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DrumBeat: June 25, 2007
Posted by Leanan on June 25, 2007 - 9:03am
BP's number-cruncher bows out with harsh words for Whitehall
Most of us have a vague idea that North Sea oil production has lately been slowing down. But by how much?I looked up the answer in BP's annual Statistical Review of World Energy, published earlier this month. Packed full of information about global energy markets, it is a highly authoritative data source in a notoriously murky area.
Well, the UK's ability to extract the black gold is declining at an alarming rate. This country pumped an average of 1.63m barrels a day during 2006 - 10 per cent less than the year before.
I get lots of letters from people in various corners of the nation who are hysterically disturbed by the continuing spectacle of suburban development. But instead of joining in their hand-wringing, I reply by stating my serene conviction that we are at the end of the cycle — and by that I mean the grand meta-cycle of the suburban project as a whole. It's over. Whatever you see out there now is pretty much what we're going to be stuck with. The remaining things under construction are the last twitchings of a dying organism.It is not an accident that the housing bubble coincided with the phenomenon of Peak Oil.
[Australia's] ABC Enterprises will also be showcasing another environmental program at MIPTV: Peak Oil, which is part of the ABC network’s long-running Four Corners series and is produced by its current-affairs department. “Whereas Crude is more of an event program, Peak Oil is more from the current-affairs point of view,” explains Dacey. “It looks at ... why oil prices have been so high lately, and how long the world has got before oil runs out. It also investigates the issue of unexploited reserves, and why investment hasn’t been going on since the ’90s to look for more oil.”
Oil Price Surge a Risk as Non-OPEC Production Peaks
Oil prices have a "substantial" risk of surging higher and boosting inflation because non-OPEC production may soon peak, the Bank for International Settlements said in its annual report."The short-run risks of sharp increases in oil prices remain substantial," the Basel, Switzerland-based BIS said in its 77th annual report today. "The impact of oil price increases could be significant; a recent analysis estimates that a supply- induced doubling of prices would boost inflation in emerging Asia by as much as 1.4 percent points above baseline."
Lawmakers ask for natural gas regulation
Lawmakers seeking tougher oversight of commodity exchanges assert in a report that "excessive speculation" dealt a fatal blow to Amaranth Advisors LLC, which helped drive up heating bills last winter before it lost some $6 billion on its natural gas bets.The hedge fund at times last year controlled 40 percent or more of the natural gas contracts traded on the New York Mercantile Exchange, and as much as 75 percent in one month, according to the 135-page report by the Senate's permanent subcommittee on investigations.
Stormy Weather Ahead for Oil Prices
Two down, 15 to go; that's this year's bleak tropical storm outlook. Two years ago, Hurricane Katrina wreaked havoc on the economy. By comparison, thank goodness, our two named storms this year, Andrea and Barry, have been relative powder puffs. But commodities tracker Sean Broderick cautions that the weather so far could well be the calm before a mega-storm, a prelude to what he sees as "another wild ride in energy prices this summer."
Are high gasoline prices the result of soaring world demand, as oil companies contend, or are there other causes? The answer seems to be both. And among the "other" causes are the oil companies themselves.
While Honda announced that it is discontinuing the gasoline-electric version of the Accord because of slow sales, the Toyota Prius continues to defy gravity. Once considered a novelty, the Prius is selling more strongly now than at any time in its seven-year history. Its volume is running at twice the rate of a year ago and Toyota now expects that Prius will outsell every single domestic passenger car nameplate except for the Chevy Impala.Why the diverging fortunes? Honda was selling added performance in the Accord hybrid, which didn't resonate with consumers the way that better fuel economy does. Besides, the hybrid Accord looked like every other Accord, meaning consumers couldn't get credit for being "green" when they parked it in front of their homes. The Prius, by comparison, can't be confused with anything else.
Report: S. Korea extracts gas hydrate
South Korea has extracted gas hydrate — an alternative fuel source Seoul hopes might help reduce its heavy dependance on oil imports — in its eastern territorial waters, a news report said Sunday.
Qatar's economic boom continues supported by massive investment flows and rising oil and gas exports
The country is enjoying the fruits of a development strategy set in the 1990s that combines economic openness with a clear economic diversification plan and institutional and democratic reforms. That strategy, together with favourable energy prices and high investment spending, is likely to see the pace of growth sustained at high levels over the next five years. The size of the economy could double again by 2012.
Kuwait oil company plans to hike output of heavy crude
The KOC's Deputy Managing Director for Administrative and Financial Affairs, Ali Al-Shimiri, stated during an honorary celebration of media figures late on Saturday, that the company seeks developing its production output to reach 50,000 barrels per day by 2011, 250,000 barrels per day by 2015, and the final target is 700,000 barrels per day by 2020.
Thailand to Buy Power From China in Next Decade to Meet Demand
Thailand, Southeast Asia's second- biggest economy, plans to buy electricity from China for the first time starting in 2017 because the country isn't building its own plants fast enough to meet an expected surge in demand.
Deutsche Bank analyst Mark Lewis told ABC TV the coal industry still has a future, despite a global push towards other cleaner energy."There is no way in which the world can generate the energy it needs realistically over the next 50 or even 100 years without coal still being a significant part of the mix," Mr Lewis said.
Australia: Jail threat cuts petrol price
THE price of petrol hit a seven-week low today as motoring groups called for anyone found guilty of fuel price fixing to be jailed.
Venezuela First in Crude Reserves
Venezuela has ratified its potentials to become the country with the largest crude reserves worldwide, as certification of Carabobo bloc, one of the four fields in the Orinoco Oil Belt, was completed.
China focuses on oil, not Sudanese needs
CNPC has invested billions in oil-related infrastructure here in Paloich, including the 900-mile pipeline from the Paloich oil fields to the tanker terminal at Port Sudan on the Red Sea, a tarmac road leading to Khartoum, and a new airport with connecting flights to Beijing.But they have not invested in much else here.
Locals live in meager huts, eating peanuts with perch fished out of the contaminated Nile. There is no electricity. A Swiss charity provides healthcare. An American aid group flies in food and mosquito nets. Most children do not go to school. There is no work to be found. Petrodar, for one, has its own workers – almost all of whom are foreigners (mostly Chinese, Malaysians, and Qataris) or Sudanese northerners. The consortium hires Paloich residents only rarely, for menial jobs.
China targets energy hogs in offices, cars
UNDER heavy pressure to cut energy consumption, China is now turning the spotlight on construction projects, the transport sector and government buildings.
Sarasota company fights high gas prices with electric cars
At around $3 per gallon, the price of gasoline is both a boon and a bane to Sarasota-based solar and electric vehicle maker Cruise Car Inc.The benefit is obvious: As the numbers on the signboards outside stations move upward, more and more people start looking for ways to ditch their gas guzzlers, be they eight-cylinder sport utility vehicles or two-seater golf carts.
But because Cruise Car's parts are made in China and shipped around the world and cross-country to a Venice assembly plant, the rising cost of fuel means consumers may also have to pay more for what the two-year-old company's founder acknowledges is a largely unknown - and unproven - commodity.
Miners having a blast in Utah uranium rush
Utah mining prospector Kyle Kimmerle has more than a hunch that uranium will make him rich. It is a conviction so strong he has bet his house on it.'We literally spent every dollar we had in savings, hawked and sold our houses and put everything we owned into this. We went all in,' said Kimmerle, who runs a funeral home in this Canyonlands city. 'My wife is scared, but I'm not.'
He is among a rush of prospectors in the Colorado Plateau mineral belt who are thumping stakes into public land and registering claims, hoping to get rich on the back of record uranium prices.
Hawai`i: New laws scrutinize gas prices and boost tech
New Hawaii laws taking effect this weekend aim to scrutinize gas prices, fight genocide in Sudan and make the state's economy more high tech.Other laws will crack down on copper thieves, allow for onsite drug testing and allocate money for union pay raises.
With gas prices sticking around the $3-a-gallon mark, public transportation is packing in more and more riders.
High fuel prices sinking boaters
Kivell works for Sailaway Yachts at Captain’s Cove Seaport in Bridgeport, where he’s seen a recent decline in the sale of larger powerboats. He’s also noticed that many owners of large boats have resorted to "taking little harbor cruises on their inflatable dinghies while the boat just sits at the dock."With gas mileage ratings as little as a quarter-mile per gallon, large boat owners seem to have no choice but to limit their trips.
Tyson Foods and Syntroleum Launch Renewable Fuels Venture
The 50/50 venture intends to construct and operate multiple stand-alone commercial facilities capable of producing ultra-clean, high quality, next generation renewable synthetic fuels using Syntroleum's patented Biofining(tm) process, a "flexible feed/flexible synthetic fuels" technology. Feedstock primarily derived from animal fats, greases, and vegetable oils will be supplied by Tyson.
Calderon No Fox in Mexican Pension Crisis, Bid to Raise Taxes
Calderon, a former energy minister under Fox, says crude oil from the Gulf of Mexico buried in waters as deep as 1,500 meters (4,900 feet) represents the future of the oil industry. Pemex doesn't have the technology to drill so deep, and Calderon is seeking the help of companies such as Brazil's Petroleo Brasileiro SA to acquire it.
Pakistan: Power and political crisis
As far as the choking heat, as of mid-June, it has taken many lives, given tens of millions sleepless nights and extremely uncomfortable days in the absence of power outages, and made millions run around for water even in cities like Karachi. Excessive heat of course is a natural phenomenon linked to global warming. But power outages are certainly not.
Mobs flood Karachi streets in anger
Grid stations had shut down, underground cables were damaged, and feeders tripped as a result of which some city areas had no electricity for 24 hours after the rains.Residents streamed out on to the streets, burnt tires and other materials and blocked roads. Some enraged protesters also burnt a KESC vehicle and pelted local complaint centres with stones.
Mischief in Karachi mob teeters on ethnic violence
Some people reportedly tried to turn what started out as an angry protest against a lack of electricity after the rains into ethnic violence Sunday.The power outage sparked a violent reaction from affected residents near Al-Asif Square Sohrab Goth but then there were reports that unidentified gunmen made abortive attempts to turn the protest into ethnic clashes.
Ortega to Take Nicaragua out of Energy Crisis
President Daniel Ortega assured that Nicaragua will get rid of the "energy bankruptcy" in which the nation was driven by neoliberal governments, in the last 16 years.
The odd alliance aiding Nicaragua
Communism and shortages go together. When the price mechanism is tossed out and the planners take over, watch out! That lesson is being re-learned in Nicaragua, which recently installed Daniel Ortega back in power, and is experiencing power shortages.
Vietnam: Power shortage announced for July 1 to September 30
he Electricity of Vietnam Corporation (EVN) on June 22 announced that electricity shortages would occur from July 1 to September 30, 2007....To diminish the shortfall of electricity because of this reason, EVN plans to run gas-turbines by oil. However, once those turbines use oil as fuel, their capacity will reduce by half.
Venezuela Threatened by Bio-fuel
The use of agricultural products to elaborate ecological fuel becomes terrible for Venezuela because of its mainly agricultural dependency, assured Food Minister Rafael Oropeza.
Sri Lanka: Ceylon Petroleum Corporation urges Sri Lanka govt to increase fuel prices
Sri Lanka's government-owned Ceylon Petroleum Corporation (CPC) has been urging the government to increase fuel prices as the CPC is facing huge losses due to the rise of fuel prices in the world market.
India: Oil & Natural Gas Profit Falls on Fuel Subsidy Costs
Oil & Natural Gas Corp., India's biggest explorer, said fiscal fourth-quarter profit fell 13 percent after increasing payments to state-run refiners to share the cost of subsidizing fuel prices.
Energy crisis 'cannot be solved by renewables'
THE world is blinding itself to the reality of its energy problems, ignoring the scale of growth in demand from developing countries and placing too much faith in renewable sources of power, according to two leaders of the global energy industry.The chief executive of Royal Dutch Shell today calls for a “reality check”. Writing in The Times, Jeroen van der Veer takes issue with the widespread public opinion that green energy can replace fossil fuels.
Shell’s chief gives warning that supplies of conventional oil and gas will struggle to keep pace with rising energy demand and he calls for greater investment in energy efficiency.
Instead of a great conversion to wind power and solar power, Mr van der Veer predicts, the world will be forced into greater use of coal and much higher CO2 emissions, “possibly to levels we deem unacceptable”.
Friday of last week I had occasion to do brief battle on CNBC Morning Call with Steve Andrews co-founder of what is considered the most influential organization supporting "peak oil " the Hubert curve theory which predicts future oil availability. Surprisingly there is more than one such organization. And why should that be? The Wall Street Journal summed it up succinctly in an article appearing in the Sept. 14, 2006 issue, stating:"That argument known as 'peak oil theory' has provided intellectual backing for the boom in crude prices."
Trust Russia on energy, Putin tells Balkan countries
Russian President Vladimir Putin on Sunday urged the Balkan countries of southeastern Europe to trust Russia as a reliable energy supplier, as he outlined plans for a major new gas pipeline through the region.
Trinidad and Tobago: No business as usual in energy
What is unfortunate about McGuire's article is that he does not take into consideration that Peak Oil phenomenon in world petroleum production is fast approaching. Shell, a large international oil company, sees this happening by the year 2025; the US Department of Energy thinks that this can be postponed to 2030 while other analysts see the date as somewhere between 2015 and 2020. What this means is that the predicted world demand for oil for 2030 of 121mb/d, increasing from current demand of 84mb/d, will be economically and geologically infeasible, impossible to satisfy. Hence, petroleum and its products will continue to fetch escalating prices with new and deleterious effects on the world's economies and politics.
Japan, Saudi Arabia Heighten Relations
Japan's presence in Saudi Arabia widened with investments in various projects exceeding $13 billion between April 2000 and March 2006. The latest investment of $9.8 billion is the PETRORabigh project, an equal joint venture between Saudi Aramco and Japan's Sumitomo Chemical Company that is set to become operational next year.
World Agencies on Energy Summit in Zagreb
As the battle for control over European energy markets and transport routes is moving to the Balkans, the Russian president pledged in Zagreb to develop the Black Sea area as a centre for the distribution of fuels, Reuters writes. At the summit Putin announced that Russia wants to play a crucial role in all forms of supply and production of energy in the region, stressing the close cultural and historical ties with the countries of the region, Reuters reports.
BP looks to emerge from rough few years
Today, oil production is in steady decline — about 6 percent a year — but the North Slope's largest operator, BP PLC, remains bullish about the future because of the region's untapped resources.But success starts with restoring public and employee faith in the company's ability to operate safely as it approaches the first anniversary of a major Prudhoe Bay shutdown that resulted from poor maintenance on transit pipelines.
New York State Renewable Energy Task Force Members Named
New York Lieutenant Governor David A. Paterson today announced the appointment of members to New York's Renewable Energy Task Force. Under Lieutenant Governor Paterson’s leadership, the goal of the Task Force will be to identify and recommend ways of expanding the state’s use of renewable energy and alternative fuels.
Rich nations blamed for global warming
Developed countries are hypocritical for criticizing China's greenhouse gas emissions while using the country's cheap labor to power industries that pollute, Asian business and government leaders said Monday.
Panama: Cold water on refinery plan
The EFE news agency reports that one of the oil refineries under discussion is now in doubt because the Mexican government has told the Panamanian ambassador in Mexico that the state-owned PEMEX oil company would have less oil to send for refining at the contemplated facility than had been previously predicted.
Gas prices fall sharply from May peak
The average price of gasoline across the country dropped about 11 cents over the last two weeks, according to a national survey released Sunday.Regular gasoline, which peaked at $3.18 in May, dropped to $3 a gallon, oil industry analyst Trilby Lundberg said. Mid-grade averaged $3.11, and premium was $3.22.
Automakers latch onto fuel-saving tech
A promising, if so far underwhelming, fuel-economy technology is gaining momentum as automakers, squeezed by social and political pressure, look under every rock to gain even a few tenths of a mile per gallon.The technology goes by various names but by any name does the same thing: shuts off fuel to some of an engine's cylinders when the vehicle needs only partial power.
Chavez predicts resistance war with U.S.
"We must continue developing the resistance war, that's the anti-imperialist weapon. We must think and prepare for the resistance war everyday," said Chavez, who has repeatedly warned that American soldiers could invade Venezuela to seize control of the South American nation's immense oil reserves.
Iran fuel import budget likely to run out soon
Iran will exhaust its annual budget for petrol imports by August 1, more than seven months before the financial year ends, if fuel consumption continues at the same pace, officials said in remarks published yesterday.
Kuwait oil minister faces axe but policy to stay
Kuwait's oil minister could be removed from office after a grilling by opposition MPs Monday, but the Organization of Petroleum Exporting Countries (OPEC) member's oil policy is not expected to change dramatically, analysts said Sunday.
Australia: Gas shortage seen as symptom of wider energy woes
The peak body representing Australia's energy users says a gas shortage which is affecting large commercial users in the New South Wales Hunter Valley is just the symptom of a growing energy crisis across the country.
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What did you do this past weekend to prepare? I, with my husband, three friends and a Mexican family of three planted six acres of butternut squash, baby pam pumpkins, corn, pinto beans, zucchini, beets, parsnips, turnips, sweet potatoes and other vegetables by hand. It took us about four hours. Just 496 more hours of this to equal one gallon of gas! My friends last just two hours because of fatigue and bad backs...
Sandiego, I spent this weekend getting prepared also. I scouted several gardens that I might raid when things get tough. ;-)
Ron Patterson
During the 30 years war, they switched to below ground crops because they could not be burned and were less likely to be pillaged. A good idea post peak. Also, every time I think about the 30 years war, I think what a great video game that would make. Turn Based Strategy, RPG as a mercenary soldier, resource management game, the potential is endless.
Ron-
I have been scouting also. Huge amount of wild plums within walking distance, and the abandoned apples are looking good. As a former Commercial Fisherman (the last hunter gathers on a major level), and avid mushroom hunter, it astounds me how little people know about food in the wild. People are terrified of mushrooms. I spent 200 days a year in a sleeping bag, and find the new age "vision quest" hilarious! Wow 3 days by yourself alone in the "wild".
We have a rails-to-trails bike path near our place that makes a 7 mile trip to the local town. Right now the cherries are ripe on many cherry trees along the path. We have picked a couple of gallons from trees that only the birds seem to pay attention to. Next come the plums, then the apples and blackberries. In the woods, if the spring is wet, are myriad types of mushrooms and other wild edibles. Lots for the picking for those who pay attention.
Made an offer on a 5 acre lot with brick ranch house, pond, garden & pasture located 7 miles from downtown. Holding thumbs - I am anticipating lots of competition.
If you get the house on 5 acres, check out Gene Logsdon book All Flesh is Grass. He gives an example of a couple with 5 acres and using rotational grazing for a horse, calf, flock of chickens and a pig complete with a garden and fruit trees.
I recommend also the classic work by Kain, "Five Acres and Independence." It was written during and in the context of how to survive the Great Depression, and in terms of page for page value, it is hard to beat.
Thanks for that, I will definitely check it out. My initial take would be:
1. Fish from pond
2. Chickens for eggs & occasional meat
3. Nubian goats for milk & occasional meat.
4. Milpas planting in the garden + tomatoes and more.
5. Orchards (apple, cherry, peach pecan)
Thats about it. I will have to get a small diesel tractor as the land does need lots of work and there is only one of me. In the future we can work out some kind of community gardening & sharing arrangement.
The garden I planted three weeks ago is sprouting nicely...corn, Roma tomatoes, lettuce, carrots and watermelon. The way corn prices are going, I can probably sell it for its equivalent in gold.
Kids are having a good time helping out and getting dirty.
You know...all these gardens need a name...you know like "Victory Gardens"? How about "PO Gardens" or "TOD Gardens"?
Any other ideas so we can tell our neighbors why we are planting all these gardens?
A young filmmaker friend of mine is doing a piece on energy in Maine with a peak oil slant. I invited him over to film my "peak garden" in July to demonstrate the possibility of growing a vast amount of one's own food without the use of fossil fuels.
I call it my "peak garden" because I'm gardening this year as if my life depended on it.
i dunno if calling it a po garden is such a good idea. if you search in the acronym finder, peak oil comes in 26th behind post office, purchase order, pissed off, piss off and put out, to name a few.
Ha...well if you mix in some manure, it really is a "po" garden!! How about Peak Gardens then?
Got in touch with a realtor about buying a 1.8 acre plot that's 6 miles from my brother's house. That's within biking distance. It's off on a dirt road where traffic is a lot lower, so hopefully it would attract less attention. Plant a garden, have a tiny house, and wait for TSTHTF.
Watered, weeded and harvested lettuce, arugula, peas, stawberries, blueberries, kale and herbs for drying.
Finished reading Gardening When it Counts
and got started on Barbara Kingsolver's Animal, Vegetable, Miracle
I really reccomend both as great summer reads.
A little hint to help reduce the strain on those backs:
Go to a sporting goods store and buy one of those plastic tubes they use to store golf clubs in golf bags. Also go to a store where you can buy a cheap funnel.
Get yourself a piece of duct tape and tape the funnel to the tube.
You now have yourself a stand-up seed planter! You can place a seed in a furrow with great precision, standing upright the whole time.
I have had and use such, it does help.
They called them Beer Bongs at college.
they sell a nifty little hand powered planter at our local tracker supply co. store.
It has a hooper for seeds, a wheel and a handlebar. different plastic attactments for various seeds , all for under $100. My buddy next door bought one, I borrowed it to plant corn.
Out of curiosity, do you till that land somehow? How do you keep weeds down? Do you ever water, and if not, what kind of mulch do you use?
This weekend we drove our car 800 miles, about as far as we've driven it the rest of the year till now. Last weekend we added charcoal to a few garden plots, put in teepees for the pole beans to climb, put down cocoa bean and straw mulches, and set up some soaker hoses. The broccoli is about done for the spring, the spinach didn't work out this year, the wheat is about done, and our peas are going nuts this year (it helps to keep the bunnies out!). I strongly recommend adding charcoal to your compost or to your plots.
Oh, and I got my first sting from one of our honeybees. I suspect it had something to do with wearing a blue shirt. I also recommend getting a beehive. They don't take much room, and so far not much work either. It's great fun to see them working hard in the morning and spot a bee in a nearby field and realize it's probably one of yours.
do you have a market for this? anyone can get that much in, it takes a helluva person to get it out and to market. best of luck
http://americanvalleygrowers.com/
You planted 6 acres in 4 hours? I'm curious, did you achieve this just using manual labour? I assume the soil was already prepared and ready.
Triumvirate of collapse - Economy, Ecosystem, Energy
Yes, the soil was ready. It is called muck soil and part of the black dirt region of Orange County, NY (adjacent to New Jersey and Pennsylvania). All together there are 800 acres. It was purchased by a non-profit organization, Global Country Farm. 200 acres are in the CRP/CREP program. 500 acres will be planted with corn and soybeans and grown organically. (We're getting a very late start due to funding issues). I am volunteering my time in exchage for being able to use some of the land to grow vegetables for myself, friends, the Mexican family who live on the property and the rest we will sell to others. There was a cover crop grown for three years which was tilled into the soil with a tractor. The planting of seeds was done by hand. The most difficult to plant were the 500 sweet potatoe slips as those required me to plant on my hands and knees. But this black dirt (glacial soil) is like butter to work with. It's so soft and pliable with a good amount of organic mass. There are also 11 greenhouses which have not been used for years in which we will get three going by this winter and attempt to grow cold tolerant vegetables Eliot Coleman style -- low tech. I would strongly recommend anyone interested in gardening to find a local farmer and strike some type of deal. I am still growing a large home garden, fruit trees, etc. but this experience is invaluable. Plus, I'm getting to know all the farmers in the area, the John Deere people, the Tractor Supply Company people etc. etc. I'm also looking for some black dirt to buy. It would really be great to get a group together to buy it in the fashion that gun clubs pool together money to buy land for hunting.
I think the brief Panama story is fascinating - a refinery won't be built because not enough oil will be available? And who said it?
Pretty hard to accuse the Mexican ambassador as being part of some fringe peak oil theory circulating around the murkier corners of the Internet.
Slowly, the reason why new refineries aren't really being rushed into construction in oil consuming countries will become too apparent. And which point, another reason will be found - whether it is the greens, or government interference in the free market, or something a bit more creative.
They are building them in the oil producing nations. The reason for that is because they can make more selling finished product. Watch for declines in crude export in excess of even WT's model as they stop selling crude and switch to only exporting finished product.(and a lot less than world demand, I would expect.)
Yes, refineries are being built in producing countries, but apart from Saudi Arabia and a few other favored Gulf states, not that many. The rich oil consuming nations just happen to be the countries that are also the source of the necessary technology and labor to build a profitable refinery - though obviously, China will likely break this 'monopoly.'
The point was, that a Mexican government official seems to be confirming the reality why refineries are not being built - the amount of oil being produced is declining.
It's because Mexico won't open up to the free market. They'd have more oil than they knew what to do with, if only they'd let capitalism work its magic. ;-)
Leanan, the problems in Mexico are more serious than most Americans realize. For starters, their army is disappearing:
JOURNAL: Open Source War Settles in North America
Mexico's army, due to low salaries ($330 a month) and bad conditions/treatment, already suffers an 8-9% desertion rate -- these deserters are left unpunished due to an inability to pursue, prosecute, and imprison. That rate is is expected to radically increase as the war with narco-guerrillas in northern Mexico heats up. As a hint of what's to come, between 2000 and 2006 (the Vicente Fox administration), of the 4,890 soldiers assigned to Federal police duties, all but 10 deserted (according to IAPA journalist Maria Idalia Gomez).
A Fragmented Opposition
"The Zetas don't ask the Gulf cartel permission for anything anymore. They simply inform them of their activities, whenever they feel like it." US law enforcement official, under condition of anonymity to Alfredo Corchado of the Dallas Morning News.
In contrast to the depletion of the Mexico's military, its non-state opposition is expanding rapidly. The Zetas (originally formed by 50 Mexican special operators, some with US training, recruited by the Gulf Cartel as enforcers) has ballooned to a network of 2000 members, including recruits from Guatemalan counter-insurgency forces called the Kabiles. Also, compared to the low rates of investment by the Mexican military in its recruits, the Zetas (according to US intelligence estimates) spend 50% of their substantial smuggling earnings on training, recruitment, intelligence gathering, and computer software. As a result, its operations have expanded to 24 Mexican states. In Nuevo Laredo alone, a focal point of smuggling, an estimated 200 Zetas with a support system of 300 are in operation.
Another sign of Mexico's decay, has been the arrival of a new paramilitary group called La Gente Nueva ("the new people"). Apparently loyalist (although it could be that this group is more about protection of its cut of smuggling revenue than support for the government), this network is composed of current and former police officers seeking revenge against the Zetas for their slaughter of policemen.
http://globalguerrillas.typepad.com/globalguerrillas/
Hello River,
This posting of mine was buried at the bottom of yesterday's Drumbeat, but is now a key breaking-news feature at Savinar's LATOC:
http://www.mexidata.info/id1416.html
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Blackwater Mercenaries on the USA-Mexico Border
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What I think makes it especially relevant is that this is a Mexican website, yet no mention of this on CNN and other US MSM. Can you see the Halliburton workcamps going 'live' shortly?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hi Bob, Yes, I can see a lot of things happening soon but none of them are good. No one paid any attention to this post...I suppose that they think a melt down in Mexico will not effect them.
For starters lots of auto parts are now made in Mexico. That begs the question: How will I get a new fuel efficient car if the auto companies cant get the parts to assemble it from Mexico? How will I get parts for my tractor to run the farm? How will I get parts for my Cat to repair the roads? How will my kids get to school because there are no parts to fix the school buses? If an Iraqi type insurrection starts in Mexico we are definitely going to feel the impact in many ways, including food. I could go on but I think you get the picture.
Not that they would have more than they know how to use, but they very well might have had more production in the in the coming years if indeed they had invested their returns in the oil business rather than having to give such a large chunk over to the government, no?
Perhaps. But would it be a good thing?
Iran is keeping the oil majors out, knowing it means production will be slower. They see it as saving part of their precious, one-time gift of geology for their children and grandchildren.
Leanan,
I appreciate your comments, posts and thinking, but I can't follow you on this one.
Can you explain how it is _Iran_ who is keeping majors out of Iran?
Facts:
- USA advocates sanctions on Iran
- USA limits American companies from working in Iran (legally)
- USA is putting a shadow of war on Iran making it difficult for others to invest long term in Iran
- Other (non-US) oil companies are already in Iran, regardless of the above difficulties
- Iran is subsidizing local oil consumption to the point that they have to start rationing, because consumption is growing faster than what they can allot to consumption out of their total production
So, again:
How is it that _Iran_ is keeping majors out.
How is _Iran_ saving their oil?
To me it looks like:
- USA is keeping oil companies out of Iran (for now)
- Iran is using more oil domestically than is sensible
That, based on the reports available in the news.
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Iran is keeping the oil majors out, knowing it means production will be slower. They see it as saving part of their precious, one-time gift of geology for their children and grandchildren.
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Starting a war (perhaps Nuclear) with the United States over the erichment of Uranium is a sure way to kill all their children and grandchildren.
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Iran is keeping the oil majors out, knowing it means production will be slower. They see it as saving part of their precious, one-time gift of geology for their children and grandchildren.
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Starting a war (perhaps Nuclear) with the United States over the erichment of Uranium is a sure way to kill all their children and grandchildren.
Duh? Canterrel is in massive decline. Has nothing to do with Free Markets or Capitalism not being allowed in Mexico. Give me a break, Leanan, how can you have been here for years and still believe that crap? For you to say that, makes it feel like it's Night of the Living Dead. Are you a zombie Leanan? Have you lost your soul to American Propaganda?
Sarcasm alert.
I'm pretty sure the ;) symbol meant sarcasm. :)
Thank God. I thought I'ld dropped into an alternate reality or something. Don't do that, Leanan!
I'm serious in that that is how Wall St. (and probably Main St.) will see it. Even if refineries all over the place start shutting down due to lack of product, they won't blame peak oil, they'll blame NOCs that won't let IOCs in with their spiffy free-market created technology.
I'm an atheist. I don't have a soul!
Check out Summerland. I'm not what ever religion or group (Celtics or Druids or something) but I have memory of it, and when I ran across someone talking about it I tripped out. I'm a reincarnationist.(I think of it as a playgroundist) You have to have something to fill up that eternal life.
I think it's pagan, perhaps via the Celts. At the end of Lloyd Alexander's Prydain Cycle, everyone with magic has to go to the Summer Country. Which plecks off the teenaged sorceress Princess Eilonwy, since she's in love with a muggle.
Not if you don't have one. :)
Ha...and what, pray tell, drives you to all this PO-Awareness work?
If not having a soul drives one to become altruistic, then perhaps you are on to something.
Not the hope of reward, that's for sure. Now or in the future.
b traven's book about capitalism and mexico.....the treasure of the sierra madre........ we know how that turned out for bogey
The proposed refinery in Panama is currently undergoing a feasiblity study and, if accepted, is slated to begin construction early next year. It is to be built by the combined investments of Occidental Petroleum and the state of Qatar. Qatar wants a bigger share of Latin America business.
The refinery is to be located at the southern terminus of the existing trans-isthmian pipeline that runs across western Panama between Puerto Armuelles and Chiriqui Grande.
I don't believe that Mexico is a major player in these plans, and Qatar may in fact be happy to hear that they are somewhat opting out.
Your Iron Triangle at work -
'Rich Barker, a broker of SUVs, motor homes, trucks and imports at Patti's Car County on US 1 in Fort Pierce is one who describes current sales as terrible - in part because of the softening housing market and because of higher gas prices.
"It's not just me feeling this, everyone down the street is feeling it," Barker said. "It's a new reality that no one wants to talk about because everyone wants the public to feel secure and happy so they'll spend more."'
http://www1.tcpalm.com/tcp/business/article/0,2541,TCP_998_5600408,00.html
The storm is coming - but let's not scare anybody into preparing for it, since that means less profit now. This is part of what is so striking about the U.S. at this point - people can see what's coming, but discussing it is in nobody's short term interest.
This dynamic, while thoroughly normal, has reached extreme proportions in the U.S. - and Americans think that the rest of the world is merely a reflection of themselves. It isn't.
"The storm is coming - but let's not scare anybody into preparing for it, since that means less profit now. This is part of what is so striking about the U.S. at this point - people can see what's coming, but discussing it is in nobody's short term interest."
That sounds so sociopathic. Maybe that's what's wrong with America. We've become a sociopathic nation.
To be honest, I wonder about that. For example, the constant discussion about guns in terms of how Americans feel they are necessary - and the scorn of other societies, where guns are not common. Or the idea that what happened in New Orleans was not a publicly displayed failure of American society, but a vindication that only rugged individualists, guns in hand, can ensure their families safety in the face of lawless hordes.
And the seeming acceptance of torture, though forbidden and illegal according to the Constitution - that is deeply, deeply disturbing. Especially as the justification often hinges on 'defending' America from its enemies, a faceless group of people who can only be recognized by a government which can no longer afford the luxury of following its own laws.
I don't know - after a few weeks last summer in the U.S., it is no longer possible for me to extrapolate America's future as in the past. But the increase in prison rape jokes, entire forms of discourse such as 'bitch slap' (or all the variations on 'bitch' as a put down), the casual acceptance of violence in general, these may not be so easily recognized within the culture as outside of it.
America has always tended towards extremes (lynching has not quite returned to its previous role of public entertainment on a warm summer night), but there may be something more going on. For example, several Germans I recently talked to were amazed at the lack of any news about Iraq in the media they were exposed, whether in Florida or Seattle or NYC. This lack of public discussion of what is being done seems to be a necessary condition to ensure that there is no discussion in the future.
It's because it's bad news, and nobody wants to hear bad news.
We don't have news any more in this country, we have "info-tainment."
Honestly, I think today's media would never have broken Watergate or Iran-Contra. They're too busy covering Paris, Britney, and the latest pretty missing white woman.
It's pretty hilarious (sad) when "The Jon Stewart Show" has more truthful news than the standard MSM.
The Jon Stewart Show is picked up by one of our networks here in New Zealand now, and I have had that exact same thought when comparing it to CNN and other MSM news programs we also pick up on Sky TV...
"You can never solve a problem on the level on which it was created."
Albert Einstein
For anyone that doesn't know, the real name is The Daily Show with Jon Stewart.
http://www.comedycentral.com/shows/the_daily_show/index.jhtml
The lack of reporting is because of a lack of competition in the news market.
arn't there something like 6? major news operations now.
back when nixon was around it was more like 300.
It means that independant journalists cannot sell a story to as many newspapers, if they get shot down by the big 6, then they don't eat.
It also doesn't help that the big six are owned by even larger corporations.
I think the problem may be the opposite: too much competition. And deregulation. It's capitalism run amok.
The news divisions of the major networks used to be run as a sort of public service. They weren't really expected to earn a profit.
Now, they are. They've become part of big corporations that expect every department to turn a profit.
CNN, for example, has been forced to go more entertainment-oriented, as Fox News ate away their market share. Larry King Live, a celebrity interview show, is the top-rated CNN program. They spun off Headline News for those who preferred straight news, and now even Headline News is running info-tainment like Nancy Grace.
The network new shows have been battered by the cable news channels, and they, too are feeling the pressure to go info-tainment. Hence Katie Couric where they once had Walter Cronkite.
PBS probably has the best news these days, and it's not a coincidence that they don't have to worry about ratings or market share.
In a way, we have only ourselves to blame. They're only giving us what we want. And our eyes glaze over and we reach for the remote when news about Iraq comes on, so it's quick, cut to a story about Anna Nicole.
This is an important and often overlooked point. I always hear bloggers railing against the MSM. Conservatives complain of "liberal media bias", liberals complain about "corporate owned media" and both feel like they are not properly represented by the media.
Very few people look at the fact the these large media outlets are businesses, and they give us what we want. We vote with our remotes and the results are clear. We like bleach blond news anchors, aggressive confrontational pundits, and stories about "famous" Hollywood-types and missing white women. Car chases and fires are also popular in the short term, as well as any story featuring the rescue of an animal.
Sigh, I wasn't born a doomer, but watching the deevolution of the media and our political system over the last 20 years has turned me into one.
Don't become a Buddhist. The world doesn't need more Buddhists. Do practice compassion. The world does need more compassion. -- Dalai Lama
Television works best as an entertainment medium, with video images that capture an audience's attention. The televised news, therefore, has to be entertaining, and it has to have good video to go with it. There is no guarantee that the most important news will meet this criteria. On the other hand, CNN will clean up in the ratings with Larry King's interview with Paris Hilton this week.
Sometimes video can communicate news well, as with weather radar or satellite photos. Most of the time, written words work better. The brain has to actually do some work to handle text.
And the decline in newspaper subscriptions, newspaper budgets, in the US? Is it all because of the popularity of the intertubes, or are American brains becoming lazier?
Don't become a Buddhist. The world doesn't need more Buddhists. Do practice compassion. The world does need more compassion. -- Dalai Lama
For me, it's definitely the Internets. I used to buy several papers a day, or at least grab them after others were done with them. Now, I don't bother. I read it all online. It's cheaper, and I don't get ink on my fingers.
I still read (skim selectively) the NYT, WSJ and sometimes the FT. Most of it IS junk, but some very worthwhile stuff leaks through occasionally, including on PO. But if I were forced to choose between these and the net, it would be a total no-brainer. On the darker side, I don't think this situation on the net will continue. There will be ever more intense efforts to throttle and control this medium. Don't grow overly dependent on it it. (But please don't ask what choice you have.)
TV I don't watch at all unless it's a clip posted on YouTurbe or the like. Actually, I watch it ten minutes a year, when we stay in motels going to and from WV to see my daughter. I flick thru all the channels, get completely disgusted, and that's it for another year. I have a friend
who gets mad at me because I don't follow all the stuff on TV. But why should I care about the Paris Hilton when I've never even been to Paris?
Forgot to add: one of the things slipping thru, in particular in WSJ, are hints of panic re the economy. I saw the word "cliff" as in "edge of" in today's.
I'll jump in here -
'They're only giving us what we want. And our eyes glaze over and we reach for the remote when news about Iraq comes on....'
I think far too many people are forgetting a war which was finally shut down due to popular will, the one America 'lost.'
That war was pretty much the first one in human history broadcast without effective censorship within a democracy.
And that experience confirmed a lot of truisms about ensuring the reality of war remain very far from public discourse.
The German media shows much more 'reality' about war, not merely in Iraq, and it is not a question of protecting children or sensitive people from that reality.
The American media isn't showing anything like the images published in Der Spiegel or Die Zeit - they tend to be merely a reflection of what happens in a war, a reminder of why war is wrong.
Look at the classic Vietnam images, combining reality with something more - a feeling of responsibility, pictures documenting what we were doing, not the enemy. An enemy which just happened to be the people who were living in their own land.
There is no way that any functional government, pursuing what it sees as a necessary war, will again voluntarily let its citizens see the reality of what their government is doing.
And that censorship runs deep - 'protecting' viewers from the gruesome reality of what is actually happening to real people, for example, is just part of the common censorship ruling the American media. Censorship which püurports to reflect civilized conventions, ones beyond any reasonable discussion, but which serves the brutal logic of war.
I haven't forgotten it. The difference is the draft. Or lack thereof.
Personally, I still think the difference was lack of censorship and active participation of the citizenry, in part because of the experiences of the civil rights movement in forcing change.
Drafts are an entirely normal part of war - most wars involve drafting, as most people won't voluntarily become soldiers.
Now, if we want to discuss the baby boom and their active self-interest in avoiding risking themselves, it is a valid topic - like Cheney, who had better things to do.
Hey, you have to admit, Katie Couric's legs are a lot more beautiful than Walter's.... and PBS had funding cuts because it doesn't "have to worry about ratings or market share."
Everyone is talking about Rupert Murdoch buying the WSJ and the Dow Jones..
Nobody seems to be asking WHY he is buying (trying to corner) the financial news outlets.
http://www.observer.com/2007/times-responds-news-corp-slam-are-you-kidding
I'm not a lawyer, but it seems to me our coroporate law giving a corporation the rights of a "person" has turned us into a nation of sociopaths. Corporations have the legal right of a person, but not a person's ethical responsibilities. Corporate officers are responsible for enhancing profits. What do we call a person who's decisions are based soley on personal gain? A sociopath.
It seems to me that if a corporation is found guilty of any criminal act, the proper legal action should be that all corporate assets are forfeit to and confiscated by the state, to be liquidated at auction to fund a corporate victims compensation fund. The creditors and shareholders would be left with nothing -- but I suppose that they could go after management in a civil suit to attempt to recover some fraction of what they lost.
We seem to have no trouble confiscating the property of drug dealers when they are busted, why should corporations be held to a different standard?
Sociopathic criminals are locked away for life -- and thus effectively have their lives shut down as far as their involvement in the outside economy is concerned -- if they cross certain lines of criminality. Why should corporations be treated any differently?
If this outcome were a real possibility, I can guarantee you that shareholders would get a lot more activist, and creditors would look very, very carefully at a corporation before lending it money.
Which all raises the question: Why is it not already this way? I'm afraid we all know the answer: Life is not fair, "justice for all" is a slogan not a reality, and those that have the gold make the rules.
Corporations were actually given personhood after a Supreme Court decision, Santa Clara County v. Southern Pacific Railroad Company, in which the court reporter erroneously summarized the Court’s findings of law in the head notes that personhood for corporations was found in the fourteenth amendment. A truly disastrous development for this country.
For a short summary see:
http://www.straightdope.com/columns/030919.html
This a better article explaining the decision:
http://www.thomhartmann.com/theft.shtml
This theft is still going on today, witness the recent decisions by the Supreme Court by a slim 5 member Christian fundamentalist reactionary majority (was that enough bile?) that pretty much gives corporations and the neoconservatives everything they want. When I was at the University of Minnesota Law School I had a professor for civil procedure, Roy Brooks, who contended that all higher level decisions are based on what is called “policy analysis”. That is rather than precedent it is an agenda of policy considerations, - for example how will this decision help the economy? - that dictate how a case is decided. Therefore the desired outcome decided first and then case law is found and distinguished to back up the decision. As a “conservative” back then I was repulsed by this notion that something other than “finding the law” drove court decisions. How naïve I was.
The most important case was Henry Ford vs The Dodge Bros.
'The most famous case in American corporate law, decided in the Supreme Court of Michigan in 1919. It posed a short but complicated question: what is a corporation supposed to do, and who gets to decide its fate? Is it really all about maximizing shareholder value?'
http://everything2.com/index.pl?node_id=1768159
That is one of the main points of the movie The Corporation.
There is a freely downloadable version available at YouTube and such.
I highly recommend it.
Yep - that's a good primer for studying corporate personhood.
"You can never solve a problem on the level on which it was created."
Albert Einstein
The whole financial market has grown increasingly complex, and it is this complexity that is part of what holds back the full story from filtering through the system.
This article talks about the role of credit rating agencies in the current mess. Loans gets sliced up and resold. The purchasers of these new assets rely on credit rating agencies in determining whether these bond are safe or not.
As long the credit rating agencies say all is well, and the real defaults don't start showing through, buyers of the repackaged loans can keep their heads in the sands. Once the defaults start showing through, the error of the credit rating agencies will become apparent. I don't know haw quickly this will work through the system. Once it does, it seems like it could result in "the great unwinding", especially if interest rates are also rising, exacerbating problems.
I agree that the details of financial institutions and instruments is becoming more complicated. But the essential elements of finance are unchanging. BTW, finance is not especially hard to understand, and I'm speaking as one with an MBA in finance (U.C., Berkeley, 1965) and some dozens of credits beyond the MBA.
Being an actuary is tough. Being a financial guru is relatively easy. I'm even willing to make fearless forecasts, such as: Interest rates will go down.
(But my crystal ball hazes over when it comes to a question of when rates will go down or how much or what the shape of the yield curve will be a year from now.)
Another fearless forecast: Inflation is the big problem. Deflation we do not have to worry about. We are not going to have a rerun of the Great Depression, in large part because of the invention of macroeconomics that was stimulated both by the Depression and also by the mobilization needs of the Second World War.
Don
Re: your fearless forecast
What if unemployment reaches 20% and energy and food prices skyrocket? What effect will macroeconomics have then?
....just wondering.
The current unemployment figure is those eligible and recieving unemployment benefits. Has nothing to do with the actual number of people without gainful employment. That figure is far larger.
Cid,
You are mistaken about how the official unemployment statistics are gathered and corrected. It has nothing to do with those receiving unemployment benefits; rather it is based on a stratified random sample of U.S. households.
The official statistics are of great value in showing changes in direction and magnitude of unemployment.
Few people outside of economics or statistics understand how the numbers are computed, so don't feel too bad.
If prices are skyrocketing, we do not have a rerun of the Great Depression, where food prices fell year after year after year after grim grim grim year for the farmers.
With inflation the Fed and the Treasury (working in cooperation) can inflate away all the excessive debt that is out there. Why would they not do this.
IMO, the chances of a debt induced deflation are about nil.
Back in the Great Depression, a much larger % of our economy was ag based. So an increase in food prices in the future would hurt many more people than it would help, now.
I wasn't referring to a debt induced deflation, I was implying a PO induced recession.
High food and energy prices will cause increasing numbers of unemployment and a gradual loss of our consumer driven economy. Ben has an impossible balancing act right now, between keeping our economy going and keeping the Asians buying our bonds in a world of decreasing energy supplies. We're in uncharted territory now with the complexity of our global financial system, central banks, derivatives, and energy supply.
Kalpa,
You are quite right to state the concerns that you have mentioned. IMO, however, the mother of all economic problems from Peak Oil is going to be massive and persisting structural unemployment.
With enough inflation we can stop a cyclical recession from turning into another Great Depression. But nobody has the faintest idea of what to do about a humongous increase in structural unemployment.
I'd be interested to see if anybody on TOD has some constructive ideas in regard to structural unemployment--a problem that we don't even know how to deal with in good times. In all probability, radical measures will be necessary, some will be tried, but it is hard for me to imagine any of them working well. The history of the attempts by the U.S. to deal with structural unemployment is a sad and discouraging one.
Farming + Electrification Of Transportation (FEOT)
As I told Alan yesterday, one of the reasons that I support his plan is that it puts unemployed angry males to work.
And one good reason to own a small farm (perhaps through a joint venture arrangement) is that you can put your unemployed college graduate offspring to work on the farm.
FEOT is good, but I have three concerns:
1. I expect the magnitude of the structural unemployment to be in the forty to sixty million person range. We must go far beyond FEOT.
2. Who is to teach people to farm and to electrify transportation? My own least bad solution is community colleges--but these are largely commuter colleges, and hence getting to them with gas at over ten dollars a gallon is going to be a challenge.
3. Many people are going to experience drastic downward social mobility: How do we deal with this short of martial law? For that matter, will martial law be enough to stop the riots? We might be looking at a reign of terror that would make the French Revolution look like a comedy show.
Thus my search for an old lime green Volvo, with a Greenpeace sticker.
Structural unemployment equals lots of cheap soldiers. milice, border guards, thought police and secret police. All fired up and angry at the enemy, both within and without. ('will fight for rations').
Cheap = unsophisticated: More Dr. Zhivago than Dr. Strangelove. But still effective to the coming demagogues of a post peak world.
Also, they will need a lot of cavalry mounts.
Saddlers should do well.
Think Cold War Eastern Bloc...
Here's a nice portrayal of what you may be heading for (more of):
http://www.rottentomatoes.com/m/the_lives_of_others/
"You can never solve a problem on the level on which it was created."
Albert Einstein
See my previous post -- only something along the lines I have suggested can be scaled up to the degree needed.
Community colleges are great, some of the most valuable assets we have going for us. The program I have suggested could be structured so that as participants work part of their compensation can be in the form of vouchers toward community college tuition. If you have participants in dorms or barracks and the program operates a fleet of shuttle buses to take participants to and from job sites, it could also take them to and from community college classes. Community colleges could also make arrangements to offer classes on site at program residence centers. This is SOP for most community colleges, they have such arrangements with major corporate facilties, prisons, etc.
Again, see my other post. Some of the work to which program participants can be put includes various adjunct and assistance tasks with law enforcement and homeland security agencies. Specialized training may need to be provided for some tasks, but this will be true for many of the other things they will be doing. I anticipate that some sort of specialization and rank system paralel to the armed forces will develop in such a system.
Americans might not feel very comfortable with this level of collectivation and regimentation, but they would probably feel far less comfortable with 40-60 million unemployed, hungry, homeless, desparate, angry, and violent people rioting on the streets.
Don, 'philosophy soccer' worked well for Monty Python. Maybe our government can sponser a variety of sports teams. Why limit it to philosophy soccer when we can have 'baseball for bricklayers' and 'basketball for hookers'? Well, you get the idea. Ben's helicopters could hoover over the fields at halftime and throw out the money. People would be entertained and pick up a few bucks at the same time. Sort of like bread and circus. Perhaps it would stop them from hanging their local politicians?
Out of work teachers, lawyers, and businessmen became farmers in Cuba during the special period ..suppose it'll happen in America too? Seems like a manual harvesting or maintenence job would beat starvation any day. Also anyone able to figure out a way to grow a surplus from the fruits of their own would have a very marketable commodity and hence 'have work'.
I expect the world will contract quite a bit. Filling the needs of those formerly obsessed with their next jet-ski or vacation by offering them jobs harvesting vegetables, forest products for fuel or in various low tech re-use and recycling industries may be a tough fit but necessary.
Converting an economy committed to growth to one which mearly provides for essential needs and not much profit can't have much allure for investors. Some jobs tied to the development of green house tech, renewables, and small transport technology are probably inevitible and could make money.
The notion some entity like a government/big oil revenue program would develop into a massive rebuilding and extending of our Urban and intercity rail system is afoot. That would create jobs and produce a positive payback in the bargain. Don't know if the resources will be left for that after we try to save suburbia, interstate trucking, car manufacture and the airlines but...
Since so many respected folks like Alan, JHK, Simmons, and WT have reached the same conclusion I'd say it may be our last best hope.
If I could be the chief advisor to a truly COMPETENT US President (OK, I'm dreaming here, but at least not to the extent of pretending to be Prez myself!):
As I see it the only good answer is to make the government the employer of last resort. Set up a program somewhat along the lines of the depression-era CCC.
One big difference though: Design the program so that people can move in and out of it repeatedly as their life situation changes. Keep the commitments relatively short so that people are free to move into other jobs if they get an offer, but allow them to work in the program for as long as they need to.
A big, critical feature: Abolish the minimum wage, but set up the program so that the combination of in-kind compensation (food, shelter, uniforms, health care, transport to/from worksites, education) plus cash stipend will provide a decent safety net. The package should be high enough that employers will actually have to offer living wages to attract employees, otherwise they would be better off continuing in the program.
Have an initial intake/orientation/training "boot camp" for everyone as soon as they leave H.S. Then they can either continue in the program, go to college, go to the military, or try to find work. The door is open for them to come back at any time if they need the safety net.
This program would become the primary safety net for almost everyone. Everyone who found themselves unable to support themselves could re-enter at time. They would get decent healthy meals, minimal shelter (I am thinking dorms or barracks here, maybe very minimal private quarters for married couples), uniforms, health care. Participans without a HS education would have an opportunity to complete their GED, people not fluent in English could take ESL classes, and some ongoing training could be offered in basic job and life skills, etc. Because most of the compensation would be in the form of in-kind benefits rather than cash, it could be run on a shoestring. Indeed, the participants could do a lot for themselves -- constructing their housing, growing and cooking their food, sewing their uniforms, etc.
You might even make it possible for someone to participate in the program on a part-time basis while working at an outside job. They could earn the rights to shelter, food, health care, etc. with just a few hours of program work per week. They would thus be able to save up their money from their paid job, and ease their transition into the employment market.
The one exception to the door being open to anyone at all times would be troublemakers. Strict rules would be enforced, and anyone causing trouble would be out on the street with no safety net. Some of the work opportunities within the program would be to maintain a high level of internal security. All participants must feel that they are very safe at all times while in the program.
What type of work would they do? In addition to the types of stuff that the CCC did, I can see lots of other stuff. There will be lots of buildings and residences needing energy conservation retrofits. Yards and vacant lots could be dug up and vegetables planted. Abandoned suburban housing could be dismantled and the building materials recycled. For those of you worried about societal breakdown, here is where a lot of the homeland security eyes and ears could come from. Work crews could be hired out to help fund the program.
One of the advantages of such a program is that it gets around the problem of so many potential jobs being less than really full time. This program could more efficiently match a marginal workforce with such marginal work opportunities, actually increasing the efficiency of the economy.
This all sounds quite radical, I am sure, but only a radical solution will work. The sad, hard truth is that we have a significant and growing fraction of our population that are just about worthless to the market economy, left to their own devices. By organizing them, providing effective leadership and strict discipline, and assuring that they need not fear destitution, they just might be formed into a workforce that is economically viable.
Give it a name! I suggest Stalag_ or Gulag_. The CCC camps worked well while they were in use. Drive along the Blue Ridge Parkway and look at all the beautiful stone work that was done during the depression.
Lets face it, if we are going to continue to be an auto society we are going to have to repair the infrastructure of roads and bridges that have fallen into disrepair. The amount of work on public projects now dwarfs what needed doing during the depression. Ir we are going to give up autos then new light and heavy guage rail needs to be built.
This damn government of ours will do nothing outside defense appropriations. If they would look inward and forget the idea of being an empire and policeman for the world we could once again become a great country.
The first thing that needs to be done is an overhaul of corporate law. Failing that, we will remain on our current trajectory until we hit the wall. Since I believe that the ship of state has grown too cumbersome to change course, its the wall for us. As our government and power elite see the situation it is a matter of empowerment. They do not wish to do anything to empower Americans and they see all public projects as empowerment. The reason that our government hates Castro, Chavez, et al, is that those leaders are empowering their people by spending money on their people...health care, nationalization of oil, etc.
Lord Acton summed up our situation very well with a single sentence: Power tends to corrupt, and absolute power corrupts absolutely.
Lord Acton was very much against the North during the American Civil War because a loss of the war by the South meant the loss of State's Rights. He predicted correctly what would happen if the North won the civil war: Tyranny.
http://en.wikipedia.org/wiki/John_Dalberg-Acton,_1st_Baron_Acton
I knew there would be some people that wouldn't like my proposal. I'm not really thrilled about it myself. . . but I'm even less thrilled at the idea of 60 million unemployed, hungry, homeless, desperate & angry people on the streets and left to fend for themselves. Desparate times call for desparate measures.
I would just point out that except for an initial "boot camp" of a few weeks, participation in my proposed program would be completely voluntary. If I recall my history correctly, I don't believe that either the Stalags or the Gulags were voluntary programs.
I would be perfectly happy to see such a program as I have suggested set up at the state level rather than the federal level -- IF the federal government would get out of the way of the states.
'If the federal government would get out of the way of the states...'
Sorry to be the one to break the news to you but the federal government is going in the opposite direction. The FG of the current administration has taken direct control of the National Guard, formerly under direction of state governors. The FG has mandated K12 testing that relegate students to the role of bots, learning only what the tests contain. The FG has stacked the supreme court with right wingers, who, just yesterday agreed to allow shrub's 'faith based initative' to continue, in direct opposition to seperation of church and state. The FG has invaded its citizens privacy by illegal wiretapping. The FG has usurped the powers of our justice department for political gain. The FG has granted enormous tax cuts to those who least need them, while at the same time inflated our dollars by printing the hundreds of billions of dollars to finance the illegal and failed war in Iraq. The FG has shifted enormous powers to the administrative branch...stripping it from our elected senators and congressmen. I could continue but I believe that you get my drift: Power is flowing to the top, not to the states...Just as Lord Acton predicted.
'An initial boot camp of a few weeks...' In all of history can show me an example of those that have attained power voluntarily giving it up? There may be a few instances by extrodinary individuals but for every one of those I can name a thousand Cheneys. I believe you need to reread our constitution, study some history, and fight the good fight against those jackals that have seized our country and are shredding our constitution. 'Those that would willingly surrender their freedoms for the promise of a little security deserve neither'...Ben Franklin.
I like your idea, however, there is a big problem. All the jobs that this organization can do are already being done either by government or by private enterprise. You would basically put large segments of the economy out of business.
The sad fact is that without a large excess of energy to support non-critical activities, we just have too many people. About all we could do would be to put that 60-100 million people in front of a tvs in big camps and give them food and free drugs and alcohol so the don't consume much energy and don't cause any trouble. Then we just wait for them to die of poor health.
There are plenty of socially desirable things that could and should be done but are not being done because the market does not value them. Many of these things are in the character of public goods; it is the classic free rider problem that explains why the market does not put a proper value on these jobs. For example, public safety could be considerably enhanced if a cadre of night watchmen, equipped with two-way radios, patrolled neighborhoods on foot, each cadre in constant contact with and under the supervision of a policeman on the beat. Because of the free rider problem, people in the neighborhood that would benefit greatly from the enhanced security will not voluntarilly pay for the service. Yet, such a service might have a very high social and economic value -- indeed, it might make the difference between holding society together and it coming totally unglued.
My proposal was in response to a specific problem: what to do if 60 million are already out of work. Under that scenario, all of the marginal jobs are already gone. The types of work that would be done under this program is not going to put anyone out of work, for no such jobs would continue to exist.
"About all we could do would be to put that 60-100 million people in front of a tvs in big camps and give them food and free drugs and alcohol so the don't consume much energy and don't cause any trouble. Then we just wait for them to die of poor health."
except for the big camps part, and change free to cheap, we already do that
But won't we need 250 strong men or women to do the work of every front-end loader?
Thank you! I was waiting for someone to point out that once the cheap energy is gone many hands will be needed to replace it.
Many will die doing the tough manual labor that will be required to repair and maintain infrastructure, but it has always been so. Read the stats on deaths during construction of the great damn, bridge, and road projects of the depression era. These vast projects were not the only places where the weak, incautious, or just plain unlucky were eliminated. All manual labor projects cost more lives than those employing large machinery. One of the benefits of putting people back to work will be the reduction of obesity and diabetes that is now rampant in America. The problem of child obesity will decline. The life expectancy of Americans might decline. People will take more interest in what their government is doing as the calluses grow on their palms and they realize the true cost of a loaf of bread. We should remain compassionate and maintain a system of social security or some form of help for the aged or infirm. Medicine will have to be socialized. Nothing less than a total restructuring of the economy will work if we are to remain a vibrant nation.
I am not advocating slave labor camps but paid labor carrying out tasks that will need to be accomplished after the end of cheap oil. Many that are now employed in the 'service sector' of our economy (which is really just a system of swapping dollars among Americans, doing nothing to create goods for export that adds to our economy) will have to move to jobs that will rebuild infrastructure and carry out other vital tasks. Many that are sitting on their fat asses in front of computers in our 'information based' economy will have to do some real work to put bread on the table.
The transition will be painfull, many will die, but many will live and we will have a stronger nation, based on a realistic economic model. All who believe in 'American Exceptionalisim' are simply deluded. America is going to have to compete in a dog eat dog world like all other nations. We are starting out with a huge disadvantage because we have almost no public transport and our housing is scattered all over hell and gone.
Corporations will have to be restructured to return to a role of subserviance to the federal and state governments. The military will have to be reduced to reflect a new policy of defending our shores and staying out of 'foreign entanglements.' Power of the purse will need to become more balanced between state and federal governments. But, our constitution can continue to be the foundation of our country. This American experiment can continue if we want to continue it. We did it before oil, we can do it after oil.
All the jobs that this organization can do are already being done either by government or by private enterprise.
If the government can not collect enough labor of the people via their income - do you think that the chance to collect the labor directly will not be done?
Eh?
Then Don's "fearless forecast: Inflation is the big problem." will have come true by definition. No?
Didn't Ben Bernanke tell us long ago that creating money is no problem?
They dont call him 'helicopter Ben' for nothing. At one point he suggested that money could be thrown out of helicopters to boost spending and insure that enough money was in consumers hands. That lad has some far out ideas.
I suppose we can use it in a wood stove to keep warm.
Actually, Bernanke makes it clear in the linked speech that he's got other ways to do the deed, such as banking manipulations. Though he attributes the "helicopter drop" term to Milton Friedman. But I can't find a cite for where Friedman invented it, in all the search clutter - Don, do you know?
I knew Milton and got some valuable tennis tips from him back in 1955-56 when we were both at the University of Chicago. I question whether he used the term "helicopters." Most likely he adopted the idea (by no means a novel one) of bombing a population with dollar bills to keep the money supply up during a depression. However, I have no reason to doubt Ben's memory: If he said (to the best of Ben's knowledge) that Milton (in some semiflippant comment) referred to bombing the population with money from helicopters, then Milton said that. However, the idea, as I've said, is by no means original with Milton Friedman and is a variation on a comment by John Maynard Keynes in his famous 1936 book, where he wrote about burying bottles of money and digging them up to stimulate the economy, because pyramids were out of fashion.
And of course, the idea is not original with John Maynard Keynes, either. There are few good original ideas in economics (or anywhere, for that matter).
Rather than build pyramids or bomb the cities with currency, we should electrify our transportation infrastructure, which would make a lot more sense than loading up helicopters with fives, tens, and twenties.
that would be called stagflation
Don: My (perhaps overly simplistic) working model for planning purposes assumes that the next decade will look and feel a lot like (but not exactly replicate) the 1970s, while the 2020s will look and feel a lot like (but not exactly replicate) the 1930s.
With regard to that 2nd decade: I agree that deflation is unlikely, both price and money supply inflation are a more likely scenario. However, I think it is quite possible that we can have roaring inflation in the 20s and daily living conditions for a lot of people will still remind them a lot about the stories they heard of the 1930s. The dislocations are likely to be every bit as severe, with a lot of businesses (mainly in the discretionary sector) failing and a lot of people needing to find other work. Lots of job dislocations due to impossibly high commuting costs, too. Energy and food prices will rise enormously and put such a squeeze on even employed people that it will seem that money is every bit as tight as it was in the 1930s, for all practical purposes.
As to interest rates, though, I don't share your confidence about them going down. The US dollar has been under pressure for several reasons that I'm sure you already know. Normally, the Fed would have already raised interest rates further in response. However, as we all know, there is that whole housing market and mortgage interest rate mess out there. Normally, the Fed would have already lowered interest rates in response. They can't both raise and lower rates, so since they can't do both, they are apparently doing neither.
Being a financial guru might be easy, but being a Fed governor right now must be hell!
In general, I agree with your comments. IMO by far the greatest hardship caused by Peak Oil will be a great and abrupt increase in both structural and cyclical unemployment.
Eventually the Fed will either ease the money supply or it will tighten credit. Because the Fed has already bombed the housing market, my guess is that they will work to get long-term rates down a bit over the next two years. Note that one thing helping the Fed is the low rate of core inflation. (Of course that low core rate could change if the price of oil doubles and redoubles, as it undoubtedly will at some point not too far in the future.)
If inflation rates soar (as I expect them to do before the year 2020) then nominal interest rates will soar along with inflation. Recall that during the inflation in Germany in 1923 debtors pursued creditors--anxious to pay off mortgages and other debts for less than the price of a postage stamp. Those who were liquid were ruined. Those who went deeper and deeper into debt, such as the notorious Hugo Stinnes, prospered big time. Of course, with the end of the inflation Stinnes was ruined. It helps to get your timing right;-)
A small stash of those "Forever" postage stamps could be a pretty good investment, then?
;-)
This is your greatest hardship, Don? Or what this triggers? A huge variable is how the US will weather what is effectively an economic collapse. Since I don't think any of us can be sure of how that will play out, my motto is plan for the worst and hope for the best. ;)
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
In my opinion, massive structural unemployment is worse than hyperinflation that wipes out all savers and creditors.
In other words, I expect to see the concrete reality of "economic collapse" in structural unemployment for fifty million Americans (plus or minus ten million).
In addition to the intractable problem of structural unemployment, I expect another (roughly) thirty million to become unemployed due to cyclical unemployment.
Thus, if my guestimates are right, we'll be looking at well over half the labor force unemployed--at a time when the government is broke and running ten trillion dollar deficits . . . each month.
On my optimistic days, I buy tools for repairing bicycles. On my gloomy days I read up on military history and revolutions.
Don, ever read "Anatomy of a Revolution" by Crane Brinton? I was assigned this book in a history of revolutions class. Very good analysis, not perfect, but commendable in it’s effort to separate the stages of Revolution and the similarities between all of them.
I've read Brinton's book three times. Unsurpassed to this day.
Right now many in the US are bailing out of their homes and taking a 10-20% loss. I would catagorize those losses as 'deflationary.'
DEFLATION
'A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression.
Declining prices, if they persist, generally create a vicious spiral of negatives such as falling profits, closing factories, shrinking employment and incomes, and increasing defaults on loans by companies and individuals. To counter deflation, the Federal Reserve (the Fed) can use monetary policy to increase the money supply and deliberately induce rising prices, causing inflation. Rising prices provide an essential lubricant for any sustained recovery because businesses increase profits and take some of the depressive pressures off wages and debtors of every kind.'
http://www.investopedia.com/terms/d/deflation.asp
The key word there is "general". It is quite possible for prices to be declining for one category of good (housing), rising for another (energy) and stable for most others, all with no real inflation or deflation.
In fact, as energy and food prices increase in real terms, one would expect that the prices for most other things would decline in real terms. The opportunity cost of paying more for food and fuel means that there is less remaining to pay for other stuff.
Published on 4 Dec 2006 by Energy Bulletin. Archived on 4 Dec 2006.
Closing the 'Collapse Gap': the USSR was better prepared for peak oil than the US
by Dmitry Orlov
http://energybulletin.net/23259.html
One would expect a lot of things when the Fed is printing money as fast as the presses will run. I expect that the dollar will soon become irrelevant as a world currency but will continue to be used internally in America because we have nothing else to use except barter. The system worked in the CCCP for a long time when the Ruble was hardly welcome abroad. The CCCP collapsed because oil prices crashed, not because the buffoon Regan demanded that the wall be torn down. Our crash will look somewhat different since we are not dependent on oil to bolster the dollar. I have included an interesting link that gives a comparison of the collapse of the CCCP and the coming collapse of the US. The author and speaker lived through the collapse in the CCCP and is probably qualified to speak and write on the subject. At least, he sounds like he knows his subject.
So you think that means that most other things will cost less? If a thing has a cost and your disposable income goes down, that doesn't mean the thing now costs less than X. It means you go without.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
more than that, if the prices of several key ingredients to other objects (energy for instance) go up, then the price of the item, in real terms, also has to go up - in essence as the price of energy goes up you get hit twice, firstly the fraction of your income that has to be spent directly on energy goes up then, out of the smaller remaining (disposable) share, you get less as the cost of those items in real terms has also increased
if you spend 10% of your income on energy, and its price goes up 20 percent, you now spend 12% of your income on energy.
assuming the price of other goods would have to go up by atleast 10% (estimating raw energy cost to be %50 of the final cost)
before this price increase you had purchasing power of 90% of your income, now you have purchasing power of 80%(88%/1.1) of your income.
In this scenario, even though your direct expenditure on energy only increased by 2%, your purchasing power decreased by 11% (80/90).
I keep wondering about the hedge funds. Why/how can an investor buy an article that is unvalued, as I understand hedge funds. BearStearns intervined to prevent a valueation of funds from occurring, that is the take I got from last weeks activity.
Now another UK real estate based fund tanks in UK, and still, why would the wealthy, who didn't get that way from giving away money, invest in the first place in a vehicle that is unvalued?
"The rally pushed the yield of two-year notes to the lowest this month on hedge fund losses at Bear Stearns Cos. and the U.K.'s Queen's Walk Investment Ltd. The National Association of Realtors reported today that sales of previously owned homes fell in May to the lowest in almost four years.
``People are looking for safety here,'' said Charles Comiskey, head of U.S. government bond trading in New York at HSBC Securities USA Inc. There is ``a lot of concern out there.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=aodde6dt02v0&refer=home
I think part of the problem is reliance on models as to what the price should be. As long as you don't have other good information, you keep going back to the model - which perpetuates the myth that you know the truth.
Models can have a whole host of problems - they may match reality for only certain ranges; they are likely to underestimate real-world variability; and the choice of the model can easily influence results, but users aren't aware if this. I expect investors have more faith in the models than the future will show was warranted.
Models are fine until the parameters turn into variables:>)
What did Dmitri Orlov say?
"It may not be profitable to slow decline."
http://www.financialsense.com/editorials/weiss/2007/0625.html
MORTGAGE MELTDOWN!
Yea WT...that's some scary sh*t. But somehow, some way, the willey coyote is still treading air after he has run off the cliff.
Please explain it me..anybody...without using ANY conspriracy theories.
Except they're only bailing out the smaller hedge fund. The larger one is up for grabs. They can only afford to bail out the smaller fund. Personaly it's foolish to bail either of them out. They're going to need that cash to deal with future litigation. What they should have done is let them both fail and work with the investors to litigate against the lending institutions that sold them bad bonds on false documentation (aka the NINJA loans "No Income, No Job" and no Doc Loans). By trying to bail them out, they become the target of litigation by investors.
Australia seems to have one problem after another. Today's story tells about energy shortages, and in particular electricity shortages, in Australia.
We have also been hearing about drought and water shortages. It is not a very large economy to begin with. I am wondering how this will all work out. Will Australia be the canary for the rest of the developed world?
With Australia, we have a country that clearly has energy resources (coal, uranium), but the problems illustrate that while these resources are helpful, a country has to have other things as well (investment in infrastructure, water), or it doesn't get the energy end product it needs. Also, we have Liebig's law of the minimum at work - if there is not enough water or electricity, other things don't happen.
True true true.
Current society has been built on having some level of energy to run everything. This is a cost built into the system.
Coal was used to bootstrap oil production, which bootstrapped current society (rockets, compys, internet)
I will make an addition, that in "free markets" (quotes cause no market is truely free) shortages do not occur in the absence of price ceilings. The price of a good will rise and demand will drop.
But with current society and the minimum cost, if demand falls too far and price goes below that threshold the good will no longer be produced.
The good in this case is NatGas supplies in Australia.
Generalize it to the world and notice that oil will follow the same curve (look at the Iran Story about the budget being done already).
In our global "free market" it is simply becoming too expensive to live.
When basics such as food, water, and safe shelter become too expensive, people die.
Welcome to the "ownership society" -- or not.
Can you afford to live in our Brave New World?
I will use the golden rule:
He who has the power makes the rule
If economic power is no longer important, I will rationally resort to physical power (guns, swords, arrows(renewable!), clubs, and fists) to protect myself, my close ones, and to obtain what we need to survive and procreate.
Everyone becomes an outsider in this scenario. A 9/10 population reduction will happen very quickly.
The world isn't a nice place and I am not going to be the one to die.
Australia's current issues with energy shortages are really just a symptom of the extended drought (not enough water for the coal power plants), which is bound to break sooner or later (and may already be doing so). Gas is a very temporary problem also - new refineries are being built tapping supplies that are expected to last over a 100 years at current consumption rates (we're a long way off "peak gas" here). And Australia's economy is continuing to boom along, despite all the set backs, in part due to strong exports to China.
I actually feel far more confident about Australia's future than I do about the U.S.'s - we're less dependent on foreign oil (we import about 20% of our needs, and the amount we do get comes from relatively stable areas - mostly SE Asia), and while there is a significant percentage of the population that will be hit hard by skyrocketing fuel prices, the need for better public transport is already recognised by major governments, and has been improving rapidly in recent years. We have enough land and energy resources to keep ourselves self-sufficient for a long time (assuming we control immigration sufficiently). The biggest risk is the Australian economy's dependence on trade with China and the US. Once those economies hit the skids, ours will hurt badly soon after.
Seems to be much how I see it, although i'd imagine that New Zealand is probably in a better position that we here in Australia are, I think we'll see a reversal of the decades long trend of New Zealanders migrating to Australia. Nonetheless one of my prime concerns remains how the outer suburban sprawl of our large cities will cope with rising oil prices and subsequent oil shortages. Already we have a large car driving populous that is agitating the government to "do something" about petrol prices (who seem to be responding in kind, I can't help but feel that will be this year's federal election "wedge issue"). Will they accept a wholesale restructuring of the economy to shift to a lowering energy consumption, or will we see a backlash as the growth dissapears?
Unfortunately in some respects, Australia has not seen hard times for 15+ years now, I'm 26 and can barely remember the last time we had a full-blown recession. Most people my age, who are not so aware of the past, have no idea of what the economy can do when it turns against you, and I feel that the same can be said for a lot of people older than me, who have been lulled into a false sense of security by the ongoing prosperity. I think that how Australia handles the next couple of decades is going to be entirely dependant on whether these people pull together and recognise the gravity situation, do something about it, and this effect flows onto what is likely to be a fairly disgruntled youth; or whether we will see large scale problems due to the inability of the population to respond to hard times. I can't say I'm overly hopeful, however maybe we'll get by. My greatest fear is that people are more likely to look to a leadership who promises them the world, rather than one who tells the truth.
I think the "tyranny of distance" that Australia was so concerned about in the past may in the end help out, though that may be dependant on how things go to our north, in south-east asia. One thing is for sure though, with our water issues on top of everything else, the next few decades are certainly going to be interesting
Matt
"Australia's current issues with energy shortages are really just a symptom of the extended drought (not enough water for the coal power plants), which is bound to break sooner or later (and may already be doing so)"
--In Ecology of Fear , Mike Davis describes two mega droughts endured by S. California and much of the rest of the SW in the middle ages, one lasting 120 years and the other 220 years. (one of them was likely associated w/ the Anastazi "moving on"). Sooner or later can be a long time!
matt
Can be yes, but doesn't appear likely in this instance.
Sydney's dams are already filling up, and Melbourne's are due to over the next week. And given the new desalination plants and other projects coming online, I would think that within 5 years or so water shortages will be more or less behind us...at least until another major drought hits (which it inevitably will).
I just listened to what is, IMHO, a fantastic interview on financialsense with Bill Paul, who has written a new book on energy. After following the peak oil story for a few years all the info becomes somewhat redundant and repetitive, usually quite negative and defeatist. This guy acknowledges all the facts accepted by TOD re energy supply while still painting an optimistic vision for the USA. I am not saying that he has a crystal ball, but IMO his predictions are far more realistic than these Mad Max scenarios. I think everyone would enjoy the interview no matter what your future views are.
Then why not post a link?
http://financialsense.com/fsn/main.html
One line from the show:
"We must find a way to keep on driving down the highway without going bust."
He did not mention running our cars on dark matter, but he suggested just about everything else. Plug in hybrids was his big push. Plug in hybrids will increase energy security and reduce our dependence on foreign oil according to Bill Paul.
Of course there was lots of everything else that he proposed that will enable us all to keep on trucking. So not to worry, we will have a green energy security in the future according to Mr. Bill Paul.
Ron Patterson
Ron: I didn't hear the Pollyanna story you heard. I thought his comments re LNG were quite dark.I agree that the weakest part of his pitch was the premise that the auto centric type of development can continue. IMO, it is an interesting interview as it expresses a rare viewpoint-peak oil is here, NG supplies are running out, gasoline prices are heading to the moon- the sky will not fall and we will not all perish in a Mad Max fireball.
Energy crisis cannot be solved by renewables, oil chiefs say
van der Veer predicts demand growth – for sure, He’s saying renewables can’t meet more than 30% of that, I’d also agree that they can’t meet 30% of business as usual growth. He’s stressing the need for conservation – for sure, conservation is more effective than new supply (renewable or otherwise) from where we are now. He warns conventional oil and gas will struggle – of course, and of an “unacceptable” switch to coal.
With van der Veer and Tillerson saying oil and gas can’t keep up with demand – and also pointing out renewables can’t fill the gap – what are we left with? Energy shortage, that’s what. When ExxonMobil calls for a carbon tax we should know it’s time to panic!
Lemmi paint it this way,
Assumption: Oil production rates will decline
Assertion: Renewables cannot keep up to this decline
Assumption: Renewables are not self sustaining, and require some fraction of oil production to keep going.
It then follows that Renewable growth will decrease when oil does, bringing humanity back to an 18th century level of everything.
so the short and long is, "we are screwed!".
Just because renewables require some fraction of oil does not mean they can't continue to grow as oil production falls. We can choose how to allocate what oil is available. We could increase the absolute amount of oil allocated to renewables, growing renewables, even as the total amount of oil declines.
Same point can be made about agriculture. We could maintain exactly the same agricultural fossil fuel inputs long after the absolute fossil fuel availability peak.
Hi Chris Vernon.
The prospects of What-Could-Happen-if-Only-the-Right- Decisions-are-Made make Peak Oil seem managable.
But the actual priorities being set in the US from the administration on down suggest to me that our collective response will be so maladaptive and dysfunctional that we'll settle down into Kunstler's Long Emergency (and Kunstler is an optomist according to Matt Simmons). The alternative fuel mirage and the pitiful conservation measures proposed lag so far behind reality...
'sigh'
I will now question HOW goods are best allocated!
By the dollar and free market.
Those who can pay the most will gain the greatest share. Unless the feedback in the market is rapid (which it is theoretically not, inelastic shortterm/elastic longterm) oil demand for everyone else will outstrip the needs of the farmers(essential).
Literally if we havn't already introduced large taxes to reduce consumption of oil and use proceeds to redirect the tax to renewables we have ALREADY LOST.
Market collapse will likely occur, and it will not be pretty.
The collapse will be followed by a new market, with hopefully some semblance of proper risk being crafted into it(future risk). But humanity will have squandered its most precious and valuable resource (oil; being the easiest form of energy to extract EVER discovered) and is fscked forever after.
Hey! I had ancestors that lived in the 18th Century. They survived and so will a small percentage of us. The great grandchildren of those who survive will see nothing wrong with the world they live in. They will know nothing better.
Surely, we must all have ancestors in the 18th Century...
Actually , you picked a good Century to look at:
1. Lessening of the little ice age.
2. fewer famines than the hungry '90's of the 17th Century.
3. The development of breeding theory: Cows, pigs and cattle increased amazingly in yield size due to selective breeding.
4. Semi-mechanical agricultural implements (Jethro Tull)
5. Stable Government, few and smaller wars abroad, expansion of British interests in the World. India, the cape, Australia, The Americas (:-))
6. No major outbreaks of plague,or the (probable) influeza outbreaks that bedevilled England in the 17th Century. Some smallpox though.
7. Tea and Coffee meant boiled water (If you could afford it).
Not too good if you were a modest Yeoman Farmer though. Or a Highland crofter. Most ended landless wage labourers or dual income tenant farmers. Or left.
Van der Veer may well have said that 'The energy crisis will ALSO not be solved by Petroleum', and been just as accurate.
To address your point,though; oil-based fuels require oil. Renewables require *Energy* to be sustained, built/rebuilt. Who says it has to be petroleum-based energy, just because it is at the moment?
The 'short and the long' seems to be that many, many of us have to figure out how to live with a LOT less energy. Many will certainly be screwed in that process, but we are spread way out across the planet. Some places will probably make out just fine, while others will be terrific disasters. This falling tide isn't necessarily going to drop all boats the same way.
Bob
Times wrapper on the article here, here.
Shell boss comments here.
Thanks. I fixed the bad link in Chris' post.
NORTHCOM is asking permission to do what it is already doing: deploying American Military Troops on American soil for certain contingencies. But exactly what are the contingencies?
-- Non-conventional assisted recovery
-- Integrated survey programs
-- Information operations/"special technical operations"
-- "Special activities"
All very hush-hush, you know.
Here is a link to the WAPO article.
http://blogs.washingtonpost.com/earlywarning/
Regarding the so-called man-made global warming, here's a good article on it: WHY (really) IS OUR PLANET WARMING?
Not a very convincing essay. The author does not know that about which he speaks, and he is hoping that the audience does likewise.
For all of my dislike of Al Gore and his minions, it is very clear that man is indeed in the act of changing the atmosphere (and the land surface), and by doing so is perturbing the climate.
The challenge (scientifically) is to separate out that perturbation from the non-man made changes that have always and will always occur.
Painful piece of drivel. Just to pick out a couple of the more absurd comments:
If there is indeed a large volume of CO2 in our atmosphere, and if CO2 does indeed absorb infra-red heat, why would it not absorb the heat of the sun’s rays on their way to the earth’s surface?
If he were to take a second or two to do some research, he would discover that the energy does not come in as infra-red, it comes in at visible light wavelengths, which is not absorbed by CO2. Once it reaches the ground it is absorbed and re-radiated as infra-red.
The fact is that CO2 is heavier than air. Everyone who has been to a live stage performance will know that when dry ice (frozen CO2) melts, a white cloud of CO2 gas crawls along the stage below knee level. It does not rise into the air. Under such circumstances, how is it possible for a ‘blanket’ of CO2 to trap the exothermic warmth of burning fossil fuels?
This is just hilarous. All the climate scientists of the world stop what you're doing! There's no CO2 up there at all, it's all creeping along the ground. Furthermore, since the atmosphere is 70% Nitrogen, and around 25% Oxygen, and these molecules have different weight, it must also be the case that there is a layer of Nitrogen and a separate layer of Oxygen sitting adjacent to it.
The atmosphere as a giant tequila sunrise! I like it.
They really should stick to finance.
The finance is a lot of drivel as well. it just happens to be drivel that you and many here agree with.
Edit: Actually, it is not all drivel. However, Financial sense is a gold bug website. There is nothuing wrong with that, but it does present a very negative, doomer-friendly view of the world.
I do think a lot is useful froma counter-balance standpoint, but many people getting all of their economic information from the housingbubble.com and Financial Sense are just seeking reinforcement for what they already believe in.
Jack: If you took a few minutes to listen to the interview I mentioned you would be aware that the author, while acknowledging global oil depletion as laid out by Simmons, TOD, etc. is somewhat optimistic. He feels, as does Simmons, that this is an opportunity for quite a few persons to make quite a lot of money.
Point taken.
That is hilarious! CO2 gas is now visible and crawls along! Of course that white cloud couldn't be condensed water vapor from the atmosphere, way too simple! If this is the "science" of current climate change deniers, James Hansen does not have to worry about losing the Nobel prize to them, that's for sure.
The guy knows nothing about global warming, admits it, then admits that he references a known global warming denier.
This is akin to someone knowing nothing about Iraq, admitting it, and then further admitting that everything he just said was a regurgitation of official Bush administration pronouncements. Not very credible, is it?
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Interesting...
Leanan, please feel free to edit down, though I think the article is short enough... :)
Franc (penguinzee)
http://www.bloomberg.com/apps/news?pid=20602099&sid=aq9WiCtLtIJA&refer=e...
Persian Gulf Tanker Rates May Fall for Sixth Day on Ship Glut
By Alaric Nightingale
Edited down. It's not just bandwidth, it's copyright. Posting a few paragraphs might be fair use, but posting the whole thing is copyright violation.
Another excerpt from the article:
Let's see, as exported oil declines, what would happen to the demand for crude oil tankers?
Forty-five tankers have been hired already to load in July, compared with an average of 106 bookings a month last year, according to Barry Rogliano.
This implies that exports have been cut in half. In that case how come we don't have widespread, global shortages? There must be some other explanation.
I'm sure more tankers will be chartered for July, but the key point is that a lot tankers seem to be chasing the available crude oil cargoes. It seems unlikely that the number of tankers for hire suddenly increased. I suspect that we are seeing a continuation of the net export decline that started last year.
Can crude tankers also transport refined products?
In the US, our refineries are going out all max (except when they are down for repair) and imports of refined product have increased.
Is it possible that crude tankers are sitting on the sidelines because exporting countries have moved upstream into exporting refined products that have much higher margins than crude and in some cases, the importing countries do not have the available refining capacity anyways?
"Clean Product" tankers ship the variety of refined products. Crude is considered "dirty" and transported by tankers of various types--VLCC, Panamax, Suezmax, are the primary 3. As more oil will be drilled too far offshore for seafloor pipelines, single hull VLCCs are being converted to floating offshore storage as they are required to be decommissioned for oil transport after 2010. The surge in clean product demand has pushed charter rates up. Given operating costs, ships aren't "sitting on the sidelines," unless they are drydocked for service.
Yes. There is.
The 45 tankers hired versus 106 has absolutely nothing to do with the level of demand for product, how much will be shipped, or how many tankers will eventually be hired. . It has to do with expectation of future shipping rates and risk appetite by those that sell the product.
Companies shipping oil expect that tanker rates will continue to go down, so they are not locking in rates early, but willing to take the risk on the spot market. They will contract new tonnage when they need it.
I believe most analysts expect tanker rates to continue to fall through the next two years, largely on oversupply. One reason is that regulations requiring double hulls have brought on a lot of new ships, but the old single hull vessels haven't been phased out yet.
Chavez might take them to ship oil to china.
Yes Yes. If they come into his territorial waters, he will nationalize them(take them). No need to hire them.
:-P
Well, that RTE peak oil documentary was pretty good, but the reactions to it so far have been disappointing. "Too gloomy." I guess the Irish, like the Americans, expect reality to accommodate them, rather than the other way around.
This guy blames peak oilers for teen suicide:
It must be someone else's fault when a teen commits suicide. "Peak Oil" is just one of many targets for blame.
It's a natural response for grieving parents to search for some cause to explain teen suicide. There are any number of bugbears available to blame, but its pretty interesting that something as abstract and nebulous as peak oil could get the nod. And it's not peak oil that poses a threat (IMO), it's our collective failure as a society to prepare for it.
By far the leading cause of death for teens is traffic crashes. Compared to suicide, traffic crashes are responsible for 5 to 6 times as many teen deaths. Pretty ironic, then, to put the blame on the forecast of motor fuel shortages, when the biggest culprit is the all-motoring culture itself.
...Covers his ears and drones tunelessly...
Noooooooooo... peak oil isn't the center of the universe??? I've been betrayed!!! All this time reading TOD, and I find out that peak oil is nebulous!
...blah blah blah blah blah... I can't hear you... blah blah blah blah
There are nebulae at the center of the universe :)
Actually it's this guy. ;)
Blaming peak oil would almost be funny if the whole thing wasn't such a tragedy for those concerned and their families. The suicide rate is pretty high in Ireland. I'd blame alcohol before blaming peak oil.
You are right Leanan, the reaction here has been pretty muted. Some of the TV critics said that "we already know all this peak oil stuff - what's the problem", that the program was stating the obvious. I just don't get that. There is very little peak oil awareness here. A professor I know recently told me that the US has loads of oil, that it had deliberately held back production for all these years! This view is pretty widespread over here. If only it were true...
They must be talking about the oil shale. We have more oil than Saudi Arabia! The problem is getting out of the bloody rock.
They don't even know what oil shale is. Honestly, there are educated people in Ireland that believe that the US of A relies mainly on middle eastern oil because they've been saving their own oil for a rainy day!
IRELAND - WE HAVE MORE TURF THAN SAUDI ARABIA!
new slogan. problem oslved. peak oil = overzzz.
Cuchulainn
$7.47 per US gallon: gas/petrol price here in Aberystwyth, Wales, UK.
Diesel is the same (98.9p per litre/1.47 EUR per litre).
And so many in America complain about $3.00 per gallon gasoline. John
When gas in America is $7 a gallon, it will be somewhere between $12 and $18 a gallon in the UK. Enjoy your $7 gas while you have it.
Love the DrumBeat posts (though they tend to make me depressed).
Just wondering why they are updated incrementally and are not in final form when they first appear? Causes me to have to recheck them later, trying to remember what the head post was....
Because I post stories as I find them.
It is? I was convinced it was a capitalistic scheme dreamed up in order to rack up page views, and as a result, advertising impressions! ;)
That, too. ;-)
Yes TOD is dynamic; thanks Leanan!
history shows again and again how nature points out the folly of men
Is it only you? Do you have a submit form?
You're BTW doing a heck of a job :)
It's been in several of the UK newspapers today that incoming Prime Minister Gordon Brown may call an election next year - even as early as next Spring - even though he doesn't NEED to call one until May 2010. Wouldn't that be very clever? In 2-3 years, the UK economy will almost certainly be tipping into recession due to rapidly increasing oil and gas imports at soaring prices. Whereas in 10-12 months he might just get away with it. Does he know more than he's letting on!?
...'Does he know more than he's letting on!?'.
Well as Chancellor of the Exchequer he probably gets to see the loot from UKCS production (loot going up, volume going down, then predictions of both going down). The Mandarins must have worked out what it all means by now. - Even if PO was generations away, UK is now a net energy importer and this costs money.
All round about the same time he has to bail out the Olympics I would think. (Britain doesnt do major entertainments well, we have no flare, we should have let the French get it).
But he probably does know more than most. As Chancellor he must see the wheels coming off within 5 years.
Personally, I would go to the people in 2009, loose it and let the next government take the wrap.
Oh, the Mandarins have worked out what it all means and so has Gordon Brown.
Armies must ready for global warming role -Britain
http://www.alertnet.org/thenews/newsdesk/L25649273.htm
It used to be known as colonialism. That is, taking control of someone else's country so as to control resource extraction for the benefit of the homeland. More of the same really, but without the soft neo-colonialism and more of the hard stuff.
Triumvirate of collapse - Economy, Ecosystem, Energy
At the risk of boring the vast majority of the readership, remember Brown has been grinding his teeth at his nextdoor neighbour since '94. I think _he thinks_ he's clever enough to beat the fall.
If I was him I would have magnanimously handed the poisoned chalice to Miliband and started breeding Aberdeen Anguses in Patagonia, precise location undisclosed. But I'm not.
Congressional inquiry into Speculation in the Natural Gas markets (PDF)
This is the government committee report looking into the speculation done by Amaranth last year, which was written about in A Tale of Two Markets
As pointed out, Amaranth used the Intercontinental Exchange (ICE) to bypass the margin and reporting requirements of the NYMEX. I havent read the whole document will, but am adding it to the to-do list.
I will make a bold prediction. In the not too distant future, hedge funds and private indiviudals will not be allowed to trade oil and gas futures, due to national security, economic sensitivity, etc. The markets might still exist but will be used for hedging by producers. In reality this will be hard to enforce (hedge funds will buy nat gas producers so as to be able to trade, etc). The short term implication may be an increase in margin rates for both on and off balance sheet energy derivatives - that may be enough..
Remember, for $4,000, you can buy 1,000 barrels of oil, which is 8 times more than 1 person has left for all time.
Nate, how will they stop hedge funds trading over-the-counter financial products (swaps and swaptions) that essentially replicate the trading of futures and options?
On an individual level, how can they stop the trading of CFDs that essentially do the same thing?
To a large extent both the OTC and CFD markets are largely unregulated (at the moment).
Furthermore most hedge funds are offshore entities and thus hard to regualte anyway.
Sarbanes-Oxley et al have done serious damage to Wall St, further regulation will simply push more companies to other less-regulated environments, IMO.
Nate-
As a trader, unfortunately, I believe you are absolutely correct. I don't believe it is a bold prediction, though.
Although a majority of hedge funds are set up offshore, the majority of beneficiaries are in the States.
I believe as oil cruises through $100/bbl the public will be so outraged (as a result of the MSM propaganda that we have plenty of oil) that elected politicians will have no choice but to conduct a witch hunt.
When the politicians declare that the only beneficiaries of skyrocketing oil prices are hedge funds traders and oil companies, they will slap a huge punitive tax on traders. This will make trading oil futures pointless. Oil companies will be a similar but separate issue.
I'm hoping they don't restrict short sales and precious metals but that will happen eventually when it gets bad enough.
That scenario, or something like it, is part of the quite watchable French movie "Oil no more". Although in that movie all of a sudden the world finds out in 2013 that there is exactly 2 years left of oil supply.
AWWW FUCK.
we are really screwed now
I can buy 1,000 barrels of oil for $4,000? $4/barrel?
I know you're talking about margin rates, but really, the last sentence is completely BS.
(not into stocks at all)
I believe it was the right to buy that oil in the future that he was talking about - if you control that future, you have controll over that oil - if you can't afford to buy it outright, you can sell that right to someone else who can.
-if this post is totally up the creek, please let me know
I can envision this going into two directions (one or both):
-Heavy government regulation into the futures market will allow for manipulation of prices; a-la PPT (plunge protection team), to prevent run-a-way prices to the upside and to delay the impacts of Peak Oil as long as possible. Gold price manipulation has been long documented by GATA (http://www.gata.org)
-Heavy government regulation into the futures market will prevent speculation taking economic advantage of Peak Oil for “regular/normal” investors. Once Peak Oil becomes common knowledge, it is not difficult to make the leap of logic that oil/NG prices will continually rise in the future. Any speculator with half a brain realizes that they can make a profit by going long in futures and once everyone piles on, then prices will quickly rise out of control, thus making a bad situation worse.
good points everyone. im not sure which way the wind will blow. everyone (except the vanguard who reads sites like TOD) believes the market will solve it. But leverage upon leverage will make an unstable situation in energy even worse, and volatile which will hamstring true change as entrepreneurs will get different price signals depending on which hedge fund blew up the prior quarter.
Regulation of some sort is coming. And that is an admission that the market cant solve it. Using leverage on something that is unlimited to begin with (dollars) to something that is just now being recognized as scarce(not yet finite) is a bad screenplay...
This is an excerpt from a Yahoo news clip posted upthread by Leanan. My understanding of gas hydrates was that these were chunks of frozen gas distributed across the seafloor. This story seems to indicate that they also exist in "pools" and that these "pools" may be drilled and the gas extracted.
Does anyone have any better understanding of these deposits and their geographic distribution? If the Yahoo story is correct and hydrates do form "pools" and these can be extracted using conventional drilling technologies then it would seem likely that there may be a sudden oceanic "gold rush" as firms lay claim to this sub sea resource.
Given the total world volume of hydrates it also seems possible that these may serve as a FF (oil) substitute and if the economics are favourable, undermine the market for other FF substitutes.
Of course, the development of this energy resource will likely advance the problems associated with AGW but that will be tomorrow's headache.
"Pools" is poor translation, they are solid deposits, in the form of a thin layer. The drilling will have been a core sample, used to investigate the sea bed. All they have done is recover a small sample.
You can't pump it out like oil, so you would have to strip mine the sea bed, separate the hydrate, get it to the surface somehow. I can't see how that would ever be economically viable. And fom a climate perspective we had better hope it stays down there.
Gas hydrates are very common. Shallow hydrates float up on the shore in Oregon from time to time. Nobody has figured out how to "mine" them yet.
Of great concern is the massive hydrate deposits under the Canadian arctic tundra and near arctic ocean. Some of these deposits have been under observation for several years. They are starting to warm up and bubble to the surface. That is not good news.
Hello John McFadden,
There is some speculation that the 1946 Unimak Scotch Cap lighthouse and Hilo Tsunami was caused by a methane clathrate release/undersea landslide, but detailed and accurate seismographs obviously were few and far between back then.
The earthquake did not have the usual sharp and short timeframe signature, but is thought to have a signature more like an slower undersea landslide. It's proximity to the continental shelf is why the tsunami hit the lighthouse at such a gigantic scale:
Please see the artist's illustration of the tsunami just before the lighthouse was wiped out in this first link:
http://www.semparpac.org/tsunami.jpg
Detailed photos in this link:
http://www.sitnews.us/0205news/021205/021205_asj_tsunami.html
PDF discussion of undersea landslide anomaly:
http://www.usc.edu/dept/tsunamis/2005/pdf/Unimak1946.pdf
The Koreans need to be extremely careful that any undersea clathrate mining doesn't cause the same effects. Recall my earlier speculative posts on clathrate release: like a 100 ft tsunami bringing the equivalent of 1,000 ruptured LNG tankers into NYC, then add a spark of imagination for ramifications.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hi Bob, Do you have a link to the US Navy sea floor surveys that were done in the mid 1950s? The Navy found chunks of lava, some the size of Manhattan Island, that had calved off the Hawaiian Islands and were resting on the sea floor around the islands. The Navy findings led geologists in the US to start looking for evidence of large tsunamis that had hit the west coast in the distant past. They found rocks, sand, and other objects that would have normally been near sea level at over 1000 feet up in the hills and mountains behind the California coastline. I did a google search on tsunamis but only came up with a ton of hits on the Indian Ocean Tsunami... One problem with google alogrithyms. Thanks.
BTW, that is one impressive painting of the tsunami and lighthouse.
Click on the advanced search link. Then exclude the words Indian Ocean.
Thank you, thank you, thank you very much... Elvis
After being down about 2%, oil has bounced right back up today. Anyone have any idea what is driving this? I guess the Nigeria strike wasn't behind last week's rise after all.
And talk about a bearish reversal on the stock market. I think this thing is just running out of juice.
PPT,PPT.John
?,?.Jack
Plunge Protection Team
"After being down about 2%, oil has bounced right back up today. Anyone have any idea what is driving this? I guess the Nigeria strike wasn't behind last week's rise after all."
Dow jones says this is why:
"In a speech on Friday, President Hugo Chavez said some foreign major oil companeis may reject Venezuela's demand for majority control of their heavy oil projects in the Orinoco river basin, and those firms would have to leave the country, according to Dow Jones Newswires."
http://www.marketwatch.com/news/story/crude-futures-stage-recovery-after...
Triumvirate of collapse - Economy, Ecosystem, Energy
I've no idea either, all the news reports have "crude falls after Nigeria strike ends". Very odd!
Perhaps some big investors were waiting for the price to dip to $68 before weighing in. The bull run over the summer usually starts in June, and we are near the end of the month.
The market is quite volatile though, it doesn't take much to spook it.
I wonder if this stock reversal will turn into a rout before the day's over.
It's not only oil that's bounced today. The DOW has done one of the biggest midday reversals I've ever seen. It was up over 100 points at one time this morning and is now skirting -50.
Yes. I think this big bearish reversal, along with the recent Blackstone IPO, is another sign that this market is topping. The Russell 2000 closed down almost 1% today. Small caps might lead the way down since they would be the earliest to feel the affects of a housing-led slowdown/recession.
Iran will be hit by another tropical cyclone, though this one will be not nearly so strong as Gonu:
http://www.wunderground.com/tropical/tracking/ni200703_5day.html#a_topad
Hello NASAguy,
Thxs for the info. I am not a weather expert, but this chart sure puzzles me:
http://earthobservatory.nasa.gov/Newsroom/NewImages/Images/tropical_cycl...
Why doesn't the huge sea area east and west of South America get cyclones? Undersea cold currents or some other phenomenon? Consider that the Gulf of Oman, and the sea east of India are much, much smaller bodies of water: yet generate their fair shair of cyclones. During El Nino periods: lots of warm water piles up on the western side of South America--shouldn't that generate cyclones?
In summary, I would have expected the Southern Hemisphere seas to have a continuous cyclonic history band like the Northern Hemisphere.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I think they can only form 15 or more degrees from the equator where the Coriolis force can get them spinning.
Hello Sterling,
Thxs for responding. What you said is true--that is why the Equatorial Middle is blank. But, IMO, that still doesn't explain the 'historical blankness' off either coast of South America. Maybe the Antarctic Circumpolar Current concentrates the cyclonic weather effects around Oz, but that is just a WAG on my part.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
For the Pacific coasts of both South and North America, the landmasses of both continents tend to disrupt the tropical disturbances that lead to tropical cyclones. This is not the case through Central America, hence the occurence of cyclones off the pacific coast of Central America. According to http://trmm.gsfc.nasa.gov/publications_dir/south_atlantic_cyclone.html
the strong windshear that is prevalent in the south atlantic largely precludes tropical cyclone formation
Close but they can form a bit futher from the equator:
http://www.blinkbits.com/bits/viewtopic/tropical_cyclone_wikipedia_rss_f...
'Nearly all of them form between 10 and 30 degrees of the equator and 87% form within 20 degrees of it. Because the Coriolis effect initiates and maintains tropical cyclone rotation, such cyclones almost never form or move within about 10 degrees of the equator 2, where the Coriolis effect is weakest. However, it is possible for tropical cyclones to form within this boundary if there is another source of initial rotation. These conditions are extremely rare, and such storms are believed to form at most once per century. Hurricane Ivan of 2004 developed within 10 degrees of the equator. A combination of a pre-existing disturbance, upper level divergence and a monsoon-related cold spell led to Typhoon Vamei at only 1.5 degrees north of the equator in 2001. It is estimated that such conditions occur only once every 400 years.'
The first ever recorded hurricane to hit Brazil was in 2004.I feel sure this is not connected to climate change.
'On March 25, 2004, the first ever recorded hurricane made landfall in the South Atlantic along the Southeastern Coast of Brazil. While there may have been other such rare storms in the past, satellite imagery of the South Atlantic began in 1966, and this was the first time a hurricane has ever been detected on such satellite imagery.'
http://www.hurricaneville.com/brazilian_hurricane.html
Bob,
The reason they don't have hurricanes in the South Atlantic is that the water is too cold, even in the southern hemisphere's summer. Water needs to get to about 26.5 centigrade or 80 fahrenheit to have a hurricane. That rarely happens south of 10 degrees south latitude in the Atlantic.
Now why the water gets warmer in the North Atlantic than the South Atlantic is whole different subject, but water temperature is the answer to the hurricane question.
Off subject so apologies - over here in the UK a swathe of the country is currently facing extreme flooding from the heaviest June rains ever recorded.
http://news.bbc.co.uk/1/hi/uk/6236348.stm
A really strange day - I live about 80 miles from the heaviest flooding yet today after heavy rain overnight a really calm sunny period from 11am for about 4 hours yet the horizon in each direction was dark with incredibly high cloud build ups. The 'eye' of the depression. This evening the wind has suddenly got up strongly with light rain.
Just weird, weird weather which seems to striking everywhere.
Hello Sangiovese,
Tell you what: I will gladly trade you some of our relentless blazing Southwestern US sunshine for some of your thunderclouds. Each one of all of our new golf courses require the water equivalent of 6,000 US homes, and Californians, and probably most other motorized desert denizens, wish to continue getting their cars washed twice a week for maximum bling. A microlayer of dust on a fancy vehicle is considered abhorrent to social status. =(
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Very much worth reading....
Editorial in the Times of London by Jeroen van der Veer (chief executive of Royal Dutch Shell)
High hopes and hard truths dictate future
Efforts to fight global warming will be wasted unless we concentrate on energy efficiency
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_...
This is really an addendum to Leanan's link in Drumbeat with the title:
Energy crisis 'cannot be solved by renewables'
That article talks about the editorial but doesn't (I believe) give a link to it.
I find the ever increasing reserve estimates to be both comical and questionable. Just a few years ago, CERA was derided even by the oil industry for suggesting that there might be 5 or 6 trillion barrels of the stuff. Then there was the 10 trillion barrel estimate. Now we have the 20 trillion barrel estimate. And none of these estimates are backed by geology at all.
Your article is not credible with me. I suspect it is not credible with others either.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
For the record, not for a millisecond do I believe van der Veer's reserve estimates.
But that doesn't mean his editorial is not worth a close read, largely because we don't have any good source on what the big oil companies really think. We are stuck with deconstructing official missives.
I'm hoping there is somebody at TOD who follows what issues forth from the big players fairly carefully and that thay can give us some penetrating analysis.
Here is the original passage:
First of all, these are IEA's numbers, not van der Veer's.
Second, he says that the 20 trillion barrels is oil and natural gas "in place." This means he's talking about "original oil in place" (OOIP), not to be confused with recoverable reserves which are historically a relatively small fraction (~30%) of OOIP.
Third, he's including conventional oil, nonconventional oil (e.g. shale and tar sands), and natural gas. Since he's talking about OOIP, I assume it includes oil already produced.
My understanding of the way OPEC allocates oil sales to member countries is based on each countries reported reserves and when OPEC began basing sales on reported reserves, suddenly all member countries began reporting much higher reserves. Nothing new here...move along.
I'm starting to find it hard to see why people have problems with the simple facts of life, but hey....
Van der Veer CAN NOT admit to Peak oil, it would put the value of Shell shares in the basement, AND expose him to lawsuits. No CEO can on purpose do that.
On the other hand, if he puts 30 billion into tar sands, the stock value stays up for another year, 2 years, and he gets a good salary and a bonus, and no-one can sue him for investing in what is generally seen as a risky, but good investment.
What is so hard to understanbd? Can we leave this behind and move on?
Big Oil CEO's CANNOT say what they know, it hurts their shareholders' values.
Could you explain why peak oil would put a major oil company's shares in the basement? Peak oil means the price of oil is going to go up and up, which increases the value of reserves they control.
I think that you are right that they realize that peak oil is near and do not want to admit to it for some reason. I think it is more likely that it is because it would cause all kinds of political turmoil and create calls to nationalize the oil companies or otherwise slap controls on them. It would greatly unsettle the markets. But I think they know that when the dust settles, they will do all right financially.
The oil majors are not replacing their reserves. At some point the company becomes worthless because it has nothing to sell. The problem is in deciding when the general public reaches the same conclusion.
How would it play on Wall Street if Shell Oil announced "We are not able to replace our reserves and consequently will be out of business in X years" where X was some reasonably short number like 5 or 10?
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Does anyone know the status of the NPC (National Petroleum Council) study, which was supposed to release its final report at the end of June? The last official communication was a progress report (PDF) issued on February 15th of this year. The last line of the progress report says that a first draft of the report would be available in April and the final report at the end of June. To my knowledge the first draft has not yet been published.
This report is supposed to directly address the question of the timing of peak oil per the October 5, 2005 letter (PDF) from U.S. Energy Secretary Sam Bodman to NPC Chairman Lee Raymond. It could be a very interesting report.
Your post reminded me that we still haven't seen the report. Perhaps the GAO report scared them a little.
I sent the NPC an e-mail this evening, asking what the current timetable is. If I get an answer, I will post it.
Not an organisation I am familiar with (they seem to charge for all their reports), but their most recent offering stresses major near term problems for the oil market:
http://www.cges.co.uk/index.php?main_page=product_info&cPath=4&products_...
I should add they make a comment on US refinery use of heavy oil which has been the subject of some debate here
Anyone with a spare £650.00?
THE FOOL THINGS: TECHNICAL REVOLUTIONS OLD AND NEW
I was doing some browsing through old books last night, when I came upon a valued old hardback book, a compilation of selected articles from ”Automobile Quarterly” magazine.
One of my favorites had long been an article, complete with paintings, called “THE FOOL THINGS, Remembering the Halcyon Days When America Wasn’t All Too Sure It Liked the Automotive Idea.”
The article recounts what must have been one of the most fascinating revolutionary periods in technical and business history The birth of the 20th century and the approximate five year period thereafter, (1900-1905), when the automobile went from being an oddity and a technical curiosity to commercial acceptance. But it does so with charm and humor:
“In America, the mayor of Warsaw, Georgia found it politically expedient to offer a public apology when he bought one. In England, the Marqis of Queensbury, rather unsportingly, petitioned the government for sanction to “shoot on sight” anyone speeding past him on one. In France, novelist Hughes Leroux tried exactly that, firing his revolver twice in the direction of one whose charge he had just escaped. He missed. Somehow, the automotive idea survived too.”
There are other interesting tidbits as well. In 1900, there were 40 manufacturers of motorcars at the Madison Square Garden Exhibit of Motor Cars . Think of that, 40 manufacturers, and catering to a very small market. In 1900, there were 8000 cars registered in the United States. By 1905, there were 77,000.
However, the gasoline engine was yet to be decided upon. For example, In 1900 in Chicago, there were 378 licensed automobiles. 226 were for electric cars, 92 for steam cars, and only 60 were gasoline autos. Any auto accident had to be reported to the city electrician.
All this to act as precedent to discuss how rapidly revolutions can occur once “critical mass” is obtained. It is to be remembered that Carl Benz had built the first working gasoline powered auto some 15 years earlier, the Benz patent wagon of 1885. It is to be remembered that there had been decades of attempts even before Benz succeeded.
We are now at a potentially similar place with photovoltaic solar energy:
“By the end of May, Kohl announced that the majority of his department stores in California will run using solar energy, generating 35 million kilowatt-hours of electricity in the first year.”
“"These panels last so long — they have a power warranty of 25 years, and typically they last much longer, 35 or 40 years," says Winkle, who works with the Division of Instruction Technology (DoIT)
http://www.news.wisc.edu/13886
Solar roofing is now gaining acceptability and developments are moving fast:
http://www.2001company.com/Content_Solar/ASR%20PPT.pdf
But of course, the real need for revolutionary change is in the transportation sector.
And now, this:
http://www.solarelectricalvehicles.com/
We are now beginning to see the first functional efforts at grid based transport and renewable powered transportation bear fruit. As surely as small developments just after the turn of the last century (20th) such as the electric starter of Kettering, and the spark advance of De Dion propelled the gasoline auto into the lead in the contest for automotive supremacy, so now, just after the birth of the 21st century, advances in batteries, control systems, and advanced photovoltaic panels are laying the groundwork for a revolution.
There are futures being made, and fortunes being made. And many still to be made. However, caution must be exercised. Recall the statistic above, that there were 40 U.S automobile manufacturers (at least) in operation in 1900, As we entered the 21st century, there were 2 independent U.S. manufacturers. This does not include the multitude of makers that were born and died between 1900 and 2000 (I have seen numbers into the hundreds, but no one knows for sure). Each one had backers or bankers or believers who thought they had the key, the way to do which would win in the marketplace.
We are now at that point in the PV solar and plug/solar/hybrid automobile industry. The promise is staggering, a whole new age may be at hand. Lives and fortunes are being determined right now. But none of the firms we now see may be the winner in the longer run. J. Frank Duryea is considered the first firm to successfully sell an auto of American manufacture. Have you ever seen a Duryea. After the decline of his own firm, he allied himself with the Stevens firm, maker of guns. The combination was regarded in 1902 as formidable, given Duryea’s pioneering automobile building experience, and the established precision manufacturing skills of the Stevens firm. The car was the Stevens-Duryea. Had you even heard of a Stevens Duryea? Winton, Chadwick, Locomobile, Packard.....and dozens of others, considered the absolute standard of the industry in their finest days....now gone, taking the investors money with them.
Revolutions create fortunes, but they also create failures and destroy fortunes.
We are surely living in one of the most fascination of times since those “Halcyon” days.
Even if you do not find a way to make a fortune out of it (and there will be many, and beginning NOW), at least stay alert, watch and read. This will be the show of a lifetime.
Roger Conner Jr.
Remember, we are only one cubic mile from freedom
appendix: After completing the above post, I read the post in Drumbeat linking the story that Shell oil and certain other experts were saying the world is placing "too much" faith in renewables.
This story can be taken one of two ways: (a)The experts in question sincerely believe that alternatives cannot scale fast enough to prevent shortages and that coal will be the central replacement for gas and oil, creating a greenhouse gas problem of great consequence, or (b) Shell, and the other oil and gas companies are now seeing alternatives as a real competitor, and are stepping what has already in some cases been a virulent and sometimes slanderous attack on the alternatives. I will leave it to the reader to study and be their own judge of which is true.
We are now beginning to see the first functional efforts at grid based transport and renewable powered transportation bear fruit
The trouble with weather:
http://news.bbc.co.uk/1/hi/england/south_yorkshire/6239782.stm
They must be laughing in the ruhr valley - no lancasters required to breach this dam
What the story neglects to mention is at least 3 large steelworks [1 mothballed] are within the zone. All use arc melting [1 Stainless, 1 aerospace] I used to work at BSES Aldwarke Lane. Great fun - 80 MW furnaces. You really dont want to fill that place with water....