DrumBeat: August 20, 2007

Pemex Shuts Down Oil Platforms in Gulf Ahead of Hurricane

Mexican state oil monopoly Petroleos Mexicanos, or Pemex, said Monday it is temporarily shutting down and evacuating all its oil and gas production platforms in the Campeche Sound as Hurricane Dean approaches the zone.

In a press release, Pemex said the shutdown of 407 wells in the zone, located in the southern Gulf of Mexico, will shut in 2.65 million barrels a day of crude oil and 2.634 billion cubic feet a day of natural gas.

In the first half of this year, Pemex's overall crude production averaged 3.16 million barrels a day, and its natural gas production averaged 5.925 billion cubic feet a day.

Pemex, one of the top foreign suppliers of crude oil to the U.S., said whether or not it declares "force majeure" on shipments will depend on the effects of the storm.

Pemex exports approximately 1.7 million barrels a day of crude oil, of which about 80% goes to the U.S.

Economist said "peak oil" point is approaching

Peak oil, the point at which production of oil worldwide begins a progressive decline, is probably coming soon, economist George Littel told members of the Kansas Independent Oil and Gas Association at their annual convention this morning.

Further, Littel said, when peak oil arrives it will be an economic, not a geologic, event because demand for energy is a strong driver of new exploration and production.

Oil market uncertainty hampers investment

Uncertainty in the oil market outlook is allying with environmental measures in consuming countries and other factors to limit demand for OPEC crude and create obstacles for future investment in capacity expansion, according to OPEC.

In a report on the oil market, the 12-nation Cartel said there is a need for stronger energy security to reassure producers and encourage them to pump sufficient investments in expansion projects to meet any increase in global demand.

Facing the Multiple Risks of Newer, Deeper Mines

The days of easy, shallow coal are gone, Mr. Kohler said: “By necessity, we’re going deeper.”

"Peak oil" becomes burning issue

Swiss scientists say politicians and the public should have a greater awareness of "peak oil" – the moment when the world's maximum crude oil output is reached.

Researchers at Basel University warn that although climate change is grabbing more headlines than the possible exhaustion of fossil fuels, a conflict is brewing over crude oil.

"The question is not for how long we will have crude oil reserves, but for how long output can grow," warned Daniele Ganser, a historian and peace researcher at Basel University, who says the significance and explosive nature of the issue is underestimated by politicians and the public.

Peak Oil Passnotes: Falling Markets, Stable Crude. Why?

We have been used to hearing about how volatile the market in energy has become. But after the equity market events of recent weeks, all of a sudden one has to take a different view. One that could support the notion of "peak oil."

Oil Storm Clouds Gather in Gulf

Two years after Katrina and Rita, oil production in the Gulf has still not recovered. Although some of the lost production is due to the natural decline rates associated with an aging field, the current 12.5 percent decline from the 2005 peak primarily stems from the hurricanes’ damage to energy production infrastructure.

“The hurricanes so changed the underwater topography that pipe repairs are still ongoing,” Stratfor reported. “There is the distinct possibility that a full recovery is not going to happen” (August 16).

Another storm season like 2005 could be catastrophic for the United States.

Shell to Evacuate Further 200 People from Gulf of Mexico as Dean Approaches

Royal Dutch Shell PLC said it will evacuate a further 200 people from its Gulf of Mexico operations today and will continue to evacuate as needed in preparation for the arrival of Hurricane Dean.

The latest scheduled evacuations follow Saturday's exodus of 380 people from the company's operations in the western Gulf of Mexico, along the projected path of the hurricane.

Shoppers fed up with higher grocery bills

Blame it on ethanol, gas prices and more demand for grain in China.

Ellie Arnold doesn't care about the causes. She just knows her $300 monthly grocery budget is stretched to the max.

"That's what I budget at, and we're staying there," she said during a recent shopping trip at a local produce market. "I'm being real careful. Food is the only thing we can cut."

Season transit talks with a little wariness

Public transit has always been a good tool for easing congestion and making sure that people who can’t afford private autos can still connect with employers. But the price of fuel may speed the time when more people turn to public transit. Excitement about ethanol, biodiesel, and the hydrogen economy is good, but in reality these technologies are still under development. While the market is adjusting to new fuels, motorists may face ever higher gasoline prices and turn to public transit for economic relief.

All of this is speculation, however. There is potential for a regional transit system, but there is no immediate rationale. There is also no good evidence, no passenger studies, no congestion analyses, no carbon emission limits to combat global warming, no letters to the editor demanding that we link Racine, Kenosha, and Milwaukee counties with bus service. It’s worth noting that the sole connection between the Racine and Kenosha transit systems (at the University of Wisconsin-Parkside) is no longer listed on the Belle Urban System brochure.

Highway system at fork in the road

O'Leary recently presented lawmakers with a list of possible revenue sources, including a gas tax increase. New Hampshire's gas tax - 20.6 cents a gallon, 18 cents of which goes directly to the highway fund - is lower than the New England average of about 29 cents, according to the American Petroleum Institute. Also on the list were the possibilities of raising all or some tolls, adding a toll plaza somewhere or reducing the discount for E-ZPass users. Other states have sold off or leased their toll roads to private companies, a move O'Leary doesn't recommend.

Crisis of Money Markets Reduces Oil Prices

In the last several weeks, the drop of around 7-10% in international money market indicators in the last three weeks, due to the mortgage crisis in the US, has led to a roughly equivalent fall in oil prices. The price of Brent North Sea oil has hovered between $70-78 a barrel, and fell for a time to $68. This reduction is considered quite limited in comparison with previous experiences, when the price of crude oil fell to low levels due to international economic factors.

What is the relationship between money markets and crude oil prices?

South Africa: Supply-side crisis likely to get worse on economic growth, commodities boom

Just about every bit of spare capacity in the South African economy is being soaked up. And it is likely to get worse before it gets better.

During the next few years, consumers should brace for further fuel shortages and electricity blackouts. Industry will have to contend with continuing shortages in domestic production of raw materials such as steel and cement. The government's hands will be full devising the means to ease bottlenecks while its huge infrastructural spending programme unfolds.

Eni Expects to Resume Talks On Kashagan By This Month

A multinational oil consortium led by Italy's Eni will soon start talks with the Kazakh government on the future development of the giant Kashagan oil field, Eni CEO Paolo Scaroni said Saturday.

Kazakhstan has said it wants a bigger share of revenues from the world's biggest oil-field discovery in 30 years in compensation for delays in pumping the first oil from the Caspian Sea wells and threatened to strip Eni of its role as project operator.

Long queue forming for renewable energy dole

Despite continued reservations about the potential of renewable energy sources in the Czech Republic, the Ministry of Industry and Trade is set to begin its most ambitious subsidy program later this year.

Cyprus: Buses threaten strike if trams get the green light

THE INTRODUCTION of a tram system to Nicosia is on the table again, much to the displeasure of bus and taxi drivers across the capital.

Bus drivers have in fact threatened that if such an idea is even considered, they will go on an indefinite strike in September.

An economic noose tightens in Zimbabwe

He has lost his export customers, struggled with power cuts and shortages of foreign currency and raw materials. He has raised prices several times a month to keep up with hyperinflation. He has shrugged off government inspectors angling for bribes.

Through it all, clothing manufacturer Anthony Robinson has always managed to turn a profit.

Until now.

Big oil rig sets up shop in the N.D. Badlands

Rig 257 can go up to 12,000 feet laterally, while other rigs tend to top out at 9,000 feet. Because more pipe is going in the ground, more derrick capacity is needed to hold up to the pressure. "It takes a lot of horsepower to pull that," Shackelford said.

The rig currently is the largest re-entry rig in the Williston Basin, he said.

Energy Producing Roads Made From Solar Cells and Glass May Be The Solution To Carbon Emissions and Climate Change

Solar Roadways is still in the concept phase, built on Brusaw’s childhood fascination with an electric race car game called slot cars. The idea of cars running on electric roads stayed with him as he went on to earn his Master's degree in electrical engineering. As global warming became established science, his wife Julie suggested he turn his obsession with electric roads into a way to conserve fuel and reduce pollution. Brusaw came up with the idea of a road that produced its own electricity, a solar highway for energy independence.

Argentina reportedly seeking arrest of Shell executives over supply

The Argentine government's price controllers are seeking arrest warrants for top executives at the local unit of Royal Dutch Shell PLC, apparently on the grounds that the company has failed to adequately supply the local fuels market, Argentine daily La Nacion reported Sunday.

...Shell and Exxon cited skyrocketing global oil prices for the pump price increases. Following Kirchner's call to action, however, protesters marched on several Shell stations in Buenos Aires. As sales dropped off, Shell and Esso quickly reversed the price hikes. Pump prices have remained more or less under de facto government control since.

Iraq's oil conundrum

Many people think it was a war for oil, but US and British companies may end up getting none of it.

Should Congress consider universal energy tax?

YES: At least Dingell's economy-wrecking plan is honest about sacrifice

Dingell recognizes that carbon cap-and-trade proposals are merely backdoor taxes on energy use. As carbon-emission caps take hold, prices for energy and goods will increase, and some companies will fold. Because the tax is hidden, Congress would likely hold hearings into price-gouging and the villainy of oil companies, while avoiding all blame for the policies they foisted upon the nation. In the end, these policies will hurt the working poor, blue-collar laborers and those on fixed incomes, while doing little or nothing to prevent global warming.

NO: Dingell's mock proposal is nothing but a ruse to scare voters

Dingell's recent mock-serious proposal to create a huge new carbon tax on fossil fuels is merely, by his own admission, a ruse to show how unpopular such a tax would be with the American people. Its real aim is to relegate House Speaker Nancy Pelosi back to the political kitchen.

AskPablo: Commuting

Will our society ever file for a divorce from our adulterous love affair with personal vehicles? I couldn't tell you. But I do know that there are plenty of solutions out there, just a lack of political will and courage to implement them.

Gas companies opening up books

As Hawaii's gasoline prices top the nation once again, isle motorists can soon expect to get some information on what goes into the cost of a gallon of gas.

The first weekly pricing reports from the oil industry to the Public Utilities Commission are due this week. The commission is required to make information available within 14 days but has not yet determined what information will be posted online.

Reports are aimed at letting the public decide whether it believes oil companies are setting prices excessively high.

Oil deal means half-price bus travel for 250,000

Up to a quarter of a million Londoners are today eligible for half-price bus and tram travel as Ken Livingstone's Venezuelan oil deal finally went live.

The travel scheme, worth up to £280 a year for everyone on income support, follows an agreement by Venezuelan president Hugo Chavez to give the capital discounted fuel for its bus fleet.

Iran May Give More Fuel Rations to Help Tourism

Iran may offer drivers extra gasoline above their monthly quota, a newspaper said on Monday, in a move to help boost domestic tourism which hoteliers say has suffered a blow since fuel rationing started in June.

EU cuts funding to Gaza plant

The European Union cut off vital funding to a Gaza power plant on Sunday, forcing it to shut down the last of its generators and darken tens of thousands of Palestinian homes.

China’s private oil dealers need a yearly quota

CHINA'S leading private oil dealers’ organisation is applying for special policies from the top economic planner for changes in an industry that is now overwhelmingly dominated by state-owned giants. It says the appeal is a matter of survival.

“What we are asking for is that the state gives us a certain quota every year to access oil from major refiners and oil producers so that we can survive and develop under the industrial monopoly,” Zhao Youshan, director of the Petroleum Distribution Committee of the China General Chamber of Commerce, told China Business Weekly last week.

Pakistan: CNG stations in residential areas posing threat

The increasing number of CNG filling stations in thickly populated residential areas is posing a serious threat to the lives of people living in adjacent localities.

These CNG stations, in almost every residential area of the city including Tulsa Chowk, Bakra Mandi, Khayaban-e-Sir Syed, Ratta Amral, Chungi 22, Tench Bhatta, Muslim Town, Adiala Road and Saidpur Road, are not only posing a threat to the lives of the residents, but also causing gas shortage in nearby localities during winters.

Scientists threatened for 'climate denial'

Scientists who questioned mankind's impact on climate change have received death threats and claim to have been shunned by the scientific community.

They say the debate on global warming has been "hijacked" by a powerful alliance of politicians, scientists and environmentalists who have stifled all questioning about the true environmental impact of carbon dioxide emissions.

People buy small cars even though they can be deadly

Americans are buying more small cars to cut fuel costs, and that might kill them.

As a group, occupants of small cars are more likely to die in crashes than those in bigger, heavier vehicles are, according to data from the government, the insurance industry and the National Academy of Sciences (NAS).

The newest small vehicles, of course, meet today's strict safety standards and can be laden with the latest safety hardware, such as stability control and side air bags. They are safer than ever. And differing designs mean some small cars are safer than average. But even the safest are governed by the laws of physics, which rule in favor of bigger, heavier vehicles, even in single-vehicle crashes.

..."People are looking for ways to save fuel, and they need to know that if they decide to buy a much smaller vehicle, they are putting themselves and their families at risk," says Adrian Lund, president of the Insurance Institute for Highway Safety. IIHS, supported by auto insurance companies, follows traffic deaths closely.

Mexico moves oil workers on Dean, sees output impact

Mexico has started to evacuate 13,360 workers from its Gulf of Mexico oil rigs as powerful Hurricane Dean neared and the move will affect production, state oil company Pemex said on Sunday.

Pemex, which produces some 70 percent of its crude oil from offshore platforms in the Gulf of Mexico and is a major supplier to the United States, said it would know the output impact early on Monday.

WTI Down As Hurricane Dean's Threat Lessons

Crude oil futures were lower in London Monday morning as Atlantic Hurricane Dean's path looked on course to miss the concentration of U.S. oil facilities in the Gulf of Mexico.

But the threat to Mexican offshore rigs and a recovery for global equity markets has offered support and should help prevent further losses, traders said. "We are seeing people unwind precautionary positions because for now it looks as if U.S. infrastructure is going to miss the worst of the hurricane," said a broker in London. "But I think it's too early in Dean's progress to get to comfortable."

Saudi Aramco invites engineering bids for $8 bln Saudi refinery

The plant, known as East Coast refinery, is the fourth new facility planned in the kingdom and will boost total domestic crude oil refining capacity to above 3.5 million barrels a day by 2012, more than double the U.K.'s.

The refinery, due for completion around late 2011, will process 400,000 barrels a day of Saudi crude and will be at Ras Tanura on the Persian Gulf, already home to the country's largest refinery with a capacity of 550,000 barrels a day, the sources said.

Turkish Energy Minister in Iran Seeking Closer Ties

Turkey's Energy Minister Hilmi Güler arrived in the Iranian capital of Tehran on Sunday for talks with senior Iranian officials including his counterpart, Parviz Fattah, in order to detail a preliminary deal signed earlier this summer between the two countries for deepening bilateral cooperation in the energy field.

The Peace Racket

One peace studies motif holds that the U.S. intentionally preserves its enemies to justify military expenses. According to a 2000 article by Michael Klare, professor of peace and world security studies at Hampshire College, for instance, the Pentagon deplored the prospect of peace between the Koreas because it “would erase the most menacing of our putative ‘rogue state’ adversaries” and thus “imperil . . . future military appropriations.” (For Klare, North Korea is only “putatively” a rogue state.) The director of Cornell’s peace studies program, Matthew Evangelista, blames the cold war on the U.S. Defense Department and claims that it ended only because a good-hearted, newly enlightened Gorbachev “heeded the advice of transnational [peace] activists.” You might think that no one could fall for such nonsense. But keep in mind that the Berlin Wall fell in 1989 and that students starting college in 2007 arrived in the world a year later. They don’t remember the cold war — and are ripe targets for disinformation.

Tehran advised not to export gas

TEHRAN: An influential research centre of Iranian parliament has sounded a downbeat note on the future of Iran’s gas industry, saying that exports would not be possible in the next 10 years given the scale of domestic consumption.

The warning was supported by Iran’s sacked oil minister on Sunday. “It seems that for at least the next 10 years there will not be any extra gas for export. Iran is advised to remove gas export from the country’s policy due to the limited production capacity,” the panel said. Turkey is currently the only recipient of Iranian gas exports, receiving several billion cubic metres annually.

But Iran is seeking to export large quantities of gas to Turkey and other countries in the Middle East, as well as to India and Pakistan through new pipelines. Iranian media reported on Sunday that Iran’s sacked oil minister had also issued a parting warning to President Mahmoud Ahmadinejad, predicting a looming “catastrophe” in the Iranian energy sector because of high consumption.

David Strahan: Why Dick changed his mind

In a widely viewed You Tube clip, taken from a C-Span interview conducted in 1994, Dick Cheney argues persuasively that the United States was right not to topple Saddam Hussein during the first Gulf War.

He cites the potential disintegration of the country and the risk of American casualties as good reasons for the decision not to take Baghdad.

So what was it that changed his mind by the turn of the century?

An acute awareness of impending peak oil.

Oil Wars: Fueling Both U.S. Empire & Ecocide

Americans, more generally, have also become addicted to oil. The U.S. consumes one-quarter of the world’s oil supply, and about 40% of that is burned in passenger vehicles, including the tank-like Hummers, which get a measly 10 miles per gallon, and other SUVs. It’s a little harder to calculate how much a gallon of human blood costs, but the brutal regime seems to think “the price is worth it”, as former Secretary of State Madeleine Albright once quipped about the deaths of hundreds of thousands of (civilian) Iraqis, most of whom were children. Similarly, Donald Rumsfeld remarked that “the carnage was horrendous and it [is] worth it”. Those and other costs, including pollution and global warming, possibly the most serious threat to our planet, are efficiently externalized to the rest of us, and our descendants, and indeed all life on Earth, with dire consequences.

Our finite planet: planning for a decline in our oil bounty

In my local supermarket in Prospect there is a wonderful photo from the early 1900’s. A tram is rolling down the centre of an uncrowded Prospect Road. When I see this image it makes me reflect on how much Adelaide’s transport has changed. Since World War II Adelaide has become almost entirely dependent on cars for transport. Why?

Stop the false projections of doom

I am advised by real experts that BP, BG, BHP and others, are making massive investment decisions in the oil and gas sector of this country that have as much as a 25-year horizon. They are the real experts who put their money where their mouths are, and they know that we will not be running out of gas (or oil) in the near future.

Peak oil - less faith

The major players in the Peak Oil paradigm are the energy importing and exporting countries and the big international oil/gas companies (Big Oil). Peak Oil consists of two complementary parts-the demand for oil, driven in part by China and India, outstripping the present supply forcing high prices, and the fact that the international supply of oil is at its peak or just past it. The exporting countries may be physically unable to supply this demand. Note the scramble by the Arctic countries to claim that seabed for the petroleum it is perceived to hold. The reactions by the three stakeholders are interestingly different.

US Coast Guard joins in Arctic oil rush

The US Coast Guard icebreaker Healy and a group of 20 scientists have embarked on a four-week cruise that will help shape the future of US efforts to claim its share of mineral and oil wealth beneath the Arctic Ocean.

India faces "unbearable" oil bill, nuclear a must: PM

India is committed to developing its nuclear energy capability and other sources of power as its oil bill will impose an "unbearable burden" as growth continues, the prime minister said on Monday.

The small-farm revival - Local program equips young people for careers in livestock, agriculture

"If we're trucking in 80 per cent of produce, we know when we hit peak oil that's going to become much more expensive and even impossible," he said.

"It puts our kids and grandkids at risk," said Shook, who just welcomed a new granddaughter into the world earlier this month.

"I don't want that child to ever be hungry in her life and if we continue (with industrial farming), that's what will happen."

Ban says US shifting on climate change

The United States is shifting tack and joining international efforts to fight global warming, UN Secretary General Ban Ki-moon said in remarks published Monday.

Eco-millionaires see boom times ahead

Mankind's response to climate change will shift how the world gets its energy and is already making "green barons" out of early investors in renewable energy, clean technologies and carbon trading.

Today on the NPR morning rotation they highlighted the growing resistance of weeds to roundup.

This paper examines the factors that have led to the recent instability in financial markets,
specifically the housing bubble and the recent run-up in stock prices. Prices in both the housing
market and the stock market are often moved by psychological factors that have little to do with

Virus Spreading Alarm and Pig Disease in China
A highly infectious swine virus is sweeping China’s pig population, driving up pork prices and creating fears of a global pandemic among domesticated pigs. (Hope it doesn't make the jump to humans)

I heard that story on NPR too. I expect Roundup resistant horseweed to be making an appearance in my neck of the woods, Cumberland County Il., soon as the topography of rolling hills dictates the use of no-till methods that use roundup. As Ean Malcom in Jurassic Park stated, “nature will find a way”. A half century of use of chemicals and antibiotics is already stimulating the adaptation by organisms to our meddling.


The annual Roundup bath is creating superweeds just as predicted. In the Red River Valley of the North, farmers often rotate Roundup Ready soybeans with wheat, this spring which was wet, a lot of wheat did not come up on last year's RR soybean fields, these fields had to be replanted. In my opinion, in certain growing conditions, Roundup is also carrying over to the next growing season killing any crops without genetic engineered resistance to Roundup.


Yes. RoundUp is just like antibiotics.

Soon RU will be used sparingly. Just like TB strains/staff are
resistant to antibiotics, Johnson grass, cocklebur,
pigweed will be coming back.

As well as some virulent cornworms and boll weevils.

Wired Magazine ran an article in their November 2004 issue about the appearance of a coca plant in Colombia that showed resistance to glyphosate (the RoundUp pesticide):


The U.S./Colombia authorities have never publicly acknowledged its existence, but according to the article, all the growers in Colombia have switched to "Boliviana negra" -- the "Roundup-Ready" coca. Apparently, the original plant was discovered in a sprayed field, and cuttings were made from it, and were grown out like crazy. Seems it was a naturally-occurring mutation -- no signs of genetic manipulation. So much for Plan Colombia...

planned obsolescence by evolution.

Over the weekend, there was a car dealership offering test drives of the Smart car. They evidently had no shortage of takers - they had quite a few, and we saw them zipping around all over the place.

I gather that they have just a few, and they trot them from one dealer to the next. They were gone by Sunday - off to another dealer, I guess..

Yes, I posted an article about that. Yesterday, I think. That is how they are marketing them. Rather than doing conventional advertising, they're going grassroots, and taking the cars on tour.

The NAS report linked above closely follows this report from ICBC on the perils of imported used right-hand drive vehicles, like these. The ICBC report claims that RHD vehicles are 40% more likely to crash than LHD, and of course they cite boxes of actuarial statistics to back up their claim. The news release doesn't mention that 85% of the drivers in the study were males 18-24 years old.

I recently bought a suzuki carry from the above dealer, and have been commuting with it, on the superhighway, every day since. Its think its probably as safe as any truck when driven defensively, and it is delivering 45-50 mpg.

My admittedly cynical hunch is that this is a FUD campaign designed to stem demand. The NAS report leads the US SMART car release, and minitrucks in B.C. are selling so fast I had to put a deposit down before the container even arrived from Japan.

Best of luck to the big-3 with this. I'm sure some other people will be convinced. ;)

'When the Feds Big Guns Fail, Call in China'


By Julian Delasantellis

'In the 1939 movie adaptation of L Frank Baum's 1900 novel The Wonderful Wizard of Oz, all the characters were in awe of the tremendous magisterial power of the Wizard. Dorothy, the friends she met on her journey (the Tin Man, the Cowardly Lion, the Scarecrow), and all the other various citizens of Munchkinland, they all believed that it was the Wizard, in his castle in the Emerald City, who possessed the powers to make all their problems right, to make all their lives sweet.

Then Dorothy's little dog Toto pulled away the curtains that concealed the Wizard's supposed magic machine, and found only smoke and mirrors; as for the Wizard himself, he was just a rather ordinary little man.

Last week, chance and circumstance pulled down the curtains covering the smoke and mirrors of the operations of the US Federal Reserve. Behind them, instead of a magical wizard able to contain the raging crisis now spreading across the world's financial markets, we find the chairman of the United States Federal Reserve, Ben Bernanke.

And his magic is proving to be as ineffective in curing the ills of the world's financial markets as was the Wizard's in getting Dorothy back to Kansas...snip...

The market in what is called commercial paper, very short-term (frequently no more than a day or two) corporate borrowing of money needed to fund a company's temporary funds shortage (or lending of funds from companies with a funds surplus) has closed for companies thought to have even the remotest connection with the subprime-mortgage debt in peril; no amount of open market operations will reach these borrowers...snip...

After being ensconced around 5.30% all year, this rate climbed to almost 5.90% in the midst of the Fed interventions; that means that wherever the money the Fed was attempting to put in the markets was going, it wasn't getting to the US.

So where were the billions of dollars in Fed intervention going? The market for US government-guaranteed three-month Treasury bills is one short-term money market where the Fed probably has not wanted to have the effect that it has. Rates in this market saw an astounding fall last week, dropping almost 130 points, to reach just under 3.6% at their lows in the middle of the week...snip...

Those commentators who say this entire crisis is overblown, that the world is still awash with liquidity, are correct, up to a point. There continues to be huge supplies of liquidity in the world's markets. The problem is that a lot of financial institutions now need some immediate contact with some of that liquidity, and are not getting it. One of those might be Countrywide Financial, the largest US mortgage lender. Countrywide's stock has declined 60% in a month, and it burned through its entire $11 billion emergency line of credit in a few hours on Thursday. Thus the Fed discount-rate move on Friday...snip...

That's why it's such a problem that the Fed's Friday discount-rate cut had so little effect. If what comes out of the barrel on firing your most powerful weapon is only a little stick with a flag that says "Bang" on it, your enemies, in this case the markets, will see that there's nothing you can do to deter them, to frighten them, to change their course of action. Panic will set in, perhaps worse than before; past the curtains, the smoke and mirrors, the Wizard is seen as impotent...snip...

SWF (Chinese Soverign Wealth Fund) may swoop in and buy, at the bargain prices generated by the crisis, the discounted mortgage securities at the core of the crisis. Then, since they're also now selling at fire-sale prices, they may buy up some of the finance companies themselves - a rumor circulated around Wall Street last week that agents acting on behalf of China's still-nascent SWF were making inquiries related to picking up Countrywide Financial on the cheap. As Pettis puts it, "The large-scale shift of global reserves into what are being called sovereign wealth funds may provide the party with at least one more bowl of industrial-strength punch."...snip...

If the US does allow China to bail it out of a mess solely of its own creation, the US will prove itself less of a world superpower and more of a poor, hapless junkie walking into a pawnshop, desperate to sell another bit of its hard-earned family heritage built up over 200-plus years for just one more fix of plasma TVs, MP3 players, Barbie dolls and all the rest of the catalogue of cheap Chinese manufacture on which Americans are now hooked'...snip...

More on 'The Wizard of Oz' and money:
Note the idea of 'positive thinking' during that time of trouble.

For another take on the Wizard of Oz and money.


BTW, to give you another clue. In the Book, Dorthy's shoes were made out of Silver not Ruby.


All it took at the end of the story to vanquish the all-powerful witch was a splash of cold water in the face. Interestingly, there is speculation that the original book was a political parable and that the witch represented the evil Standard Oil corporation (now Exxon) which, in 1900 when the book was written, was aligned with the Wall Street crooks of the time and the railroads to force landowners off their property by using the "humbug" of the gold (troy Oz) - backed dollar (emerald) standard to control the money supply in order to force farmers off their land and drive their competitors out of business.

The election of 1896 was all about a contest between "goldbugs" and "silverites" (In the book, Dorothy's all-powerful slippers were silver, not ruby). Silver was a readily available commodity at the time and could be freely coined, providing a liquid and accessible means of exchange that would free the "good people" of the heartland (the North and the South) from they tyranny of the industrial witches of the East and the West. Dorothy, the proxy for the average American, gets her silver shoes early on but doesn't know what to do with them so she must follow the gold to Washington ("follow the money," whispered Deep Throat to Woodward and Bernstein) where in the end, she discovers that the Wizard is nothing but a fraud, elevated to his office by happenstance and kept alive by deception, literally smoke and mirrors.

now exxon and mobil and chevron and bp(twice)

[So what was it that changed his mind by the turn of the century?

An acute awareness of impending peak oil.]

So are we now saying that Matthew Simmons caused the Iraq war? Cheney thought toppling Saddam would be bad; awareness of peak oil made him change his mind and start the war; Simmons made him aware of peak oil, ergo....

and by extrapolation...M. King Hubbert then?

I think it would be somewhat unfair to say that Simmons (or Hubbert) caused Peak Oil.

From up top, an Export Land warning on natural gas exports from Iran, which follows a warning by the former Iranian oil minister of a developing energy crisis, because of domestic petroleum consumption:

TEHRAN: An influential research centre of Iranian parliament has sounded a downbeat note on the future of Iran’s gas industry, saying that exports would not be possible in the next 10 years given the scale of domestic consumption.

Reminder: the model suggests that the "worst" will continue to get "worse" because the decline rate in net exports will probably accelerate with time.

It seems the latest bureaucrat to learn that it doesnt pay to speak truth to power is the ex-oil minister of Iran.

the other export land warning is Saudi Arabia seeking contracts for a new refinery on the Persian Gulf headlined above in Drumbeat. They have apparently decided to make all the value added profits from their oil refining, which is awfully bad news for refiners in countries that import their oil from the region.

So competition for non-opec sources of crude is going to get very stiff when the refinery comes on line, certainly within five years.
Bob Ebersole

That refinery is supposed to supply domestic consumption:

The new project is aimed at meeting fast-growing demand for refined products from the local power and industrial sectors.

Even better.

From 2005 to 2006, Saudi Arabia and Iran showed a combined increase in domestic consumption of about 200,000 bpd (Total Liquids), from 3.5 mbpd to 3.7 mbpd (EIA), a 5.5% rate of increase in domestic consumption.

At this rate of increase, their consumption will have increased by about 3 mpbd in 10 years, to 6.7 mbpd.

If we assume a 5% per year rate of decline in production, their combined production will have dropped to 9 mbpd (Total Liquids) in 10 years, resulting in net exports of 2.3 mbpd, versus 11 mbpd in 2006, an implied decline rate of about 16% per year over a 10 year period (starting slowly and accelerating with time).

Bob, do you have a basic formula for the price difference of importation to US of refined product vs. importation of crude, expressed as a pump price? Thanks.

River, that's way out of my realm. But the gasoline and diesel refiner's margins are what I'm talking about. I just think oil exporting companies are going to want those profits and jobs for their own economies, particularly Russia and Saudi Arabia, and that's 80% of the exportable production in the world. They've both proved by their expropriations their loving reguard for multinational oil companies (sarcanol alert) and I don't trust what they say, but watch what they do, and they are both adding refining capacity.
Bob Ebersole

That makes sense Bob. If SA, Russia and other oil exporters begin selling only finished product then the refineries and knowledge to build and operate them will be lost in some importing countries. I can see a scenario where the oil exporters own everything from the oil in the ground to the pipelines, refineries, shipping, storage, and stations that sell the finished product. Not so different than the monopoly of Standard Oil Of New Jersey in days of yore. If this is the way that its going to play out, consuming countries will be totally at the mercy of exporters. This will be a certain recipe for more oil wars. Do you suppose that the lack of interest in building new large refineries in the US is because of US oil industry knowledge about the intentions of the oil exporters? Or, is it the knowledge of PO that is causing the lack of refinery building interest?

Interesting that noone here even considers the possibility that the saudi's are building refineries because they know they will have more oil in the future than they know what to do with. Even the most dire pessimest must admit it is possible that SA has more than 250 BBL of proven reserves.

Lots of things are possible--the Texas State Geologist said that it is possible that Texas oil production could rebound to its peak production level--but let me know when Saudi crude oil production exceeds 9.6 mbpd in a calendar year, and let me know when Texas crude oil production exceeds 3.5 mbpd in a calendar year.

I'm a trained professional psychic, and I 'd say the Saudis are building refineries because they expect to make money with them. Having the productive capacity gives them plenty of options. And, I'd guess they are going to keep their refineries supplied first with crude oil, because they'd like that $10-$15 a barrel that the refiners make in other countries.

There's quite a bit of difference in the markets from the late 1980's when the crude markets collapsed. That was when the North Sea, the last big province came onstream, and the end of the Soviet Union when they were desperate for cash. The North Sea is now in decline, and the Russians will want to play the same game as the OPEC members. Total world consumption has increased from about 60 million BOPD to 85 MBOPD. And the US has become more inelastic in their useage, with a paralytic government.

Before, they were clearly worried about alternatives. We have none that are practical in sight-check out Robert Rapier's posts on the ethanol boondoggle. As far as Saudi Arabia being able to increase production-check out Euan Mearns, Stuart Staniford and Khebab on the same, the posts are all linked to in Gail's book in progress. Even if they could, OPEC has made it clear they intend to defend a $70 oil price on September 11th at the OPEC meeting, a coincidental date I'm sure.

Our fine federal government has screwed the pooch with the invasion of Iraq and our sabre rattling with Iran, plus unlimited support of Israel. I think any Moslem now concludes the US is their enemy, that the US intends to conquer the oilfields if they can't get the oil any other way. I know I would if I were Moslem.

So, even if they do have 250 billion barrels, they don't intend to give it away. The US now imports 68% of our useage, 14.25 million barrels a day. Our currency is rapidly declining in relation to everybody else's, and our government is asleep at the wheel. There is no way we can ramp up substitutes and cut useage in less than about a 10 year effort, and by that time the Indians and Chinese will be able to buy and pay for everything we save.


and just think, antidoomer,I'm considered a pollyanna around here.I think we could actually change with the American can-do attitude and willingness to sacrifice, I think a slow down and a lot of pain is more likely than any kind of crash or end of the world. But we need to start now, there is no other time we inhabit, now is all we will ever have.
Bob Ebersole

The sad thing is I just don't see enough of America having the can-do attitude any more.

Bob, you and I have exchanged comments and disagreed over the roles of generations, but where I just have to agree with you is in your rather bleak assessment of the Gen X and Gen Y group into which I fit. I don't think there is the get up and go in these groups there maybe was in previous generations. And that makes me think that we are going to have a hell of a time getting any real change.

And I am not saying you were ragging on GenX/Y I know you were making a response to my comment on boomers :-)

Just saying I think the failings you may see in Gen X and Gen Y might, if right (and I think you may well be right), get in the way of a fix through the American can-do attitude that was once the envy of the world.
When no-one around you understands
start your own revolution
and cut out the middle man

I'm one of those guys who can make things work. It's required for my high-end Information Technology job, and I enjoy fixing cars and doing handyman stuff. I like thinking that I'm MacGyver Incarnate. I'm also under 30, so I fit into one of those condescendingly-named generations that you mention.

But, in order for a guy like me to do a can-do project, two things are not in place:

  1. Removal of non-technocal obstacles. I'd be happy to put posts and wire up over railroad tracks, but I'd need to be a real expert in order to get a committee to accept an enviornmental impact report. Then there's workplace safety. Taking care of the environment and workers is a Must Do -- but considering the side-effects of our actions takes considerable time and expertise and experience that a bunch of guys who just show up at work at sunrise Get 'Er Done don't really have.
  2. Real Leadership. Some real leadership could make these problems go away. Managers to in my organization keep the bullshit away from those who do the real work. Combine this with someone who has a workable positive plan for making the world a better place, a positive vision, and some eloquence to express it all... And it has to be a plan that doesn't involve shooting people for no good reason or loosing our freedoms... Then we might really have something!

This sure ain't the 1940s. We have to think about the reprocussions of our actions with every move, both professionally and personally. But, we can-do this, and we can do big stuff -- if just a few more pieces fall into place.

But, alas, I'm probably not qualified to be that kind of leader -- I'm just a skilled technician and problem-solver.

Very well said, Bob.

Ditto for me, Bob. A good summation of "where we are at."

Even the most dire pessimest must admit it is possible that SA has more than 250 BBL of proven reserves.

Absurd! No, absolutely not. It is not possible that Saudi has 250 billion barrels of reserves. Anyone who has done one whit of work looking at the data knows that this is not possible.

Saudi has somewhere between 60 billion and 90 billion barrels of reserves.

Ron Patterson

Anyone who has done one whit of work looking at the data knows that this is not possible.

You mean the state secret data that the public isn't allowed to see! I'm not saying anything for sure one way or another. But you cannot say it's impossible that the Saudi's have such reserves. Hell they could have more and want to create the illusion of less to squeeze every buck out of the rest of the world they can.

Except they are in fact creating the illusion that they have more not less--so there goes that theory of yours.

Still, yeah sure, you're "right"--no one knows... But the cornucopian take on Saudi is just not responsible, or even close to "scientific" for one second. So, I guess you take the cornucopian and highly unscientific stance here just to play devil's advocate? For one, I don't trust them for a second because it is an awful country (nor should you or anyone else--perhaps that's why we have hundreds of thousands of US troops in a country nearby? Oops, I'm sorry antidoomer, I forget we're just spreading democracy and freedom...), and secondly because it is just fatuous wishful thinking to believe that they in fact can raise production substantially above what they are at right now. Maybe they can't, many they can--but I think every "expert" agrees even if they could raise production, they couldn't sustain it for very long. Water cuts are high. I'm sure you've read all about it since you seem to be so willing to rush to the defense of good 'ole Saudi.

In all likelihood Saudi is in trouble, but believe whatever you wish antidoomer, we'll all do the same.

Hell, grant the 250 number. Subtract your 90, that leaves 160 more than estimated. At 25-30 a year, that buys the world and entire 5 to 6 more years.

That would move peak from Summer 2005 to Fall 2010.

In the scheme of things, it's moot whether they have 250 or 75. Only if everyone has 250 and shale turns to gasoline when pissed on does any meaningful shift occur.

We had good data up until 1982. Geology has not changed since then.

And it is incredible to hide a second Ghawar. There is just not enough room ! It would have been found no later than 1960.

And rumors of a giant hidden oil field would have leaked out. Too many Americans & Brits working at mid-level Aramco even today.

There is no credible way that KSA could have 250 billion barrels in reserves. It cannot appear out of nowhere.


Another article about the ongoing ammo shortage:

Bullets scarce at Sheriff's Office

Tony Magolda, Lawmen Supply Co. of New Jersey president, who supplies many state police departments and the Wicomico County Sheriff's Office, said shortfalls in .223-caliber and 5.56 mm rifle rounds, as well as .40-caliber, .45-caliber and 9 mm handgun bullets are forcing delays exceeding six months to fill. One distributor has stopped taking orders for the rest of the year.

"I've never had that where they wouldn't accept orders anymore," said Magolda, who's been in the business since 1984.

Maybe Chris Rock is more prophetic than any of us imagined? Guns are free but bullets cost $5,000 each? People will have to save some $ to buy a bullet before shooting another person! Ammo shortage might be more effective than a three day waiting period to get a weapon for preventing homocides. Are we approaching PEAK AMMO? ...PA... What will the NRA lobbyists do for a living now?

People will have to save some $ to buy a bullet before shooting another person!

It was a VERY fouling black powder, but I've made it by hand before (just to say I could) and could again. Same with casting lead balls. A flintlock is a rather 'poor' firearm, but it is still a firearm.

(And George Ure was letting his readers know about ammo shortages last year. The pull of $21 million dollar orders from the government is quite a draw.)

Crossbows work well and can be fabricated with a limited assortment of tools. Making the bolts (short arrows) is another matter, but they can be made on a rudimentary lathe, such as those seen in the link below. The real problem might come from finding arrow head material...Especially if everyone begins hoarding stones and we encounter PR...Peak Rocks.


anything that is light and can hold a edge has been historically used for arrowheads.

As a long-time recreational woodworker (I've made quite a few longbows from trees to bow), I don't like crossbows. They are inherently inaccurate and slow to reload. They were developed to pentrate metal armor and are not very useful otherwise.

Smokeless powder is high-tech and very energy intensive; while we humans love this kind of concentrated personal power, it's probably not sustainable without oil and/or nat'l gas.

Even black powder uses nitrogen that is better used for agriculture. Europe ran through centuries of saltpeter accumulation in short order; every dovecote and bat cave in Europe was mined to make black powder. They had reached Peak Saltpeter when the voyages of discovery found the guano deposits. When that started to run out, smokeless powder (nitroglycerine, nitrocellulose and fillers) came to the rescue. Kinda like the wood, coal, petroleum progression. And indeed, a hundred years from now, with both guano and petroleum very scarce, probably humans will have to go back to killing each other with bows and arrows.

I recommend young men to learn to make Native American style unbacked flatbows and wood arrows; by the time they are my age their skills may well be respected.

Barkwards to the future...
Errol in Miami

Edit: I forgot to mention Europeans mining outhouses for the Saltpeter... how could I leave out that fun fact?

My local hunting shop hasn't had any .223 except a little varmint for 6 months now. 9MM is hard to find, but if you go to the right shops it is around.

308 is getting a little rare in some loads as well.

I recommend buying Primers. You can make the powder, Visiting any parking lot you got lead(wheel weights), People save casings.

But not many DIY's can make a primer for those 9mm and 45s.

(also, you should have already stocked up).

Primers? Worth more than gold in the future?

Hi Samsara,

.223 and 9MM hardly seem worth reloading, in normal times, due to the cost per round.

I guess we will have to get creative in many areas as things detiorate.

I'm already gathering piles of stones at strategic points around the perimeter of my property.

Sharpening sticks?


Stoning people is something that will stop most people without a gun coming toward you. Or sling shot rounds.

It might not be pretty or fast like a gun, but a few good hits by a stone will not kill you, but will make you think twice about getting any closer.

Here is for a more peaceful approach to end of civilization.

May as well start practicing now:


If you're real good, or lucky, you can even go hunting:


Here comes the end of oil and the beginning of stone hoarding.

Uh oh! Peak stones!!

Could be the end of the stone age!

Not to worry. The beauty of opposable thumbs is that, when all else fails, we can still choke one another.

Man is adaptable!

Not gonna happen. Look at the Flintstones. This too shall pass, IMHO.

The Stone Age didn't end because we ran out of rocks, y'know.

You'll have to pry my stone from my cold dead fingers!

For any of you from the Garden State, my understanding is that possession of a slingshot is a felony in New Jersey.

When slingshots are outlawed, only outlaws [and those from the other forty nine states, the District of Columbia, U.S. possessions & territories, the Commonwealth of Puerto Rico, ... and probably more than 140 countries] will have slingshots.


You can make a hell of a sling from a 34-B lace underwire. If you are a real he-man you might even go for a C or D-cup.

In one episode of the Three Stooges, they came across a lady's laundry out drying. Curly picked up the bra and said "look fellas, a double-barreled slingshot!"

Woo woo woo!

This is why men have evolved preferring large cup sizes. Better defense.

possession of a slingshot is a felony in New Jersey.

As long as you use slingshots are used VS people in La Cross. If you worry a Squirrel with the slingshot - well that's a problem.

(oh and using a paint ball gun for catch and release deer hunting is considered 'animal harassment')

So just keep banging the rocks together guys!

Slightly off topic, here is an article about Mr. Cramer's stock picks...

Cramer's picks haven't beaten the market--Barron's

NEW YORK (Reuters) - Jim Cramer's stock picks on his nightly CNBC show "Mad Money" haven't beaten the market over the past two years, according to an article in the August 20 edition of Barron's.

Over that period, Cramer's stocks rose 12 percent, compared with a 22 percent rise in the Dow Jones industrial average and a 16 percent rise in the Standard & Poor's 500 index, Barron's said.


The Barron's article adds that it also looked at a database of Cramer's "Mad Money" picks over the last six months, which is maintained by his Web site, TheStreet.com. The data showed his picks were flat to down in relation to the market, according to the Barron's report.

Perhaps this explains some of his recent anxiety.

Cramer is good at education, but I've questioned his judgement about the market segment that I know the most about, the oil patch. As an example, he's consistently bad mouthed the US land drillers. All the drilling companies have at least a six month backlog in their rigs, and with the world situation they are only going to make more money. The offshore companies are the ones with geopolitical risk.

So the answer is to do your own research, as Cramer advises on every show

The "picks" on mad money are based on people calling in with their own stocks and asking if they should buy or sell. I don't think this constitutes picks, as in a recommended portfolio. Plus, something he picks this week might be panned next week. All in all, I think Forbes analysis is meaningless. Cramer doesn't follow each one of these stocks and then issue an alert as to when to sell.

Re: Scientists threatened for 'climate denial'

Where did this story come from? It's dated 11/03/2007, not really current news. Tim Ball and Richard Lindzen are professional "skeptics", part of the industry funded denial of Global Warming. They appeared is the TV program called "The Great Global Warming Swindle", which was a very inaccurate presentation of the situation.


I hope that the folks on TOD have better sense than to believe this propaganda. Surely, the fact that the sea-ice over the Arctic Ocean is rapidly declining in extent would give cause for worry. Also, there were all those record high temperatures throughout the U.S. over the past few weeks. Didn't you guys notice how hot it was outside?

E. Swanson

Sorry, I hadn't realized it was that old. Lately Google News has been serving up some really old articles as new for some reason.

I would say most of us at TOD don't buy it, but a surprising number might, including some on staff.

I hope that the folks on TOD have better sense than to believe this propaganda.

Generals in the Armed Forces of any country will spend more time considering the tactics and strategy of the opposing generals then they will on considering their own tactics and strategy.

Similarly, in my opinion, Leanan links to many stories from "the opposing generals", since those tactics and strategy must be considered when contemplating the global view of Peak Oil and Global Warming.

So, this article and others like it are valuable for considering what the opposition is saying.

Please Note: I speak only for myself, and not for everyone on TOD.

So, this article and others like it are valuable for considering what the opposition is saying.


Well, that, and they're so darned amusing. ;-)

The political and commercial morals of the United States are not merely food for laughter, they are an entire banquet.

- "Eruption", Mark Twain


I forget the saying, or maybe it is a quote, but it goes something like "reading your critics, enemies and those you disagree with is good, for it will sharpen your own thinking."

Of course, the "dialectical" problem with this, is it works both ways =]

I get tired of repeating that global warming has a negligible effect on low altitudes and latitudes and the inverse at high altitudes and latitudes. The 'fact' that an average of monitored locations in the US has or hasn't changed definitively is irrelevant.

Take all the data from above 3000 feet and above 45 degrees latitude and then we can talk about it. That's where the action is. Averaging in the rest is dilution and obfuscation. PLUS, a major proportion of the water supply comes from up there. 11,000 feet in New Mexico equals sea level at Prudhoe bay. It seems to be about how fast the temperature drops as you gain altitude/latitude, and that curve may be changing. Dumb old plants and glaciers have figured it out, but Republicans are taking a little longer.

Rule of thumb for 'lapse rate', the drop in tempreture per thousand feet of increase in altitude, is three degrees Ferinheit. This was what they FAA used for private/commercial pilot tests but it could have changed.

Crude Oil Falls as Hurricane Forecast to Miss Gulf Platforms

Aug. 20 (Bloomberg) -- Crude oil fell after forecasters said Hurricane Dean would probably miss the largest oil-production regions of the Gulf of Mexico.


Crude oil for September delivery dropped $1.15, or 1.6 percent, to $70.83 a barrel as of 9:48 a.m. on the New York Mercantile Exchange. Crude prices have fallen 1.1 percent from a year ago.


Natural gas for September delivery fell 59.8 cents, or 8.5 percent, to $6.412 per million British thermal units on Nymex. Gasoline for September delivery fell 9.18 cents, or 4.5 percent, to $1.947 a gallon.


``I don't expect there'll be any significant damage'' to oil production said Gerrit Zambo, an oil trader at BayernLB in Munich, adding that U.S. crude may drop to $67 a barrel if the hurricane threat abates.


Six of the 834 manned oil and gas platforms along the U.S. Gulf Coast have been evacuated, the U.S. Interior Department's Minerals Management Service said yesterday. That's shut about 1.8 percent of the Gulf's 1.3 million barrels of daily oil production and 0.7 percent of the region's natural gas.

Campeche Sound in the southern Gulf is home to the world's third-largest oil field. Petroleos Mexicanos, Mexico's state- owned oil monopoly, plans to evacuate 13,360 workers from its oil platforms in the sound today, reducing output by as much as 400,000 barrels of oil a day.

BP Plc and Royal Dutch Shell Plc evacuated non-essential workers and Shell shut down daily production of 23,000 barrels of oil output and 47.5 million cubic feet of gas.


``As long as prices are not above $75, OPEC is in a situation to say their quotas are matching market requirements,'' Zambo said. ``If prices go down further, OPEC can say the market is calming and that there's enough production in place.''

Scientists who questioned mankind's impact on climate change have received death threats and claim to have been shunned by the scientific community.

This article is dated March 2007, and appears to have been published shortly after the airing by Channel 4 in the UK of "Climate Change Swindle".

The complainant in the article, Tim Ball, seems to have been fudging his credentials for quite some time, and getting plenty of airtime saying he's not getting any airtime ...


the 40-70 cooling type period is readily explained, in that the GCMs are quite happy to reproduce it, as largely caused by sulphate aerosols.

Global warming is caused by the enviroloonies who made us stop producing acid rain. The high sulfer coal producers were trying to help.

In my home province of Ontario acid rain was (and to some extent still is) a problem of obviously huge magnitude even to the naked eye. We still have many dead lakes. In the Sudbury region, the landscape itself became a moonscape and people had trouble growing lawns. The borders of that vast blighted area are still clearly visible when you drive through. The trees become small and sickly. Everything looks diseased, though there has been substantial improvement in recent years.

Limits to growth, dude. It's not the end capitalism, but say goodbye to rapid expansion. Stagnation and even powering down are real possibilities.

MEES finally updated its OPEC production figures. Shows June and July.

KSA at 8.6 mb/d for both July and June. Iraq 'surges' to 2.1 in July from 1.95 in June. $10billion / ( 2,100,000 * 31 ) = $153.61 per barrel of occupation dollars.

Angola's numbers aren't included. They are steadily growing their output. 1.65 mb/d for July.


Brusaw came up with the idea of a road that produced its own electricity, a solar highway for energy independence.

I've just found the winner of the prize "moronic idea of 2007". Yeah, solar cells are so cheap, why not bury them under the tires of trucks? We can even make them last longer than the asphalt! Brilliant idea, specially breathtaking when I get to see all the holes in my road back home and I get to think: "geesh, tough luck it aint a good solar cell that gets to be holed like that."



Americans are buying more small cars to cut fuel costs, and that might kill them. (...)

..."People are looking for ways to save fuel, and they need to know that if they decide to buy a much smaller vehicle, they are putting themselves and their families at risk,"

Yeah, why not build BIGGA'DAN EVAH great SUV cars with security bars all over it so that the family that gets to be inside it can more safely put to death all the other retards? Morons. Even wondered what happens if the people start buying smaller cars? Like less deaths? Less oil consumed? Less speedy idiots?

Why does anyone even give insurance people the credit of free speech? Obviously these guys aren't human, therefore they're out of the first amendment. QED.

Actually, substitute a huge canopy of PV panels over the roadways, and this would become an idea with some merit. Some people have been wondering where we are going to put all those PV panels -- there's one possibility.

Can you believe that that was exactly what I was thinking it was about when I was starting to read the "revolutionary idea"? But no, paving it with PVs is way better! Somehow, simple solutions are stupid: they fail to ring the nerd bell in the media whores and never gets to headlines. Damn MTV generation.

What PV pavement idea missed is that in rural areas the right of way of the interstate may be over 1/4 mile wide with simple interchanges being over 1/2 mile across. Here in Decatur County there is even a small lake in the median. The pavement is a small percentage of the entire right of way's acreage.

"People are looking for ways to save fuel, and they need to know that if they decide to buy a much smaller vehicle, they are putting themselves and their families at risk,"

A friend of mine who shall remain nameless has recommended that "safety parity" could be effectively achieved by banning air bags in SUV's and trucks. He goes further and suggests that the center of each large-vehicle steering wheel should have an integrated 12 gauge shotgun shell pointed at the driver's chest and wired to a light-touch pressure plate on both bumpers.

He also will go on at length about how having an accident while driving an SUV or large truck should be considered reckless driving per se and punished. Finally, that all bicycles should come with handgun carry permits, and that bycyclists should be allowed to fire four rounds into any one vehicle without penalty each year.

Best hopes for polite commuting.

A quote from the aforementioned article:

But you can't simply buy a big, heavy vehicle and assume you're safe. Studies show that extra weight does little or no good after about 4,500 pounds, roughly the weight of a minivan or midsize SUV. And the heaviest vehicles, full-size pickups, have driver death rates about the same as small cars.

I propose that the headline writer should have written,

People buy full-size trucks even though they can be deadly and fuel inefficent

instead of,

People buy small cars even though they can be deadly

I'm happy to see that the liberal media bias is looking out for the tree-hugging environmentalists when reporting the news.

If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be. -- Thomas Jefferson

Sailboats allowed surface-to-surface missles for infringing power boat wakes. You have all of lake Erie and you have to pass 100 feet from me? WTF?

I think I could get on board with this one. I have a friend who biked everywhere for a couple of years in college. He occasionally caught up to drivers who'd behaved badly ... and the realized that kid they tried to run off the road was 6'2", 210 pounds, and not in a very good mood.

You definitely found the two live ones in today's Drum Beat. Solar roads??? That wouldn't even get past the editors at Popular Science :-)

Sorry for the post somewhat off-topic, but I was wondering if I could ask for some advice from the readers of TheOilDrum.

I am looking for a graduate school to study the issues around energy use in our society, in particular the social implications of peak oil - who will be most affected by it, and how.

My background is not in geological science, though I do have a math degree. Location of the school is not important, though I am limited to english, french, and spanish.

Hi, not sure there is anything as specific as you mention. There are plenty of courses in sustainable arcitecture, renewable energy and economics but nothing like all of it together. Possible wiki project for the well educated (and lovely :) ) folks on the oil drum?

Are we far enough past peak to actually see it in the 'rear view' yet?

Economic problems - check
Environmental problems - check
Energy problems - check

Bumpy ride? - you betcha

What if pharoes dream about the 7 cows was true but each cow represented 10 years? The post WW2 period has been pretty impressive for world growth.

Throw the anchor man overboard

I would think you could do your thesis under a Cultural Anthropology program. In the US, it is Rutgers, Duke, University of Missouri, Kent State. Maybe you could shoehorn a Masters in Geography under superstar Jared Diamond at UCLA?

You can check out the The Bainbridge Graduate Institute, out here in Seattle. They offer an MBA in Sustainable Business. From their Web site:

The MBA Core covers specific, traditional MBA topics, with an infusion of environmental responsibility and social justice in every course.

  • Business & Sustainability is taught more explicitly in the Foundations, Systems Thinking, Social Justice, and Dal LaMagna Series courses.
  • Management and Leadership courses, inspired by the work of co-founder Sherman Severin, cover the human side of business from the individual level to the organizational and societal levels, with an emphasis on methods and capacity for productive change.
  • Innovation & Entrepreneurship covers the process of developing a business from the creative vision of the individual through team-building and maturation into a business plan presented to potential investors.

Countrywide tries to calm bank customers

... People jammed the phone lines and Web site of the bank on Thursday and crowded into branches to pull out their savings, the Los Angeles Times reported on Friday...

William Ashmore, president of Impac Mortgage Holdings, pulled $500,000 from a Countrywide Bank branch on Thursday to put it in an account at Bank of America Corp., the newspaper said.

"It's because of the fear of bankruptcy," Ashmore told the L.A. Times. "I don't care if it's FDIC-insured -- I just want out." ...


Okay list, there is a call for a general strike on September 11, 2007.

No work, no school and don't buy anything.

Who will participate?

Send this around to all you know.

Er... The point being?

Send this around to all you know.

Ohhh, sure. Oh wait. Send what about?

You are not a very compelling poster, lacking data and all.

'No work, no school and don't buy anything.' ... Sounds like my daily routine. I am on strike and didnt know it!

Actually this isn't as crazy as it sounds.

Google brings up these references:

One of which is this general description:

It will most likely end up being pretty meaningless.


My link was previously covered.

Just saw on Drudge that UAE is cutting oil production 25% (810,000bbl) starting NOW! Are they in trouble or are they really working on oil facilities as the article suggests??

A little of both, probably. Yes, they are working on their facilities, but I've heard part of the work involves boosting the sagging production. Gas injecting pipelines, or something like that?

So then any talk of OPEC increasing prod. next month is fantasy. They are already dropping 810,000bbls and I don't see anyone offering to pick up the slack.

My guess--and it's just a guess--is that they are having to repair damage to flow lines because of corrosion related to rising water cuts and/or they are having to rebuild their surface production facilities to handle rising water cuts.

Of late I've been noticing a common trend in our society – namely it appears as a belief in the concept of “something for nothing”. In business, it shows up as a belief in big growth with no investment (and with no time delay either). In finance, it is the idea of big returns with no risk (we're seeing how that works now). Regular working stiffs are willing to believe that the values of their homes have doubled (and everyone else's too!), when they have done nothing at all to achieve this. The stock market soars when there is no corresponding increases in GDP, productivity, etc.

It's all equivalent to a belief in magic, and I've been wondering what the root of it is. JMG has a post on the same concept in Scrabbling Around For Plan B

I've been thinking it may tie in with fossil fuels. After a century of unlimited quantities of almost free energy, we may have totally lost our understanding of the relationship of how much work it takes to accomplish things of real value. I've read that a gallon of gasoline is equivalent to 500man-hrs of work, and I suppose that after many generations the easy access to this kind of energy has completely distorted our perspective. If you add in a big dose of corruption, where some are rewarded beyond all reason for doing nothing, it would be easy to see how the average Joe would have no idea how anything is supposed to work.

I think that's about the size of it, Twilight. Modern man is little more than a button pusher (I push a button and I go to the 20th floor. I throw a switch and I get light. I turn a knob and I get heat. I push a pedal and my car takes me to the store where I pick up food and pay for it with a plastic card...etc., etc., etc,). You can pretty easily see where some might lose sight of how all of these things happen. My gut tells me that many folks will be completely baffled when this era of "creating our own reality" -- which as you point out is really just an era of Peak Detachment, brought to you by cheap fossil fuels -- comes to an end.

Imagine what happens when the buttons stop doing what they are supposed to do? How many people have any idea of how anything actually works?


Not many anymore. I really love the person who has the hood open on his/her stalled car on the side of the road and has no idea what they are looking at. Maybe they are trying to let the evil demons out. Technology, even the simplest older ones, might as well be magic.

Agreed, but what I've been seeing is that it is not just technology that appears to be magic anymore - the simple relationship between labor/effort/investment and return is apparently mysterious to many.

banging on the hood and saying a few hootiewho's usually works for me.

I agree Twilight. I think you're on to something. I think cheap, abundant energy has modified human behavior and thought processes in fundamental ways. I was reading Thoreau's Walden a while ago, and he identified the same characteristics even in the 1850's. It's hard to quote him because he's so wordy but here's a few paragraphs that demonstrate some of his insights:

'As with our colleges, so with a hundred "modern improvements," there is an illusion about them; there is not always a postitive advance. The devil goes on exacting compound interest to the last for his early share and numerous succeeding investments in them. Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end, an end which it was already but too easy to arrive at; as reilroads lead to Boston or New York. We are in great haste to construct a magnetic telegraph from Maine to Texas; but Maine and Texas, it may be, have nothing important to communicate.


Such is the universal law, which no man can ever outwit, and with regard to the railroad even we may say it is as broad as it is long. To make a railroad round the world available to all mankind is equivalent to grading the whole surface of the planet. Men have an indistinct notion that if they keep up this activitiy of joint stocks and spades long enough all will at length ride somewhere, in next to no time, and for nothing; but though a crowd rushes to the depot, and the conductor shouts "All aboard", when the smoke is blown away and the vapor condensed, it will be perceived that a few are riding, but the rest have been run over, and it will be called, and will be, "A melancholy accident." No doubt they can ride at last who shall have earned their fare, that is, if they survive so long, but they will probably have lost their elasticity and desire to travel by that time.

This spending of the best part of one's life earning money in order to enjoy a questionable liberty during the least valuable part of it, reminds me of the Englishman who went to India to make a fortune first, in order that he might return to England and live the life of a poet. He should have gone up garret at once.

"What!" exclaim a million Irishmen, "is not this railroad which we have built a good thing?"; Yes, I answer, comparatively good, that is, you might have done worse; but I wish, as you are brothers of mine, that you could have spent your time better than digging in this dirt.'


It's all equivalent to a belief in magic

It IS a belief in MAGIC.

We laugh at the stupid people of the Middle Ages.
We're no better.

They believed in sorcerers and witches.
We believe in technologists and pundits.

Different words, same stuff.

The only difference is that the technology magic works...

And then people complain of it not being omnipotent and able to solve every need and crave in an instant.

Again, my point was not that technology appears top be magic, that's been discussed. It's more that the link between labor and results has been broken by fossil fuels.

If I use a piece of technological service I am quite sure I can understand how it works until I reach advanced chemistry, advanced mathematics, quantum physics and so on. The problem is that it takes hours, days, weeks and longer to understand it. To understand what I touch during a day would take several lifetimes. Its as impossible as reading the whole library but at least it is possible to understand things and the horizon of understanding can be expanded with the scentific method.

This link or the ability to learn most of the available culture were broken manny hundred years ago. But we can do more of it now since the work and thoghts of hundreds of millions of people can be distributed into the life of hundreds of millions of people.

And most of the prepackaged "magic" is not depending on fossil fuels but on electricity and chemistry. Fossil fuels have only been extremely cheap and we have become used to having them available in bulk.

I was not trying to say that technology is "magic".

I was trying to say that our modern civilization chants incantations in the belief that they are magic words.

We utter mere noises and pray that they will change the world.

Instead of muttering "abrah kadabra",
we murmur about "technology" and the "ingenuity of the markets". It's all the same meaningless noise in so far as Mother Nature is concerned.


Researchers Exploring New Refinery-Based Coal-to-Liquids Pathways for Jet Fuel and Other Products

Researchers at Penn State University are investigating several coal-to-liquid processes that differ from traditional direct (Bergius) and indirect (Fischer-Tropsch) liquefaction. The new pathways could introduce coal-derived chemicals or coal into existing oil refinery operations for the production of end products including jet fuel, gasoline, diesel, heating oil and carbon anodes.

The black car as the green car to the rescue:


Hello TODers,

Recall my numerous previous posts on the NPK/FF linkage. Soft rock mining for P,K continues to deteriorate and deplete [recall last post on Uralkali mine-flooding & subsidence requiring RR reroute and emergency building of housing].

It is a slow storm building to hurricane strength as topsoils lose their vitality from lack of NPK replenishment. Zimbabwe unfortunately always provides a up-to-date example of cascading blowback:

When The Herald visited the phosphates mine last week, it had temporarily closed down owing to power outages.

The mine no longer meets its monthly target of 12 000 tonnes of phosphate per month owing to the persistent power cuts, which have also resulted in it having to scale down production.

Workers at the mine spend their time playing social soccer and drinking beer.
I would suggest that if everyone in Zimbabwe understood Peakoil Outreach and how critical phosphate is to the Zimbabwe food chain: they would be frantically doing everything possible to keep production at this mine going.

From a postPeak ERoEI standpoint: I think it will be more efficient to mine Zimbabwe guano, build bat guano shelters, and recycle bones and urine, than trying to mine phosphates by human-power-only deep underground. Will the Zimbabweans try this, or is ignorance resulting in a machete' moshpit the natural course? What are the chances of Pres. Mugabe becoming a Peaknik, then declaring a National Biosolar Emergency [How about our Resident Shrub? Does he have any Biosolar Desires?]?

Most of the soils in Zimbabwe are nutrient deficient and are degrading at a rapid rate. Zimbabwe’s soils are continuously cropped but nutrient removal through
harvesting without sufficient nutrient replenishment leads to a continuing decline in soil fertility. The two
main limiting nutrients on Zimbabwe’s soils are nitrogen and phosphorus.

Reserves of bat guano are difficult to establish due to the irregular nature of the cave floor and the presence of concealed blocks. The Mabura guano caves for example supposedly contain 2 million tonnes, but the figure is disputed by Barber (1991).

The Mgweta Hill guano reserves are conservatively estimated
at over 2,700 tonnes. As a general rule, the surface layers are richer in nitrogen and the underlying layers are richer in phosphate. For example, the Mabura guano deposit contains 9.26% N and 7.53% P2O5 near the surface and 0.49% N and 14.99% P2O5 at a depth of 3.7-5.0 m (Barber 1991).

In total, the resource base of these non-mineralic fertilizer materials is low and limited. Only small
tonnages of cave guano can be excavated. Persons extracting cave guano should have their health monitored regularly to avoid contamination with histoplasmosis.
This info above is from an old article, so I think it is safe to assume that things are now much worse. Priced guano lately?

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

Hello TODers,

My father, who died in Aug. '05, wished to have his cremated ashes sprinkled in the ocean. I am now glad that I took the time to sprinkle about 1/4 of his remains on the mountainside above my paved-over Asphalt Wonderland-- maybe it will help nourish a cactus in some far off future.

Any guesses on how soon we will be forced to scavenge our cemetaries for bones when 60-75% of the labor force is active permaculture gardeners?

Or will we choose to fashion weapons from useless vehicles?

Lucifer's Hummer, Sword of Tahoe, God's Avalanche, Grim Reaper's RAV4Blood, etc?

I would greatly prefer that we name our multi-million wheelbarrows instead for optimal decline thru the Bottleneck Squeeze:

Foundation Optimizer, Utopian Load, Advanced Avalon, Elysian Fields Traveller, Crapload for Paradise, Humus Heartbeater, Biosolar Ambulator, One Step Ahead of Decimation, NPK the Hard Way, etc....

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

Of course you get a cascading blowback if you have a leader who is bent on destroying the economy. With such leadership all is lost in a country and you actually get the kind of future the run-to-the-hills doomers are afraid off. It is probably worse then that since a plunder military will plunder survivalists before falling completely apart. And gangs of survivalists will probably be indestinguishable from gangs of falling apart military.

Politics, democracy, freedom of speech, high quality journalism, encouraging people to be good to each other, creating social capital and so on is extremely important.

Isolation, throwing dirt politics, poor journalism, wishing for strong leaders who promise to set things right but dont have a sensible agenda, hatered, and so on is very dangerous.

A few days ago Prof. Goose posted an article by Michael Klare called "The New Energy Pessimism".

Apparently, the same article was also published by Mother Jones. A friend sent me a link.

That article has been published everywhere. Google it, it's insane. It's everywhere.

In the midst of the doom and gloom, I throw up some relatively optimistic stats that can possibly be torn apart. First, the general theme of TOD seems to be that after the global oil supply and global oil exports winds down things are going to be nasty. Obviously electrified transport is the future, like it or not. Electricity production doesn't get much focus on TOD, which is interesting as electricity is objectively far more important than crude oil (I realize NG and oil are used to produce electricity but putting that aside for a moment):

Here are the countries currently producing the most electricity per capita (kwh):

1. Norway 23570
2. Canada 17364
3. Sweden 16722
4. USA 13219
5. Australia11044
6. France 8625
7. Japan 7842
8. South Kor 7045
9. Germany 6880
10.Russia 6752

Now I realize that one has to look at the feedstock for that electricity produced, but my point is that there appears to be a pretty good situation in NA at least in terms of the infrastucture being in place to develop as much electricity as anywhere else (I might be wrong- I just posted the list because I crunched some numbers and I was surprised at the results-a lot of you won't be).

Hi BrianT,

As you know electricity production is really a problem in a lot of other countries. I would say at least 50 countries right now have lots of problems. Even in Ontario (with the coal plants being reactivated); suggestive of a strained electricity grid I think.

Here's a little list I compile:

Albania: IMF Fears Energy Crisis in Albania Will Damage Growth
Algeria: Rise in diesel consumption sparks concerns in Algeria
Argentina: Brasileros cruzan a comprar gasoil y vacían las expendedoras de la ciudad
Bahrain: Power woes blamed on new mega projects
Bangladesh: Cairn’s Crisis: Gas Production at Sangu Drying Up
Benin: Coupures - des appareils électro-ménagers endommagés
Bolivia: Bolivia soporta siete años de escasa inversión en hidrocarburos
Burkina Faso: Ombres &amp; lumières- sur le terrain, il y a bel et bien crise
Cameroon: UK state firm to build 200 MW Cameroon hydro plant
Canada (Ontario): Coal plants keeping the lights on
Chile: Argentina Cuts Natural-Gas Shipments to Chile, Utilities Say
DR Congo: Kasaï Occidental - Mbuji-Mayi, sans électricité
Ecuador: La producción petrolera bajó 175 millones dólares
Gabon: Tête à tête entre la DGCSP et les transporteurs de produits pétroliers
Ghana: Energy Minister: Energy crisis not over yet
Guinea: Télimélé: pas de route, pas de Carburant
Guinea-Bissau: Senegal causing fuel shortages in Bissau - exec
Guyana: Upper Corentyne suffering several blackouts
India: Dark side of populism
Indonesia: Inalum to bring northern Sumatra out of darkness with power boost
Iraq: Iraq power system 'near collapse'
Israel: Ben-Eliezer offers plan to combat electricity shortage
Jamaica: OUR still in dark over blackouts
Kenya: Maintenance of Petroleum Refineries cause of Gas shortage
Kuwait: Twelve hour blackout in Jleeb reduced to four hours thanks to Tarsheed campaign
Laos: Laos Faces Electricity Shortage Because of Exports
Lebanon: Electricity crisis to top series of planned Sidon protests
Liberia: Shortages of fuel and food compound crisis
Madagascar: La défaillance en énergie freine les investissements
Malawi: Blackouts push up cost of living
Malaysia: Abolish palm oil cess, says Guan Eng
Myanmar: Burma's Skyrocketing Gas Prices Caused by 'Incompetence,' Say Analysts
Namibia: Biomass as an Energy Resource
Nigeria: Nigeria shouldn’t suffer petroleum products shortage – Omehia
Nicaragua: Iran pledges hydro, houses, port for Nicaragua
North Korea: Think Tanks Slams Solutions to N.Korea's Energy Crisis
Pakistan: Load-shedding in Sukkur continues
Palestine (Gaza): Gazans battle blackouts as EU suspends fuel aid
Philippines: Power cries
Saipan: CUC back to rotating outages
Senegal: Primary schools grapple with digital technology
South Africa: Brace for more fuel shortages, blackouts
Sri Lanka: Conserving energy
Swaziland: Start-up costs limit access to power
Syria: Regional Leadership Studies Electricity Situation
The Gambia: Housing Crisis In Gambia
Togo: Le MODENA demande une prorogation du recensement électoral et l'adoption d'un pacte politique
Turkey: Türkei in Not
Uganda: Migereko responds to Prof Latigo's criticism of energy policy
UAE: Dubai Authorities Contradict Power, Water Shortage Stories
Venezuela: Continúa la escasez de gasolina
Vietnam: Nationwide power shortage looms after power turbine shutdown
Yemen: Demonstrations across Yemen protest price increases, poor economy
Zambia: Toiling in the dark: Africa's power crisis
Zimbabwe: Poor winter wheat harvest expected to increase food shortages

The link you posted on Argentina isn't even remotely related to electricity production, it talks about a border region with Brazil and Brazilians coming over in large numbers to purchase gasoline and diesel because it is cheaper and causing the towns to run out of fuel.

You know how it goes when one part of the info is blatantly incorrect.

I know. The list is representative of general energy issues. Electricity is a major component in many of them. I should have edited it for just the electricity ones. You can do it visually pretty quick I think.

Ooops. I apologize for the confusion.

I think you're missing Qatar, Kuwait, UAE and Finland.

Hi smekhovo,

Kuwait and UAE are there. Do you have any links to Qatar and Finland?

Thanks very much!

Smekhovo: I missed a few- the ones you mentioned plus Iceland, Luxembourg, Bahrain. Good to hear from you again.

The best thing that can happen to the oil industry and oil producing nations GDPs is natural and manmade disasters affecting oil supllies. The Exxon Valdez, Hurricane Katrina, the Gulf War at its peak and now Pemex and Dean are ironically examples of healthy cataclysms for the energy sector. The exploitation of these circumstances can be further enhanced by even greater "education" of consumers to the effects they have on supply side economics and oil prices.

I hope someday to drive from Peru to Rio and see nothing but cornfields and ethanol plants. We must feed our cars. The oil industry's distribution infrastructure should easily accomodate the changeover.

carbon caps hurt the poor most

Here's a couple of ideas
1) energy resellers introduce step pricing

Service stations hand out customer smart cards. You get the first 20 litres per week (or say 5 US gal) at the base price and any more is premium price. Utility companies charge base price for 10 kwh per day of electricity, higher prices above that. Discounts for AC abstinence...this is real BTW.

2) cut loose energy hogs
Aluminium smelters and the like pay peanuts for electricity for various reasons mostly bogus. Make them build their own power stations. Put the military on mileage targets so they use lighter tanks and slower planes.

2) cut loose energy hogs
Aluminium smelters and the like pay peanuts for electricity for various reasons mostly bogus.

And the 'bogus' reasons are?

Make them build their own power stations.

Ok, then what? A new law to break up the vertical monopoly later so 'the citizens' can get electric power?

Put the military on mileage targets so they use lighter tanks and slower planes.

Errr, there is relationship between weight, protection, cost and replace ability of the workers/equipment. Exactly when to you add what the tax payers pay, replacement models for the workers, and the reasons for the use of the equipment?

I look forward to seeing your white paper on you idea.

Thanks Eric those are good questions.

The reason aluminium smelters get cheap electricity involves crony capitalism and resource nationalism. Big plants create lots and jobs and play taxes so it had been reasoned that they quickly pay back public investment in generation. That was questioned back in the 1980s but little was done as the plants were regarded as iconic symbols of progress. It was said their power need improved economies of scale justifying plants of say 500MW or more . However more recent studies have questioned whether the grid would be more flexible if the baseload requirement was reduced so that intermittent sources could be used. The newest smelter I know of is building its own generation plant based on coal bed methane. You do the googling.

As for the military who says they need 60 ton tanks and Mach 2 planes? Maybe this is why we need homegrown aluminium. This is just my theory but I think within a decade the military will have to cut back on oil use just like the rest of us.