DrumBeat: August 3, 2007

Venezuela: No fuel for export in 2008

"Provided that in 2008 the number of cars sold is similar to that expected to be sold this year, Venezuela will not have surplus fuel production for export, and the country will be faced with the risk of resorting to imports."

Análisis Venezuela also estimated that if any domestic refinery faced operational problems cutting production by 10 percent, Pdvsa would be forced to import gasoline components or finished fuels.

White House threatens to veto House energy bill

The White House on Friday threatened to veto a massive energy bill slated for debate in the U.S. House of Representatives that sets aside about $16 billion in clean-energy incentives, mostly by repealing tax credits extended to oil companies.

Solar IPOs shine

Recent offerings, most out of China, have surged along with the sector in general. Is a correction coming?

Food, water and oil - the hidden link

Since World War II, agricultural research and development has dramatically increased crop productivity, which along with an increase in the areas under irrigation and cultivation, has allowed us to feed an ever increasing global population. Unfortunately, regional conflicts and droughts still cause famine, and poverty is largely responsible for 850 million people still suffering malnourishment. If we could overcome economic inequity, corruption and food distribution issues, we would be able to nourish everybody adequately.

However, the situation we see today is changing rapidly. World population is expected to reach about eight billion by 2025, meaning about another two billion mouths to feed. In the same period, we expect climate change to begin to bite in its impact on water supplies in many areas and oil production to potentially peak and start to decline, while growing cities need ever increasing water supplies.

Oil price 'threatens US economy'

Sustained oil prices close to $80 a barrel could hit US economic growth, Energy Secretary Sam Bodman has said.

The US economy has never faced such high prices for "an extended period," Mr Bodman warned.

There is concern about whether oil supplies can meet global demand and Mr Bodman urged oil producing nations to increase output to avoid shortages.

The trouble with nuclear waste

It's not easy building a home for spent radioactive material. The proposed site at Yucca Mountain has been underway for over 30 years.

PDVSA Begins Exploring for Light Crude in Cuba

Venezuelan state-owned oil company PDVSA said it planned to begin exploring Wednesday for light crude in Cuba as part of a joint venture with state-owned Cubapetroleo, or Cupet.

"We expect to confirm the presence of fields of light crude with volumes capable of maintaining high production potential" via exploration in the six blocks covering a 10,000-square-kilometer (3,861-square-mile) maritime area, PDVSA said in a statement.

The Single Largest Oil Deposit in the World

I'd like you to take a moment and think of what the world's largest deposit of oil would look like. Just close your eyes and imagine it....

I instantly thought of a wide open mining pit surrounded by a thick forest. Gigantic trucks, larger than any others in the world, rumbling along 24 hours a day, 365 days a year. These multimillion-dollar machines, alongside a myriad of equally large hydraulic shovels and cranes, guzzle over 550,000 gallons of diesel every year!

And when I said gigantic, I meant it. Imagine getting passed on the highway by this...

Shell Sells Norwegian Assets to E.ON for $893M

Royal Dutch Shell (RDSB.LN) Thursday said it has divested its 28% equity interests in the undeveloped Skarv and Idun fields for US$ 893 million. The agreement covers the licenses PL-159, PL-212, PL-212B and PL-262 in the Norwegian Sea.

The deal consolidates Shell's position in Norway, and improves E.On's access to equity gas, increasing the diversity of its upstream long-term suppliers.

Gazprom's Challenge to Belarus: Internal Reactions

On August 2, Belarusian president Alyaksandr Lukashenka declared that his country would dip into its reserves to pay its existing debt to Gazprom of $456 million (Itar-Tass, August 2). His decision brought a temporary halt to the current crisis raised by Belarus's failure to meet its July 23 payment and Gazprom's response that it would reduce supplies of gas by 45% starting August 3. Earlier Prime Minister Syarhey Sidorsky had failed in an attempt to obtain up to $2 billion in credit in talks with his Russian counterpart, Mikhail Fradkov (Kommersant, August 2).

Bahrain to Set Up $2.65B Energy Company for National Assets

Bahrain is to establish a holding company for all oil and gas assets creating a 1 billion Bahraini dinar ($2.65 billion) firm to attract greater foreign investment in the country's energy sector, the Bahrain Tribune reported Thursday.

Interior, Sen. Salazar Remain Far Apart on Roan Plateau Drilling Plan

Interior Secretary Dirk Kempthorne and Sen. Ken Salazar (D-Colo.) continue to spar over plans to allow oil and gas drilling atop Colorado's Roan Plateau.

Mexico's Job-Creation Problem

If one were to do a CAT scan of Mexico's economy, one would find a country with the potential to become a job creator's paradise. Mexico has far more oil than fast-growing Dubai (a net labor importer) and almost as much as Qatar, another labor importer. If Mexicans working in the U.S. are any indication, Mexico has a work force that is trained and disciplined. With thousands of miles of coastline, Mexico is a tourist haven. It shares a border with its largest trading partner. But even with these positive attributes, Mexico's job-creation engine has stalled.

Why Oil Could Be Headed Even Higher

Surging demand coupled with concerns about tight supplies are sending crude prices up, and there's no relief in sight on either side. In addition, speculators are now betting on further price spikes. "It looks like [oil] is getting ready to do a new leg of height," says Peter Beutel, president of the energy risk management firm Cameron Hanover. "There is market momentum, and the magic number now is $81. If we hit that, most people believe it'll head to $91 or higher." Beutel adds that some technical charts predict prices could hit $110 or $118 by the end of the year. He adds however that such a spike would take a "smoking gun" like Iran blockading the Strait of Hormuz, the key strategic gateway to the Middle East's oil supply.

Energy sector at risk from attacks: expert

Energy facilities are the new targets of extremists who are well aware of the enormous economic damage that can arise from disruptions to oil and gas production, a US expert said Thursday.

“The industry that I think might get attacked is the energy industry,” said Robert Taylor, professor and chair of the University of North Texas’ department of criminal justice.

Blowing up energy targets are “new kinds” of attacks the world should prepare for, he said in a speech to a regional financial crime conference in Singapore.

Water taps run dry in Baghdad

Adel al-Ardawi, a spokesman for the Baghdad city government, said that even with sufficient electricity ‘‘it would take 24 hours for the water mains to refill so we can begin pumping to residents. And even then the water won’t be clean for a time. We just don’t have the electricity or fuel for our generators to keep the system flowing.’’

Russia cancels gas cut-off

Russia and Belarus narrowly averted another energy crisis on Friday, reaching a last-minute agreement to cancel threatened cuts in Russian gas shipments that had rattled European nerves.

Gazprom backed down from a threat to slash gas supplies by almost half to Belarus, a key energy transit state to western Europe, after Belarus began repayment of nearly half a billion dollars in overdue debt for past supplies.

Memory and vision: The Apollo Alliance and eco-apartheid

The Apollo Alliance’s choice of model and metaphor is straightforward. It precisely represents their values. Its professed goal is the abatement of global warming, but its program aims at restructuring the US economy to ensure continued growth and restored leadership in the world economy. This aim stands in contradiction to the need for the US to dramatically reduce its disproportionately high consumption of all resources, most especially energy.

Environmental racism on a world scale is exemplified by the relatively greater impact of global warming on the global South, an issue which the Apollo Alliance is constitutionally incapable of addressing. The rest of the world is absent from the Alliance’s program, except for some platitudes about extending the benefits of a green economy to the Africa, India, or China. The commitment of the Apollo Alliance to growth prevents it from recognizing the impending peak of cheap energy.

Fight over oil tax threatens energy bill

A rebellion by oil-state Democrats over $16 billion in new taxes on oil companies is threatening to upend House Democratic leaders' plans to swiftly pass energy legislation.

Ethanol Makers Join Food Vs. Fuel Debate

Ethanol producers are clamoring over food industry claims that prices on everything from popcorn to soda are skyrocketing because of the rising demand for corn to make the renewable fuel.

Ethanol backers in Iowa focused their ire on the industry, particularly the popcorn market, during a news conference here Wednesday.

"We're here today to pop the popcorn propaganda bubble," said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

Petrol: global scenario until 2030

Many experts claim the world's most essential commodity is likely to suffer an accentuated rise in price followed by strong geopolitical instability. Have we reached the peak of Hubbert's curve, where oil production is destined to undergo an inexorable decline?

As oil production failed to grow since 2000, experts classified 2005 as the year of an oil production peak (and 2010 for every other liquid substance). The cost of extraction and research in the oil industry has been constantly on the rise, seeing as new oil-fields have been increasingly difficult to find and are now mostly located in deep seabeds. Oil refining (still a sector producing high investment yields) is, in turn, threatened by new environmental policies, excessive costs with human resources and new technologies, not to mention, and most importantly, an unstable demand, where necessary investments are high, re-imbursements take long to compensate initial investments, and yet where securing demand remains a top priority. At any event, we ask the question: how much will OPEC countries' supply grow? Or rather, how much crude will they be able to supply the world with in response to projected increases in consumption and a decline in production? Whilst in 2010, OPEC countries will need to disburse 50 billion dollars in investments, the amount predicted in the year 2015 is estimated at 140.

Carolyn Baker: Escape From Suburbia, a documentary review

The 2004 documentary, "End Of Suburbia", produced and edited by Barry Silverthorn and written and directed by Greg Greene, was a stunning and chilling cinematic landmark which placed the issue of Peak Oil and its consequences squarely on the world stage and connected the dots between the unsustainable suburban lifestyle and perilous issues of the twenty-first century such as food production, population die-off, and economic meltdown. Recently, Greene and producer, Dara Rowland, have released the sequel, "Escape From Suburbia" which examines the journeys of several individuals who have fled or are in the process of fleeing from civilization. It highlights how they are building new lives and new subcultures which offer the possibilities of deepened humanity and sustainability. Unlike "End Of Suburbia", "Escape" spends less time interviewing the usual Peak Oil experts and follows the escape routes of ordinary people who are passionate about removing themselves from a culture of over-consumption and extinction.

Positive energy

The terrifying prospect of a post-oil future: no more ready meals, traffic jams or lonely nights in front of television.

Beyond petroleum: It's time to rebrand Alberta

It's time for Alberta to rebrand itself, to become the "BP" of Canada by moving "beyond petroleum" and on to bio-products, and aiming to be known as a total energy producer with a significant stake in both renewable and non-renewable resources.

Africa: Questioning Africom - 2

The growing insecurity of U.S. oil supplies reflects what Michael Klare has called the "economization of security," an important strand of U.S. foreign policy since the 1930s, which has focused on global oil acquisition policy.51 After 9/11, American energy security was overtaken by and slowly merged with the amorphous, borderless GWOT. Active counter terrorism displaced earlier emphasis on training for peacekeeping and human rights. Fears that China is gaining control over African energy resources, e.g.

The Geopolitics Of Global Warming: Russia, The North Pole And Peak Oil

Global warming changes environmental conditions on the ground. In the Arctic, Russia will compete with the United States, Canada, Denmark and Norway for control over fisheries, shipping lanes and whatever fossil fuels can be extracted from the icy north. Meanwhile, environmental changes wrought by global warming in oil-rich parts of the world like Nigeria and the Middle East could make those areas even more volatile.

That oil and gas, by the way, could become even more coveted if worrying signs that the world has hit a “peak oil” production prove true.

Simmons & Co. celebrates $100 billion landmark

Founded in 1974, Simmons & Co. International just passed the $100 billion mark in transactions that the energy investment bank has either advised or managed.

"It is amazing to me that what started as a mere idea in early 1974 should, over good times and bad, working for hundreds of clients -- large and small -- result in a $100 billion track record of energy-focused deals," said Matt Simmons, founder and non-executive chairman of the firm.

Appalachian Power Uses Battery to Complement Service

American Electric Power’s groundbreaking use of a utility-scale battery in West Virginia has gone so well that the company plans to install another.

When the 1.2-megawatt battery made by Japan-based NGK Insulator began operating in Charleston in July 2006, it was the first megawatt-class sodium-sulfur, or NaS, battery to be used in North America.

As oil prices increase, the cost to find it is up as well

As oil prices have spiked, the costs of finding oil and natural gas grew right along with them, an industry cost expert told oil executives and engineers at a conference Thursday.

But Cambridge Energy Research Associates expects such costs to soften in the next two years, said Candida Scott, director of cost research for CERA.

Turkey rations water as cities hit by drought

Turkey's two major cities are grappling with water shortages after record low levels of snow and rain in the winter and searing summer temperatures.

Reservoirs are less than 5% full in the capital, Ankara, home to 4 million people, according to the country's water authority. On Wednesday the municipality began a water restriction policy of two days on, two days off.

War-torn Iraq happy with high oil prices

War-torn Iraq is pleased that high oil prices will help fund emergency reconstruction work, but does not want a price bubble to cause instability, Oil Minister Hussein al-Shahristani said on Thursday.

U.S. checking possibility of pumping oil from northern Iraq to Haifa, via Jordan

The United States has asked Israel to check the possibility of pumping oil from Iraq to the oil refineries in Haifa. The request came in a telegram last week from a senior Pentagon official to a top Foreign Ministry official in Jerusalem.

The Prime Minister's Office, which views the pipeline to Haifa as a "bonus" the U.S. could give to Israel in return for its unequivocal support for the American-led campaign in Iraq, had asked the Americans for the official telegram.

Good news from Baghdad at last: the oil law has stalled

The panic and distraction of the security crisis should not be used as cover for handing Iraq's wealth to foreigners.

Venezuela boosts oil subsidies to Cuba

Venezuela has increased oil subsidies to Cuba from approximately $3 billion in 2006 to possibly more than $4 billion this year, according to a University of Miami report to be released today.

Venezuela is shipping 94,103 barrels of oil a day to Cuba, the Miami Herald cited experts at the University of Miami's Institute for Cuban and Cuban American Studies calculated, based on official Havana figures issued last week.

Russia's gas pipeline network faces reality check

In recent weeks Russia has announced a number of high-profile export-oriented gas pipeline projects, notably the Europe-bound Nord Stream and South Stream, the China-bound Altai route, and the Caspian pipeline in Central Asia. However, all these pipelines will be connected with the existing Gazprom pipeline network. Therefore, the successes of these ambitious projects will depend on the state of Gazprom's aging pipelines.


Since the death of Saparmurat Niyazov, the US has been maneuvering to take patronage of Turkmenistan away from Russia. The new ruler, President Gurbanguly Berdimuhammedow, is trying to play both sides against the middle. Half-loyalty will buy him time, but soon he will have to make decisions.

Turkmenistan is an important pawn because it has the second largest Caspian oil reserves: they are the only serious competitor to Russian oil and gas in Europe.

A More Efficient Engine

A new version of the internal combustion engine, which could significantly cut gas consumption, might be surprisingly practical and easy to deploy, according to recent findings by researchers at MIT. Tests on a prototype based on the technology, which allows engines to switch between conventional technology and the new gas-saving type of combustion, show that it does not require a special fuel, and engines using the technology can be cheaply made out of conventional auto parts.

Farms in main Philippines island go dry amid fears of drought

Tens of thousands of hectares of farmland are being laid to waste by a lengthening dry spell in the main Philippine island of Luzon, officials said Thursday.

...Manila was hit by three-hour power outages last month as hydro-electric plants ground to a halt due to low water levels.

Senators map new plan for climate bill

Senators are lining up behind a carbon trading plan to slow global warming, with the aim of cutting 70 percent of U.S. emissions of carbon dioxide and other greenhouse gases by 2050.

Bush sets global climate meeting

U.S. President George W. Bush has set a multinational conference on climate change for September 27-28 in Washington, a senior administration official said on Friday.

Bush issued invitations to 11 other countries plus the European Union and the United Nations to attend the meeting intended to pave the way for agreement by the end of 2008 on a long-term goal to cut greenhouse emissions, the official said.

A new Round-Up has been posted at TOD:Canada.

The situation in the credit markets continues to worsen as a sudden attack of risk aversion rapidly dries up liquidity. And this is before the resetting of adjustable rate mortgages (ARMs) begins in earnest - to the tune of $50 billion - in October. Watch this space.

On the Canadian energy scene, Shell pumps $27 billion into the oil sands, even as oil patch profitability falls. Abu Dhabi wants to invest in Canadian power plants, and there are plans for BC to host an LNG terminal. Wind power grows rapidly in Ontario and Quebec, making a few enemies along the way. In BC they ask: should public transit be free?

On the climate front, water is the issue - too little and too much. Finally, in the tug-of-war between efficiency and resilience, efficiency has the upper hand, but what price will we pay for allowing our life support system to become brittle?

You may remember that our definition of household cash is as broad as can be. We include all household "banking products", per se, but also include all household holdings of bonds, inclusive of Treasuries, Agencies, corporates, muni's and mortgage backed paper. Implicitly, we are assuming bond holdings could be converted to cash at a moments notice. So what follows is simply total household cash less total household liabilities over the last six decades.

For all of you folks that don't read these round-ups, you're missing out. Like Leanan's drumbeats, these are excellent "one-stop shopping" for a variety of information put together by Stoneleigh.

Thanks Substrate :)

The Round-Up aims to integrate energy, climate and finance, and not just from a Canadian perspective.

I've been focusing quite a lot of attention on the developing credit crunch recently, because fear is spreading the contagion is so rapidly, even though the actual losses so far are only the tip of the iceberg. Things should really get interesting once the bulk of the ARMs begin to reset in October. Credit expansions proceed until the debt that creates them can no longer be supported, whereupon credit deflation follows. The consequences of this will inevitably be very serious, and global in their reach.

You do a great job Stoneleigh. I visit them each time you post. I forward your link to my friends also.


Thanks for spreading the word John - much appreciated.

Thanks, Stoneleigh

Your chart on Household Cash Less Liabilities made me think more about the household.

The chart below shows the precarious state of the US consumer from Paul Kasriel, Northern Trust,

Households: Net Financial Investment and Sum of Liabilities Increase and Corp. Equity Sales as percent of disposable personal income

Kasriel says, in reference to chart above

"I have combined households’ net increases in liabilities and their net sales of corporate equities, scaling this sum against disposable personal income. As households began running deficits in 1999, their borrowing and sales of assets – corporate equities – increased in order to fund their deficits. In 2006, households’ combined borrowing and corporate equities sales reached a record high 17.0% of disposable personal income."

He says on his last page

"To repeat, if households are spending more than they are earning, they must fund their deficit either through borrowing and/or asset sales, neither of which is a wealth effect. To deny that MEW (mortgage equity withdrawal) has played a role in funding household spending when households have been running deficits flies in the face of logic and data. Chairman Bernanke is whistling past the graveyard if he thinks that the housing recession is not going to negatively affect consumer spending via declining MEW."

This chart above shows US real GDP in the blue line, (corrected for CPI+lies) from http://www.nowandfutures.com/forecast.html

The recent drop in the US GDP (blue line) shows strong coincidence with Kasriel's increased liabilities/equity sales and decreased net financial investment in the first chart.

In the US, consumer spending accounts for about 70% of the GDP.

If this true measure of GDP (blue line) has been negative (ie recession) since 2006 and households have been running deficits for seven years, since 1999, does this mean that the US consumer spending will show, at best, no growth for the next seven years?

As consumer spending is (was?) about 70% of the US GDP, does this mean that the US could be in a recession for another seven years?

One effect of an extended recession would be that US demand for oil should drop.


Can I first suggest that you post replies such as this either at Stoneleigh's site, or maybe preferably at both? There are more reactions to her work here than at TOD:Canada, and that is simply strange, no matter how you look at it.

I see a lot of appreciative comments for the Round-Up here, in the Drumbeat, but I think it's real obvious that that kind of effort deserves reactions right where it's posted. There is of course a sitemeter that provides info on traffic, but if that remains anonymous, it's not really a booster, I would guess.

Just thought I'd point that out again, for everyone who reads all those articles over there. There is a critical mass somehow that is required to start a true conversation, and Stoneleigh deserves for that to happen, and more. I think.

As for your post: I didn't know you are following financial news, just seen your excellent oil posts so far.

Your question:

does this mean that the US consumer spending will show, at best, no growth for the next seven years?

.... doesn't go far enough yet, I think. All reported growth in the US economy since 1998 is most probably virtual. The first graph you post confirms exactly that. It shows an ever deeper level of debt. And whether it's federal, or personal, or something else, the US has accumulated a huge amount of debt since '98. Hence, any GDP number is bogus. None of us get richer by borrowing.

US GDP growth has been negative for years, and inflation has been way higher than official numbers. Housing prices have more than doubled, while the roofs have started leaking, and the paint is peeling. Getting paid just to live in a home. Yeah, feels good, right?

It's what Joe Bageant aptly calls: living in the hologram.

There has been no growth in the US economy for a long time. But it's like you when you lose your income, and have a neighbor you can go to every day for another$100. You can spend every night. but does anything grow, except for your debt? So does your neighbor give you the $100 every day beacuse he's stupid, or did you sign a paper that says he owns more and more of your property?

Stoneleigh thinks there is an unequaled economic disaster coming our way, of the kind that will make 1929 look like a 5-year-old girl's birthday party in full sunshine, and I think she's right. Housing prices have doubled in the US in 10 years, but that's nothing: Forget subprime.

The amount of leveraged credit, hedge funds, CDO's, has gone up 10-fold. And none of it is real. We are fast on our way to find out what IS real. Misery is. Debt is.

PS: the graphs Stoneleigh uses come from the ContraryInvestor, unfortunately a pay site, with some things posted elsewhere. Their strength is twofold: first, they are graphically better than just about anything I've seen, and second, they are unique in that they go back 50-60 years, which makes for great and very convincing trendlines. Just look at the first one, Household Mortgage Debt since 1947, and then tell me you think this time it's all different.

Meanwhile, nothing but appreciation for you from me. BTB, I had to look twice at your second graph, but it's true: it states "GDP, adjusted for CPI+lies". Priceless.

Thanks Ace - really interesting.

Personally I would be very surprised if consumer spending showed any growth for a very long time because I think we're in for a rerun of the Great Depression (at the very least). We've just lived through the largest credit expansion in history and should now IMO see the largest credit deflation (ie Enron on a very large scale).

I'm not saying that a recession isn't coming or that the housing market won't do some economic damage -- but GDP is partly a measure of what you cannot do for yourself. GDP is also partly a measure of waste and high profit margins. The internet and cell phones have probably saved me several percent of income per year of wasted money (and time). This effect multiplied over millions of consumers may mean that GDP could be "flat" while "consumption" rises.

People are providing more service for themselves, finding the correct products more often, and finding lower margins products due to the internet and cell phones. Economic efficiency could increase and neither GDP nor productivity measures would capture it.

Stoneleigh, great job, thanks. I especially like your focus on energy, climate and finance; areas which I pay particular attention to.

I came across this article today, which gives some idea of just how big the "iceberg" might be :)

Credit Brothel Raided, Even Piano Player Not Safe:

The malaise enveloping global markets is becoming increasingly indiscriminate in choosing its victims.

At the start of July, Tunisia hired Daiwa Securities SMBC Co. and Nikko Citigroup Ltd. to help its central bank sell yen- denominated bonds. By the time the fund raising finished this week, Tunisia's borrowing costs had risen by almost a quarter of a percentage point.

So the taxpayers of an African nation suffer because Joe Blow in Detroit can't pay his mortgage

The rest of the article provides a quick summary of what's happening around the world, much of which you've already included in your excellent round-up. Contagion obviously hasn't been contained and has become global.

Triumvirate of collapse - Economy, Ecosystem, Energy

So the taxpayers of an African nation suffer because Joe Blow in Detroit can't pay his mortgage.

Not strictly true. The consumer is going to get blamed in this but the real bad guys are the bankers who created a debt based monetary system and then ran it into the ground. They are the ones that from 1913 to 2007 destroyed 95% of the dollar's purchasing power (according to the Federal Reserve itself, no less). These bankers are the ones that found ways to leverage even the already leveraged debt into a derivatives mess that is, each year, worth more than 11 times the total global GDP.

And if you want to spread the blame, there are those nations who willingly signed on to the US imperial inflation tax scheme and have aided and abetted that scheme (as opposed to those nations forced into the scheme essentially at gunpoint).

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

Greyzone, on that line of thought, take a look at some of the roots. As you said, the Creature from Jekyll Island (aka Da Fed) is in lead dog position.

This article shows where the CDO's came from.



One of the world’s top financial strategists predicted that today’s largely unregulated financial markets are going to come to an abrupt end. That self-regulation is no more possible with bankers seeking billions in bonuses than with teenagers seeking sex in the back seat of cars.

He predicted that America would react with swift vengeance and draconian regulations when they woke up and realized their past savings and future dreams have been bet and lost by the boys on Wall Street.

Here in 2007, the bets have been made and the losses are coming. America has yet to wake up.

It will. Be prepared. It’s going to get ugly.


the real bad guys are the bankers who created a debt based monetary system and then ran it into the ground.

Their kids won't see it that way, as the world crumbles around thier well-defended and well-supplied homes.
Jaymax (cornucomer-doomopian)

I second that

Canada's growing problem with illegal US immigrants - Is it time to Build the Fence?



That story ran in the Round-Up today :)

Our collective spree started with the internet bubble and when it burst our expectations didn't. We got into the home equity piggy bank next, fraudsters of various stripes loved it, and now we have the subprime meltdown.

We, as a society, are on a truly silly consumption binge, much like crack heads who just can't put down the pipe. I wish for a soft landing but I fear the worst ...

The downturn in housing is really getting a foothold, the era of really low interest mortgages allowed the cost of housing to skyrocket. When interest rates are low, building materials and everything related to new homes fills the void left by low rates, in the last few years home prices went up by historic proportions. Home equity loans helped power the U.S. economy for the first years of the new century, now the bill comes due.

Next up:

Corporate bankruptcies

Turbulence in the credit markets has already claimed several casualties - from highly leveraged hedge funds to mortgage providers whose lenders have cut them off.

But the fallout could get worse. Some experts say the debt crunch could squeeze underperforming companies that have, until now, been able to finance their way out of trouble - and trigger a wave of corporate bankruptcies.

Landry's Restaurants looks like its fixing to declare chapter 11. Their restaurants have pretty good business, but over the last 5 years they bought way too many local restaurants and small chains. Now their year-end financial statements are late, because of a stock backdating scandal, and their bondholders have filed to call in their bonds. Landry's is "looking for financing" and just filed an injunction to prevent the bond call-in, which a judge granted.

There's another sign too. Landry's bought an old motel on the Seawall in Galveston, shut down the motel and tore it down. Now the same property is back on the market as unimproved property.

All this looks to me like bad management and financing that's caving in. The credit crunch is only partly responsible, but the cheap easy credit let them expand too fast without any controls, and now the chickens are walking home to the roost.

Bob Ebersole

And what will 'they' do. How to inject more paper money? Historically this is the response. But how do you get it into the hands of the people who will spend it? Rapidly becoming poor(er) Americans are the ones who spend it, how do you give money to them? I don't see personal debt increasing to keep the party going. So what? Tax rebates for home loans? Energy tax credits? They will do something, just what will it be?

My guess is mortgage bailouts. Won't do any good, but they'll try.

Don't forget the unsold inventory of new homes. Let's say the 580 thousand or so unsold new homes have lost an average value of 50k, that is 290 billion dollars off the balance sheets of the building companies, the numbers are huge. Plus the interest alligator that keeps knawing away at this unsold inventory must factored in.

By my way of thinking we have a huge housing surplus in the US, way above and beyond that present unsold inventory.

As gasoline prices go up, people are going to have to abandon the suburbs and relocate closer to jobs or mass transit, shopping, schools, etc. As the incomes of the Formerly Well Off continue to lose pace with inflation in general and exploding energy and food prices in particular, people are going to have to make more drastic lifestyle changes. The elderly are going to have to move in with their children (or vise versa), kids are going to have to delay leaving the nest longer, and many households will expand to include assorted other relatives, friends, or paying lodgers. You'll see a lot more subdividing of houses to create rental units; that rental income will make the difference for a lot of people between keeping and losing their homes.

The bottom line is that America is heading to a much lower level of square feet per person as far as housing is concerned. Lower s.f/person will be less expensive to heat, and thus will be necessary for that reason alone. We are going to have to decline and become a poorer country even under the best possible scenario, there just isn't any other way around it.

What this means is that, with just a little remodeling, we already have about all of the housing that we need, where we need it, with a substantial surplus left over in the low-density suburbubs (where we do not need it). Thus, we hardly need to be building any new houses at all, for a long time to come. We might just as well be taking all that money being spent on new housing, dig a hole, throw it in, and set it on fire, for as much good as it will do us in transitioning to where we need to go.

I take it you do not recommend housing stocks? The depth of the mortgage crisis is yet to unfold, it is not just the drop in actual housing value but the leverage that goes along with it. You have to wonder about the loss to pension funds and the like that are tied to the mortgage market.

I am a bit of this trend in action - I was doing fine with my $50/mo gas + electric bill in my roundly insulated apartment, but my mother was not enjoying life in her big, old farm house.

She thinks the farm is worth $150k where it sits, but I'm finding many like it for half that within a few miles of town, and that is before any sort of correction really hits. My conundrum at the moment is how to slip some solar and a water furnace into the place without her noticing ...

You don't have to increase the supply of paper money; what you have to do is to boost people's incomes, which in turn can boost bank accounts.

There are two ways to stimulate the macroeconomy: fiscal policy and monetary policy, and these two policies work together. Here is what happens: the U.S. Federal government runs humongous deficits--i.e. the government pays out much more than it takes in through taxation. The government writes an I.O.U. (government bond or treasury bill or note) to pay the difference. The Federal Reserve System, through expansionary monetary policy makes it possible for the government to finance its deficits and also assures that liquidity is present throughout the financial system so that banks and other financial organizations can make loans.

The Fed will not permit a debt deflation, such as happened after 1929. The Fed will use Open Market Operations to pump up the supply of credit in the economy, and if all else fails the Fed can lend unlimited amounts of funds to whoever it decides to lend to. (Normally the Fed lends only to banks and to the U.S. government, but it has broad authority to do whatever is needed to avoid a financial crisis.)

In tough times the Fed is faced with a tough choice: Expand the money supply rapidly and thereby accept increasing inflation--or clamp down on inflation with restrictive monetary policy. In my opinion, the bias against deflation is so strong at the Fed that increased inflation is almost certain in the years immediately to come.

As oil goes up past eighty dollars a barrel and eventually over one hundred dollars, there will be mighty strong inflationary pressures in the economy. The Fed will have a choice:

1. Choke off the inflation and accept a severe recession (for which the Fed would be blamed) or

2. Ratify the inflation and accept abrupt and severe increases in inflation to mitigate deflationary pressures and prevent inflation.

Probable result: Something like the stagflation of the seventies and early eighties--but much worse.

Don, it sounds as though you are saying that the most likely course will be for the Fed to lower interest rates (and thereby create conditions for the next bubble). Given that the US economy doesn't exist in a vacuum -- where would the money come from? How much more money will Asia lend us?

My gut tells me that you are exactly right about rampaging inflation and wage stagnation (I've already topped out as I suspect have a lot of other Boomers). But as we stop spending on discretionary items, a whole raft of jobs are going to evaporate... a downward spiral for the US economy.

The Fed (in cooperation with the banking system and the borrowing public) can create new bank reserves (and hence new loans and new money) WITHOUT LIMIT. Much attention is given to short-term interest rates, but these are only the tail of the dog of monetary policy, which is primarily carried out through daily Open Market Operations (OMO) by the Fed. See any economics textbook for how this works, how the Fed creates money out of thin air.

What about the falling dollar against foreign currencies? This is probably a Very Good Thing (VGT) because we run big trade deficits. A cheaper dollar means that our exports become cheaper and imports become more expensive. Thus a falling dollar will eventually tend to cure our trade deficit. Against some currencies, the dollar should fall a great deal, against others not so much. Unfortunately, the Chinese won't let the dollar fall much against the yuan; the Chinese don't want their dollars to depreciate because they hold so many of them.

The U.S. is a huge debtor country. Debtors win when inflation unexpectedly increases. Double digit inflation is even more effective than mild inflation, and if you want to get rid of all those old burdensome debts that are holding down consumers and corporations, why then the way is clear: Just let the hyperinflation roar.

I have stated earlier on TOD that I expect the dollar to one day again be worth exactly the same as a Mexican peso. The Fed will not give in to inflation without a struggle, but I think Peak Oil must necessarily bring much greater inflation to the U.S.--combined with slow or negative economic growth. In other words, we may have the worst of both worlds--a depression with double-digit unemployment combined with escalating double-digit inflation.

Fasten your seat belts, economic blind curves ahead.


"Unfortunately, the Chinese won't let the dollar fall much against the yuan; the Chinese don't want their dollars to depreciate because they hold so many of them."

I get the strong idea the Chinese won't hold those dollars. My best guess is that they'll find some country that will take them in exchange for their oil rights.

I don't think they are any different from me. When the music stops and TSHTF, I wanna be the one sitting on the oil.

With oil, I can make anything.

With dollars, maybe burn them to heat the house, or possibly use them for insulation... not much else I can really think to do with a lot of scraps of paper. Or worse yet, I may get stuck with just a number.



A cheaper dollar means that our exports become cheaper and imports become more expensive. Thus a falling dollar will eventually tend to cure our trade deficit.

What the heck do we export except jobs?

Aerospace, Weapons, Grain...

my last year living in brasil, some locals were frustrated about how much is imported from the US.


What the heck do we export except jobs?


How about the Weimar Republic, where the average man and woman was destroyed financially? All that your comment shows, Don, is how Uncle Sam intends to get out of paying his debts honestly. It doesn't do squat to keep the economy afloat because only the consumer can do that and the government will not, absolutely will not, bail out the consumer. Why? Because the consumer owes the banks, who are the ones that control Uncle Sam's "get out of jail free" card.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

And that's my big concern. The US government will no doubt decide at some point to inflate its way out of debt. This isn't an option for Joe Six -- particularly if his wages are flat or (worse) he is out of work.


that is all.

Do we really know that the average person was wiped out by Weimar Republic hyperinflation?

Hyperinflation today would wipe out the debts of anyone who owes debts at fixed interest rates or at variable rates that have ceilings. So hyperinflation today would pay off tens of millions of mortgages and money owed on new cars.

We can't boost the economy because we are past the point of declining marginal returns and into the world of declining *absolute* returns. The measurements aren't there - because these are typically environmental externalities or things like increasing health expenses (which show as a net *gain* as more people get sick).

cfm in Gray, ME

Looks like the UK is ready to follow the US housing lead.

Home repossessions 'rise by 30%'

Triumvirate of collapse - Economy, Ecosystem, Energy

Yes...this is why I think the US economy is not tanking outright. The US economy, as well as other nations, are so inter-related that they go up and down together.

Therefore, there is more buffer and willingness for other nations/internation companies to prevent any one economy from collapsing.

What we are now witnessing is the worldwide hissssss...as the air goes out of cheap and easy credit machine.

Re: Rising Costs in the Oil Patch, from the link up top:

But Cambridge Energy Research Associates expects such costs to soften in the next two years, said Candida Scott, director of cost research for CERA.

Based the Yergin/CERA track record, I would expect to see Oil Patch costs to rise dramatically in the next two years.


We I dont see an over supply of kids or kit in the next few years.

And maybe here is why:

Young Geologists and what they do in the uk.


Worth a look if you are in the biz...

Lord. Falling units costs in the oil patch?? How could even those CERA weenies come up with this gem?

It is one thing to believe the KSA and every other optimistic press release that gets published.

But all you have to do is open your eyes to see that the equipment is old and there isn't enough of it. Without an absolute crash in oil prices how could oil services costs decline?

These guys seem to be setting new lows in credibility every few days. Paid disinformation or merely morons?

Re: The Mortgage Meltdown, from my article one year ago, this month:

Published on 21 Aug 2006 by GraphOilogy / Energy Bulletin. Archived on 21 Aug 2006.
Net Oil Exports Revisited
by Jeffrey J. Brown

A Proposed Triage Plan
I believe that vast expanses of American Suburbia are going to become virtually abandoned in the years ahead. Alan Drake has noted that a good deal of suburbia was so poorly constructed that a lot of it is biodegradable. Alan has outlined how we can go back to what we used to have: electric trolley cars connected to electric light rail lines.

CBS Sunday Morning, on 8/20/06, had a segment on "tiny houses." They profiled a home designer and builder who specialized in building very small functional homes of about 100 square feet. You can find more information on his website.

What this builder has realized, and what millions of Americans are just beginning to also realize, is that anything over 100 square feet or so per person is not a necessity; it is optional consumption, a want, instead of a need.

The US is not Switzerland, but Alan Drake has described how Swiss per capita oil consumption in the Second World War was about 0.25% of current US per capita oil consumption. They did it primarily by electrifying their transportation system.

I propose a sort of triage operation: "tiny" homes and multifamily housing along electric mass transit lines. In my opinion, it is the only way that we can preserve some semblance of a civilized society. The suburbs are, by and large, a lost cause.

100 sq ft is all good and well if you don't have anybody with you. Even for just myself, I wouldn't go as small as 100 sq ft, but that's just me. I'm aiming for a house between 400 and 600 sq ft. That's large enough to accomodate an additional person if necessary, and continue to have most standard appliances, etc.
~Durandal (http://www.wtdwtshtf.com/)

The "rule-of-thumb" from New Orleans is that a single person needs @ 450 sq ft and a couple about 650 sq ft "to be happy".

I think that these are good #s to work with.

800 sq ft perhaps for those downsizing, just to reduce the shock and have a place to store their "stuff".

Best Hopes for smaller AND more energy efficient living,


Just moved from 4000 sq' to 1200.

Family of 4 + Taiwanese student.

The best part is getting rid of all the STUFF!

540 sq ft here. Two people, 10 years. Includes: very very small pet, sprouting garden, Ham radio station. Walking distance to work, boat, all shops. Happyish.

I have 581 sq ft and two adults in my apartment, and am looking at where to put the baby when it comes.

The big problem isn't the area, its the non-functional design.

No kiddin' (sorry ... bad pun)! The design of modern apartments are terrible and ours is no exception. We get by though by not buying a lot of big heavy things (wall units, plasma TVs, big stereo systems). We don't have a lot of stuff. My radio stuff is cramped into the walk-in closet amongst the clothes. The electronics are laptops and one shuttle PC, a super mini stereo, and a little 15" LCD TV. When we buy things size, weight, and where to store the box (seriously) are all considered. The place is pretty roomy now. Sometimes I see my neighbors' places (it's weird the alienating power of apartments), crammed full of big TVs and heavy furniture. Very claustrophobic.

If your bedroom is big enough you could keep your baby in that room for a year or so (you have to get up all the time anyway). When the child is a little bit older perhaps a Murphy or sofabed in the living room. Eventually, it will have to be a two bedroom apartment I guess. Or not. Plenty of folks live in small places, one just has to be creative.

Having said that, we're close to moving anyway ... cities are yucky.

Stonleigh, are you familiar with Linda McQuaig? She is a journalist for the Toronto Star and has written several books, the latest reviewed on ZNet link below. Her new book is titled 'Its The Crude Dude'...


'McQuaig deals with this timely and important subject in the part of the world where it matters most - the Middle East and especially Iraq where America came to stay. Her book is divided into 10 tantalizingly titled chapters. It was written in 2004, updated in 2006, and is just as relevant now as when first published. Some of the story is known, but much information covered isn't common knowledge and key parts aren't discussed at all in the mainstream. They include the rise of Big Oil and OPEC, Iraq's strategic importance, its potentially immense and easily accessible untapped oil riches, and America's intention to turn the nation into a centrally located Middle East military base with plans to stay as long as there's enough oil in the country and region to make it worthwhile. Current talk of future force drawdowns and withdrawal is baloney. That will be discussed further below as well.'...snip...

I've read several of her books, and I have the one you mention, but haven't read it yet (my reading stack is several feet high). I'll promote that one up the priority list.

Restaurant Chain suffers from Higher Costs & Slack Demand

The largest fine dining establishment in the United States lowered its 2007 profit outlook on Wednesday, citing slower traffic, higher food and beverage costs and higher restaurant operating costs in the second quarter

Forbes blames the housing slump

The consequences of a weak housing market have spread to a restaurant near you and Ruth’s Chris Steak House is its latest victim


but I think gas and overall energy costs are a big part of the change as well,

Best Hopes for Better Food,


They're building one now a mile from work, in Middleton, WI. I wonder how long before it's empty...

Tom A-B

Alan and everyone else. Take a look at the graphs here on many of the major chains.



Panera Bread


Hold your laptop upside down against a mirror and you will feel better looking at these charts.
'upside down' like American's personal equity.
Scary looking charts...

What blows my mind is seeing all these new retail businesses continuing to build when right next to them could sit strip malls with empty spaces and "For Lease" signs posted outside.

We definitely need to learn how to re-use existing structures instead of just erecting another.

Dragonfly, you clearly don't understand the logic of growth ;-)

Heh :)

"You can never solve a problem on the level on which it was created."
Albert Einstein

Stagnant paycheck + higher interest rates + higher energy prices + higher food prices = less $$ left to spend on junk. Surprise, surprise, surprise!

Ruth's Chris #1 was in New Orleans, 4 blocks from the restaurant they copied#, Crescent City Steakhouse (same steaks, 2/3rds the price). I had a passing acquaintance with Ruth Fertel, the founder (she bought out a guy named Chris in the 1960s) before she died.

After she died, and the company went corporate, they moved HQ out of New Orleans after Katrina and did not reopen #1. Crescent City did reopen (I shared a porterhouse for 3 with another guy on Mardi Gras afternoon).

So I bear them some ill will,


# The locals always laughed when Ruth's Chris advertised their "unique" preparation of steak. Just good Croatian cooking, seen @ Charlie's & Crescent City.

The round that filet mignon, T-bone & porterhouse are cut from is thicker on one end than the other. The thick end is the more flavorful end and one can cut a porterhouse for 3 only from the thick end :-)

SUPERB STEAK ! Served in sizzling butter with excellent sides.

Best Hopes,


Yes, they are good, but they priced themselves out of the market.
I can prepare food just as good at home for 10% of the cost, no tax and no gratuity.

Our group used to go out to dinner quite often a few years ago, now we rotate home meals even though I most often do the cooking.
The trick is to know where to buy the meat and vegetables.

Aged beef is hard to do properly at home, and it does change the flavor. Even sizzling butter is hard to do @ home.

Fries are from freshly cut potatoes in hot oil, etc.

And the Crescent City bread pudding is among the best in town.

I find the prices at CC Steakhouse "reasonable" for what I get.

Best Hopes for Fine Dining,


I would love to know how to do it. My personal favorite at Ruths' is the filet. The prices, however, are obscene, lol.

Too bad they are seeing demand destruction... NOT.

Other then finding the meat quality it is mostly having a very powerful grill that gets extremely hot but is also capable of slow indirect cooking and smoking.

Something like the Australian turbo grills.

The best way is to do it with hardwood, but then you have to build a blower assisted stone grill, and that's only worth doing if you are going to be wherever for a long time.

The carcass is aged, which does chamge the flavor of the meat :-) Hard to age a side of beef in the freezer at home (precise temp control required).

Serving the steak in a lake of sizzling butter is simply dangerous in the average home kitchen.

And the grill is hard to duplicate.


At prices 2/3rds of Ruth;s Chris :-)

Porterhouse for three was about $70.

Best Hopes,


Warning, offtopic...

Alan, since you've professed your 'love' of FEMA, here's where you can buy some FEMA apparel and stuff.

Howz about a Heckuva-Job plaque?


Today's Financial Times had an intriguing chart and an article that I would like to share as I do not really understand what the oil market is trying to tell us:

Oil sector rotation
Published: August 2 2007 14:01 | Last updated: August 2 2007 19:26

Investors in oil stocks, perhaps worried about contagion, should also be wary of inflection. The oil forward curve has flipped over, with spot crude now commanding a premium to longer-dated contracts, having traded at a discount for the past couple of years. What does that change mean in terms of which stocks to own?
Oil pricesIn theory, exploration and production companies should benefit from the tighter market that the new curve suggests. On Wednesday, the US reported a big fall in crude inventories. That did not stop the oil price from falling, however. The fact is inventories are still above their five-year range, so further falls will not necessarily support prices. Indeed, Bernstein Research points out that since 2004 – as more speculative money entered the oil market – crude prices have tended to follow inventories downwards.
One alternative subsector, pure refiners, is also suffering. Companies such as Valero have enjoyed Google-esque share price performance since 2004 as rising demand for fuels finally squeezed out the industry’s excess capacity. Heavy maintenance schedules in the US, keeping refineries switched off, provided a last hurrah in the first half of 2007. But the latest fall in crude inventories came alongside inventory increases for most refined products. With more refineries back online, refining margins have duly fallen sharply.
Inflection points usually portend volatility. That is amplified by the general panic gripping the markets. In that environment, oil aficionados might consider turning defensive and buying some laggards of recent years: the bigger integrated majors. BP offers some scope for gains from a recovery angle although its heavy weighting to the upstream business leaves it relatively more sensitive to oil prices. Royal Dutch Shell is cheaper, trading on about 10 times 2007 earnings, and offers a more balanced portfolio. ExxonMobil, at 12.5 times, is on a premium. On the other hand, Exxon is the bluest of blue chips, with net cash and share repurchases of $7bn a quarter. In an ailing equities market, that is strong medicine.


Backtardation is the futures market response to lower supplies in the face of nessisary demand. We are currently at the true beginning of demand destruction. It remains to be seen how much backtardation will change in the future.

It is likely that big drawdowns are being caused by backtardation and the assumption it will be shortlived. If not, OECD stocks will be drawn down significantly in a very short amount of time by profit seekers. This is the natural function of the market where "we need oil now".

The word Gilgamesh is backwardation.....

By profit seekers I assume you mean traders playing the storage play, they have long since gone...

Stocks should be drawn down on crude due backwardation and increase refinery utilisation....

Products on the other hand should build especially if record imports keep up on gasoline...

If that metric keeps up margins will suffer...something has to bring the margin back either products rise or crude falls.

If product stocks are rising going into the weak demand season of fall, then more likely crude will fall to recreate the margin...

Thats the theory anyway, all bets off with hurricanes or more ME unrest.

i think backtardation is a better word, it brings a sense of the rediculous mess we are in to a point.

I would still note that even at 6.5 Mb oil down, processed goods did not rise by enough to account for the gain. Ergo, stocks are falling and may not recover?

If price of crude does not fall(which in a falling supply situation is unlikely at best), consumption will. Then we are at DD like I said.

Thanks for the comments.

On short term basis I could argue for a crude oil price being at either $60 or $100 bucks at the end of the year...

Over the long term I think $100 is more realistic, I just couldnt tell you when..


I figure a strong rise to 100-110, sustained for 1 month next year, during the beginning of the stock build, and then DD crushes us.

(this scenario assumes that the popping housing bubble will not do the DD first)

I would still note that even at 6.5 Mb oil down, processed goods did not rise by enough to account for the gain. Ergo, stocks are falling and may not recover?

Indeed finished gasoline did actually fall! The rise was in ethanol as a blending component.

Not sustainable--we go through our weight in petroleum once a week.

Vivoleum is People!

see the video

The Prime Minister's Office, which views the pipeline to Haifa as a "bonus" the U.S. could give to Israel in return for its unequivocal support for the American-led campaign in Iraq

This has to be some kind of joke, right? The current administration wouldn't be so stupid as to further irritate the people of a country where over 100,000 American troops are mired in the middle of a civil war, would they? And wasn't Israel given a bonus of $30B of U.S. taxpayer money just the other day, an increase of 25% per year over the previous package? How many bonuses do the Israelis think they deserve? Does anyone actually think they would do something other than support the U.S. invasion of Iraq unequivocally?

On days like this I am tempted to think radical isolationism is actually a good idea.

Arkansawyer here:

No joke. They've been trying this gambit since Day 1 of the Invasion.

Impossible then. Impossible now.

Turkey waits to invade as the US withdraws.

Turkey rations water as cities hit by drought

Turkey's two major cities are grappling with water shortages after record low levels of snow and rain in the winter and searing summer temperatures.

Reservoirs are less than 5% full in the capital, Ankara, home to 4 million people, according to the country's water authority. On Wednesday the municipality began a water restriction policy of two days on, two days off.

Now this is a joke:

War-torn Iraq happy with high oil prices

War-torn Iraq is pleased that high oil prices will help fund emergency reconstruction work, but does not want a price bubble to cause instability, Oil Minister Hussein al-Shahristani said on Thursday.

Yes if you read the Sunday NYT the headline was US to approve 20 billion dollar Saudi arms deal, while in a single line in the article is the mention of Israel's 30 billion dollar deal.

I will discuss no further, because any mention of Israel and its motivations or stranglehold on American government is met with howls of antisemitism. Jesus must be proud how it is all turning out in the ME.

Jesus or Oil - We report, you decide!

Like the ME needs more armaments.

said the United States planned to offer Egypt a $13 billion package and Israel $30 billion over 10 years -- increases on previous military funding -- as well as aid to Saudi Arabia and other Gulf states.

How far could that "aide" go in helping rebuild US Infrastructure.

The Intervention of the Reasonable Men:

Reality was by this time starting to notice that Dumbses stayed constantly and imperviously drunk on a cocktail of Hubris and Delusion, and that his Party's big plan was to just let him get away with it and blame Jimmy Carter or somebody whenever someone shoved a camera at them. And so Reality did summon The Baker and The Hamilton from their homes high atop Mount Whiteguy, and lo a Commission was formed so that Dumbses might be given a face-saving exit from his Iraqi Debacle and in that way the Nation might be saved.

And the Baker Hamilton Commission did produce a very mild, very moderate, very Centrist Report, and presented it as tribute to the mighty Dumbses.

And Dumbses used this Report as ass-paper,

and his heart stayed harden as neutronium.

And the Nation wept.

H/T Driftglass

The proposed $20 billion arms deal with Saudi Arabia and the increase in military aid to Israel are two indications of what looks like a pretty sharp reversal in U.S. policy toward the Middle East The Bush administration until recently has focused on fostering democracy in this area. At the same time, military sales were being reduced, and aid to Israel had been declining for about ten years. They seem to have decided that all this hasn't worked very well, and are going back to making friends and influencing people the old fashioned way - with money and guns.

Now the reversal: in addition to the deals already mentioned, the U.S. provided significant help in the last few months to the Lebanese military, and is now showering a good bit of money on Palestinian President Abbas, to strengthen him against Hamas. I wouldn't be surprised if the U.S. began a troop draw-down in Iraq before the elections, but combined this with a really large military aid package to bolster the Iraqi military. We'll see.

How long before those weapons are pointed back at us?

Again I'd like to not that this new strategy extends well past the 2008 election.


True. Last summer, the USA were sending emergency stocks of anti-personnel cluster bombs to Israel so that they could drop them on Lebanon - especially against the Shia of that unfortunate country. Around 20 square miles of Lebanon are still inaccessible due to these bomblets.

This summer, the USA are sending plane loads of weapons to Lebanon to use against Sunni guerillas who took over some Palestinian refugee camps. It seems that these guys were financed and equipped by the USA to take on the Shia and they didn't do what they were supposed to do. They turned on the government instead.

This is what passes for a "foreign policy"

Against all common knowledge, I would say that it is the USA government that has an stronghold on Israel, more than the other way around.

¿Who is the beneficiary of all the gifts in this situation? I would say, follow the money. And here the money flows from the USAn taxpayer to the USAn military-industrial complex. The fact that it flows through Israeli pockets is just an excuse.

Is it possible\likely that the US govt\military has a much better understanding of Iraq's reserves 4 years on from the invasion?

Since the invasion, have they been able to employ technology that was not available to Sadamm to paint a better picture of Iraq's oil fields? Even during this civil war? Or does this type of field charting require more stability over a wider section of the country?

News reports continue to speculate about the size of the reserves over there. Do the PTB actually know now?

In order to get a true picture of the reserves in Iraq, the US would have to run 3D seismic of most of the country, drill the most promising structures, get logs and production history and well tests of all the producing wells, and submit it all to a nuetral petroleum engineering firm.

Needless to say, thats hard to do with folks shooting at your geophsicists and well testers.

I'm not convinced that Hubbert Linearsation works since the production history has been distorted by 30 years of war and economic sanctions. So the real answer? Who knows? And who can know before the shooting stops? Bob Ebersole

Arkansawyer here:

Above Ground constraints?

Expect more, not less.

"Why polar warfare? Well, some decades ago, people thought space and space warfare would be the final frontier. They may still be right, but it turns out that thanks to global warming and melting ice, the polar regions may figure into future conflict as well. This absolutely fascinating report, "Naval Operations in an Ice Free Arctic," gives an idea of what the military is thinking.
It turns out the U.S. is worried that as global warming melts polar ice, suddenly there's a whole new area of potential enemies, "comprised of Non-Governmental Organizations (NGOs), terrorists and environmental activists." Maybe they're worried about Al Gore, too.
Future scenarios include situations like this: "Environmental terrorists seize a research station in the Svalbard Archipelago being used by a U.S. based multi-national corporation for mineral and oil exploration in the Arctic. The terrorists have been using explosives to destroy equipment at the station, and are threatening personnel if the corporation does not cease all activities in the Arctic Ocean."-piglipstick

What is fascinating is that we still think that the Nature
will be the same after the Arctic goes ice free or
the 150 million Bangladeshiis move into India
or London is under water.

Growth is madness now.

Bob, you seem to be misunderstanding the violence in Iraq. Almost all of it is in or around Baghdad. The areas out near the wells in Shiite and Kurdish territory are not nearly so violent. I would submit that it is highly possible to get this sort of information. From what I have seen of the new US bases near the oil fields, it is positively peaceful compared to Baghdad. Check the US casualties and you will see the vast majority are in or near Baghdad. Likewise with the Iraqi civilian casualties.

You have to remember that Iraq covers a nice chunk of territory and has 27 million people, of which over 7 million live in Baghdad! This means for all the rest of the country, 20 million people are spread out all over.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

I doubt that there has been much reservoir engineering happening in Iraq, I don't care about the relative safety of the oil fields. There are still about 80% of people resisting the occupation of their country. With the proposed looting of the Iraqi oilfields, do you think the field personel are going to coooperate? They've already been striking. There have been repeated bombings of pipelines, and the various factions all engage in kidnapping.

A good engineer doesn't have to go anywhere near a war zone these days to make an excellent living.
Bob Ebersole

Bob, take a straight edge. Lay it across the Persian Gulf giants. Wigggle it around a little to allow for all of the Iranian production.

What this will highlight is that Western Iraq isn't in the groove. If there is oil there, it probably isn't just the continuation of a trend.

For the record, and against my better judgment I have in my limited experience participated in a few ventures where a straight edge on a map told a story on a gut level. None of these has every worked in the target zone. I got lucky a time or two in another zone, but this is one mistake I am resolved never to repeat [at least until the next time.] Sigh.

Is it possible\likely that the US govt\military has a much better understanding of Iraq's reserves 4 years on from the invasion?

Good question. According to ASPO, the U.S. did survey Iraq's oil reserves shortly after the invasion. Before the insurgency got so bad. The results of the survey were classified, but were supposed to be released by the end of 2004.

It's now three years later, and the survey is still classified. But geologists talk, and supposedly, the results were disappointing. Rather than having more oil than claimed, Iraq has less. Less than half as much as Saddam claimed. Which would be about right, if that huge bump in reserves all the OPEC nations added when their quotas started being based on reserves is as fictional as Deffeyes says.

Is it possible\likely that the US govt\military has a much better understanding of Iraq's reserves 4 years on from the invasion?

It is highly unlikely that any new seismic activity has gone on during the war. It is all they can do to keep as much oil flowing as they currently do.

What we keep hearing about is "possible new discoveries in the Western Desert." But that part of the country is entirely outside the so-called "golden triangle" where most of the oil is found. The area just across the border in Saudi Arabia has been explored, though not throughly, and they found nothing. The geographical strata of that area, on both sides of the Iraqi-Saudi border, doesn't seem to have any of the Jurassic-Cretaceous type of depoits, found further east, that produce oil.

Think of it this way. Look at slide 5 of this Simmons slid show. It is a diagram of the “Golden Triangle”. About half of this area was a shallow sea sometime in the Jurassic and the other half was a shallow sea during part of the Cretaceous. If this shallow sea did not extend into the Western Desert, during the periods of intense global warming during these two eras, then no oil will be found in the Western Desert.

Basically the oil can be found where the shallow seas were during the Jurassic and Cretaceous periods. That is the case all over the world, not just in the Middle East. If there were no shallow seas outside the Golden Triangle, then there will be no oil found there.

Ron Patterson

This story is actually from 2003.

Bernard over at Moon of Alabama breaks it down: http://www.moonofalabama.org/2007/08/kirkuk-haifa-pi.html

Not. Gonna. Happen.

Good catch of a good catch. I'm always glad to have one less thing to be outraged at.

Israel is like a drunk GF that gets you into a fight every time you go to a bar.
Sooner or later you need to dump her.

Yep, sooner would be my choice.

Musahi: More like a drunk GF with a boyfriend who is totally whipped (and pays all the bills).

Chevrolet Volt E-flex Fuel Cell prototype
(This prototype seems to rely on swarthy workers for basic locomotion. Maybe they should call it the Hispano-Ease-Ya, or Rolls-Canardly.))

Toyota believes producing an electric car with a range of 40 miles or more can't be done at a cost that would make the vehicle affordable for most consumers ....

A plug-in Prius probably would have an electricity-only range of 20 miles or less, and maybe as little as 10 miles, according to a person with direct knowledge of Toyota's plans who didn't want to be identified.

GM Vice Chairman Bob Lutz said in June he's confident GM can overcome any obstacles to producing an electric car with a 40-mile range. GM says that target is significant because more than half of Americans live within 20 miles of their jobs. The automaker hopes to patent technology that would extend the range beyond 40 miles, people with direct knowledge of the plans said.

GM aims to have a prototype in early 2008 that can travel about 10 miles without recharging, the people said. The 40-mile Volt would follow in 2009 and might go on sale by the end of the decade, they said. GM spokesman Scott Fosgard declined to comment on the timetable.

Guess I won't be buying a hybrid for a few years.

Ha! Ha! Love the "suit" behind the wheel. Maybe this is how the car of the future will be powered ("Will you worthless SOBs get a move on!!! I'm late for my appointment, for crying out loud!!!").

We'll have to change the name of the Steve Burden song to"All my friends push a low rider"
Bob Ebersole

It could have been a rickshaw, but that wouldn't have been as good for employment.

Like bad news on the Viking longboat.

"The king wants to water ski"

GM says that target is significant because more than half of Americans live within 20 miles of their jobs. The automaker hopes to patent technology that would extend the range beyond 40 miles, people with direct knowledge of the plans said.

Of course, if the employers installed metered recharging stations in their parking lots, then that range could be cut down to 20 miles. PV panels could be erected over the parking lots to power the recharging stations.

Do something to encourage quick deployment of fast recharing stations at service stations and parking lots everywhere, so worse case anybody running on empty need only be stranded for a hour or so at the worst.

Designate one lane during rush hours for MPVs OR EVs, with a max speed of 55mph. Now you don't need to worry about keeping up with the pack to avoid getting rear ended by a semi. Even better, design the battery packs so that they can be quickly changed out; service stations could be in the business of exchanging battery packs for a fee.

These three measures reduce the battery capacity required to something like maybe 30-40% of what they are figuring on for that 40 mile range. That should go a long way toward making these more affordable.

Great Thoughts WNC. It will be interesting to see with what battery provider the volt goes with. The most interesting of all the battery companies is Advance Battery systems who are working with Zap in developing a 300 mile range electric car, using nano batteries, check it out:


ABAT will be buying the required nano particles from Altairnano (diclosure: I own Altairnano shares). In my honest opinion Altairnano has a disruptive technology -- an actual solution to the oil crisis.

I respect your clarity and honesty.

I, however, think Altairnano is a scam and has a long corporate history (previously Altair Gold, then it was a medical device company, etc. About 8 corporate names) Check out Yahoo Company Profile.

They partner with smaller companies (Which leads me to think they are also scams) unlike A123.

And they have what they claim is a disruptive technology.

H'mmm. I wonder about their gold mining claims "in the day".

Just a different POV,



You have to do more research than the Yahoo "profile". ALTI is essentially a reverse takeover (RTO) -- not literally, but almost. The personnel changed dramatically from the "old days" as the former BHP Billiton researchers came in. Old assets were disposed of. Prior management replaced, etc. They were completely restructured (but not re-incorporated).

They've partnered with AES -- one of the world’s largest power companies. They have agreements with Alcoa and Sherwin Williams. Their claims are independently verified by Aerovironment -- perhaps the top vehicle battery testing company in the world (Sunraycer and EV-1 developers).

If you really think Altairnano is a scam then why did Senator Reid get a Navy contract for them?

I must say, they did a great job with those high drag windmill wheels. Those extra wide rims give the finders a nice drag inducing outward "bump" in the airflow. Love that "plow" front bumper, it's simply smashing. The GM stylists seem to like the sharp angles on the tops of the fenders too, which increases drag in cross winds. It ain't no econobox. Of course, in the world of "the suits", appearance is everything. Gotta have an aggressive looking ride on the trip between your gated, secure community and the members only parking garage beneath the great mega tower office/shopping mall/restaurant/club where one spends one's day time hours with one's equals.

E. Swanson

Ahhhh! A comment about styling!
Good observations.

Gotta have an aggressive looking ride on the trip between your gated, secure community and the members only parking garage beneath the great mega tower office/shopping mall/restaurant/club where one spends one's day time hours with one's equals.

Might I add "when your private helicopter or fighter jet just wont fit the bill".

Still its just a concept car, something sharp and shiny to catch your eye.
Reality will intervene during the production process.

Why not?

A plug-in hybrid will have a many hundred mile range just as hybrids do today. It's just that shorter trips around town to the store, school, errands, friends, can be done very efficiently on electricity alone, using no gas. These short trips on a cold engine are where mileage really suffers anyway, as well as wear and tear on the engine. We keep railing about "soccer moms." Well, this system would let almost all of their driving be on electic power. Longer trips can still be made, very efficiently, using the hybrid system. Remember, at stop lights, stop & go traffic and such settings, zero fuel is being used. When the engine runs, it will charge the battery efficiently to them power you through those situations.

Because they won't be available for several years.

Dissapointing performance, as GM's old EV1 would 75-150 miles per charge. Here is the Wiki entry:

The first generation EV1s used lead-acid batteries in 1996 (as model year 1997) and a second generation batch with nickel metal hydride batteries in 1999. Some of the Gen 1 EV1s were refurbished and upgraded to Panasonic lead-acid batteries.

The Gen 1 cars got 55 to 75 miles (90 to 120 km) per charge with the Delco-manufactured lead-acid batteries, 75 to 100 miles (120-to-160 km) with the Gen 2 Panasonic lead-acid batteries, and 75 to 150 miles (120 to 240 km) per charge with Gen 2 Ovonic nickel-metal hydride batteries.

Jon Freise

Analyze Not Fantasize -D. Meadows

They just don't seem to be trying very hard, do they?

Sorry Donal, nothing could be further from the truth.
The real problem is nothing we have available to us replaces the energy density, portability or convenience of gasoline when it comes automotive travel.
The batteries in the EV1 held the energy equivalent of 1/2 gallon of gas!

GM is taking a huge gamble with the Volt, gambling that there will be a battery when the car is done.

Sorry Spaceman, but given that they managed 75+ with the EV-1, a ten or twenty mile range sounds bogus to me. Forty starts to be reasonable assuming they're trading the weight of extra batteries for the charging engine.

Under ideal conditions, maybe but the batteries didn't hold up in the cold.
Something over half the country has to deal with.
Got a link for the numbers?

A high school friend of mine had an original EV-1. When I visited, he told me he got about 60 miles between charges, which agrees with the EV-1 FAQ of 55 - 90. Some of his fellow EV-1 club members tested the later model with NiMH batteries, and reported ranges of 115 miles or more here:


There's a story in Internal Combustion about early electric cars being the only ones that could get around in some fierce blizzard. I'll have to look it up again.

You anyway want to plug in the wehicle while parked to charge and then you can keep the batteries warm with electrical heaters.

And you could also dry out the cars interior with a miniture dehumidifier but that would probably require some development work.

I was really disappointed by "Escape from Suburbia."

It lauds the activities of two guys who -- aware of coming energy shortages -- decide to leave the most energy efficient place in America and then support society by doing something they have absolutely no skills in: milking cows by hand. It was more of a "peak oil tourism leads to personal fulfillment" than actual good advice.

Even if NYC is the most energy efficient place in America, it will be total mayhem when food or energy is only intermittently available. My personal maxim is: "Bad things happen where there are high densities of humans". When TSHTF NYC would be on my short list of places to avoid. (LA will be worse I fear) Good luck on power-down in the big city. I have visions of the more recent "War of the Worlds" movie still running through my mind.

Yeah right, just like all the advances in civilization in the past have come from sparsely populated areas of subsistence farming and hunting-gathering. Not.

The solution is not to flee the community, the solution is to build and rebuild communities. It takes longer than "hey, pack the kids and the ammo in the van, we're off to the homestead".

Every catastrophe even in the atomized western world brings out the almost disbelieving stories of neighbors going to check on neighbors, sharing supplies, and being human. This tends to be the first instinct of regular people. If you want to concentrate on the negative, sure, you'll find yourself examples of that too. Damn humans, some are not up to any good.

Ah yes, the urban myth. Well, Rome did stick around, didn't it? But not before a population of over 1 million fell below 30,000 and then several centuries passed in squalor, poverty, and misery. But yes Rome did come roaring back... eventually!

Now, just how long will it take New York to go from 8 million or so down to about 240,000? (An equivalent drop, by the way.) And then how long will it take for New York to come back? A century? Two? Ten? In any case, my homesteading ass won't care. Maybe my great-great-great-great-great-great grandson will want to see the rebuilt "Big Apple" but it won't matter to me... or to you.

Ah but let's not let the reality of real collapse, like Rome, cloud our techno-geek happy talk! So... ON WITH THE SHOW!

We now return you to your regularly scheduled cornucopian happy jabber session.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

Please don't put words in my mouth about techno-geek cornucopian happy jabber. That's not what I said. A little less pressure on the trigger finger, please.

Sure, NYC will have problems - it uses a lot of energy for both cooling and heating. Not to mention that importing of food thing. Lots of problems. LA actually has a great climate and lots of backyards (and freeways!) for food production. Water will be a problem (with or without TSHTF). Same here around the SF Bay area.

But there are shades of "urban" between NYC and your homestead in the boonies. World isn't all that black and white.

I just don't understand how some people boast about their fear and loathing of other people. And when scenes of War of the Worlds start playing in your head... are we expecting an Alien Invasion too? Are they after our precious fossil fuels too?

Yes, you are engaged in techno-geek, cornucopian, happy jabber. I did not bring up "War of the Worlds" - you did. I did not bring up "alien invasion" - you did. You are the one trying to deflect the discussion by reaching for absurdity.

You (and I) have zero idea how this is going to play out so there is no way to know whether New York will see a little pain, a lot of pain, or so much pain that New York might cease to exist. Yet there you are declaring that New York will go on, no matter what, and that therefore it's better to be in New York than not. That's an assumption that terminates all other discussions.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

I did not say anything like "New York will go on, no matter what". This is you again putting words into my mouth.

At least read the thread. The poster I was responding to, Odysseus, brought up War of the Worlds.

Let's not forget that most of NYC wll soon be inundated because of global warming.

James Gervais
Hope was the last evil to escape Pandora's box.

Well I'm screwed

Interloafer: There is a not-so-subtle political tone to PO awareness. It appears to be pro rural living, definitely anti-urban living. This might just be an American trip-here on TOD the number of posters from NYC, Chic or SF appears to be negligible. It appears that the urban lifestyle is considered to be more desirable in Canada or Europe- not a good omen for the USA going down the road as urbanization is the logical response to PO, IMO.

We have a lot of people from NYC and SF who post here. A few from Chicago that I know of. (I think the coasts in general are more likely to be peak oil aware.)

I don't think TOD or peak oil are anti-urban. Yes, some peak oilers want a homestead in the boondocks. But just as many want "new urban" car-free neighborhoods, or small town life, a la Kunstler.

Heck, we even have a separate TOD:NYC blog.

Leanan: The separate TOD: NYC blog is damning evidence (I think I might have posted on that one). I like your post better than mine.

Why is it damning evidence? There are enough NYers that they rated their own blog, that's all. It was the first TOD "spinoff." Many of them post here as well.

And the ever-popular Stuart Staniford is from San Francisco.

Leanan: I meant it was damning evidence against my argument/post.

Oh. Sorry! I thought you were implying we'd herded them off into a ghetto or something. :)

It appears to be pro rural living, definitely anti-urban living

I did not get the memo.

Must have been issued whilst I was evaced for Katrina and the federal flood.

Best Hopes for TOD,


Alan: Your name did occur to me when I wrote the post. Official retraction: TOD represents the urban lifestyle agenda as well as the hinterland agenda.

Although Brian, you did actually say the "PO awareness" in general (not just TOD) seemed to be correlated with an anti-urban (and certainly anti-suburban) mindset, a statement that seems reasonably defensible. I'd go further and suggest it is often anti-capitalist, anti-technology and sometimes outright anti-human. However TOD has quite a reasonable balance of views compared to most PO sites. I wouldn't want it any other way - constantly conversing and being surrounded by people that agree with you on everything is not terribly simulating (...hoping that someone will disagree with me on that...).

The most energy efficient place in America

I would argue that the Big Easy is more energy efficient than the Big Apple. Both currently and in the future.

Best Hopes for Both,


What in the world do you people mean by "most energy efficient place in America?"

Do you mean that your city compared to other cities? Which is to say that you spend much less energy importing EVERYTHING to make life possible in the urban core?

I am really puzzled by this. It seems to me that the people who use the least amount of energy, and who destroy the least amount of environment, are the most energy efficient.

NYC pretty much is facing the same situation that Japan is facing (and has faced for the past century): you need to import food and energy to support your population. To be sustainable long term, exports must equal imports. NYC's challenge is thus to figure out what you can export. "Financial services" and "Advertising" and "Legal Services" etc. won't cut it by themselves. You need to get back to making stuff that is actually going to fill up the barges and shipping containers for the return voyage. A big part of that can just be trans-shipment of stuff made elsewhere, that is how port cities have classically made a living. But to support a port city the size of NYC, you'll need more than just that.

Let me just say I do not know the answer to this, but let me ask a question...

Are computer programs a viable export?
How about music? Movies?
Design? (architecture, computer chips, clothing, etc...)

All of the above can be reduced to 1's and 0's and transmitted on the internet, although I consider them "products". The Pat Larouche supporters I meet on the street vehemently disagree with me however.

Anyone have any thoughts?


Lyndon LaRouche, maybe? (or maybe you were having some fun by combining Pat Buchanan + Lyndon LaRouche?)

Garth, as you say, anything that can be reduced to 1s and 0s can be transmitted on the internet... and also pirated.

IMHO, the long-term prospects for making money from digital media are not good. If PO means struggling economies, I would bet you that piracy of software, music, movies, etc. will only become a bigger problem.

Are computer programs a viable export?
How about music? Movies?

To poor or politically not-so-friendly countries, no. If it can be copied free, it will be.

Anything which has laws of physics, as opposed to laws of man, as barrier to inexpensive cloning will be a viable exportable product if the density of value to volume/mass is high enough. Petroleum, of course, is the canonical example.

Design? (architecture, computer chips, clothing, etc...)

Yes, but the monetary significance of the design itself may be fairly small compared to the manufacture.


Economically, negligible. Culture often doesn't translate, and whatever products of literature there are fit into the digital "copiable at negligble cost."

Depends ....Hollywood and radio did quite well in the 30's but that was due to the hold the system had over film distribution. What freaks out “the industry” here is the ability for a kid to do videos in his bedroom and then have a high viewer ship. Hollywood can still do good as long as a large talent community stays in Socal (actors, set designers, musicians ect...) and it can seduce people into working and living here. The talent pool has something when people are face to face that a digital community can not replace.

Software design and industrial design will be big players as long as the firmware is durable and they also need to be a part of a service that is related to a tangible good/service (ie plumbing, public transport, drugs ect...)

Brings to mind a question I have - how durable is the digital infrastructure we currently have? DSL lines ect...will it be worth it to keep it up or will it be abandoned /evolve?

The internet was developed by DARPA for military communications to continue over existing telephone infrastructure in the event that large portions of the system were knocked out by strikes on this country. See here. It has evolved considerably since then to include satellites and soon WiMAX. The underlying infrastructure is reasonable robust and will tolerate multiple failures.

However, there are two problems.

1) Eventually parts will need to be replaced and cables restrung. Which will require new parts and cables. Which will require that industry still be able to produce such goods in a lower energy world. Considering the utility the net provides and the variety of technologies available and the inherent interoperability of networking technologies to replace failed parts I consider it likely that someone somewhere will be able to produce these goods.

2) Energy to run the equipment will need to be continuously maintained for a least the minimal communications equipment required to support the spine of the internet. This will happen in countries that have enough electricity to supply to consumers (even if the price is very high) and will not happen in countries with electricity shortages (places like poor African nations that currently have electricity for two hours a day every other day) Although satellite and radio modems keep service running to those rich enough to support such things.

In the long run the internet is like any other type of infrastructure. It has a useful lifespan, after which it needs to be maintained. A society will only be able to keep the infrastructure of any sort which it is capable of maintaining. So ultimately it depends on what level of civilization we have after the peak.


After living in a 3rd floor walkup apartment for a couple of years, I wish the new occupants of a 20 story WALKUP much luck.

How much energy will it take just to keep the lights/heat/cooling/elevators working in buildings over 5 stories?

I think everyone(in the US) should move SOUTH, to a big city.

(He said as he moonwalks backwards north into the country)

The news from Russia seems to show flat to still slowly rising production, and lower oil exports:

Oil Output Hits New Record
The Moscow Times - Russia

The data showed that oil production rose to 9.89 million barrels per day, a 0.4 percent increase on June, and up from the previous post-Soviet record of 9.87 million bpd, reached in March.

July production rose 2.2 percent versus July 2006. Year-to-date output stood at 9.86 million bpd, up 3 percent from 9.57 in January to July 2006.

Oil exports via pipeline monopoly Transneft in July were up 1.2 percent to 4.3 million bpd after they fell seven percent month on month in June.

Russia revises export duties every two months, tracking moves on the global markets, and the jump in export duties from June made crude exports less profitable than domestic refining.

Oil exports via Transneft noticeably fell, by 5.5 percent year on year as oil companies tried to refine more crude oil at domestic refineries to benefit from increasingly profitable exports of refined products.

Most of the big producers cut output, except the state-controlled Rosneft and Gazprom Neft, which improved by 1.2 percent and 0.3 percent, respectively.

I received an e-mail from an energy analyst in Europe who saw a research report suggesting that Russian oil exports in the third quarter of 2007 will be down close to 10% from exports in the third quarter of 2006. Total liquids may show a smaller decline. Another article that seems to support the report:

Russia Cuts August Black Sea Crude Exports, Maintains Baltic
Tuesday, July 31, 2007

Russian seaborne crude oil exports are set to drop off sharply in August, as Moscow plans to cut exports from Black Sea ports, while maintaining shipments from the Baltic. Russian pipeline monopoly Transneft has penciled in seaborne exports of 2.931 million barrels per day (13.396 million metric tons) in August, down more than 100,000 b/d from June's schedules for 3.034 million b/d (12.833 million tons).

That would place a 10% decline in exports as lower than your predictions of 15% YOY decline in exports; yes?

a 10% decline in exports is only a halving in 7 years! (and 1 of those years is already accounted for!!(assuming no further speedups, beacuse this might just be the tip.)

IMO, what we are presently seeing in Russia is lower exports, because of rapidly increasing consumption, versus basically flat production.

When Russian production starts declining, I think that the decline will be quite rapid, resulting in a 20% plus initial decline rate in net exports over the first three years.

In any case, I believe that virtually every one of the top 10 net oil exporters is currently showing lower exports.


The top article Venezuela: No fuel for export in 2008 says loud and clear that ELM is going down even faster than even you have predicted. And people will still attack it for being "unscientific", even as the pumps stand dry.

Okay, so now given that Venezuela is talking about no net exports and Mexico is saying that they've got 7 years of oil left, would anyone care to speculate what that will mean for the US market? This is two out of the top 5 crude exporters to the US warning that they are starting to suck air.

I would presume that Venezuela would still be exporting to the US beyond 2008, even if net exports were zero? No?

HSF, PO T, don't panic just yet. It's finished product (gasoline fuel) they're talking about here, not crude.

Thanks, JN2. I knew I had to be missing something.

Just checked on EIA:

Crude imports from Venezuela:
- 29.6 Mb in Jan 2007
- 38.2 Mb in May 2007 (latest)

Product imports:
- 8.9 Mb in May 2007

US monthly imports approx 30 days * 13.0 Mbpd = 390 Mb
Venezuelan imports = 38.2 + 8.9 = 47.1 Mb = approx 12% US imports

So, if 8.9 Mb is kept for internal Venezuelan consumption, US imports would decline approx 2.3%. Better get those stripper wells in West Texas cranked up!

I am a tad confused by that Venezuelan article. I read it as that they will have no FUEL available to export, NOT that they will have no OIL to export.In effect they are saying that they have limited refinery capacity and in 2008 internal fuel (ie petrol) consumption will surpass local refinery production, leading to importation of petrol for example. Meanwhile they will still be exporting crude.

At least that is how I read it? Even this reading is of course pretty dire, since a major producer, because of increasing internal demand, will not be able to meet its own petrol needs. Also say a lot about Venezulan infrastructure.

Exactly how I read it. We can look to Iran and Nigeria as an example of how well that works. Fuel rationing when oil is being exported and seems plentiful doesn't play well with locals regardless of refinery issues.

Venezuela has started to build a refinery in Nicaragua. I read that it will have enough capacity to export to other parts of Central America. Perhaps they will not be exporting so much gasoline in that direction once it is finnished.

You are right, the article (maybe deliberately) confuses oil and oil products. Actually oil refining infrastructure has been badly managed after the "oil coup" (as current authorities name it)took place on 2002. Most of PDVSA staff just left and the remaining ones had to start up units in refineries with retired operators and whomever offered help. So it has been a very difficult time for PDVSA, the newcomers are young and do not yet have the skills. On the other hand, the policies of Chavez have transferred wealth to the poor and there is an economic boom based on oil prices in Venezuela. Also top car makers have opened factories in Venezuela and waiting lists for new cars are long and it may take 6 months to get your car. Roads have collapsed, Caracas is one big traffic jam and on top of that, Venezuela has the lowest price of gasoline in the world (yes, cheaper than in Saudi Arabia), so that "fuels" demand as well as economic bonanza. Actually Venezuela has not exported gasoline to the US for quite a while, but they will surely continue to be net exporters of crude oil.

That's no refined product for export, not no oil for export. Very big difference.

I would argue without a scientific journal to examine it inside and submit counterexamples to it is currently scientific hearsay.

There is a hypothesis, which is currently being tested with real world data. The behaviour of a system adhering to the first law, (in+out=stored) is well known and understood.

I patiently await the journal submission or even a preprint. (im really just interested in data for all countries to see how much oil is left for importing countries)

A scientific reckoning of oil reserves is impossible. Even if you could assemble an unbiased group of observers, TPTB in various countries would not let them do their jobs.

A bird in hand is worth two in the bush right? These powers say they can produce more and they are choosing not to? highly unlikely.


I suspect you saw them, but a month or so ago there were a couple of truly fascinating attempts by several of the top hands on reservoir mechanics who frequent the Oil Drum to piece together the best available facts on a small cross section of Ghawar.

That group after a lot of effort reached a conclusion concerning where the cross section they were looking at was located. All during this discussion the time period was in doubt.

As you indicate, without a policy of disclosure we can't know for certain.

BTW, if you were a KSA fat cat, would you sooner manage the expectations of the masses or bank on a couple of more good years and then a long prosperous retirement in London.

Maybe I'm not weighing the factors proprely, but if I thought I could continue to be the boss of what is now the KSA, I think I would try to manage expectations downward in the hope of retaining power.

That in my estimation is the main issue I have with the theory that the key players know / very strongly suspect that this phase of the oil game is rapidly drawing to a close.

Every Sunday in Houston Texas between 1pm and 2 pm (CST) on the AM radio dial, at channel 950 AM KPRC.
http://www.950kprc.com/main.html is a program about energy news. It is headed by a guy named Alan Lammey, He has about an 80% minimum accuracy rate on oil and natural gas predictions on a weekly basis. Can any of you do better than that? He has a website, http://www.houstonenergyanalyst.com/ and also leaves his email address as well as phone #. But even though the site is not exactly something to write home about, he has a wonderful broadcast on this channel, and I highly recommend anyone to listen to his broadcasts as he kind of brings oil and natural gas news into perspective, as they pertain to world events. You don’t really have to live in Houston Texas in order to be able to listen to the broadcast, just click on the website mentioned above between those times and you should be able to hear it, no matter where you are in the nation or the world. This guy is pretty darn good and entertaining as well. I listen to him on my way to work each Sunday, even though I keep up with energy news EVERY day, from various websites, including The Oil Drum. I don’t work at the radio station or anything so don’t think I am pimping this program. I just thought I’d share this guy’s input on energy news to those of you here, including the silent lurkers. Pretty darn informative!

Here is his bio:
Alan Lammey, nicknamed "Petrodamus" by his radio show listeners, is a crude oil and natural gas futures, basis, and options market analyst and journalist, best known for his innovative and forward-thinking energy and financial market analysis. Additionally, he is a knowledgeble energy consultant educating Houston area businesses (both big and small) on how to notably improve their bottom line concerning electricity and natural gas expenditures. Regarding the oil and gas markets, his primary focus is on the production of daily analysis of the oil and gas futures market as well as weekly feature stories on a host of market issues for various,popular,worldwide,energy,publications.

Alan developed a keen interest for energy, financial, and commodity markets more than a decade ago in his former career as a licensed stock and options broker, where he honed is knowledge on the fundamental and technical aspects of trading, as well as various forms of risk management. He has also worked for one of the largest energy marketers in North America as a supply manager to the western half of the United States, and has formal education and training in futures, stocks, and options trading and hedging strategies.

Alan pioneered "award-winning" coverage of financial basis (or forward curve) markets, and has also conducted a detailed study of the influence of hedge funds and large speculators in natural gas futures market, which is significantly at odds with studies by the New York Mercantile Exchange (NYMEX) and Commodity Futures Trading Commission (CFTC). He is currently writing a book exploring how transformations in energy trading, market dynamics and supply are likely to impact the petroleum industry for years to come. His work is published daily in many well-known energy publications in the United States and around the world.

Alan can frequently be seen on national television shows, as well as radio programs in Texas and other states.

Damn, no Podcast.

Does anyone here have recommendations for good Energy related Podcasts?

I wish it were podcasted, I emailed thye radio station requesting a podcast of the program, they say "they" are considering it. In any event, if you click on the site you can listen via computer. Sundays between 1pm and 2pm. A very good program.

Go to Global Public Media.

Adam Porter was doing his OilCast for a while but these are quite out of date. He must not be doing this any longer.

This month's Alfred E. Newman Outstanding Achievement Award goes to House Speaker Nancy Pelosi and an apparent majority of the House of Representatives that can not bring themselves to pass a version of the energy bill which includes new fuel economy (CAFE) standards.

What, me worry?

Congratulations again to all concerned, who have once again shown us the role that Statesmanship & Courage plays in addressing energy issues.

Dave: Don't be so hard on Nancy and her friends. They may be rich, but everyone could always use a few extra bucks in their pocket.

As if anyone would be surprised that the spineless and brainless wonders would be capable of anything else?

You win. You are the Cynicism King.

I was under the impression that raising CAFE standards was a no-brainer, even for the House of Representatives. I did, in fact, underestimate their ability and desire to shirk their duty.

I'll try to never repeat that mistake again.

"I'll try to never repeat that mistake again."

Yeah, but it also seems however low your expectations go, they seem able to go even lower. Hard to win that one.

Re: hard to win that one

It is indeed a hard task I have set my sights upon. Considering the problem immediately at hand, the House could

  1. Raise the CAFE rules to X mpg, or X+1 mpg, etc.
  2. Do nothing.
  3. Lower the rules some Y mpg from present levels
  4. Abolish the rules altogether
  5. Mandate that everyone drive an SUV because what is good for Ford and GM is good for America
  6. Mandate that everyone drive a Hummer
  7. Declare that waste is great, so require a minimum number of vehicle miles traveled (VMT) that must be driven everyday in the aforementioned Hummer or SUV
So, we see that our Elected Representatives can do their worst, up to a point. Or have I missed something?

I can't help myself for being a cynic after watching Chicago and Cook county politics for almost fifty years. I come from a very politically connected Irish family on my mothers side and often saw the backroom deals that benefited no one but the deal makers. I am beyond hope. I wish it weren’t so.


Your post is an example of exactly why I am a doomer. It's not that we can't fix these problems, it's that we won't and are not fixing these problems.

People like you, Stuart, Heading Out, Alan, and thousands of others nationwide have issued a clarion call describing the problems clearly and outlining useful, workable solutions.

And yet, here we are, 2 years after Katrina and New Orleans is not even rebuilt, let alone the nation taking any significant action on its growing problem list. Instead we are playing get-rich-quick schemes with ethanol and other people's money (aka tax subsidies).

A day may yet come when we look back and realize that it's gone, global civilization and the best of what humanity could produce (along with some of its worst, of course). And when we look back we will know that we could have averted that fate, if we had been honest with ourselves and made crisis level responses to the problems in question. But instead of doing what was needed we will see that we dawdled, lied to ourselves, and played silly games.

I really hope this is not our fate. I really hope that we can muster the willpower to do what needs to be done, from nuclear to solar to wind to electrified transportation to higher urban densities and on down the line. But right now I don't see it happening.

Passing improved CAFE? Hell yes, it was a no-brainer so what does that mean when Congress doesn't pass improved CAFE? Maybe it means Congress lacks a brain. And these are the people who "lead" us.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

Is Pelosi part of the problem or part of the solution? As one of the marginal players [a tiny tiny marginal player at that] working the end game of U.S lower forty onshore production, I suspect that whatever she has in store for me had better for my sake involve a liberal [no pun intended] dose of vaseline [alas petroleum based] even if I have to provide my own.

I am not a doomer, but the gross stupidity of everyone in D.C. is so obvious as make to me wonder if the entire country does not deserve the pending treatment without the aforementioned vaseline. Bush, Pelosi, Reed, phoey. I can name a few more Dems that I detest the Repubs, but that won/t make me a Repub the next time around by any stretch. "A country deserves the Government that it gets ... and I am very afraid that we are we about to get it."

I've been wanting to ask this for a while...surely raising CAFE standards without simultaneously raising gasoline taxes risks Jevon's paradox wiping out much benefit from better fuel economy. To a certain extent, the amount of driving people do is restricted by what they can justify spending on gasoline, and if in 10 years' time they're all driving cars that use 25% less gasoline to drive the same distance, what's going to stop them all driving 33% more, because they can afford it?
Of course, it may well be that gasoline prices will increase rapidly enough on their own without raising taxes, but it's still something of a gamble.

and if in 10 years' time they're all driving cars that use 25% less gasoline to drive the same distance, what's going to stop them all driving 33% more, because they can afford it?

The traffic, of course.

The bulk of people's driving isn't very discretionary.

The bulk, time-wise, perhaps, but what about the bulk distance wise: that interstate road-trip that we couldn't afford last year, now we can because we've bought a car with double the MPG!

It's really hard to see how gradually raising gasoline taxes is not the best way to encourage people to use less fuel, plus it ensures that there are sufficient funds to maintain the roads. And I genuinely believe a bit of clever advertising could convince the general public it won't cost them any more.

The bulk, time-wise, perhaps, but what about the bulk distance wise: that interstate road-trip that we couldn't afford last year, now we can because we've bought a car with double the MPG!

I think interstate road trips for vacation are generally not so significant---and people use them as substitutes for air travel on further distances. And a car with double the MPG is going to be smaller and people won't be as comfortable as far as the rolling Suburban living room on wheels.

It's really hard to see how gradually raising gasoline taxes is not the best way to encourage people to use less fuel, plus it ensures that there are sufficient funds to maintain the roads.

By far I think a better choice at first, is to subsidize high MPG vehicles and tax low MPG ones. This way people will have a choice to avoid consuming more gas.

And I genuinely believe a bit of clever advertising could convince the general public it won't cost them any more.

C'mon. The reaction of the man in the street: " Them liberals are a piece of work---they piss on us and then they have the gall to tell us it's raining gold!"

It would damage the conservation movement very severely politically.

There's no possible way that raising fuel taxes will do anything but anger people. At best you have to apologize and say---honestly---"sorry about this but we need to do it now so we have good infrastructure and efficiency, because in just a little bit you know the the overseas petro dictators would take that money anyway. We know it's a burden so that's why we're going to help with A,B, and C."

Peak Oil will ""help"" with the increased fuel prices anyway. The point of priming high MPG vehicles now, before hand, is to minimize the future economic burden of that oil price increase.

I guess my view is that people make decisions that affect how much driving they do far more often than they buy new vehicles: where to live, where to work, what school to send kids to, what extra-curricular activities to take up etc. If everyone knew that gasoline prices were guaranteed to rise steadily in the next 5-10 years, they might make those decisions differently.

As for judging that "the man in the street" will always react in particular way no matter what, that seems to be the sort of thinking common among "doomers" on this site: just because they observe a particular mode of behaviour among a particular class of individuals in a particular country, they seem to believe that this necessarily applies to the human race as a whole, and can never change.
Which flies in the face of the evidence of centuries of changing attitudes, and billions of other humans who don't act and behave like middle class Americans.

Marketeers and advertisers are very skilled at getting out messages to the masses: if you presented them with the challenge of selling a message of the need for a program of gradually increased fuel taxes, I don't doubt they could come up with it. Hellavu lot cheaper than waging futile wars, depending on expensive unconventional oil resources like tar sands or shale, let alone pumping so much CO2 into the air that coastal cities start to become unliveable and crops start failing due to erratic climate change.

I'd suggest they are doing their duty - representing their constituents.

cfm in Gray, ME

Thanks for that, Dave! I was shocked, stunned, and not the least bit surprised to hear there was no adjustment to the CAFE standards. Clearly the plan is to accelerate into the wall.

Interesting that the word "collapse" is tops in the news. Just replace "bridge" with "economic" and we have the headline of the (near?) future.

I take it this means that GM, Ford & Chrysler will not be needing to come to DC, hat in hand, asking for a bailout when nobody wants to buy their inefficient cars anymore?

I am not saying this is what is going on, just think of it as a possibility. My logic is as follows:

The House of Representatives needs more than a simple majority to pass anything if the President will not go along (ignore the Senate for now) so in a closely divided House the minority party has great power. Think a troop pullout Bill that passed the House but was vetoed by Bush.

From a political standpoint pushing an agenda (a Bill) that your party supports but that the opposition is against, including the President, is not smart. It may pass the House , get vetoed and die before it can become law. This makes you look weak, ineffective and haunts you come election time.

Therefore without enough votes maybe you don't touch an issue at all if you don't have bipartisan support. Allow the opposition's viewpoint to continue. This may be detrimental to the economy and country but the outcome would be the same with or without a verbal fight in the House that doesn't lead to changed law. This gives you operating room to build a larger majority in congress (independent of whoever is President next cycle) by focusing on other issues.

Only when you have a clear majority of votes for changing law do you bring Bills to the floor. At that point if they pass the House (and Senate) they are guaranteed to get to law, presidential veto or not, because the veto could always be overridden. At that stage in the game the President would look weak and ineffective if he vetoed Bills that were passed over his head anyway by 2/3 majority in congress.

I know the above scenario is a stretch but smart politicians are all about what they can get DONE not what they would like TO DO. We have had a scarcity of smart politicians for a generation. Let me just dream that somebody, somewhere has a grand plan to legislate change that makes sense! I doubt it is the Democrats but miracles happen.

U.S. highway system badly in need of repair - Thousands of bridges need rebuilding, but funding hasn't kept up

The U.S. highway system is broken. And it’s not clear where the money is going to come from to fix it.

Amid a steady rise in congestion and ongoing deterioration of decades-old roads and bridges, federal and state funding is failing to keep up with the need to maintain existing infrastructure and increase capacity. And the cash shortfall is only going to get worse, with the Federal Highway Trust Fund — supported by a tax on gasoline — projected to run dry in 2009.

This is why I think the happy motoring lifestyle could unwind, even for the wealthy. The infrastructure is expensive to keep up, and it's going to be hard to raise taxes to repair or replace it if energy prices are high and/or the economy is bad. Eventually, poor people who can't afford gas or cars are going to rebel at paying so the rich can drive. And even the rich might be reluctant to drive if the road might fall out from underneath them.

Or on them. One of my first jobs involved a highway overpass that was "spalling." A 700 lb. chunk of concrete fell off the bottom, killing a dentist who was sitting in his car, waiting at a red light below.

This gets to something that Kunstler has alluded to. What happens to this extensive and expensive-to-maintain road system that we have when the average Joe/Jane can't afford the gasoline and automobile to drive on them? Will they continue to support road taxes? Not if they don't feel that they benefit.

So what then? Toll-roads for those that can afford them? That might work for some arteries but how many existing roads could fall into disrepair/abandonment without effectively isolating those arteries? What percentage of roads could you remove from the system and still maintain a useful network of roads?

The fact that we fund our highways via gas taxes makes it an even more difficult problem. If people actually do cut back by buying more fuel efficient vehicles, that cuts back road funding.

Privatizing the highways is already a national trend. But of course, that only works if you can make money off it. The companies that agree to build and/or maintain roads so they can collect tolls are expecting economic growth to fuel future profits.

Privatization of toll good providers is a perfect illustration of all that is wrong with our hypercapitalist ideology in the US. Toll goods are intermediate between private goods and public goods. Yes, they need to be run efficiently, like private goods. And yes, governments don't always do a very good job of that. But they also serve the public interest -- the long-term public interest. The public depends upon them in a way that they don't depend upon buying the latest gee-gaw from Mall-Wart. Corporations do not do a good job at all in serving the public interest; quite the contrary.

Is there a better solution? Yes there is, though it has been largely untried. We need public ownership of toll good providers, but this should not be government ownership. How can this be? Set them up under a board of trustees, directly elected by and answerable to the public, not the government. In essence, run them as cooperatives rather than corporations.

We have a few telephone and electric co-ops now, but these are small and rural. Doing a wholesale transformation would require socialist-style nationalizations, but with immediate spin-offs to the elected trustees. Not likely in today's USA. If we crash far enough, though, and the wave of corporate bankrupts goes deep enough, then just maybe.

I wonder where highway taxes are going to come from after enough people start charging their cars out of their living-room sockets? Will the government somehow meter the cars? (I guess a lot of inventive electrical-piracy can be expected in general.)

Actually, the roads will hold up pretty well if trucks stop using them. My guess is that the roads will outlast us all if we don't transition to some other fuel when gasoline is too expensive to use. I don't know whether the bridges will fare so well, but they might last pretty long too if the physical stress of constant traffic goes away.

- Scott
"Try sour grapes; you might like them."

I think the opposite will happen: the last users of the highway system will be trucks.

Even people who can't afford cars and gas, or even taxis, might still buy stuff trucked in from elsewhere.

Look at what Cuba did during their energy crisis. They converted 18-wheelers into mass people movers.

''I think the opposite will happen: the last users of the highway system will be trucks''.

Armoured vehicles, personnel carriers , the odd ration truck up the way, Heimat Security trucks full of Un-Americans down the way. To the Kellog-Camps...

That 'right to bear arms' thingy - might come in handy. Maybe your founding fathers knew what they were about...

Yes, they were forward looking; however, I do not thing arms will be the problem, it will be ammunition. The ability to gain ground without firing a shot will be the key to survival.

Hey all, Lets take a look at some of the WORST roads in the world. Take a look at the pictures of the 1st one on their list.

Looks like Trucks will try to get thru even without pavement and shoulders on the roads...

DON'T LOOK DOWN ! (reminds me of Romancing the Stone movie)

Most Dangerous Roads in the World

Trucking is already on the decline, and the freight rails are expanding their operations. Big corporations are much better than consumers at noticing how the price of oil makes it better to ship by rail.

The need to spend vast sums of money continually repairing roads is highly dependent upon miles traveled and the types of vehicles using those roads. A larger vehicle creates more damage and pays more taxes but are the taxes proportionate to the taxes?

Driving I-80 through Wyoming, I cannot help but notice the increasing dominance of the big truckers, large empty "light" trucks, and large, mostly empty SUVs. We are all paying up big so we can maintain an infrastructure that is largely devoted to an inefficient method of transporting goods and/or inefficient and wasteful methods of transporting people. Better we spend those resources rebuilding the train system. Leave the deteriorating roads for those intent on plying the nation's highways in their monster mobiles.

Our nation's highways and roads are unsustainable on many levels. They should largely be abandoned, at least by the government. If people insist on making thousand plus mile journeys, then let them use toll roads. I am not advocating this because I have a penchant for advocating so called capitalistic solutions, but because I would like to see long distance travel for both freight and passengers move to government subsidized trains.

Speaking locally, I see no advantages to the road "improvements" that were done in my area over the last 35 years. Better that we return to the slow tortuous journed that it used to be to get up to the mountains. Those who truly wanted to be here found a way to be here. Those who just wanted to pass through to somewhere else or want the wider, faster roads for easier shopping experiences can travel or move somewhere else.

If you cut the traffic, you cut the frequency of road resurfacing. We need to cut the traffic anyway to conserve oil and address global warming. So it's a win win.

As for toll roads, whether or not they are run by the private sector or government. Don't charge the same for every vehicle to make us for the decreases in gas taxes caused by more efficient vehicles. Charge in proportion to the weight of the vehicle or its EPA rating.

If certain roads are abandoned, then the people will be getting what they have decided not to pay for.

I think the future model (which was really the model before the auto or when it hadn't taken over) is that trains are taken from city to city. When you arrive at the city, you take light rail, the subway, a bus, or a small neighborhood electric vehicle to your destination. Automobile or truck travel from city to city will be damned expensive, which is as it should be.

We are a traveling nation and have become accustomed to going anywhere, anytime, at the drop of a hat with little thought of the expense or the consequences. This is not the way it has always been and this will not be the way of the future.

Am I the only one that thinks that Chain Gangs would solve a enormous amount of our problems?!?!

But instead we have bridges to nowhere *eyes roll out of head*

"Am I the only one that thinks that Chain Gangs would solve a enormous amount of our problems?!?! "

No, probably not. But you are probably one of the few.

Are you planning to be on the chain gang? I can't see that reinstituting slavery has any benefit
.Bob Ebersole

Slavery benefits slave holders.

As economic times worsen and the costs of dealing with illegal immigrants and other criminals increase, I imagine that there will be considerable pressure for felons to be sentenced to long terms at hard labor, i.e. to work in chain gains and perhaps mining shale by hand and similar tasks.

We always look for scapegoats. I can think of no more convenient scapegoat for our worsening economic and financial problems than the "Illegals." Why deport them when we can enslave them? Why pay to support felons when we can feed them on rice and beans and work them twelve hours a day?

Of course we won't call it slavery. "Work rehabilitation programs" or something like that instead. And no metal chains . . . oh no, that would be cruel . . . plastic leg cuffs and perhaps electric "dog" collars to deal with the recalcitrant. And if the welfare class gets uppity, we'll have work rehab programs for them too, instead of bread and circuses. Again, none of this will be called slavery, instead it will be made to look something like the Civilian Conservation Corps of the Great Depression.

After all, conservation is a good thing, right?

Extreme economic distress will lead to extreme policy responses.

I think this is a very important thing to watch out for. There is an old deceptive meme floating around the US that America's past of bigotry and inequality were a necessary defense of patriarchal "tradition", and represent true conservatism, while Hitler's Nazism was not truly "conservative" and thus any comparisons to the American right are invalid. The crux of the argument is that Hitler believed in big government while the noble sons of the South believed in private property and limited government. Thus "good" slavery is by landowners, "bad" slavery is by the State.

It's a sick joke, because the Nazis started out wanting to smash the state and decentralize into a sort of Khmer Rouge-like neofeudalism. Ernst Rohm's faction championed that, but Hitler had to cut a deal with big business. After Rohm was murdered, Himmler rose with his fantasies of cutting up conquered France into feudal estates divided among the SS chiefs, served by Russian serfs. Instead, the regime carried out mass enslavement and apportioned the labor between corporate barons.

If the slaveowners of the old South could only have won the war by pooling their slaves in mass state-run factories, they would have done it, but the South didn't have the capital to build them. Jefferson Davis had to turn the country into a dictatorship to function militarily.

So it's all in the way the eternal elite can most profitably manipulate private and state roles - and their accompanying ideology - to reduce the rest of us to impotence. That will be determined by whether existing resources favor centralization or decentralization. If there's money to be made as contractors running a giant slave labor camp, our elites will make themselves sound like Nazis. If there's money to be made wrecking the state and subdividing us serfs behind feudal barriers, they will make themselves sound like Confederates. If they can find a way to do both at the same time, they will make themselves sound like George W. Bush.

The penetentiary system, at least in the South, is based on the old slave system. The prisoners are required to work for free and fed slops, and the prison units are called farms.
At various times after the civil war the prisoners were rented out to local plantation owners as field hands. This was prevalent in the sugar and cotton producing areas of Texas. The practice ended about WWII, but it was because machines were less trouble. The state prison farms grow the food for the state schools and hospitals, and manufacture license plates and furniture for state offices and school districts.
Lots of Counties use their prisoners for tasks like maintaining road landscaping and picking up trash. I don't know of any actual chain gangs at present, but wouldn't be surprised if someplace still has them.
Bob Ebersole

Not sure if it's still the case, but Florida did for awhile have chain gangs in the late 90's. This was introduced by Charlie Crist, our current governor. He actaully reveled in the nickname his opposition called him-"Chain Gang Charlie". Ya just never know... :-)

Franc (penguinzee)

Is road building sufficiently complex that it would be worth feeding slaves to do it? I assume that anything that can easily be done by machine will remain more efficiently done by machine (given how inefficient plants are at converting sunlight into food,how inefficient humans are at converting plants into work, and how good humans are at avoiding work they don't want to do).

I understand that the wooden horse collar and the cotton ginny (sp?) were pretty much the end of slavery, at least brute manual labor.

Continuing on my pet issue right now:

More megabucks required for capital reinvestment in crumbling highway infrastructure - money we don't have and really need to be investing in electrified rail transport and renewables. We don't have enough to do everything and must make some tough decisions. We really won't need any of those interstates anyway in another decade or two. They will make a great place to set up those massive banks of PV panels & wind generator farms; leave one lane open as a service road. The older US and state highway systems are designed for lower speed, shorter distance travel, which is the only non-rail travel that there is going to be.

If it were up to me I'd leave the I35W bridge exactly as it is right now. You could not come up with a work of art that makes a more perfect statement about where we are at and where we are going as a society.

"We ... must make some tough decisions."

Why? It is much easier to wait until there are no decisions left to be made. I see no evidence that such tough decisions are being made, nor any functioning system by which they could be made.

THAT is the problem!

On the Weather Channel (!) they mentioned a study of US bridges with an estimated total repair/retrofit cost of $190 billion. So you've gotta figure that it's probably at least twice that much. And that's just bridges, not the rest of the crumbling road surfaces.

The Colbert Report just did a segment on the Nafta Superhighway, treating it as a "conspiracy theory" (wink wink). Worth checking out.

Is there a link for that somewhere?

The primary source was from the American Society of Civil Engineers, from their 2005 Report Card for America's Infrastructure, Bridges:

Between 2000 and 2003, the percentage of the nation's 590,750 bridges rated structurally deficient or functionally obsolete decreased slightly from 28.5% to 27.1%. However, it will cost $9.4 billion a year for 20 years to eliminate all bridge deficiencies. Long-term underinvestment is compounded by the lack of a Federal transportation program.

It was written up by AP; here are a couple of references:


www.colbertnation.com gets you to Stephen Colbert's website, but you're on your own on finding that clip. Bob Ebersole

How to make a difficult problem real easy:

Take the population of Massachussetts, then the total US, and start multiplying the 588 defunct bridges till you get a satisfactory result. Don't try to find out what it will cost. You will not like the outcome.

588 Mass. bridges 'deficient'

State poring over records of faulty spans

Approximately 10 percent of the 5,500 bridges in Massachusetts are classified under federal standards as "structurally deficient," including 65 well-traveled bridges with such serious defects that they may need to be replaced and at least 10 with a design similar to the span that collapsed in Minneapolis on Wednesday.

In February, the last time the Federal Highway Administration's bridge registry was updated, 588 bridges in the state were deemed structurally deficient, the same classification as the bridge that fell into the Mississippi River, killing at least four people. These bridges are not necessarily unsafe or at risk of collapse. The rating indicates the bridge has problems that need to be monitored or repaired.

It is a fascinating question for PO aware people going forward, isn't it? If we really believe that there will be dramatically fewer ICE miles driven in the near future, should we not advocate for 'no build' and even 'de-build' highway options? Why allow I35 bridge to be rebuilt to 2007 design standards and suck resources? This would seem to be a good opportunity for some PO rabble-rousers to thrust some truth in policy and opinion makers face "You are not going to see 2006 traffic volumes in 2010! WAKE UP!" If we have the courage of our (professed) convictions. I think about this subject often as city of Seattle has an elevated roadway that is beyond the end of it's intended life-span, it has settled a few inches,and huge cracks have opened up. So twice a year they shut it down over a weekend for inspections, and we basically put some very fine people, high calibre structural engineers, in the intolerable position of attesting to it's safety, with all the usual caveats. Hopefully, somewhere, sometime soon someone will risk their careers and just red-tag infrastructure that compromises public safety. Or have motorists sign waivers.

The LS9 technology discussed this week featured in Technology Review:


Note that the article doesn't say that the process is energy-positive, ever the bugaboo with cellulosic.

Details details.

They might lose energy on a gallon by gallon basis, but don't worry, they'll make it up in volume!



It's a startup and it's a start. Traditional yeast ethanol production isn't very energy efficient, no doubt. However I think we should give technologies such as this a chance. Again their claim is that this bacteria can produce gasoline (not ethanol). Which means it would have a same energy content as normal gasoline. It could also be transported by pipeline (Ethanol looses a lot of its energy value because it has to be shipped by truck across the country). This engineered bacteria may require far less energy then yeast production of ethanol and claims to use less water. In addition this process can be used with any biomass which mean we could use land not normally used for food production. Let's give someone trying to solve the problems a chance before we shoot them down.

Sure let them try, as long as they are not asking for money, who cares. Alchemists were trying to convert lead to gold for ages, why not let these guys try. Most likely they are just looking for fools to invest into their company.

When I read your statement it makes me laugh. Makes me think of a old geezer in 1900 sitting on his porch. "Look these poor fools think they're going to be able to move a cart without horses"

And when I read your statements it makes me laugh. Makes me think of some young chump in the 1950's sitting on his porch... "Why, in 30 years we'll all be jetting around in our own personal flying cars! And nukular power will make electricity too cheap to meter!"

There's nothing wrong with looking for "solutions" (though I think many people are trying to solve the wrong problem), or even believing that they exist. But when you let yourself get suckered into every bit of happy-news that comes down the pike, you waste attention and resources.

Nobody's shooting it down. But it's not worth getting worked up about, either. Nor is it worth posting about every day for days on end. Give it rest, until there's more info. If it really works, we'll hear about it.

Leanan, it's well worth getting worked up about - but in the panic direction. Consider what they are doing - designing and building a new bacterium that eats biomass and produces gasoline, which is very poisonous. When this bacterium escapes to the outside environment and starts reproducing, potentially vast areas of the world are going to be poisoned. This is an extremely arrogant and mindless attempt at riches.

James Gervais
Hope was the last evil to escape Pandora's box.

You see, this is why I think it's a bad idea to grow genetically altered bacteria in old coal mines that would eat the remaining coal and turn it into methane. Yes, someone is talking about that. Have you ever seen the cover of Fantastic Four #1? Where part of the earth seems to have grown a face and arms and is thrashing around violently? Very bad idea.

On: U.S. checking possibility of pumping oil from northern Iraq to Haifa, via Jordan, see up top.

The Iraq- Haifa pipeline died in 1948 if not before. By now there is nothing left, I guess?

One of Chalabi’s promises before the invasion (03) was to rehabilitate it:

From Salon (04):

Zell, a Jerusalem attorney, continues to be a partner in the firm that Feith left in 2001 (...) Chalabi met with Zell and other neoconservatives many times from the mid-1990s on in London, Turkey, and the U.S. Zell outlines what Chalabi was promising the neocons before the Iraq war: "He said he would end Iraq's boycott of trade with Israel, and would allow Israeli companies to do business there. He said [the new Iraqi government] would agree to rebuild the pipeline from Mosul [in the northern Iraqi oil fields] to Haifa [the Israeli port, and the location of a major refinery]." But Chalabi, Zell says, has delivered on none of them. The bitter ex-Chalabi backer believes his former friend's moves were a deliberate bait and switch ... salon

In April 2003, there was a flurry of articles about this pipeline revival, see for ex: guardian/ asia times/ the hindu

Haaretz still seemed to believe in it in Aug. 2003 U.S. checking possibility of pumping oil from northern Iraq to Haifa, via Jordan haaretz

Amazing to see it pop up again. Note, after april 2003, Haaretz assumes the US will do the heavy lifting.

I guess you could say that Chalabi was to Neocons what Wilt the Stilt was to women.

(and I always thought they called him "the Stilt" because of his height)

Forecaster lowers year’s hurricane prediction

Hurricane researcher William Gray lowered his 2007 forecast slightly Friday, calling for 15 named storms, with eight becoming hurricanes and four becoming intense.

On May 31, at the outset of hurricane season, Gray had called for 17 named storms and nine hurricanes, five of them intense.

“We’ve lowered our forecast from our May predictions because of slightly less favorable conditions in the tropical Atlantic,” said Philip Klotzbach, a member of Gray’s team at Colorado State University.

Power outage hits Samsung plant

Samsung Electronics Co. Ltd. said Friday it shut down six of its chip production lines following a power cut at a plant near Seoul, prompting expectations of tighter supply and a rise in prices.

The world's top maker of memory chips said in a statement it hoped to restore electricity to its lines within the day and a spokesman added that it could take up to two days for the lines to resume normal operations.

...Analysts said that any unplanned stoppage at a chip plant was bad news.

"When the power goes down, some of the wafers die in the process and they ... become obsolete," said Jae H. Lee, an analyst at Daiwa Institute of Research.

"Everything is going to depend how long the power situation continues. Even if the power is turned back on though, it would take some additional time for the production line to resume."

this should be the top shit today. chips manufacturers can demand premium dollar for silicon. if some of the asian plants go dead, then solar plants can get more silicon.

this is much bigger than you realize.

the fact that Seoul is having outages is another HUGE problem.

my suggestion to most business owners here is to throw down the cash for enough solar to keep your company working. quintuple bonus if you are in the process of creating solar panels or silicon.

I think this was just an accident. It wasn't a question of insufficient supply. Could've been a squirrel electrocuted, or something along those lines.

But I thought it was interesting because it's so disruptive. If we do reach the point where blackouts are common, it's going to be tough on manufacturing. As Africa is already finding out.

While I believe the Brussard Fusion reactor holds Great potential, this story was found to be false, California is not funding it. Best hopes that someone does fund it, especially since Mr. Brussard is quite old and the sooner this gets started the better.

Hello TODers,

Thxs to Leanan for posting the topthread newslink on Iraq's dire water problems. Potable water as the Liebig Minimum is the worst case scenario to cause maximum blowback from dehydration, disease, and violence.

I wonder how many Americans would be willing to have their gasoline purchases increased by $1/gal tax to prevent Iraqi decimation from lack of water? This way the military could provide emergency supplies and quickly rebuild the Iraqi water infrastructure to modern standards. My guess is that if a poll was taken now [especially with the recent bridge collapse]: most Americans would say Screw the Iraqis.

Thus, we seem headed ever more into the '3 Days of the Condor' scenario. No responsible questions asked, just get the energy anyway you can to fulfill the short-term need for lizard brain satiation. I expect the MSM to report the Iraqi decline, but the vast US majority will just grab the remote, then channel switch to sports, celebutainment, or some other inane Roman Circus.

When the US Southwest starts having dire water problems from drought plus Overshoot plus crumbling infrastructure: will Americans be willing to impose upon themselves a $3/gal gasoline tax to rebuild the Southwest's water & sewage spiderwebs? My guess is most Americans would say screw the Southwest [or whatever US area is having the worst problems, like Nawlins].

Thus, the subsequent postPeak migration into Cascadia and other areas deemed better suited for future survival will seem like a tsunami.

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

"My guess is that if a poll was taken now [especially with the recent bridge collapse]: most Americans would say Screw the Iraqis."

And you would be right, but it has nothing to do with the bridge collapse.

"My guess is most Americans would say screw the Southwest [or whatever US area is having the worst problems, like Nawlins]."

And again, you would be right.

There was a time not all that long ago when people in the south were saying "let them freeze in the dark", regarding energy shortages in the northeast. So much for having a nation.

The US has not been a real nation in a long time, in my opinion. It has been totally commoditized, corporatized, demagogued, free-marketized, and sold out.

No, we can't help NOLA, we can't build and maintain infrastructure - oh no, too expensive. But isn't it funny how we can somehow afford hundreds of billions of dollars for a misbegotten "war" in Iraq.

I weep for what was my country. It doesn't exist any more.

I would certainly agree with you that we are no longer living in the country that I grew up with but I think there is plenty of evidence that Americans are as good-hearted a people as they ever were when faced with a catastrophe (and I would add that Americans are no better or no worse in this regard than other folks).

Now, if you are talking about "the gummint" -- meaning the bone-heads in Washington -- that's a different story. They will say screw it and let you freeze in the dark.

Which reminds me: The figure of the all-powerful Uncle Sam striding confidently around the globe no longer reflects reality. I think America needs a new icon -- someone that really more accurately portrays who we are in this New American Century.

I'm thinking of Old Mother Hubbard. What do you think...???

Peak: IMO the iconic view of the USA (from outside the country) would currently be a crook in an expensive suit who is holding a bible in one hand and maybe a machine gun in the other. Maybe a cross between Al Capone, Donald Trump and Jimmy Swaggart (like Tony Montana without the likeability.)

I think humpty dumpty after he fell off the wall. All the kings horses and all the kings men aren't going to be able to fix our problems.

I vote for Mickey Mouse in The Sorcerer's Apprentice except paste GWB's face on him and add the caption: Bring It On!

We have become a nation that believes in magic incantations.

Do you want to look for an image of what we seem to have devolved into, or look for a new image of what we should aspire to?

I'll try for the latter one..
One that's been calling to me is Ben Franklin's desire to have the National Bird be a Wild Turkey, instead of the Eagle, which we share with Nazi Germany and Rome. Old putdowns based on Turkeys notwithstanding, I like the character of it, not that I think many would agree with me.

Instead of Uncle Sam, who could be our 'Personal Representation'..? All I came up with was a small conversion, turning Sam into Samuel Clemens, Mark Twain.. as an icon of a more ascerbic but wise voice coming out of the continent.


Unfortunately that's not true.

The government reflects the thinking of plenty of people, and they know it.

There were plenty of people, a majority in many states, whose reaction to the obliteration of NO was "they can go cheney themselves."

There are surely smallminded idiots everywhere.. but who, where did you see this attitude more widespread? I never heard a whisper suggesting that the US Govt shouldn't do whatever is possible to save lives and restore that city.


I never heard a whisper suggesting that the US Govt shouldn't do whatever is possible to save lives and restore that city


Too many times. I realized that I am as American as, say, the "coloured troops" during WW II.

The USS Bataan (Marine assault ship, 600 hospital beds, tons of MREs, able to desalinate 100,000 liters of water/day, couple of dozen helos) could have been docked at the USN base in the Upper 9th Ward (100 yards from the Lower 9th) or at the Cruise ship terminal behind the Convention Center Monday night or Tuesday morning. Instead she was assigned to the MS Gulf Coast where she was "underutilized" according to her commander.

I know a doctor who took IVs for dehydration (no liquids by mouth, what little they had was for patients) till Wednesday night (other hospitals had to hold on till Thursday). They could have evaced to the USS Bataan by Tuesday noon or early afternoon if our Commander-in-Chief had given different orders.

FEMA set up a bus evac for white Republicans in Metairie (their pump operators ran away and they got 1 to 2 feet of rain water, ours swam out) Wednesday morning with ice (it ran out) and Port-a-lets (they overflowed) so the white Rs did not get first class treatment despite FEMA's best efforts.

The road from that white R evac point to the Convention Center was completely dry. Not a puddle. New Orleanians that tried to walk to that evac point were chased back by gunfire. Once all the white Rs were safely evaced, relief was sent into New Orleans two hours before GWB's photo op in Jackson Square. That overhead shot of the military trucks going through water was just for show.

Calls for a 8/28 commission (like the 9/11) have gone unheeded. No one outside New Orleans wants the truth to be known.

I suggest that you have not been listening.


In retrospect I think that NOLA would have been a lot better off to assume in its disaster planning that no help from the fedgov was ever coming, and to plan accordingly. We'd probably all be better off if our local governments operated on that assumption.

Of course, this raises the inconvenient question as to why we are bothering to send our tax dollars to Washington in the first place. . .

Under Bill Clinton, disaster relief and FEMA got pretty good marks.

But then Bill understood that good disaster relief was good politics and made good photo ops. (I see nothing wrong with a politician claiming credit when they actually did a good, or even half-way decent, job).

Gov't CAN work, when it 1) wants to and 2) has competent people.

#1 and #2 did not apply to New Orleans.

Only 17.7 more months,


Hi WN and Alan,

re: "...a lot better off to assume in its disaster planning that no help from the fedgov was ever coming"

This gives me an opportunity to mention "CERT" and this particular incarnation of it, which is one of the most creative and amazing examples of community-building I've seen. People in the community use emergency preparedness as an organizing framework to consider all community needs. The program can be started by any community, (with or without funds, though funds are available via grant.)


And a quote from the "Chief":

"The key to a community's survival during and in the aftermath of a disaster is found in the resilience of the community. Participation in the CERT program creates resilient individuals and families, and resilient individuals and families create resilient communities."

Keith Woodley, Ashland Fire Chief

re: "Hurricane Katrina"

Alan, the actions (and inactions) of (entities I might call) responders you mention didn't at all reflect the level of (what is the right word?) extreme anxiety and desire to help (and actual responses) I saw on the part of everyone I personally know (plus many others.) I saw people do everything they could, (considering the distance from my little spot to there). And they still do, as I see it. And it becomes difficult, given the number and immediacy of things we need to work on.

Yes, the reproach is completely justified. I would just say that the things you talk about didn't (in my experience, anyway) reflect any aspect of the reactions I witnessed.

In any case, this might be of interest, in case you didn't hear it:


* James Ridgeway and Daniel Schulman. Earlier this year they co-wrote an article titled: "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads.”


JAMES RIDGEWAY: "Well, yeah. It's absolutely horrible. I mean, what's going on here is this horrible disaster is going to be used as yet one more reason to privatize all this stuff. They'll say, “Well, you know, we didn't have the money. These Wall Street guys will give us some money, and we'll fix this decaying infrastructure.”

But, look, what's going on in Minneapolis is exactly the same thing that happened with Katrina. What happened in Katrina is that after this storm, Bush goes down there and does his meet-and-greet, and then, under a plan devised by Rove, they start blaming it on the states."


The details of how this "blaming it on the states" is carried out are interesting and important (IMHO).

Well, we already spend what, $10 billion a month on this Iraq fiasco? And it appears that things we as the colonial occupying power actually care about, like the grotesque embassy, the permanent (sorry, enduring) bases, and prisons to warehouse lots of Iraqis who may or may not be guilty of anything besides breathing while Iraqi are on time and on budget.

So to me (and I opposed this filthy war strenuously from the start) it appears to be a matter of priorities - ie we're there for the oil and the enduring bases and we barely can even pretend with a straight face that we give a toss about the Iraqis we've supposedly "liberated".

So I don't think throwing more money down that rathole will bring any positive results whatever. It would probably end up in someone's Swiss bank account in any event, as apparently billions mysteriously unnacounted for in this smash and grab already has.

I didn't notice this in the keypost:

Oil market's rally is a classic case of fear

SAN FRANCISCO (MarketWatch) -- U.S. crude supplies are near their highest level in nine years, and retail gasoline prices stand at their lowest level in more than three months, yet crude-oil prices have climbed into uncharted territory and may be headed for $80 a barrel.


It's the "realization that the cheap oil era is over that has prices on tear, followed up by the fact that alternative fuel sources just aren't showing up on the scene to fill that void in an economically feasibly scenario," said Ryan.

Then there's the theory of peak oil -- the notion that any finite resources will have a beginning, middle and end of production, according to PeakOil.com.

"The theory of peak oil is no longer just theory," said Kevin Kerr, editor of Global Resources Trader, a newsletter of MarketWatch, the publisher of this report.

"As the market knows, key fields are disappearing," he said. He points to Mexico's Cantarell oil field as an example.

"The theory of peak oil is no longer just theory," said Kevin Kerr, editor of Global Resources Trader, a newsletter of MarketWatch, the publisher of this report.

"As the market knows, key fields are disappearing," he said. He points to Mexico's Cantarell oil field as an example.

Holy crap!

That does seem amazing, that folks are starting to get it. But then there's the flip side.

I was arguing a couple weeks ago with a commodities broker who is often quoted by a large daily newspaper on energy. Not only does he call Hubbert and the whole idea of peak oil a bunch of crap, he's a very strong proponent of abiotic oil. I didn't think such folks still existed.

How do you argue with the hypothesis that extreme heat and pressure can create carbon compounds without prior biological action? "Can you prove it couldn't?" was the counter. But there's NO evidence I'd reply. And no adjusting their thinking. Quite frustrating. All the rational arguments for peak fall by the wayside.

I think abiotic oil may exist. The question, as geologist John Clark puts it, is whether it exists in "economically interesting accumulations." The answer to that appears to be "no." Which means it might as well not exist, as far as we're concerned.

The first time I heard about abiotic oil was from an old wildcatter, petroleum engineer and oil operator named Carnes Weaver. His point was, that oil is where you find it, nobody really knows the origins.

Its pretty obvious that abiotic methane exists, its on Titan, one of Jupiter's moons, and some methane comes out of volcanic vents. So I'd suppose that oil could come from these processes. It does seem that useful accumulations of oil only occur in sedimentary rock, though.

Bob Ebersole

Dr. Clark argues that we do know the origins: via the biomarkers in the petroleum.

There may be tiny amounts of abiotic oil out there, but we haven't produced any yet.

As for Titan...well, abiotic natural gas may be more abundant than abiotic oil. ;-)

The conversation with Carnes Weaver was in my 20's, about 30 years ago. He was a wonderful man and taught me a lot about how to think about oil prospects. A lot of the old wildcatters were very interesting fellows.
That link of Dr Clark's arguements is very convincing. I'm not a scientist, I majored in Romantic Poetry in college. I had to go back and take night school courses at Houston Community College to get the geology and geophysics that I know, plus I've read and studied a lot of geology over the years. What amazes me about the guy on the raft arguing for abiotic oil is his willfull ignorance. Its almost a mental illness, yet I see it in our culture all the time. And if someone reevaluates a position and changes, many people call the person a flip-flopper, instead of valuing openmindedness and curiosity. What's the value to a commodities trader of an obstinate theory of oil's origins? Whats to be gained from assuming that we'll never run out of oil instead of the logic of peak oil?
I read somewhere, possibly an essay of Stephen Gould's, the hypothesis that the scientific method was born as a direct reaction to the religeous schism of the 15th and 16th centuries. That people started to investigate the natural world because it changed the conversation from dangerous arguments that could get a person killed, stuff like infant baptism vs. adult baptism, or transubstantiation of the bread and wine to the body and blood of Christ. People just aren't rational on these issues. And this is really central to all of the peak oil debate-how can we help them to change? And its the basis of the argument of the doomers vs. slow descent people and technology faith guys. Doomers don't believe that people change enough quickly enough to make a difference.
Bob Ebersole

those flipfloppers if they evaluate positions with sound mind, will make a killing in the markets over those other dumb dinosaurs


And, as I'm sure you know Leanan, hydrogen is the most abundant element in the Universe!

Here's to the Hydrogen Economy!


And here's to you! Now go out into the universe and get that hydrogen!

Titan has methane thanks to a scarcity of oxygen.

That and many other lines of argument were presented to no avail. That even if any were found, it could never scale, that our concern was with flow rates, not theoretical possibilities with no evidence. Plenty of oil will always be available to us (US), running out is fools talk. He conceded demand destruction, felt that was a good thing. I had traveled hundreds of miles, him likewise, to be thrown together on a raft hurdling down a river. The other rafters quickly tired of us. Thanks for the link


How do you argue with the hypothesis that extreme heat and pressure can create carbon compounds without prior biological action? "Can you prove it couldn't?" was the counter. But there's NO evidence I'd reply. And no adjusting their thinking. Quite frustrating. All the rational arguments for peak fall by the wayside.

I had a similar conversation with my brother. A BOC minister(Born Again Christian).

I talked about carbon dating in another tangent and was using a glass of water being half empty after a certain amount of time, then a quarter full, etc.

He started countering asking "Who put the liquid in the glass?" I said it didn't matter, but that's went no where

You are dealing with a belief based not in rational thought but a belief in faith.

Your arguments, if that is the case, will be useless.

"Can you prove it couldn't?"

- I think the counter to this has to be simply,
"No, I can't prove what made the oil, but I can show you that it's coming out of the ground harder and harder, the great fields are caving, and not for lack of trying or the financing necessary to try even harder. IF the Earth, or GOD has placed this here for our benefit, it is still up to US to use it responsibly and respectfully, and like the rains, be grateful when it comes, and be ready when it doesn't."

Hey, that wasn't bad! I think it has to make reference to something that people already accept are finite, unpredictable, not guaranteed.. (ie Rain, Food, Money) and even some kind of acknowledgment of this 'bounty' in terms they might see it in. As I look at things 'Supernatural', albeit metaphoric, I can understand both the food on my table and the oil that heats my house as generous 'gifts' from the Great Spirit, Great Pumpkin, the Universe, what have you.. I think it is useful to try to find ways of expressing it so that there's a place for Fundamentalist Religious folk to fit it into their understanding of things. Ultimately, I think it's just semantics.. no less than our energy problems are 'just physics'..

Bob Fiske

It sure looks like the Export Land Model of Jeffry, Khebab and Ace is starting to kick in with Venezuela and Mexico both talking about the end of exports.

I can't believe what a disaster the bunch in Washington has set us up for. We're in a war with Saudi's proxies, we're in a war with Iran's proxies, the dollar is collapsing, we've alienated the Venezuelians, we're not doing anything about the collapse of Mexico into narcotics gangs and revolutionaries, most manufacturing is overseas now.

I truly don't know what the US is going to do.
Bob Ebersole

Elect another nincompoop with no concept of the problem, and beholden to those who funded his campaign. It's becoming a tradition.

It takes three generations to change anything significantly. What you see is what you have to work with. We'll all be dead by the time this thing gets turned around.

If the transition has been made to corporatism in its full sense, as it seems, then corporatism will have to either morph or be replaced. Unless corporatism collectively embraces massive alternative energy megaprojects, we can expect a long period in the wilderness.

I'm feeling a lot better about not having had progeny these days.

"Elect another nincompoop with no concept of the problem, and beholden to those who funded his campaign. "

That would pretty much describe the entire field of candidates from which we are supposed to elect. As a candidate, you're not allowed into the debates if you're not a nincompoop. (Great word, nincompoop!)

I think they allow a few Ninnys, too. Plus the feebs,nitwits, and just plain morons. I kind of like the the old communist rhetoric too, imperialist running dog lackey of the bloated plutocrats has a certain ring to it.

But, frankly, sgage, they can be described succinctly as evil. Scott Peck, M.D. wrote a book on evil. In it he described evil people as narcisistic. Evil people are unable to view others as having an individual existance, they have no boundries. Peck then got pretty weird and started describing diabolic possession from a born again christian point of view .

Its supported by the body count, as they are probably up to a good round million people dead in Afganistan and Iraq, plus ordering torture is evil, and disposing of the rights of citizens is a traitorous act, as well as corrupting the electoral system.
Bob Ebersole

That was People of the Lie. Besides the patient that wanted to jump his bones, I remember particularly the couple that gave their son a present - the same rifle that his older brother had used to commit suicide. The possession business was pretty weird.

Perhaps sociopathic is a better word than evil.

agreed, we are currently at the shift from stage 1 to stage 2, where we quickly shift from noone knowing whats going on, to everyone knowing.

Watch for solar and wind stocks to easily jump 400% in the next 5 years, with E/P of 60 or 70 years. People will internalize the danger of oil depletion and go with safe bets.

Gentlemen, start your calculators. $188 billion obviously is a joke. All it takes is 1 or 2 more collapses, a bundle of able and willing lawyers and some screechy grumbling in the insurance industry, and you'll all be taking the train. No, wait. NOT.

NB Leanan, I'd be really interested in your review of all this. I'm thinking just checking all 70.000 bridges will take $billions.

NB2 If anyone picks up an assessment of pay-outs and responsibilties for the Twin Cities tragedy, please do post.

NB3 My feelings are still very much with those who lost loved ones, and especially those that miss them, not knowing if maybe they're underneath the rubble.

More Than 70,000 Bridges Rated Deficient

More than 70,000 bridges across the country are rated structurally deficient like the span that collapsed in Minneapolis, and engineers estimate repairing them all would take at least a generation and cost more than $188 billion.

That works out to at least $9.4 billion a year over 20 years, according to the American Society of Civil Engineers.

The bridges carry an average of more than 300 million vehicles a day.
It is unclear how many of the spans pose actual safety risks. Federal officials alerted the states late Thursday to immediately inspect all bridges similar to the Mississippi River span that collapsed.

In a separate cost estimate, the Federal Highway Administration has said addressing the backlog of needed bridge repairs would take at least $55 billion. That was five years ago, with expectations of more deficiencies to come.

It is money that Congress, the federal government and the states have so far been unable or unwilling to spend.
"We're not doing what the engineers are saying we need to be doing," said Gregory Cohen, president of the American Highway Users Alliance, an advocacy group representing a wide range of motorists.

"I'm thinking just checking all 70.000 bridges will take $billions."

So let's take a week off from the absurd "war" in Iraq and check the fookin' bridges. Or maybe postpone those tax cuts for the rich folk who can certainly get by without them.

What a country...

We've been through this before. This isn't the first bridge to collapse, and it won't be the last.

There will be much hand-wringing from Congress critters. States will demand money for their Depts. of Transportation. They'll probably get some, but not enough. Everyone will forget about it before the election.

Remember the Blackout of 2003? Everyone was up in arms about our aging electrical infrastructure, congress was demanding an investigation, there were articles warning that many of our powerlines were installed in the 1930s and couldn't handle today's higher demand, etc. Two weeks later, everyone had forgotten about it.

Bridges are all inspected regularly anyway. So states, counties, etc., have the staff. They may get more money to hire more people and fix more bridges, but it won't be enough. Take Connecticut for an example. In 1983, they had a major bridge collapse. They got more money, but not enough to keep up. Basically, they fell behind slower.

Something similar happened with the Schoharie Creek Bridge collapse in NY. Scour became a new worry, they hired a lot of new engineers to inspect bridges, but the result was basically "falling behind slower."

Scour became a new worry, ...

Scour around bridge pilings and barge hits have always been the big worries in South Louisiana (that and hurricanes).

The Pontchartrain Causeway (24 mile long twin bridges) has dropped spans 16 times due to barge hits. By early 1980s they solved that problem.

Bridges are a fact of life around the Isle de Orleans. 11 mile bridge, 7 mile bridge are some descriptive names around here.

Fortunately we do not throw mountains of salt on them every year.

Best Hopes,


Everything we built for the boomer era - including the boomers themselves - needs to be rebuilt and that is several times more expensive than building new. There is all this funny money floating around, but the resources to accomplish this work do not exist no matter how much money is found. We have too much infrastructure to maintain; building more doesn't help. We're already at Defcon 1 but the lights and sirens aren't working so we don't know it.

cfm in Gray, ME

Dryki, its very obvious from your lack of manners that your family is trash, or maybe not. Perhaps you're just the founding member of The Greatest Degeneration...Copyright 2007.Bob Ebersole

Easy, Bob.
Nobody is trash.

You guys are both great posters at this site, and also both strongly opinionated, and I'm glad of it. People have some bad habits or use unhelpful words, and out goes any useful conversation. If we can work to improve our chances with sites like this, I believe it will revolve around strengthening communications and relationships, despite challenging manners, opinions and cultural differences.

"Strive Mightily, as Lawyers do in Law. But eat and drink as friends." -Shakespeare

Bob Fiske

Perhaps there is a lot of work going on in silence? We had a major blackout in southern Sweden in 2003 and the reinvestments in switching stations etc were doubled. That accident and the need for more power trading initiated a handfull of minor and major investments. But only the largest investment that hits a lot of NIMBY and initiated a debate about cheap HVAC on pylons or expensive HVDC via cable is reported in media, all the smaller stuff is only visible if you look for it.

To remind folks, industrially built things are not permanent, they require maintenance. These bridges are exposed to the full fury of mother nature, and most are approaching the limits of life 40-60 years.

Simply put, the counties/states in charge are negligent in applying properly timed maintenance because bobble-heads believe the bridges will last forever. This is not the case.

buy concrete/construction/and steel company stock. buy engineering consultancy stock too for good measure. (it's probably already up, but i noticed the day was down 1% or so)

Food and mouth is so contagious it can close down an entire country's farm system. There's never really an isolated case.

Case in point: the Prime Minister hurries home for an emergency meeting. Just for one farm?!

Foot and mouth found at farm in Surrey

Britain has suffered its first outbreak of foot and mouth disease since 2001, the government confirmed Friday night and an exclusion zone has been thrown around a farm in Surrey.

Gordon Brown is to cut short his holiday and return to London Saturday to chair a meeting of the government’s emergency committee, Cobra.

Within hours of government vets confirming the suspected outbreak at the farm near Guildford, suspected on Thursday by local vets, the Department for Environment Food and Rural Affairs threw a three kilometre exclusion zone around the site. A national ban has been imposed on the movement of all cattle, sheep and pigs.

The prime minister’s spokesman said he was informed of the outbreak shortly after 7pm Friday night on the first day of his holiday in Dorset. He took part by telephone in a Cobra meeting that also included Hilary Benn, environment secretary.

The outbreak marked the first time the disease has hit the UK since early 2001, at a cost to the British economy of £8bn.

Uk Farming and livestock controls have fundamentally changed since 2001, it won't be like last time (he says, confidently)
Jaymax (cornucomer-doomopian)

FMD is contagious, but the main damage it causes is to the value of beef exports, which become graded as not for human consumption, ISTR. I think this will be the last outbreak that will be worth containing this way; next time round the UK won't be exporting much food. This time we can vaccinate as well as cull so perhaps we'll see less costly containment.

The PM's presence will be wholly symbolic, as with the recent floods, but is there to reassure "the countryside" that the government cares about their plight, given that if it is picked up elsewhere in the UK the tourism industry will be very heavily damaged.

Following Minnesota Bridge Collapse, New Scrutiny for Nation’s Ever-Privatizing Roads

We speak with James Ridgeway and Daniel Schulman, authors of the Mother Jones article "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads." [includes rush transcript]

On the national level, the highway trust fund is about to go broke. When President Bush took office the fund had a $23 billion surplus, but it is expected to be running a deficit by next year in part because Bush killed an increase in gas taxes two years ago.

The columnist Jim Hightower recently accused the government of deliberately defunding these vital infrastructure projects in an effort to open the door to privatization. Investment firms including Goldman Sachs, the Carlyle Group, Merrill Lynch and Morgan Stanley are forming large funds to purchase publicly owned infrastructure projects.

And the privatization of the nation's roads has already begun. In Indiana Governor Mitch Daniels has leased the 157-mile Indiana Toll Road to a foreign consortium from Spain and Australia for $3.85 billion over the next seventy-five years. By one calculation, the Toll Road will generate $11 billion over the life of the lease. Indiana's governor Mitch Daniels has been nicknamed Mr. Privatize by some for his willingness to sell off public assets. Before coming to Indiana, Daniels served as the President Bush's White House budget director. And Indiana is not alone. In Illinois, officials signed a 99-year, $1.8 billion lease to hand over the Chicago Skyway.


The Chicago Skyway...the memories racing the brothers on my bored out and heavily modified Yamaha 750 triple almost thirty years ago, an empty high rise road before the housing boom in Indiana and Michigan.


Finally, a solution to our balance-of-payments deficit! Let's sell the entire interstate system to Chumps ( oops, I meant China ; ) they can have *all that revenue* for the next 75 years. Hahahahaha!

Errol in Miami

Wreck it, then privatize it.
Seems to be the pattern.
When the Roman elites decided for whatever reasons that the state no longer served their interests, they closed off their estates, cut themselves off from the system, turned their slaves into serfs and became the first aristocrats of the Dark Ages. Then barbarians came, some of whom offered protection from the rest for cash. They became aristocrats too.
150 years later, a man named Mohammed organized some friends to do something about the awful collapse of civilization, and found he could create an army that would cut thru privatized feudalism like a hot scimitar through butter. I think I'm beginning to see al-Qaeda's game plan.

i think there's something to that
When no-one around you understands
start your own revolution
and cut out the middle man

Yup...I know that after or during peak oil last phase, Islam will look very good to a lot of people as a force to hold society together

Hello TODers,

Zimbabwe: Mugabe Splashes Trillions On Cars

Contacted for comment, Deputy Information minister Bright Matonga said the vehicle acquisitions were justified and a "security issue".

"This is a security issue and we don't discuss security issues with anybody. If government decides to buy vehicles for the president or cabinet ministers it is justified...
[wait for it-BS]... because we're a very responsible government."
$1.4 million USD for Mugabe's armoured limo, and thirty new Mercedes for his Cabinet at $100,000 USD apiece.


Zimbabwe: Bulawayo Runs Dry Amid Fears of Disease Outbreak

The former governor of Matebeleland north Welshman Mabhena has described the critical water situation in Bulawayo as 'dangerous' and potentially catastrophic.

Some parts of Bulawayo, the country's second largest city, have been without water for the last five days. Authorities in the city on Thursday issued a warning of a serious potential outbreak of disease after a week without a drop of water. This is the first time in the city's history that such a health warning has been issued.

Mabhena said ever since he was born 80 years ago he has never experienced such a serious water shortage as that currently sweeping through the city.

'We are living in fear because if there is any disease that breaks out now, we will all die like flies. Ever since government took over the running of water from city councils, everything just started crumbling,' Mabhena said.

When the last of the five dams was completed in the city in 1979, Bulawayo had a population of around 250,000 and the City Council could manage the needs of residents and factories. Now the city has a population of 1,5 million people and the same five dams cannot cope with the requirements of the residents. Mabhena put the blame squarely on the Zanu (PF) led government.

'In the next coming months Mugabe and his ministers will come and lie to us that plans are at an advanced stage to draw water from the Matebeleland Zambezi Water Project to alleviate the water shortages in the city. These people have been lying to us since Independence,' said Mabhena.
My guess is Mugabe and his cronies were too busy car-shopping to worry about water supplies for a major city. As for the rest of the Zimbabweans:

Zimbabwe crisis turns hearses into buses

HARARE, Zimbabwe—Funeral parlors have put hearses to work as buses to provide desperately needed public transport, in yet another illustration of Zimbabwe's economic collapse.

A routine 30 minute trip from Harare's suburbs now takes up to five hours, most spent waiting to flag down passing drivers who give rides for money.
How many Americans will be willing to spend five hours on a one-way postPeak commute?

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

Zanu PF and Mugabe are Shona, based in Harare. Bulawayo is the second city of Zimbabwe and the Ndebele heartland. This is creative mismanagement with a racial agenda rather than simple incompetence.

From Turkish daily News, Aug. 1, 2007:

The government has found a new solution for the water crisis that emerged due to global warming, insufficient rain and the delayed construction of dams. The right to operate the rivers and lakes will be sold to private sector for a period of 49 years.

Heh, that is pretty plainly stated, upfront!