DrumBeat: May 11, 2007
Posted by Leanan on May 11, 2007 - 9:01am
The Coming Explosion in Energy prices!
Oil and natural gas are finite in their supply, and should be husbanded for portable energy production, cars, planes, boats, etc. Peak oil theories are justified, China is now training 40 thousand geologists a year to confront these challenges, the US trains 500 geologists and 40,000 lawyers. What's wrong with this picture?If these supplies are used for fixed plant energy production they are irresponsibly deployed today to the detriment of future generations. Just like the deficit spending on entitlements destroys the future prospects of their children and grandchildren by sending them the bills for today's extravagant welfare programs, these same selfish people and politicians send the future cost of oil and natural gas production to future generations as well. Global warming advocates push the increased use of natural gas, rejecting nuclear power in an ideological manner. Wasting this beautiful clean portable energy source on fixed plant electrical generation. We need practical solutions to problems, not political or ideologically devised ones. They need to be balanced to consider the broad energy requirements of a modern society (who wants to go back to the Stone Age?) and preservation of the environment. Both needs can be met if the issues are thoughtfully addressed and modern technology is brought to the table.
Peak Oil Passnotes: Blair’s Legacy, Missing Oil
The U.K. was one of the world’s biggest producers of crude oil. With the emphasis on ‘was’. It produced over 3 million barrels a day in 1999; compare this to Iran’s 4 million barrels a day, Kuwait’s 2 million barrels a day and so on. This is major league work. The U.K. left it to the market to decide what the output would be; it gave huge tax breaks to private companies and allowed its precious hydrocarbon resources to be governed by the ungovernable.Now some eight years later, the U.K. produces around 1.3 million barrels a day and all of a sudden it has become a net importer of hydrocarbons. Oh dear, what happened? The market did what it does best, suck a resource dry and then move on. The U.K. government has responded with a record number of permits given out to smaller oil companies mopping up what was left. Even if decent sized fields like BG Group’s Jasmine and Buzzard can be punchy in themselves, the decline in the U.K. North Sea is unstoppable.
Gas pipeline only addresses symptoms
A gas pipeline may boost our economy and is likely worth building, but it does not resolve the more pressing issue of peak oil. Alaska needs a leader brave enough to restructure our energy supply. We need someone to lead us to sustainability. Are there any pioneers left in the Last Frontier?
Supersonic Electric Aircraft: The Potential for Electrically Powered Commercial Aviation after Peak-Oil
Platts Survey: OPEC Oil Output Rises Slightly in April After Months of Declines
The 10 members of the Organization of Petroleum Exporting Countries (OPEC) bound by the group's output agreements produced an average 26.57 million barrels of crude oil per day in April, a Platts survey showed May 10. This is up 30,000 barrels per day (b/d) from March's 26.54 million b/d and 770,000 b/d above their 25.8 million b/d production target established last month."But these numbers have to be viewed as worrisome for consumers," said John Kingston, Platts global director of oil. "Although the International Energy Agency (IEA) projects that OPEC only needs to supply the market with 29.3 million b/d in the second quarter to keep inventories balanced, from a full-year perspective it must supply about 30.4 million b/d," he explained, with the heaviest supply needs coming in the third and fourth quarters respectively, of 30.5 million b/d and more than 31 million p/d.
"So OPEC has to add a significant amount of supply in the market, just to keep inventories from declining further later this year," Kingston said. "And those estimates don't include any extra surge of OPEC oil that would be needed should the US Gulf of Mexico get hit by a significant hurricane in the coming months."
In Brunei, Shell has figured out how to extract rich but scattered deposits—a technique it plans to roll out worldwide.
Fighting for Survival - As the sea devours them, villages make plans to relocate—but who will pay?
An unprecedented crisis has struck many Alaska rural settlements—communities historically built close to navigable water so residents could easily gather food and hunt animals. In recent decades, permafrost has been warming, the land melting away. Ancient bluffs have crumbled. The tide has been advancing on schools, tank farms, roads and runways. Homes have been flooded, boat landing ramps washed out. In parts of the western Alaska tundra, the earth itself appeared to be sinking.
ConocoPhillips Seeks Venezuelan Solution
ConocoPhillips Chairman Jim Mulva said Wednesday the company continues to work toward an amicable resolution with Venezuela over its oil operations in that country, but he acknowledged negotiations are sensitive and arbitration is possible.
No fuelin' this time: Oil supply near crisis
To protect our economy, we need a coherent national energy policy.
Oil Price Not as Simple as Demand and Supply
Crude market prices are continuing to seesaw - rather heavily. From a price approaching $70 a barrel last week, it is currently hovering at around $65. Who is controlling the oil market prices and who is pushing it?
China: Energy Market Of The Future
It seems like a weekly occurrence that another deal is struck between China and another key energy producing country. However, Americas once solid position as most oil exporters No. 1 customer has changed dramatically. Now the US is seen as a third-rate customer that is taking a back seat to China and others. The United States as a power is going down and China is going up, Hugo Chavez said. China is the market of the future....
Nigeria: Militants promise a month of 'mayhem' in oil delta
Nigerian militant group MEND who have staged 10 attacks on Western oil facilities in the delta in the last nine days, kidnapping dozens of foreign workers and curbing output from the world's eighth largest oil exporter, said on Wednesday it had instructed armed groups in the Niger Delta to unleash a month of "mayhem" to press its case for more autonomy in the oil-producing region.
Weekly Offshore Rig Review: More Day Rates & Durations
This week, we will continue our examination of the correlation (or lack thereof) between contract lengths and day rates by looking at the worldwide fleet of competitive semisubmersibles and drillships. Based on the findings from last week's rig review, we expect to see a similar pattern among the deeper water rigs whereby longer contracts command higher day rates, given that largely the same supply and demand factors are at play among these rigs as well.
Will NYMEX Futures Boost Uranium Stocks Even Higher?
The world's soaring thirst for energy will be the biggest issue over the next few decades--not global warming, overpopulation or even the death and devastation of war (which will most likely start over the energy crisis).And the catalyst of the energy crisis will be Peak Oil.
If you don't believe me, I understand. But I would urge you to look at the news coming out every day. You'll see a fossil-fuel driven world gasping for breath.
Religion and peak oil: The next spirituality
It may be prophetic that science fiction, that cracked but not always clouded mirror of our imagined futures, so often makes religion central to narratives about a world after industrial civilization. That fashion was set in a big way by Walter M. Miller’s 1959 bestseller A Canticle for Leibowitz, which leapt past the then-popular genre of nuclear holocaust novels to envision a centuries-long reprise of the Dark Ages, complete with Catholic monks guarding the knowledge of the past. Miller’s book covered a lot of philosophical and theological ground, but among its core themes was the argument that religion — specifically, of course, Catholic Christianity — was the wellspring of humanity’s better possibilities, and would be more important than ever when progress betrayed the hopes of its votaries.In the hothouse environment of mid-20th century science fiction, a retort from the other side was not long in arriving. It came from Edgar Pangborn, whose award-winning 1965 novel Davy was in large part a counterblast aimed at Miller’s vision. In Pangborn’s future history, the collapse of industrial society was followed by the slow rise of a neomedieval society shackled to superstition and ignorance by the Holy Murcan Church. Like A Canticle for Leibowitz, Davy covered quite a bit of intellectual ground, and Pangborn’s invented Murcan religion was at least as much a scathing satire on the American Protestant religiosity of his own time as it was an attempt to imagine a religion of the future. Central to Pangborn’s vision, though, was the argument that religion was the zenith of human folly, an arrogant claim to privileged knowledge about the unknowable that inevitably lashed out violently against those too sane to accept its pretensions.
Aviation boom doesn't bode well for climate
Air travel is the preserve of a mere 5 per cent of the world's population, but this tiny minority's behaviour affects the poorest- who will probably never fly. Aviation has enormous repercussions on climate change. Let's look at a few figures. An Air France/KLM report of 2005-2006 reckons it takes 3.1 litres of kerosene to fly one person for 100 km. This means 10 kg of co2 emissions, as per accepted calculations.So, a person flying a distance of 10,000 km (two ways) ends up adding more than a tonne of co2.
Glimpse into a fuel free future
With the prospect of substantial urban sprawl in New Zealand cities and increasing car usage, Dr Andre Dantas (Civil Engineering), Dr Susan Krumdieck (Mechanical Engineering) and mechanical engineering PhD student Shannon Page have developed a software system to measure the impact of potential fuel shortages for a variety of future scenarios.
IEA trims 2007 oil demand forecast slightly but warns market is tightening
The International Energy Agency lowered its 2007 oil product demand forecast marginally but warned the global oil market is tightening and said the situation will not improve unless OPEC ups its output before the summer.
BP: To Shut in Four North Sea Oil, Gas Fields June 17-27
A spokesman for the company confirmed the Ula, Tambar, Valhall and Hod fields on the Norwegian continental shelf will be shut in for maintenance to coincide with installation of a new bypassing gas export line.
UK Drivers Undeterred By High Gasoline Prices
U.K. motorists appear undeterred by record-high U.K. gasoline prices, with fresh government data out Thursday showing an increase in traffic.New Department for Transport data shows traffic on British roads increased 1.2% in the first quarter of this year compared with a year previously, led by rising traffic on country and minor urban roads.
Cabinet endorses new fuel pricing parameters
Fiji's high cost of fuel will see revised fuel pricing template parameters from June.
European Parliament to hold conference on Caspian's hydrocarbons
"Caspian's hydrocarbons are of great importance from this aspect. 233bn cu m gas and 50mln tons oil is planned to be transported through newly-commissioned Baku-Tbilisi-Erzurum gas pipeline and Baku-Tbilisi-Ceyhan oil pipeline. Oil and gas of Kazakhstan and Turkmenistan will possibly to have an access to western markets."
Alaska village suffers fuel shortage
The village of Newtok is suffering a fuel shortage hardship, having run out of both heating fuel and gasoline last month. The community has a population of over 300.Gas was flown in by air carrier last week – 8-55 gallon drums and is being sold for $11.83 a gallon at the Newtok Native Corporation, said residents. The local electric company, Ungusraq Power Co. bought stove oil from the school to run the generators to provide the community with electricity. Stove oil was selling for $5.10 a gallon as of last week.
As New Yorkers recently discovered, when crude oil prices jump, gasoline prices can jump even more. But though oil sheiks in the Middle East and President of Venezuela, Hugo Chavez, are convenient scapegoats, the real problem lies closer to home — our shortage of oil refining capacity.
Gas remains a hot topic for callers
"Back in 1977, when we were gas rationing, I was on the debate team and I debated the oil shortage. We weren't supposed to have gas by the year 2000. I don't drive to the north end unless I have more than one errand to run. After Memorial Day, the prices are going to drop back down to a lousy $3.19 because that will be a good price to us once it hits $4 a gallon. This has absolutely nothing to do with an oil shortage. This is complete and total corporate greed."
Bad Climate “Science”: The ideology goes in before the science goes on.
In other words, we should worry about the risks of climate change; we should worry about the risks of geoengineering; and we should apply our most meticulous and careful scientific thought to characterizing these risks. But we should not consider — indeed we should remain utterly unaware of — the risks of forcing wealthier people to stop using, and preventing poorer people from starting to use, the fossil-fuel energy that played a leading and essential role in the vast improvements in human health, prosperity, and life expectancy during the last hundred years.
CALIFORNIA'S groundbreaking global warming law, AB32, along with executive orders signed by the governor, requires California to cut its greenhouse gas emissions about 35 percent below current levels by 2020 and a staggering 90 percent below current levels by the year 2050. How in the world will California meet those aggressive goals?
Toyota expects to cut costs for hybrid cars enough to be able to make as much money on them as it does on conventional gasoline cars by around 2010, a top executive said on Thursday.
World oil production has maxed out: Talisman
Talisman chief executive Jim Buckee has never been one to shy away from controversy.....So when Buckee suggests, as he did at Talisman's annual meeting Wednesday, that Peak Oil has arrived, we are not completely surprised -- even if that observation is likely to again land him in the eye of a storm.
Hit by petro crisis, Nepal sends SOS to India
The spectre of the worst fuel crisis ever loomed large over Nepal after the Indian company, the lone one exporting oil to Nepal, reduced petroleum supplies by 40 percent in a bid to pressure the importer, state-owned Nepal Oil Corporation (NOC), to clear old dues.
IEA says Iran gasoline rationing is a clever move
Iran's plans to ration gasoline and increase the price should help curb imports and raise fuel efficiency but may provoke considerable domestic opposition, the International Energy Agency (IEA) said on Friday.
'Project Big Green,' will target corporate data centres and includes a new global 'green team' of more than 850 energy efficiency architects from across IBM....'The data centre energy crisis is inhibiting our clients’ business growth as they seek to access computing power,' said Mike Daniels, senior vice president, IBM Global Technology Services.
Argentina confronts biofuels craze
Argentina's government is hopping on the biofuels bandwagon by offering tax incentives for new initiatives and saying 5 percent of the nation's fuel supply must be biodiesel- or ethanol-based in three years.But many Argentines are worried that diverting farmland for biofuels — made from corn, sugarcane, palm oil and other agricultural products — will drive up food prices even higher.
A Brief History of Oil (Profits)
It seems almost quaint now, but just seven years ago, Bill Richardson, then the Clinton Administration's Energy Secretary, was quoted by Reuters World Report as calling oil prices "dangerously high," and saying the White House would use all options to fight soaring energy costs. The same story reported that farmers in Spain were taking their tractors on the roads to protest the cost of fuel. Saddam Hussein was threatening Kuwait again for stealing Iraqi crude. Soon, oil analysts were saying that if Hussein decided to quit shipping Iraq's oil, it could upset the world's petroleum market, possibly causing another severe hike in the price of crude. Yikes!Of course, when these stories crossed the newswires in September, 2000, things were very different. The soaring energy costs Secretary Richardson was complaining about were $38 per barrel for oil and $1.58 per gallon for gas.
Vermont could clear way for new emissions rules
A Vermont judge could soon clear the way for nearly a dozen states to surmount auto industry protests and limit emissions from cars and light trucks to protect the environment, legal experts said.
Blueprint for greenhouse gases
Buy a fluorescent bulb and stop a hurricane? It's not that easy. A new climate-change report finds voluntary conservation and the use of clean energies together won't be enough to slow global warming. Rather, strict rules on greenhouse gases will need to pinch lifestyles. And the biggest price? A crimp on world economic growth.
Risky Business: The Outlook for Investing in Nuclear Power
A new report scrutinizes the nuclear industry from an investor’s perspective and finds a rotting fantasy of cheap energy and huge returns.
Positive results reported at the Kootenay Climate Change Conference
Businesses and town administrations both prosper when they switch to less energy-intensive methods.
The case for raising gasoline taxes
Prices cannot be brought down because market tolerance determines the price, no matter who charges it.
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Also in the news today...
IEA calls for OPEC to raise output
and
Choke point for oil sands may be water shortage
Wasn't the time for OPEC to boost production for the summer season about eight weeks ago?
The headline I'd like to see is "Greenpeace calls on OPEC to cut output, save some for later".
If we are to believe in things we cannot see or touch, how do we tell the true belief from the false belief?
Yes, Opec should cut output at least 4% per year for the next 20 years. All the other major oil producers, including the U.S. should do likewise. Of course, we can just burn it all now, which seems like the preferred approach.
If Monbiot is even close to correct, we need to start the downward path of fossil fuels burning yesterday.
But nooooo. OPEC would prefer to play hide and peak, or peak-a-boo if you will. Here you see it, here you don't. And, if you decide to be prudent by seeking alternatives, including conservation, we will punish you by refusing to raise our outputs. We need to call their bluff. The irony, however, is that they may be embarking on this policy not by choice, but out of necessity. But they still want to maintain the illusion that they are in control of their and our destiny.
More of than not, people use the word "fear" when they are projecting supply and prices over the coming summer and beyond. My fear is that prices will just spike temporarily as usual and settle down to a new slightly higher price which people have learned to tolerate. If we went to $5 per gallon tomorrown and then settled down at $4, we would be consuming like it was under $3.
Absolutely. An environment of consistently rising prices is required in order to create a sense of urgency. Hopefully another year or two of September prices spikes will cause the penny to drop in Detroit. (Well, maybe not Detroit. Tokyo?)
If we are to believe in things we cannot see or touch, how do we tell the true belief from the false belief?
Actually, what we really need is a steady 7% a year rise in prices for the next twenty years. And for people to realise that it is happening, and expect it to continue - an "oil inflation" environment. People might make different decisions when buying (or designing) a car if they thought of the price they were likely to pay at the pump ten years down the track.
If we are to believe in things we cannot see or touch, how do we tell the true belief from the false belief?
Actually, that started already 5 years ago. Remember oil was 25$ / barrel?
This is only an issue because we keep hoping the market will save us, rather than making rational but difficult choices.
Instead of our acting like an enlightened democracy, we place our faith in Kings to make the wise move for everyone. I guess the world has not really changed as much as I thought.
Hi gTrout,
Thanks for your comment.
When I've talked to people (commuters) many of them believe that they *are* being rational in their decision to go by "what the market says". They say they'll start to ride-share when the price of gasoline goes higher. In fact, they say, if there was a problem, either "the market" or "the media" or "someone" (presumably, someone other than yours truly) - would have told them.
In other words, they believe "the market" is "rational". As though "the market" exists as something more alive than descriptive.
Now, some things have changed. (People voluntarily cutting back; people questioning; the largest anti-war protest in the history of the world, prior to a an invasion, more than 5 million "green" and "human rights" organizations around the world; etc.) The question is, how do we use those changes to help us?
Wildfire areas get influx of residents
Seems like there are a lot of stories like this in the news lately. The villages in Alaska, located by the government with little local knowledge or concern for the future. The floods in the midwest, in the same areas that flooded in 1992. New levees were supposed to "fix" that problem, and of course the residents are blaming the government, the engineers, etc.
It's unsustainable, and it's going to be even more unsustainable when peak oil really starts to bite.
The craze, building in forest hillside, fragments the forest. And unlike harvest operations, there's no regrowth, just roads and homes and shrubberies. The homes are a liability in fighting wildfires by draining resources, and also by igniting them. These houses are "springing up like wildfire"-couldn't resist. Two years back we had a racing 350 ac blaze that hit 5 homes, started by one of the new residents burning their household garbage in a barrel. In late July.
I don't know enough about the property insurance business, so I'm not sure about this, I could be entirely wrong on this one. However, to me it looks like a market failure -- if insurance companies were to rate these properties according to the real site-specific risks, my guess is that insurance would be either unobtainable or so expensive as to prohibit the vast majority of these homes from being built.
I cannot understand why the insurance industry is so anxious to underwrite health insurance on the basis of the individual insured's health, but when it comes to property is perfectly happy with pooled risk. Individuals often cannot help it if they have health problems, but no one HAS to live in a high-risk location. Why should those of us that choose to live in lower-risk locations have to subsidize the riskier with our insurance premiums?
One more example of a US economy that has things bass-ackwards.
We're heading that way. I think eventually, market forces will rule. Right now, governments are stepping in to insure the uninsurable (see Florida). And there's always FEMA, in case of major disaster.
But they won't be able to afford to keep doing that.
The problem may be that people build homes appropriate for Cleveland in California. If the state building codes required adobe walls and metal roofs then wildfires wouldn't be a big deal. Using flammable materials out west is insane especially when adobe is dirt cheap.
It's not design, its placement. And tho adobe may work in parts of southwest, it's not for all the west. Expensive in many parts. Cheapest is trailer, or woodframe, maybe a metal roof. But it's massive earth moving to site it-sorry, toto no wheelbarrows here-a four by four to get there, drilling to china for water and commuting 50 miles to stay. When the fire does roll thru, you need an air tactical command to fight it. Along with a couple firefighters in a box canyon.
Actually, solid stone or slipform walls (using stones collected onsite or nearby) under that metal or a tile roof would be the ideal building envelope for those mountainside sites - pretty much 100% fireproof. People have put such up with their own labor, but it would be pretty expensive to pay builders to do it.
I don't care if Helen and Scot Nearing built it themselves-its placement. And at least the early slipformers sited their home near water, on moderate ground, with the idea of producing some food.
doug, one of the things that I've noted on my (too) infrequent trips to MT is that the old homesteads tend to be located in draws, near a water source and a few shade trees. In contrast, you see many modern homes plopped down out in the open with no shade and no water. As I understand it, having a water tanker deliver water to the house is not that uncommon -- particulary in the case of vacation homes. As you point, it takes a whole lot of "outside support" to maintain one of these places. If Jim Kunstler thinks the suburbs of the humid East and Midwest have no future, he ought to see these places that you are talking about.
That is something Lester Brown notes. He recommends buying property in the center of old cities. People settled the best areas first, as far as water, shelter, soil, etc. go. Now these areas are often low-income neighborhoods in fading cities. Property is relatively cheap, and if you get together with like-minded friends and family, you can create your own eco-minded neighborhood.
In contrast, modern homes are often built in areas with not enough water or shelter (build on top of hilltops, say, for the "view," when in the old days, the house would be built in the lee of the hill, not on top of it). The topsoil is scraped off and sold to farmers or Home Depot before building starts. Never mind the transportation issues...
I'm in an 1830 Cape, set into the landscape exactly as you've described, the lee side of the hill, which also happens to face due south for maximum solar exposure. The cold winds out of the north west and storms from the Nor'east are lessened this way too.
They also built their chimneys in the center of the house, which with our wood stove provides a large mass of retained heat. In so many ways and respects this old home is a thing of beauty compared to the cheap but expensive junk built of late.
As for good soil, our bottom land here between two long ridges is amazingly fine compared to most of the sandy soil out here on the Cape. I go to sleep each night offering thanks to my blessings here.
But the mosquitoes can be a real bitch for a spell.
you tellin' me that these three car garage liet motif suburban hovels are not classic design ?
I would definately wait.These places are going to get nastier first. At some point you'll be able to buy the whole place before/if it becomes desirable.
Matt
Don't forget the wind. Those draw locations afford other types of shelter. X years ago, I watched a well to do local perch his McMansion on the very edge of a large coule. He lasted 2 years, before selling out and building a large home in town. The wind drove him, and esp his wife, bonkers. You just don't realize it from initial site visits. It's all view and upfront cost.
Water hauling is a thriving business.
Thinking of ol Helen and Scot in my post above-we're about same. Their objective after the depression was not working all day every day. They wanted 4 hours for themselves, would only spend 4 hours in work-build house, grow food, cut firewood, etc. Modern folks live on about 4 hours-four for yourself, about 4 for fed, local, SS, state, property, sales tax. Times I think they cut a better deal.
"September is like a quiet day after a whole week of wind. I mean real wind that blows dirt into your eyes and hair and between your teeth and roars in your ears long after you've gone inside."
Milred Walker, Winter Wheat.
Gee whiz, you can't do that. It wouldn't be FAIR!
You already know the deal. People in this country have a right to live under water, next to rivers, on cliffs, on top of faultlines, and surrounded by Duraflame logs. And of course, it's the government and insurance company's responsibility to pay for it all.
After all, what's the alternative? Admit we're stupid? That might work, but as I always tell my friends, "Idiots don't know their idiots."
Now if you'll excuse me, I need to go get a couple barrels of diesel for my motorhome while there are still barrels to get. (See previous paragraph)
What a great visual... I think my next fence will be a Duraflame split-rail.
Thanks for the laugh!
Duraflame split rail fence around a straw bale house with split wood shingle roof. Sounds like the perfect choice for a semi-arid mountainside woodland!
I appreciate the humor, but I have one quibble.
This, according to the Australian government.
So the moral is, don't forget the render.
Incidentally, I grew up in a Southern Californian neighborhood with wood-shingled houses. I've spent more than one afternoon on the roof with a hose, watching the flames get closer. How stupid can a developer be?
The developer wasnt stupid enough to actually live in it though. He just made a buck since no one seemed to perform due diligence.
Fine Homebuilding carried an article on sprinkler systems, and also discussed installing them on roofs, with a standpipe at groundlevel. In case of threat the garden hose goes from faucet to standpipe. With no standing water in the sprinkler system no danger of freezin breakage either.
New York apparently requires sprinklers in new residential construction.
Insurance companies should do some research. They are clever enough when it comes to anything involving health coverage. Clever in how to get out of paying or keeping rates high.
One way to bypass that is to pay off the mortgage (for those who can) and cancel your hazard insurance.
And All-State is bailing out:
Allstate to stop insuring Calif. homes
In Southern California urban and suburban sprawl of this sort continues to be subsidized by State and local government through maintenance of fire/flood protection (and typically utility and road inftrastructure too -special districts and fees not withstanding). Money, in the form of personnel and equipment, always seems to be available to fight wildlfire - no matter how costly such efforts become. I suspect that these subsidies help keep insurance costs down (or simply available) in areas that otherwise would likely be avoided by the insurance industry. So we continue to see development snake its way into remote canyons and ridge-tops surrounded by chaparral. I suppose at some point our fearless leaders will find that tax-base growth no longer pays for the spiraling costs of supporting such sprawl. What with energy and materiel costs going through the roof (and higher interest rates) maybe that time is approaching. But I've been watching this mess unfold for 40 years so I'm not holding my breath.
As far as those Alaskan villages go, there used to be very little if any infrastructure, and the people moved around to different sites anyway, so changes in sea level would not have been a big deal. Now, using the same traditional sites, but built up with fixed infrastructure, there is a problem.
The IEA's summary of the Oil Market Report is out today.
http://omrpublic.iea.org/
According to them not much is happening to world oil supply. Here are their reports for the last few months:
Dec +110 kb/d to 85.4 mb/d
Jan +175 kb/d to 85.5 mb/d
Feb - 65 kb/d to 85.5 mb/d
Mar -265 kb/d to 85.3 mb/d
Apr - 55 kb/d to 85.5 mb/d
We have been down three months in a row by a total of 385 kb/d yet we wind up exactly where we started in January at 85.5 mb/d. (That is all liquids of course.)
Ron Patterson
Dec +110 kb/d to 85.4 mb/d
Jan +175 kb/d to 85.5 mb/d
Feb - 65 kb/d to 85.5 mb/d
Mar -265 kb/d to 85.3 mb/d
Apr - 55 kb/d to 85.5 mb/d
The numbers don't add up. Mar is 85.3, then we lose a bit more but APr is 85.5. Should that be 85.2?
Peter.
Peter, you don't understand. This is just how the IEA reports things. The figures this month automatically revises last months figures. In other words, last month's data was wrong and are corrected this month. This almost always happens.
The figures never add up. Every month is a guess, to be corrected next month.
Ron Patterson
Oh. How confusing!
Peter.
The figures aren't that accurate anyway. Don't trust anything past the decimal point and say it is about 85 mbd and on a flat plateau.
"Platts Survery: OPEC slight increase" - the increase is 0.11%, as in 1/10th of 1%...yes, I would call that slight. :-)
Rick
I don't understand what is the statistical significance of such a small increase, 30 kbpd is probably well within the production estimation error margin.
Jean Laherrere (and I) would agree with you. It's false precision that shows up only because those keeping the numbers keep using the same approach to tally outputs.
But we also have to keep in mind that over a period of time, those little differences start adding up. For example, is the reported C+C output of May 2005 statistically different from the value of December 2005? No, but by the methods used to tally those values give May the nod in one EIA dataset, December in another. Either May or December represent a current peak output in C+C values with no corresponding recession/depression to curb production.
Is the February 2007 estimated output of 73.3 MMBPD statistically different than the 74.1 MMBPD C+C estimated for both May and December 2005? Yes, but the path has much oscillation even though the values from a moving average are nearly flat and many months may not be significantly different from another on the basis of statistics.
I am starting to come to the conclusion that the price rises that we have seen so far aren't really sufficient to depress demand very much - especially in the short term. In the longer term (i.e. the timescale on which people purchase new vehicles - perhaps). The short term? People just complain about it.
That being said, people are definitely aware of the higher prices - they just don't know how to react.
Most people recognise that gasoline prices are really not that big a deal. Irritating maybe, but not anywhere near the top of the list of financial concerns.
Property taxe increases - about which one can do almost nothing, Health insurance/long term care insurance, home heating costs and similar "life necessities" are way above gasoline prices. You can do something about high gasoline prices - drive less, drive something that gives better milage, telecommute, etc..., so while high gasoline prices are an irritant they are not the major concern of people if you really talk to them.
I have to agree with you. I don't like higher gas prices, but like you said, I just drive a little less.
Property taxes are outrageous in my town. They just built an 80+ million dollar school. "It's for the children". But there's nothing you can do, except pay. Insurance is another big expense that's beyond your control.
Home heating I have been banging away at... Insulation, new systems, etc...
It's a brave new world out there...
Garth
the only thing you can do to control insurance cost is to buy less of it. home insurance is a scam. i recommend that your deductible be at least $5,000. of course you will need emergency funds available should you have a loss.
the reason for the $ 5000 deductible is thus: 1) if you have a claim, it will become a monkey on your back, costing you more each time you renew or look for a new policy. 2) if you have a claim, the insurance co will want to "patch it up" as cheap as possible. if you are not satisfied with the offer, you can spend a lot of time seeking out bids to fix it right. and your ultimate recourse is to take them to court. good luck.
so imo if you have a claim of less than $5k, you might be just as well off to fix it yourself.
"replacement cost coverage" what a joke. they want to sell you "replacement" cost coverage but settle based on "cobbled up" cost coverage.
That presupposes that the price increases are over. However, wholesale prices spiked 4+% yesterday and was up more than a percent this morning. That's 11 cents in 30 hours. If passed along, that will set the record not only above last year but the all-time 1981 record when inflation adjusted.
All this without President Bombsalot invading Iran and no hurricanes.
I think it's too early to tell where the prices will peak and how people will react. I can tell they're getting madder by the penny around here.
Better stock up on those new "Forever" stamps and stash them away as your inflation hedge!
:-)
If I could find them, I'd post a picture.. but in my stamp collection from childhood, I have a bunch of Million Mark Stamps from prewar Germany. Been wondering when to take my oktoberfest vaca and cash them in...
Bob
Another thing about wholesale prices...usually in KC, MO metro area, the station retail is about $0.50 above the wholesale price.
KC, MO has been at $2.93 for about a week and it just shot up to $3.09 this morning. Wholesale has been between $2.20-2.30 for the last week (usually I see a lag of 2-3 days for wholesale closing prices to filter to the corner station).
Why all of a sudden does it appear that retail is now $0.70 above retail? Perhaps refiners are requiring more dinero to keep the machines working at their current pace or to upgrade in anticipation of heavier grades?
Just speculation on my part.
Excluding the isolated (from a gasoline point of view) West Coast, gasoline inventories fell by 700,000 barrels last week.
So, after we had spot shortages in Colorado and Iowa, inventories continued to fall.
But WT...what about the widening spread between wholesale and retail dollars? I don't remember if I saw this pattern last summer or not, but there's a BIG markup going on right now.
That may be true in the US. I think the people in Zimbabwe or Nepal may disagree about the suppression of demand
From the story above
http://news.yahoo.com/s/nm/20070511/wl_nm/energy_iea_iran_dc_1;_ylt=AvaJ...
Not that it took this to convince me, but the IEA is retarded to believe gas rationing is the answer to problems. The black market price is going to skyrocket and hording will be all over the place. WTFever.
I think it's happening!
It is all over CNBC, the web and other news this morning. Everyone is in a panic because OPEC refuses to even meet to consider a production increase. Some say, correctly I think, that it is even now too late to avoid a crunch this summer, even if OPEC changed course today.
But OPEC refuses to budge. Ignoring all calls for a production increase. They will meet in September to assess the situation then decide what to do.
Methinks there is a method to their madness. They are all just about maxed out in production but the release of that news would send the world into a sheer panic. So they will delay that news until it becomes obvious what their actual production capacity really is.
Ron Patterson
Ive been combing cnbc.com and cannot find a link anywhere. I suppose you watched it on the tube?
Impossible. We have been assured that, even by people at TOD, that KSA has 2mbpd of production that they can turn on anytime. Any day now their production is going up.
We should not forget the february 15th announcement that Saudi Arabia is 'ready to produce 12 or 14 mbd by the end of 2008'.
18 months left for them to come clean.
Too beautiful a day to be posting away...but this will be my one post before I hit the garden again.
The EIA numbers show that all the OPEC countries except KSA are flat out, there excess capacity is essentially rounding error, insignificant. And, well, KSA is looking a lot like a false hope. So, 30Kbpd is about all they could do...of course it is big news.
CNBC would be right then(did I really say that)...as we have been following production closely the last 5 weeks, last week I thought we are already 1 week past the point of no return, this week would be 2 weeks. ie. T + 2 weeks since OPEC(read KSA) should have boosted output to arrive(transit time) in time for summer demand spikes.
Bit jaded lately...back to doing some hands on stuff. Building a new fence, and raised bed gardens.
I am finding that hard, manual labor is an excellent way to forget about the impending crunch and a way infuse your body with mood-lifting endorphins.
Anyone feeling a bit down about the world really needs to get outside and sweat a little...it helps to focus on what is in front of you instead of worrying about what/could happen. Wish I was out there right now...it's 85 degrees in KC today.
^ Agreed! Manual labor may be drudgery to some, and it is at times, but I do as much as I can without resorting to gas guzzling bob-cats, roto-tillers, etc. to care for and tend to our homestead/garden projects, and at the end of the day, while somewhat exhausted, I feel spiritually and emotionally enlivened. We're creatures of the earth and are better off for spending most of our time working outdoors. Stuck indoors in some mechanized air filtered florescent lit cubicle pushing papers or whatever else a vast majority of folks do in their senseless 'jobs', now that's drudgery!
Anyway, we've got our peas in, beans, lettuce's, cucumbers, herbs, and god knows what else. The Ms. does all the seeding and most of the planting while I'm the mule, good for weeding, hand tilling, compost making, tree/shrub pruning, digging out stumps, wood cutting/stacking, brush hauling, building maintenance and repair chores, etc. We've just finished up putting in our new drip irrigation system, but the good work just never ends.
Enjoy it while you can folks.
My corn came out of the ground today, so I am enjoying it.
Most excellant!
Here in western KY we had to replant the corn and it isn't up yet.
We do have lettuce, turnip greens, brocolli and some squash. We also have a couple of ripe cherry tomatoes. I think I will have a nice lunch today.
I have corn 2 feet high, tomatoes on the vine, cucumbers, green peppers, green beans... but I'm a wee bit further south than you, I suspect. ;)
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Speak of coincidence! I was repairing fence (but just a small section) to protect my raised bed garden yesterday. The night before I had evidence of an animal in the garden. I'm betting raccoon but it might be something else. It got about half my sweet onions and a bit of my green beans too!
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
There's no question we are entering/in a genuine recession. Spreading "Containment" of housing,poor retails sales, $4 gas. The big R is here. For what it's worth. Now lets see how much it really affects consumption.
Matt
I apologize if this has been poster before but I was looking at the last ASPO newsletter (April 2007) where there is a section on Saudi Arabia and the work of Hans Judd:
The chart on the right looks identical to Stuart's chart:
However, there is no mention of TOD and Stuart anywhere in the text!!
To quote Aretha Franklin, who's zooming who?
Aretha...I was thinking more along the lines of R-E-S-P-E-C-T...find out what it means to me!!!
Ahhh...the wonderful free and open services provided here at TOD, unlike some that would charge $1,000 per report for such analyses and keep the rest of the world in the dark.
There can only be one explanation: Hans Jud = Stuart Staniford.
I find it astonishing that anyone could believe that Saudi production could be held flat for 17 years.
This model still gives Saudi Arabia 173 Gb of remaining reserves, allowing for modest new discoveries. This is way too high, in my estimation anyway. If that is the case then Saudi Arabia has only used 38% of their URR. If that is the case then with their new horizontal maximum contact wells, they should be increasing production.
The point is, Saudi Arabia is clearly in decline therefore there is a problem with this scenario. That should be obvious to even the casual observer.
And it was rather cheesy of Hans to use Sturat's chart without giving him any credit for creating it. He owes Stuart an apology and the editors at ASPO should make sure he gets it. And TOD should be given credit for first publishing it.
Ron Patterson
The Creative Commons License used on this site by Prof G. and the others allows copying of such data but it requires attribution to the original source. I've not read the article yet but if Hans Jud failed to attribute that to Stuart then he both must do so now and actually ask if he can still use it. Simply fixing a license violation does not restore you ability to use a work published under the license (as SCO is finding out to their chagrin).
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Is a bit cheeky. When I first learned about po 12/04 I waited for aspo letters with great anticipation. Now tod, on account of researchers and commentaters such as stuart, you, wt, rr and pitt et al, have imo pushed us far ahead of aspo. IMO aspo and chris have yet to incorporate sa/mexico/venezuela declines or russia plateauing, and in general have not factored in world wide rig shortages that are delaying nearly all announced projects past what would have been expected from past experience. My recollection is that aspo went from 2010 to 2007 and then back to 2010, could be time to yo-yo again.
EIA shows sa at 8750kb/d and 8600kb/d jan feb, and opec shows sa at 8.51M/d in march. So, if these are correct, production was a bit higher than stuart shows early 07 but is nevertheless falling at a rapid rate, 850Mb/d y/y to march but accelerating to a rate of 1.5Mb/d/y from jan. The bigger they are...
I'm having trouble following the ASPO forecasts lately, their last forecast (#76) is extremely optimistic and was more accurate two years ago (#46)! Also, their 2006 production estimate seems wrong with only 72.1 mbpd for crude oil + condensate (the EIA is saying 73.4 mbpd) and only 79.0 mbpd for CO+NGL (the EIA gives 81.3 mbpd).
Khebab, do you have one of those fancy graphs showing all liquids on a BTU corrected basis?
Calculating what you stated is tricky, but simply correcting for the low btu content of ethanol is not. This would reduce the ethanol bit by 1/3 or all liquids around 400kb/d. IMO the overall liquid btu production is pretty flat over last two years, pretty much in line with c+c.
I should probably have been a little more specific, as I'm just talking about the shaded in areas for C+C, NGPL, and Other Liquids.
The other liquids category has more than ethanol, but I think is mostly ethanol, so that category should take a pretty steep hit on BTU basis. I can remember seeing a graph, but not the specifics of the NGPLs, but I know it was less BTU's per gallon than C+C. If the data points were available one could multiply each category by the correction factor to get at least a rough estimate.
Just eyeballing it, it appears that Other Liquids and NGPL have been taking up an increasingly larger percentage of the mix and consequently of the increases. It's so jagged that it's hard to visualize, but I believe that when corrected to a BTU basis this plateau we've been on lately is actually pointed downhill.
The BTU content varies between fuels, NGPL is not much better than Ethanol:
We often forget that we are no consuming barrels but BTU content of fuel. Energy density does matter, a more accurate picture would be to compute the Net energy content but it's vastly more complex.
Thank you!
It looks nearly about the same(as would be expected), but the rise during the last couple of years is dampened quite a bit. It also brings a few more months into an arguably plateau-y range.
Once again, very nice work Khebab!
The BTU chart is excellant.
That surely does suggest "peak plateau" since 2005. Thanks for the chart.
A new Round-Up has been posted at TOD:Canada.
Peak Oil: The Movie
As I have previously described, if we had written a script for Peak Oil: The Movie, recent events, including the call by the IEA for more oil, would have been in the screenplay.
So, what is the likelihood that future events will not follow the "script?"
With world crude oil supplies and refined products being this tight, what are the chances that some event somewhere will sooner or later start an oil price conflagration?
Quote of the week from the Housing Bubble Blog:
"What made sense yesterday doesn’t make sense today"
I am increasingly getting the impression that whether we are at peak or just immediately pre-peak does not matter. The remaining upward growth that Robert and others anticipate is very small, as Robert noted, on the order of 2-5 mbpd and probably in the lower end of that range. That upward growth also depends on above ground factors that are working against that growth.
When I look at the mega-projects info, I can see where Robert and the "near peak" group are coming from. I also see that they are not arguing for a peak very much higher than where we are anyway.
And now the above ground factors may be removing that last possibility of growth anyway so the net effect is that we have hit the plateau and been on it for a few years now (since July 2004 if we count the earliest hit above 84 mbpd). The one thing that the mega-projects may give us is a longer plateau. A longer plateau is good because it gives at least part of the world more time to prepare for the eventual declines.
Right now the plateau appears to be maintained by a combination of deep water oil, tar sands, and bio-fuels. As we've noted, growth in tar sands and bio-fuels is limited. It can grow more yet, which will cover more potential C&C declines but eventually the C&C decline rate rises to where bio-fuel and tar sand growth cannot keep pace. That leaves deep water but as we've seen, the growth in deep water has been tepid so far.
Given the above, it would not surprise me to see the plateau extend for another 2-5 years. Declines in total liquids might begin sooner but right now I don't think so. More and more I am thinking Ace's 2009 all liquids peak call is the right one.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
I'm not sure Robert is fully taking into account the inevitable delays and shortfalls in these mega-projects. From what I've read almost all of them are not happening on schedule and/or are being down-graded. Also it looks like the declines in the mega-fields are going to be much steeper than Chris Skrebowski has been projecting. But I'm just a lay person so I may be wrong.
Ok..I lied...one more post.
Since I posted on this with Robert yesterday.
It is very important to note the last update (I have seen at least) of the Megaprojects DB was APR06...a lot has happened in the last year.
It doesn't factor Mexico's decline, KSA's apparent plateau/decline, and other changes in the last year.
And let's not forget perhaps the most import thing...it doesn't factor NET EXPORTS...only production. ie. Russia net export decline in 06.
Peak Exports may precede peak Total Liquids...as in...it may already be happenning.
I think the data from megaprojects is pretty idealist...it's what we might get if all goes correct. It is a "best-case scenario". And I don't think Chris is thinking there won't be any problems, but you can't quanitify those until they happen. He is only quantifying what countries/companies are projecting will come online in the future.
It is the Ideal vs. Reality where things get dicey.
I'm not sure Robert is fully taking into account the inevitable delays and shortfalls in these mega-projects.
The mega-projects list has delays and shortfalls built in. It does not presume that everything that is announced will come online. Also, not everything that will come online within 4 or 5 years is on that list. I knew of a specific project that was going to come online in 4 years that was not on the list. So, the list is a guideline, but is obviously not assumed to be precise. It is just a lot better than navel-gazing and guessing where we will be in 3-5 years.
>Peak Oil: The Movie
As I have previously described, if we had written a script for Peak Oil: The Movie, recent events, including the call by the IEA for more oil, would have been in the screenplay
You would be a little late. All one has to do is turn on CNBC or buy fuel. By they time any big screen movie is completed the PO will probably make headline news.
The movie has already started and we are all in the cast.
From the Times today:
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_...
Stocks at a 16 year low.
How is it that C+C peaked 05/05 (2 years ago) yet only 5 out of 216 countries in the world are showing -ve GDP growth?:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28real%29_growth_...
Marco.
Total oil production was not down that much, just one quarter of one percent in 2006. That followed several years of strong increases in oil production. Oil production in 2006 was still up almost 10% higher than it was in 2002.
It takes the world awhile to catch up with that kind of growth, and it is still catching up.
We will need to see some sharper declines in oil production before the world GDP starts to turn down with much conviction.
Ron Patterson
""We will need to see some sharper declines in oil production before the world GDP starts to turn down ""
So by that rationale the doomer scenario whence 'peak oil arrives the world economy is plunged into chaos' does not hold any water.
If a slow ramp down occurs and we can compensate with a more energy efficienc way of living, keeping up our energy savings in line with the rate of decline of supply; then major upheaval should surely be avoided?
Can we have a decreasing energy base and a simaeltaneous increase in GDP?
Marco.
Marco, look at the dats on this data. Most of it was from last year. You expect to see a downturn in GDP right in the middle of a year when production was virtually flat?
This data reflects (mostly) the upturn in oil production for the years of 2003, 2004 and 2005.
The effect of a declining oil supply will definitely cause a decrease in GDP. However you are expecting far too much action far too soon. There will be a natural delay in the results of a declining oil supply just as the hottest days of summer fall about four to five weeks later than the longest days of summer. The world does not follow the month to month changes in world oil supply and adjust its GDP accordingly.
At any rate the first effect will likely be psychological. It will be when people realize that peak oil has arrived, and contemplate the consequences thereof that will cause dramatic changes in the world economy.
Ron Patterson
Once more, with gusto: Net Oil Exports are declining much faster than overall world crude oil production is declining.
Case in point: Mexico, the #2 source of US crude oil imports. The EIA puts the decline in crude oil production, from 2/06 to 2/07, at 6% per year, while Pemex reports that oil exports are down 10% over the same time period. In the first quarter of 2007 versus 2006, oil exports are down 16%.
This is a normalized plot of the US Personal Saving Rate versus quarterly Brent crude oil prices that Khebab did that shows the saving rate going negative in the second quarter of 2005:
http://www.theoildrum.com/files/PSR_Brent.png
100 = oil price and saving rate in the year 2000
This illustrates my thesis that the US has basically been going into debt in order to pay for our petroleum product consumption ever since the second quarter of 2005, and IMO, this was the trigger--but not the underlying cause--of the mortgage meltdown.
IMO, we are going to have a hard time outbidding China and the EU for declining crude oil + product exports.
So basically the shit is flying towards the fan and hasn't quite hit it yet. Is that it?
What about a global recession to damage demand? See Greyzones' post below, although I think it more likely China's bubble be pricked from our side whose demand drives their production.
Marco.
We maybe need an update on the graphs on this post by Prof Goose:
http://www.theoildrum.com/story/2006/10/5/215316/408
Marco.
Khebab and I are going to do a Net Oil Export article, probably focused on the top 10 net oil exporters. I'm just waiting for the 2006 EIA net export data to come out. Note that the UK went from probably peak net oil exports to net importer status in about six years.
Any rough time frame? Minneapolis, MN, is updating it's 30 year plan and holding public meetings to collect input. I would like to make them aware of what is happening.
I'll e-mail the EIA and ask them about the 2006 data.
Thanks!
The upper mid west has some advantages post peak. Lots of food, timber, iron ore, water, a manufacturing base, wind power, hydro, nukes, water based transportation linked to the sea both north and south. If we can only get it linked together by electric rail!
A correlation does not prove causation.
You can not say by simply looking at both personal savings rate and the price of crude oil that crude oil is the driver of the subprime mortgage melt-down.
I’m sure that the price of crude oil is certainly not helping anything, but to say it is the “driver”, is a stretch and disingenuous to those who do not have a background in statistics and know how to properly read the data.
Did you read what westexas actually wrote? He said, "this was the trigger--but not the underlying cause--of the mortgage meltdown.". i.e. "certainly not helping anything", the subprime mortgage market was a bubble, and the price of crude oil a pin.
And that's why, this time around, when fuel prices start marching upward, it hurts us all a little more than last year. Toss together the housing crisis AND rapidly rising gasoline prices (for no apparent reason according to the MSM) and you have some very stressed out and confused people.
I'm finding people at work are a little more open to discussions of Peak Oil these days.
This morning it started with talk about rising gasoline prices and then moved onto the grocery bill...milk, fruit, etc...prices gone up..."why?" people were asking...I said, "well, have you ever heard of something called Peak Oil?"
There's a time and place for everything...what didn't work last year...may this year...people are looking for logical explanations.
Talking with a farmer lately he mentioned to me that while energy prices and corn prices are rising, (food)packing plants are refusing to pay any increased prices for raw product.
Still not an understandable model for causation to me. what specifically actually caused what to trigger and how didi it do it?
my example (poor): excess money supply by fed+banks helped to boost a bubble in various asset classes incl. real estate. Continually growing supply of money helped ppl to pay increasingly higher prices for housing.
The increased (foreign) debt caused by rising oil prices restricted this money supply, causing ability to pay increasing prices to diminsh. At the same time: continued flooding of RE market by late speculators, rising interest rates for loans, increasing saturation of home buyer markets and continued warnings from msm about the housing bubble caused a pinch for real estate swindlers (rising costs, longer selling times, more competition, more risks).
All this combined made the psychology of the markets turn against the real estate asset class by revaluing its potential risk.
The above is probably more wrong than right, but at least it attempts to show causality.
On a futher note i dont think the bubble is truly bursted yet, just slightly deflated.
Lets not forget that global money supplies are increasing on the order of 10-15%/year. Global GDP can easily increase, even in a depression, when you have runaway inflation of the money supply.
GDP divided by a basket of commodities would be a much better indicator of whether an economy is expanding or contracting. Based upon metals and oil, GDP would have had to at least triple over the last 5 years just to break even on a true expanding economy.
The source of that data is the CIA factbook. That data does not correct for inflation, just as the US government does not correct for inflation so as to lend the appearance of larger growth rates. Any growth rate below the US rate of inflation is negative since almost all economies are directly tied to the US dollar and have to increase at a rate faster than the US dollar.
That chart fits the old maxim about "lies, damned lies, and statistics".
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
So is this not balanced by the fact that over the last 2 years the American dollar has lost an appreciable amount of it's value WRT other major world curriencies?
Marco.
I cant find where I stumbled upon it now, but if you locate the DJIA priced in anything BUT dollars, it's going down like a sinking ship. When the Fed Reserve lowered i-rates to 1%, they were in effect paying people to borrow since the irate was lower than the inflation rate. So you could borrow @ 1% (not people, but banks who then pushed it into the consumer/business/capital markets etc) and hold it for a real gain of a few percent. Crazy! If you get a chance, take a look at the DJIA priced in gold,oil, Euro's, even Franc's. It's just not going up, this is literally a blow off top all predicated on paper money. We will witness a depression far greater than the great one we know today.
I came across a point I thought was very valid as it relates to Europe and US.
Europe remembers the Weimer regime and hyperinflation so they trade unemployment for low inflation (given you buy into this trade off).
American's remember unemployment and deflation so we trade inflation for employment.
Seems reasonable.
Maybe this?
THE DOW IS CRASHING
Looking for something else and I FOUND IT....
http://www.financialsense.com/fsu/editorials/2007/0416.html
DOW priced in almost everything BUT dollars!
U.S. Wind Industry to Install over 3,000 MW of Wind Power in 2007: First Quarter Market Report
I think this may put the US in second place behind Germany.
Good start, but we've got to keep it up, there is a long way to go.
The Asia Times article Brace for a China-led Chill subtly raises a question that many are probably still not considering. Is the world economy now hinged on China rather than the US?
Recall that before the Great Depression, the US economy, while significant, was not the primary mover of the global economy. That job was mostly Great Britain's with some assistance from France and a few other European nations that were seeing the tail end of the benefits of colonialism.
However, the Great Depression marked the beginning of the fall of the British pound to be replaced by the US dollar. That the depression basically started in America and not Britain should have been telling but it was not. The world continued to focus on the pound. This all culminated in the Suez Canal incident in 1956 where the US basically told Britain to pull out of the canal or the US would (a) withhold oil supplies (US was the swing producer then) and (b) the US, as the largest holder of British debt, would dump the pound. These combined actions would hurt the US but would devastate Britain. Britain looked at the hand fate dealt it and folded.
Now we are seeing signs that the yuan may be the world's next currency, not the euro. The US housing bubble, while horrid, pales in comparison to the scope of the speculative bubble running through China today and the Chinese central bank appears to have lost control. Will a Chinese depression be the entry signal into the great financial unwinding? For many observers this is unthinkable as the dollar is the global currency. But I urge those observers to reconsider history itself and what happened the last time the world switched currencies.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Problems in china may well roil markets, just as thailand started the asian crisis a few years ago. However, for the yuan (or anything else) to replace the dollar, china or whoever would certainly have to have a larger economy and may also have to have a comparable military, neither of which will happen any time soon.
Why would they need the military? We didnt have a standing military during the interwar period. War planners created a standing army only so they could avoid the pain of draft following Vietnam. They got smart and utlized the free market.
According to http://en.wikipedia.org/wiki/List_of_countries_by_size_of_armed_forces
China has the largest military anyway in terms of people. We have the technology advantage which was the choice of Rumsfeld. I would argue the Chinese know where our satellites are and are more than willing to shoot them down should it become necessary. If not that, why not drop an EMP bomb in the heart of the ten largest cities in this country. Little fallout, complete chaos. I just don't think an Army is necessarily the same issue now.
I just got done with a international politics course and the missile technology today is crazy compared to even just seven years ago. Missiles are at parity with jet aircraft. A jet can not outrun some missiles and I'm sure the Chinese are investing heavily into it. Or even if a military mattered, why couldnt they use their FOREX reserves to buy the equipment they need from Europe, Russia? Better yet, they can sterilize the cash into Yuan and make it themselves.
Lastly on to their economy. Economists have come up with a more precise measure of economic power, you may have used it, purchasing power parity. This compares the ability of one yuan to buy a coke in china to one dollar buying the same coke in US. China is #2 and is according to the CIA, nearly 80% parity with the US based on PPP.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29
Stop discounting China. Time is FLYING by and we're all hanging on to our old ideals of what china USED to be. They are doubling their economy in less than every seven years. Parity is roughly a half decade away and they will begin to control the world economy within the next decade.
That brings up another issue. Since China is socialist/communistic (I dont really know to be honest) they have control over their economy in a similar fashion as the Plunge protection team, only they don't hide. In competition any advantage is to be exploited. If the Chinese wanted to strategically attack us on finance, they could corner a commodity market for a resource. Not that we couldn't but with central authority the ability to carry it out is easier.
Now if they were to realize they can send financial "bombs" our way, wouldn't our own government centralize more in an effort to squash the advantage of the Chinese. I realize this is explained quickly, but the premise is simple. China uses central authority over many macro policy decisions that affect world markets. USA would have to counter by becoming more centralized to minimize the advantage of central authority moving capital around the globe. I mean think about the moves they could make by simply selling something like crazy and destroying a local economy, only to leave it and watch it evaporate.
Tate, please read this and tell me how scared it makes you.
China can drop its US assets on the market tomorrow morning. Everybody says they won't, for their own sake. Yet, while it would hurt them, for sure, it would obliterate the US. And that could well be worth the price.
This won't happen. The US enjoys nuclear primacy vis a vis China: It could obliterate China with military impunity. Whereas there may be some controversy about this with regard to Russia, there is really none with regard to China, as their nuclear deterrent is really amazingly puny - it is limited to some 18 ICBMs that take hours if not days to prepare for launch, and are thus effectively neutralized as first strike threats. The US could probably take them all out with a first strike without even running a serious risk of creating a globally threatening nuclear fallout.
The Chinese know the US thus has a gun effectively pointed at their heads, and they will therefore never take any drastic steps to alter the dollar's status as the world's reserve currency.
Incidentally, the FOREIGN AFFAIRS article by Press and Lieber that discusses this, and which I have often cited in the past, is available in its entirety online, it turns out:
http://www.foreignaffairs.org/20060301faessay85204/keir-a-lieber-daryl-g...
The Chinese know the US thus has a gun effectively pointed at their heads, and they will therefore never take any drastic steps to alter the dollar's status as the world's reserve currency.
I agree that there will be no "drastic" moves by the Chinese toward the US$, but not because there is radioactive gun at their head. Why bother doing anything drastic when we're showing how perfectly capable we are of doing it to ourselves!
My original comment apparently escaped some of you or perhaps you are not even replying to me any longer. The point of the Asia Times article was not that China would do something against the US on purpose but that something would happen in China despite China's central bank trying very hard to not let it happen and this might be the trigger for a massive global recession/depression.
In other words, guys, control of events may no longer be in the government of China's hands and instead is in the hands of speculative investors in the Chinese economy.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Oh, I agree that China's economy is full of speculative froth that could very well implode, which the government hopes to contain from happening. Will they be able tho is what we'll just have wait and see. Some more shock drops like this past Feb. are likely, but will it beome a prolonged bloodbath that washes across the globe...? That could well depend upon our recession and how much it affects a pile up of unsold goods over there? Again, we'll just have to wait and see how this all unwinds.
If you check out Mises.org and look for their history of the great depression by I believe Rothbard, it details exactly what caused it, but be prepared for a book as it's free in pdf, but over 200 pages. The federal reserve yanked the rug from under people by reducing the money supply at the height. Everyone wanted to sell. Then they made it worse by reducing it even farther making it last longer than it could have.
Your article is poignant, but what I posited was that not now, but a decade from now, China will be in a much better position to challenge the US and not necessarily through military might.
Phil,
We cant seem to get great information on the people running around in caves, so what validates your claims like the ICBM's? I dont doubt it, but in the back of my head I always think there's more to it. My larger point wasn't so much centered on now, more looking to the future. They will thoroughly dominate the geopolitical sphere and reach parity in another decade. We've seen it repeated throughout history and claiming this time will be different is wishful thinking. PAX AMERICANA will give way to the new Pax Mongolica.
You're right, it's some deep stuff. However I know they have something planned. I think the last line says it all. They will inch their way forward, readying themselves to leap ahead.
If military recruitment is a model for free markets may God help us. And I don't believe in God.
Or are free markets themselves God in tateland, and casually invoked for any occasion?
Read some Econ books, I can recommend some if you would like. It was discussed in one of them, not to mention we discussed this in my international politics class and the same idea was raised in that the war planners recognized the distributed effect that conscription created, so it was far easier to manage the domestic PR when only a slice of America is pulling the trigger. Think about it.
According to the Financial Times, 05.10.07
Here are the market capitalisations for each countries stock exchange(s):
China still has some ways to at least "meet" the US's size. Although on the 9th of May it became the 2nd largest market in terms of the volumn of shares traded in a day.
Your numbers are not Purchasing Power Parity weighted. They are based on exchange values and nominal numbers. They all need to be qualified.
For yuan to become the defacto currency, china would need to be able to:
1) print a lot of new money
AND
2) export the ensuing inflation to foreign countries
BY
3) having a major resource(s) for sale that other need to buy and have to pay with yuan only
in this regard russian ruble is much better positioned, because of russia's huge oil/gas/metal resources and ability to dictate payments in rubles.
this also looks more believable if you look how much rubles money supply grew in 2006 (45 percent) without causing a huge domestic inflation.
Have you considered that the world has exported their manufacturing capacity into China. When a critical mass is reached, the benefits to kick out people who will still do business with you, becomes a bit rosier. Anything can happen for sure, but they are coming up and we're sinking.
Im on board and have some more points to fill in. Go back to Britian post WWI. They have massive debts that are being repatriated into gold payments. We still have a gold standard. The federal reserve begins to print money like mad and buying debt issued by England. The original irrational exuberance is on. Everything works hunky dory until credit can no longer be absorbed into the system. You can print and print but when people must pay to play, the game eventually HAS to stop. We are in a situation no different today.
America is the leader. China is the lender. It's time to pass the torch. I've been saying this for a while, but I'm also working on an idea in my head to determine how a US carry trade is working to China's favor and they will have the ability to restrict credit to the US without destroying their economoy. However, I feel they must lead the world through another depression which we be short lived because everyone knows how to fix them now, war. The oil wars will consume the nations and spawn untold investments into alternatives. Nothing will work as well, but there will be breakthroughs that allow us some flexibility. It just won't be AS flexible as now, just more so than we are currently staring at.
http://www.financialsense.com/fsu/editorials/willie/2007/0426.html
GZ,
http://press.princeton.edu/chapters/s6817.html
From Ben Bernanke himself.
I don't want to pull the entire paper, but I find it interesting that Ben describes the problems in the light he chose. He even goes on to say there were multiple equilibrium prices for money during this time due to bank panics that created expectations within the people. You know, I've always argued about this whole expectations within economics. If inflation is high because people expect it, doesn't the human ultimately determine economics? And if so, why do we spend so much time talking about things that are not applicable to a human. Von Mises, A Human Action spends the first 100+ pages talking about human psychology and it's an economics book!
AHHHHHH FOUND IT!!!
http://www.financialsense.com/editorials/petrov/2004/0902.html
Remember my fellow Missourian, Mark Twain, "History doesn't repeat itself, but it does rhyme."
This is almost three years old too!
The Britain/US vs US/China comparison was not my own. I think I first read comments about it at Chaos Manor, Jerry Pournelle's web site (the original "blog" if you want to think of it in those terms).
It looks amazingly similar though, doesn't it? Enough similarity that it ought to be worrisome.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
I'm amazed how many smart people don't see the possibilities, and instead get deluded by some semblance of nationalism. For what it's worth it has helped, but there's a ying and yang to everything and nationalism has it's weakness' and they're all starting to glare. Not to mention the backdrop of this board, the oil scarcity will bring this country to it's knees. Let's just look at it this way. If tomorrow WWIII started, who would manufacture the war machines?
In 1990 I was thinking along exactly the same line about Japan. Richard Rosecrance's "The Rise of the Trading State" practically demanded that we see the US as passing the torch of global dominance to Japan. So what we need to examine here is, why did Japan drop the torch? And how did it get trapped by its own investments in the US into being an even more subservient little American stooge when it should have dictated serious reforms to us?
Imagine if Japan had chosen to use its financial advantages back then to expand its power instead of standing pat. Instead of investing in "safe" US companies like movie studios, it could have spent on alternative energy to solve its greatest strategic weakness (now China's greatest strategic weakness). Now that money's just vapor. It could have built a reasonably sized independent military (our allies build militaries that are nothing more than extensions of their local American fleets & garrisons). It could have offered Africa and Latin America a better deal for development.
Somehow, Japan hesitated, and all that hot money turned into a real estate bubble and then a depression. I think the US has planned the same fate for China. Why this is foolish is: every time we sink a reasonably civilized rival to our hegemony, we create a vacuum of misery and anger in which people will turn to unreasonable alternatives. The analogy to the era you're talking about is the destruction of Wilhelmine Germany, which had surpassed British steel production in 1890 and was jousting with Britain over control of oil discoveries made in 1910 in - dig it - southern Iraq. Instead the folks who controlled the financial system tried to pass the torch to the US, which balked at the attendant responsibilities. We tried to enjoy our winnings in isolation and ended up with a depression and global trade war.
I think, though, that the leaders of China are very aware that America pulled a judo move on Japan back in the early '90s and are trying desperately to avoid the same trap. They've got to find a way to move that $1 trillion in foreign exchange before it goes bad.
If they were smart they would buy all the gold and silver they could. I read an article the other day that pointed out why silver was more valuable moving forward. The most interesting point made was the manufacturing industry that utilizes silver has depleted silver whereas gold is stored/worn as jewelry. Kodak has depleted silver used to develop film. It's gone. I figured out one time the entire notional value of the gold stock in the world. Then the financial leverage against gold in terms of money circulating was like 200:1. For every dollar in gold there was a 200 hundred bills. Now that I think about it, it was far worse than 200:1 but that seems to have stuck. Gold is natures form of exchange aka, money. We will soon be getting to know nature a bit more, but we won't like her near as much.
Many economists like Ian Gordon to name one, believes that we are in the verge to enter a new great depression or Kondratieff winter. This time the depression could be worse than the 1930 depression because of an unprecedented worldwide creditexpansion/speculation.
If theese theories proves to be right, and we really soon enter the greatest depression ever, and it lasts 10-20 years or so, then it certainly would take down the oil demand for a long time.
Theoretically a depression could perhaps take down the oil demand to match the oil production for maybe ten years or so, and give us a little moore time to mitigate PO.
Well i don´t know, but perhaps someone more in the know than i could outline a possible outcome in a great depression scenario.
Kenneth
The empire will still burn disproportionate amounts relative to the world. The people will ask the gov't to go into deeper debt to get out and hyperinflation consumes us. Prices will be bid up to levels we can only laugh at. I always found myself in wonder as a child learning about the recession/depressions and how they never seemed to happen anymore. I knew then that what goes up comes down was applicable to more than gravity.
Who knows?
But I would suggest that the one party that can crash both China and US markets overnight is the Bank of Japan.
Raise interest rates, kill the yen carry trade, POOFFFF!! go the bubbles.
They would do the world a favour if they did it ASAP, but even though US driven everyone owns a few stones of the Potemkin Village we are watching grow.
Hubbert's Peak: Is There More to Being Human?
The New Horizons probe, on gravity assist to Pluto, recently skirted past Jupiter's vast domain of moons, faint planetary rings and intense radiation belts. Beautiful images of a giant world draped in streaming cloud belts and swirling storms broader than the Earth were returned as the tiny probe hurtled through Jovian space. The robotic interplanetary explorer is traveling between worlds at a speed faster than any other space mission to date. With a 4 kilometer-per-second (km/s) boost from Jupiter's gravity well, the vehicle accelerated to 21 km/s relative to the gas giant and 23 km/s relative to the sun.
Even at a velocity that would take New Horizons from Los Angeles to New York in about three minutes, the probe would not reach distant Pluto until 2015. Eight years traveling through the cold, dark emptiness of the outer Solar System.
All the while, a growing energy crisis will continue to unfold back on the spacecraft's homeworld, the Earth. For industrial civilization, the energy shortfall marks a critical inflection point, like New Horizon's gravity assist via Jupiter, one triggered by the relentless decline in oil production world-wide, the so-called Hubbert's Peak in oil production. Oil, the lifeblood of industrial civilization. Oil is the "master domino" according to Dr. A. M. Samsam Bakhtiari, an Iranian energy expert. When the oil production domino is healthy, all the other dominos of civilization--important structures such as food production, health care, education and economies--thrive. When oil falls, the rest follow. Likely, space programs, with their delicate budgets, would crumble early. Save maybe for those programs that had military application.
Would anyone listen to New Horizon's signals in 2015?
What might happen to civilization world-wide over the course of the next eight years? By the middle of the next decade, world oil production will likely be dropping quickly. By 2020, it could be back to 1970-levels, with a resource-consuming human population well over twice what it was when people visited the Moon. And this projection assumes that above-ground factors such as war won't accelerate the process of oil production decline.
Oil wars began in the 20th century. The Iraq invasion of 2003 appears to be one of several, and this one appears to have been among the first that is a direct response to Hubbert's peak. How many more conflicts will unfold over the next eight years? How many lives will be lost to the body-rending violence from supersonic bullets and crushing bomb blasts? With the rapid ticking-away of kilometers as New Horizons travels between Jupiter and Pluto, people will fall. Little dominoes that helped prop up the vast business of civilization.
Potential nuclear conflict loomed. Such an eventuality could take away many humans, and much of the infrastructure of industrial civilization. The facilities to support space missions, such as NASA-Ames, the Kennedy Space Center and the Jet Propulsion Laboratories, might be a shattered ruin. There, indeed, may be no electronic ears waiting to receive New Horizon's distant signals from Pluto.
No more space discovery. The collection of Mars rovers would sit silent and collect a coat of ruddy dust over the decades and centuries, never to be visited by future human explorers on a grand mission to colonize space that seemed so inevitable during the heyday of Apollo. The artificial satellites that surrounded the Earth would die, become increasingly pockmarked with micrometeoroid impacts and eventually plunge back to Earth as their orbits decayed. The Hubble telescope would heat to plasma temperatures as it scraped the atmosphere on its way down, a brilliant flare that would just as quickly fade, like the very era of discovery that helped put the sensitive eye into orbit. No more extrasolar planet detection. No more soul-stirring images of stellar explosions, nebulae and the process of star-formation.
The age of peering deep into the past, of uncovering the processes that led to the creation of the Earth, life, and human beings, would be over. It seemed possible that, as future centuries unfolded, much of the information gleaned by science could become lost. Forgotten during an age of conflict. A vast edifice of knowledge, crumbling away like the World Trade Center in 2001.
What did that say of humanity? In the 20th century, our species appeared to have a purpose. People were supposedly the eyes of the Universe, probing everywhere, learning how everything functioned. Like a child peering closely at her hand, humanity, an integral part of the Universe, was in the process of learning about itself every time it explored the huge, intricate and ancient environment from which the tool-using ape emerged. With technological progress exploding exponentially during the Age of Oil, humanity's eventual expansion into space seemed like destiny. Earth's precious, beautiful and amazing life would make that next leap—occupying other worlds, reaching for the stars.
Due to an almost magical nature, oil provided the fuel for god-like thinking even despite the obviously wobbly and uncertain nature that should be expected from any structure made out of a liquid. An oil crutch. A slick and easily-obtained support that temporarily masked many of the challenges of living.
Now, as the Earth's store of oil became increasingly depleted, godhood seemed like a false promise. A dream. The energy crunch seemed to force humanity back to reality. Homo sapiens' self-proclaimed greatness appeared to be nothing more than a group hallucination brought about by an overwhelming addiction to a special, black hydrocarbon that formed over geologic timescales.
With oil depletion, is appeared increasingly obvious that human beings were just a mere animal. Of course, deep down, most people knew this. The power of oil addiction simply kept many people from considering the reality very deeply. Humans were prone to the same strengths and failings as other species. Humans are instinctual creatures, and carry within their brains a powerful program to exploit a given bounty with as much efficiency as can be mustered. This trait is critical for survival in the energy-limited environment provided by Earthly ecosystems. Like ants swarming a pile of sugar, people exploited a vast and accessible energy resource, oil, and used it up as quickly as possible lest someone else take the good stuff away. And, as the oil ran out, humanity now faced the challenging prospect of continuing without such a powerful form of energy to prop-up the species.
Without the prop, space colonization seemed a distant dream. A fantasy. Like the fantasy of utopia offered by the creation of suburbia. It seemed people were so strongly attached to the planet that gave birth to them that they would not be leaving anytime soon, if ever.
Humanity's purpose, it seems, is something other than space colonies, or the discovery of all the secrets of the Universe. The purpose of H. sap, if there is one, is probably much more humble than such grandiose notions. Indeed, Hubbert's peak appears to be screaming to humanity that there is no purpose at all, save perhaps one: That age-old task of living in the harsh and challenging realm that envelops the Earth. Nothing more. Nothing less.
In 2015, as Pluto is scanned by distant New Horizons, symbol of an animal that has a wonderful but nevertheless bounded technological ingenuity, and follows its program to send signals back to Earth, the new information may go undetected. At that time, human minds may be focused on the much more immediate task of staying alive in an environment thrown into chaos by an oil-starved industrial revolution. The probe will sail away into the vast depths of space, soon to be forgotten. And human beings will continue the struggle of survival among the complex depths offered by Earth's living shell.
The Age of Oil closes. Reality returns.
+++
Thanks for reading!
-best,
Wolf
Have you considered submitting your work to So Long, Hydrocarbon Man?
Thanks for the pointer! Just sent in a query...
-best,
Wolf
Thanks for that. It pretty much captures how I've felt for quite a few years now. We have usurped our own future by our very nature, I guess it had to be that way.
Thank you.
This subject has been on my mind for quite awhile. It took some time to figure out how to express things succinctly.
-best,
Wolf
Thanks, Wolf. I've been enjoying your writings. This one reminded me of a favorite Ray Bradbury story -- August 2026: There Will Come Soft Rains.
That's a great story! Thanks for pointing it out. I'll be keeping that one. Leave it to the masters of the Golden Age to have covered all the relevant topics. :o)
-best,
Wolf
When oil falls, the rest follow. Likely, space programs, with their delicate budgets, would crumble early. Save maybe for those programs that had military application.
I guess the weather satellites will still be in use then, what with the Air Force owning the weather in 2025.
http://www.google.com/search?ie=UTF8&q=air+force+own+weather+
I'm sure they will want to watch what they own...right?
They will own the weather, does this mean there is a 'battle" for it ' )
Ever noticed those weird "flashes" on radar. This is an archive of a site that used to collect them. The person that did this I believe from memory has passed on. Someone archived some of the best.
I draw your attention to the second one down. From 1998 However the top one is an amazing "snapshot" taken by a dedicated group of people that used to report and send them to the original site owner. Not sure if the person that is archiving these is doing that.
http://members.tripod.com/~DELTA_9/
top left corner. Do you see it, now look at the detail. Freaky freaky. there are some others that are unique also. Butterfly shaped etc.
The one (second down) though. Wow. Still get many like the top and other, but not the "shapes" that used to happen when it was first noticed.
enjoy
Quid Clarius Astris
Ubi Bene ibi patria
There's been some discussion regarding energy-efficient housing over the last few days, so I thought I'd mention that my wife and I will be spending a week (starting tomorrow) learning how to build a house using cob. It's a hands-on class in which we'll raise the walls, learn plastering, and begin framing the roof of a small cottage intended for a couple and their two small children. For those who don't know what cob is, it's a mixture of clay, sand and straw that is similar to adobe. The main difference is that instead of forming bricks, one simply forms the entire wall (usually 2-3 feet thick)and lets it dry in place.
Ironically, we'll be building this dirt-cheap, low-energy structure on a farm about fifteen miles from Cushing, Oklahoma. I'm curious to see how the massive walls function in this climate; they're usually found in either arid (U.S. Southwest) or moderate (Devon, England; Pacific Northwest) climates. I'm concerned that they'll store too much solar energy during the summer months and make the house unbearably hot at night. Although the cottage won't be finished this week, I plan on visiting later this year as the owners get it dried-in to find out how much cooling is necessary.
For more information on this building technique, see here.
Also here.
A related home building technique/material is Rammed Earth.
Although the insulating properties of these natural materials is low, the thickness and high thermal mass can work to your advantage, depending on nighttime temperatures in the summer. Also, the house can be designed such that roof eaves shade the walls from the summer sun but not the winter.
Tsulio
Thanks for mentioning this. I'd be very interested in hearing about your experiences this weekend. Please post an update.
Thanks
Shawn
for the weather hounds,
Last night at 11:00pm, the National Hurricane Center discontinued advisories on Subtropical Depression Andrea. At that time is looked like Andrea was done and likely to just spin itself out. However, this morning is showing a different picture. A renewed burst of convection near the center of circulation is raising the possibility that Andrea could return from the dead... and more tropical than before!
www.thestormtrack.com for photo's etc.
There was also a "rain pattern" over the Midsouth yesterday I have never seen before. Center of the circle mostly over ARK. and with rain to South MO. North LA. West TN and W Ar,E OK.
A round circle of rain maybe 60 miles "thick". with the inner part dry. It (the rain) didn't move in clockwise or counter cw motion. it moved or drifted is a better word seemed to be mostly stationary areas of rain that built, fell apart, and reformed, it, had some strong lightning and heavy downpours in areas. Lasted all day long like that, and fell apart some time last night.
Quid Clarius Astris
Ubi Bene ibi patria
I have been seeing the same thing since this winter...huge cyclonic storms perhaps 4 states wide dumping snow and now rain (there was one at the beginning of the system that resulted in flooding of the Midwest last week). It doesn't happen with every storm system, but there are definitely large rotating systems moving over the US this year. Curious to see what happens with this pattern of storms if there is more heated energy thrown in. Does anyone remember the Pacific hurricanes off the coast of western Mexico last year? Those ended up going fairly far inland.
Why does my imagination keep thinking of the large eye-like storm on Jupiter? Hope this ain't our future.
I know what you're referring to. Looked like a "land cane" so to speak. Huge counter clockwise circulations. Though the pattern yesterday was not this. It was small basically a circle around Arkansas, with say little rock at the center. It Did not rotate. There wasn't a low in the center. Just a round circle of heavy rain and TS that just sat in place. They would drift and fall apart, then reform in the same areas. I grabbed a couple of images from TWC at different times. Others mentioned it also, they said the same thing, they don't recall seeing anything like this. It was a round circle, like one wag pointed out, right over the Madrid fault area.
No update on thestormtracker.com site..
The Pacific and typhoon season last year was a wing dinger. Most Americans think that last year was mild because of no hurricanes. Not so, there were some huge destructive typhoons, above average number I believe also.
Quid Clarius Astris
Ubi Bene ibi patria
Re: typhoon season. Not particularly unusual in storm number or number of supertyphoons. But an unusual number did seem to make a beeline for the Philippines, which took a beating. South Pacific was unusual in that the storms skewed west (hit Australia).
If both PO and Climate change are in fact going to rear their heads together for us, I hope people are considering ways to use the absolutely wild amounts of energy that may be unleashed to our advantage. The Windside company in Finland produces Vertical Wind Turbines that can be made storm-tolerant. ( www.windside.com )
They make some claims about the advantages of Verticals and 'Savonius' turbines, including power output advantages of not losing precious seconds in having to reorient into changing gusts, lower 'tip' speeds hence less or no danger to wildlife and material degradation, less tower 'torquing' than Horiz systems, and cheaper overall installation requirements due to decreased equipment stresses and the better utilization of variable, lower-altitude winds.. Can't attest to the claims, but there does seem to be a lot of sense in much of the approach. As Alt energy goes, I tend towards the 'Slow and Steady wins the race' approach.
Bob Fiske
Hmmm...harvesting the energy in a hurricane or tornado would be beneficial...now...let's get to work on those 30 mile props to put on the turbines.
I think a 30mm prop would probably spin fast enough for my purposes during a heavy storm. (Understanding the intended Hyperbole)
Still, Lotsa little ones and you've got a heavily paralleled system. Think modest verticals on everyone's rooftops.. Together, they give you that 30 mile reach, but it doesn't compromise much if even a couple hundred rooftops are ripped off.
Can Technology Save Us?
Can improved car technology out run declining oil production and keep our standard of living the same?
I built this spreadsheet to examine that question. Each curve is an oil decline rate, from the 2% assumed for world decline (taken from the Portland Peak Oil planning document) to 8% for UK north fields, and up to 16% for the Mexican export decline last year.
The Hirsch curve was taken from the Hirsch reports recommendations for a crash program to improve vehicle efficiency. This assumes that the average US vehicle is a 41MPG hybrid in 20 years. The bills before congress right now are not this aggressive.
Assumptions
US Vehicle fleet starts with an average of 20 mpg.
Miles traveled stays constant (no change in standard of living). Exact number is not import for this calculation, but I used 12,000.
Population is constant (no new drivers).
Analysis
If the decline is very slow like 2%, then currently known technologies could meet demand if the US fleet is forced to be very efficient (consumers pushed into hybrids ASAP).
If the decline is 8%, then the decline quickly outruns current car technology. An 8% decline requires most US drivers to ride scooters in just 20 years. Needless to say, large scale drops in miles traveled are the only solution.
At a fast decline rate of 16%, the MPG numbers grow huge. So huge they shoot off the graph to 650 MPG in 20 years. This kind of MPG is only possible for a subway or light rail.
Conclusions
First, the US should back some form of Decline Protocol to insure we don't lose oil supply at a 16% rate (Export land style)
Second, we should be pushing light rail and subways for anyone willing to ride them. And focusing on TOD to reduce the needed miles.
Third, if the decline is going to be quicker, we need a policy to get tiny 60 MPG vehicles into production now, so they are a sizable portion of the US vehicle fleet in 15-20 years.
How Much Reduction?
The Hirsch crash program for vehicle efficiency could help us cope with decline (it essentially puts everyone in a Prius in 20 years).
How much less driving would we need to do to make up the difference?
This chart examines several decline rates and shows the reduction in driving needed. All curves factor in the crash vehicle efficiency program. No added drivers are assumed (zero population growth).
As can be seen, low decline rates mean that some room opens up for more miles to be driven (meaning some room for new drivers).
At an 8% decline rate, miles traveled will be cut in half in 20 years even with every person driving a hybrid. Clearly, demand will outstrip supply despite the improvements.
At 16% there is not time for anyone to get into hybrids. A better solution is to skip the Prius and buy a tent, because at 2000 miles a year, you will need to live at your place of employment (driving range = walking range).
The us decline is 2%/y, and internal production still accounts for 35% of consumption.
Mexico, with a very large population, is not typical of all exporters. Russia, a larger exporter, has a much lower internal growth rate. SA has a high growth, but on a much lower base.
IMO 6%/y might be about right for the US.
Then, if cars last 10 years, and we therefore replace 10%/y of our current fleet with prius type new cars at, say, 60mpg (net gen due fall 2007), or alternatively with equivalent diesels, this move by itself will reduce consumption over 6%/y. However, just as high price pushes consumers towards efficient cars, they will also be pushed to carpool. Carpooling is still relatively popular in dc and the northeast, but there was a time when most car pooled because employers were pushed by the gov to restrict parking to those who pooled. We will see many such moves past po, including scooters, bicycles and walking.
Auto replacement is pretty slow actually. Cars last 15 years. And people don't always purchase the highest MPG vehicles on the market. They are not looking 15 years down the road and saying what will the price of gasoline be then? (Cheaper! says Exxon Mobile).
Hirsch report here
http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
The giant oil fields report was predicting a drop of 6 to 16% decline. And that does not factor in economies competing for exports. The UK will be drawing at 8% now heading up to 13% over time.
We need a "standardized" depletion model we can use for forecasting.
The reason for the second graph was to estimate the amount of conservation needed. At 8% half in 15 years, and at 16% most in 15 years.
Actually, one of our cars is a 17 year old Honda Civic with 175K miles on it. Still running fine, probably has several years left. And we are the original owners. My other car is a 12 year old Subaru with 195K miles. I plan to keep both cars for a few more years. I'll probably replace the Subaru first, and probably with a 3-6 yr old VW tdi. I'll then probably keep that until even biodiesel is unavailable or I'm dead, whichever comes first. The Honda will eventually be replaced with a NEV.
We're able to keep these cars going so long because we live in a relatively mild climate, live in a small town, and have daily round trip commutes of only 4mi & 7 mi respectively. The total miles we put on both cars each year is far less than the average that is put on ONE US car annually.
A lot of energy goes into the making of cars and disposing of them. There is a lot to be said for owning them until they are just about ready to die. Reliability? These cars are all for local transport, not to exceed 100 mile radius or so. If we have to go farther, and Amtrak is not an option, then we rent a car for the trip. Do the math, it really is a more economical approach than buying a new car every three or four years.
Of course, if everyone in the US followed my example, GM & Ford & Chrysler would all be dead by now. . .
So would Toyota: My two vehicles are a 1980 & 1986 Toyota trucks, the 1980 has a little over 200 thousand, and the 86 has 168 thousand. I do my own service, and I really don't see any need to replace either one of them. I also own a 1967 Volkswagon camper van, that I wouldn't hesitate taking across country. It just doesn't get that good a gas milage, and it would cost me a fortune to do it. -:)
The Hirsch report says At normal replace rates, consumers will spend an estimated $1.3 trillion over the next 10-15 years just to replace one-half the stock of automobiles.
If we can double or triple our replacement levels then we'd replace one-half the automobiles in only 5 to 7 years. The A123 converted Prius gets 30 miles on all electric power. Considering the average driver goes 41 miles per day then this is a 75% reduction in fuel use. According to estimates, there will be 5 million standard hybrids on the road by 2010. There will also be an increasing number plug-in hybrids. And, there will be some all electric vehicles as well.
The bigger point is this -- once vehicle replacement levels begin to ramp up to a level that presents a credible challenge to oil dependency, OPEC will begin to see the end. OPEC may decide that they'd be willing to control oil prices in order to achieve some "after oil" benefit -- such as construction of solar farms.
It's not very popular here in TOD, but I believe that technology will save us.
Time is the major problem. Time needed to change.
Hirsch dismisses accelerating replacement by payout. It is 1.3 trillion per half stock. That is a lot of money to borrow. High mileage vehicles are not the only ones for sale. Did Prius sales out run SUV sales last year? By 10 to 1? By 100 to 1?
The other point is that where will the electrical power come from for plug in hybrids? Natural gas is in decline.
It has been argued that coal peaked in energy content produced per year (lower and lower quality coal).
At what rate will new Nuclear come on line? Wind and PV are not growing at the rate oil is declining. So if we shift cars into electric consumers, then people will need to give up something besides travel distance. Lights? Refridgeration?
If the decline is faster than 3% people are going to have to do without. And that means major changes to the city structure and economy.
Don't get me wrong. I believe cut backs will come -- and a very bad recession.
The more important point is that the technology that will save us *already exists* and simply must scale up. Also, I'd disagree about Wind and PV/CSP -- what growth rates are you using for these?
Wind growth rate of 25% on a US installed base of 11.6 GW (thousand megawatt). Assuming that rate can be held it will deliver 4.6 million barrels per day equivalent energy in 20 years. We will just ignore the steel needed (limiting rate of rate of growth) and declining site quality.
At the 8% decline rate we will be down 17 million barrels per day from current consumption in 20 years.
So wind will not meet that need. And we have not factored in the decline of natural gas or coal.
It is possible I have made an error in calculation. Again, the US should be putting a Depletion Protocol into place to limit the fall, plus be mandating rapid changes to very small efficient vehicles.
Again, it is an issue of a huge system needing to turn fast.
Here's what I got: wind 3000MW (US) in 2007 and a 26% growth rate, PV solar 2000MW (World, assume 25% of this US going forward) and a 41% growth rate (although the biggest companies seem to have polysilicon agreements that would allow for over 100% growth rates for the next few years -- e.g. SPWR, ESLR, STP, FSLR-thin film). Also, SES is building a CSP solar 500 MW installation all by themselves (growth rate cannot be determined).
So renewables could be adding over 12,000 MW per year in the US in 2012 (not counting CSP) -- the equivalent of 10 new nuclear power plants PER YEAR and growing. Also (as Nick has pointed out) electrical motors are 3 times as efficient as engines. Converting this (using the A123 Prius 5kWh, 14 mile range and average driving) gives us 840,000 vehicles each year completely powered by renewable energy in 2012 (2.9 million accumulated, and in 2016 at the same growth rates 2.46 million per year with 9.6 million accumlated -- a point at which we would be adding 10x as much per year as we are going to add in 2007). Not bad. We can hope to do even better if we have a growth rate for CSP.
Of course a lot can happen in the oil patch in the next five years.
W: There is a minority on TOD that feel this will all work out. IMHO, there is no necessity for the average American to travel 41 miles daily. Eventually Americans will have to live in urban settings close to their place of employment. This will entail a structural upheaval, but there is no magical "wealth effect" created by simply driving 41 miles. As Kunstler notes, the American economy developed around suburbia but the suburban growth model is not particularly efficient nor does the end of suburbia indicate or lead to the end of economic growth.
For those of you who have access to Oil & Gas Journal, there is a new mathematical model of peak oil in this week's issue. Mathematical model forecasts year conventional oil will peak.
The authors, Steve Mohr and Geoffrey Evans, reject other models.
I'm sorry, but the new model is bit too convoluted to explain here -- even if I understood all the math! Suffice it to say, there are two scenarios.Figures 4a and 4b
Click to enlarge in new window
As you can see, their model requires an estimate of the world URR as an input. Their Scenario 2 is very unlikely because, contrary to the discoveries trend, it requireslater, have a good one,
Thanks Dave, it looks very interesting.
And then there are the above-ground geopolitical factors that will in all probability prevent these theoretical peaks from ever being realized. Thus the scenario 1 2012 peak could actually become more like 2009, or 2007, or 2005.
If somebody has access to the pdf, I'm interested :).
Khebab@TheOilDrum.com
for those two new giant fields of 100 billion barrels, try this:
www.netl.doe.gov/publications/press/2007/PrinterFriendlyHTML_1_104267_10...
Release Date: May 9, 2007
DOE-Funded Research Opens Way to 218 Billion Barrels of By-Passed Domestic Oil
Novel Computer Modeling Tools Make Recovery Accessible to Small Producers
WASHINGTON, DC - A joint venture in technology development between researchers at Texas A&M University and the Department of Energy has produced a new computer tool that will increase recovery of up to 218 billion barrels of by-passed oil remaining in mature domestic fields. The nation's current proven reserve is 21 billion barrels.
The developed technology has already been adopted by two companies. As a result of widespread interest in advancing this technology, A&M researchers have an on-going industry research and development consortium funded by eight oil production and service companies, and won a grant from the National Science Foundation.
The groundbreaking Texas A&M technology was developed in a project managed by the Office of Fossil Energy's National Energy Technology Laboratory which provided the research funding for this effort. Total investment was $890,000 with the government share of $630,000 and the university provided cost-sharing of $160,000 for this 3 year research project.
This approach adapts sophisticated computer modeling to the personal computer, using "Generalized Travel Time Inversion" technology. The developed software makes reservoir modeling capabilities feasible for small domestic producers. It will save time and money in predicting the location of such by-passed oil and in planning its recovery.
More than two-thirds of all the oil discovered in America to date remains in the ground and is economically unrecoverable with current technology. About 218 billion barrels of it, a volume approaching the proven reserves of Saudi Arabia, lies at depths of less than 5,000 feet. This by-passed oil represents a huge target for the roughly 7,000 independent producers active in the thousands of mature U.S. fields which cumulatively account for a significant share of the country's crude oil supply.
Much by-passed oil lies in difficult-to-access pockets. Predicting the location and size of these elusive, compartmentalized deposits is costly because it often requires complex computing capabilities. Many independent producers aren't able to commit the personnel or buy the expensive supercomputer time required to build and operate the models needed to find and produce these overlooked stores of oil.
The A&M research effort engineered a cost-effective way to streamline computer-generated reservoir models. It provides significant savings in computation time and manpower.
Reservoir characterization identifies "unswept" regions in these mature fields containing high oil or gas saturation. In this process, geoscientists first employ computer models to develop an accurate picture, or characterization, of a productive oil reservoir. "History matching" is then used to calibrate the model by correlating its predictions of oil and gas production to a reservoir's actual production history.
A key input to the history matching process is data from tracer tests, in which traceable gases or liquids are injected into a well to determine the paths and velocities of fluids as they move through the reservoir. This information helps reservoir engineers calculate how much oil remains in the reservoir and determine the most efficient methods to sweep this residual oil from the reservoir.
In the Texas A&M project, researchers developed a novel, computerized method for rapidly interpreting field tracer tests. This innovation promises a cost-effective, time-saving solution for estimating the amounts of remaining oil in bypassed reservoir compartments. The new method integrates computer simulations with history matching techniques, allowing scientists to design tracer tests and interpret the data using practical PC-based software - a process that is much faster than conventional history matching. The cost and time savings coupled with the streamlined model and accessible PC-based tools make the technology feasible for small independent producers.
This assumes:
1. That the technology works as advertised in the vast majority of cases; and
2. That all of these "unswept pockets" of oil can successfully be identified and produced at a rate that can replace the declining super giant fields.
I think that #1 is being optimistic and #2 is being wildly optimistic. What this technology very well may do is stretch the tail out further, extending the peak and slowing the decline. If so, great! But if not then what?
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
just another taxpayer supported boondogle.
Thanks Dave, for posting this. Those of us who do not have a paid subscription to The O&GJ appreicate all the input we can get.
Looking at the data they show current production at around 30 billion barrels per year so that has to be all liquids. Here is the very important point about this graph. Well, at least I believe that it is. In scenario 1 they show OPEC production continually until about it reaches about 18 billion barrels per year around 2040. Assuming an average of 15 billion barrels per year over that 32 year period, that is a production of about 480 billion barrels before they peak.
Now clearly they do not believe that OPEC peak will happen at 50% of URR because they show a sharp decline after that point. But assuming that OPEC will produce another 220 billion barrels after peak, that means that OPEC still has 700 billion barrels of reserves.
No biggie here because that is about exactly what they claim to have. But assuming 400 billion barrels already produced, this put OPEC peaking at 80% of URR. For some reason that just don't sound right.
However, as I have expressed many times before on TOD, I don't believe those vast Middle East reserves are real. All OPEC probably has between 300 and 400 barrels of reserves, about half of what they claim. Which means they are peaking right now, or more accurately peaked in September of 2005, at about 50% of URR.
Again, just about everyone's scenario takes those vast Middle East reserves for granted. It will be a bombshell exploding in the financial markets when it is realized that these reserves, or about half of them, are mythical.
Ron Patterson
Ron --
Read what the authors say about reserves. Note
their remarks on OPEC, and especially Saudi Arabia
Thanks Dave, this is a real eye opeaner. According to this chart OPEC has 68% of all oil reserves. This is by far the most realistic estimate of reserves I have ever came across. Of couse that is only my opinion and may be entirely incorrect.
But it is important to note that they have Saudi Arabia and Kuwait at slightly less than half what they claim to have. The reserves shown here are only slightly less than what Iran and Iraq claim to have. (125 and 115 billion barrels respectively.) They have Venezuela at about two thirds what they claim. (77 billion barrels.)
I still think 619 billion barrels of reserves is way too high for OPEC though this estimate is far closer to the truth than anything I have read before. Well, at least that is my humble opinion. Their estimates for FSU and the rest of the world are truly realistic. (Another humble opinion of mine.) ;-)
The comments about Saudi Arabia are very interesting. Also, doing the numbers here, they put total reserves at 910 billion barrels. This puts us well past 50% of URR.
Ron Patterson
Hello Dave Cohen,
Attn: F_F, SS, Euan, and other TopTODers
I just found this interesting SPE article [but I am not a member]:
http://updates.spe.org/index.php/2006/12/14/gagd-process-works-with-natu...
---------------------------------------
GAGD process works with nature to improve light oil recovery
----------------------------------------
It has cool graphics and an easy to understand writing style. It appears that they are about to move from the lab to a real test in the field. Does anyone know if this is being tried in KSA or OPEC? Could it help explain gas-injection programs and MRCs in North Ghawar? Thxs for any reply.
Okay, back to googling to see if I can find more info.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Very cute that the first item, Venezuela, has a note that heavy-crude is not included.
Greg Palast: Internal US Department of Energy analysis (I got my hands on it for BBC; it's in the book) shows that Venezuela, not Saudi Arabia, has the largest reserve of crude. That's a geo-political earthquake.
Can anyone reject this with some credibility?
What they are talking about here is the Orinoco Bitumen. Very similar to the Alberta Tar Sands. It is not oil in the sense that you can pump it out with a well. It must be mined.
Not really. Just like the Alberta Tar Sands, there is a limit as to how fast this stuff can be mined. Right now none of it is being turned to diesel or gasoline or any of the products that you normally get from crude oil. What they are doing right now is mixing it with 30% water and using it as a boiler fuel. It is called Orimulsion.
If you count bitumen as oil then both Canada and Venezuela has more oil than Saudi Arabia. It is no big secret. The amount of bitumen in the Orinoco basin is common knowledge in the oil world.
Ron Patterson
Darwinian-thx your data on Orinoco. Comes to mind now that Venezuela has ample water and labor to process their heavy, and it is notable that Chavez claimed it would be profitable if there was a $50 price floor to justify the enormous investment.
Perhaps he was talking aloud to any takers...such as China, Argentina, India, etc.
Dave,
I think that the authors estimate of Saudi Arabia's remaining reserves is still far too high.
The 1979 report "UNITED STATES. SENATE. The Future of Saudi Arabian Oil Production : Staff report to the Subcommittee on International Economic Policy of the Committee on Foreign Relations, United States Senate. 96th Congress, 1st Session" states:
That means that the 130 Gb should be reduced by 60 Gb (170-110) to give Saudi Arabia remaining proven reserves of 70 billion barrels as at end 2006.
The abstract of the report states further that:
Two decades have now passed since the report was written.....
References
http://72.14.235.104/search?q=cache:U_uYRGHQNEYJ:antiqbook.com/boox/stro...
Matt Simmons "Twilight in the Desert" pp 377-384 Appendix C - "The 1974 and 1979 Senate Hearings - The Smoking Gun"
http://72.14.235.104/search?q=cache:lcNfhFcPAJEJ:www.osti.gov/energycita...
More above ground factors...
GDP growth and creative bookkeeping
The US economy is falling into a deep dark vortex, while media and politics desperately try to keep coming uo with something positive, because that is what sells and what garners votes. Their message no longer has any link to reality, though. US GDP growth over the past decade is nothing but a fairy tale. And in this one, the ugly witch gets to eat the children in the end. It's the adult version.
Want to know how bad the housing bubble really is? The official version still talks only about subprime loans, but that by now is an outright lie.
The no.1 US builder of big homes reports a 19% earnings drop. Yet, only 2% of their business is in the subprime sector. Is this clear enough, or do we need more time to think about it??
Yeah, sure that's just real estate, right? The economy overall is much bigger, and we have GDP growth and all.
Well, not exactly. This week's US retail figures should have everyone running for the exit. If not now, how much proof do you need?
Still not convinced? Mike Shedlock does an update on job losses....
Gap, Citigroup, IBM, Intel, and that's just a daily snapshot.
It’s over, guys, it’s gone, it’s pushin’ up the daisies.
The system itself CAN'T survive for long in this sort of climate, the tolerance for decreases is very limited, that's a quality inherent in the way the system was built and works. It stops functioning.
What'll we do? Watch this video:
Amerikan Lullaby
IMO, a lot of Americans have maxed out their credit cards, and they can't borrow against their alleged "equity" any longer.
Two types of Americans: (1) Those who now realize that we have to reduce our consumption and (2) Those who will realize that we have to reduce our consumption.
Even without PO, the average American's standard of living had nowhere to go but down. Globalization would see to that. The Greenspan Fed's easy-money policy was nothing but a smokescreen to hide that fact. Can't increase their wages to keep up with inflation? No problem; we'll just make it cheap and easy to borrow money, then keep reminding the average 'Murrican that as a homeowner, he/she is getting richer by the day.
I'm a homeowner. Know what I got out of the run-up in home prices over the last five years? A doubling of my property taxes. Oh, and now your home is worth twice what it was 5 years ago? WELL, we need to raise your insurance rates then, too, don't we?
How stupid can we be?
Economists like to come up with fancy theories about cyclical markets. But all that is just bogus. What we are witnessing and experiencing is a linear system, not a cyclical one.
There's no brakes, no reverse, and the indebtedness at all possible levels, from credit cards to mortgages, and defense budgets to Medicare, guarantees there is no recovery possible.
It will crash, and it's getting awkwardly close to doing just that. "Coincidentally", this happens at the exact time that it runs out of physical (oil) energy.
Target practice: take all the economic data and then throw in $5 a gallon gasoline. See how that feels.
It's time to look at your families and wonder if you can keep them safe without that job you have now.
Add to this the utter BS thinking in America that China's rising energy consumption is thier fault and the problem! I have seen CHINA STEEL on pipe for at least 10 years. Coupled with computer cases, clothing, and a huge assorment of needed and unneeded items made from plastic I would say importing countries like the US are in lala land. We (consume) (import) more oil and oil related products than ever before, plus our own consumption, and lets point the finger at China.
The (christian right)leader of the largest country in the free world tells people to go shopping for the holiday's? How far to we stray from our spiritual roots that this is OK? It comes down to shopping...go shopping. Get a picture taken of your dog with santa for the holiday's. Consumption is 76% of GDP? GDP based on doggie pictures? I bet I could find someone who would like to eat thier dog for food. Is it any wonder why the radical muslims hate us? Americans need to be bitch slaped for being so delusional. Maybe its the bottled water, I don't drink the stuff.
I bet it last longer than we believe it could. I still believe we might have something left for this summer before it begins its fall down. Although from the activity in the pits today, I dont know if it's not happening now. More and more stocks are being left behind when the indices rise. When you pull the DJIA into it's componenets, only a small minority are holding the numbers up and if you look really close you'll see in the daily charts of the past MONTH, at 10:30 a GIGANTIC bid gets put in and the market rises. Hmmm?
Ive read that 23 of 26 trading sessions went up. That hasn't been seen since the 29 collapse. I surmise the 29 collapse is half as bad, so I believe we could see another month of April before this thing lets go. It's hyperparabolic and as the dollar falls it only serves as a PROP for the market since the dollars underpin the market and become cheaper. Then again a cheaper dollar means increases to asset classes across the board, save for maybe housing.
You can add Sprint/Nextel and a large, privately-owned greeting card company based in KC, MO to that list.
As tate423 says: "I bet it lasts longer than we believe it could."
While I agree too with HeIsSoFly's overall take that "It's over guys, it's gone, it's pushin' up the daises," I suspect this epitaphic take about how "The system itself CAN'T survive for long..." underestimates both the length of time and the herculean efforts that will be (and are being) undertaken to prop up, manage, manipulate even, and prolong *the system.*
The diagnosis is indeed terminal; but we have a ways to go before *the system* is given up for dead. The stakes in it by all the world's biggest players are too large to allow for it to fail; at least not yet.
This is not to deny that the US citizenry aren't already tumbling into a recession, and then a depression. Nor that there are not a huge array of systemic risks and potentially surprising shocks that could unwind at any moment.
Still, notwithstanding all this and even how much more difficult it is becoming to keep the erratically spinning plates from crashing to the ground, I think we will be surprised by how long they (TPTB) hold it together.
I've mentioned this before, which GreyZone's up-thread comments upon China's new economic weight/might reinforces, and that is that the Chinese are still very committed to hosting the 2008 Olympics, and everything else related to their new manufacturing power. There is a whole lot of can-do pride built into this whole global showcase of themselves. Both China and Japan too has a lot of interest and reason at this time to try and help keep afloat the system, and by default the US dollar -- even if they can't rescue the US people now sinking into debt ridden recession.
So, for sure just about everything connected to the deteriorating US situation and the global economic system is at risk, but I do suspect that if *the system* can be kept on life support 'til sometime after the 2008 summer olympics I'm betting that's exactly what will happen. After that, all bets are off. That's when I think the real show gets underway, whereby PO, Climate Change, and Economic meltdown all merge into one huge elephantine clusterfuck.
Oh boy, won't that be fun.
I been feeling more and more like 08 is the year too. WIth so many over arching issues like olympics (national pride) vs american elections the end of the war. We could go on and on, but it seems like next year is the real problem year even though we'll look back and realize the end of 06 was the recession beginning's.
World Oil Article on the Barnett Shale Play
(IMO, nonconventional gas in North America is to total gas production in North America as nonconventional oil production is to total oil production worldwide. In other words, exploding costs are a big, big problem.)
http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3171&MONTH_Y...
The short version: today's prices are JUST NOT HIGH ENOUGH for businesses to see bringing new supplies to market as a good investment.
We are already seeing sharp reductions in drilling rigs in Canada.
Just today I read Alberta won't happen based on current water supplies. They are running out of water to use. I'll see if I can find the article.
Pssst. The article you mention is linked in the first comment in this thread.
Nothing knew for TODers: http://europe.theoildrum.com/comments/2006/11/18/93514/869/14
Just today I read Alberta won't happen based on current water supplies. They are running out of water to use. I'll see if I can find the article.
According to the Chesapeake Energy conference call (the largest Barnett shale producer, I believe) they are already seeing 15% reductions in rig day rates and frac jobs, and other service costs declining thru 2008.
Also of note in the CHK call, McClendon said [paraphrase] that "nat gas in NOT in scarce supply in the US, lots of gas is locked up in shale and other unconventional locations" -- (he may have said "enormous") which represents a reversal of his opinion of a few years ago about nat gas supplies.
Also also, their West Texas play is 100 miles long and 30 wide
CNN is running a little "gas gauge" thing every morning, checking up on gas prices. Today they also had a story about how high gas prices were forcing small gas stations out of business. They interviewed a man in Brooklyn who had decided to stop selling gas.
The transcript is here; search for Goldsmith (that's the guy's name). He can't match the prices of larger stations, and as prices increase, people become more conscious of that.
He also complains that customers get mad at him, but he's not making any money. He blames the oil companies:
Then the anchor asks if it's possible all the gas stations in the neighborhood will close.
I've been seeing a lot of this kind of story lately. The small, indepedent gas stations get hosed on fuel prices. The gas stations that are connected to an oil company get better deals; the independents often have to buy at spot market prices. So a lot of them are closing. They make their money off other businesses, like convenience stores and repair shops instead, or close altogether.
Most of the stories I've seen have been rural areas. (One station that closed last year meant the residents of the little town had to drive 40 miles to the nearest gas station.) But I guess it applies in big cities, too. Kind of like "food deserts" - places where there are no grocery stores. Most are in rural areas, but some are inner cities.
It's true that the little stations are having a difficult time, but I am also seeing some of the Big Oil ones close down "extra" stations, especially BP stations in the KC metro area....not sure why.
The small retailers get killed mostly because they have no (or very minimal) convenience stores. That's where the real profit is.
All you have to do is watch the people, even the 300# ones in Expeditions on their way to the welfare office. They all whine about the cost of gas, but they all buy their chips, overpriced junk like Red Bull or $2.00 quarts of water.
And then they charge it on a credit card.
We are still lower than 1980:
Gasoline prices 1918 - 2006 inflation adjusted:
http://inflationdata.com/inflation/images/charts/Oil/Gasoline_inflation_...
How about inflation adjusted average income since 1980? Does anyone have more infos?
With these 2 infos we would be able to figure out, when this so called demand distruction could be take place.
Thanks.
From here...
http://www.census.gov/hhes/www/income/histinc/h05.html
I get $17,710 as the median income in 1980 in 1980 dollars. Then I plug 17710 into here....
http://www.minneapolisfed.org/research/data/us/calc/
and I get $44167. Using the same table as the first link I see median income in the last year reported (2005) as 46326. Looks like were ahead a bit on paper. We've got aways to go. More like $5 gas not $4 for sure. Then again if we begin to get more layoffs, this median might come down just as prices continue their climb.
Even tho gas is near the inflation adjusted price you show,
a) we spend a smaller portion of gdp on gas now than then.
b) inflation is probably higher than the official version, meaning that in 2006 dollars the 1980 price was probably much higher.
Nevertheless, we may be approaching the point where price is high enough to push us into recession given the concurrent housing crisis. Yesterday's store sales data may be showing that consumers are finally cutting back to accommodate high fuel prices, and this is fairly ominous. What recessions do is usually to increase the savings rate, which is now negative...
Gasoline prices 1918 - 2006 inflation adjusted:
http://inflationdata.com/inflation/images/charts/Oil/Gasoline_inflation_...
How about inflation adjusted average income since 1980? Does anyone have more infos?
With these 2 infos we would be able to figure out, when this so called demand distruction could be take place.
Don't hold your breath while waiting for the demand destruction to kick in.
Quoted from an article I came across last year:
http://www.cato.org/pub_display.php?pub_id=6440
Article includes graph of gas peices adjusted for inflation and dispoable income.
http://www.cato.org/images/pubs/pub6440.jpg
Your link is broken, maybe caused by some line break. See the correct link here
And no, you can't 'see' when or where demand destruction is going to set in. It will be a long term development, 'visible' only in the 'rear mirror' after a long time.
Demand destruction in some cases starts to become visible now - for third world countries.
Obviously the Cato Institute's figures on increase in disposable income are bull. Consider Tate's post just above:
"From here...
http://www.census.gov/hhes/www/income/histinc/h05.html
I get $17,710 as the median income in 1980 in 1980 dollars. Then I plug 17710 into here....
http://www.minneapolisfed.org/research/data/us/calc/
and I get $44167. Using the same table as the first link I see median income in the last year reported (2005) as 46326."
There's no way in hell that disposable income has doubled if median income has only gone up 5%.
What's changed is personal borrowing. Debt is not disposable.
BINGO...we got some smart ones round here. We simply do not save until we can pay cash. That got tossed out the window with zero percent financing.
< small-letters > For those who qualify < /small-letters >
I just finished watching the documentary 'future of food'
despite the upbeat ending, i get the nagging feeling we have already killed ourselves. the pain just has not reached our brains yet for us to know it off hand..
Ruminations outside the garden,
(read your book UnrepentantCB and thus my title)
BTW fella why did you just keep hacking and hacking at that stony Texas soil? Repentance? Hell of it? Why one wonders.
Ruminations:
Someone asked me in an email about the annual rainfall where I live. I checked it out and am in the blessed very dark green band. This is akin to 50-60 inches per year. So I took a look at Texas and saw that the 'white band' cuts it right down the middle. From the white band westward it appears folks are in bad shape for rain. Approx all west of the Mississippi but Arkansas, S. Mo. and Louisana get reprieves.
So twere me and I were Tontoneila I would get the hell out of those bad orange areas.
Here is the URL for the patterns:
http://www-das.uwyo.edu/~geerts/cwx/notes/chap17/us_precip.gif
Dated up to 1990. I tried in vain to locate data regarding climate change activity on the patterns but could find none.
Problem here is sometimes we have a little too much rain however we have never had a drought as long as I have lived in this area or known about it. Also being in the western area of Ky we get a 2 uptick on the planting zone vs the rest of the state. I once had a farm in Lexington as well and found that here we are about two weeks ahead of the middle of the state in planting and harvest.
"ThatsItImOut" wrote of gas costs for a 40 mile roundtrip commute. I find his exposition to be seriously flawed.
I used to commute from downtown St. Louis to about 30 miles south to Jefferson County. It was freeway most of the time but my costs were never as stable as his were and I was sometimes driving a VW beetle. First was getting out of the city. Stop and Go. Stop and Go. Traffic light after traffic light. Then I-55 and alwasy construction, always a parking lot until Arnold and then some. Trying to take alternate backroads resulted in even longer delays behind slow moving traffic.
Then the winter and lots of accidents. Well accidents all the time and the gaperblocks which wound on for miles and miles.
Sounds good on paper. Doesn't work in reality.
Same as when I worked in Lexington(Ky) and lived about the same distance away only this time is was toll booths. To drive back to the other farm in the western part was at least 7 toll booths. Gone now but not then, now its just very bad roads with lots of potholes.
Oklahoma: RR said I never must have visited Okla. I have. In fact while he was likely nursying I was attending AirCrewman school in Norman, OK. A year and half ago I biked down to Tulsa for the stockholders meeting. All I heard was "Oklahoma is burning". Stopped to see and old navy buddie just north of Tulsa who told me just how extremely bad it really was. And it was bad.
He was sticking though and I wished him well and motored on home. Back to where we usually do not have to ever water our vegetable gardens, long as you know how to use mulch wisely and don't over till when the ground is dry. I have a home built irrigation method that works when needed built of PVC pipe ,etc.
We do not use those massive irrigation rigs like they do in the Missouri bootheel. All those tons and tons of water being flushed all over the ground. And they are supposed to be in a good rainfall pattern area. Yet just to get a few more bushels per acre they abuse the water tables.
My thinking it we need to forget about feeding the rest of the world. Screw ADM. Its said that just Indiana could raise enough hogs to feed all the USA. So why are we blessed with this ugly tasteless pink mush they call pork? Raised on concrete and highly genetically engineered they have created a ugly product. Real good bacon now costs upwards of $4.00
I can't find sausage not loaded with gristle and other unedible trash. The taste is beyond reprieve.
I have one honest farmer in Muhlenberg County who still does it on his farm and the old fashioned way. To this man I will go soon after emptying all the other noxious items from my icebox.
Eggs the same way. I haven't consumed a good egg in a long time. Not unless I get from my friend and has some of what the rooster inserted as well. That white part I try to seperate out with a kitchen spoon. After you fry the egg you can always spot that rooster part anyway. I prefer to not eat it though I suppose it mightn't bother others.
A hint on planting sweet corn. Put two seeds down where you normally put one. Ifn a deer gnaws one down then you got a spare. It a cutworm gets one ..ditto. If one seed rots(like a bunch of mine did) then you have insurance. You later thin the extras back out.
You want to plant them with a full handswidth apart. Stretch out your hand with thumb and little finger extended sideways. This is the distance apart in the row. You must plant it exactly 1 1/2 to 2 " deep. No deeper and no shallower. The nodal roots should not be exposed after making a stalk. I push the seed down with my first finger to about the 2nd knuckle joint since this is about almost 2 ".
For all other measurements I used a walking pace to measure large distances. A foot to foot(heel to toe) of my Red Wings to get closer distances and I use a rake head for the rest.
Airdale-keep your furrows straight
and as we say here "are you keeping it in the furrow"
it being generic for behaviour,sexual or otherwise.
Ok Eric and Old Hippie..take your best shots and Old Hippie its not 'baccy'. Its pronouced T'baccer...phonetically "Taa Backer" and we never say Harley Davidson...we say like ----
Ohhh Two Low Rider---....never rode have ye? Maybe a bagger says that but thats not what a 'biker' sez. Baggers are ok but I just ride/live in a different world than them. To each his own. I ride alone. Too much distraction otherwise.
Ok Eric and Old Hippie..take your best shots
Errr, what are you talking about?
Some "baggers" ride alone also.
Hello Airdale,
Glad to see you still posting-- I always look forward to what you have to say.
Thxs for the mention as a likely early victim when PO & GW effects kick into high gear. Such is life. Maybe it might convince some of those in my Asphalt Wonderland [that never respond to my warning emails] to give me a little more credibility. For example: still waiting for Tiger Woods and Phil Mickelsen to email me back that they are now going to start plowing golf courses into vegetable gardens.
I hope you check this link [with lots of good graphics]:
http://www.drought.unl.edu/dm/forecast.html
Scroll down to the soil moisture anomaly graph. It shows a big red target near your area. Being a city boy--I don't know if that is a concern or not--just wanted you to be informed.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Something about flies, honey and vinegar comes to mind...
Seriously, I am not unfamiliar with Maricopa county, having lived there before. It just seems like one of the last places where you will get much action on the issue of sustainable communities. Too much of the population knows it will either (1) die in the next 5 years, or (2) be moving out anyway.
... Muhlenberg County ...
I thought Mr. Peabody's coal train done hauled it away!
:^)
...father forgive us for what we must do-...Prine
wrote it all down as the progress of man
Congress to the Rescue: "Prices at the Pump: Market Failure and the Oil Industry"
I just paid 3.29 per gallon to fill my tank for the weekend. I just noticed that the number of soldiers dieing in Iraq has been averaging 3.36 per day in the month of May.
Somehow this seems like an arguement to developing some alternatives energy scheme.
Someday, big oil will realize that it is in their best interest to admit that global oil production is in decline. Perhaps at next Wednesday's hearing?
>Someday, big oil will realize that it is in their best interest to admit that global oil production is in decline. Perhaps at next Wednesday's hearing?
They're afraid of more nationalization of thier oil & gas projects (aka Venzuela & Russia). There are absolutely right to fear public acknowledgement. Once PO and permement declining production is recognized. Virtually all exporters will either end exports or tightly regulate them. Exporting cheap oil is like giving away free money and candy. Its simply too valuable to trade away as it is today.
My prediction before all this PO brewhaha is over will be that all oil reserves will become "nationalized". Governments are just waiting for the music to stop before they find their chairs to claim.
The solution is obvious. Break OPEC up and split Saudi Arabia into at least a dozen principalities.
Good that we don't need no stinkin' peak oil analysis. Good to know that congress has figured it out -- just force the oil companies to invest more.
So what is he trying to do, increase supply? Build more refineries? And where, pray tell? Excuse me but the game has changed. While everthing Conyers says could be perfectly true, is the solution to find ways to drain America first? Is he suggesting that we should drill in ANWR and off the coasts?
By god, just pass a law prohibiting as over $2.00 per gallon. Take the direct route. Taking the antitrust route is too slow.
If the oil companies and OPEC and everyone else is conspiring to restrict supply, at least someone is taking the action we need.
If the oil companies, countries and refineries are making "excess profits", take the crap out of gasoline and at least retain part of this windfall to cut the deficit or for other purposes like energy conservation and alternatives.
Whether or not we have oligopoly or monopoly simply isn't very relevant anymore. If an efficient market would produce even more oil, then let us encourage inefficiency.
I guess he missed this
http://www.financialsense.com/fsu/editorials/andros/2007/0511.html
I bet he didn't miss this:
Exxon Mobil Says Peak Oil Unlikely Within 25 Years
But I wonder if he or his staff at least glanced at the GAO report on peak oil?
I don't see politicians mitigating the problem. When they find out about peak oil, I hope they don't panic and pass very stoopit laws.
Amen
By the way, Conyers is the Congressman from Detroit and recently voiced opposition to increased CAFE standards. He and Big Auto are waiting for the return of $2 oil and are getting impatient!
Detroit has a problem. Gas prices will only go up through the summer and then the contract negotiations begin.
The US car makers need big concessions and the unions are not going to back down, they will need to force a strike and use chapter 11 to survive.
Perhaps this was linked to yesterday (if so I missed it) - an article in the LA times about CTL:
http://www.latimes.com/news/nationworld/nation/la-na-coal10may10,0,77692...
I have no doubt that CTL will be proffered as a significant choice in maintaining the high use of the personal automobile. What strikes me is that the LAT article author is writing as if CO2 emissions will be a significant factor in deciding the acceptance of CTL. Rather, I propose that when gasoline finally is rationed (physically instead of by price) and unemployment increases (due to the energy-GDP linkage) then CO2 emissions will be seen as inconsequential as a deciding factor.
For those interested in ng, the following link re: canadian stats is interesting:
Exports to the us are up 50 bcf in april, presumably reflecting higher us ng prices, but their storage is halved to 109bcf... can't go on like this much longer.
Drilling is down 43%, implying a coming production decline (they sent us 1/3 of their rigs, so us production looks to be stable this year.)
http://www2.nrcan.gc.ca/es/erb/CMFiles/April_2007206OAD-09052007-7612.pdf
" ...and preservation of the environment."
What preservation?
A note on the Colony Collapse front.
According to this web posting and site, the organic bee hives have been doing just fine, and it just happens to be the commercial hives that are really taking a beating.
http://www.informationliberation.com/index.php?id=21912
-article noting that in a 1,000 member organic bee group that none of them experienced a collapse
http://bushfarms.com/bees.htm
-The site of one of the members of said group
http://www.beesource.com/forums/showthread.php?t=208334
-A thread from a bee keeper forum where various bee-keepers and interested parties discuss some potential causes for the american collapse.
Just some interesting stuff I thought others might be interested in scanning through. I'm not confident in the objectivity of these articles or discussions, but there is a good bit of info to be gleaned from the sites none-the-less.
It finally warmed up here and our wild honey bees are out in force. They survived the vevoria(sp?) mite as well. Maybe they will figure out taking all thier honey makes for a poor diet?
As I look at my clock it is about 5:40AM Eastern time, and gasoline futures are down, aboot 22%. For a wacky look at the world of five day futures,
http://finance.yahoo.com/q/bc?s=RBM07.NYM&t=5d
I am going to be on the computer doing some other things, let's see how they move in the next half hour to hour or so....the wacky world of the "opps, another unplanned shutdown!" continues.....
RC
Remember we are only one cubic mile from freedom
The Yahoo charting is wacky.
A more reliable charting programs can be found at:
http://futures.tradingcharts.com/marketquotes/
Well folks, it's now about 6:20AM, and gasoline futures are now up 1.12%, regaining all of that 22% drop at the opening about 40 minutes ago, and now
$2.35, up from $1.90
That's a 45 cent spread in 40 minutes :-)
Man, that oil work is tough, really breaks out a sweat on a person....
A used car salesman I once knew once said what he liked was "repeat" business...."you fleece um, and they come back to be fleeced again!"
Trivia question: If you were a Saudi oil minister, would you be bustin' your azz to raise production so the speculators could wallow in money you could have made?
Didn't think so....:-)
To all a Good Morning....
Roger Conner Jr.
Remember, we are only one cubic mile from freedom
PS
Look at it, as steady as a fvckin clock, 5 straight days...Big Ben isn't this reliable!
http://finance.yahoo.com/q/bc?s=RBM07.NYM&t=5d
RC