DrumBeat: June 28, 2007
Posted by Leanan on June 28, 2007 - 9:12am
In 1938, Walter Lowdermilk, a senior official in the Soil Conservation Service of the U.S. Department of Agriculture, traveled abroad to look at lands that had been cultivated for thousands of years, seeking to learn how these older civilizations had coped with soil erosion. He found that some had managed their land well, maintaining its fertility over long stretches of history, and were thriving. Others had failed to do so and left only remnants of their illustrious pasts.In a section of his report entitled “The Hundred Dead Cities,” he described a site in northern Syria, near Aleppo, where ancient buildings were still standing in stark isolated relief, but they were on bare rock. During the seventh century, the thriving region had been invaded, initially by a Persian army and later by nomads out of the Arabian Desert. In the process, soil and water conservation practices used for centuries were abandoned. Lowdermilk noted, “Here erosion had done its worst....if the soils had remained, even though the cities were destroyed and the populations dispersed, the area might be re-peopled again and the cities rebuilt, but now that the soils are gone, all is gone.”
John Tjepkema: Oil prices may spiral even higher
Warning! In spite of the jump in the price of gas and heating oil over the past few years, prices may go much higher. Demand is increasing, while new supplies are limited and becoming more expensive to produce. After the energy crisis of the ’70s, new oil supplies were developed and we enjoyed 30 years of low-cost energy. This is not likely to happen again, and it is very possible that prices will increase, perhaps even sharply, rather than decrease.
This planet ain't big enough for the 6,500,000,000
Behind the climate crisis lies a global issue that no one wants to tackle: do we need radical plans to reduce the world's population?
Nigeria - Crude oil: Not a renewable resource
Other resources nave been completely abandoned for crude oil which incidentally is today the mainstay of the nation's economy. One is more disturbed by the ugly fact that the technical expertise required for exploration and exploitation of these resources largely depends on foreigners. What is also certain is that this resource will not last forever; it is not perennial, it surely will get dried up someday.
US Energy Secretary: Co Litigation Over Venezuela Projects Likely
ConocoPhillips and Exxon Mobil Corp. likely will sue after abandoning their Orinoco oil projects under pressure from Venezuela, U.S. Energy Secretary Samuel Bodman said Wednesday.Bodman also reiterated concerns that Venezuelan crude-oil shipments to the U.S. will be limited following the U.S. companies' pullout.
Chavez: Venezuela, Russia remain strategic partners
"Russia and Venezuela remain strategic partners in the energy sector, and this visit should serve to strengthen this cooperation," Chavez said at the opening ceremony of the Simon Bolivar Cultural Center in Moscow on Thursday."Lukoil is already in Venezuela, and Mr. Bush doesn't like it," Chavez said.
As a case in point, Chavez recalled the drop in oil prices several years ago. "However, thanks to cooperation between OPEC, Russia and Norway, which is not an OPEC member, we prevented sales of oil at ridiculous prices," Chavez said.
It's not too late to change world
Here we are, fully aware that the civilization we have created is wildly unsustainable, and yet we refuse to adapt. Though the appetite for change is growing, governments and business would have us believe we simply can't afford to be smart.But as Gregory Greene's new movie, Escape From Suburbia, makes clear, we can't afford not to change.
Practical responses to peak oil
For those who came in late, it is increasingly clear that global oil reserves are reaching the point where half has been used up, called “peak oil”. After this point supply will no longer meet demand, and prices will rise increasingly steeply until oil becomes inaccessible.
India's Emissions May be Higher Due to Dams - Study
India's greenhouse gas emissions could be 40 percent higher than official estimates if methane released from dams is taken into account, according to a new study.
Earth, wind, solar fire fuel India future
Last week, a report released by the United Nations Environment Program said global investment in renewable energy, especially solar, wind and biofuel, rose from US$80 billion in 2005 to $100 billion last year, with an especially high rate of growth in developing countries such as India, China and Brazil. Renewable-energy investments in developing countries accounted for 21% of the total.
Life After Oil Is Coming...But Will We Be Ready?
The year is 2040. Symbolic of Edmonton’s rust-belt economy, electric cars whiz by an abandoned, derelict Refinery Row, although there are plans to turn part of the old complex into a petroleum heritage site. In a nearby run-down cafe, Chad and John talk about the boom years of their youth. They recall the time before Alberta got left behind, as governments and consumers worldwide turned away from dwindling oil and coal energy sources in a mass response to global warming and other environmental concerns. They discuss the time before downtown Calgary became an abandoned shell of empty buildings, before Fort McMurray turned into a ghost town, before so many of Alberta’s youth moved to Atlantic Canada to take plentiful jobs in the red-hot tidal-power industry. “We never thought Alberta’s boom would end,” says John. “Yeah,” replies Chad, looking philosophical. “But the Stone Age didn’t end because we ran out of stones.”
Hey, John, I have news for you: there is a finite supply of oil on Earth and we are going to run out of it! If the demand for oil continues at the present rate, the world will need 140 million barrels a day by 2035.A decline in oil production is on the horizon, and when it does get here (as it undeniably will), there will be very little time for us to react.
Norsk Hydro Dismisses Reports of Ormen Lange Phase 2 Overruns
Norsk Hydro (NHY) Wednesday shrugged off press reports that the cost of the second phase of its Ormen Lange gas project had overrun by as much as $2.9 billion, saying a final development plan wasn't ever decided...."Contractor costs over the last year-and-a-half have increased, which is a worldwide thing," said Hydro spokesman Halvor Molland.
New Delhi hosts IPI talks on Iran gas pipeline
Pakistan Foreign Minister Khurshid Mehmood Kasuri has said that his country urgently requires natural gas to overcome the current energy crisis, and could not understand public objections to the Iran-Pakistan-India (IPI) gas pipeline, which would go a long way in ameliorating the shortfall.
Climate and energy major threats to European agriculture, conference finds
The starting point of the event was the outcome of a foresight process carried out by the EU's Standing Committee on Agricultural Research (SCAR). A Foresight Expert Group, set up in June 2006, developed scenarios based on the factors most likely to disrupt European agriculture over the next 20 years.
Iran's Black Market Bull Takes Off
As petrol station managers tried to institute what was literally an eleventh-hour recalibration of their pumps, rigging them to shut off after a certain amount is pumped (though I wonder, how would each pump tally a monthly aggregate for each driver?), panicked queues formed.Some pictures are visible on reform journalist's Ruzbeh Mir-Ebrahimi's website, here: http://www.shabnameha.net/spip.php?article394. Twenty-seven-year-old blogger Mehdi Mohseni wrote that the "last minute announcement of the start of the rationing caused a predictable psychological shock in society." "However," he adds, "one must admit that an important step has been taken toward the efficient use of energy."
House Votes to Maintain Offshore Drilling Limits
The House rejected two attempts to lift sections of the moratorium on oil and gas drilling on the outer continental shelf.
It seems Learsy thinks small non-profit groups like ours -- the Association for the Study of Peak Oil and Gas/USA -- are in cahoots with the oil companies, joined at the hip in a conspiracy to hype the "fabricated drama of peak oil" in order to drive up oil prices and profits. This is a delusional notion with zero substance that deserves no further comment.
No Short Supply of Freaking Doom!
He reveals the problem so elegantly, almost Newtonian, when he explains, "Free money with which to buy energy equals free energy, and free energy does not occur in nature."And how to explain that it IS occurring right now? He easily brushes me off, like he would some pesky fly buzzing around his head, by saying, "This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the U.S. economy will be forced to shut down."
Innovation Keeps Prudhoe Bay Going Beyond Expectations
If Rip van Winkle had been an oil worker who dozed off at Prudhoe Bay in June 1977 and awoke the same day 30 years later, he would be flabbergasted.When Rip and his buddies turned the valve three decades ago, on June 20, 1977, starting the first flow of oil into the newly completed Trans-Alaska Pipeline System, most Alaskans and even many oil workers were of the opinion that the North Slope oil fields would be depleted and shut down by now.
Fun with Density and Transit Statistics
Conventional wisdom holds that the U.S. is too spread out for workable mass transportation except in a few high-density cities. ...Is that accurate?
Iran's oil restrictions 'a warning for Australia'
Dr Bezdek says the events in Iran provide a warning for Australians."Even though they're probably temporary and are indeed self-induced, they may just be a tiny precursor of what's in store for the world as we approach peak oil and petrol shortages occur and prices increase and people are not able to get the petrol they require," he said.
Oil Workers in 6 Brazilian States Approve Strike in July
Oil workers in six states for state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, have voted to go on strike in July, Brazil's main Oil Workers' Federation said Wednesday.
Ireland: Stuck at crossroads . . . without fuel
IRELAND will be one of the most exposed European economies to future carbon fuel shortages with a staggering 70pc of Irish electricity generation set to be derived from natural gas supplies.The warning came as the Association for the Study of Peak Oil and Gas (ASPO) previewed their landmark carbon fuel conference next September.
NYC power outage jams six subway lines
A power outage on Wednesday briefly brought some of New York's busiest subway trains to a halt, forced the Metropolitan Museum of Art to close and left tens of thousands in the dark on a sweltering afternoon.
After Venezuela, ConocoPhillips May Redouble Canada Efforts
Venezuela's intransigence on its challenging crude-oil projects may send ConocoPhillips' into the arms of Canada's oil sands.Venezuela confirmed Tuesday that ConocoPhillips would exit the Orinico river basin, home to ventures that produce low-quality, or heavy, oil, after the Houston-based energy company refused the terms covering a new ownership structure for its projects. ExxonMobil Corp. also said it wasn't able to reach agreement with Venezuela.
The ramifications for oil markets may be far-reaching. Venezuela's oil output has been in steady decline, and it's unlikely that the state-owned oil company, newly instated as operator of the Orinoco projects, has the access to technology and project-management prowess to turn the trend around.
Kremlin lays claim to huge chunk of oil-rich North Pole
It is already the world's biggest country, spanning 11 time zones and stretching from Europe to the far east. But yesterday Russia signalled its intention to get even bigger by announcing an audacious plan to annex a vast 460,000 square mile chunk of the frozen and ice-encrusted Arctic.According to Russian scientists, there is new evidence backing Russia's claim that its northern Arctic region is directly linked to the North Pole via an underwater shelf.
Bolivia: Four Companies Operating Under New Contracts
Four of the 12 hydrocarbons companies that signed contracts with Bolivia's government are operating under the new deals, according to hydrocarbons and energy minister Carlos Villegas.The government forced foreign companies to sign the contracts - of which 37 are for production and seven for exploration - to give the state a larger take of hydrocarbons assets as part of President Evo Morales' nationalization program.
Cannon lashes out at Dems for oil shale delay
Rep. Chris Cannon charged Wednesday that the House had "put the brakes" on oil shale development in Utah, Colorado and Wyoming by passing a measure to prohibit more permits until an in-depth study was completed.
Congress wants U.S. coal industry destroyed: exec
A senior coal company executive on Wednesday lambasted U.S. lawmakers for proposing caps on emissions blamed for global warming, saying the Democrats were out to destroy America's coal industry.
Pemex Sets Oil Output Goal of 3.1 Mln Barrels a Day
Petroleos Mexicanos, the third- biggest oil supplier to the U.S., set a goal of producing an average of 3.1 million barrels of crude oil per day until 2012, even as output at its largest oil field declines.Pemex, as Mexico's oil monopoly is known, won't spare any expense to optimize the production of Cantarell, the offshore oil field where output declined by 12 percent last year, to help keep production from slipping under 3.1 million barrels per day, said Chief Executive Officer Jesus Reyes Heroles.
Qatari Doubts Concept of Gas Cartel
Qatar will seek cooperation with Russia in the natural gas industry, but the tiny energy-rich Gulf state sees "difficulties" in forming a gas cartel similar to OPEC, Qatar's oil minister said Wednesday.
Floating wind turbines? 2009 could see first
Floating wind turbines would represent a technological breakthrough for offshore power generation, which has had to rely on shallow sites for turbines installed on the seabed.
Waste Management to tap landfill methane
Waste Management Inc., the nation's largest garbage hauler and landfill operator, plans to spend roughly $400 million over the next five years building facilities at 60 landfills to convert methane gas to electricity, its most ambitious renewable energy project to date.
Desertification threat to global stability: U.N. study
Desertification could drive tens of millions of people from their homes, mainly in sub-Saharan Africa and central Asia, a U.N. study warned on Thursday.People displaced by desertification put new strains on natural resources and on other societies nearby and threaten international instability, the 46-page study by the U.N. University showed.
China, ONGC, Pertamina Iraq Contracts to be Amended
Iraq's top oil and gas advisor said Wednesday that oil contracts signed during the Saddam era by China, Vietnam, India and Indonesia would be amended within the framework of the country's proposed oil law.
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
Can U.S. Adopt Europe's Fuel-Efficient Cars?
I doubt that european vehicles meet the average of 35 mpg. While I myself had several diesels for rent in the previous years which consumed 6 litres/100 km or less (that is 36 mpg or more), there are large amounts of vehicles consuming considerably more.
Last summer on vacation I had a Peugeot 407 which burned 6 litres/100km (36mpg), occupied with 5 persons and baggage(!) Most distances were on the highway.
In autumn I had a Renault Megane for rent which is a great car in my eyes. It took around 5 litres/100km (46.8 mpg), also mostly on highways.
A month ago I had a Volkswagen Golf TDI, a very economical car with a little more than 4 litres (58 mpg).
BTW - if you want a quick formula to calculate mpg to litres/100km (which is commonly used in Europe) just divide 234 through mpg (or vice versa).
IIRC the average in the UK a few years ago was 33mpg. Not sure what the current figures are, but it would be relatively easy to hit an average of 35mpg I'd guess, and even 40mpg would be achievable.
even 40mpg would be achievable
The Audi A2 is one of those cars nobody wanted in Germany. Production was stopped in 2005. The A2 got more than 80 mpg.
But at least Audi has the option of restarting the production of the A2. Unlike Ford, GM, and Chrysler who destroyed a generation of engineers by having them work on add-ons for pickup frames, otherwise known as SUVs.
If we're talking about U.S. miles per U.S. gallon, 6 liters/100km is equal to 39.25 mpg.
You are right - I failed to use my own formula properly.
Crikey, dont tell me you have different miles as well! So thats pints, gallons, pounds, miles, ounces[?], any more different I should learn?
We have differing standards of truth and honesty, too. Just watch Fox news and listen to Rush Limbaugh!
Miles are the same; gallons are different. A calculator/converter for US/UK mpg and litres/100km is included on the last line on this page. (enter a number in any box then hit tab/enter).
This should be easy...
There are still going to be loopholes large enough to dive a truck through, although it will have to be a wide truck with an extra-long wheelbase. The Ethanol loophole also remains. Finally, there's the measuring stick actually used for the mileage.
I believe the same EPA test currently used in 2007 will be used for the future CAFE measurement. The figures reported on the window stickers of cars is reduced 10% and 22% (city/highway respectively) from the EPA test. The city score counts for 55% and the highway score counts for 45% of the total CAFE score. So, working things backwards to calculate CAFE score: city/(1-10%)*0.55 + highway/(1-22%)*0.45. Simplifying: CAFE = city * 0.611 + highway * 0.577
A Honda Accord with 4 cylinder engine and automatic transmission is rated 24/34 on the window sticker, which equates to 34.28 MPG CAFE. So, I guess Honda is going to have to find a single MPG in the next 12 years to get their best-selling vehicle up to standard.
The Toyota Camry 4-cylinder with automatic scores 33.7 CAFE. Even the V6 version makes 31.3 CAFE.
The 2007 Mercedes E320 Bluetec scores 37.8 CAFE while the 2006 VW Jetta TDI scores 45.7 CAFE. Since both of these vehicles can run on renewable biofuels, so perhaps the ethanol loophole can be extended to them also, in which case the Jetta will score something around 80 MPG--not bad!
I have followed landfill methane for a while now. Here is a good site from the EPA (US).
http://www.epa.gov/lmop/
Does anyone have any first-hand knowledge of these projects? Are there any benefits to designing landfills with the intent to recover the methane versus what we do now which is retroactively 'mine' the methane?
Of course there are benefits, Keithster-one of the major ones being cutting the release of methane, a greenhouse gas, and a lot lower volume of waste to be buried. The problem is the same as all recycling-waste separation costs exceed the value of the products. If costs were not a problem we could recycle all the metals, turn the plastic and tires back into oil, make all the compost to replace chemical fertilisers, and feel very virtuous.
The problem is Americans don't want to hand-sort garbage for slave wages. Why don't you volunteer?
I saw a news story back in the 80's about a town in WA state. They had scales on the garbage trucks and they weighed the garbage collected from each household and charged them accordingly. This incentivized people to remove recyclables from their trash.
Everywhere I have lived, they simply charge a flat rate and people discard whatever they want. Driving up the price would be one simple way to reduce the amount going to landfills and increase the pre-sorting of recyclables.
In Japan, I believe they are required to pre-sort their trash into 14 different categories.
Don't become a Buddhist. The world doesn't need more Buddhists. Do practice compassion. The world does need more compassion. -- Dalai Lama
14?!?
I live in Tokyo and do three, burnable, unburnable and recyclable (cans, glass).
I can't find the article I read that mentioned 14 categories but here's a quote from the NYT.
How Do Japanese Dump Trash? Let Us Count the Myriad Ways
This article is from 2005. The one I saw was from earlier this year. I guess I need to be more specific as garbage collection varies from city to city just as it does here.
Don't become a Buddhist. The world doesn't need more Buddhists. Do practice compassion. The world does need more compassion. -- Dalai Lama
Yokohama garbage collection guide
Burnable Garbage
Non-burnable
Cans, bottles and PET bottles
Plastic Containers/Packaging
Recycle paper
Used Cloth
Spray Cans
Dry Cells
Small Metal Items
Oversized Items
Apparently some people take this quite seriously.
More specifically...
phreefallin,
Is that what passes for trashy behaviour in Japan?
Bad jokes aside, its a good idea,and wouldn't be onerous while the garbage is fresh. Probably helps hold down rats, too.
I was going to call him a garbage "nazi", but I think that term gets thrown around too often :)
Don't become a Buddhist. The world doesn't need more Buddhists. Do practice compassion. The world does need more compassion. -- Dalai Lama
Hello TODers,
Interesting mini-thread on recycling. Although I posted this before, please consider how badly Mexico recycles:
http://www.chron.com/disp/story.mpl/front/4916749.html
-------------------------------------
Litter choking streets throughout Mexico
Activists say public isn't only culprit — leaders and companies are also culpable
Mexican environmental officials say that only several dozen of Mexico's more than 2,500 cities, towns and villages have a landfill or other kind of municipal garbage dump.
-----------------------------------------------
Please click link for photo and much more text!
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Okay, I get what you are saying.
And yes, my town has a similar list of garbage requirements. But 99% of the time my trash is only the three above mentioned categories. I only have three trash containers.
On the rare occasion I have to throw out a battery it has to be on the 4th thursday of the month. I thew out a matteress (futon) once, and I had to pay 500yen (5$) for a sticker to do that.
Its not nearly so severe as you'd think. The only one going through my garbage is the local alley cat :-)
Here in Sweden almost all trash goes directly to a district heating central and are burnt for energy. And yes, the furnaces do not emit poisonous gases, apparantly.
Recycleable or hazardous waste are supposed to be sorted and left at local recycling stations, of which several are located in most neighbourhoods, supposedly within walking distance (I live in the countryside and thus have a 2 kilometer walk to the recycling station). At the least people in general sort out paper and glass, but you could also sort metal, plastics and cloth. Rare categories like oils, car batteries, kitchen appliances, electronics etc are picked up twice a year outside the local firestation, or can be left year-round at the main recycling station, which features some 30-35 different categories of recycling containers.
Trash disposal at the household are solved differently, at my old dwelling they weighed everything automatically. At my current residence it's a flat fee, but bio-degradable waste should go into black bags, burnable into white bags, and they are sorted automatically - white bags goes to district heating, black bags goes to a local biogas fermenter unit, which produces pure methane and soil/fertilizer. The biogas serves some of the local buses, the soil/fertilizer goes back to the farms.
Landfills still exist in Sweden, but there aren't a lot of them, and I guess only non-usable trash like plaster, rock-wool insulation, fiberglass etc goes there.
There are discussions if the recycling system is wasteful, energywise, but people don't have to recycle, everything can go into burnable waste if they wish, although it would be illegal to put batteries and other hazardous waste there. Not that anyone would be caught, that is.
Anyway, the entire recycling system requires fossil fuels. Or maybe the biogas could be used to fuel the waste trucks in the future. I guess eventually people will burn their waste in the backyard, and you can imagine what that will do to the environment in the cities...
The upcoming shortage of fossil fuels will cause us to consume less, and therefore produce less waste, so it might play out nicely enough anyway.
When our youngest stops using diapers, we will switch to emptying the trashcan every four weeks, instead of two weeks as we do now. All biodegradable kitchen waste goes into our own composts and back into our vegetable patch.
The local council here in Hastings, New Zealand has a good system.
You can only put out 'official' orange plastic rubbish bags for collection, and you have to pay for the bags. Thus, the fewer the bags of rubbish you throw out, the cheaper it is.
What's even better is that the recycling collection is done on the same day as the rubbish collection. So you put all your 'rubbish' (or garbage for our US friends) out at the same time.
We have gone down from putting out one bag of (land-fill) rubbish a week, to only putting one out every 3 weeks. We now put out more recycling than rubbish.
By the way, there are lots of great rubbish-reducing ideas out there. After recycling, I would say composting is the biggest way to reduce the amount of 'waste' you throw out. And a really good suggestion I saw recently was to build a bird table, and then feed the birds your left-overs.
Landfills have to have gas collection and venting systems already, to prevent methane buildup, so collection is a non-issue. Gas prices have to be pretty high however, to justify the costs of power generation from this gas.
It is a lot cheaper if you can find a way to simply burn it for heating purposes somewhere nearby.
Memphis light gas and water has made an arrangement with a company to purchase the landfill gas. It is in operation I believe and has been for a year or two I think. Its costing them less than NG cost, but how its worked out I don't know.
Quid Clarius Astris
Ubi Bene ibi patria
Austin bought 4 MW of landfill gas generation over a dozen years ago. There are dozens, if not hundreds, in operation today in the USA. I am surprised it took Memphis so long (competing with cheap coal ?)
Best Hopes for universal use of land fill gas instead of just flaring it off,
Alan
Alan,
MLGW is owned by the citizens and the top jobs are political appointments. The recent stories from the press about their situation with scandals and more is a litany. Though being part of TVA the rates in that town are reasonable. Though the stories will soon appear with the heat about the high bills, as does each winter.
One fiasco that they did was start a venture running fiber optic cable for high speed for business and even to citizens in the future. Went no-where (hmmm) and now is being sold at a loss the citizens of Memphis.
The political chaos in that city is huge. Criminal prosecutions, misdeeds in office at all levels it seems. Conspiracy to hire a stripper to take comprising photos of the mayor (called King Willy by many these days) to force him out of office. The stripper had to be taken back to Nashville for probation violation of a previous sentence, And she was also a flight attendant.
Memphis behind, lol, I lived in Atlanta and Memphis, and know many other cities. Memphis is truly something. A big small town. Has its share of major corporations founded and moved there, and the largest bond selling office outside wall street too.
as for flaring off the gas. Many years ago they built some soccer fields on top of a landfill. They are located in a park area called "shelby farms". A buddy of mine had a job long ago of painting the lines on the field. He discovered one night that the crack were letting gas out, because he fired it up. Well a few nights later he got it in his head that it would be cool to have his brother and a few friends out for a "weenie" roast using the gas and take pictures etc. Well all went well into a big pocket was lit and the gas flared up into the night sky and people on a busy road say it and called the fire department. The "guys" ditched the picnic stuff in the car and then acted like they saw it and were there to check it out. Well thats what I 'heard" anyway. They now have tapped it and drain it off every so often I hear.
Quid Clarius Astris
Ubi Bene ibi patria
My father in law designs brick factories. They've designed several that went in next to land fills to use the landfill gas to fire the brick. This is apparently much cheaper than buying regular NG. the downside is it's less predictable. With standard NG, you can count on firing your brick X number of hours at a predictable temperature. With the landfill gas, the temperature must be constantly monitored and the firing time adjusted bc/ you just can't count on a steady input to your kiln. Nevertheless, when and where possible, this approach is cheaper for brick manufacturers and also shields them from seasonal variations in NG prices.
Landfills have to have gas collection and venting systems already, to prevent methane buildup, so collection is a non-issue.
But the issue is the gas is not JUST methane. You have Nitrogen, Sulfur and other gas mixed in. These things should be accounted for in the design, thus making it non-trivial.
Better not to throw anything away:
http://www.zerowaste.org/case.htm
A big part of the problem is that almost nobody cooks whole foods from scratch any more. Most people (Americans, I am referring to here) don't even know how.
Processed foods are highly packaged foods. That accounts for much of the household waste generated.
How true is this? Don't manufacturers have an incentive to use everything? We joke about what goes into sausages, but I imagine that there isn't a lot of waste; what I would throw out, a manufacturer would be able to sell as livestock feed.
I suspect manufacturers are much much better about using economies of scale to avoid waste than most consumers could ever be. Unless you somehow do aerobic composting & have a fish pond for leftovers, a major food manufacturer is probably better than you. I know I just through out a chicken carcass when I've taken the meat off of it.
I found one article, http://www.ncpa.org/studies/s165/s165.html
which implies that the packaging is a solution rather than a problem. I don't know how biased it is, but 40% more household waste in Mexico convinces me.
The whole "cook things yourself" (while tastier and better for you) seems more wasteful, all things considered. It seems more like nostalgic thinking than rational thinking.
Depends on what packaging is used for the 'raw' ingredients surely. If you buy meat wrapped in just butcher's paper, place fruit & veg straight into reusable bags, and buy other packaged ingredients according to the largest and simplest forms of packaging available (e.g 50kg sacks of rice or flour), then this surely produces far less waste than buying pre-prepared individual frozen meals that often come with 3 or 4 layers of packaging.
It certainly costs a lot less, but yes, requires more effort.
You count packaging, largely plastic, some metal (cans) a paper as a zero cost.
Reducing the solid waste stream is, quite frankly, not a major social benefit.
I would rather throw away avocado skin & pits, peach & plum pits, chicken bones, etc than throw away non renewables that generate GHG.
Due to NIMBYs, finding solid waste disposal sites is a problem in some parts fo the country, but hardly a big deal in the overall picture.
Packaging and processing is bad. Composting is good (not possible for me), eating low on the food chain is good.
Energy spent processing and transporting food is bad.
I will take my farmer's truck delivering Creole tomatoes (25 cents/lb cheaper than WalMart 9 blocks away due to simpler supply chain BTW) and okra (NA at WalMart) and mustard greens (likewise) to Zara's corner grocery 3 times/week. Harvested that morning. I walk there, take them home, prepare them and eat them :-))
The farmer uses recycled cardboard boxes most of the time. he takes his empties back and accepts any of a certain size that Zara's gets from other suppliers.
Processed food is largely unnecessary. I am shocked when I visit Phoenix grocery stores how little real food they have and how much hyper-processed "Hot Pockets" etc. etc. they have filling an entire store. 80% of that "food" did not exist 30 or 40 years ago and should disappear.
Obesity, heart disease and diabetes are MUCH bigger problems that solid wastes for our societies.
Best Hopes for Reducing US food processing by 90%,
Alan
A landfill in my city that sits on forest preserve property was closed about 10 years ago and electrical generation began. According to FP info the plant produces 9mw and puts 7mw into the grid enough to power supposedly 7000 houses thru 3 Caterpillar gen sets.
Keithster's question is would there be benefits to redesigning our dumps, not whether there are currently methane harvesting projects. I think there would, but its probably not economic at today's prices for the recycled materials.
In answer to the questions on experience and design, my answers are yes.
Regulations already require recovery of methane above certain size limits for both new and existing landfills. However, beyond the minimum requirement for flaring or incineration (or clean up for other sale and use), the regulations are silent on addition requirements.
In designing new landfills, one must take into consideration the rate of refuse deposit (and the patterns that one anticipates using so that when the methane extraction wells are placed in service, the maximum recovery of methane is realized for this type of project. Note that the gas is a mixture of methane, carbon dioxide, a number of other organic compounds (which go by the acronym NMOCs: non-methane organic compounds), a few inorganic compounds and water. Treatment of the extracted gas (these are usually active systems with gas extraction under vacuum without excessive air inleakage) are designed to knock out water.
As far as projects are concerned, we sometimes see the gas burned as a substitute for natural gas (with a lower heat content than NG) in standard boiler (process steam heat) or burned in internal combustion engine(ICE)/generator combinations. The gas can also be burned in standard combustion turbines to generate electricity. Currently, there is approximately 800 MW of installed electrical capacity designed for use of landfill gas.
One of the tricks is the proper stacking of refuse and timing since the methane generation varies both with time (rate of decomposition) and moisture. It takes some time to establish the anaerobic conditions that promotes the growth and support of the methanogens in the building "core" of refuse. As more refuse is added and sections (the term "cell" is used to describe an area of waste placement) are stacked out, new wells are added to capture the gas.
It takes some effort because you have to design both for the maximum design flow and for a time variable generation rate. You might start a project with one or two ICEs or turbine of smaller design rather than one large one and then add to the system as needed.
For comparison, burning municipal solid waste yields more energy while reducing the volume of waste (and at the national level some 2700 MW generating capacity is installed in the US). However, people don't like the idea of having incinerators and all that burning refuse nearby.
wondering what the typical composition of landfill gas is? you state that the (landfill gas) has a lower heat content than ng. ng (methane) has a heat content of 1031 btu/scf. what accounts for the difference? is it co2 ?
what we buy at the meter is not pure methane. i think i read that the btu content is about 850 btu/scf with the difference being nitrogen.
It is the CO2 that reduces the heat content (~60 methane, most of the rest is CO2).
Actually, suppliers do try to keep the BTU content up around 1000 BTU/scf. Nitrogen and CO2 can be present in small quantities, but too much ends up reducing the efficiency of any combustion process more than is necessary (the air has nitrogen along "for the ride" which has to be heated up as part of the combustion process. Extra nitrogen contained in natural gas is just a heat diluent and reduces efficiency). You see it in the "therm adjustment factor. We can accept that in a waste gas like LFG and it the combustion process is properly tuned for it.
I should mention the obvious: Were sewage to be mixed with organic wastes that had been separated out of the solid waste stream, and run through an anaerobic generator, an optimal amount of methane could be produced and captured as an energy source. The residue could then be used as a soil amendment/fertilizer for non-food crops (fiber & biofuels, mainly). Even with the anaerobic digester process, direct incorporation into food cropland is not recommended, though perhaps the treated land could be rotated into food production after a few seasons. Segregating industrial wastes from human sewage would be essential to minimize levels of heavy metals and other contaminents. In short, we really need to engineer our system of handling waste a lot differently than the way we presently operate.
WNC Observer
Could earthworms eat the anaerobic waste from a methane generator? If so, the worms could be sold for fish and chicken food, while the worm castings would be an extremely valuable fertiliser. This would be 3 seperate income streams from the waste and might add enough value to be worthwhile to a large organic waste producing company.
There is possibly a better alternative to collecting methane or incineration for electricity generation from MSW. Check this out:
http://www.plascoenergygroup.com/content.php?cat=tech
I just heard about this plasma gasification technique. This plant is supposedly coming online any day now.... will have to take a trip down to Ottawa to find out how it goes, this seems to be a great solution to the problem of MSW.
A quick request.
I am looking for pointers/data on historic predictions of field/region production vs the reality for areas that have peaked.
In particular I recall a Yibal graph, and I would like to source something on the North Sea and lower 48 US, and maybe Cantarell.
Does anyone know of such data?
Thanks.
You might look at some Jean Laherrere's data for some of what you are looking for. He has charts on Yibal, the North Sea and Cantarell (to name a few) in some of his papers. One suggested source:
http://www.hubbertpeak.com/laherrere/
As for "predictions" you might be able to find some of what you are looking for (at least as far back as 1995/96) from the archives of the International Energy Outlook from the EIA. Certainly the predictions for the North Sea (with estimates for Norway and the UK's production are included. It will take a little work but the outlook is always in the same chapter (and you will notice the "cut and paste" sameness to the wording year after year. I will tell you that the EIA got it right before they got it wrong with the North Sea.
The page for the current IEO is http://www.eia.doe.gov/oiaf/ieo/index.html
Archived versions are found at http://www.eia.doe.gov/oiaf/ieo/ieoarchive.html
You might also find additional information at the IEA in their World Energy Outlook. Free archived versions (PDFs and some very large) can be found at http://www.worldenergyoutlook.org/free.asp
Hope that helps.
Thanks for that.
I'm trying to pull a paper together and it helps to convince people that there really is a problem if you can point to past production forecasts and show how they got it badly wrong (therefore its likely their predictions today are wrong as well).
There is some data here for Brent and Forties, but any other pointers (particularly nice political statements about how production was going to continue to ramp, made just at the production peak) would be gratefully accepted.
If you know how to do a Hubbert Linearization, the estimates by the EIA and the actual production can be quite revealing.
I recently ran the data from 1982 through 2006 and then put the EIA's estimate for conventional crude oil production (from 2007, the estimates from 2006 and particularly 2005 out into the future are even more revealing) out to the year 2035. It is quite revealing what they are predicting...a whole different curve aimed way out at ~4300 GB production (of course the EIA also "predicts" global collapse out there around the year 2044).
But the current curve from 1982 through 2006 is aimed squarely at a value of 2215 GB ultimate recoverable reserves (URR, ± 35 GB at the 95% confidence level). Of course, the thing to concerned about is that some of the newer fields with the enhnaced oil recovery simply don't roll over a peak, their production curves look more like they fell off a table. And that might make getting to 2200 GB rather tough.
I have in mind to present a straight production curve peak, with actual and predicted in sharp contrast. The problem with Hubbert Linearization is twofold. Firstly its overly mathematical and difficult for the non-expert to understand, and second it concentrates on total recoverables, and key issue is decline and decline rates.
Need a graph that enables you to predict/show the downslope %age.
Don't try to prop up the old Hubbert Linearization on a pedestal just yet. They are remarkably easy to make if you have even the most basic understanding of mathematics and rudimentary computer skill. All you really need to know how to do is add up two numbers, divide another set of numbers, and plot your results on a graph. A simple straight line ruler can give you pretty accurate URR, while a logarithmic function on all spreadsheet programs can give you the wildly touted 'correct' numbers. Here is an example:
Year1 Production: 10 : 10+0 = 10, 10/10 = 1.0 | x=10, y=1
Year2 Production: 10 : 10+10 = 20, 10/20 = .5 | x=20, y=.5
Year3 Production: 15 : 20+15 = 35, 15/35 = .4286 | x=35, y=.4286
Year4 Production: 17 : 35+17 = 52, 17/52 = .3269 | x=52, y=.3269
Year5 production: 25 : 52+25 = 77, 25/77 = .3246 | x=77, y=.3246
And so on...
You take those decimals(y), and plot it on a graph above their corresponding cumulative production number(x). For instances, year 4 production would be at y=.3269 x=52. Once you have a large enough data set, usually a few decades worth, the plots begin to 'align' and form a semi-straight line. A simple best curves fit equation around the 'aligned' numbers plotted to y=0 gives you your URR.
There is no 'magic' involved, and don't let anyone here fool you with the numbers. And if people in this country truly cant understand these numbers, then there is no hope for any of us. Fortunately, I'm certain most people can! :P
Jeez...I know that voice from somewhere...Hothgor???
Sorry friend, but I'm not. You can confirm this with Robert Rapier when he comes back! Please don't try to 'BenjaminCole' me out from this wonderful site :*(
Ha! Ha! I'm not out to push anyone out. I was just curious. One of Hothgor's "things" was pointing out the over-simplicity of Hubbert's methods. I just thought I heard an echo.
Have fun!
yeah, that's him. Or at least someone posting the exact same idiotic crap as Hothgor.
He's also posting as LuisDias (do you really think that's an architect from Portugal?).
And he was BennyCole as well (unless you really thought Mr Cole lived in a 1972 airstream trailer in downtown LA while eating carp from the LA river).
There are two types of people in the world, those who rigorously adhere to the TOD party line and Hothgar.
That's a load of bull and you know it Jack.
There is a huge spectrum of opinions here.
How you can think that Hothgor was the only dissenting voice around here is beyond me.
What exactly is the TOD party line? If you can define that then perhaps we can see just how much people "rigorously adhere" to it.
And as far as I can tell Hothgor has been behaving himself this time around. Has anyone objected to his posts? I didn't. I was merely pointing agreeing with another poster that yep, this guy sounds a heck of a lot like him.
Rethin, I'm sorry friend, but I think you are jumping the gun here a tad quickly. Do as I said and ask Robert when hes back. He will either confirm or deny your claim. Aside from that, I am at a loss for how you can automatically assume that I am Hothgor. You do know what happens to people who assume things, right?
It has a tendency to make an ass out of you.
It's semi-bull at worst. I'll grant it is a gross oversimplification and posted partially for fun. I am just surprised at the virulence of the Hothgar obsession. But it is abundantly clear that the huge majority of TOD commenters are on the doomer side of center.
Much of this commentary has been insightful, unique and ahead of almost any other media sources. I have learned a huge amount here and some things I doubted, or argued with wwhen I read, have come to seem true to me now.
However, if someone suggests that a large portion of Mexican or Iranian oil production decline comes from the dreaded "above ground factors", they become a target for abuse. Suggest the George Bush blew up the World Trade Center and you are fine.
I come from the John Steward Mills school of argument: That all counter views should be heard and discussed because if they are right we need to know and if they are wrong, they strengthen out original point.
I do think that much of the counter consensus views have been shouted down by angry posters who make little effort to refute the points. In my opinion, TOD is weaker for it.
Do you really think Hothgar hurt TOD? You you really think there are paid trolls out there trying (and suceeding) in blocking TOD's efforts to get the word out?
Yes, at the end of the day, a range of opinions is heard here, but it is narrower than it could be. Even the editors are embarrassed by the "run for the hills" messages that often dominate the dialogue.
I also think the attack the commenter and not the comment approach hurts TOD. If some one claims something that you don't like (yes, even questioning Hubbert), you gain a lot more ground by proving them wrong, than by calling them and idiot or getting them banned.
Define "doomer". A huge majority of TODers are doomers? A vocal minority perhaps.
I certainly come here to learn and have learned a lot. In fact I find your posts to often be dissenting and informative. I don't recall anyone objecting to your postings.
Discussing Mexican oil production is the whole purpose of this board.
Trying to argue sense into the "truthers" is far outside the purpose of this board. It doesn't get challenged for that very reason, not because its accepted as gospel. I personally can't stand that crap, but never argue about it here.
I agree 100%
How often does that really happen? And really, how can you shout down someone on a message board. Its not like you can cover up their message with your post. It gets equal airing. Just because several people disagree with it doesn't mean it isn't seen/heard.
Yes, so did Fredddy and oilceo. They truly did damage the discussion on this site. It went way way beyond simply disagreeing.
No. Where did this strawman come from?
Dominate the dialogue?!? Are you reading the same site as I am? This site has always had a scientific/political theme to it. In fact just the other day Airdale decided there wasn't enough "run for the hills" messages on this board and left in a huff.
Do you really think Alan's rail proposals are "run for the hills" type thinking? Its even been suggested he run for president.
Of the hundreds of posts on this board every day how often do you ever see that? Be honest. I know you love to rant and rave everytime you do see it, but how often is that? Pointing out that so and so poster is obviously a sock puppet for another is not attacking the poster. No one attacked hothgor to discredit his comment on HL. Just that yes, we've heard this all before.
What happened to Oil CEO?
He seemed to have BPD, or perhaps even MPD. He actually would post some occasionally interesting stuff, in between the megalomaniacal interjections.
I thought he was sometimes funny, even if he was highly disruptive...
[ps for Jack: It's John Stewart Mill... I can't stand to see an iconoclast's name spelt wrong--I'm sure your JSM School of Government wouldn't approve either, so I thought I'd rectify the matter.]
Oil CEO was airbrushed from the photographs. Banned from TOD and made to walk alone into the peak oil future.
Thank you for the correction. I stand rectified.
My copy of On Liberty is in a box somewhere, but I'm quite sure it was authored by John Stuart Mill.
Hah, looks like I need to go the the JSM School of Argument and be schooled myself...
Eh, spoke to soon. I just knew it wasn't "Steward" and pulled the trigger without my team of fact checkers' approval... Alas, from the looks of it--you have schooled me, so perhaps I will skip the JSM School for now. (Which I noticed I misread as "of government" instead of "of argument"--not that there is a big difference between the two =] ).
/me humbly bows to Donal. I stand rectified...
Memory is a tricky thing. I can remember scifi books I read in my teens better than memos I read last week. This morning I was trying to remember the name of a girl who had sent me an email. We were in a play together last year. She is a very pretty girl with the sweetest smile, but I couldn't pull in her name.
I finally opened Eudora and there was her name - Rachel. Not a hard name, but not a minute later I couldn't remember it again so I had to open up Eudora again. Now I think I've got it.
Alright. We are mostly in agreement here. You are certainly right that the run-for-the-hills brand of doomerism doesn't "dominate". I will dodge defining doomer, but will certainly acknowledge that it is a legitimate and rational position to hold.
I would say Leanan is a doomer, but also smart, informed and polite. Same for Alan. The doomers may be right. I just don't think the case is proven or the future cast. I am not using the term pejoratively.
I agree that of the thousands of posts here, a small minority are ad hominim, but I do think they exist and are often used as an attempt to shut down those with different positions. Odogragh left because of this behavior.
I don't mind a little ranting and raving now and again, but it is hardly every time an insult crops up. I just can't resist teasing you periodically for your Hothgar behind every tree outlook.
By the way, I have not opposed the banning of belligerents and do agree they come back with other names some times. I have said my piece on this and will leave this issue alone until after the rainy season. Promise.
There you go being all civil and reasonable :-)
I'm one of the few that thought Hothgor's dissenting voice created some decent discussions. Anytime he would post something, people would jump on him and call him a troll rather than debating the issues. As such, he would return the response in kind. I think one of the indicators that he wasn't just out to be a pest is that I haven't noticed him rise from the dead, unlike benjamin cole and especially oil ceo. If you look at garyp's post that PartyGuy was responding to, he was concerned about the overly complicated nature of the Hubbert Linearization. PartyGuy's assertion was that HL is not, in fact, complicated which is true if you take a few moments to look at the physical variables which go into forming it.
Also unless I'm mistaken, Hubbert never even did "Hubbert Linearization" - it was Ken Deffeyes that came up with the technique as a simplification for estimating URR.
So, that woman might "be a man, baby"...but you should probably think twice before grabbing some crotch to prove it, cause you might have a really pissed of gal.
Hrothgar started out as a know-it-all troll, but actually responded positively to criticism and reasonable encouragement. He's a kid-early 20's from an East Texas town where everbody has chronic depression. Hrothgar is a quick study, and showed a real talent for doing quick research to back up his opinions. And how many guys his age can write as well as him?
I don't know a good method for civilizing him, but I kind of think we blew it by barring him. I can't say the same for Freddie or OilCEO, both of whom were old enough to know what they were about. There is no doubt that Hrothgars postings stirred up too many flame wars, even when he tried to just participate in the give and take here. Maybe the process should include a period of a month or so of being barred from postings, then a return on strict probation.
I think you misunderstand.
I'm quite capable of generating and analysing such plots Log-lin plots aren't a stretch. However from the standpoint of the non technical reader they are difficult to immediately grasp and tend to focus on the URR, which is less important than the downslope shape.
Its a question of using the right tool for the job. If you are trying to illustrate how industry/political forecasts can be wildly wrong, even close to peak, you need a different tool.
Roger Blanchard is the Norweigan expert. He has data on every field Norway has in the North Sea, and a lot more as well.
http://www.hubbertpeak.com/blanchard/
http://www.energybulletin.net/17262.html
Or just google Roger Blanchard North Sea
Ron Patterson
Re: Riglogix article on Conoco-Phillips and Exxon going to Canada rather than Venezuella.
The whole " nationalisation" accusation in Venezuela started because Venezuela proposed raising the 1% royalty on the Orinoco heavy oil to 16%. Canada's current royalty in Alberta is 1% on the bitumen sands.
There's a couple of geopolitical factors too- Hugo Chavez is still a little angry about the CIA coup that deposed him for a couple of weeks a few years back, he seems to lack Christian forgiveness for big oil companies and GWB.
I don't know how long the people of Canada will continue the give-away to the Major oil companies, but I can't imagine that it will be very long. The low royalty is justified to get the hugely expensive syncrude reineries built, and I'm sure will be raised after the peak in light sweet crude is firmly established. I also question how long they are going to allow open pit disposal of the tar sands waste water, and the huge CO2 releases.
This is another nail in the cornucopian coffin. If synthetic crude has to be subsidised in order to fuel wasteful American consumption yet prices are still through the roof, how can they afford it? The economic substitution model is flawed on costs.
Hey OMB if I could change the subject and ask you a couple of questions about your neck of the woods. I just received a quarterly report from PBT and I was wondering does that part of the world they show on their mailed out form actually look like that (assuming you have seen the brochure), and how deep is the water and do they shoot strangers out there?
Haven't seen the brochure, not sure of the real name of PBT. I live on Galveston Island, a barrier Island in the Gulf about 50 miles SE of downtown Houston. Our archetechture is late Victorian through WWII in the older parts of the island behind our 17 ft. concrete seawall. The landscaping in town is not native-lots of trees.
West of town the archetechture goes to beach house on stilts, and the typograhpy to dune and swale covered in marsh spartina and wildflowers. No shortage of mosquitos.
Going towards Houston we have about 5 to 10 miles of salt marshes, then a rapid transition to American Suburban nightmare.The largest petrochemical complex in the world is on the west side of the bay and the Houston Ship Channel.
The water's shallow. Except for the Houston Ship Channel and the Galveston Ship channel, the water in the bay seldom exceeds 8 ft in depth. Offshore, the water gently shelfs off-a couple of hundred yards until its over 6 ft. The fishing is pretty good.
My onry neighbors are much more likely to shoot each other than to rob and shoot tourists. We actually welcome them! Its very close to the ASPO convention this fall, come down for a day.
PBT is the Permian Basin Trust. PBT been berry, berry good to me. PBT and SJT always have "cute" quarterly reports, with one artsy theme for the year.
olepossum,
I looked at the financials, and my advice is to buy as much of Permian Basin Royalty Trust as you can stand. Although its stripper production, how can you beat a 10% ROI with tax advantages on old production with a major as operator? Its pretty well a perfect shelter-energy will most likely continue to go up as the peak happens. If congress goes nuts and puts on a "Windfall Profits" tax, they'll probably exempt stripper production, just like last time. Dollars may be eroding in value, but oil prices aren't.And its domestic production, geopoliticaly safe.
There's even a deep gas play. The Wassom field is in the Woodford-Barnett shale fairway-even though its not mentioned in the Financial Statement.
People are always asking on this site for a good place to put their investments. They damn sure need to look at this one.
The Annual Report picture looks like the LLano Estacado after a wet spring, about 600 miles north-west of my area of the Gulf Coast. Its pretty, but the flowers are hiding the buffalo grass, prickly pear and tumbleweed. The area of the Wassom Field in northern Gaines County is generally pretty dry, about 10-15 inches of rain a year and all the flowers bloom at once when it rains.
Thanks anyway, I thought I remember you making a recomendation for them as a well run outfit, hence I asked about their brochure. Been to Galveston on a weather day when our diving was curtailed on an inspection job back in the darks days of 1987, and had fun. The people I know who lived in Texas but were not native made it seem an unfriendly place between the fire ants and the locals. Would like to hunt South Texas sometime. Good luck in the patch.
existentialtribalist
I was talking about the Hugoton Royalty Trust, another excellent company in my opinion. Its a spin-off of XTO's, but mainly natural gas, not oil. Also the Louisiana Land and Exploration Royalty Trust is worth looking at.
Alberta is the first CDN jurisdiction to implement a carbon tax -->
http://www.edmontonsun.com/News/Alberta/2007/06/26/4290916-sun.html
With regards to the "people of Canada" the Bank of Canada is likely to raise rates to curtail inflation. Most of the inflationary pressure is centered in Alberta due to the investment in tar oil projects; fast food workers are paid $18 to $20 and hour and depart for tar oil jobs where the pay is better. The CDN dollar is moving toward parity with USD and this hurts eastern MFG. The east is therefore in a low growth mode and increased bank rates will amplify the hurt and are unlikely to slow the influx of foreign capital. The province of Newfoundland (Canada's version of Appalachia) is forecast to lead in economic growth while Ontario (the MFG center) will have the lowest rate of growth.
With regards water resources there is a problem with future supply and contention for the available water as AGW projections indicate a future decline in rainfall. Downstream aboriginal populations exhibit increased cancer rates and this is attributed to hydrocarbon residues in the water. The civic administration of Fort McMurry has also called for an embargo on further growth as they are unable to manage it.
So the Alberta govt is taxing it, the local mayor wants it to stop, the Indians are being poisioned by it, the ranchers and urban dwellers are competing for a declining water resource, the NG supply is drying up, the economic distortions are hurting the export sectors and you ask when will the brakes be applied?
The American way of life is non-negotiable. I don't know how many billions have been wasted in the US "Stay and Slaughter" campaign in Iraq, but Canada is much less hostile and provides a security of supply not readily available elswhere. Coupled with the foregoing is the fact that Big Oil = Big Money and Big Money = Big Influence and the outcome is that the will of the Canadian people is pretty much irrelevant. I don't think you are going to see any changes. We are going to burn all the tar oil, plus we are going to burn all the organic corn oil, the consequences be dammned.
Floating Wind Turbines you say?
http://www.speakerfactory.net/wind_old.htm
http://www.treehugger.com/files/2005/04/selsam_multirot.php
I’ve been thinking quite a bit about the U.S. debt situation lately and have posted several times regarding how a slowing global economy might dry up financing of the U.S. deficit. One of my main points has been that a country should run surpluses during good times and deficits during bad, or at least smaller deficits during good times and larger deficits during bad.
Here’s an interesting thought experiment which shows how this might work (or not work; hope this isn’t too long):
Imagine two countries, Country X and Country Y. Both countries have a GDP of 10 trillion. Both grow at an average rate of 3% per year. Both have an accumulated debt of 5 trillion up to this point. Interest rates are currently at 5%.
In Country X, there is a leading newspaper called, “The X Street Journal” which recommends that debt servicing loads always be held constant at 2.5% of GDP. Country X currently has a debt of 5 trillion on which it pays interest rates of 5%. This is 250 billion in interest per year, which is 2.5% of Country X’s GDP. After some quick calculations, the economic gurus of Country X determine that in order to keep debt servicing loads at a steady 2.5% of GDP all they need to do is run yearly budget deficits which are equal to the countries average annual growth rate of 3%. After 30 years of following this policy, the country’s GDP has grown from 10 trillion to 24.27 trillion while debt has grown from 5 trillion to 12.13 trillion. Paying 5% interest on a debt of 12.13 trillion comes to an annual payment of 606 billion which is 2.5% of the GDP of 24.27 trillion. Mission accomplished.
Country Y also strives to maintain a constant 2.5% ratio of debt service to GDP. However, “The Y Street Journal,” and the economic gurus of Country Y are slightly more sophisticated than those of Country X. They recognize two factors that the citizens of Country X ignore. First, while GDP grows at an average rate of 3% per year, growth is not steady. Country Y tends to experience periods of 8 years of 4% growth followed by periods of 2 years of -1% growth. Since the economists of Country Y recognize the enormous stimulus provided to the economy by deficit spending, they decide that instead of running constant 3% per year budget deficits, they will run deficits of approx. 2% during the growth years, and deficits of approx. 7% during the recession years. So far, Country Y’s yearly deficit (by percent of GDP) looks like this:
2,2,2,2,2,2,2,2,7,7,2,2,2,2,2,2,2,2,7,7,2,2,2,2,2,2,2,2,7,7
while Country X’s looks like this:
3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3,3
The economists of Country Y, however, also recognize that just as the growth rates of economies tend to fluctuate between periods of growth and recession, interest rates tend to fluctuate as well. Taking into account the fact that the current interest rate of 5% is well below the historic interest rate average of 7.5% (with rates tending to fluctuate between about 5 and 10 percent), they decide to assume a long term rate of 7.5% when determining proper deficit spending levels. Given this, the Country Y thirty year deficit series:
2,2,2,2,2,2,2,2,7,7,2,2,2,2,2,2,2,2,7,7,2,2,2,2,2,2,2,2,7,7
changes to:
1.5, 1.5, 1.5….,5.25, 5.25, 1.5, 1.5, 1.5…5.25, 5.25, 1.5, 1.5, 1.5….5.25, 5.25
After thirty years of following this policy, Country Y’s economy (3% average growth) has grown from 10 trillion to 24.27 trillion (just like Country X’s), but their debt has only grown from 5 trillion to 9.67 trillion (compared to 12.13 trillion in Country X).
Many people might be wondering at this point, “What is the big difference between a 12.13 trillion debt in Country X and a 9.67 trillion debt in Country Y?” Some might even be saying, “Both countries are hopelessly indebted.” Well, it turns out that there is a surprisingly big difference in the outlooks for these two countries.
Imagine that at this point (after thirty years of unusually low interest rates), interest rates now spike up to 10% for thirty years. So, after sixty years, interest rates will have corresponded to their long term average of 7.5%. Look what happens to Country X and Country Y.
Let’s start with Country Y. Well, they don’t have to change anything. They have already planned for average interest rates of 7.5%, so during the next thirty years, their series looks just like it did in the first thirty years:
1.5, 1.5, 1.5…5.25, 5.25, 1.5, 1.5, 1.5…5.25, 5.25, 1.5, 1.5, 1.5…5.25, 5.25
At the end of sixty years, Country Y’s debt load is still 2.5% of GDP. No major shocks, pretty consistent growth. They have successfully, “smoothed out the bumps.”
Country X, however finds itself in a far more desperate situation. They first respond to the, “completely unexpected” rise in interest rates with denial and bewilderment. Initial articles in, “The X Street Journal,” claim that the situation is bad, but not dire. Recalculating their yearly deficit levels using the new 10% interest rate, they come up with the following:
1.5, 1.5, 1.5 ….
In other words, instead of being able to run a 3% yearly deficit, they comfort themselves, they can still run exactly half of that (since the interest rate has doubled). But then they remember their already accumulated debt of 12.13 trillion. Slowly, the economic gurus of Country X realize that in order to get back to their 2.5% of GDP debt servicing load, the 12.13 trillion debt will have to be sliced in half to 6.07 trillion. They get out their calculators and realize with astonishment that just to get back to a 6.07 trillion debt they will have to run 1.5% budget surpluses for 30 consecutive years.
Needless to say, this is devastating news for the economy of Country X. Without the stimulus of deficit spending, and with the correspondingly bleak outlook for future growth, the country enters a recession almost immediately, FDI evaporates, consumers lose confidence, businesses lose confidence, the stock market crashes, etc…
Admittedly, this thought experiment is simplistic. But I think it pretty effectively rebuts the common argument I have seen in many magazines/newspapers here in the U.S. that deficit spending is OK as long as debt doesn’t grow faster than GDP. Many of these articles make the same mistakes as the economic planners in Country X. They give you the deficit spending as a percentage of GDP in a growth year (say a year of 3% growth) and argue that the country only ran a 3% deficit, the same as GDP growth, so everything will be fine. They fail to take into account the fact that in a non-recession year, the country should, at the very least, be running a deficit which is smaller than GDP growth (say 2% instead of 3%) as a way of saving some stimulus for the inevitable lean years of recession. More importantly, they act as if the current abnormally low interest rates will go on forever and ignore the consequences of this changing. I also thought it was interesting to see how big a difference there was between two very indebted economies, one of which, “did deficit spending right,” and one of which, “did deficit spending wrong.” With a little foresight, Country Y gets by OK, although one could still argue that they are over indebted and that at some point they will also have to run surpluses in order to pay back their principle, rather than just paying interest. On the other hand, by not recognizing the fluctuating nature of interest rates, Country X ends up in a situation that I think would lead to significant economic collapse. In other words, if we assume that a country must keep its debt servicing burden at a relatively constant level in terms of percent of GDP, a seemingly small difference in planning leads to a huge difference in outcome. A little foresight goes a long way.
If memory serves, the ratio of total US public and private debt to GDP more or less doubled from 1929 to 1934, because GDP collapsed.
Currently, the US debt to GDP ratio exceeds what we saw in the Thirties, and of course this current ratio is during "boom" times. Consider what will happen to the ratio as GDP contracts.
Also consider the nature of the GDP in the Thirties versus now, i.e., how much of GDP in the Thirties was a result of discretionary spending, versus today?
The problem isn't debt but debt service. As long as the debts are in your own currency you can inflate them away, which is what has happened to those 'unpayable' debts from the end of WW2 that were going to reduce the baby boom to penury. See Congressional Record.
How much of the national obligation is in foreign currency is a good and rarely asked question. Also, despite the apparent financial shambles in the US, it only has to be better than the financial shambles in other places to make the dollar seem like a sound bet on a relative basis. Where is the figure of foreign debt denominated in foreign currency/GDP ? ??
Despite the recurrent warnings that 'paying off' the national debt would be such a horrendous and onerous task, the thing just keeps growing with the money supply. Funny about that. Hey, let's roll up our sleeves and pay this sucker off! No more T bills, no more books, no more banker's dirty looks.
Yes, the vagaries of paper money will, like the poor, always be with us.
Petrosaurus asks:
Indeed it is a good question. The U.S. is in a unique position, since the dollar is the world's reserve currency. Virtually the entire U.S. debt is denominated in dollars. For other countries, much of their debt is often denominated in dollars or other currencies not their own.
This is the way things are now. They may change.
the debt was about 120% of gdp at the end of ww2. through the war and peace, republican and democrats in power the debt was reduced more or less linearly to about 32% of gdp at the end of carter's term. following 12 yrs of republican "leadership" the debt balooned to 67% of gdp at the end of bush the daddy's term. at the end of clinton's term, the debt was 59% of gdp and it stands in excess of 70% of gdp today. and if you dont believe me you can go to zfacts.com national debt graph.
the debt increased by $ 21 billion in clinton's last full yr in office and increased by $ 21 billion in one day (nov. 23,2004) under the leadership of el'befuddleoso.
"the problem isnt debt but debt service" just wondering, do you make the minimum payment on your credit cards each month ?
"Currently, the US debt to GDP ratio exceeds what we saw in the Thirties, and of course this current ratio is during "boom" times."
Yes. This is what I am worried about. There is no foresight at all being exercised with regards to these two issues. Number one, the boom times will not last forever. Number two, interest rates will not stay low forever. Also, take into account that the U.S. is far worse off than even Country X in the situation described above. Take a look at the latest Flow of Funds Report from the Federal Reserve:
http://www.federalreserve.gov/releases/z1/current/z1.pdf
Some excerpts:
"Debt of the domestic nonfinancial sectors expanded at a seasonally adjusted annual rate of 7-1/4 percent in the first quarter of 2007..."
"Household debt expanded at an annual rate of 6 percent in the first quarter..."
"Nonfinancial business debt expanded at an annual rate of 9 percent..."
In other words, across the board, debt is increasing much faster than GDP, which grew at 0.7 percent in the first quarter. Clearly, none of this is sustainable.
Another quote from the Flow of Funds:
"At the end of the first quarter of 2007, the level of domestic nonfinancial debt outstanding was 29.3 trillion..."
U.S. GDP is currently 13 trillion. Our debt to GDP ratio has fallen apart. The only thing that has saved us up to this point has been a very unusual period of abnormally low interest rates.
> GDP, which grew at 0.7 percent in the first quarter
That's a "real" number, not a nominal.
The 0.7% is an annual rate. Divide by four to see how little the economy grew in just that one quarter. Then round off to the nearest whole percentage number, and you come to zero. With GDP growth statistics, we're lucky if the first digit is right; sometimes they are revised by fairly large amounts YEARS after the quarter they measured.
GDP growth statistics are very useful, but you have to know how to interpret them--and also know how much they tend to be revised many months after the fact. For one thing, to get the real GDP "correctly," you have to have a correct number for the GDP deflator to get from nominal to real. Again, with the GDP deflator, we're lucky if the first digit is correct, and taking seriously anything after the decimal point gets you into the fallacy of misplaced precision.
As closely as our statistics allow, the first quarter growth was about zero (and may actually have been negative--no way to know at this point).
I wasn't saying 0.7% good, just that comparing nominal vs real is not "apples to apples". Further, a lot of things about debt are not properly normalized, and growth rates of debt can be misleading due to this.
To your big picture point though, as I recall, Bill Gross at Pimco said that the nominal growth rate of the economy was about 5% lately and a weighted average of debt is a little bit higher than that -- so if the economy stays nominally at or below 5% then there will be trouble in the debt market over time for sure.
Whoops: It is not complicated. Debt is neither good nor bad. Borrowing money to invest and get a better rate of return than your borrowing costs is advisable often. If the USA had borrowed money to embark on a program to grow future wealth it could be justifiable. Borrowing money to buy your weekly booze (which is basically what the USA has been doing for years) is ridiculous no matter what the amounts are.MSM mouthpieces ("economists")promote the practice because that is their job- someone has to do it.
BrianT, but there are lots of votes to be bought by cutting taxes while handing out trillions in government contracts. My grandfather is spinning in his grave! He voted Republican all his life because they were fiscally conservative, but he died before Reaganomics and the Neocons.
Oilman: Yep. Lots of votes and lots of money to be made.
Just to add- today there is a story that 19 BILLION dollars supposedly given to Iraqi troops has vanished (cannot be accounted for). Nice work if you can get it.
19 BILLION? with a B? Wow, but then again that is just a drop in the bucket. If you want to talk about real disappearing cash check out this link...
http://www.youtube.com/watch?v=oj1rT4bszWg
And as far as I know, there was never any meaningful investigation. Other factors emerged which took precedent.
ej
i think bernanke put it in a helicopter and it just flew away (instead of making a strategic drop like they were supposed to)
A similar story was written by Warren Buffet (link):
My radical and totally unnaceptable solution to the crises is import tariffs and a switch from income taxes to consumption taxes.
The dollar has lost more than 35% of its value compared to the Euro since Bush took over and yet our deficits continue to grow.
Problem with this is that a significant portion of US imports represent the products of US MFGs made overseas likely in China.
US MFGing left for China 10 years ago. It is US investment in China that has started that nation on the path to being an economic superpower. At a certain point local Chinese wealth increases to the point that the export market will be of lesser importance and China will grow through providing products to her and India's growing middle classes.
The decline of the USD is also of benefit to all those nations and individuals holding US denominated foreign debt. My US denominated debt has declined 40% over the past 3 years.
This is totally in line with the need for tariffs. Instead the US government id fruitlessly begging the Chinese to raise the value of the Yuan. I wonder if the average American working stiff would become angry if they learned they sacrificed 35% of their wealth so that a few lucky urban Chinese (rurl China is going nowhere) could become middle class?
Besides, a tariff would also raise the price of imported petroleum. much simpler than a gasoline tax at the pump. Since the US uses 25% of the world's oil, demand would weaken a faster. Tariffs would also put money in the US government's coffers. Their budget is also way out of balance.
If the US dollar was allowed to continue its fall, then the price of oil would rise anyway to match. This would (does) cause greater trade deficits, which in turn causes the dollar to continue to fall. Round and round. That cycle can be broken by eventual American poverty or by tariffs which would reduce consumption but would defend the value of the dollar and might even cause Americans to save.
It is all about maintaining a balance of economic fundamentals -- trade deficit, budget deficit, and value of the dollar.
All this pointless jawboning is nothing more than commercial Kabuki. The US govt doesn't want to take any action that would inconvenience the US firms responsible for the imports. Remember that these are the firms that support political parties, presidents, senators, congressmen. You are arguing on the basis of economic logic as it appears valid to you. Look at the demographics of the US income distribution. You are arguing against the economic windfall which has accrued to the top quintile. Why should they voluntarily empty their pockets and deprive themselves of power and influence? The lower quintile lives in NO (and we all know that story) or they have just been shipped to Iraq, or they are keenly waiting further details of Paris Hilton's jailhouse conversion.
George the IV has been engaged in lawbreaking. Despite his oath of office he only honours the constitutiuon via breeching it. You live in an increasingly sad country that makes Nigeria look to be an advanced state. As was noted earlier on TOD, there is more news on the Daily Show then all of the MSM.
And yet we just cant seem to keep people from coming here! Something else must be amiss...perhaps good ol' Junior is secretly shipping in immigrants to the US against their will? Lets wait for the next batch of secret CIA files to be released to find out for sure!
afteroil,
Thanks for the link. The question in my mind is, "When will we enter the world of pain that Buffett describes?" I don't think we have entered it yet. Low interest rates have kept debt servicing ratios from getting out of hand even as debt levels have skyrocketed. This country doesn't have a, "feast or famine" economic policy, it has a, "feast, then famine" economic policy. The problem is, it seems that the underlying economy has gotten so bad that even the feast is not that enjoyable anymore. It's hard to imagine that a country with close to an 800 billion dollar trade deficit, with all of the money creation that entails, a several hundred billion dollar government deficit, massive household and corporate deficits, only grew 0.7 percent in the first quarter of 2007. Something is very wrong here.
It may get much worse. What is being described is Peak Debt. What happens when Peak Debt meets Peak Oil? Just think of buying all those imported bbls as the value of the dollar declines. Remember that the other participants in the market may benefit from the write down of US denominated debt and the appreciation of their currency relative to the dollar.
US defense spending represents a significant cost. See Chalmers Johnston for an indication of what it costs to maintain all those outposts of empire. How do you pay for all that, for the FF imports ,and also ensure your foreign trading partners still accept your scrip?
The problem isn't so much the 800 billion trade deficit but where does it go. We usually think in terms of 'once spent it's gone forever' but the US has been reasonably certain that the trade deficits will come back or at least stay in the loop. While profits might occur offshore, they have had a habit of putting on a new suit and showing up again. Maybe we borrow them back and pay ourselves interest.
The real scandal is that the public is still stupid enough to allow the tax havens and offshore accounts and shell companies and such, which could be eliminated at a stroke by Congress. We keep electing people to office who have no intention of eliminating the tax free loopholes for their lobbyist associates. I suppose that any country which did so would be ostracized by the international banking community and generally cut off at the knees until the perks were reinstated.
How much of the trade deficit ends up in these places is beyond knowing. However, after the party is over, the funds get recirculated and as long as they flow through New York...you just have to accept the fact that taxes are not for corporations and rich people; once you get over that, it all makes sense.
The trade deficit is an enormous positive in terms of today's economic situation. I don't think there is any doubt about that. The U.S. gets 800 billion dollars worth of goods and services, hands over 800 billion dollars to China et al., China et al. then turn around and spend the 800 billion dollars that we just gave them on U.S. debt instruments. Through this process, the U.S. receives 800 billion dollars worth of goods and services plus we get the 800 billion dollars right back so we can do the whole thing all over again. On top of it all, this whole process drives interest rates down here in the U.S. (through China et al.'s purchase of debt instruments), leading to even more credit creation, much of which is spent in the U.S. housing market. So although the trade deficit is reported as a drag on GDP numbers, the artificially low interest rates created by the trade deficit provide a huge stimulus to domestic consumption. In the end, the U.S. gets 800 billion worth of foreign goods and services, our 800 billion back, record low interest rates which create a housing and credit boom, and China gets a bunch of I.O.U.'s stating that future generations of Americans will pay them their 800 billion dollars at some later date plus interest. It isn't hard to see how this process provides an enormous stimulus to consumption in the present while subtracting enormously from consumption somewhere down the line. We are essentially borrowing from future consumption in order to consume today to the tune of 800 billion dollars per year. What I find shocking is that given this massive stimulus provided by the trade deficit, given the massive stimulus provided by the budget deficit, by household deficits, by corporate deficits, the U.S. economy still only grew 0.7 percent in the first quarter of 2007.
Does anyone know how much interest America is currently paying on the already outstanding debt? - even 2% interest on the 8.8 trillion would soon add up.
$406 billion in 2006, in excess of 5%
The US Treasury's website has lots of detail on this. Average interest rate paid for May 2007 was 5.053%.
I posted a few days ago on how the enormous reserves of China and the Gulf countries, among others (1 trillion plus in both of these cases), have made the IMF suddenly seem pretty irrelevant. The same case could be made with regards to the Fed. Many economists have argued that in the last few years the Fed has lost control over interest rates. The Fed tightened repeatedly, but bond yields continued to fall. This was largely due to the fact that China and others were buying up U.S. debt like crazy, driving yields lower in spite of the Fed.
If we have the U.S. led global slowdown/recession which the data indicates is more and more likely this year, I wonder if the Fed will again find itself impotent. Under this scenario, I imagine that the Fed would very quickly begin to cut interest rates. The question is, would bond yields follow? I can imagine that in a global slowdown countries like China (following very sound economic principles) would prefer to invest much more of their surpluses and reserves in domestic spending projects designed to get their economies moving again, rather than investing in U.S. bonds. So, as the Fed cuts rates to try to stimulate the struggling U.S. economy under this scenario, bond yields may actually end up rising due to the efforts of China and others to stimulate their own economies.
regarding the %.07 growth last quarter. Maybe this is the Dirty little Economic Secret Kunstler refers to. If we aren't building, furnishing, and outfitting new Burbs, we aren't doing jack.
NH: Actually, that .7% figure is only accurate if one feels that CPI is accurate. Any understatement of price inflation will overstate GDP growth. The guy at shadowstats would have a negative GDP number as he feels inflation is quite understated currently.
The CPI is not used to convert nominal to real GDP. Instead, a number called the GDP deflator is used--a quite different concept and somewhat different number from the CPI.
Iraq Looks To Amend Saddam Era Oil Deals...Not only is Iraq going to miss the 'deadline' imposed by Bush, it appears that they are anxious to honor the oil deals, signed prior to the Iraq invasion, with China, Vietnam, Indonesia, and perhaps with Lukol of Russia and others...
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=157790...
Meanwhile the oil exporting port and city of Basra is totally out of control of the Iraqi governmemt and is being run by various insurgencies. From Azzaman in English: 'The various factions running Basra do not bother to control the streets but have placed taxes and levies on oil exports...British troops are almost powerless to retake Basra because their previous attempts have all backfired...'
This is fourth generation insurgency at its best, or worst. Hollow out a state, provide no infrastructure, steal the resources.
http://www.azzaman.com/english/index.asp?fname=news\2007-06-27\kurd.htm
As Roseanne Rossana Danna would say...What a Mess!
WSJ: "Russia's Growth Is Fueling Home-Building Surge"
This is an article in yesterday's WSJ. On a square footage basis, total housing construction in Russia in 2006 was up 67% from 2000.
The average price of a small two bedroom, one bath home in Moscow at the end of last year was $336,000, up about 100% from 2005.
In a previous article, the WSJ noted that foreign car sales in Russia are increasing at an annual rate of 50% per year, doubling about every 17 months.
I wonder what effect all of this is having on domestic Russian energy consumption?
Kazakh and Russian oil exports via the CPC pipeline are down 9.2% since February:
http://www.reuters.com/article/economicNews/idUSL0451724020070604
Caspian CPC oil exports fall 4 pct in May
Mon Jun 4, 2007 4:50AM EDT
The CPC, (Caspian Pipeline Consortium) was completed in 2001.
It is not likely that it will ever carry 1.4 mb/d. There have been rumors that Kazakhstan is near or at her peak. And it looks like Russia is about at that point also. For the CPC it is probably all downhill from here.
Kazakhstan produced 1.435 mb/d in December 06, its peak so far. March producton was 1.405 mb/d. It looks like Kazakhstan, along with Russia, saw a considerable drop in production in May.
Ron Patterson
"A senior coal company executive on Wednesday lambasted U.S. lawmakers for proposing caps on emissions blamed for global warming, saying the Democrats were out to destroy America's coal industry."
If only they were. Actually, America's coal industry is out to make the planet largely uninhabitable, and if not uninhabitable, unbearable.
James Hansen made his big splash on global warming before congress in 1988 and the response from both parties and administrations since then has been deplorable, or at least ineffective. That year was the hottest in human history at the time. But we hadn't seen nothin' yet and we have set several more records since then.
Now it's 19 years later and we haven't done squat. I had great hopes for the new congress, but the Republicans have and will continue to filibuster any progress to a stop. They are exercising their ability to obstruct and destroy. And remember how they loudly lamented the filibuster's use in the last session?
is that an admission that the coal industry believes that it causes global warming?
politician: we want to regulate things that cause global warming
coal executive: no, you mustn't destroy us.
My newest column at ASPO-USA. The Gulf of Despair? (update on the Gulf of Mexico)
From Fatih Birol's comments linked in at Nate's thread yesterday.
I love it. There's no need to be an expert. It's all plain as day!Even if somebody somehow manages to sort out Iraq politically, extracting all that oil is not going to be cheap:
http://en.rian.ru/business/20070628/67998349.html
$75 billion to rebuild and upgrade the Iraqi oil infrastructure? Well, we are currently pissing away $2.5 billion per week in Iraq to accomplish nothing that I can discern. $2.5 billion X 30 weeks = $75 billion. The answer is obvious to the most casual observer...call a time out in the war on terror for 30 weeks, then use the $75 billion saved during the period of time out to repair and upgrade the Iraqi oil infrastructure. There is also the possibility that other things advantageous to the US might happen during the time out. Like, maybe they will stop shooting at us...
Dave, great article!
The problem of small oil reservoirs at salt formations exists onshore, too. The problem is that salt formations continue to rise through the sediments, making lots of faults. The small reservoir size is why the US exploration industry more or less abandoned drilling onshore at domes in the mid 1950's and never went back. A major can't make money on a well with 30,000 bbls of recovery no matter how cheap, because of their huge fixed overhead. Like any set of prospects, the ones where you are going to make more money get drilled first-but we may be soon at the point where salt domes are much more attractive.
I've heard that there are experiments in using wells as an energy source location for 3-d seismic, but this is pretty cutting-edge and I haven't seen any publication of results, just heard rumors hanging out at a geophysical truck.
One other thought. Your second graph lists barrels of oil equivalent. Natural gas isn't oil and can't be used as motor fuel without a big investment in converting cars and building storage and delivery. The most common equivalency is stated as 6mcf/bbl., but the price differential is generally about 10mcf/bbl. What I'm saying is all the reserve replacements using natural gas for oil are fundementally flawed, and the real reserves of public companies are overstated by a very large amount.
Oh shit, I own major company stocks and probably shouldn't have said that!
Dave, Great Article!
A couple of comments. Salt structures onshore have the same problem with smaller reservoirs for oil. As the salt rose through the sediments, it caused a huge amount of fracturing. Deeper domes where the oil is produced from sands above the structure tend to have bigger reservoirs.
This small reservoir size is why the majors went to exploration offshore in the fifties, and virtually none have been explored on the Texas coast since the Windfall Profits Tax of the mid-70's.
Major oil companies can't make a living completing 30,000 bbl traps, no matter how cheap the drilling, too much fixed overhead. So there are thousands of these reservoirs in old salt dome fields yet to be produced.
Geologists mostly get their training at major oil companies. And since the new exploration for the last 50 years has been offshore on the Gulf Coast at the big companies, there are very few geologists still alive who know how to work salt domes. I'd sure like to meet one, I've got some ideas.
I've heard of some advances in 3-D seismic using drill motors as a point source to gather more data, but have not seen any literature. That, if true, may solve some of the sub-salt problem.
There is another flaw I've noticed. Natural gas is listed as Barrel of Oil Equivalent in the ratio 6 mcf=1 bbl. The problen is that gas sells for 1/10th of the price, so all listed companies reserves are badly overestimated. Also, natural gas can't substitute for gasoline or diesel without some major capital investment in refitting cars, plus storage and delivery-its really not equivalent any more than bitumen is oil.
Oh shit, I own some major company stock, maybe I shouldn't point out that the emperor's clothes have big holes!
Leanan, sorry about the double post same topic. I returned to the oil drum after witing the first post, and it didn't show as posted so I went back and rewrote it as the second.
Is this the fault of my connection, or of your server? How to avoid this in the future?
Beats me. Could be an issue between your connection and our server. A cache issue, maybe.
The only thing I can suggest is a little patience. Give it a few minutes before re-posting.
Bob, just hit the "preview comment" box. That will show your post exactly as it will appear on TOD.
But in any case, if you go ahead and post it and it is not what you thought you posted, you still do not have to repost! If no one has replied to your post, and in the above case no one did, you can simply hit the "edit" link and change it.
Ron Patterson
This interview with Fatih Birol is just amazing! what a disconnect between the official line and what experts are really thinking behind closed doors! I don't remember ever seeing such negative comments from a top governmental agency official.
Yeah, great article Dave. Combine this with the latest hot air from Pemex (Bloomberg article linked above) and you can feel the knot in your gut starting to form.
Pemex nowadays is always mentioning the "large" Chicontepec area without adding much detail. Certainly no more detail than they offer regarding any deep water Gulf exploration, which they don't know how to do and are constitutionally restricted from contracting out. Since they've known about this "large" area since the 1920's and it's on land & they've sunk a few hundred wells there (that I once read averaged about 500 bbl/day each), one has to consider that what is now considered a "large" part of their salvation was bypassed because it was easier (and far more prolific) to go 50km offshore to develop Cantarell in the first place.
Now that Cantarell will be toast in 2 years or so it's belatedly back to good 'ole Chicontepec to more than compensate for the declines at sea. Ha! Pemex says they will be drilling from 11 to 14 thousand (yes that's THOUSAND) wells in Chico' in the next few years. (They better hurry, as they also say they only have proven reserves for 9.3 (.3??) years at "current rates of production") Last time I checked Mexico had about 75 onshore rigs available. Figuring that they'll add a few and lose a few each year, with that number available it'll take them a decade or more to punch that many holes in the ground --even if they complete one well per month per rig. Should they somehow be able to substantially increase the number of rigs, I wonder where they'll find the qualified engineers, geologists & crews to man them in time.
Thanks, and also to Bob above.
I agree, the situation with Pemex seems hopeless.
I duly report this stuff and I'm often left wondering whether anybody is reading & understanding all this bad news. That MMS report got no critical attention whatsoever. The uncertainty at Tahiti should be front page news like Jack was. The next few years should clarify the Gulf of Mexico "oil boom", but time is running short.
The sad dogma in the MSM and most corporations right now (taking the lead from BushCo) is report only the good news and brush the bad news under the rug.
It is all about perception and slight of hand.
Current Mantra:
"Don't be a pessimist"
"Plan for the best case scenario...not the worst case scenario"
"Ingenuity and innovation will overcome all obstacles"
Update (1 day after I published)
Chevron's $3.5 Billion US Gulf Oil Venture Faces Delays
Somebody once said it — I'd rather be lucky than good!I haven't tried it yet, but I'm guessing if you would google "oil" and 'cost overrun", you'd get a ton of material.
All over the place, they're running into brick walls. And most of it is due to the same elementary mistake: projects are budgeted as feasible with a $(x+1) oil price, and they all forget that that drives up the costs of the projects. Basic bad accounting, really.
At TOD Canada you can read how the oil sands patch borrows itself into billions of debt now to finance their golden future. And then oil prices rise, and they have to borrow more etc etc. What will then finish them off is rising interest rates on those loans. As predictable as the original sin.
Horizons recede all around us.
Hugh Roy Cullen, the wildcatter who found Thompsons Field and Tom O'Connor field said "I'd rather be lucky than smart anytime." He was both, and his timing was good too. He found well over a billion barrels on the Texas Gulf Coast in the 1930's.
Electrolisis, galvanic corrosion, and a host of related problems await anyone that drops anything into salt water. It would seem that oil companies with a lot of off shore drilling experience would have learned from past mistakes and anticipated the problems when designing new rigs.
Maybe they are outsourcing the designs to engineers in far away places with no salt water experience? Bean counters looking for low bids can sometimes be disasterous to the bottom line.
River, the problem is the metalurgy in 10,000 PSI water pressure for extended periods, plus in water that deep everything has to be assembled and welded by robotics. Nobody has experience in materials at those kind of pressures used for periods of years. Every new field out there will need dozens of new inventions, and the penalty for a blow out on a 500,000,000 bbl field would be horrible-think of the potential environmental damage. Oil floats.
Dave, I think you are overreacting to that comment. The way I read it was that the situation is becoming clearer and clearer such that even laypersons without extensive backgrounds can begin to see the pattern.
I need an expert (a meteorlogist) to warn me to evacuate when a hurricane is approaching but not yet within my area (so I can't see it). Once the hurricane arrives though, I no longer need the expert to see it.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
So Russia is going to claim the Artic now? My guess is they will succeed. Who will stop them?
I know who will try. That new US "missile defense system" slated for Europe ain't got nothing to do with Iranian nuclear ambitions.
I just listened to a very interesting UK Radio 2 program on the China 1 child policy. Very pertinent to our discussions:
http://www.bbc.co.uk/radio/aod/radio2_aod.shtml?radio2/r2_vine_thu
Marco.
I have a proposition for Raymond Learsy: Stop flapping your gums about all of the groups (ASPO, OPEC, the Boy Scouts, etc) who are conspiring to keep us from getting "our oil" and go out and find some. Shouldn't be hard.
Some graffiti:
Oil prices rise after data shows unexpected drop in gasoline stocks
Tail is wagging the dog. Also, somebody please explain to me why the market had "expectations of products builds"? Keeping a good thought, were they? A little wishful thinking here? Maybe they consulted Nostradamus? Ah! Now we know why there was no stock build. Happy motoring is sucking it up faster than they can make it! The recent falling gasoline price — this is inexplicable — hasn't helped this situation much. (AAA has $2.975/gallon) Could affect... No kidding.Major Chavez gives the UN a required reading assignment
Too Funny! Fox couldn't even get Chavez's former rank correct--he was a colonel.
I'm with you Dave on the falling pump prices in the face of higher demand and falling stocks. Currently, we're at $3.21.
Is there a breakdown of gas demand by region?
Total daily demand is here. You can toggle this to get the 4 week moving average. Interesting that the US is on track to take out all the records this summer unless TSHTF first.
Using this chart you can get the daily average supply for the 5 different PAD districts By toggling around you can get any specific area you like. These numbers are a bit lower than totals due to something with imports or blending components. I would love to hear a detailed explanation of this difference as I don't understand the discrepancy.
Another thing to watch here is stock levels in each PADD because as the minimum operating levels get close to historical lows the price and spot outage headlines start to occur. BTW all the numbers are in daily supply averaged over the last week or previous 4.
I heard a small sound-bite news clip this morning – the CBS News feed through my local radio station
The news item discussed just how bad traffic has become in metro areas around the US. How we are having to wait more and more in ever increasing traffic jams…
So, what can be done to help this situation you might ask – well the CBS reporter threw it over to someone from the Reason Foundation to see what bright ideas they had…
“Clearly the solution is to build more roads, more lanes…”
And so it goes…
Life deep within the Iron Triangle
Yes, this solution has proven to be quite effective for California.
California has worst U.S. traffic: study
There is an upside to traffic jams.
Don't become a Buddhist. The world doesn't need more Buddhists. Do practice compassion. The world does need more compassion. -- Dalai Lama
I'd believe lower fatality or serious-injury rates, but not lower accident rates. In stop-start traffic with intersections involved, accidents happen all the time but are mostly fender benders with minimal injuries/deaths.
". . . expectations of product builds . . ."
Expectations in speculative markets have little to do with fundamentals of supply and demand. Rather, as John Maynard Keynes pointed out seventy years ago, expectations are determined by what speculators think other speculators are expecting. And these "second level" expectations are determined by what speculators think other speculators think still other speculators are expecting . . . and so on for round after round.
Because this indeed is how expectations form and change, we can see why expectations will be highly volatile--and also mathematically complex. For most intents and purposes, short-term fluctuations in price expectations are indeterminable.
Thus social psychology trumps rational economics. To understand speculative markets, study collective behavior, especially the symbolic interactionist school of social psychology from sociology. ("Social psychology" means something entirely different within the field of psychology.)
I couldn't agree more Don.
Don...what role do you think hedge funds have played in "speculative markets." How much weight do the hedge funds have to move markets here or there and how does this jive with Keynes? Is Keynes only talking about a collective of smaller investors or larger ones that can move billions of dollars at a time from one investment or another? Or does this not even factor in?
This is all, of course, a leading line of discussion because I believe hedge funds have been used to take control of certain markets and move things around to their own advantage. The perception that the market is still open and free still exists, but in reality the mass of smaller individual/group investors carries no significance to the movements of the behemoths.
According to economic theory, unleveraged hedge funds should reduce volatility and increase efficiency in financial markets.
The problem is that hedge funds are way way way too highly leveraged. This makes them obscenely profitable some of the time, but it also means that the potential for going bust is also fairly high.
Hedge funds are relatively new; for a long time they were against the law--the laws written after the Great Depression to stabilize financial markets.
If you are smarter than everybody else, get a job as a hedge fund manager; they make tons of money in bonuses when the fund does well. Also the base salary is high. Think of hedge fund managers are gunslingers: You have to have eyes in the back of your head to survive, and also you have to draw quicker and aim more accurately than the other guy. Also you need to be supremely self-confident and decisive. Note that the life expectancy of gun slingers is not high, and there is also a good deal of turnover among managers of hedge funds.
You have given the "correct" answer. Bravo! Kudos!
However, it seems to me that even an upright, large-brained, almost hairless primate which evolved from a chimpanzee-like common ancestor about 5.4 million years ago is capable of seeing that 1) if demand is surging and 2) imports levels are low and 3) refineries are tightly stretched, then it is rather unlikely that there would be a stock build.
And lo and behold! — It Came to Pass.
best --
Don the sailorman, them's mighty fancy words, but the conclusion is its all a crapshoot. Generally, when I rely on my intuition rather than my ex post facto reasoning applied to the current situation, I do better.
I agree with Dave, oil prices rising with building oil inventories seem contrary to logic. Don't these hedge fund cowboys realise that refineries use oil? If they're not processing oil, prices should go down.
My intuition is that I need to stay out of this game.
It is more like poker than a crapshoot. You have to guess
1. What cards the other guys have, and
2. How they will bet--assuming they have the cards you think they have.
But all you can observe is the betting, and you have to infer the rest.
Speculators frequently bet against the fundamentals--and win.
Keynes, BTW, was a successful speculator, and he used mostly a social psychological approach rather than troubling himself much about supply and demand. Indeed, John Maynard Keynes had only six weeks of formal economic education in his whole life; as an undergraduate he majored in Latin poetry--which is at least as good a background for speculation as is an education in economics or finance. When Keynes took civil service examinations to get a job, his lowest score was in economics--and J.M.K. haughtily said that that was because he knew more about economics than the examiner did (which was true).
Southwest plans new seating policy, schedule changes has this little line:
I wonder if he's considered what will happen if prices don't just stay high, but keep climbing?
Seems pretty much everyone still assumes that the energy prices won't get higher. A few years ago "nobody" believed that gasoline could ever cost as much as $3/gal. Now they say that $5/gal is impossible (in the US, of course...) And when it's $5 and TOD'ers warn it could rise to $8 or $10, we'll still be treated like kooks! Oh well...
I'd love to see a survey on "Why are gas prices so high?". I'd bet Katrina/hurricanes would get lots of votes. Nobody remembers the simple fact that gasoline had breached $2.50/gal a couple of weeks before Katrina. We no longer wait to reinvent history, we do it as we go...
BTW, the Nymex has gone over $70 today. Time to renew the calls for the "gov't to do something!!". We'll need another meeting in Washington, that always solves our problems!
Sunspot: If the greenback had held its high against the Cdn dollar reached in 2002, ave US gasoline prices would be approx $1.95 -crude would be $45. Crude is stated in US dollars, but the US dollar itself is anything but a constant.
Have your average wages increased by over 50% in the last 5 years? A more accurate comparison would be % of average wage per gallon of gasoline during those years...
"You can never solve a problem on the level on which it was created."
Albert Einstein
Leanan probably knows this already, but Southwest Airlines has saved themselves a gazillion dollars by hedging fuel prices. In 2005 they paid $26 a barrel for 85% of their fuel: http://www.thestreet.com/_tscrss/markets/rosssnel/10232353.html.
The problem they're facing is those hedge contracts are expiring. They have to pay what everyone else pays now.
I honestly don't understand how airlines are able to operate profitably with the prices they charge. A new airline here is offering something like $50 flights more than half way across the country (~2000km). It would cost me roughly $300 in petrol to drive there. Now I accept that flying might use half the fuel per passenger than driving, and that aviation fuel is basically untaxed, but at best I would expect that to mean that the cost of fuel for flying should be about 1/4 that of driving. Even if it was as low as 1/6th, $50 would be the total cost of the fuel alone, allowing no room for covering other expenses, let alone profit. So either $50 is a loss leader or aviation fuel is not just untaxed but substantially cheaper to produce from crude?
I guess Southwest is finally running out of those jet fuel futures that kept them in the black for so long.
(edit) Never mind, you guys are too quick for me, and this stuff is obviously common knowledge here. One of the reasons I keep coming back...
Re: Mogambo's latest rant, No Short Supply of Freaking Doom!
Yes it does. We are awash in a sea of energy. Without even invoking crank physics. The sad part is that our little chimp brains (even the ones who can drive) tend to bicker over this little piece of energy right here in front of us.
Meanwhile yottawatts of solar just go streaming off into the cosmos...
| The problem will solve itself.
| But not in a nice way.
One person's crank physics is anothers Nobel Prize which establishes the sea of energy for EM via broken symmetry.
Where IS that 'Theory of Everything' ?
Here
it is !
You're doing the bickering. Because the issue isn't energy, it's return on energy. The work was all done for us by the planet's natural processes to create pools of coal, gas, oil, and uranium, that had obscenely high returns for our relatively minuscule energy investments.
If you could get anywhere near that kind of return from solar or Gibbs energy, you'd be out doing it without subsidies and making money hand over fist. You wouldn't be here complaining about it.
Or maybe you would, what do I know? :)
This is stupid. One can also say that we are "awash" in any source of energy - wind, nuclear, oil shales, tar sands etc. Just take the total size of the resource and come out with some impressive number - and there we are, problem solved, mission accomplished. The small technical detail of how is it possible to harness all this energy is left to those pesky engineers to figure out...
WTI just crossed 70$, the highest price since last August.
It seems that the price anomaly of recent times when the WTI was considerably below the Brent index is fading away.
Apparently someone didn't get the news that crude was going to be selling for $35 or $40 a barrel by now.
Hey Michael Lynch -- Just where is that $40 oil that you were so recently predicting?
RED ALERT: DANIEL YERGIN ISSUES STRONG "BUY SIGNAL" FOR OIL
CNBC just quoted Daniel Yergin as saying that, without the "fear premium," oil prices next year should be down to $60.
Most of you probably recall Daniel Yergin's previous predictions for lower oil prices. Based on prior experience, once Yergin issues a prediction for lower prices, one should expect oil prices to be 100% or more higher than his predicted price, within one to two years of his prediction--think $120 or more within one to two years.
Regarding his $38 prediction (do a Google search for Daniel Yergin and click on "Daniel Yergin Day"), following is an excerpt from a 11/1/04 Forbes column (emphasis added):
Perhaps I am too simplistic, but it seems to me that those who are always claiming that high oil prices are temporary, like Yergin, are the ones who are encouraging people to increase their oil consumption--and thus causing oil prices to go even higher.
WT,
Perhaps I am too simplistic too, but I still can't help wondering what it is that those 230 employees do every day. That's a lot of people for a company that doesn't produce diddly squat. Think they are just continually looking for things that confirm Yergin's pre-conceived sales pitches?
Yergin is a politician, always has been, always will be. If we listen to what he says and think 'this is a politician talking' then we will know exactly what to do with his opinions...put them in the circular file.
Yergin knows oil like I know particle physics.
Yergin knows oil like I know dating supermodels
Rich Karlgaard has had a bit of a change in his position. Earlier this month, in his Forbes print column, he wrote:
Green Greens versus Red Greens ($$$)
by Rich Karlgaard
Forbes Magazine
June 18, 2007
Rich is also on record as saying that for all practical purposes resources or their substitutes are infinite, so it will be interesting to see how his position evolves going forward. He is also a private pilot and is acutely aware of the price of fuel.
Actually, I agree with Yergin that we can and will find new fields, but the problem that we have had in post-peak regions is that the new smaller fields--while profitable--can’t offset the declines from older, larger fields
In my opinion, we have just seen a squall line in front of the coming Perfect Energy Storm--when it becomes apparent that world net oil export capacity is rapidly declining.
The fascinating question (to which I do not have an answer) is: When will perceptions change to reflect reality?
I buy into your export-land model 100%. We probably peaked in crude plus condensate a couple of years ago--but outside of TOD, hardly anybody has noticed.
Expectations and perceptions can turn on a dime.
My WAG is that when U.S. citizens face gasoline at five or six dollars a gallon, suddenly the mainstream media will "get it." My guess is that until that day comes the opinions of Yergin and Co. will dominate media and political discourse. Indeed, just to make things more fun, I hereby venture a Fearless Forecast to that effect.
The most interesting questions, I find, are not about the reality of peak oil (where there is much general consensus at TOD) but rather when perceptions will change. Once again, social psychology trumps economics.
I think a lot about this. My wife works with a pretty "white-bread" bunch and a month or so ago, she brought up the subject of rising gas prices with a couple of co-workers over lunch. One of the women in the group declared emphatically that she "would not drive a small car."
Try to reconcile that sort of thinking with Fatih Birol's warning that "If Iraqi production does not rise exponentially by 2015, we have a very big problem."
2015. So, what is the US doing, as a nation, to prepare for the impending "very big problem?"
"DeNile" is not just a river in Egypt.
People that routinely use the word 'never' should regret it. Of course, by the time they are forced to do the thing that they said that they would 'never' do, they are in denial and convince themselves that they never said 'never.' The same woman probably spent last evening watching Paris recite the verses that she didnt learn while reading the bible in jail. What a country.
"Guns. Lots of guns." ~Neo
Well, being among America's entitled, she's correct. She won't be driving a small car.
Technically, in several years she likely won't be driving at all. :)
Yeah, that's what I said to my wife. She likes horses, so maybe she'll have a big horse to ride.
I'm also thinking that gasoline @ $5.00/gal is a magic number. At that level, it pretty much takes someone on minimum wage an hour of work to earn the after tax wage to buy one gallon of gas -- and some of those folks have commutes that take a gallon per day. At that level, a gallon of gas costs around as much as a typical lunch at a typical fast food joint. At that level, the typical small car 10 gallon tank refill is $50, and the typical pickup truck, van, or SUV refill is going to be well over $100. Plus there is also this psychology: $5 is halfway to $10 -- double digit territory. Once we hit $10, the next significant milestone is triple digit territory: $100. This may not register in most people's consciousness, but it will in their subconscious.
I thus agree with your fearless forecast. When we hit $5.00 (widespread, not a one-off), there will indeed be a sea change in the MSM and in the general public.
When? We could have a long debate on that. My best guess is: no LATER than 2012, and quite possibly within the next year or two.
My G-d .... at $5.00/gal you'd have to live ...
like EUROPEANS!
The horror!
but without the train system.
I don't really buy that idea at all. Yes, $5 seems unthinkable now to most people. But $3 was unthinkable a few years ago and now people have adjusted. And as for the economics, consider this:
An SUV that gets 15 mpg and is driven 15,000 miles a year goes through 1000 gallons of gas a year. So that's $3000 a year for gas now, $5000 if gas goes to $5.
I don't think the folks that spend $40K to $50K on a big SUV are going to stop driving it over $2000 a year. They've got the money. Yes, it will hurt the poor. But the average American is earning far more than the minimum wage you use in your example and won't be forced to make drastic changes at $5 a gallon.
That may all be true, but the complaining and whining we are seeing at $3/gal will seem like nothing when $5/gal hits.
It will certainly take far more than $5/gal for everyone to ditch their SUVs, but at $5/gal you will start seeing lots of people actually starting to think about ways to consolidate trips, slow down a bit, and economize a little.
Barring hyperinflation, gasoline is never going to be $100 a gallon. And yes I said never. There will be too many available substitutes at considerably less than that price. What do you really think the current world usage of oil would be if gasoline was $100/gallon (or equivalent in other countries)?
$10/gallon I can believe...$20 at a real stretch. But at anything like that price demand will be destroyed at close to the rate supply is likely to reduce, preventing prices getting much higher.
Barring hyperinflation ...
At even $10/gallon there will be significant inflationary feedbacks, and feedbacks into our balance of payments & value of the US $ as well as economic activity.
If a specific suburban house (an entirely domestic fixed good) can be bought for 120,000 gallons of gasoline today, I can foresee it being worth 4,000 gallons at some time in the future. That would be roughly equal to $100/gallon.
Alan
Don, you are right on. What draws me (and I think many others) into PO, CC, the oil wars, and associated economics, is watching it play out, watching it unfold, and sometimes we see something happen that we have predicted, if only to overselves. It is like watching the greatest film ever made but much longer than an ordinary film, with a seemingly infinite number of plot twists, and while we are watching we are able to speculate to ourselves on how this film can possibly end because the number of different possible endings is very, very large and some of them are down right frightening.
In other words, its a lotta fun!
I think that this is 100% spot on for some of us. However it is hard to shake the perception that some have very specific agendas and/or motivations.
Still interesting.
Way it goes when typing, It's a lot easier to read people in person.
At this point, CERA and Yergin have so much backstory that they have no choice but to keep on truckin' to $40. They're on that train till the bitter end.
An honest question for you, westexas: how has global oil production been increasing until relatively recently while the huge fields have been declining? I would assume that there had to be some kind of 'cutoff' point for when the smaller fields simply can't keep up, but it does seem a tad silly to suggest that a good number of giant (not super giant) fields can stem the tide. Perhaps someone could model this phenomenon? Russian back-burner production alone isn't enough to account for the fairly steady increase since the early 1980s...
It appears that the two largest producing fields in the world, Ghawar and Cantarell, probably peaked (or had their final peaks) in 2005. These two fields alone accounted for 10% of world crude + condensate production.
By way of comparison, the largest oil field in the Lower 48, the East Texas Field (which had its final peak in 1972), accounted for about 2.5% or so of peak Lower 48 production.
But you can turn the argument around. Given the virtual certainty that every oil field that has ever produced one mbpd or more of crude oil is now in decline, why would you expect crude oil production to continue increasing?
In any case, my thesis is that the whole HL model is primarily driven by the rise and fall of the giant oil fields. While we can profitably find and produce smaller fields in post-peak regions, our case histories suggest that we can't reverse the long term declines in total production, e.g., the Lower 48 and North Sea.
Interesting thoughts. However, wouldn't it be wise to look at the global production profile as a whole instead of breaking it up into ever smaller regions? It seems to me that from that perspective, oil production has been increasing despite the demise of the dinosaurs so to speak. There is obviously a vastly larger pool of oil located outside of the super giants than we thought. Peak Oil is a global phenomenon after all, and not just a Lower 48 or North Sea one.
Re: global production profile
Of course, that's what Deffyes did when he predicted a world crude oil production peak between 2004 and 2008, most likely in 2005.
The cumulative shortfall between what the world would have produced at the 5/05 rate and what we actually produced has grown to about half a billion barrel of oil (EIA, crude + condensate), resulting in the high oil prices we have seen since 5/05.
This pattern of higher oil prices and lower crude oil production is what we also saw in the Lower 48, at the same stage of depletion that the world is presently at.
Unless global production increased at a rate that far outstripped actual demand in the form of refinery inputs for finished products. There technically isn't a shortfall until global demand actually outstrips global supply. Couple that theory with the fact that if our dollar today held the same value it had around y2k, and oil would technically be priced in the mid 40$ range...at least according to the inflation reports from the shadow stats :)
Monthly Brent crude oil prices in the 20 months prior to 5/05 averaged $38.
After 5/05, the price has averaged $62, within a range of $54 to $74. Currently, Brent is about 10% above its 2006 average price and about 90% above the pre-5/05 price. And as Deffeyes predicted, world crude oil production is declining (EIA, C+C)--at the same stage of depletion that the Lower 48, North Sea and Mexico started declining.
Having said that, if you prefer to believe that we will see rising crude oil production in the months and years ahead, I hope you are right, but if I were you I would plan on Deffeyes being right.
Then we have the Export Land Model. . .
meanwhile, i see a headline that august natural gas futures are at a 2 year low. what about a "this week in natural gas" type synopsis to explain this market?
Natural gas stocks are higher than average and still growing at a healthy clip, according to this week's report, which is essentially "this week in natural gas":
http://tonto.eia.doe.gov/oog/info/ngs/ngs.html
Yup, back to May of 2005 for august nat gas this low. Why isn't "The Oil Doom" rejoicing?
Listen to Chesapeake Energy conference calls where you'll hear excellent explanations.
Chesapeake is a great example of a public company run almost exclusively to run up their stock price, these are the fools who paid $18,000 per acre lease bonus for the DFW Airport Barnett Shale lease, then 6 months later were explaining they were shutting in gas production. Now that the Newark East field (Barnett shale around FT. Worth) has been proven to be a resource play (fancy oil speak for trading dollars) they've become moguls in the Alberta tar sands.
Listen to their tripe if you want, I'm not going to bother. The reason gas is soft is there is more supply available than can be sold, mostly because of so much drilling in unconventional gas prospects, combined with the offshoreing of so much of our heavy industry and the electric company conversion to coal for generation.
Prices will probably rise in a couple of years, but they are going to be constrained by the import price of LNG. Investing in oil is probably a lot better idea than investing in NG.
And , of course, I could be totally wrong, I often am. Read Dave Cohen's archived key post "Running with the Red Queen" on TOD. Its by far the best piece I've read on the North American gas situation.
> run almost exclusively to run up their stock price
I don't see any evidence of this. Wall Street has always disliked CHK because of their active hedging program (makes quarterly estimates hard to do). McClendon was king of running down the stock price awhile back, and he admitted that he needed to be more shareholder friendly. McClendon was THE biggest insider buyer on the NYSE a couple years ago (and still buys a lot on the open market), so he/I hope the stock continues to go up.
> Alberta tar sands
I thought CHK had sold all Canadian assets years ago.
> shutting in gas production
McClendon has stated that he will shut in gas when the market price is too low. He and Tom Ward (before Tom left) have the best track record of anyone that I know of calling moves in the nat gas market.
This is for the WT/ Alans ELEP plan;
Flywheel Energy Store Hybrid Light Railcars
http://www.greencarcongress.com/2007/06/flywheel-energy.html
hybrid light railcars are equipped with a flywheel energy store to capture braking energy for use in acceleration. The railcars can be powered by an on board LPG-fueled automotive engine, diesel- or hydrogen-fueled internal combustion engines, or hydrogen fuel cells
This Is Your Brain On Politics
That's an article well worth reading. I can't help but think it would have been cool for Gore to argue more like this:
Why have the Democrats been so bland?
Because they've been suffering under the delusion that logic and rationality is the way to reach people.
That just goes to show they don't live in the same world as the rest of us... :)
Well, you would think so, but it doesn't quite fit.
When Bill Clinton (re)hired Dick Morris in 94-95, it's exactly the rationality that was thrown out first. That's how we got the V-chip, or the idea of it at least. Ratings soared.
Hillary remembers that very vividly, and she's using it as we speak. If you look for rationality in her, there's not much.
That just proves the point. Bill Clinton was a very successful politician, even though he was a Democrat.
Absolutely, Leanan.
I was just trying to point out that the Dem rationality meme doesn't hold up all over. I think Gore lost because he refused to be sold like a car. And that happens to be the only way to win: Commercials with wide open promising and empowering vistas. You will vote for me if I make you feel good about yourself.
Hillary looks like the kind of person who'll sell herself like a prostitute if that's what it takes.
I have another take on it: Because the Dems owe their political livelihoods to the same concentrations of money and power that the Repubs do.
Like Henry Ford said; you can have any color that you want as long as it is black.
Have you, personally, ever bought a firearm anywhere within the United States? It certainly does not seem as though you have given your statements above.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Those aren't his statements. He is quoting from the article I posted.
On any Saturday anyone can go to a half dozen flea markets in this area and find any fire arm that they want...cheap, and no questions or ID involved. Even the gun shows in this area have special rules to allow individuals (as opposed to gun stores) to set up a table and sell guns with no questions or ID involved. Why bother buying from a gun store when one can buy from an 'individual' and leave no paper trail. Criminals, lunatics and terrorists can easily avoid gun registration, waiting periods, felon lists, etc.
I think the 'Rational and Logial worldview' argument falls behind the Corporate Subsidization of the Electoral system, Bill Writing and Mass Perceptions.. which makes obedient pups out of both parties.. just that each has a different way of being "Puplike"..
Happiness is a warm Puppy!.. who refuses to outlaw a warm gun!
Bob Fiske
It looks like a unprecedented change is taking place in the Arctic if this trend continues we have officially added a new ocean to our planet.
http://arctic.atmos.uiuc.edu/cryosphere/
We could see almost ice free summers in as little as 2-3 years.
I've been looking at this site for a while now. Do you know of a way using image processing to analyse the images to get a quantititve level of ice cover?
Could I do this in photoshop?
We could graph the changes in cover from year to year on the same date for example as the archive goes back to 78'.
Marco.
I should have said, I would leave spherical to flat OUT of map projection calculation. I realise this is a bit crude but it is nearly flat up there!!.
Yes, the average loss of ice area in June is about 2 million sq. km., this June there has been well over 3 million sq. km. lost. Another graphical presentation:
http://polar.ncep.noaa.gov/seaice/hires/global.xml
he lives!
Maybe the most disturbing clip is the one on soil. Hydrocarbons are fundamental to modern industrial society, but soil is fundamental to agriculture, i.e. continuance of society in any form. This is the resource we'll have to fall back on when the oil age winds down. ('Wind down' may be a euphemism.) There's an extremely interesting book: Eating Fossil Fuels, by Dale Allen Pfeiffer, that links these two subjects.
Anytime you put a plow to virgin grasslands, you oxidize soil organic matter that (a) binds the soil particles together, (b) serves as a pool of plant available nutrients and (c) increases the soil water holding capacity. The American Dust Bowl of the 1930s, the Soviet experience with the Virgin Lands Project and China's experience in Mongolia were all predictable. You simply cannot till virgin grassland soils and not expect to trigger a significant period of wind and water erosion. After all, a high proportion of the upper foot or two of soil in these systems is simply partially decomposed plant and animal matter. Dry it out and it will blow away. Ever reach your hand into a dry bag of peat moss and marvel at how light and fluffy it is? It doesn't take much to get it moving.
Our agricultural productivity will be seriously challenged in this century as:
From a North American perspective, whether we eventually exhaust the soil resource is an open question. Many folks -- including many farmers and agricultural scientists -- will tell you that as long as we follow best management practices, we can continue to do what we are doing forever. Certainly -- as this Lester Brown article notes -- there are places on the planet that have been cultivated for thousands of years. But it is worth remembering that those places were farmed using methods that employed a lot of human and animal labor and which relied upon continually replenishing the soil with large additions of organic materials -- crop residues, manures, etc.
Modern, industrial agriculture is wholly dependent upon petroleum inputs. Ask a farmer what would happen if he/she were forced to give up the machinery, the synthetic fertilizers and the pesticides and he/she will tell you that half of the population would go hungry. Sure, there are plenty of folks out there farming a few acres using draft animals, crop rotation and green and animal manures, but I'll guarantee you -- and I should say that I'm very sympathetic to those folks -- I'll guarantee you that what they are doing can't be scaled up to feed a planet of 6 billion people (unless we're willing to commit a significant portion of the population to manual farm labor).
Great post POT but 'significant portion of the population' doesnt really paint the picture you want people to see. Over 95% of the population involved in agriculture...now that is more like it!
Thanks, River. I didn't want to venture a guess as to what portion of the population would be required to make up for a loss of petroleum inputs. This USDA-NASS page shows about 40% of the US population both "living" and "working" on farms in 1900 as compared with 3 or 4% today.
I once had a conversation with a math instructor in college who told me about being sent to the countryside during China's Cultural Revolution, to stand all day on a platform in the middle of a corn field and throw stones at the crows. Maybe that will be the "hot job" twenty or thirty years from now.
I can't recall the source, but ISTR it as pre-industrial revolution 90% of the European population was employed in food production or processing.
So was the US before oil and coal use became common after the Civil War.
We probably cannot feed a planet of 6 billion people organically (not that we're really feeding them all now). In the future, however, as the decline in oil and natural gas really gets cranking, I guess we won't be able to feed them chemically, either. It doesn't sound like we have much choice, anyway, and perhaps we have to plan for a world with a lot less people and a greater percentage of the people working the land with less mechanization, synthetic fertilizers, pesticides, and herbicides.
Is it responsible to try to accomodate several billion more people if they will eventually be subject to mass dieoff. Or, is is argued that organic agriculure needs to be suppressed to avoid dieoff.
The argument seems to be that since organic can't be scaled up sufficienty that we should redouble our efforts to sustain the unsustainable. Biting the bullet now seems better than waiting for the miracle later.
Some people believe that the planet can support billions more people. But why would we want to do that?
Further, who are all these people following best management practices? Does that apply to the big three --- corn, soybeans, and wheat?
tsteet, in my limited experience, I've seen that most US farmers are fairly conscientious people. Oh, there is the occasional crank who abuses his equipment and his land (and sometimes his neighbors, as well) but those guys tend not to last long. By "best management practices" I simply mean whatever practices have been prescribed -- usually by such entities as USDA or the Land Grants -- to reduce erosion, conserve moisture and maximize yields per unit input.
My own personal belief is that 6+ million people is probably pushing -- if not outright exceeding -- the planet's carrying capacity and anyone that doubts that should probably read Lester Brown's Plan B 2.0 (Note that EPI has generously posted the book online in PDF form -- they ask for a donation).
Julian Simon famously claimed that the planet could support 60 billion but -- with all due respect to the late Mr. Simon -- that's just plain NUTS. My own great hope is that mankind comes to its senses and manages some sort of soft landing, gradually reducing the human population by some significant amount over time. But -- to echo a favorite soil science prof from years past -- I'm not very optimistic.
I think organic farmers fill an important niche in the industrial West, supplying high quality (if somewhat more expensive) food and keeping agricultural traditions alive. If the future pans out as we think it will, these folks will serve as an important resource at the community level. God bless 'em. The traditional farmers with their machinery, their chemical inputs and all of that -- somehow, we're going to have to find a way to keep them going. Probably not farming as they are now, but farming in some way that allows large scale planting and harvesting operations. These are our grain growers -- corn, wheat, rice -- and we can't let them go (when was the last time you saw someone selling flour or corn meal at your local farmer's market?).
Soybeans? To hell wid'em. Press them into bio-diesel, maybe, but other than that, they're of little use.
My own personal belief is that 6+ million people is probably pushing ...
We all know you mean 6+ billion. Informative post!
Yes, dave, thanks for the correction.
Based on random Googling, I understand that human urine is actually a pretty good fertilizer, with about 80% of the nutrients we ordinarily excrete (feces being the rest). If movie theaters, markets, schools, and other public places were to require honey pots (or farmers were willing to pay money for a 5 gallon pail of piss), mightn't we be able to support our current population? If we actually cared whether poor people lived or died?
Check out The Humanure Handbook.
I'm not yet "with the program" but I think the writing is on the wall.
Although energy useage per person peaked between 1965 and 1985 depending on which of four data sets in the link below you believe, the population of the earth continues to grow.
The consensus opinion seems to be that without hydrocarbons the earth will not sustain 6 1/2 billion people for long. With the benign weather we have enjoyed over the past 12,000 years many scientists believe that the earth will support about 2 billion people sans hydrocarbons. Of course ice ages, global warming and other natural calamities would reduce that number.
Most here have probably seen this 'Olduvai Theory' but for those that have not here it is. Please note that I am not promoting this theory and have no opinion on it at this time.
http://dieoff.org/page125.htm
World per capita energy use is at an all-time high. (EIA data)
"Consensus opinion" and "well-informed opinion" (much less "fact") are not the same thing.
Name some.
Ones who are (a) working in that area, and (b) not seen as crackpots by their peers.
Yeah, it's nonsense. Demonstrably so - it's based on nothing more than statistical sleight of hand.
Suppose there are 100 poor people consuming 1 unit of energy each, and 10 rich people consuming 12 units of energy each. Total energy consumption is 220 units, or 2.0 units per person.
If the population grows more among the poor than among the rich - as it has in the real world - then suppose in the future we see there are 200 poor people, each consuming 1.1 units of energy, and 12 rich people, each consuming 15 units of energy.
Total population? 212 people
Total energy consumption? 400 units
Per capita energy consumption? 1.9 units per person
So the people pushing this "Olduvai Theory" nonsense would have you believe that this drop in per capita energy means people have less energy. That is false - everyone in this situation has more energy - 10% more for the poor people and 25% more for the rich people.
"Olduvai Theory" is based on a misunderstanding as nonsensical as saying that a baby boom pushing a country's average age from 35 years to 34 years means everyone in that country is getting younger. It's based on a total failure to understand demographics, and it's useless as a result.
Well said!!!
I can believe ~2 billion people with no "artificial" energy input, and all consuming the sort of diets we do now, but with sufficient non-hydrocarbon-sourced energy, good application of technology and understanding of horticulture, and a modification to our diets (particularly those of us that eat far too much in total, and certainly more animal produce than is optimal for good health), I'm confident we could at least feed 6, or even 9 billion people even without hydrocarbons. Water shortages and topsoil degradation/desertification strike me as more likely to cause food production a serious problem. We quite possibly won't have much choice but to rely significantly on GM foods that require less water/nutrients at some point.
For many crops organic farming does NOT produce less than chemically fertilised and poisoned land. Farmers will just have to learn new (re-learn) skills. The restriction/high price of fossil fuels to power farm machinery, transport, storage, etc. will be the bigger problem...
"You can never solve a problem on the level on which it was created."
Albert Einstein
Of course in drought years unirrigated organic probably yields hugely more than unirrigated non-organic. Organic methods improve the soil's capacity to absorb and hold moisture. Given the way that water resources and climate change patterns are going, this is no small consideration.
Not hugely, but significantly. That was one of the interesting findings of the 20-year study on farming techniques at Cornell.
Pfeiffer's shorter essay of the same is still available to read online. Excerpt:
Just add more R&D. Problem solved. Get those plants to capture more, damn it!!!
"Get those plants to capture more, damn it!!!"
The Holy Grail of Agriculture.
Anybody see this?
Giant microwave turns plastic back to oil
And next up, I wonder?
"Biodiesel Green is people! Biodiesel Green is people!"
just uploaded... "The Secret Energy Bill: Ron Paul and Mike Gravel"
http://www.youtube.com/watch?v=xADWkL7fgOs
What do you see as true and untrue in the points made in this 2 minute clip?
____________________
MySpace.com/ziontherapy
Reuters offered more detail today than usual in its oil price update, with an interesting bit on spreads between WTI and Brent and between front-month and later month prices.
http://www.reuters.com/article/ousiv/idUSN2833515620070628
The piece ends with: "Until August Brent expires on July 16, both spot Brent and WTI as benchmarks are likely to underestimate the true tightness of global oil markets."
I don't feel I completely understood the argument for why Brent and WTI currently underestimate the "true tightness" of the market or why Brent and WTI will reflect the tightness of the market after July 16. Anyone care to explain it to me at, oh, say, about a sixth grade reading level?
Based on the article, there is some kind of technical issue regarding Brent crude quality, but I think a key factor is also the following, from the article:
So, the demand for crude oil will be increasing as more refineries (hopefully) come back on line. However, IMO, exported crude oil worldwide is declining.
It's possible that oil prices could cross over the Two Yergins mark this summer (one "Yergin" = $38/barrel).
WTI goes double Yergin without a Gulf hurricane? That seems entirely plausible to me at this point. But I think we have to see, and will see, some domestic crude inventory drawdown without any significant improvement in gas stocks.
It's possible that oil prices could cross over the Two Yergins mark this summer (one "Yergin" = $38/barrel).
In Asia Tapis has already been 2 yergins this year.
there's a very detailed article here on the components of the brent oil marker, recent changes and associated quality issues:
http://www.ceag.org/articles/pdf/PR_Devil_06_07.pdf
it was published in the recent issue of Energy Review by the Energy Institute in the UK.
"It's possible that oil prices could cross over the Two Yergins mark this summer (one "Yergin" = $38/barrel)."
Surely this has to be a TOD standard unit of measure from now on! :)
"You can never solve a problem on the level on which it was created."
Albert Einstein
The Carlyle Group, the closest thing we have to the antichrist, gets out of the kitchen.
I'm still wondering what that last line is supposed to mean:
"They were unlucky with the timing.''
A lot of rich people are spooked by the Bear Stearns thing. It hits the New York financial professionals in exactly the way that reading news about home foreclosures of poor people in Missouri just doesn't.
I know New Yorkers who did work on the Long Term Capital Management bailout back in the 90s, and this has that same creepy feel, looking over an abyss and imagining what it would be like if it weren't just one fund, but a cascading series of hedge fund collapses.
I wonder how long before Tony Blair is offered a piece of the action in Carlyle? It would be a shame if he had to take it up the poop shoot from jr. without getting anything for it.
HISF
I'm still wondering what that last line is supposed to mean: "They were unlucky with the timing."
----------------------
Meaning the same as if they were selling a house. They are a year or two too late.
Look at Blackstone. It's currently below it's $31 opening.
It's already has started. The Great Unraveling.
http://ml-implode.com/
http://calculatedrisk.blogspot.com/
JC
Hello TODers,
Just released US drought chart--not looking good. How long before this spreads into the central heartland?
http://drought.unl.edu/dm/monitor.html
Cascadia and the New Vermont Republic looking like better places for the multi-millions for relocation. Will Earthmarines arise to prevent the migratory flood?
Please contrast with slightly older North American drought chart [Western Mexico rather dry]:
http://www.ncdc.noaa.gov/img/climate/monitoring/drought/nadm/nadm-200705...
Leanan: any update from family in Hawaii?
http://www.bizjournals.com/pacific/stories/2007/06/25/daily41.html
----------------
Drought conditions extend statewide
-----------------
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Meanwhile, parts of Texas are beginning to look like Venice. Two days ago, Dallas had more rain in one day than we had in all of May and June last year.
Hello WT,
Thxs for responding. Any reports on how many millions [billions?!] of tons of topsoil are being swept out to sea?
No reports yet, but it can't be good for farming operations in the area.
Speaking of levees, the City of Dallas has their emergency operations center up and running. While the levees are okay now, they are worried about water releases upstream from full lakes along the Trinity River system.
Local TV just ran a story about an effort trying to locate a family (that called 911) stranded on top of their house, along the rising Brazos River. Deja Vu all over again. . .
Apparently, what we have is a circulating low pressure system that is constantly being resupplied by Gulf of Mexico moisture. Another rain system coming in with rain amounts of up to three inches per hour.
This is not just a recent event. This is a link to the last page in a thread about the amount of rain in Dallas/Ft Worth area. The topic starter lives near there. Go back to the first page and work your way thru. He has posted images of radars with time stamps. It is simply amazing. They were in a drought and I think some lakes have gone up 21 feet and more. He has some of this data through out the thread.
http://www.climatepatrol.com/forum/48/2587/pg4/index.php
This low they mention has not moved for a very very long time.
small group of guys watching the climate with various opinions. but this thread will lay out what has been happening there.
Quid Clarius Astris
Ubi Bene ibi patria
What I found curious when reading that a stationary low pressure to the west of Dallas FT is said to be the cause. Yet rain moves in from the north several times in the radar images. Yet I don't recall cold fronts. oh well, lot o rain
Quid Clarius Astris
Ubi Bene ibi patria
There's a couple of huge reservoirs on the Trinity between Dallas and Galveston Bay. They should be filling in quite nicely.
I hope you were kidding...
We are enjoying....well maybe enjoying may be a bit strong another 3" rain today in South Central Kansas. We have had rain 25 out of the last 30 days and in my particular area have had around more than 12" this month. Good news is our local aquifer has added almost 3 BILLION gallons or water this season due to all the rainfall. About 8' of increase in the level.
Our local water utility has also started their program (planning has been going on for several years.) this year to treat river water to tapwater standards and pump it into the aquifer they are currently pumping 10 million gallons in a day and should soon reach 45 million gallons a day soon. Average consumption for the area is 64 million gallons a day. Sourced from a combination of surface rivers, lakes and the aquifer. Treatment infrastructure has been expanded thru increases in the water rates. Actually show a bit of foresight and glad to see them pull it off since to date we have never been subject to water rationing or shortages. Not that I don't think a little more discipline in water use would be a bad thing for most that live here. I still get pissed when I see someones sprinkler system running during or after we just got a couple of inches of rain.
I believe someone mentioned that it usually takes 5ish years for an eastern drought to 'make its way' to the west coast. Eta 3 years and counting...
Okay Bob, I bite. Excuse my ignorance.
What are earthmarines? A nasty alien plague that tunnels below the surface to feed on humans? Or are they macroscopic?
Phnx 5th largest? Let's see, there's NYC, LA, Chicago, and another. What happened to Frisco, Seattle, Portland, Boston, DC, Dallas, Miami, even ol Cleveland?
Hello Doug Fir,
Thxs for responding. Earthmarines are basically people that will rise up to protect their habitat at all costs; invading people will only make the local Overshoot even worse. A speculative proposal of mine that might help optimize our decline. For example, does Cascadia really want an influx of 50 million Southwesterners, or will they keep them out?
http://www.theoildrum.com/comments/2006/9/13/9140/74894/291
300 more OilDrum links using google advanced search:
http://www.google.com/search?q=earthmarines+%22bob+shaw%22+site:Theoildr...
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Dick Cheney would probably call them "EcoTerrorists".
This not being Jim Kunstler's blog, we won't go into what they would probably call Dick Cheney. . .
We've had three good days of rain in my area of WNC this week. Not enough to totally make up the deficit, but encouraging.
No problemo here in the Great Plains states-- cool dry weather this week with a chance of weekend showers. If I have time this weekend I'll shoot & post some photos of 6' tall cornstalks in the fields of God's country, Iowa's loess hills. "Knee high by 4th of July" indeed-- to Paul Bunyon.
Local ethanol farmers are still happy. If this keeps up we'll have the record corn-producing year they're expecting.
Hello TODers,
http://www.wvnstv.com/story.cfm?func=viewstory&storyid=25740
----------------------------
State Declares Drought Emergency: Winter hay already being used.
CHARLESTON -- The lack of significant rainfall so far this year forced state officials to declare a drought emergency in 42 of West Virginia’s 55 counties Thursday.
“We have to go back to 1939 to find a drier May than what we had this year,” he said. "Cattle are drinking water like it’s going out of style — and it is.”
“Hay is in jeopardy,” Douglass said. “All indications are that there will be no second crop.”
And it’s not just commercial farmers being affected by the drought, Douglass said. Smaller gardeners who grow food for their personal use and those who sell at the state’s numerous farmers markets also have been hit hard.
“If you can find sweet corn, you’d better enjoy it,” he said.
------------------------------
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Wow, Bob, that's not far from my old stomping grounds. I'm going to have to check in with some of the folks back home and see how they are faring.
How are you guys doing out in Phoenix? I have an uncle in Scottsdale (actually, he has retreated to the high country for the time being) and a brother-in-law in Glendale. When he calls, I don't even bother to ask whether it is hot and dry (ha! ha!) -- I know the answer.
Hello Peakoil Tarzan,
Carwashes doing a booming business in the desperate war to prevent a microlayer of dust buildup; A/C units running 24/7 for the protective cocoon of denial; food still arriving from all corners of the planet [but none growing out of our scorching asphalt]; big screen TV sales and # of A/C cars burning fuel in drive-thru lines increasing in direct correlation to rising temps; yet increasing #'s of fountains, pools, McMansion lawns, and golf courses evaporating water at record rates.
But our leading research org proclaims, "It's all good!"
http://sustainability.asu.edu/gios/
Meanwhile, our local news stations were absolutely giddy as they proudly announced that Phx is now the 5th largest city in the US, followed by commercials for SUVs, new housing developments, and shopping extravaganzas.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Why anyone would think that living in a desert is a good place long term is beyond me.
Oh, if you are there during the cooler months, you might just think you've discovered paradise. My uncle walks out into the back yard and plucks fresh grapefruit off the trees for breakfast. The landscape is beautiful and when the "smaze" isn't up, you can see forever.
Course...then there's April, May, June, July, August, September...
Like Bob says: as long as the A/C and the faucets run, "it's all good!"
I live on the Ohio-WV border and know several families that keep horses and dairy cows. For the first time in memory they've had to feed them hay in the summer bc/ of poor grass growth in this drought. We did get a nice rain this evening though.
You'd expect to hay to fetch a premium this year, with grains and soybeans up so much also, but I'm not sure of acreage values this summer. Checking the Illinois market report, prices up some, but not drastic. In the west , prices are pretty much unchanged. We'll see what happens as the crop progresses.
Curious, but hay is also following grain in terms of overall supply. The May 1 USDA report showed US hay stockpiles at their lowest level since 1950.
Greetings all, I have been following the Oil Drum for 2 years now as an avid, daily reader. I have been following the peak story day by day -- I applaud you all for the excellent work. Thank you.
I am an American expatriot living in the Southwest of France, outside of Toulouse and have spent the last year scrambling to get ready. Out small house is sold, the debt is paid off and we're renting a house with a huge garden beginning July 1. I am not sure of the next steps, but I know that have to be made decisively and quickly.
I belong to an organization that is the fighting the construction of a new highway through our neck of the woods (from Toulouse to Castres). The website is http://rn126.free.fr. The basic scenario is probably typical of many anti-development fights. The players are government (Conseil Regional and the Prefet) in collusion with industry leaders (Fabre, Autoroutes du Sud de la France) and other self-interested parties on one side, and then a combination of self-interested (oh no, the highway is going to be on top of my house), ecologist, and other well meaning citizens who are against it, and who give very good legal, safety, environmental, common-sense arguments against the project. Talk of we need buses and trains, not highways, but no mention of peak oil.
As an avid TOD reader, I know that this project is really about growth. Toulouse is running into infrastructure issues -- the current beltway is saturated. This project is just the first step of a larger project to build a second ring road around Toulouse.
In TOD world, we know that the increased economic activity unleashed by this project, will increase the demand for OIL. A newish member in the rn126 project, I recently asked the other fighters if they knew about peak oil -- I gave them a very high level overview of how I see the current situation ( peak likely in 2005, latest in 2011, we will see serious perturbations this summer) and they immediately got the significance of peak oil to the struggle.
My task is to pull together a report for them to give them as clear and accurate a picture as possible, in French, of the peak oil situation and then try to pull it together to create a solid, reasoned argument against the autoroute. I will look at translating Gails work (was it ever updated to reflect the comments ?) to French as well as looking at French peak oil sites.
So I think this is an excellent opportunity to get the peak oil word out. I would appreciate any and all ideas on resources and argumentation.
Love and Respect,
Natural
Welcome to The Oil Drum, Natural ! Its great to see more people with perspectives from other parts of the world. Have you posted this request on TOD Europe and TOD Canada, both of these sites have french speaking readers.
What you're doing with your neighbors is of the utmost importance. I think building local communities who are peak aware will really help the transition and keep us from becoming isolated and frustrated-I'd like to see an organisation like AA for the movement, no central structure,no guru's (sorry, chimp who can drive),no dues, fees, but instead a group that helps each other with the peak. Well, maybe a few Grief Counselors (laugh, you humorless bastards!).
Hi oilmanbob, Thank you for your message. I have been telling everyone I know about peak oil for at least two years. They all basically think I am crazy (or at least they did for a good year and 9 months). And of course, I have felt crazy because I've been living alone (with TOD) the enormity of what lays in front of us.
I have a funny story to share. We had to take our son to the child psychologist to try to get him (our son) to accept the fact that the diaper period was over. At the end of the session, I said to the psychologist, I think I am crazy, I know things that nobody else knows. And then I explained to him. He was nice to me and said that he thought I was right. Anyway, I don't think I am crazy.
Natural
Nat,
A little help with the ambiguity...He thinks you're right...as in in, "You're right, you are crazy. A real loon!" Or, as in, "You're right. There's a greater than zero percent chance that we are so totally screwed!" ??
I'm just looking for some free therapy. 'Cause I see dead people everywhere. They just don't know it.
Signed,
Cuckoo on the Gulf Coast
Cuckoo, Right, as in OIL is peaking. The shrink said that he is preparing -- i noticed after the fact the generating windmill outside of his office !
The dead people we're going to see first are in Africa and other nations we're there is little give in the food and fuel supply.
I believe that we should be worrying less about how individually we are going to survive and more about how we can stop this machine that has lead us to the edge of hell. Lets start worrying about the folks who are already suffering the effects of peak oil. It is here.
Keep your spirits up.
In the struggle,
Natural
Peak Oil information in French:
http://www.energybulletin.net/31397.html
Top IEA official: without Iraqi oil, we hit the wall in 2015
Jérôme à Paris, European Tribune
In a stunning interview for the French daily Le Monde, Fatih Birol, the chief economist of the International Energy Agency effectively says that peak oil is just around the corner, and that without Iraqi oil, we'll be in deep trouble by 2015
published June 28, 2007.
The coming energy crisis is now starting to become a topic of discussion on even some conservative forums such as The Town Hall.
The Impending Food Fight
By Victor Davis Hanson
http://www.townhall.com/columnists/VictorDavisHanson/2007/06/28/the_impe...
It is a decent summary of the rising issues being faced (and some good comments too.) VDH is unusual as he is a farmer as well as a historian and contemporary commentator.
Working the problems of P.O. mitigation will require building coalitions across otherwise disparate interest groups. A website such as TownHall gathers readers that have rather different opinions than often found on TOD, but surprisingly one could build a consensus on energy, no?
So just how energy thrifty are those LCDs?
Apparently not very...
It seems they're great for computer screens and laptops, but awful beyond anything larger. Its ironic that we need to stick with the good old projection TVs in the 25"+ range, at least until Sony mass produces these.
Our favorite econobust Micheal Lynch was just on CNBC and I wanted to assure you all that more oil and lower prices are just around the corner. Mikey thinks that the demand statitics are bogus and once things straighten out $30-$40 oil will be again be the norm.... Sheeze I was getting nervous!
SO CHILL OUT!
Man Caught Stealing Bike Wheels, Set to Music
Don't become a Buddhist. The world doesn't need more Buddhists. Do practice compassion. The world does need more compassion. -- Dalai Lama
Prediction: "Salvaging" will become an increasingly popular way of supporting oneself.
"MadMax" will become a reality in the coming years.
It might already be a reality if you live in the wrong country.
I'm up for driving the last of the V-8 Interceptors...I'm just another one of the crazies, 'cept I got a badge and gun to say it's okay...
This is a great initiative to develop sustainable energy. Technology buffs will be interested in how these turbines look like regular wind turbines.
With Peak Oil nearly upon us its time we all start working to develop this technology.
http://giftofireland.com/Siteblog/2007/06/29/worlds-largest-tidal-turbin...
Your site doesn't seem to work well with Firefox 2, is this a problem?