DrumBeat: July 14, 2007

Exxon's $1 Trillion Hurdle: As Oil Reserves Dwindle, Giants Find That Size Can Often Be a Liability

Size has traditionally been an advantage for Big Oil. As the world shrinks, the number of choice oil fields has diminished and new finds have become more expensive and complicated to tap. The trouble for Exxon chief Rex Tillerson is that to move the needle on a company bigger than most governments, he needs to broker ever larger deals.

Yet last year Exxon didn't replace its reserves through the drill-bit for the first time, according to Oppenheimer research. That's because more of the world's oil reserves have become off limits to Exxon and other private drillers. Many are controlled by national oil companies, such as Saudi Arabia's Aramco or Mexico's Pemex. Expropriation by governments like Russia and Venezuela took other reserves off the market.

The IEA'S Come-to-Jesus Moment

Q: What's the difference between an oil analyst and a used car salesman?

A: The used car salesman knows when he's lying.

IEA: 08 Oil Demand Seen at Fastest Clip in Years

Global energy consumption is seen rising at its fastest clip in recent years in 2008 but high oil prices persisting above $70 a barrel may steadily eat away at demand, the International Energy Agency said Friday.

The Paris-based agency, in its monthly oil market report, also conceded that it had been too upbeat in its forecasts for oil production by rival producers to OPEC, such as the U.S., Norway and the U.K.

Economics 101: Oil Rises On Supply Questions

The law of supply and demand caught up with the oil market on Friday.

The price of crude jumped on a multinational report that predicted world oil demand will rise 2.5% in 2008. In the short run, that reflected the temporary closure of a North Sea pipeline. Longer-term, however, questions about supply from Nigeria and Iran mean that the amount of crude available may not keep up with the rising demand.

Mexican Crude Falling, Will Drop More

International Consultant company analysts associate the reduction in hydrocarbon production to the exhaustion of Cantarell, the largest oilfield in Mexico, the output of which has decreased over 26 percent in the two most recent years.

They warned that at the current pace of exploitation, if another vein like Cantarell does not appear, this country will only have oil to maintain between nine and 13 years at present usage levels.

The Trouble with Refining Crude Oil

The weekly status report continues to reveal a highly unusual and persistent problem developing in the US market for crude and refined products. Specifically, the US is absolutely awash in crude oil, yet it's experiencing a growing shortage of motor gasoline just as we enter the peak of the summer driving season.

And, more recently, the gasoline supply shortage is starting to have knock-on effects for supplies of another key class of refined products known as distillates. Key distillate fuels include diesel and heating oil. This will become a bigger issue as we head into the winter heating season; heating oil is still a key source of heat in certain regions of the nation, and the winter marks a season of heavy demand for distillate fuel.

Total and Gazprom sign $15bn deal

Total and Gazprom today signed a $15bn (£7.4bn) deal that will give the French energy group access to huge gas reserves under the Barents Sea and the ability to supply Europe for decades to come.

A glimmer of hope: The struggle for energy independence from Russia

WESTERN failures in recent energy tussles with Russia have been persistent and spectacular. Key allies have drifted off into private deals. The big picture has been ignored. The gloomy drift accelerated this year with the signing of a three-cornered deal between Russia, Kazakhstan and Turkmenistan to pump the Caspian’s huge gas reserves north through Russia. Now Uzbekistan, according to Russia’s Vladimir Putin, is going to join too.

More for turnpike tolls? Maybe much more?

About two and a half years ago a group known as Better Roads and Bridges sponsored the circulation of a petition for a statewide vote to raise the fuel fees on gasoline and diesel.

The group largely was made up of road and bridge contractors as well as concrete and asphalt companies. In light of rapidly rising fuel prices as well as state legislation just passed to better fund our roads and bridges, the measure went down in flames to a lopsided defeat.

Since that defeat, many of those same supporters have come together to form the organization Transportation Revenues Used Strictly for Transportation. Four of the key principles they stand for are: Protecting and growing dedicated funds for Oklahoma’s transportation system; supporting leaders who are committed to transportation as a priority of state government; use of high-quality materials in building and maintaining roads and bridges; and efficiency and accountability within the Oklahoma Legislature and Department of Transportation.

Hot Fuel Web Site Launched to Educate Consumers

Did you know you may not be getting your money's worth at the fuel pump? At warmer temperatures, liquids -- including diesel and gasoline -- expand, decreasing the amount of energy (Btu) per gallon purchased. The "Turn Down Hot Fuel" campaign will educate consumers on how "hot fuel" may have them paying higher prices than necessary for fuel. The campaign is spear-headed by a professional truckers' organization, the Owner-Operator Independent Drivers Association (OOIDA), and includes a Web site, http://www.turndownhotfuel.com/.

Biofuel producer faces supplier friction

A dispute between a recently floated biodiesel company and its supplier has shown how pricing conditions in the biofuels market are burning some of the companies involved.

Shares in Renewable Power and Light, an Aim-listed company whose assets are in the US, fell nearly 70 per cent on Friday after it announced expected losses because of increased commodity prices.

RPL said it was suing its supplier, Safari Group, which it claimed had breached an agreement to supply palm oil at an agreed fixed price.

In a Rare Pairing, Blue Chips and Oil Climb Together

Rising prices for crude oil usually send the stock market lower. Now, these markets are moving in tandem, and some Wall Street pros are wondering how much longer the unusual trend can last.

Unusual 2006 has oil customers guessing in 2007

In most years, a customer who bought oil during the summer instead of waiting for the first frost saved money, sometimes several hundred dollars. That's because prices were low during the summer months but rose as winter drew closer.

Then came 2006, a year when prices paradoxically soared during the summer and dropped when winter hit. It was the first time since 2001 that prices in New York dropped when winter arrived, according to figures from the U.S. Energy Information Administration.

Number of gas stations in Canada continues to decline

This trend reflects an average decline of about two percent per year, over a period of time when Canada's population, and its economy, have been steadily growing. "This is a consequence of a lack of profitability in the retailing of gasoline", states Michael Ervin, the president of MJ Ervin & Associates. Despite significant profits in the oil industry in general, the retail sector has been a poor performer: in 2006, the wholesale "rack" to retail markup on a litre of regular gasoline was only five cents per litre at a typical urban gas station, according to pump price statistics gathered by MJ Ervin & Associates.

Chinese regime suppresses green protests

Hundreds of farmers near Mount Emei in Sichuan province blocked a highway last week, starting their action on Tuesday 10 July, to protest against an aluminum company responsible for a gas leak that contaminated grapes and other crops, the Hong Kong-based Information Center for Human Rights and Democracy reported. Five protesters were arrested and ten injured when police drove the protesters away.

Law and policy concerning crucial issues

Last month, I had the rare privilege of spending five days in Canada with a group of legal and policy scholars from around the world. Our formal duty was to complete work on a book on the topic of "Moving Beyond the Carbon Economy" — what roles should law and policy play in addressing such front page issues as climate change, the increase in fossil fuel demands, international poverty, and the political and military challenges posed by the dominance of the carbon fuels.

Iowa: Rising gas prices smack region

Gasoline prices soared to an average of $3.27 per gallon in Sioux Falls on Friday - up about 25 cents since the start of the month - pinching pocketbooks and pushing consumers to scale back or change spending habits.

Analysts blame the July 1 shutdown of an oil refinery in Coffeyville, Kan. - caused by flooding - and the closing this week of a key piece of oil processing equipment at a BP PLC refinery in Whiting, Ind.

Groceries gobble up budgets

Ann Gilpin, a food-industry analyst for research firm Morningstar, said the jump in corn prices has had "a domino effect on the whole industry."

Other pressures driving up the price of food include high fuel and labor costs.

Idea of veggie oil burns bright

Even in the fringe world of alternative fuels, vegetable oil has mostly remained on the margins, the domain of a few do-it-yourselfers who have rigged their diesels to run on old fryer fat, making the rounds of local burger joints to fill their tanks.

But the veggie power movement is about to stick one greasy toe into the mainstream, as a company in this western Wisconsin town prepares to open what its owners believe is the first recycling and filling station for waste vegetable oil in the Midwest, and one of just a couple in the nation.

Yemen increases crude oil prices

Last week, Yemeni crude oil reached the highest price since Yemen started exporting crude oil in 1981. Crude oil price in Masila, Hadhramout rose to $77.49 per barrel and Marib’s oil price per barrel rose to $79.24, said Khalid Bahah, Minister of Oil and Minerals. This increase is due to the stopping of oil production in Nigeria and the low supply of OPEC which causes fears of an international oil supply shortage, Bahah said. Marib’s crude oil price is higher than Masila’s price because it is lighter than Masila crude oil.

Risks Rise for Western Oil Firms in Africa

Big foreign oil companies are finding it harder to make money in Africa because of the region's often unstable politics, output restrictions and moves by some governments to rewrite contracts.

Africa remains one of the last big regions open to foreign oil exploration, and companies of all stripes are benefiting from record energy prices. But fresh obstacles threaten to crimp future production in a region that is crucial to global energy supplies.

New York: March set to highlight power outage

Marchers will pass out an open letter to the state Public Service Commission and Con Ed for people in the community to sign. The letter will tell Con Ed: Accept fault for last year’s outage. Pay us what you still owe us (for non-food losses and damages). And NO 17 percent rate hike — use your $12 billion in profits to pay for upgrades.

Argentina 'Total Energy Program' Breeds Total Skepticism

When the Argentine government announced a plan late Thursday to subsidize liquid fuels to make them as affordable to industries as natural gas, it gave it the grandiose title of the "Total Energy Plan."

But this latest bid to fix a relentless energy crisis has met with immediate skepticism from industry analysts, who see it facing huge logistical challenges, generating punitive fiscal costs and creating a black market in fuels.

Natural gas found in western Uganda, officials say

The London-based oil company Tullow Oil Plc has discovered natural gas in western Uganda, which the government says will be used for solving the country's power shortages, officials said on Friday.

Chile, U.S. to cooperate in biofuel research, development

Chile and the United States signed an agreement on Friday to jointly carry out biofuel research and development.

Summer Sale

In order to have a lasting bull-market in any sector, supply and demand must be out of whack. In the case of natural resources today, demand is rising ferociously in China and India whilst supply is struggling. Consider the energy market as an example: At the beginning of this decade, China and India combined used to consume roughly 8% of the world’s oil and today they consume over 11%. Now, to illustrate my point that supply and demand are important factors, I would add that this rising demand (regardless of monetary inflation) would not have translated into a higher oil price IF there was an endless supply of oil. In the current scenario however, the oil price is rising because supplies are extremely tight when compared to demand. In fact, I would argue that humanity is staring “Peak Oil” in its face.

GM exec cool on diesels

In a video posted to his official General Motors blog Thursday, GM vice chairman Bob Lutz took pains to point out that fuel-efficient diesel engines, popular in Europe, will not provide an easy an easy answer to America's petroleum dependence.

U.S. man convicted of pipeline, energy attack plan

A Pennsylvania man was convicted on Friday of plotting to blow up U.S. oil pipelines and energy installations and of attempting to enlist al Qaeda militants on the Internet to help carry out his plan.

China complains of cold shoulder from Canada on oil deals

Chinese companies coveting Canada's oil patch are unhappy about the chilly reception they are getting from Ottawa, a top Chinese oil executive told media Friday, after withdrawing from a Canadian pipeline project amid delays.

Fuel, IAEA enter North Korea on nuclear arms deal

A tanker carrying fuel oil docked at a North Korean port on Saturday as a team from the U.N. nuclear watchdog agency headed for the country ahead of a planned shutdown of its atomic reactor under a disarmament deal.

India plans national strategy to tackle global warming

Indian Prime Minister Manmohan Singh has asked policymakers to come up with a detailed national plan by November to tackle the effects of global warming, his office said Saturday.

Schwarzenegger: GOP can lead on climate

Charges that protecting the environment hurts the economy are "bogus," and climate change shouldn't be a political issue, California Gov. Arnold Schwarzenegger said Friday.

Speaking at a summit organized by Florida Gov. Charlie Crist, Schwarzenegger said that environmental issues are a cause Republicans can embrace.

Governor signs Florida greenhouse gas targets

The Republican governors of California and Florida gave the Bush administration the cold shoulder on Friday as Florida set new limits on greenhouse gas emissions and signed cooperation pacts on climate change with Germany and Britain.

Rooftops key to Florida green energy goal

Despite its nickname, the Sunshine State, Florida's heavy rains and pricey real estate mean it has never been considered a good place to set up big solar energy plants.

So a new initiative by the fourth most-populous U.S. state to get its utilities to generate 20 percent of their power from sun, wind and other renewable resources will mean wiring rooftops rather than building huge solar or wind farms.


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Rooftops Key To Florida Green Energy Goal...

I enjoy reading about these much ballyhooed signing events. On the front pages of newspapers across Florida this morning are headlines shouting the story of Governor Crist and the Terminator signing??? What exactly did they sign??? Well, it must have been something like a letter of intent??? No details, mind you, just high minded ideas and fuzzy, if any, plans. Being a curious sort of person I ask myself the natural questions, why, why now, who will pay, how much, etc. Of course most of these questions will not be answered untill FPL (Florida Power & Light) make some decisions. Perhaps the why, why now questions can be answered especially if the front pages of yesterdays Florida newspapers are read. 'Crist Declares Global Warming Real Threat, One Third Of Florida Could Be Under Water In 25 Years.' Gov Crist and the Terminator are well aware of the tipping point of global warming and that some brainy experts on the subject, including scientists Hansen and Lovelock, have predicted that if we have not passed the 'tipping point' of global warming that the momentum of using ever more FFs to make ever more widgets will send us barreling through the 'tipping point' with no notice being taken by most. As usual, politicians are using a 'nobel cause' to go after a problem facing their dominions. In the case of Florida it is the problem that the state has little housing construction going on and this has been THE economic engine for the state for a very long time. To get the guys with the hammers back to work why not have them put a lot of solar collectors on a lot of roofs and charge the residents for most of the costs? ...And when the next hurricane blows the damn things into the nearest river or lake, well, we can just do it all over again!

There are massive savings available by building trees to shade peoples houses to reduce A/C load, though a bit of a silly idea in a hurricane prone area. Also painting houses white to make them absorb less heat is a fairly smart idea. Imagine if they did that and provided PV/Wind. CSP is ideal as it has the highest output at time of most demand. Global warming tipping point is mighty scary, why was the 'evidence' for WMD's in Iraq enough to warrant a war but the 'supposed scientific consensus on global warming needs more research.

Fossil fuels contribute to global warming,
They are finite and we are approaching the point when demand and supply cross
Our current way of life WILL have to change to even give the rest of the world a chance.

There are even more massive savings to be had by building underground, which eliminates the need for air conditioning and most heating. We may be forced, in inhospitable areas, to become burrowers. The next real estate bubble could be McBurrows. Florida has a freeboard problem at the best of times, and these aren't the best of times. Burrows may flood but they don't blow over. I'd recommend not living in Florida in the frst place, unless it is on a boat.

I think that's where we're heading. The only question is when.

As Newsweek pointed out a couple of years ago, Florida became the vacation and retirement fantasyland it is during a period of unusually low hurricane activity, and because of the availability of cheap air-conditioning.

Like Jared Diamond pointed out, we tend to assume that the future will be like the past. Tain't necessarily so.

Dig down a couple of feet in my yard and voila! There is a well! Across the street there is a large river. Burrowing here is not an option imo. My house is surrounded by large trees, mostly live oaks, which shade the house, vehicles and lawn. If I was dumb enough to cut down the trees (to install solar collectors on the roof) my water useage would go up if I wanted to continue to have a St Augistine Grass lawn and my AC costs would go up considerably in a house without shade. Most homes in Florida, except those that are new on lots scraped bare by developers, are shaded.
If Florida floods one third of the world population is going to become refugees. This GW problem is not just limited to Florida...are you reading, Oilmanbob? Alan?

River, I'm 55 and expect that Galveston will only become the new Atlantis after I'm dead.
I sure agree about the value of shade trees. I have a decent sized south roof that gets no shade, and I'm considering a 4 mw system. Not enough to pay for my AC, but enough to keep the refrigerator, computer and ceiling fans going in a brown-out.
I bet Alan's off eating another fantastic meal and will torture us with a description later. He'd better act right or I'm going to support a draft - Alan Drake For President!
Bob Ebersole

Bob, I will put up signs in my area 'Alan For Pres'...
Saturday is market day and right by the market is Cafe Du Monde...Ummm...Benigts and great coffee. NO has some great food.

I assure you a 4 mw system would do a lot more than provide your AC. Surely, you mean 4 kw unless you wanted to electrify the whole community.

North Little Rock where I live has gotten 7.5 inches of rain in the first 14 days of July, breaking 30 year records.

I was here 30 years ago. But the parents and I were hunting down a House to buy and move into and I was the family devining rod. I had a feel for houses and was the person who picked this one. I am currently living in my parent's house taking care of them and myself in their old age and my room is again being used for something besides another storage room.

I have need of nothing much myself, and have tons of things I can sell, give away or reuse to make something else with. I have hundreds of pounds of tools, but they are just so mixed in with over a ton of books and papers it will take me months or years to sort through them.

PS. I did announce my F.R.N party, If Alan would like to run as a write in canidate, prehaps he can write me, LOL, I am serious, I am just tried of the status quo not getting anything done.

A burrow that has flooded is going to be just as useless as an aboveground house shredded to smithereens by a tornado. You'll have to rebuild it from scratch, as it will be soaked through and through with polluted water like all those unsalvageable houses in lower NOLA. Only, since it's a burrow, you'll have the added expense of pumping it out and tearing it apart first. Never mind that in most parts of the country, keeping even shallow basements reliably dry seems to be an unsolved problem.

You're right, the real problem is living in Florida, or anyplace else within easy reach of storm surges, in the first place. An issue, though, is that we live in the age of the Safety Nazi, appointed to rule over us because we all know that Baby Boomers would live forever if only all perfidiousness could be suppressed. This means that older folks are often told to become hermits whenever there is the tiniest threat of the tiniest bit of ice or snow. ("I must advise you this way, if I don't, I could be hauled before the medical board for failing to use best practice, or you could sue me for malpractice.") So, not wanting to spend whatever time they have left in prison, they naturally move to where it never snows. And there's almost noplace in North America with temperate weather year-round, so they must pick their poison. C'est la vie.

I agree with PaulS regarding the "Safety Nazi."

I can think of no better way to cull all the really stupid people who clutter the blogosphere and byways of the US and the world.

Imagine, some complete dolt decides "I don't need no damned gubbamint man atellin' me what I cain't do. If I wanna build a house out of used beer cans and oriented strandboard, then by God I will do it!!!"

Along comes a tornado/hurricane/flood/heavy gust of wind and the gene pool is a tiny bit better. Let the retards do what they will. In fact, let's encourage them. The more they knock themselves out of the game through retarded building methods, the better all of our lives will be.

Maybe we should give them all lots of C4 to play with while we're at it.

Can we somehow attach the type of lawyer that usually exploits defends them to the fate of their clients?

I would agree with your comments if you would simply substitute "self-righteous pseudo-intellectuals" for "retards."

Speaking of the word "retards," it seems this term has had a resurgence recently. I think I've heard or seen this word used more often in the past six months than since, oh I'd say, ninth grade shop class (and believe me, that's many moons ago). I'm fairly certain that this says more about the people who use this word, though, than about any members of some subject pool to which these people attempt to refer.


All of you have no idea what you are talking about... "Retard" is so passé. These days everyone knows the word is "fucktard". Get with the times! And I hope you aren't "calling for any human decency that [I] may have in [my] pseudo-intellectually mind of [mine]"? Are you? Because, then I'll just reference to the point made by the comment above this one. =]

I am a big fan of numtard.

At the ris^h^h^h certainty of dragging this thread even further into the slime ...

Link to the alt.tasteless records on the subject.

I believe the '96 origin predates its wider use as a term of abuse.

Thanks for the unwanted, but educational, history lesson =]


/me looks around at the world...

You can say that again!


There's a great house in Houston on Malone St. called the beercan house. A folk artist put away a couple of six packs a day and then flattened the cans and used them as aluminum siding and great decorations. I'm sure you can find it if you google "folk art, Houston" Its a great piece. Its survived several hurricanes, and is owned by The Orange Show foundation.
Bob Ebersole

A folk artist put away a couple of six packs a day

Sorry for the recycling idea but I couldn't be up to that :-D

Paul, not all earth-encased passive solar houses are burrows. A friend of mine in Montana has a lovely passive solar home built into the South face of a small hill.

The panhandle of Florida has lots of rolling hills...

Errol in Miami

'The panhandle of Florida has lots of rolling hills...'

Yes, it certainly does. It also has lots of christian fundamentalists, shrub/vader supporters, and little tolerance for anyone that thinks or acts slightly different from those living in the hills and hollers of the panhandle. I would not move there if the real estate were free.

"You're right, the real problem is living in Florida, or anyplace else within easy reach of storm surges, in the first place."

It's interesting that suddenly Florida has become so fragile as to be unlivable...and yet, the oldest continiously settled community in North America is in Florida. St. Augustine.

Who knows, maybe you just have to design correctly.

Remember, we are only one cubic mile from freedom

Selecting a building site at least a couple hundred feet above sea level is the first step to designing correctly. Selecting building sites that are not in flood plains, near active fault lines, not near volcanos, etc. are also good ideas.

There is clear evidence that homo sapiens were building structures even as hunter gatherers during the last ice age. The structures were simple but built, nonetheless. Many of these structures were built near the ocean, Roger. Do you know why they cannot be found today? Because the ocean today is several hundred feet higher than during the last ice age and the continental shelf, which was once beachfront property, is now buried in silt from the rest of the continent.

You might wish to acquaint yourself with how radical the changes in climate have been over the last 20,000 years. Once you do, you will then realize that what Dr. James Hansen recently said about the IPCC rings true - he doesn't agree with their 59 cm sea level rise while temperatures rise 2 degrees celsius because the last time this happened on earth (temperatures this warm then another 2 degree celsius rise) sea levels actually rose another 25 meters. Note further that Dr. Hansen said that sea level doesn't all rise at the end of this temperature increase but during. And note even further that even the IPCC puts the temperature rise over the next 93 years (to 2100) as at least 2 degrees celsius. This means, if Dr. Hansen is correct, that we will see a cumulative 25 meter rise between now and 2100. Even if we backload the last 20 meters of that from 2050 out, that still means 5 meters (15 feet) in the next 44 years.

The US corporate media have ignored a new report by Nasa's top climate expert saying that the international scientific community got it wrong, and we may be facing an 80-foot rise in the ocean by 2100.

And here is the original paper by Hansen (WARNING! PDF!) first published in the British science journal, Philosophic Transactions of the Royal Society.

So, you see Roger, there is a bit more to proper construction than the luck of having built during a stable climatic period. If Hansen is correct, no construction technique will save St. Augustine, nor New York, nor London, nor most of the major coastal cities of the entire world.

Ghawar Is Dying as we slide Into the Grey Zone
"The greatest shortcoming of the human race is our inability to understand the exponential function.

CSP is ideal as it has the highest output at time of most demand.

I dunno. We're talking retail here, rooftops. Does retail CSP even exist? All the installations I've ever read about are big farms. Would it even be practical to be constantly sending guys out in trucks to adjust and repair expensive, finicky, delicate, mechanical tracking equipment in a plethora of scattered tiny retail installations? Is even large scale CSP practical in Florida if those delicate tracking systems are going to be wrecked every time a hurricane or large thunderstorm comes through?

As I mentioned in original post this rooftop scheme has no detail to it. Like the Fl State legislature was going to force localities to roll back taxes 30-40%. After a year of back room deals in Talahassee the tax cut in my county turned out to be 4-5%. By the time the Gov., the Terminator, and the various legislatures get a real proposal passed for the ballot this rooftop scheme might be a single panel large enough to run an electric razor.
Crist and the Terminator want to go on record as 'the environmentally aware governors.' If past Florida politics is an indicator, whatever they do will be stupid. They always start out with a fairly sane idea and 2,000 compromises later end up with something that is FUBAR.

Aaaah. Politicians.

Concentrated Solar Power, CSP, can't be put on residential rooftops. They need a clear field so they can track the sun. Or you use a solar tower with heliostats to point the sun at the top of the tower. It is utility grade stuff and not ideal for Florida, due to hazy skies and hurricanes. But Florida could go with batch solar heaters on everyone's roof or in their backyard. These have no moving parts and replace from 50 to 100% of the hot water needs for a family of two. Hot water accounts for 20% of the electric use in Florida homes and solar can eliminate it entirely. With a bit of incentives from the state of Florida utilities could do the job on getting these installed.

I have had a batch heater since 1999 and now look forward to free hot water forever in my home. Many times it is hotter than you can get from an electric heater. I'll know we are serious when we put batch heaters on every roof in Florida.

Solar1, life is full of little ironies. Most of the houses built in South Florida in the 1930s and early 40s were built with integral ( collectors flush with the roof don't blow off in hurricanes : ) thermosiphon domestic hot water heaters. Thermosiphon systems are perfect for South Florida because there is no need for any temperature detection gear or auto drain down because it almost never gets below freezing here. And of course thermosiphon needs no pump, so folks had hot water even during electic outages!

Also, these tended to be small, 2/1 houses with excellent cross-ventilation, a big "Florida room" (screened porch) on the back, and a big yard with a lot of fruit trees. Did these folks know something we need to know?

However, the little "chimneys" on the roof that housed the water tank are almost all gone; I guess I'll be able to time to the day the world all-liquids peak - the day the last of those water tank "chimneys" is removed.

Errol in Miami

I post this icon of catabolic collapse and with apologies to Leanan:

Ahh, the gloom of it all ... JMG is my hero. His writing is quite charming though if you follow it, he's probably running about a defcon 1. I'm thinking of studying Druidry.

With that rambling, I tear my bloodshot eyes from the terminal and wander down to the Sunset Valley Farmer's Market for some vittles.

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

OMG, considering we aren't even on the downslope yet, that photo is simply horrifying.

Good luck to us all...

Errol in Miami

It points out that during periods of paradigm shift, a lot of things are going to be tried and not all of them are going to be winners. A lot like the Cambrian explosion.

Wind will be a winner, but not every single implementation of it. There will be casualties along the way.

Something I wonder about, in addition, is that if clouds and rain make Florida an uneconomic locale for solar farms - where the equipment can be bought and installed at deeply discounted wholesale rates - how can high-priced retail solar possibly be a going proposition?

I gather from my reading on this issue that they feel that the free cost of rooftops will counterbalance the decrease in economies of scale. The article mentioned the high price of real estate in Florida and stated that the number of full sun hours ranges between 5 and 6. If true, that would be a decent amount of sun for a solar installation.

Imagine what that will do waterfront property values by declaring 1/3 of Florida will be underwater in 25 years. If you are in the mortgage business are you going to take the note on something that might be a soggy mass of Styrofoam and stucco in 10 to 25 years? I told my in-laws this in no uncertain terms this past month whom live in S. Miami and are retiring any day now with their house as a significant part of their assets. Not one usually prone to foul language I said, "One day very soon the dumb fucks are going to get wise and stop moving to S. Florida by the droves."

Or you should see parts of the west Miami-Dade and Broward Co.'s housing developments. No guff, they've got homes sitting about 18" to 24" above the surrounding water. Idiocy compounded on idiocy.

Fortunately we live in north Florida and will cash out on the fools moving north but wanting to stay in the Sunshine State. As for the rooftop solar, well some doubt the validity of Citizenre, but political trends such as the one's moving forward in California, and now Florida, are going to make their prospects much better.

ther's a couple of subdivisions in the Galveston Bay area that have already been flooded. One is in Seabrook, the other in Baytown. Plus, about 1/3rd of the Goose Creek oil field is underwater due to sudsidence from oil production.

On West Beach in Galveston a number of houses are now virtually in the water due to erosion. They're beyond the seawall. It amazes me that the state and city allow people to continue to build where the Island is already eroding, and that anyone would be fool enough to build a $500K beach house on that kind of land. Yet the're still building.
Bob Ebersole

Err...If waterfront in Fl is in trouble what about the really expensive waterfront on Cape Cod, Long Island, Hyennis, etc? Getting an insurance company to write a policy for waterfront property in Florida is no longer a easy thing. Many that have never filed a claim have been cancelled, including me. The state has started an insurance fund of last resort but it is not cheap.

I think it's insurance that's going to be the death knell for coastal real estate. Eventually, the taxpayers are going to get ticked off at paying for it. It's not like these are poor people who need the help. These are often the filthy rich, who had a one million-dollar home wiped out by a hurricane, then used taxpayers' money to build a 2 million dollar home.

Florida has had the most insurance problems, because of all of the hurricanes, but All-State recently dropped New York and other east coast areas. Even though they haven't been hit by hurricanes recently, they will, and the insurance companies know it.

Leanan, you are correct. We are not filthy rich but our home was paid off long ago. Now we self insure this home but the home on beachside that we own is still insured. If the insurance on that home goes up again we will drop the insurance on it. If it blows away we will sell the lot if someone wants it, if no one wants it then so be it. My wife and I are over 60, have enjoyed life and dont really care if we make another dollar. We are both keenly aware of the perfect storm of PO, CC, a tanking world economy, and an imcompetent administration and we have discussed at length what we should do. We have decided to stay put and keep the water wings handy. All of our friends live in this area. At our age selling all this stuff and moving is not an option that we are anxious to take. Our lives were fun and productive and we are not afraid to go. As long as we are together, that is all that matters. We still help out at the local center for blind children and volunteer at the Red Cross. We both have worked quite a few hurricane and tornado aftermaths on the RC disaster response teams. We were both in Homestead with the Red Cross a couple of days after Andrew passed through and were almost in as much shock as those that weathered that storm. It looked like the aftermath of a nuclear explosion. We will keep on keeping on and do what we can to help out. Watching the perfect storm develop holds our attention and makes us curious to see how it will unfold. BTW, thanks for Drum Beat, it is a hoot!

Any real estate at less than 200 ft. above MSL should be avoided for, umm let's see..., about 200 years or so.

Of course if you can trust your climate models, just buy a hill and have an island later!

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

My favorite local cornucopian ("No Worries About Peak Oil For 50 Years or More), Ed Wallace, was doing is usual anti-Peak Oil rant this morning. Ed has a Dallas area radio talk show that is 100% supported by auto dealers and related advertisers.

In any case, this morning he quoted the Saudi Oil Minister ("None of our customers are asking for more oil") as proof that oil prices are up solely because of rascally oil speculators. Note the continuing pattern: a media guy (who lives off advertising from the auto/housing/finance group) is quoting a major oil exporter to the effect that we can have an infinite rate of increase in the consumption of a finite energy resource base.

BTW, in regard to the Saudi comments, the Saudis have already said that they will not increase their production, and they have told various importers what they will be receiving. So, what is the point of asking for what you can't get? (Assuming the Saudis are telling the truth in the first place, a big "IF" in my opinion.)

Another day, and more encouragement from the Iron Triangle to borrow and spend, spend, spend: "Party On Dude!"

A (small) counterpoint to the Iron Triangle:
It looks like Jim Puplava has some interesting energy discussions today:

There was lots of talk last year about how the Saudi oil production had X% decline over the year, but I have noticed such comments in the last few months have been conspicuously absent due to the fact that their production has been essentially 'flat' this year. It does make some people wonder...

It's not an either-or proposition. KSA may have made some voluntary cuts and may also be experiencing decline. They may be able to increase production or hold it steady even in the face of some declines. However, based on Stuart's work I would guess that efforts right now to increase production or even just stop decline means that they are draining other fields harder and faster, which may damage them and certainly will mean an even steeper decline when it does arrive.

That's Euan's entire point about KSA - they've brilliantly managed those fields for decades squeezing every last drop they can get out of them. It's incredible engineering but it also mean when the declines really start across the board in KSA that they will very likely be steep and sudden, with KSA ending up somewhere between one third and one half of their peak production (which, by the way, is still a huge amount of oil - between what Iran and the US each produces).

Oil prices are rising and if KSA says they cannot find buyers now then that's a pile of BS. But notice how the KSA song has changed? First it was they could not find buyers. Then it became compliance with OPEC cuts. And now, with oil up 50% from earlier lows around $50 per barrel to about $75 per barrel, they claim the world is well supplied. Hey, the very definition of rising prices is short supply. And the market is no longer deeply in contango so the inclination to buy now and stockpile is going away too. The deep contango was one point that Robert Rapier never adequately explained, in my opinion, in his dissenting views. And the deep contango state of the market gave a very logical reason for high inventories - it was cheaper to buy now than later. Now that the market is leaving that state, it will be interesting to watch both prices and inventory going forward.

Ghawar Is Dying as we slide Into the Grey Zone
"The greatest shortcoming of the human race is our inability to understand the exponential function.

I think this has been said a few dozen times before, but its very easy to test if they are lying. All one company would have to do is call up KSA and ask for a few million barrels of oil. Its very hard to lie about something like that when you make a very, very public statement like they said. But who knows, maybe they are declining. Either way, it doesn't help us at all right now, now does it?

yeah party on partyguy go ahead order a few supertanker loads. report back here.

Now you guys are getting a tad ornery.

Not seem rude to point this out but could you imagine a serious oil trader ringing up Frontline & Saudi Aramco and ordering a 4 or more VLCCs of oil on a whim? What about those tankers getting bumped from the line? I am sure that their owners/operators would have a thing to say.

The Saudis have stated that they are not increasing their production, so why ask for what they say they will not provide? They have already put Asian refiners on allocation, refusing to deliver the crude oil that they had previously agreed to provide.

But in any case, in regard to your question about oil companies, your assumption is that major oil companies would want to prove that the Saudis are post-peak. What if the majors--like the rest of the Iron Triangle--want to preserve the illusion of Saudi crude oil abundance?

Recent annual Saudi crude oil production (C+C):

2004: 9.1 mbpd
2005: 9.6 mbpd
2006: 9.2 mbpd

From 2005 to 2006, this was an annual decline rate of 4.2% (average annual production).

The long term decline rate for Texas, the prior swing producer, has been 4.1% per year.

The key test of whether a region has finally peaked is whether or not the region exceeds the apparent peak production value on an annual basis. So, we would need to see Saudi Arabia exceed 9.6 mbpd in a calendar year in order for 2005 peak estimate to be wrong.

And we will need to see 9.2 mbdp this year for your decline rate to be correct. I don't understand why people tend to jump the gun, especially with their history of wildly swinging oil production :/

If memory serves me correctly, it was often quoted at TOD by Robert and others that the 'nominal' production rate for KSA is about 8.5 mbpd of crude.


For 3 months in a row, its been at 8.5 mbpd, and most of the preliminary data suggest that May and June were no exception. Any comments, WT?

My thoughts on Saudi Arabia, using production data through the end of 2005:
Texas and the Lower 48 as a Model for Saudi Arabia and the World

The 4.1% decline rate for Texas was net, i.e., it was old (declining) production + new production. The same thing is true for Saudi Arabia.

One key difference between Saudi Arabia and Texas: Saudi Arabia was, at one time at least, dependent on one field for more than half its production.

In any case, in post peak regions the net decline is a result of declines from older, larger fields plus production from new, generally smaller, fields coming on line. Production will vary, month to month, and year to year. Post peak regions will sometimes show year over year increases. But all of the following regions have (so far) never shown production higher than its presumed final peak: Texas; Lower 48; Total US; North Sea; Mexico; Russia; Saudi Arabia; and now the world.

So you are using data up to the end of 2005 where you called a peak, and ignoring their historical nominal production rate (8.5 mbpd) and all the data that comes after 2005?

Forgive me for remaining skeptical just a little while longer :/

I suppose that what you said makes sense to you.

In any case, I think that the point of the following graph is relatively clear, but perhaps I was too subtle:

I think that a Saudi production rate of 9.2 mbpd in 2006 is pretty clear, and I think that a production rate of less than 9.2 mbpd for 2007 is pretty clear.

I assume that you realize this article was posted in May, 2006.


Note the reference to the "Hubbert Logistic" method in this report on Saudi Arabia: http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news...

I suspect that they are charging somewhat more than what Khebab and I charged.

The beauty of HL is that it can elucidate the similarity between the two curves on that graph. Just looking at the data points as presented, you can see that they are sort-of similar but wouldn't instinctively extrapolate the Saudi curve to a downtrend.

HL can show that the downtrend is within 5 years of right now and it may already have happened. The raw production figures are inherently quite "noisy".

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

If memory serves me correctly, it was often quoted at TOD by Robert and others that the 'nominal' production rate for KSA is about 8.5 mbpd of crude.

What the hell is that supposed to mean? There is no "official" TOD position on anything. In case you haven't noticed this is an open forum. But I don't think Saudi has any "nominal" production rate. That's just silly.

You should go back and read the many special TOD threads on Saudi Arabia. There is where most of us made our case. We do not need to make it again simply because Saudi has produced level production for three months in a row.

Ron Patterson


Saudi Aramco maintains a maximum sustained crude production capacity of 8.5 million barrels per day. Saudi Aramco ranks among the top ten companies in gas production worldwide. The company is also a leader in both the production and export of natural gas liquids (NGL), and a major producer of refined products. The company produces natural gas in association with crude oil and nonassociated gas from deep, independent gas fields. This gas is used as fuel and feedstock for the Kingdom's backbone industries and utilities, and for export and domestic consumption as NGL. A vigorous programme is currently under way to expand gas production and processing capabilities to meet increasing demand for gas at home to power the Kingdom's robust domestic economic growth.

Several other articles online talk about how in years past, KSAs has often quoted that 8.5 mbpd is their sustainable production rate, sans depletion of course. By the end of the year, they're supposed to add to that. But right now, their production exactly matches up. Very interesting...

PartyGuy, this is Wikipedia saying what Saudi Arabia is doing TODAY! The same article stated:

1994 Maximum sustained crude-oil production capacity is returned to 10 million barrels (1,600,000 m³) per day.

You wrote:

Several other articles online talk about how in years past, KSAs has often quoted that 8.5 mbpd is their sustainable production rate, sans depletion of course.

That is pure BS PartyGuy and you know it. Saudi has talked about the capacity to produce 12 mb/d on many occasions and even some time back they said they might produce even more. But as a long time Saudi follower, reading everything I could possibly find on Saudi oil production, I have never read any such statement. Saudi, in the past, would NEVER have admitted that 8.5 million barrels per day was all they could sustain for long periods of time. In fact they have talked about producing much more and being able to sustain that level for decades to come.

Saudi averaged 9.55 mb/d Crude + Condensate in 2005, producing 9.6 mb/d April thru September of that year and 9.5 mb/d for the other five months.

You should not come on this list and start making up bullcrap PartyGuy. The folks here have been following Saudi oil production for many years and know BS when we hear it.

Ron Patterson

This is exactly what I mean when I say this guy is dishonest.

No, what exactly do you mean by that? Nothing I said was dishonest. It has been quoted here several times. I linked sources, and gave you a direction to do your own further research. The only one that is being dishonest is you.


Just go do a search for 'KSA Sustained Production Rate'. Look at the few dozen articles that talk about their past 8.5 mbpd sustainable production rate, then realize that I am not predicting an increase in KSA production, only that their current production rate matches perfectly.

As for WIKI, its peer reviewed just like this site is. Its edited by 'experts' for outdated or wrongful information. Are you suggesting that TOD is the only site for accurate information on KSA?

I stopped over at the official OPEC site and clicked on the link for KSA and found a dubious quote for current oil production. (http://www.opec.org/aboutus/member%20countries/sArabia.htm)

current Crude oil production*
(1,000 b/d) 9,353
*including share of production from Neutral Zone

You figure an organization that rakes in billions of dollars a year can keep there production numbers current.

edit: Whoops, looks like I should read more before I post...that number is from 2005, apologies.

WT and others; I really enjoy your contributions.

I have been lurking here and reading archives for a long time and I am trying to get my mind around all of these observations. I preface this by saying:

1) I really want to improve my delivery with how I frame the conversation regarding PO with people willing to listen to me.

2) I feel woefully unprepared with regard to ELP and reading about other peoples plans for mitigating the likelihood of personal failure to adapt to a massive paradigm shift.(I am a student of science, but the topic of PO never entered my sphere until 2006: I run a non profit youth shelter, drive a saab, rent a home...I guess one plus is I am a licensed EMT-B..rambling sorry)

3) I am very alarmed by the implications associated with PO and I have no reason to openly question the volume of work TOD has to offer. I am, however, entering a field I have no native understanding of; Hence my fervent reading of every analysis I can find.

To be clear on the analysis presented recently I would like a little clarification. If KSA does not increase output for the remainder of 2007 does that point all attention toward their inability to actually increase output even if they wanted to? After reading "Twilight in the Desert" the idea was that KSA could not afford to purposely hold back production if they were able because they need the oil revenue for their exploding population. My understanding is that they essentially need to meet or break their 2005 peak to prove that speculations on their peaking are premature.

My apologies if I appear as naive, but I honestly feel very ill equipped to adapt to a massive change in collective conscience and I may be part of that initial die off associated with a crash in supply at the present moment. This is something I wish to rectify ASAP!

Hello Zeronerve, Everyone at TOD is alarmed by the PO ramifications. There is no way to personally "fix" the problem. I kind of feel like a drop of water in a stream. You are carried along and there isn't a lot you can do. Still, every day I try to make my personal preparations more complete, try to read and absorb more about things, write editorials, do a little stockpiling, reduce debt, etc. Personally, Barbara and I have stockpiled 1 year of food, half in a freezer and half in the pantry. Our car is a four cylinder and paid for. Insulation has been added to the house. Besides my wife, who thinks I am a doomer, I haven't convinced anyone that there is even a problem. My relatives haven't done anything to prepare, either. So, tomorrow is another day. Maybe with a lot of little steps we can accomplish something.

Do you have a way to power the freezer if the grid goes down for a week?


A generator would do it with a high efficiency freezer. Diesel would be nice but gasoline would do.

Does he have one?


i have been appreciating the input from better informed readers to some simple questions. does anyone have particular long(er) range prognostic forecast synopses/discussions regarding the evolution of this year's atlantic/caribbean/GOM hurricane season? i have seen the reference to a la nina type circulation pattern which would tend to promote hurricane development. this pattern appears reasonable to describe weather in the western u.s. this year. but here we are in the middle of july and i don't think much tropical convection is developing. where should i look to see what may be going on, particularly with respect to large scale circulation?

Quote from the Daytona Beach News Journal this morning: 'NO LA NINA'
'The National Oceanic and Atmospheric Administration has predicted that La Nina - a cooling of ocean waters that generally brings a more active Atlantic hurricans season - will be absent for the next two months.'
'This doesn't necessarily mean a tame summer for tropical storms and hurricanes.
'Hurricane season 2005 was a textbook example of this. La Nina wasn't around, but the season managed to break records.'

If you get the Weather Channel try to catch the 'Tropical Outlook' at 10 minutes before each hour. Especially watch the cloud formations around the Lesser and Greater Antillies, Puerto Rico, Cuba and the Gulf. Look for wind shear from the west. Wind shear is a blessing. Shear will be evident if the tops of high cumulus (orange,yellow,red) are being smeared into (white) to the right of the high cumulus formations. High westerly winds aloft prevailed all last summer in these regions and we had no significant hurricane activity. The same winds are prevailing now. How long? Who knows? If you see that the shear has diminished then its time to start paying closer attention if you are in an area that is prone to hurricanes. When Andrew ran into significant shear everyone breathed a sigh of relief but it emerged from the shear and rapidly intensified. Hurricanes remain very unpredictable, regardless of what NOAA would have you believe.

I would point you to the Weather Underground:


Jeff Masters has a good blog there. June and July do not normally see much tropical cyclone formation. 2005 was a very unusual year.

This season look for the following:

La Nina seems to be neutral this year which tends to be associated with higher tropical cyclone formation.

Saharan Dust levels are elevevated despite the increase in rainfall in Northern Africa. Dust levels inhibit tropical cyclone formation.

Sea surface temps are higher than average this year which tend to help tropical cyclone formation.

A ridge of high pressure is expected to from off the east coast which will help create stearing patterns that will put the GOM and west coast of Florida at higher risk.

The CMC model is predicting a low to from from a wave in the Central Atlantic in 160 hours. The CMC hasn't been accurate this year and it would be unusual to see such a formation in July.

Links for you:

Model Analysis




Good site:


anyone here anything about the typhoon that (has) hit japan ?

Man-Yi resulted in lots of rain, some homes flooded, and 1 death I believe. For satellite pics and movies of the western pacific try here:


Over all still a quiet year in the western Pacific.

Jeff Masters blog is incredible I love reading it. I would say that anybody here who cares about tropical weather make it one of their stops.

#1 Item in On-line News List

Britney Buys a New Dog





I'll add this to my Sad and Happy Columns for the week:


Along the lines of "Idea of veggie oil burns bright," there's a company here that recycles used cooking oil into biodiesel called Blue Ridge Biofuels.

Blue Ridge Biofuels is an employee owned business that produces and distributes biodiesel for Asheville and Western North Carolina. We currently supply biodiesel for 6 publicly accessible biodiesel pumps in the greater Asheville region, deliver bulk on and off road biodiesel, provide BioHeat as a replacement to heating oil, and provide waste cooking oil removal services in western North Carolina. A portion of our distributed biodiesel is produced at our facility from area restaurants' waste fryer oil. We believe that offering biofuels education is a critical component to the success of biofuels and are committed to helping improve public awareness of biofuels options both locally and throughout the region.

Twilight posted this over at PO.com. It's an old one, but funny.

We Must Preserve The Earth's Dwindling Resources For My Five Children

As we move into the 21st century, it is our responsibility to think of the future of the earth—not for ourselves, but for those who will inherit what my husband and I leave behind when we're gone. If we do not join together and do what's best for this, our only planet, there may not be an environment left in which my five children, and their 25 children's 125 children, can grow up and raise large upper-middle-class families of their own.

Nothing less than the preservation of my descendents' lifestyle itself is at stake.

Imagine a world devoid of pristine wilderness for my progeny to explore on the weekends in the sport-utility-vehicles of the future, leaving my youngest son, Dylan, with nowhere to blow off steam on off-road adventures. Imagine a world in which my beautiful middle son, Connor, is denied his twice-daily half-hour hot showers because of water shortages. Picture what it would be like for my oldest boy Asher, preparing to start his first semester at Stanford, to have to go without basic amenities such as cable television, satellite radio, central air, or massage chairs, all because of the shortsighted squandering by his parents' generation of our non-renewable energy sources today.

I The Onion.

Hehe very funny, imagine having to grow your own food and getting the bus?
Did anyone see the article on the spoof about Chavez buying out Exxon? funny reading, I hope peak oil isn't peak humor too we are going to need a lot of it to get us through.

god ELP us all

Bill Hicks again, all my little miracles - thunk, thunk....

Haha. Unfortunately, it's way sicker than that. Where I live I know oodles of people who "do the recylcing thing," are on the board of "eco-friendly" businesses, vote for "green" stuff, and have a bunch of "eco" kids who do the above too. All are concerned about global warming, wars, and poverty. Their kids get married, invite 5 million people to their eco friendly weddings, and go on a barrio honeymoon to gawk at people. They in turn will have some more eco friendly kids who will do more eco things too.

On and on it goes. It's not so much the breeding that gets me down, it's the doing and breeding. It's the "helping" and "advising" and "fixing" and “pamphleteering” (I'll excuse electronic communication for now just to stay in the good books here!) to get "the message out." But I think the message is skewed towards having your cake and eating it too.

I receive groceries delivered by a company that specializes in organic produce. It’s convenient, there is little packaging, and most of it is locally produced. I also receive political propaganda that articulates what I’m getting at. Last week I received a shop politically green correct throwaway magazine. Amongst other asinine BS, an article was on how to take one less around the world vacation a year!

There was movement called sloth that started in Japan. I like the website because it hasn't been updated in 2 years.

For the record, I should point out that the "Twilight" at peakoil.com is not me - I've had this moniker considerably longer!

Whoa, you're not the same Twilight? I didn't know that!

Nope! I've never posted there - actually, I've only visited the site maybe twice, or I would have made note of it before. I get all the info and links I need on PO right here, and the rest of my surfing time is spent keeping up on the geo-political, economic, and climate change situations at other sites.

Mexican Crude Falling, Will Drop More

They warned that at the current pace of exploitation, if another vein like Cantarell does not appear, this country will only have oil to maintain between nine and 13 years at present usage levels.

I take this to mean that at this point exports will have dropped to zero and they will not have enough oil to meet domestic needs.

Ron Patterson

"Two warning beacons (Ghawar & Cantarell, 10% of world crude oil production until recently) burning brightly in the night sky, heralding the onset of Peak Oil."

I found the discussions last year about the 14 fields that have ever produced one mbpd or more (C+C) particularly interesting. Many people insisted that all 14 fields could be in permanent decline, and we could still increase our aggregate crude oil production. We know that three of the four that were recently producing one mbpd or more (Ghawar, Cantarell & Daqing) are watering out, and the Kuwaitis have strongly hinted that Burgan is watering out. And recently a Russian bank warned of rapidly rising water cuts in Russia.

Regarding Ghawar & Cantarell, assuming exported crude is about 85% of Total Liquids, these two fields probably used to account for close to 20% of exported crude oil worldwide.

And the "Iron Triangle" says: "Party On Dude!"

WT, thanks for your imput on my letter of R A G E to the media outlets of Maine. You're footnoted prominently at the end. I've edited it and gotten about half a dozen signatures to append at the end.

That's it! My work is done. I've kicked the Iron Triangle and broken my poor toe. If the letter is published, I'll supply a link.

In the meantime, I've just started a new job at an organic farm in town. I'm doing minimum-wage labor now in order to learn about large-scale organic farming. The people there are wonderful. My "new best friend," Betsy, who manages the fields, is also an old-time banjo player. I'm in my element. ELP, indeed.


In addition to my volunteer EMT work, haying and gardening here at home, and then soon preparing for my Fall semester at the U where I teach, I'm not going to be able to do much trolling here for awhile, much as I love to chip in my .01 cent (yes, I meant 1/10 of one cent).

I'll be reading though.


Over on the Net Export/Iron Triangle thread, I again posted my story about the Simmons/Kunstler Symposium, which was partially underwritten and attended by Boone Pickens, as an example how the local media pretty much ignored the Peak Oil story. The sole local coverage of the event was by the SMU student newspaper and the local PBS station.

Very good discussion by Jim Puplava in the third hour of his show. He is pushing his own version of ELP, with some good advice.

Westexas - if you are around.
I like your ELM, it makes sense, and the UK does make an interesting example. However there is one thing that I am not sure about and that is the question of double counting; the EIA predictions etc for future world demand are presumably for all countries, both producers and consumers. When you look at individual countries and apply the ELM surely that component of increasing demand from that particular producer is already factored into the global projection for increasing demand? It feels in some way as though each producer is being singled out, the ELM is applied and in some way a net worse effect is being claimed for the totality (if you get my drift)? Those global demand projections already include a component which is the net increase in demand from within given producers n'est pas?

Let's assume that the US were the sole source of world crude oil production. If that were the case, oil exports would have ceased around 1950, 20 years before world oil production peaked.

The EIA can project world demand to whatever level they want to. From the point of view of importers, there are two key factors: their domestic production and world net export capacity (and specifically what percentage of that net export capacity that they can obtain). One begins to suspect that net export capacity has been driving the whole Neocon move into the Persian Gulf. Whether we can stay is another matter.

My simple ELM showed how a 5% production decline rate can yield about a 30% annual decline rate in net exports--15% per year at first, then 45% per year.

The real life UK example showed how a 6.5% production decline rate yielded a 60% annual decline rate in net exports, from 2000 to 2005.

Memmel has been pretty quick to grasp the essentials of the problem, and he actually thinks that the ELM is too optimistic.

One critical short term point is that we are seeing a positive feedback loop in these exporting countries, where their cash flow from export sales will increase even as their exports decline.

The ELM is the ultimate "Black Swan" event, to use the phrase from the current book. I have compared a typical production decline to a commercial airliner gradually descending for landing. An export crash is more akin to a terrifying near-vertical dive into the ground.

We need to quickly start planning for a world with vastly lower crude oil and petroleum exports.


If Russian production starts declining at 10% per year, and if their consumption continues increasing at about a 6% rate, they would effectively be a net importer in about seven years--a net export decline rate of about 40% per year. Again, the decline would be "slower" at first, faster later.

You must not be a math instructor. You may have meant 1/10 of one cent but you wrote 1/100th of a cent. Regardless, happy educating.

Bingo, bud. Bingo.

For a while these fields were in decline and oil production was increasing until 2005 with peak monthly production (so far). 2006 saw a greater yearly average production than 2005. Q1 2007 was slightly lower in production than Q1 2006 after a huge OPEC cut. If one stares at production from the Caspian, West Africa, Bohai Bay, Brazil, Vietnam, Canada and so forth and does not look at all the declines like the North Sea, lower 48, Australia, Syria, Egypt, Argentina, Mexico, Malaysia, Indonesia, Ecuador, Gabon, Columbia, etc. then one might not get a good idea about what is going on.

UAE has especially bad reserve inflation. They might peak about 2010-2012 and instead of a decades long plateau, go into irreversible decline, yet they claimed close to 100 billion barrels for quota allocation purposes. In reality they most likely have no more than a quarter of that amount with standard recovery methods. Was there some sort of indoor ski area somewhere in the UAE? The party continues with higher oil prices.

According Hubbert curve analysis published on the ODAC site, once the decline curve forms 3-6% annual global declines might be expected.

2006 saw a greater yearly average production than 2005. Q1 2007 was slightly lower in production than Q1 2006 after a huge OPEC cut.

There may have been a tiny amount of "cut" from OPEC but most of it was decline pure and simple. Look at who is doing the most cutting, Saudi Arabia who is down one million barrels per day from the summer of 2005. They were "having trouble finding buyers" ;-) for over a year before they decided to find a legitimate excuse for their falling production and calling it an OPEC cut.

And you are looking at the IEA total liquids in your stats above. If you look at the EIA, Crude + Condensate, you get the real story.

Average crude + condensate extraction

2005 73,791,000 barrels per day
2006 73,546,000 barrels per day
2007 73,302,000 barrels per day (so far).

Ron Patterson

I did not have IEA, saw a bar chart that might have been EIA or other originated.

Thanks for the correction.

Did you have 2Q 2007 data yet?

No, the EIA is always two months behind in their data. Lately they have been almost two and one half months behind. At any rate the June data will not be here until early September.

Ron Patterson


In my personal opinion, Robelius thesis is absolutely deadly to anyone who believes we can significantly increase global production without finding more giant and super giant oil fields. The critical point is that there are about 50,000 oil fields in the world today but only 507 of them produce 60% of the oil and have 65% of the reserves. When those 507 begin to decline, no human industry can run fast enough to replace those fossil fuels. We simply must switch to other energy forms (nuclear, solar, wind, etc.). So anyone who makes the claim that we can increase production by a large amount needs to address the numbers from Robelius thesis. Failure to address those numbers is tantamount to an admission that they cannot address those numbers.

Ghawar Is Dying as we slide Into the Grey Zone
"The greatest shortcoming of the human race is our inability to understand the exponential function.

I thought we imported about 14% of our crude from Mexico? Dont those darn Mexicans know that we need that oil to keep our economy going so that the 'illegal immigrants' in the good ol US of A can continue sending money back to Mexico? Where is President Polk when we need him? Those uppity Mexicans should stop driving VW Bugs, take more siestas and go back to riding burrows! Unlike Merkens, they dont have anywhere important to go, like Dizzy World or Lost Wages!

Once again TOD reflects narrow-mindedness and a lack of imagination when it comes to oil. There are billions of untouched galaxies with zillions of planets, all with unexploited resources ripe for plucking. And probably some of those planets even have hot space babes with low self-esteem.

Anyhow all we have to do is fold space and step over to a new virgin world and have at it.

Mr Yergin, your wormhole is ready.

I'm going where the moons are made of methane
Past thermodynamic's second law
Where the babes are raised without a brain
And you don't have to meet their pa.

Bob Ebersole

That last line is real important, since I'm probably older than their pa.

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

Don't tell Cheney: Titan is flowing with hydrocarbons!

Oh, and once we're in the neighborhood: the gas giants are mostly hydrogen, so all we need to do to jumpstart our hydrogen economy is establish some robotic factories to scoop it up and drop barrels downsystem. Piece o' cake.

Actually, do tell Cheney. It would be cool to get this funded.

Apologies for the length, but it seems appropriate to point out just where the subprime racket is starting to hit: municipal funds. Property taxes are a huge part of city tax bases, used for road building etc. They are linked to home values. As these go down, or homes are even abandoned, who'll pay for the roads? The sewage systems, the water, schools?

"Each abandoned house can cost a municipality up to US$20,000 in unpaid taxes and utility bills"

Subprime woes hit U.S. city tax rolls

These days, the best Maria Bautista can do is offer her sympathies.

Ms. Bautista is the branch manager of the Maryland office of Premier Mortgage Funding Inc., a Clearwater, Fla.-based mortgage company with 500 branches specializing in subprime mortgages.

She is seeing a steady stream of new homeowners, who with the collapse of the subprime mortgage market in the United States, spurred largely by sinking home prices in many areas including suburban Washington, are now facing higher financing charges -- and, in increasing numbers, foreclosures -- as their mortgages come due.

"Many, especially in the Latino community, have adjustable rate mortgages coming due," Ms. Bautista says at her office in the heart of the Latino community of Wheaton, Md., where she supervises 12 brokers.

"I just don't know how to help them."

While much of the focus of the collapsing subprime market has been on mortgage lenders and investors, such as hedge funds, the fallout from tightening lending rules and dropping house prices is starting to spread into unexpected areas.

Some communities are finding things are worse than they had expected. In Manassas, Va., just southwest of Washington, the city council had figured there would be a modest 2.5% drop in residential assessments for fiscal 2009. But that has proved to be way off even before the fiscal year starts. Housing values are already off 6% and there are 20% more homes for sale now than there was this time last year.
So dire is the problem that Martin O'Malley, Maryland's governor, has announced a US$111-million loan program to try to help home owners facing foreclosure.

The problem is not limited to the Washington area alone.

For example, Delaware recorded 2,962 mortgage foreclosure filings in fiscal year 2007, which ended June 30, up 20% from the state's previous record in 2003.

"Most of these stories are very sad, whether it's a medical bill or divorce or just, 'My God, what did we do? We can't afford this,' " says Loretta Forsythe-Walsh, chief deputy of the New Castle County, Md., Sheriff's Office, which sells foreclosed properties at sheriff's sales every second Tuesday of the month.

Not only are municipal tax bases eroding, there are other costs.

Each abandoned house can cost a municipality up to US$20,000 in unpaid taxes and utility bills and for upkeep and maintaining essential services, according to a report by the Joint Economic Committee of the U.S. Senate.

Last February, when the subprime issue first hit the MSM, the ABX index had "fallen off a cliff." You can see the cliff on the graph below at February 23. Now compare that with what happened last week. We are going to be hearing a lot more about this. Pension funds are loaded with this stuff.

ABX-HE-AA 07-1


It is now cloaked by an SEP field and is therefore invisible.

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

So far, on the TMA list we have:

GOM - Gulf of Mexico, which the rest of the world still spells out.
NOAA - not International oceanic etc.
CSP - ???
WMD - I guess you would have had to be RVW [Rip Van Winkle]
AC - was alternating current when I was a boy
CMC - ???
BS - no comment
ELP - 'elp me please
EMT - empty???
SMU - Some Mother University ??
PBS - I guess if you have a three figure intelligence quotient and a television...
ODAC - ???
IEA - Sorta like OPEC and OECD, I guess you oughta...
OPEC - see above
TOD - means death in German last I looked.

So maybe we need a PDF download dictionary of common PO acronyms. ASAP. IMHO. AFAIK there isn't one. ROFLHMD. {Holding my dentures}

I like the idea of an index of acronyms, but would much prefer it in a plain HTML or text file.

Every time I pull in a .PDF, it seems to take forever for it to load, then versioning or DRM issues often cause problems.

We can always open a link in another window using standard browser controls, then use the "find text" function to find the acronym.

The main problem with acronyms is that they could soon grow to pandemic numbers as many people, including me, coin their own.

I still use a dialup and K-Meleon is my browser of choice.

I grew up hearing that CMC means 'Continually Maximized Cussedness'

Here's one for your folks that need something to rant about (BG).

Hot-and-heavy sculpture gets artists warmed up
Enormous flame-breathing creations at Fire Arts Festival are prelude to Burning Man

In the shadow of the West Oakland BART Station, a 168-foot-long serpent breathed fire, flames rocketed out of swinging pendulums and Silicon Valley engineer Lucy Hosking drove a fire-breathing pipe organ, "Satan's Calliope."

More than 400 fire sculptors, dancers and musicians gathered for the seventh annual Fire Arts Festival, a fundraiser benefiting the industrial arts program at the Crucible. Many of artists who showcase at the festival are also test-firing the sculptures they plan to bring to the annual Burning Man festival in the Nevada desert later this summer.

Full articlew at the url below:


With any luck this group of fire artists will encounter the 'walking dude' from Stephen Kings Novel, 'The Stand.'

I have stood next to this remarkable creation while it was running. It was a stimulating experience.

It's fully controllable with lots of actuators and little and big flamethrowers. It gleams and moves and it barfs huge warm balls of burnt propane in the air.

Note this sentence:
"We're asking the question -- what will happen to our convenient society of cars and power products when all the oil is gone?" Cusolito said.

35,000 people are about to think and act that message, for a week, in the desert. Last year I used less water for a week than I usually do in a day. I've thought about renewable energy and water every day since.

Did it take a lot of work and fuel to get there? Sure did.

But I drive < 1500 miles a year so it seems a fair trade for 100 mind-numbing commutes.

I would like to take this space for the announcement of a new Political movement in the USA. It is green, Christian, and totally grass roots in nature.


Free Right Now.

The basic Ideal of this party is that, Everything worth while is Free Right Now. So should your government elected Officers be in their dealings with You the Free Peoples of The free Nation of The United States of America. Long times ago the elected men of the Congress or other offices were working class farmers, land holders, men with thinking caps fully on their heads.

Why do we now have whole families that have done nothing but held political offices? Why do we have $5000 dollar fund raising dinners? Why because people have to use the money to get advertizing and such. My question is still why is that? The F.R.N campaign will accept no funds from anyone for the purpose of running for higher office.

I, Charles Edward Owens Jr. Hereby am letting everyone of you know that Offically on July 19th I will be running for President of the United States of America In the General Elections as a Write In Canidate.

I have informed friends and family of my intentions and as of now all my public writings are free to the public and found at http://www.dan-ur.blogspot.com

And My e.mail address is ceojr1963@yahoo.com

The world needs to get the money out to the people and places that it is needed and not in politicans pockets.

If I were elected, though I'd guess it is a slim chance of it, I would not take a salary, and if forced to sign the checks, I would turn it a round to pay any bills I have and then donate it to my feeding and housing the poor, and homeless of our nation.

Currently I am helping the HUSH movement here in Little Rock Ark, Homeless United to Save the Homeless. Email can be sent to hush_the_homeless@yahoo.com

Because that is what the politicans have been trying to do for years now, hush the issues and sweep them under the rug.

I'll post more as I can later in the Drumbeats.

I also suppurt more sustainable Energy uses, more use of Natural resources, more recycling and more use of Green thinking to reduce the need for the energy signature in the first place.

This New Moon, 14th July in the year of Our Lord 2007 Your Brother in Christ, Charles.

Go get 'em, Charles!

Your agnostic advocate,

Thank You, You of course are free to think and feel however you want. Even My God would say so. It is others that try limit us with their thinking.

I am still looking into what I have to have to even be considered a write in candidate on some state's ballots. 50 states 65 different rules and some even can't decide till after the election.

I doubt I'd be considered much more than the humorous non-vote for some people, especially since it is the electoral college that votes in the guy in the first place. But I am gathering e.mail addresses to add to my blogspot roles so when I make a new addition I can tell all these folks too.

Helping the Hopeless and poorer folks in my area allows me to say I spend more public service time than most, though I don't flaunt myself as a do gooder or something. I just give my stories and poems away for free. I am classed as disabled. I have even gone by and filled out the paper work for that. 2005 saw me with damage to my lower legs due to massive blood clots that even showed up in my arms, and the after affects of several strokes in later years. In most Doctor's books I am lucky, or a miracle to be alive.

Heck I even saved a dying cat yesterday At least I hope I saved her, she was on her last legs and I don't like to see things die If I can help it.

Anyway thanks for the help. pass it on.

You know things are getting bad when.........

Three Jehovas Witness turned up at our door Saturday morning with a pitch for our souls that started with Peak Oil. Did we know about it they wanted to know, apparently it had all been fortold in the Bible, it all portended disaster (end of days yada yada yada).

Its a bit of a witches brew when the folk rubbing their hands with glee at the prospect of PO are the religious nutcases and the extreme right (the BNP in the UK for instance).

the bible told that one company to drill in israel. as far as i know the bible has not yet proved to be geologically accurate.

and the astronaut niel armstrong didnt have much luck finding noah's arc using the bible or satalite imaging.

there seems to be a fundamental incompatability between what the bible says (or is interpreted to say) and scientific data and "theories". but maybe someday it will be proven that the earth is in fact the center of the universe.

elwood delmore
Of course the earth is the center of the universe. If not, show me just one person who has actually seen it from any other perspective!
Bob Ebersole

Those who landed on the moon saw the universe from a non-earth-centered point of view. I think this expansion of perspective is a major justification for going back to the moon . . . with ethanol-fueled rockets, like the Germans used during World War II?

Also, the view from space probes is not earth-centered.

maybe someday it will be proven that the earth is in fact the center of the universe.

This is actually a tricky question. If you believe the big bang, the universe has no center and no edge. According to the big bang, no matter where you are in the universe, it will still look like you are at the "center" based on the red shift. If the universe does have a center (meaning the big bang is wrong), the earth really is at or near that center, because the red shift that we see is the same in every direction around us.

Of course, another way of saying it is that if the Big Bang happened, EVERYplace is the center of the universe, since it's space itself that's expanding.

You could put up a little monument in your backyard and sell tickets: "Original Location of the Big Bang".

I'm just saying...

While out on a walking tour of the region near here called Park Hill I veiwed several houses that had that "JUST Like eden must have been" kind of atmosphere and even one that had Kiwi's growing near a pool that had been covered over and the sheet had fallen in and there were minnows growing in the pool. Where did the fish come from is what I want to know? the swimming pool is a good deep one, but the kiwis are in an over grown back yard. Which is odd the house had a car in the carport, but the inside was going through revisions or something.

5,000 square feet of empty house with wild kiwis and other vines growing in the back yard. Wasted space, or wasted mental space.

Arkansas with this city's 7.5 inches of rain and lcoudy days in the middle of july the hottest and dries month of the year is starting to make me think of the tropics.

Eat the figs now they are much tastier when not seedy and juicy off ripe, eat right out of the hand.

sooner or later climate change is going to make Centeral Arkansas like the tropical EDEN.


Hello TODers,

Pakistan's top judge to lead anti-Musharraf rally

Imagine the US Supreme Court doing this against a President.

ISLAMABAD, Pakistan -- A suicide bomber attacked a military convoy near the Afghan border on Saturday, killing at least 24 Pakistani soldiers as thousands of troops deployed to thwart a call for an anti-government holy war.

Twenty-nine troops were also wounded in the attack, one of the deadliest suicide bombings in Pakistan in recent months, said Maj. Gen. Waheed Arshad. Elsewhere in the border region, Islamic militants detonated a roadside bomb and fired rockets on a military base.

I am getting pretty worried about Pakistan's nukes. Will Pres. Musharraf invite us in early to safely remove these weapons, or could we see a US Draft so that we could later invade to get control of these weapons? Or will the topdogs just nuke Pakistan? I think the MSM really needs to raise world awareness and discussion of what could happen in Pakistan. My feeble two cents.

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

I would be very surprised if there were not extensive plans to deal with Paki nukes,that might involve india,and local us troops,and a few tac nukes "just to be sure"

Hello Snuffy,

Thxs for responding. The sad thing is that the army-jihadi faceoff is counterproductive to helping the flood victims; both sides should call a truce to give help where help is needed:

Aid worker shocked by devastation in cyclone-hit Pakistan

As far as the Pakistani nukes: I hope they have already been secretly withdrawn from the country. We could have a US Boomer sub on station under the Indian Ocean that would keep the Indians from getting any wild ideas about nuking Pakistan.

We could have a US Boomer sub on station under the Indian Ocean that would keep the Indians from getting any wild ideas about nuking Pakistan.

And why would India want to nuke Pakistan? India has a "no first strike" policy. The US is the only nuclear power in the world that threatens a non-nuclear state with a first strike.

What non-nuclear country has the U.S. threatened to attack with nuclear weapons? Can you provide a reference quoting a U.S. government official?

What non-nuclear country has the U.S. threatened to attack with nuclear weapons?

Islamic Republic of Iran.

Can you provide a reference quoting a U.S. government official?

Bush and Cheney have been asked several times whether they will use nuclear weapons against Iran. Their answer is always the same: "All options are on the table".
By the way, this is also the position of all the leading presidential candidates from both the political parties. Click on this link:

Here is an excerpt:

On April 18, the day after the appearance of Seymour Hersh's New Yorker report on the administration's preparations for a nuclear war against Iran, President Bush held a news conference. He was asked,

"Sir, when you talk about Iran, and you talk about how you have diplomatic efforts, you also say all options are on the table. Does that include the possibility of a nuclear strike? Is that something that your administration will plan for?"

He replied,

"All options are on the table."

The President never actually said the forbidden words "nuclear war," but he appeared to tacitly acknowledge the preparations — without further discussion.

Not quite all the candidates. Congressman Ron Paul was suitably appalled at the idiocy of the other nine Republicans saying they'd consider starting an unprovoked nuclear war with Iran. Later in that third Republican debate he even went so far as to call the acceptance of preemptive war as the greatest moral crisis facing the US. Kind of nice to see the only obstetrician in the group say that when the other nine yammered about abortion.

"Let us wrestle with the ineffable and see if we may not, in fact, eff it after all."
-Dirk Gently, character of the late great Douglas Adams.

Not quite all the candidates.

I agree. That is why I said "all the leading presidential candidates" in my response. Ron Paul is not a leading candidate in the sense that he is unlikely to get the nomination.

Incidents of Nuclear Blackmail (note - not only American)

* 1946 - Truman threatens Soviets regarding Northern Iran.
* 1946 - Truman sends SAC bombers to intimidate Yugoslavia following the downing of U.S. aircraft over Yugoslavia.
* 1948 - Truman threatens Soviets in response to Berlin blockade.
* 1950 - Truman threatens Chinese when U.S. Marines were surrounded at Chosin Reservoir in Korea.
* 1951 - Truman approves military request to attack Manchuria with nuclear
weapons if significant numbers of new Chinese Forces join the war.
* 1953 - Eisenhower threatens China to force an end to Korean War on terms
acceptable to U.S.
* 1954 - Eisenhower’s Secretary of State Dulles offers French three tactical nuclear weapons to break the siege at Dienbienphu, Vietnam. Supported by
Nixon's public trial balloons.
* 1954 - Eisenhower used nuclear armed SAC bombers to reinforce CIA-backed coup in Guatemala.
* 1956 - Bulganin threatens London and Paris with nuclear attacks, demanding withdrawal following their invasion of Egypt.
* 1956 - Eisenhower counter by threatening the U.S.S.R. while also demanding British and French retreat from Egypt.
* 1958 - Eisenhower orders Joint Chiefs of Staff to prepare to use nuclear weapons against Iraq, if necessary to prevent extension of revolution into Kuwait.
* 1958 - Eisenhower orders Joint Chiefs of Staff to prepare to use nuclear weapons against China if they invade the island of Quemoy.
* 1961 - Kennedy threatens Soviets during Berlin Crisis.
* 1962 - Cuban Missile Crisis
* 1967 - Johnson threatens Soviets during Middle East War.
* 1967 - Johnson's public threats against Vietnam are linked to possible use of nuclear weapons to break siege at Khe Shan.
* 1969 - Brezhnev threatens China during border war.
* 1969 - Nixon’s “November Ultimatum” against Vietnam.
* 1970 - Nixon signals U.S. preparations to fight nuclear war during
Black September War in Jordan.
* 1973 - Israeli Government threatens use of nuclear weapons during the “October War”.
* 1973 - Kissinger threatens Soviet Union during the last hours of the "October War" in the Middle East.
* 1973 - Nixon pledges to South Vietnamese President Thieu that he will respond with nuclear attacks or the bombing of North Vietnam’s dikes if it
violated the provisions of the Paris Peace Accords
* 1975 - Sec. of Defense Schlesinger threatens North Korea with nuclear retaliation should it attack south Korea in the wake of the U.S. defeat in Vietnam.
* 1980 - Carter Doctrine announced.
* 1981 - Reagan reaffirms the Carter Doctrine.
* 1982 - British Prime Minister Margaret Thatcher threatens to eliminate Buenos Aires during the Falklands’ War.
* 1990 - Pakistan threatens India during confrontation over Kashmir.
* 1990-91 - Bush threatens Iraq during the "Gulf War."
* 1993 - Clinton threatens North Korea.
* 1994 - Clinton’s confrontation with North Korea
* 1996 - China threatens “Los Angeles” during confrontation over Taiwan
* 1996 - Clinton threatens Libya with nuclear attack to prevent completion of
underground chemical weapons production complex.
* 1998 - Clinton threatens Iraq with nuclear attack
* 1999 - India & Pakistan threaten and prepare nuclear threats during the Kargil War.
* 2001 - U.S. forces placed on a DEFCON alert in the immediate aftermath of the September 11 terrorist attacks.
* 2001 - Secretary of Defense Rumsfeld refuses to rule out using tactical nuclear weapons against Afghan caves possibly sheltering Osama Bin Laden.
* 2002 - Bush communicates an implied threat to counter any Iraqi use of chemical or biological weapons with a nuclear attack.
* 2003 - U.S. mobilization and implicit nuclear threats against North Korea
* 2006 - French Prime Minister Chirac threatens first strike nuclear attacks against nations that practice terrorism against France.
* 2006 - Implicit U.S. threats to bomb Iran’s nuclear infrastructure with “bunker-buster” atomic bombs


you left out regans "bombing begins in five minutes"

Bob, have you forgotten that India is negotiating with Pakistan and Iran for a cross Pakistan gas pipeline that India desperately needs? A war with Pakistan is not in Indias long or short term interests.

As far as removing the nukes from Pakistan, what gives you the idea that the US has the means or will to invade Pakistan to 'remove the nukes?' Any such move on the part of the US might provoke an all horizon launch by Pakistan. Then the dance would really begin. BTW, Dr. A.Q. Khan, father of the Pakistani bomb and proliferator par excellence has been released from his very loose house arrest. Khan is a revered national hero in Pakistan with streets and buildings named for him. Kahns network of nuclear proliferation was never completely uncovered, the US was never allowed to interogate him. Why was he released from house arrest?

Hello River,

No, I haven't forgoten the proposed pipeline, but I also haven't forgoten the long simmering India-Pakistan disputes:


This could very easily spiral out of control if both Muslim and Hindu extremists each have nuke weaponry. Similar to giving two seven year old boys real, fully loaded guns, then telling them to go outside and play cowboy. Yikes!

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

This could very easily spiral out of control if both Muslim and Hindu extremists each have nuke weaponry. Similar to giving two seven year old boys real, fully loaded guns, then telling them to go outside and play cowboy.

I think there is a tendency in the western world to assume that people in less developed countries are immature, unstable, irrational and child like; that unlike sophisticated, modern, westerners, they can't be trusted to be mature and responsible. Therefore, unlike the westerners they can't be trusted with nukes.

I think you should stop living in a fantasy land. India is a mature, secular democracy with a Sikh Prime Minister and a Muslim President. The leader of the ruling party is a Christian woman. So the "Hindu extremists" in India certainly don't have their trigger finger on any nukes. And unlike in the US, where an uneducated, lying, moron became the President by stealing an election, Prime Minister Manmohan Singh is a graduate of London School of Economics and was elected by the people of India. He is very popular in that country since he was the architect of India's economic reforms when we was the finance minister during the nineties. The President of India (Mr. Abdul Kalam) is a real rocket scientist (he ran the space and missile program before becoming the President).

If nukes can be safe in the hands of a womanizer like JFK, a paranoid Lyndon Johnson, a crooked Nixon, a senile old fart like Reagan and a thinly educated alcoholic playboy like Bush, they are certainly safe in the hands of Prime Minister Manmohan Singh or whoever the Indian people elect.

If Pakistan has become a dangerous failed state today, it is because of the policies of the Reagan administration during the eighties. Al Qaida as we know it today is a creation of the Reagan administration. Have you forgotten that not so long ago, the US was the biggest sponsor of Jihad in the world?

Bob, Juan Cole of the blog 'Informed Comment' now has a new blog entitled 'Informed Comment Global Affairs.' I have linked to todays essay regarding the history of the Pakistan/Afganistan area and the tribal view of where the Afgan border should be. Interesting bit of history and take on Bin Ladens point of view. Poppy production, etc...


Today I am in Istanbul in a hotel overlooking the Sea of Marmora. I am here for -- of all things -- a conference on the Durand Line. Of course it is about much more than the Line itself, demarcated by Sir Henry Mortimer Durand in 1893 as the limit of the dominion of the Amir of Afghanistan.

Today this line through a mountainous, arid, sparsely populated area is regarded by Pakistan, and most of the world, as the international border with Afghanistan, but Afghanistan has never formally recognized it as such. Above all, the people living around the line have never recognized it as a border. They were there before these states. They wonder who gave Durand or anyone in London, Kabul, Delhi, or Islamabad the right to divide them?
And as the itinerary of the containers shows, that region is no longer the isolated backwater it remains in the National Geographic mind. While in the days of Abdul Rahman Khan only British India was permitted a legation in Kabul, today the capital of the Mughal Emperor Babur is a major outpost of the UN, NATO, the US Central Command, and the European Union, with enormous embassies of every major country under construction. The people whom Amir Abdul Rahman Khan informed about his rule with an illustrated map are now more likely to have traveled abroad than Americans, if not usually as tourists, and listen to far more international news in several languages.

Their country, which used to rely on subsistence farming, has become a commercial single-crop economy. Opium poppy -- like sugar cane in Cuba, rubber in Liberia, or tea in Sri Lanka -- encroaches further every year on land used for subsistence farming and traditional horticulture. Traffickers and traders from all major markets reserve their share of the Afghan product through futures markets. Every family includes migrants in Karachi, Iran, or the states of the Persian Gulf. The remittances sent by these workers finance many new houses and shops, while the workers, separated for years at a time from family, tribe, and village, seek refuge and meaning in mosques frequented by global preachers. Cash, once rare, reaches the remotest villages through this global trade and the omnipresent hawala system, which links Afghans to global electronic banking networks through mobile phones and itinerant traders.

re: "Hot Fuel" (linked above) - I just scanned the thread and I don't see any comments on this. I mentioned the other day that I thought it was all bull. So I went to the new website. My opinion hasn't changed...

OK, they mention in the "myths and facts" section that the gas will retain the temperature that it was at when it was pumped into the underground tank. There won't be enough time for it to cool due to the underground insulation effect. Seems logical. But then they go on to say that, for a 25 gallon fillup, you "lose" a quart at 75 degrees and a half-gallon at 90 degrees. Still only a buck-and-a-half on a $75 purchase, boo-hoo, but wait! Why would the gas underground have heated to 90 degrees?? It certainly wasn't that hot when the megatanker truck pumped it in there, a truckload sitting in the sun for a couple of hours shouldn't heat up that much, should it??

I still say it's simple - measure the f*ckin' temperature of the gasoline on a cold day and a hot day. Don't any of these geniuses have thermometers?? But the truth would give some people one less thing to bitch about I guess...

Hello TODers,

Any reasonable person understands that friendly fire accidents unfortunately occur. The military should have been totally upfront with Pat Tillman's sad demise, IMO, no big deal, no coverup. It would have been fair to the Tillman family and the public at large, instead of the circus we have now:

White House Invokes Executive Priv. In Tillman Investigation
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Stan Goff wrote the best stuff right when it happened.
www.fromthewilderness.com of course had some of the best coverage.

Start here if you want some good coverage.

Apologies is this has been posted before, but this is quite a story:


JEFFREY LEE is not interested in the soaring price of uranium, which could make him one of the world's richest men.

"This is my country. Look, it's beautiful and I fear somebody will disturb it," he says, waving his arm across a view of rocky land surrounded by Kakadu National Park, where the French energy giant Areva wants to extract 14,000 tonnes of uranium worth more than $5 billion.

Mr Lee, the shy 36-year-old sole member of the Djok clan and the senior custodian of the Koongarra uranium deposit, has decided never to allow the ecologically sensitive land to be mined.

RE: Exxon's $1 Trillion Hurdle: As Oil Reserves Dwindle, Giants Find That Size Can Often Be a Liability

Leanan, wirh all respect, posting articles behind paywalls doesn't look very useful.

Although I would generally agree if the site in question was the Podunk Village Times and , the Wall Street Journal (WSJ) is one of the most influential (and best) newspapers in the world. Over a million people pay the remarkably low sum of $8 / month for full access to the site, including the past 90 days of articles. (Incidentally--more people subscribe to the WSJ Online than read all but three newspapers in the US: the WSJ itself, the NY Times, and the USA Today.)

Even more importantly, the WSJ also has had some excellent (and balanced) articles on many of the energy issues hotly debated right here on the Oil Drum. As a leading (and influential) member of the MSM, it would be wise for those of us who do have access to the WSJ to keep a close eye on its energy-related articles.

However, I do understand the frustration of clicking on an interesting story only to be stymied by the request to sign up for a paid subscription. In order to make things easier for those who don't choose to subscribe, perhaps articles which appear being a paywall could be explicitly tagged in some way so that the non-subscribers don't waste their time?

This happens from time to time. When Leanan reads them they are free to access. Sometimes after she posts them to the drumbbeat they get moved behind a paywall.

Its hardly her fault.

The reason The WSJ is the best newspaper in the world (aside from their--could be argued, neofascist op-ed section) is simply because when one is "doing business" you simply have to have some clue what is really going on in the world... The rest of the media, TV and print, really don't compare to the WSJ coverage (along with other slivers of the business media). To make up the their decent coverage, yes, they also have a ton of fawning, but sifting through it is easy. However, Rupert Murdoch was (and I guess still is?) trying to buy them out and put them under his "baby" News Corp. WSJ does have the de facto web subscription model in "print" journalism, as is spelled out above... There's a lot of repulsive stuff, but a lot of gems too, and you really get a sense of the business zeitgeist reading it. I let my subscription lapse recently, I feel I'm missing something lately... I think I'm going to renew soon, at least read it until Murdoch stains it with his dirty paws.

An great article by one of our greatest living war correspondents and thinkers...

Robert Fisk: TE Lawrence had it right about Iraq
'Rebellions can be made by 2 per cent active and 98 per cent passively sympathetic'
Published: 14 July 2007
Back in 1929, Lawrence of Arabia wrote the entry for "Guerrilla" in the 14th edition of the Encyclopaedia Britannica. It is a chilling read - and here I thank one of my favourite readers, Peter Metcalfe of Stevenage, for sending me TE's remarkable article - because it contains so ghastly a message to the American armies in Iraq.

Writing of the Arab resistance to Turkish occupation in the 1914-18 war, he asks of the insurgents (in Iraq and elsewhere): "... suppose they were an influence, a thing invulnerable, intangible, without front or back, drifting about like a gas? Armies were like plants, immobile as a whole, firm-rooted, nourished through long stems to the head. The Arabs might be a vapour..."

How typical of Lawrence to use the horror of gas warfare as a metaphor for insurgency. To control the land they occupied, he continued, the Turks "would have need of a fortified post every four square miles, and a post could not be less than 20 men. The Turks would need 600,000 men to meet the combined ill wills of all the local Arab people. They had 100,000 men available."

Now who does that remind you of? The "fortified post every four square miles" is the ghostly future echo of George W Bush's absurd "surge". The Americans need 600,000 men to meet the combined ill will of the Iraqi people, and they have only 150,000 available. Donald Rumsfeld, the architect of "war lite" is responsible for that. Yet still these rascals get away with it.
Oh, how we miss Lawrence. "The printing press is the greatest weapon in the armoury of the modern (guerrilla) commander," he wrote 78 years ago, accurately predicting al-Qa'ida's modern-day use of the internet. For insurgents, "battles were a mistake ... Napoleon had spoken in angry reaction against the excessive finesse of the 18th century, when men almost forgot that war gave licence to murder".

True, the First World War Arab Revolt was not identical to today's Iraqi insurgency. In 1917, the Turks had manpower but insufficient weapons. Today the Americans have the weapons but insufficient men. But listen to Lawrence again.

"Rebellion must have an unassailable base ...

In the minds of men converted to its creed. It must have a sophisticated alien enemy, in the form of a disciplined army of occupation too small to fulfil the doctrine of acreage: too few to adjust number to space, in order to dominate the whole area effectively from fortified posts.

"It must have a friendly population, not actively friendly, but sympathetic to the point of not betraying rebel movements to the enemy. Rebellions can be made by 2 per cent active in a striking force, and 98 per cent passively sympathetic ... Granted mobility, security ... time, and doctrine ... victory will rest with the insurgents, for the algebraical factors are in the end decisive, and against them perfections of means and spirit struggle quite in vain."

Has the US General David Petraeus read this? Has Bush? Have any of the tired American columnists whose anti-Arab bias is wobbling close to racism, bothered to study this wisdom? I remember how Daniel Pipes - one of the great illusionists of modern American journalism - announced in the summer of 2003 that what the Iraqis needed was (no smirking here, please), a "democratically minded strongman".
They had already had one, of course, our old chum Saddam Hussein, whom we did indeed call a "strongman" when he was our friend and when he was busy using our gas against Iran. And I do wonder whether Bush - defeated, as he is, in Iraq - may not soon sanction an Iraqi military coup d'état to overthrow the ridiculous Maliki "Green Zone" government in Baghdad. Well, as one of my favourite expressions goes, we'll see.

During the postwar uprising against the British, where the Royal Air Force was the primary combat arm due to a fear of casualties (sound familiar?), Lawrence also made the cynical and devastatingly accurate comment that aerial bombing was at best a patchy and unreliable way of killing innocent women and children that primarily served only to make the men angry, and if the British were going to insist on using bombers to fight they should simply load them with nerve gas and be done with it instead of continuing to commit atrocities piecemeal. Paraphrased from memory, but only lightly, I swear.

Those who can remember history are condemned to watch it be repeated by everyone else.

"Let us wrestle with the ineffable and see if we may not, in fact, eff it after all."
-Dirk Gently, character of the late great Douglas Adams.

... and with 20/20 hindsight it is easy to see that the generals "fought the last war".

They probably thought the winning weapon would be the cruise missile (as against Milosevic) - instead it looks like the IED.

The winning vehicle - the tank -(Desert Storm) - instead the suicide car bomb.

Hello River,

Sounds about like the American Revolutionary War: small % of population that actually fought, but had the support of the public.

Throughout the war, the British were able to use their naval superiority to capture and occupy coastal cities, but control of the countryside (where 90% of the population lived) largely eluded them.

When the war began, the Americans did not have a professional army or navy. Each colony provided for its own defenses through the use of local militia. Militiamen were lightly armed, slightly trained, and usually did not have uniforms. Their units served for only a few weeks or months at a time, were reluctant to go very far from home, and were thus generally unavailable for extended operations.

Militia lacked the training and discipline of regular soldiers but were more numerous and could overwhelm regular troops as at the battles of Concord, Bennington and Saratoga, and the siege of Boston. Both sides used partisan warfare but the Americans were particularly effective at suppressing Loyalist activity when British regulars were not in the area.[2]

Armies were small by European standards of the era; the greatest number of men that Washington personally commanded in the field at any one time was fewer than 17,000. This could be attributed to tactical preferences, but it also could be because of lack of powder on the American side. [3]

In addition, Britain had significant military disadvantages. Distance was a major problem: most troops and supplies had to be shipped across the Atlantic Ocean. The British usually had logistical problems whenever they operated away from port cities, while the Americans had local sources of manpower and food and were more familiar with (and acclimated to) the territory.

Suppressing a rebellion in America also posed other problems. Since the colonies covered a large area and had not been united before the war, there was no central area of strategic importance. In Europe, the capture of a capital often meant the end of a war; in America, when the British seized cities such as New York and Philadelphia, the war continued unabated. Furthermore, the large size of the colonies meant that the British lacked the manpower to control them by force. Once any area had been occupied, troops had to be kept there or the Revolutionaries would regain control, and these troops were thus unavailable for further offensive operations. The British had sufficient troops to defeat the Americans on the battlefield but not enough to simultaneously occupy the colonies.
As they say: History may not repeat itself, but it sure can rhyme. The entire Middle East and the 'Stans maybe seen as the early American frontier. Then add FFs & nukes to the recipe, stir, then bring to a full boil. Let's hope the pressure cooker can handle the high pressure. King George Bush is not my idea of an accomplished chef.

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

Bob, to be totally honest, the Brits had bigger fish to fry than the US Colonies. They were making a fortune in India, the 'crown jewel' of the empire, and were not about to lose India because of excessive commitments to a war in the US. What were they getting from the US? Tobacco, virgin pine for ships spars and masts, a little tax revenue from sale of Brit finished goods and tea to US, some cotton but nothing compared to Indian production, and little else except heartburn. The Colonies fought a prolonged insurgency that made the price for ownership for the Brits higher than they were willing to pay. The same is happening in Iraq today. At some point the US fiat currency will fail to purchase the needed manpower and materials to continue the war in Iraq and the war will come to a halt. WT suggested that M3 is doubling every 5.3 years, a pace that cannot be maintained without a continuing fall of the dollar and increasing inflation. shrub/vader rolled the dice and they came up snake eyes.

Of course this was reported first on my blog weeks ago. He has clearly stolen the idea from Shell:


From http://www.nakedcapitalism.com/ -

'In Kuwait's case, the government's budget is heavily dependent on oil revenues, so it cannot afford to sell less oil. But there are reasons to believe the Kuwaitis are exaggerating. Kuwait was one of the countries to boost its proven reserves from 63.1 billion to 90 billion the year the quota system was imposed. Petroleum Intelligence Weekly reported that it had seen internal Kuwait records that showed its reserves to be only 48 billion barrels, less than half the official figures. And today, colleague forward an e-mail from one of his partners stationed in the Middle East that said:

-A committee of Kuwait MPs claims to possess reserve report for Kuwait Oil Co. that indicates 48 billion bbl of actual oil reserves rather than the official 100 billion bbl of oil reserves

-Power shortages have caused the intermittent shutdown of the entire oil refining and export complex in Kuwait, rather than subjecting residents to power cuts.'

It is the second point which is interesting - and it has a very tangential relation to the Saudi purchase of fuel oil, I would think.

That such energy rich countries cannot generate sufficient electricity is interesting. Assuming the anecdote is correct, of course - also, some of the electricity may be going north to Iraq to help keep a lid on greater unrest in Basra, etc.- or to help keep southern Iraqi oil infrastructure running.

We tend to think of grid collapse in the consuming countries first - perhaps such rigid assumptions need to be examined in detail?

The highlights of IEA Oil Market Report dated 13 July 2007 showed two graphs on supply and demand.

I placed the two charts side by side and stretched the demand chart so that the vertical scale was the same as the supply chart. The new chart below is the result.

I added a light blue vertical bar to show what oil supply would have to be in 1Q2008. There is also a reasonable likelihood that peak oil (total liquids) may have passed in 3Q2006 as indicated in the chart above.

In 2Q2007 oil (total liquids) supply, just less than 85 mb/d, was greater than oil demand. However the IEA is forecasting oil demand of about 88.5 mb/d in 1Q2008. This means that to meet forecast 1Q2008 demand, supply must increase by 3.5 mb/d! This explains why the IEA keeps on asking OPEC to increase production. It is highly unlikely that OPEC will be able to increase production by 3.5 mb/d in six months and consequently the next six months will be exceptionally volatile for the oil markets.

Thanks for that ace. I guess a cynic might say why should they believe their demand estimates?

Or a rational person, seeing how virtually every prediction they have made has been wrong, might wonder why we should believe this new one :P