DrumBeat: August 22, 2007

Dean may shed light on OPEC/IEA debate

OPEC countries adamant their policies are not to blame for oil's five-year rally may feel vindicated by the energy market's response to Hurricane Dean.

OPEC has said a shortage of refining capacity to make motor fuels, particularly in top consumer the United States, has been the main driver. Crude oil supplies, it says, are ample.

Consumer nations, represented by the International Energy Agency, want OPEC to pump more oil. Otherwise, they reason, oil stocks in consumer nations are headed for steep falls.

...The reaction of the global oil market to Hurricane Dean may give some insight into how investors view the situation.

Myanmar arrests dissidents, squashes fuel protests

Myanmar's military junta arrested 13 top dissidents and deployed gangs of spade-wielding supporters on the streets of Yangon on Wednesday to halt protests against soaring fuel prices and falling living standards.

Armed police also took up positions across the country's biggest city alongside truckloads of men from the army's feared Union Solidarity and Development Association (USDA). Many were carrying brooms and shovels, pretending to be road sweepers.

Despite the clampdown and the overnight arrest of the prominent activists, 100 people staged an hour-long march before being dispersed. Five women and a man were arrested, although there was no violence, witnesses told Reuters.

"Onlookers applauded but failed to join the march," one said.

Iraq: Power cuts getting worse, affecting lives

In the backyard of the house of Jassim Abdel-Rahman, a 34-year-old resident of Sadr City, a suburb of Baghdad, there are always six or so jerry cans which he refills daily with petrol for his small generator.

With less than four hours electricity a day and with a newborn baby at home, Abdel-Rahman refuses to leave his family sweltering in the hot weather so he spends at least half his US$380 monthly salary repairing and refuelling his generator.

Blackout over for Gaza as EU agrees to resume oil shipments

The European commission said it would allow the resumption of oil shipments to Gaza today after a move that left large parts of the area in darkness for four days.

India: Facing the energy crunch

The Tata Consultancy Services’ six story building in Gurgaon, Delhi, maintains five giant generators, with an underground tank of diesel of 20,000 litres. This is almost the same quantity of fuel one would find in a petrol pump. The reserve fuel can power the Tata building for up to 15 days. And power cuts average eight hours a day during shortage periods.

Perhaps the best place to look at corporate energy problems is in the heart of a company – the data centre; often a not-so-miniature metropolis of server computers that processes network transactions. As businesses grow, their data centres reach a breaking point. In most cases, computers on both ends of the network use – and waste – huge amounts of electricity.

Uganda: Electricity Prices to Drop By 50 Percent

BUJAGALI hydropower dam will cut the cost of electricity by more than half the current rate in the early stages of completion, His Highness Prince Karim Aga Khan has said.

Nigeria's Electricity Dilemma

The recurrent devastating economic and environmental impact of power black-outs, both planned and un-planned, underlines a need for urgent implementation of the long-term least cost generation expansion framework and proper maintenance of transmission and distribution networks to ensure enhanced energy supply and reliability in Nigeria.

Bazetta Twp. cuts fire station hours to save money

[Fire Chief Clyde] McKenzie said the cost of fuel and insurance has gone up, and he said the current budget doesn't allow for the high prices.

Should beach towns be rebuilt again and again?

The magnitude of Katrina's destruction — and concern that people will rebuild in the same way, in the same precarious places — have sparked calls for new regulations on a range of matters, including flood insurance and the funding of coastline restoration.

Such efforts, though, have foundered, largely over resistance from developers and politicians who fear that such changes would stem coastal development and the revenue it brings, says Oliver Houck, an environmental law professor at Tulane University.

Meantime, thanks to government help, "You'd be a fool not to live on the beach," he says. "We're building highways to them, causeways to them, sewage-treatment plants to them. We're paying their (flood) insurance to live there."

How to push the oil levers in the wrong direction

By now, it should be clear to everybody that we are facing some problem with oil production. Facing a problem, the normal reaction is to do something about it. If crude oil is becoming scarce, the first reaction often is, "where can we find more of it?"

Far north Queensland plan to include climate change forecasts

QCCCE officers are working with staff from the Department of Local Government, Planning, Sport and Recreation and Queensland Transport. The team is looking at the likely impacts of climate change and "peak oil" - or the date when the world maximum crude oil production is reached - on Far North Queensland, as well as planning adaptation strategies. This work will be of enormous benefit to local councils in particular to help them undertake proper planning.

East Woos West In Oilsands

At the height of the market meltdown last week, Abu Dhabi National Energy Co. broadcast its intention to take advantage of depressed share prices and cashed-out balance sheets to expand aggressively in Canada's energy sector, where it hopes to become one of the top-10 producers.

Maine appealing electric ratepayer fees

Representatives of the paper-products industry, unions and consumers joined Gov. John Baldacci on Tuesday in support of Maine's appeal of a federal order that imposes what they call excessive and unjust fees to help expand generating capacity in southern New England.

Will the Real Transportation Fuel of the Future Step

For macro reasons, I think that the next generation liquid fuels may be cellulosic ethanol and biodiesel or renewable diesel from algae. But those fuels will increasingly be sharing the roads with the long term transportation fuel of the future: electricity from renewable sources, especially wind. Wind will be important for electric transportation and electric transportation will be important for wind because, when you're already going to be charging batteries, you may as well do it when the electricity is cheap, which will be when the wind is blowing.

Black Swans: Highly Improbable Events in the Investment World

That is why we try and focus on Black Swans in the investment world. You can read the newspaper to find out what happened yesterday. We try to focus on the events considered so statistically improbable that no major analyst would take them seriously. Most of these Black Swans have negative consequences, like Peak Oil… or a housing crash… or the collapse of the U.S. dollar. The history of financial markets shows that high-impact events are much more probable than statistical models would indicate.

Sony champions free recycling

The company that invented the CD, the Walkman and the PlayStation will soon become an environmental pioneer, too: Sony says it will offer free recycling of all its products in the United States.

Gas station owners allege price fixing

Nearly two dozen gas station owners in California sued Shell Oil Co., Chevron Corp. and Saudi Refining Inc., on Tuesday, claiming the companies conspired to fix prices for 23,000 franchise owners nationwide.

The case filed in U.S. District Court in San Francisco seeks class-action status for the plaintiffs. It is similar to another lawsuit filed in 2004 by other California gas station owners that was thrown out by the U.S. Supreme Court last year. The new group of plaintiffs hopes the court will consider a slightly different argument.

Dean Only Seen Causing Mild Disruptions to Mexico Oil Ops

As Hurricane Dean heads into Mexico's main oil-producing zone, industry officials are optimistic it will only cause a blip in operations instead of the extensive damage the country remembers from Hurricane Roxanne over a decade ago.

Share slump and credit crunch: passing peak oil

Regular readers may be surprised to see me offer commentary on the financial markets, given my dim view of such factories of speculation and greed. This is no sideshow, however. The unfolding turmoil may eventually be seen as a historic event. Another turning point, the worldwide peak in oil production, is a key player in this unfolding drama, although its role goes unnoticed by most in the audience.

Iraq-Syria oil flows depend on security

Iraq is interested in re-activating a pipeline linking its oil centre of Kirkuk to a Syrian port only if it could be secured, Iraqi Oil Minister Hussain Al Shahristani said.

The two countries, which are at odds politically, have been discussing restarting the 880-km pipeline from Kirkuk to the Banias terminal on the Mediterranean.

Who resolves Arctic oil disputes?

Russia's planting of a flag at the North Pole this month has set off a race for control of the Arctic, with five nations preparing to make claims to the seabed at the top of the world.

...Resolving disputes arising from the claims will represent a major diplomatic challenge to the five nations that surround the rapidly thawing Arctic Ocean. But experts say the track record for dealing with similar disputes is encouraging, suggesting it's likely that rival nations can work out a mutually satisfactory solution over the coming decade.

Norway Debates the Promise, Costs of New Drilling

In little more than two generations, oil and gas have transformed Norway from a country recovering from World War II occupation into an economic powerhouse. But now its citizens and politicians are debating whether it should take advantage of Earth's warming to drill for more oil above the Arctic Circle, knowing that consumption of that oil will accelerate climate change.

Europe’s gas monopolies may suffer as glut aids UK utilities

A widening natural gas glut in Britain will bolster the profits of UK utilities and could threaten the dominance of gas monopolies in continental Europe, according to a leading gas industry forecaster.

Yankee plant closed but its waste remains

With the site of one of the country's first nuclear power plants finally considered safe for public use, all that remains of the reactor that stood for 47 years in the woodsy town of Rowe is its radioactive waste.

The federal government announced this month that the Yankee Rowe site had been officially decommissioned. But 266,000 pounds of spent fuel is still sitting on about 3 acres of land, sealed in protective barriers in the Western Massachusetts town teetering on the Vermont border.

State windmill plan causing quite a flap

The Pennsylvania Biological Survey has gone to bat for the bats in a swirling policy debate over whether commercial wind power development should be permitted in state forests.

The debate pits advocates of wind power as an alternative energy source against those who fear that windmills are harmful to bats and birds.

Environmentalists win White House suit

A federal judge ordered the Bush administration to issue two scientific reports on global warming, siding with environmentalists who sued the White House for failing to produce the documents.

Climate change called security issue like Cold War

Climate change is the biggest security challenge since the Cold War but people have not woken up to the risks nor to easy solutions such as saving energy at home, experts said on Tuesday.

Does Flying Harm the Planet?

Airplanes operate on petroleum fuel, which means they release large amounts of carbon dioxide when they fly. Commercial air travel is currently responsible for a relatively tiny part of the global carbon footprint - just 3.5% of total greenhouse gas emissions, according to the Intergovernmental Panel on Climate Change. But the unique chemistry of high-altitude jet emissions may produce an additional warming effect, while the explosive growth in air travel makes it one of the fastest-growing sources of carbon gases in the atmosphere. And unlike energy or automobiles, where carbon-free or lower-carbon alternatives already exist, even if they have yet to be widely adopted, there is no low-carbon way to fly, and there likely won't be for decades.

Having read this about the depleted uranium:
Kerr Magee had applied to the Nuclear Regulatory Commission to call their waste an "experimental fertilizer" and just spread it over the top of the land.

I'm now wondering if one could have a whole WEEK of drumbeat topics on the failure modes of fission power, what with yesterday's news about the attempted cover up of a reprocessing accident.

(the hits just keep coming folkes!)


The link you provided gives absolutely no cite to any application by Kerr-McGee or any information thereon and is instead a rant against use of DU weaponry (now, in fairness, I didn't subscribe as requested so maybe that was why I missed the actual reference). Do you have a cite or link that actually gives information on the alleged application? (If the link given is the extent of the information available, that might be why TOD doesn't devote a whole WEEK to this topic.)


(And is DU useful enough that governments would have an 'enriched uranium disposal problem' just to get sweet, sweet DU for use? Somehow I doubt it.)


Thank you for the link. Since this occurred back in the 80's, it is difficult to know if such an application would even be made in today's political environment (although I have no doubt these companies still own many politicians). And I agree with your implied message that increasing the use of nuclear is not the answer to our energy problems. As you recognize, we still have not figured out the waste issues (and probably never will), so creating more radioactive waste by building more nuke plants so we can continue the our current unsustainable lifestyle is moronic.

we can continue the our current unsustainable lifestyle

The 1`st step in system analysis is to look at the limits and understand what, if anything, can be done to address these limits.

I've yet to see the "Ohhh, lets build fission plants!" pimpers talk about other limits, let alone talk about the failure modes.

Oil prices rise on renewed storm worries

Crude oil prices rebounded Wednesday after dropping below $70 overnight as Hurricane Dean threatened to regain strength and possibly further affect oil installations in Mexico.

While the storm was downgraded to a Category 1 storm on Tuesday, it was closing in on the Mexican mainland Wednesday, battering evacuated oil platforms on the Bay of Campeche and threatening to regain some of the force it unleashed on the Yucatan Peninsula.

The sprawling, westward storm was projected to slam into the mainland Wednesday afternoon near Laguna Verde, Mexico's only nuclear power plant, which is suspending production.

Japan eyes chopsticks for biofuel

Japan will try to turn the millions of wooden chopsticks that go discarded each year into biofuel to ease the country's energy shortage, officials said Wednesday.

Meanwhile, in China they're recycling disposable chopsticks in other ways...

Boy, talk about scraping bottom...

And has China, Inc. taken it on the chin lately, or what?

Boy, talk about scraping bottom...

No, the very real bottom will be scraped when China starts recycling used toilet paper without disinfection. Yuk!

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

Bob, I've heard it said that we needn't worry about our trade deficit with China because eventually those dollars will come back to us.

I just realized how that might happen ...

Paging Mr. Sailorman...

Hey Don, I appreciate your level headed economic analysis.

I think you mentioned consumer confidence yesterday as one of your barometers on how we should fare in the coming months. As long as US Consumers continue to feel good and spend, we should be alright.

Headline this morning: "Biggest One Week Drop in the History of Comsumer Comfort Index"


Is the Canary Singing?

As King Solomon is reported to have remarked...'There is nothing new under the sun'...And much later legendary stock trader Jesse Livermore commented...'There is nothing new on Wall Street.' And this is the summary of a panic written by Walter Bagehot, influential economist/banker and editor of The Economist, during the mid-Victorian era in his essay on Edward Gibbon...'Much has been written about panics and manias ... but one thing is certain, that at particular times a great deal of stupid people have a great deal of stupid money ... the money of these people, the blind capital as we call it, of the country is particularly large and craving; it seeks someone to devour it, and there is plethora, it finds someone, and there is speculation, it is devoured and there is panic.' As long as the wind blows, as long as the grass grows, human nature will remain unchanged.

It is when the canary stops singing that you need to worry.

Not deathly quiet yet, but the tune is clearly no longer so bright and upbeat.

Consumer confidence is key: There are several surveys of consumer confidence, and when they all turn down then usually we see a fall in consumer spending.

If consumer spending goes down, then we are in a recession. If consumer spending holds up or increases, then no recession. I hate to oversimplify, but it really is that simple.

Now variations in business spending (real investment in inventories and plant and equipment) do matter a lot because they fluctuate greatly. Changes in investment frequently trigger either recessions or booms. Note that new home construction is counted as investment; it is way down. Thus I do not look for a boom in investment spending to keep the economy going in the face of declining spending by consumers.

Last year I forecasted a recession in 2007; I might have been right then.

Note that government deficits are expansionary, but here it is change in the size of the deficit that has the most fiscal effect, and because the deficit is not increasing, I do not look for expansionary effects from fiscal policy this year.

So long as consumers keep charging more and more on their credit cards (and clearly, increases in credit-card debt cannot indefinitely outpace increases in nominal income in percentage terms) the economic expansion will continue. If consumers spend less, then yes, we are going to into a recession, and it could come quickly.

Hang out at WalMart and Kmart.

When they stop stocking so many big screen TV's and switch focus to cheap clothes, cheap food, etc....

The emphasis on 'always low prices' has been increased with WalMart's influence in the last couple of decades, so there may not be much room for people to make up their money losses. It seems that now the only route is to borrow heavily against their houses and then let the houses go.

Then the IRS comes after them for taxes on the forgiven debt.

More than glaciers are melting...

"If you want Change, keep it in your pocket. You vote for a faux president every four years, but you vote for real corporations thousands of times each month. Your money is your only real vote."

It's strange how the financial headlines (Bloomberg) these days are so eerie and contradictory:

Lehman Brothers Closes Subprime-Mortgage Subsidiary, Fires 1,200 Employees

U.S. Stocks Rally on Speculation Takeovers Will Pick Up, Economy Will Grow

Citigroup, JPMorgan, Bank of America, Wachovia Tap Funds From Fed Window

U.S. Notes Fall on Speculation Fed Rate Cut Will Be Held to Quarter Point

Mortgages Lead Biggest Rise in Late Loan Payments Since 1990, FDIC Reports

Lehman, Accredited, HSBC Shut Offices, Fire Employees Amid Subprime Rout

Capital's Discus Hedge Fund May Lose $407 Million After Sentinel Collapse

So stocks go up 145 pts on the Dow on speculation that merger mania is coming back. What I want to know is what information these traders are acting on. 'cause I couldn't possibly go long on stocks based on the news that I'm hearing. I now expect that when some actual good news appears again, stocks will crash.


Let's see... B of A gets easy Fed Funds and then invests 2B US in Countrywide which is clearly going banko. Can we talk about the beauty of the free market?


From The Housing Bubble Blog:

“‘People who are ready, willing, and able to buy a house can’t do it because they can’t find a mortgage,’ said Timothy Warren Jr., Warren Group’s chief executive. ‘That’s got to be bad.’”

They did a story on Accredited this morning on CNN. (Can you imagine what it must have been like for their employees, waking up to that?) The CNN hairdos recommended that if you needed an exotic mortgage, and qualified, to rush out and get one now, while they were still available.

"Cut thy spending and get thee to the non-discretionary side of the economy."

In addition to the housing & finance layoffs, look for spreading layoffs in auto, entertainment, travel & leisure, etc.

WT, 'travel & leisure' is taking it on the chin in Florida and has been for several months. Housing sales have tanked badly here, only behind California last that I read. CNBC did a segment on auto sales this morning and the talking heads said 'Not that many good deals to be had because auto makers have cut back on manufacture'...and...'Some good deals are to be had on SUVs and pickups.' Entertainment...I dont know about that. I continue to purchase books and dvds from Half.com when someting I want is for sale at a bargain. The last movie that I saw in a theatre was 'Ferinheit 9-11' and the popcorn cost more than the price of admission. I dont see that practice as a sustainable business model...lol

I continue to wait for the Hollywood crowd to urge consumers to avoid seeing movies at theaters--because of the enormous amounts of fossil fuels used in driving to and from, and heating and cooling, movie theaters.

In any case, given the high ticket prices at theaters, I expect to see more and more people to seek their escapism entertainment via DVD's.

Funny, when a power emergency is declared around here, they ask us to go to the mall or to a movie. If we all go home and turn on the aircons, it doesn't help reduce power use. Going to the mall does, because they have their aircons running whether they have one customer or a thousand.

Of course if your A/C at home is left running full blast while you are at the mall, that doesn't end up being all that helpful. . .

True, but there's a pretty strong economic incentive not to do that. Those who don't have a lot of spare cash do think twice about turning the air conditioner on, because you really see it in your power bill. Even relatively cheap air-conditioners come with timers now.

Those flush with cash can get zone cooling and all that fancy stuff, and usually do.

Geothermal A/C--it's the way to go.

Geothermal heating and cooling is definitely efficient. Essentially, the earth is used as a giant thermal battery to average out the thermal loads over year.

It does take a lot of upfront capital and a fair amount of land. Approximately one well is required for each ton of cooling. On the few commercial buildings I worked on, the site around the building looked like it was pockmarked with wells.

A drilling company in northern Ohio has made a business of a set of wells for a commercial building and charging by the BTU for energy, like a utility.

I put in a vertical standing water column geothermal system at my house (new construction) and it cost less than 25% more than a standard forced air system (and the forced air system would not have included A/C so it was really less expensive than both heating and cooling). It runs off my well pulling water from the bottom of the well, extracting or adding heat from or to the water, and reinjecting it into the well, so doesn't require any extra land. The well was no deeper than it would otherwise have been to find water (although that is not always the case). Although the geothermal compressor takes a higher start-up amperage than the inverters on my PV system can handle, the pump itself is a soft-start variable speed pump that does run off my battery bank. And the geothermal system has a back-up that runs a blower and pump to extract heat off my hot water tank (currently propane, but I'll add a solar hot water preheater next year). For new construction that will already be putting in a well, it is a pretty ideal system.

expecting Hollywood to advocate not going to theaters is the same as expecting coal burning electric companies to advocate solar panels on the roof of every home in America. It might be a great idea and patriotic to do , but don't expect them to willingly commit suicide.
Bob Ebersole

Hollywood (even the latte liberals) would never suggest that people stop going to movies per say. Having said that it will not be that bad if Movies decline in popularity - as long as the infrastructure for digital transmission is still up.

The neighborhood Movie theater may even make a comeback. Go to any pre WW2 hood and an old movie theaters, bars, clubs, ect are in walking distance.

Travel and Leisure is also suffering in Galveston, judging by the new ease of finding a parking spot on the Seawall above the beach I don't know if its the fear because of tough times, the cost of gasoline, or a new higher level of unemloyment or some other factor and combination of factors. But the real data, surf's up and not very many surfers, is there for anyone to look at.
Bob Ebersole

Bob, one of the many problems facing this area (Daytona Beach, Ormond Beach) is that the communities have never decided 'what they want to be.' It is as if the entire area is schitzophrenic. For instance, we have two large NASCAR races per year, a large sports car race, two large biker events per year, a large spring break, a large black spring break, the Turkey Rod Run, and several other special events, and the communities bill themselves as 'family destinations.' Most of these events bring in more money to the community than the community spends on services but some do not. If families come here on vacation and happen to interact with the 'events' crowd the results are usually not good. Most of the families go away with a poor opinion of the area because they are disturbed by the 'events' crowd. Personally, I am a biker and enjoy the biker events and dont mind the other events. I have lived here a long time and can contrast what I see here with other beach communities, like Myrtle Beach, and see that MB decided long ago that they wanted to be a 'golf and family destination' and have concentrated on those areas...and have been very successfull. As usual, there are several wealthy families in this area that are the powers behind local politics. In addition, there have been huge and continuing battles about 'driving on the beach.' None of these fights over events or beach driving or families have been settled so the communities contiue to live torn between being 'events' oriented or 'families' oriented. Meanwhile, I go my own way and do as I like, and avoid the petty bickering.

River, its amazing how parallel our local issues and events are, from driving on the beach to Black Beech Party Weekend. We don't have NASCAR and driving on the beach is largely settled, but eveything else is pretty much the same except we fight over free parking on the Seawall and have a couple of Mexican/Latino things too.

I can't resist arguing sometimes, a major flaw as you see in my other posts and hastle with eric blair, so I do get involved in local politics. I want commuter rail to Clear Lake and Houston so we can hook up to Alan Drake's Electric Rail Plan. Getting started on mitigation will involve a lot of local work too.
Bob Ebersole

I want commuter rail to Clear Lake and Houston so we can hook up to Alan Drake's Electric Rail Plan.

Funny thing is, the backbone for such an idea is already in place and runs along Old Galveston road aka Highway 3. I see trains moving large box cars and tanks along those tracks periodically, and with some revision and expansion, you could easily have a north/south line running from Galveston through South houston, Pasadena and on to Houston proper pretty easily I would think. But then I won't claim to be a railroad engineer or city planner, so perhaps I'm being idealistic.

One of our city councilman is coming to ASPO and I'm hooking her up with Alan Drake. Call me at 409 three nine two seven four nine seven and I'll fill you in. I think we all need to start working on a local level because our federal reps from Houston and Galveston are all a bunch of party hacks pretty much except for Gene Green. The sooner we get the Houston line down to Hobby, then down to Clear Lake, the better. And from Galveston to Dickonson, then up to meet in Clear Lake. It just might make all the suburbs south of Houston liveable as gasoline availablity declines. Bob Ebersole

I agree about the local level. Amtrak runs right by our neighborhood, and our local senator has already raised the issue of why we don't have a stop.

I used to live in Clear Lake. I seem to remember that a commuter train used to go from Houston to Galveston in the early years of the 20th century along that track.

Bob, I can understand that you want commuter rail. Locally we have only a municipal bus system but it is well run, clean, and organized. Several times per day there are bus trips to and from Orange City and Deland (about 27 miles southwest) but no trips to Orlando and attractions (Disney, Sea World, etc), unless one takes a Greyhound. There is a movement afoot to open commuter rail from Deland to Orlando to Kissimmee (pronounced Kiss-em-ee). That system might be extended to Daytona Beach and to Tampa eventually. The wife and I both love Mexican food so we make the trip to Orange City often to visit one of several excellent Mexican restaurants. For some reason no one has ever opened a really good Mexican restaurant in this area, and we have tried them all. Actually, there are few decent restaurants of any sort in this area although there are lots of them. One of the reasons that we still have beach driving and parking is that otherwise there would be no place for all the cars to park. During the last local election there was a ballot initative to restrict height limits on beach front hotels in Ormond Beach. The initative carried in spite of heavy campaigning by the mayor and many developers that wanted tall hotels. It was a bitter fight and afterwards the mayors wife wrote a letter to the editor of the Daytona Beach News Journal stating that the locals were ignorant and that those that voted against tall buildings were going to economically retard the community...sour grapes, in other words. She ruined any chance of hubbys reelection. That sort of stuff happens here constantly but I suspect it will subside now that real estate is tanking. I dont care to argue except with those that think shrub and vader know what they are doing and voted for them twice. If those supporters knew anything about history they would understand that all powerfull nations have been lender nations, not debtor nations, and that no debtor nation depending only on military strength to maintain their world power has fared well. Oh well, they will learn the hard way. I continue to bring up peak oil to my friends but do it in as subtle a way as possible. Ocasionally I hear the comment 'Damn, it just cost me fifteen bucks to fill up my bike!'...then I might slip a comment into the conversation.

Can you still drive on the beach in Galvaston?
I remember doing that on the beaches of Galveston 22 years ago and oh what fun! Of course, 1985 was the last year one could drive down a texas highway and legally drink beer at the same time.

rude crude
, only for about 3 miles at San Luis Pass and in a couple of parks, Stewart Beach and East Beach. Other than that, its park and walk. You can still drive on most of Boliver, and across the bridge from San Luis Pass all the way to the Brazos.

But if you want to get drunk and drive on the beach, Bolivar's the spot, but the Sherrif's deputies sit by the ferry to prosecute/persecute poor old drunks and kids, I pretty much stay off Bolivar Peninsula during the warm months. The city encourages drinking only at East Beach "the party beach" which is sensible, they aren't going to stop beer drinking at the beach, so having a place to do it with posts to separate the drinkers from the pedestrians works out pretty well for everybody
Bob Ebersole

Sure it's not school starting up in Houston?

Somehow, I suspect that people who meet the same criteria that my wife and I were required to meet when we got our first mortgage -- 10% down, house price less than 2.5 times our verified annual gross income -- are not having any problems getting mortgages. Of course, the savings and loan with whom we had that mortgage wasn't about resell it; the risks were known and understood, and they were making a reasonable profit providing a valuable service to the local community. Cain's Law™ applies: "Any situation in which is easier to get wealthy by manipulating financial instruments rather than providing the underlying goods and services themselves will end badly."

Somehow, I suspect that people who meet the same criteria that my wife and I were required to meet when we got our first mortgage -- 10% down, house price less than 2.5 times our verified annual gross income -- are not having any problems getting mortgages.

You are wrong, according to CNN. They reported this morning that to get a mortgage these days, you need to have a credit score above 700, and a 20% down payment.

Did not see the CNN piece, but Countrywide did increase their standards substantially to just what CNN stated. By their own admission, Countrywide would now be financing few jumbo mortgage borrowers. I assume something similar is happening at all other lenders.

Bottom line – those not getting a Fannie/Freddie guarantee will have a hard time getting a mortgage, and will be paying a higher interest rate.

So far, that formula is working. We're buying country acreage and having a barn built at the same time (no house out there and we aren't planning to live there). Credit score over 700, we're putting 20% down, and it's at a 7.25% interest rate. There was only one lender willing to finance it, largely because of the lack of a house. I sweat every time I don't hear from the lender for a week.

... And so far, the lender hasn't asked for documentation!!! I was really shocked. I expect any day to get a call that their requirements have changed and I need to fax pay statements pronto. Or worse, that they've closed their lending office...

Well then, CNN is wrong. I'm in the process of buying a house now, and had no problem putting 5% down and getting a 2nd mortgage for the remaining 15%. And that's through Wells Fargo.

What concerned me was that now, when mortgage lenders were supposedly "tightening lending practices", Wells Fargo prequalified my wife and I for a mortgage which would be 5 times our combined income. Which would give us a mortgage that would be over 50% of our combined takehome pay. Totally irresponsible, you'd think they would've learned by all of the recent events.

I laughed at the woman, and said that we were looking at something that was maybe a third the cost of what she was saying we prequalified for.

I suspect it depends a lot on what lender you are talking to. The ones in trouble are going to be stricter.

Something about closing the barn door after the horse gets out comes to mind.

Why would a legitimate lender take 10% down when the underlying asset is bound to depreciate more creating a de facto subprime loan?

The new thinking is that these "assets" will not appreciate in the near future, so the exposure is much bigger, people just have not realized it yet.

If I were in the market I would pay 50 cents on the dollar tops and I would be very picky. Of course most people can not afford to sell at this price so we have a stalemate, I guess it has to go to auction.

There most likely is a big gap between their and the lenders definition of "able".

In addition if one were to lend even 80% on an asset that is surely going to depreciate more then that, then in effect you have a sub prime loan even with 20% down. Never mind the shrinking job market.

Leanan, it's certainly getting interesting as the massively unwieldy credit structure crumples (sorry if theses have already been posted). It also seems all attempts at containment have failed completely and the global financial system is infected with something akin to potato blight (anyone who's seen what blight does to a potato crop will know what that means).

Funding squeeze likely after refinance failure

Issuers of asset-backed commerical paper yesterday failed to roll over a large proportion of these notes in the European market - a development that suggests more financial institutions could face a funding squeeze in the coming days.

Data from Dealogic showed that $22.6bn worth of ABCP was due to mature yesterday in European markets but only $4.6bn of new notes were actually issued.

This suggests that a number of institutions could face funding mismatchs.

For the European commercial paper market as a whole, some $41bn worth of notes expired yesterday while only $15bn worth of funding was issued.

In normal markets, the level of commerical paper issuance roughly matches the volume of paper that is maturing because institution typicallly roll - or refinance - these notes.

Commercial Paper Market Roiled With $550 Billion Due

The $1.1 trillion market for commercial paper used to buy assets from mortgages to car loans has seized up just as more than half of that amount comes due in the next 90 days, according to the Federal Reserve. Unless they find new buyers, hundreds of hedge funds and home-loan companies will be forced to sell $75 billion of debt, according to Zurich-based UBS AG, Europe's largest bank.

Those sales would drive down prices in a market where investors have already lost $44 billion, based on Merrill Lynch & Co.'s broadest index of floating-rate securities backed by home- equity loans. That may hurt the 38.4 million individual and institutional investors in money market funds, the biggest owners of commercial paper

HBOS forced to tap balance sheet in illiquid markets

Earlier in the day it emerged that the Bank of England had granted access to a back-up loan facility to help banks see their way through current market unease.

The Bank said it had lent £314 million through its "standing facility", which allows banks to borrow unlimited funds overnight, albeit at a penalty rate.

The facility is made available to just under 60 banks to provide support to members when they are having liquidity problems or where a technical glitch might make lending from another bank impossible.

Banks normally borrow short-term funds from other banks. However, the current market turbulence has made banks more reluctant to lend.

Banks that borrow from the facility pay interest at 1 percentage point above the current Bank of England base rate.

The facility was last used in July, when £109 million was lent. At the end of June the Bank made overnight loans worth £4 billion in one day

Triumvirate of collapse - Economy, Ecosystem, Energy

This time it is going to hit the ones that have come to consider themselves upper middle class.

Many of the useless paper pushers, cubicle dwellers and deal makers that used to flutter around real estate are going the way of the do-do bird.

How are they going to pay the mortgages on their villas and leases on their Mercedes' with no job and no real skills.

Methinks flipping burgers isn't going to be sufficient.

I could tell you a story about something that happened to me yesterday and today while buying a laptop over the internet that really opened my eyes as far as the credit situation.
Those that think consumers are going to keep charging on credit cards better think again.

Please tell.....

Just major bullsh*t.

I have bought from this quite large company several times before. Always entered the credit card info on the website and the computers were here a day or two later.

So this time when I entered the info it went to another screen of "security" questions just like the ones required when you access your data at credit bureaus. So right then and there it told you that they are directly hooked into some new credit bureau system. Up to here one might say, OK they are playing it safe.

But here it gets funny. After it passed that instead of shipping the thing it said that the order had to be approved by their credit department. LOL, WTF when you are paying them with a credit card that has a limit high enough to buy a couple dozen of the mofo's?
Because I want to give the laptop to a friend that leaves for Europe in 2 days and it is much less expensive here I called their help line and after about 15 minutes they say I have to call again in the morning when the credit department is there. So I call them and the stupid mofo goes through all the security question BS again. It took another 20 minutes on the phone, getting transferred to a manager, etc to get the thing done.
I have a very high credit rating and no debt, so just imagine how it might go with a bigger purchase like a car or something like that or someone that is squeezed a bit.

Something as small as 2500$ in Europe takes 10 seconds.

Are you sure this was the result of the current credit situation or the result of the approaching deadline for implementation of Payment Card Industry Data Security Standards?

Absolutely, the standard you mention goes back to 05/06 and is a entirely different issue as it goes to data / network protection and internal firewalling.
No doubt in my mind that they were hooked into a credit rating co data base due to the nature of the questions asked and the format the questions were presented in.

I do quite a bit online and I'm familiar with a few things, but this one I had not seen before and for several reasons it would seem unlikely that they would single me out.

musashi - I have been working on PCI DSS standards for large corporations everyday for the last 14 months. Let's just say your assessment is not entirely on target.

Summary of Weekly Petroleum Data for the Week Ending August 17, 2007

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) grew by 1.9 million barrels compared to the previous week. However, at 337.1 million barrels, U.S. crude oil inventories remain above the upper end of the average range for this time of year. Total motor gasoline inventories fell by 5.7 million barrels last week, and remain below the lower end of the average range. Declines were seen in inventories for both finished gasoline and gasoline blending components. Distillate fuel inventories increased by 1.3 million barrels, and are in the middle of the average range for this time of year. Propane/propylene inventories increased 1.7 million barrels last week. Total commercial petroleum inventories increased by 0.5 million barrels last week, and remain in the upper half of the average range for this time of year.

Leanan: Interesting. Gasoline inventories down 6.5% YOY, gasoline demand up 5.7% YOY, gas prices low http://biz.yahoo.com/ap/070821/energy_sector_afternoon_roundup.html?.v=1

It continues to look like the stuff will hit the fan this fall:
(OECD Days of Supply, Actual & Forecast)

Wow,,a picture is indeed worth a thousand words

Excerpt from the OPEC/IEA article that Leanan posted up top:

Consumer nations, represented by the International Energy Agency, want OPEC to pump more oil. Otherwise, they reason, oil stocks in consumer nations are headed for steep falls.

Cut and paste data from the previous years and call it a forecast. Sounds like an easy job, I wonder how much it pays.


It will be interesting to watch gasoline supplies. I beleive that we are at or near an historic low in days of inventory. When prices drop, as they have for the past 30 days or so, actual demand gets distorted. That is because the distributors, in connection with the filling stations, delay deliveries as long as possible since the next day might bring a lower price. That is, they run with minimal inventories, which is a key fact resulting in the information the last 30 days that demand has been falling despite lower prices. This is a temporary one time effect. If an uptrend starts again (we hit a 5 month NYMEX low yesterday), the reverse will happen. Distributors, in connection with filling stations, will try to keep their tanks full as tomorrow may bring higher prices. This will, temporarily, distort demand to the upside.

Matt Simmons, in a recent one hour interview, stated that we are at the point that just a one time, brief anomally, (such as a one week hurricane shut down - even without damage) could be enough to put gasoline supply at a point that the refiners could never catch up (with what they have now). This week, refiners again ran at a lower than expected rate. Matt's big mantra these days is that the semi-annual shutdowns for maintenance are no longer working. Many of our largest refineries were built 50 or more years ago and virtually need to have their "guts" torn down and rebuilt from the ground up.

from the yahoo dean link:
"The report is expected to show that crude oil stocks fell 2.8 million barrels last week, according to the average forecast of analysts surveyed by Dow Jones Newswires. Gasoline stocks are predicted to have fallen 600,000 barrels, and distillates, which include heating oil and diesel fuel, are forecast to have risen by 800,000 barrels."
So expectations were crude down, and it was up, gasoline down 0.6Mb, and it's down 5.7Mb.
Analysts, what do they know hey?

I, for one, am glad to see the propane inventories up, seeing that I'm so dependent upon it.

Fuel oil is up, too. Are they already doing the seasonal switchover from gasoline?

For the oil trader types out there, Yergin has issued another "strong buy signal" for oil.

He was just on CNBC, reiterating his call for $65 range oil next year--funny how he never mentions his prediction in 2004 that oil prices would decline back to $38 long term.

That $38 would be in "new dollars", after the hyperinflation, re-introduction of the gold standard, and whacking off of a dozen zeroes or so as the replacement currency is issued. That $38 in new dollars equates to something in the multi-billions in present nominal dollars.

Shall we designate $65 as the new Yergin?

Another sign of inflation.

How long before we hit a double New Yergin? A year?

By the way, that 52 days of supply is totally terrifying from a national security standpoint. A new OPEC embargo would cripple us in 30 days and we'd never get out of the hole again.
Bob Ebersole

We need to stay with the original Yergin so we have a point of reference.

Surprising drop in gasoline stocks...looks like the main blame lies on imports. Are the lower prices sending the ships elsewhere?

Utilization - flat 91.6%

Imports - down! 927,000 bbls/d

DEMAND - flat - 9.6mmbpd

WOW! - Gasoline DOWN - 5.7 Million barrels.

Very odd week? Not much of a market reaction either, move along :P

Hey, didn't you hear? Oil doesn't matter anymore. In this new high tech world everything runs on hope and debt...

Hello TODers,

Please refer to EnergyBulletin's 'Peak Phosphorus' article if required, and my earlier NPK, potash mining, and phosphate mining posts, too.

Although there is billions of tons of suitable rocks to mine for P & K, if a shortage develops it will be due to the fact that we may not have sufficient energy to extract, then process, then distribute these deposits where needed; the ERoEI goes negative:


From this link, I found some interesting info:

We continued to import most of our potash from Germany until 1914, when the outbreak of war completely cut off supplies. During WWI, the U.S. was forced to get what potash it could from expensive sources, such as brine lakes, distillery wastes, flue dust and seaweeds. The price soared from $35/ton to almost $500/ton.
Using an inflation calculator:

$500/ton in 1914 = $10,414.95/ton in 2007 dollars!!

I think this shows how desperate people can become when their food supply becomes critically dependent upon NPK fertilization. Here is another link on the "Development of the Potash Fertilizer Industry in North America":

[ATTN: at the bottom is an excellent 58 slide Powerpoint Presentation with tremendous pictures and info--BS]
I like the photo of the early underground mining being done by hand because they couldn't run the highly polluting early internal combustion engines underground. Germany has some mineral mines over 100 years old! Does anyone know when the more advanced mechanized equipment became safe to use in a deep mine?

As FFs deplete: how much more energy-efficient can these mines, processing facilities, chemical plants, railroads, and ships become to move these multi-millions of tons worldwide? Recall that Britain found it worthwhile to use wooden sailing ships to move Peruvian guano south around Cape Horn, then all the way back up and across the Atlantic to London.

If my Asphalt Wonderland tries to convert to relocalized permaculture: will we be able to afford Canadian NPK if it goes to $10,000/ton again because it all has to be mined and moved using non-FF equipment and/or human muscle power? How about where you live?

EDIT: If I was China's topdog, I would buy all the potash and phosphate I could to stockpile before the price goes skyhigh. Let's see: $1 trillion in USD notes/$10,000 per ton = 10 million tons. That won't go very far when you are trying to feed 1.3 billion people.

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

Not THE solution, but probably a helpful idea:

Build bat boxes, & place them directly over compost piles. The bat guano gets mixed in with the compost -- no smell. Then into the garden to boost soil fertility.

As a bonus, the increased bat population = reduced insect population. With organic methods and/or unavailable chemical insecticides, and with more people growing gardens, there would otherwise be an insect population boom, so it is actually going to be critically important that we do all we can to boost the bat population.

In Europe we need to boost the Hedgehog population too.

At least the slugs are enjoying the weather

Jim Hosking, a farmer growing cauliflower, broccoli and cabbage plants from seed every year on his land outside Truro, Cornwall, said he feared that the numbers were approaching plague proportions. “There are more slugs this year, they’re bigger and there are going to be even more when they breed I’m expecting an explosion,” he said.

“There could be a plague of slugs by autumn in fields and gardens. I’m expecting at least 50 per cent more slugs and snails than in a normal summer. They will be there just waiting to attack anything they can. They could do serious damage to crops and gardens, much more than normal.”

Farming - caught between economic chaos, climate change and failing energy production - is going to suffer enormously and in unforeseen ways. Plagues of various kinds will probably become the new normal as change disrupts established systems, whether it be ecosystems or economic systems. Food security is the ultimate threat we all face and possibly the least discussed.

Triumvirate of collapse - Economy, Ecosystem, Energy

Hello WNC Observer,

Thxs for responding. Yep, bat boxes are a good idea. I think everyone should be going crazy to build these if they read the following paragraphs:

I was trying to imagine Saskatchewan potash mining by human power only [future Halliburton work camp?]. Most of the mines are 3,300 feet underground to start with, so that is a hell of a lot of stairs that will be descended even before you start your working shift. Don't forget you have to CLIMB these stairs again at days end.

They also currently have about 5,000 miles of underground tunnels, so you would then need a bicycle to pedal to your mineface. Then pick & shovel rock into a wheelbarrow, strap your bike on top, then push your load to an upshaft. Dump load, hook wheelbarrow to bicycle, pedal back to mineface, bust your ass some more. Rinse, lather, and repeat, but this would be considered a good job. Since one barrel of crude = 25,000 man-hours of labor: the underground tunnels would be packed with other miners working the same way trying their best to extract potash as effortlessly as the huge mining equipment used to do in the cheap fossil fuel past.

Meanwhile, people on the surface, in a freezing Canadian blizzard, would be pedaling like hell to run air-pumps so the miners below won't suffocate. The best way to insure this is a success is have Dad down below, then Mom & kids
are highly incentivized to pedal; they won't stop pedaling for fear of losing the main income-earner to his own carbon dioxide exhaling.

Others would be on surface winch duty: pedaling to help wind up the loaded buckets from so far down below. Imagine yourself on a bicycle with an additional 50 pounds of rock inside your bicycle's baskets, then pedaling up a 6600 ft hill with a 45 degree slope.

Use your imagination for human power replacement of some of the other processes for potash. How about carrying 100 lb. potash sacks out of a scorching ship's hold all day in the steamy tropics [post-FF: no powered cranes anymore]? Hope you have a wheelbarrow to use vs using your back.

Yep, gently turning the bat poop in the compost heap, and recycling our urine seems much easier. Will we get off our porcelain thrones in time, or will we ignorantly prefer the 'Royal Treatment' from the Grim Reaper?

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

Yep, gently turning the bat poop in the compost heap, and recycling our urine seems much easier. Will we get off our porcelain thrones in time, or will we ignorantly prefer the 'Royal Treatment' from the Grim Reaper?

you better have the people you get your urine from go through cold turkey removal off prescription drugs. so much of the stuff passes through a average person's urine and then is recycled at the water treatment plant that your local tap water has trace amounts of many prescription and non prescription drugs.

We just call that "universal health care"

In lots of mines they used compressed air networks with the main bulk of the compressed air storage and compressor running at the surface, then the tools can be connected to the system inside the mine. Is dodgy using electrics cos of the damp conditions. Using digestion both in its natural occuring state and in artificial conditions it is possible to produce night quality fertilizers, and to think how much food our 'developed' countries waste which goes to landfill is staggering. The UK is thinking about implementing 'pay as you throw' rules for waste disposal after cutting waste collection to once every 2 weeks. There should be very little to throw away that can't be reused, recycled or composted / digested.

Glad to see more interest in the wind / electric car combination they go together like all those silly words from Grease,

Are there enough UK people on hear with enough time, knowledge and willingness to set up a TOD:UK? The UK has massive potential for renewable energy and a sustainable transport network, and we could have one hell of a collapse also. Any takers?

If my Asphalt Wonderland tries to convert to relocalized permaculture: will we be able to afford Canadian NPK if it goes to $10,000/ton again...

If things got that bad, would it matter? Where would all the water to support "permaculture" come from?

The Reuters article at the top of the heap seemed to me rather twisted logic. Opec says it's a lack of refinery capacity pushing up crude prices. If the bottleneck were downstream one would expect a glut of crude waiting to be processed. I guess they want us to think that refined prices are high due to capacity problems so they aren't going to supply more crude and might as well keep their prices high.

Methinks the dance has begun in earnest. Anything but the truth, the 'hole' truth, so help me gawd. Next we'll hear that they aren't drilling for environmental reasons - see Norway.

Gentlemen - connect your batteries.

Re; Should Beach Towns Be Rebuilt Again and Again
linked above, USA Today Article

One of the basic functions of most goverments in nations
is insurance mitigation of various risks to society. For example, money spent on Defense is supposed to keep us from being victims of an invasion. And that's a pretty good way for all but the most radical anarchist or peace activist to justify an army, navy ect. We have natural disasters of various sorts in all areas of the US-earthquakes and forest fires in California, tornados and flooding in the Great Plains and Missippi Valley, hurricanes in the coastal states. Its an unspoken assumption, but there. This is my own pet political theory, I have no references.

As a country, we were shocked by the Federal failure to help quickly in the Katrina mitigation in New Orleans, Louisiana, and that's not a right wing/left wing position, its more basic than that, it applies to to our unstated expectations of the functions of government.

I live in Galveston, Alan Drake in New Orleans, River in a flood and hurricane prone area in Florida, NASA Guy near Galveston Bay and I'm sure many others that belong to TOD.
I have both federally subsidised Flood and Windstorm insurance.Private insurance companies don't offer this stuff in my part of Texas, and many other areas, because insurance companies are in the business of collecting premiums, not paying claims, just a basic fact of life, as I'm sure Gail the Actuary can verify. I also have another free insurance that all Americans share, help from the rest of the country if we have a disaster in the form of grants, help to our police and fire in security and clean up, ect..

Galveston Island is similar to Daufin Island, we are both sandbars, but we have a 17ft Seawall of granite over 10 miles long that protects about half of our sandbar, and the rest of the island is about the same as the houses discussed in the article, lots of million dollar plus houses that are at really excessive risk of being destroyed, about once every 10 years is my scientific wild-ass guess, or SWAG. So given that, the real subsidy to houses built in that area is about $100,000 per year on a $1,000,000 beach house if a private insurance company took the risk, making a beach house unaffordable to anyone but the super rich. I think this is another subsidy that the US can't afford anymore.

I pay $1200 per year for my federal insurance, which is probably pretty close to the actual risk premium on my home. Its built to code, my first story floor is 11' above sealevel and I have about $100K in market value including the $30K I have in invested in my home.

So, this is my thought about removing the insurance subsidy by the government. Its politicially impossible to remove the subsidy, and not a good idea. But we ought to consider repricing this risk to something like the real value of the insurance in any area that is subsidised, and I'm including places like the houses in the brush in California, or any flood zone in the U.S. This would have a severe effect on the value and desirablity of all these houses and the rebuilding necessary, and the NIMBY attitudes of rich guys with beach houses that prevents an effective seawall between them and the ocean, or brush cutting and firebreaks in the California hills.

For example, money spent on Defense is supposed to keep us from being victims of an invasion.

(632 billion for protection VS 350 billion)

I pay $1200 per year for my federal insurance, which is probably pretty close to the actual risk premium on my home.

And you know this because of the 'free market'?

So, this is my thought about removing the insurance subsidy by the government. Its politicially impossible to remove the subsidy, and not a good idea.

So it is a GOOD idea to have property where it is so dangerous that the only way to 'protect' it is to have an insurance scheme that rely on the ability of government? In an industry that has exemptions to antitrust laws?

Wonder why it is that the two posters here at TOD who talk about (or are talked about) running for Prez are also the ones who talk about how the government should be taking money from others so they can have the government take money from other places to rebuild their personal property?

Amazing how "the citizens" will be asked to conserve, but hey, the government should cover others poor planning and use whatever resources are necessary!

Eric: Invasion. Classic. In the history of the USA, the closest thing to an attempted "invasion" is the current relatively successful attempt by Mexicans. Seems like the USA taxpayer is getting his nickel's worth.

I'm pretty sure that buying a 100,000,000 or so rifles and giving them to every able-bodied man in the US would do as much to protect us from invasion as the 18 gazillion dollars/year they spend on the military. Plus we would actually have militias, just like we are supposed to.

Of course, without aircraft carriers, nuclear missiles, depleted uranium, cluster bombs, etc., how will we ever be able to spread democracy?

I think you are correct EA.
I tried to find a link but couldn't.
After Pearl Harbor, the United states was in a very weak position against the Japanese and many in our military expected them to invade the mainland. As we all know, the Japanese did not proceed past Hawaii and capture United States territory with the exception of some of the Aleutian Islands.
Anyway, at wars end, one of our generals asked one of their generals why they didn't invade the mainland as we expected them to.
The Japanese general said(I paraphrase because I can't find a link) "Every American has guns. It would have been like entering a hornets nest."

In the history of the USA, the closest thing to an attempted "invasion" is the current relatively successful attempt by Mexicans.

Not true.

We invaded and burnt Washington. You can thank us for the White House. The prior one was just kindling.

You Brits shouldn't forget your invasion of Southern Louisiana in the same war, and we musn't forget Pancho Villa and the burning of Columbus, NM in 1919
Bob Ebersole

That doesn't really count as an invasion, more of a raid in force. The march on New Orleans was more of an invasion, but even that was half-hearted. Invasions are done with the expectation of staying on the ground that has been invaded.

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

I worked for Cisco for a few years. It sure looked like we had been invaded.

I am in favor of the US Gov't keeping it's commitments it has made to it's citizens; such as Social Security, Medicare, VA benefits, Gov't retirement benefits et al, including the 1928 (repeated and strengthened in 1968) assurances given to New Orleans.

I also support US Gov't compensation when it kills or injures it's citizens, whether it is atmospheric nuclear bomb testing in Nevada & the Pacific, Tuskegee syphilis tests (denying them antibiotics so as to follow the course of the disease), imprisonment of people later found to be innocent, or victims of malfeasance by the US Army Corps of Engineers in New Orleans. I felt this way before 8-28-05 and I still believe this.

It was, after all, a federal flood caused by malfeasance and not Katrina that killed over 1,100 directly and thousands more indirectly in New Orleans.

But I understand that your pocketbook is the highest and greatest value to you.

We just have different values and yours may well be representative of a majority of Americans.


I am in favor of the US Gov't keeping it's commitments it has made to it's citizens; such as Social Security, Medicare, VA benefits, Gov't retirement benefits et al, including the 1928 (repeated and strengthened in 1968) assurances given to New Orleans.

And I'm in favor of world peace, and cheap, abundant energy forever.

What we are in favor of doesn't matter. Even without peak oil and climate change, it wouldn't be possible for the government to keep all those commitments.

With those thrown in the mix, plus the possibility of a dollar collapse...forget it. It's insane. I have paid more into social security and medicare than I will ever get back. I may not get a penny back. I've accepted that, and am planning my life accordingly.

Reluctantly, I have to agree with Leanan. Many of these programs were instituted when times were relatively flush. Even those that weren't -- Social Security, for instance -- were created in a world where the economics and demographics were favorable to support such programs. We no longer live in that world.

Going forward, I see all of us as having plenty of opportunity to demonstrate our compassion. And I certainly hope that we all will. But I don't think it is realistic to think that the goverment will be able to do much of anything -- even if it wanted to.

My sister sent me a piece yesterday that contained a little tidbit that I thought was funny and apropos: The "Vermont Retirement Plan."

If you ask whether a Vermonter is retired yet, the correct answer is, "Nope, he’s still alive."

LOL! I have a feeling a lot of us, in Vermont and elsewhere, are going to find ourselves on that plan.

S'okay, they say retirement is bad for you. Many societies don't even have a word for it.

LOL! I have a feeling a lot of us, in Vermont and elsewhere, are going to find ourselves on that plan.

But how can this be? One very likely result of a steep drop off in oil production is much higher unemployment. In such a scenario, there won't be jobs for old folks. Thus the most likely possibility would be a very meager lifestyle on some form of government assistance or even dependence on younger family members.

I think there were will be jobs. Maybe not the kind we think of now, but jobs. Farm laborer. Babysitter. Seamstress. Carpenter.

My grandparents worked throughout the Great Depression, running small businesses. A candy store, a grocery store, a cheap restaurant. Their parents took in laundry and sewing from the nearby military base, and gardened and raised chickens in their postage-stamp sized front yard. Their kids were always hungry, but they raised a dozen of them.

Yes. Plenty to do back then, but paying work was hard to find. Nobody disputes that. My great-grandparents supported their parents who generated no income but they did, of course, help out around the house.

My grandparents and great-parents all had paying work. Not necessarily regular jobs, but paying work. The kids worked, too, with paper routes, waitressing for tips, etc.

The thing is, what pays in the future may not be what pays now.

There's a European woman over at PO.com who has talked to her grandparents about how they got through the war. I believe she's Italian. Fascinating stuff. She said it was the white collar workers who starved. People who had practical skills - tailors, mechanics, carpenters, farmers - did all right. They could barter for food and such on the black market. People who only had office skills had nothing to barter.


But wartime Italy is a case where the state completely collapsed. German occupation and then American invasion. Meanwhile it became a battleground where the world superpowers clubbed desperately at one another with little thought to the hapless locals.

So here is where I suspect that at heart you are a 'doomer'! :-)

That's not an accusation. It's more like a technical label. Just making the point that preparing for another Depression is very different from taking measures to ride out societal collapse where your country becomes a mass grave for foreign soldiers. Two *very* different things with at least an order of magnitude difference in probability in my view.

EDIT: Order of magnitude difference in severity, too.

So here is where I suspect that at heart you are a 'doomer'!

If I were, I wouldn't still be investing in the stock market. (Yes, I really am.)

Just making the point that preparing for another Depression is very different from taking measures to ride out societal collapse where your country becomes a mass grave for foreign soldiers.

And my point is even if the worst happens, there will still be paying work. Maybe not the kind of work you imagined you'd be doing, but there will still be work, even for elderly people.

Part of this argument could rest on cultural differences.

In Canada we have only recently seen forced retirement at 65 go the way of the dodo. (I'm not sure it's completely gone).

This has become politically possible, in my view, only because we now enjoy our lowest unemployment rate in 3 decades. Employers and younger workers tend to like forced retirement of the old guard.

Things are different in Canada. At 65 you get social security even if you have never contributed a dime. It's meager but enough to live on. There is another universal government run pension that is dependent on contributions.

But I would wager that even in the US, involuntary unemployment and underemployment among the elderly would rise much faster than the overall rate. But I admit I'd need to dig into the data to be really sure!

PS: Glad to hear you hold stocks. Sure not one of those short funds, though. ;-)

Or oil or coal? If it's an alt-energy play or pretty much anything else, I concede your non-doomer creds are established.

Mostly mutual funds. Index funds and such. I'm not not interested enough to buy individual stocks.

But wartime Italy is a case where the state completely collapsed.

Every social contract broken as Leanan noted, the rule of law replaced by rule of man. I cannot imagine how such a state will be able to "legitimize" itself when the grid goes down - except as a pure authoritarian nightmare. Will Newark and Los Angeles look like Iraq? I wonder if that is why impeachment is not going to happen in the US, because it would reveal there is no state remaining and there has been a defacto coup.

cfm in Gray, ME

The rule of law is the rule of man, your just under the rules of more generous men then most.

The thing is, what pays in the future may not be what pays now.

This I completely agree with. A while back I read a book that documented ways in which the Depression led to modernization. The author was focused on the fundamentals of the Depression. There was a extremely steep drop-off in farm production BTW. Farmers, especially in Canada, were horribly hit.

Anyhow, he noted that it was exacerbated by people having the wrong skills. ie. At the time it occurred, people thought everything that was expanding would continue to expand. But the truth is that even without the financial panic, the economy needed to go through a wrenching transition.

Sound familiar?

During the Depression, the economy shrank a lot but did not retrench to old ways. Instead, it transitioned very painfully to something new.

My guess is that we face something similar but only for a few industries do I think I can guess the future.

You conveniently forget what ended the Great Depression: a global war for the oil supplies in the caspian, the Middle East, and the South China sea.

Qeustion: What ended that global war?

Answer: Two nuclear devices.

Question: What's different today?

Answer: Now the world has 20,000 nuclear devices and the U.S. arsenal is in control of people who believe in a first strike attack.

@ all you soft-crashers who like to say "well we're heading for another Great Depression . . ." You forget that ended with most of European and Russian civilization in tatters, with a regional nuclear holocaust taking place in Asia, not to mention Hitler's holocaust.

But hey, maybe writing our congressmen can stop all that (again) . .

I misspoke somewhat above since I'm not among the soft-crashers. I'd see a Great Depression II as a worst case scenario and unlikely. But it is on the radar, and something to hedge against if one likes to live cautiously. Stagnation and recessions are far more likely.

Matt, I think you focus so much on your nuke doomsday scenarios because without them nobody is likely to be panicked into the radical preparations you recommend.

Honestly, what would say are the odds of complete societal collapse in the US within the next 10 years? I'd guess you'd say something like 50 to 100%.

I'd say something like 1% absolute max. Those 2 orders of magnitude make a lot of difference!!!

There is one difference here that is far more crucial than you want to recognize:
You wish that which you see to become reality, Matt does certainly not wish for his visions to come true.

It would be more accurate to say that although Matt may not really desire his visions to come true, he definitely wants many folks to believe they will. Fear is a bread and butter business for him. That's undeniable. Check his site. On a couple of occasions I've seen him crow here in the TOD comments on how good he is at scaring people.

For myself, I'd love to see green tech make it possible to live well and sustainably. What I want is for humanity to come to grips with "Limits to Growth" rather painlessly. Best case would be a gentle stagnation trending toward lower energy consumption.

More likely we'll also see frequent recessions and higher unemployment. Those, I emphatically don't want.

Rather than a Great Depression II, I think a better name for it is the Great Decline. The onset won't be so sudden and so steep, but the decline will be more relentless, and there won't be any recovery - just a gradual leveling off to a permanently lower economic level.

That's too optimistic for the doomers and too pessimistic for the cornucopians, so it is probably spot on, or very nearly so. ;-)

Beware of placing history's past templates on future events - they just won't fit, and will mislead rather than help. We'll see some things in the Great Decline that remind us of the Great Depression, but a great many things will be very different.

And as for global thermonuclear war: well, I've been living with that monster under the bed my entire life. Maybe someday it will happen, then again, maybe not. With any luck, maybe it will happen after I'm already gone. If I'm not so lucky, then I'll very soon thereafter be gone anyway. Too bad, but it is not worth getting anxious about it. It makes more sense to focus on the much higher probability contingencies that one really can do something to prepare for and mitigate.

Stoneleigh makes a pretty good argument for a "much worse than the Great Depression" scenario.

The Great Decline, interesting concept.

However, I expect discontinuities in the decline, -9% one year, +1% the next, -3% the year after. This argues against a the slow, steady decline model.

I agree that no past event will be an exact template for the future, but historic analysis is still useful.

Best Hopes for the Great Decline,



The cold war scare situation regarding nukes was totally different then the post-peak oil situation. . During that era, wealth and living standards were expanding. Now they're declining. So the economic and political system in which the nuclear weapons exist is totally different and many magnitudes more dangerous than it was from 1950-to-2005.

It's not entirely a coincidence, imho, that the US has adopted a first strike policy around the same tieme that global oil production is peaking.

AS far as not being able to prepare for it: that is a myth that was largely propagated here in the US for political reasons.

If it were not possible to prepare, Sweden would not have made extensive preps.

Google "nuclear war survival skills"

Hey, I still have a copy of Ye Olde The Effects of Nuclear Weapons and know all about this stuff. And yes, I know it is possible for some people in some places to "survive" an all out nuclear exchange -- for a while at least. I still think that the possibility that global thermonuclear war (or rather, its aftermath) ends up being an extinction level event cannot be ruled out entirely.

If the missiles start to fly, of course I'll take shelter, and of course I know HOW to take shelter. I'm just realistic enough to realize that once the missiles have been launched, my life expectancy will have just become significantly shorter regardless of what I do.

I very much doubt that it is going to happen real soon, and in any case I am getting older by the day. I know that my time on earth is limited, and that my end will come some day, one way or another. I am at peace with that. I'll try very hard to avoid my end being due to radiation poisoning, as I know that is a particularly unpleasant end.

However, once the missiles fly, then all the best made plans of mice and men become null and void. IMHO, I think it is vain, if not downright foolish, to think that one can come up with any plan to assure one's long-term survival after a nuclear war. There are simply too many unknowns. Not least, there may in fact be too many other survivors whose own "survival plans" might not exactly mesh with yours. More than likely, their "plan" for their own survival will mean that you don't. In America we are all surrounded by 50 million Bubbas with guns, and the chances are pretty good that a fair number of them will survive for a while at least. Someone made a joke upthread about the last surviving American being a lawyer. That's not right; the last surviving American will be a redneck sitting in an out-of-gas pickup truck, with a rebel flag on the aerial, holding a shotgun in one hand, and the least can of beer in America on the other - with the former owner of that last can of beer lying in a pool of his own blood on the ground in front of the pickup.

I just think that rather than get myself all tied up in knots over something that very well might not happen, it is more prudent and rational to focus on the contingencies that are near-certain (higher energy prices & scarcity) and high probability (economic decline). That's enough for me, but YMMV.

I go for depression and not decline.

Development of new technology will continue, habits and lifestyles will change and people adapt to new situations. After a decade or a generation there will be new habits and lifestyles wich togeather with new technology will give new opportunities and something different will start to grow.

In such a scenario, there won't be jobs for old folks.

Right you are, Asebius. And unlike times past, many of our generation will not have large numbers of children (my wife and I have none) to assist us through old age.

So, now you know what keeps me up at night.

This keeps me up at night too, but for a different reason..

I'm 30 with a 401K worth about $60K (tied up heavily in Insurance Co. stock). A wife and two small kids.

Why should I not take the tax hit, walk away with my $40K now and spend a portion on hard goods that will be needed in the near future? Retire the Vermonter way?

Yeah, I'm no financial wizard and even if I were, I wouldn't know what to say about that. My wife and I, being middle-aged, have had a few years to put money away in our "retirement" plans. It isn't a huge sum but it would more than pay off what remains of our mortgage, even after Uncle Sham got his share.

Would that be the smart thing to do? I don't know. Ask me in twenty years.

Rather than offering direct advice, I like to quote other people, in this case, Marc Faber, who had one primary recommendation for 2007--buy farmland.

One idea I have proposed before, based on the way many oil deals are structured, is the following. Find some farmland, pay for an option to buy it, and peddle the deal to joint venture partners, with the funding group paying for 75% of the cost, carrying you for 25%.

From there, you could just lease it out to an organic farmer, or you could try to structure the thing from day one as a small farm, with the capital raised up front to try to get the operation going.

The key point is to try to secure access to food supplies. In addition, it might provide a future place for your kids to work, after school and in the summers.

On a somewhat bigger scale, I have read about suburban developments--preferably along mass transit lines--being built on the periphery of working farms. This is a link to a New Urbanism development ("Hometown"), just north of a commuter rail line, and just south of a future light rail line, between Dallas and Fort Worth: http://www.hometownnrh.com/disclaimer.asp

Most of the houses in Hometown are fairly small, on small lots, similar to the houses around the gazebo in one of the pictures on the website. In any case, imagine small houses like this clustered around a working farm, along an "Alan Drake" electric mass transit line.

From the Hometown website:

Clean air. Wildlife. Less dependence on cars. The scientists at the Berkeley National Laboratory have helped design Home Town to reduce heat and air pollution within the community. The “mixed use” environment brings residential, office and retail space all within easy walking distance, reducing dependence on passenger vehicles. Shaded sidewalks, light-colored roofs and pavement minimize heat gain and air pollution within the city. Plenty of green space provides an important habitat for wildlife. And to combat pollution even further, a mass transit link near Home Town is also in the works.


It's been awhile since I've seen your ELP program pushed. I agree with it, but this post brings up topics it used to address, and with which I strongly disagree.

Most "farmland", forest and rural areas today are extremely overvalued, far, far beyond levels that agriculture or timber can support. The deciding factor has been the home or secondary market, which has pushed land prices way beyond reality. It may be several years, but these will fall precipitously IMO. Seeing farm or grazing land for 2K/ac and in 15 inches ppt is an example.

To get away from these overvaluations, you need to look at land blocs in excess of 3 or 4 sections, above 2000 ac. But you need to know what you are looking at, which most don't. And should you get it down, have evaluated the crop histories, know the rainfall, can provide for the droughts to come, know the soils, etc., your plan better withstand falling crop prices in the next recession. And even this size will show falling land evaluations shortly.

With finding an organic farmer, that will be a stretch. The good ones are already working, the wannabees will drive your place into the dirt, no pun intended, and be gone in a couple years. Then what? Conventional farmer or organic, the good ones have all the work they can handle. Does your plan support on the job training?

I think it is foolish to jump into land at this point. Better to tear up the lawn, get your hands dirty for a few years, see if the kids will come close to helping.

I never promised you a rose garden, but--like growing old--for a lot of people becoming involved in farming/gardening may beat the alternative.

In any case, people can certainly start small:

Published on 22 Jul 2004 by San Francisco Chronicle. Archived on 25 Apr 2005.
Berkeley: Urban farmers produce nearly all their food with a sustainable garden in their backyard
by John Fall

The ELP Plan: Economize; Localize & Produce
April 2, 2007
By: Jeffrey J. Brown

In this article I will further expound on my reasoning behind the ELP plan, otherwise known as “Cut thy spending and get thee to the non-discretionary side of the economy.”

I have been advising for anyone who would listen to voluntarily cut back on their consumption, based on the premise that we were probably headed, in a post-Peak Oil environment, for a prolonged period of deflation in the auto/housing/finance sectors and inflation in food and energy prices.

Rose garden or not, Lynn Anderson needs a pig sty.

EB link brings up a point often overlooked. That CA example required compatible animal zoning ordinances, few and far between I think. It was those "animal rich manures" that fueled the residence.

Even with their repeal or being ignored, there's real problems between neighbors. It's a major rural problem today with all the folks moving "their dream" home to the country, and I bet it'd be worse in cities. Even town to rural. Watched a fight erupt into gunfire with a cow dead last fall in town, even though the only applicable law was open range. Some say that was the problem, the shop owner didn't realize his town shop was open range before he fired. Open range is fence the animals out, not fence yours in.

Start small, yes, but beware buying the farm now.

People in towns and cities need to start with rabbits. They are quiet, the hutch can be hidden out of the view of neighbors (& zoning inspectors), and with frequent removal of the droppings to the compost pile, smell can be kept to a minimum. If anyone does find out you have rabbits, tell them they are "pets".

Once you've gotten away with rabbits, next try a goat. Make sure you have a good tall fence around your yard, both so they can't be seen and so they can't get out. If anyone notices, go on and on about how goats are a better "pet" than dogs because they don't bark.

You don't want to be the first in the neighborhood with poultry, but once you have seen some other people in the neighborhood with chickens or turkeys and getting away with it, then those can be added -- except roosters. Just buy newly hatched chicks for the time being. Once you are being awakened consistently by roosters in the neighborhood for several months (indicating that other people -- probably people with political pull -- have them and have gotten away with having them), then you can add a rooster. Again, make sure your stock can't get away, and clean out the droppings daily.

Finally, don't be the first in the neighborhood with a pig. By the time you see or smell other neighbors with pigs, that is a pretty good sign that zoning enforcement is now defunct, or at least very relaxed. Go ahead and get the pig, but do keep up with the manure and make sure that the fence at ground level is very secure so that the neighbors don't complain.

Rabbits, poultry, a goat & a pig are about all the small stock that would be practical for most town and city dwellers, unless you've got a huge lot (well over 1 acre), in which case some larger livestock might be considered.

Chickens have become wildly popular. I thought it was just my office; everyone's got chickens here. But apparently, it's a nationwide trend.

Man's new best friend lays eggs - More urban, suburban residents turning to chickens as pets

And the next big thing will be turkeys. Barbara Kingsolver's book Animal, Vegitable, Miracle makes a big deal about her raising of heritage breeds of turkeys. Look for a lot of people to get into that over the next few years.

Hi Doug,

I'm glad to see you and Jeffrey talking about this, as some of the same things occurred to me. Some questions:

It seems to me one big gap is in finding the experienced organic farmer - esp. one who would be willing to move. The only ones I know about are pretty settled right where they are.

I've given some thought as to how to encourage young persons to take up (organic) farming. (There are many gaps and problems, if we really will need the 50 Million or so Richard Heinberg and Sharon Astyk refer to.)(And large-scale conversion to organic seems like a really good idea - on the "top ten list". For the new leaderhsip.)

Maybe putting money into programs that are like internships, and also funelling money into the few organic ag programs that must already exist at some of the colleges that have ag programs. (ie., really stepping up what's already there, and expanding it.) - ?

1) I wonder if it isn't the case that a large-scale conversion to organic has to be done via some local incentives, as in the case of Woodbury County, Iowa.


.And possibly as part of new national farm policy. (Please no sarcanol). In other words, this type of education should be in our top ten list for "peak" legislation - along with, or as part of, a national energy policy.

2) There must be many acres (how many?), if not huge, tracts of farm land that have been already purchased by developers for purposes of putting in new subdivisions, but which now - due to the housing market collapse - are just sitting there, i.e., projects "on hold" - such as in the CA Central Valley.

The thing is, one would have to convince these developers of "peak" - and that being ahead of the curve is a good idea?

And one further problem - the idea of land value going from value as housing (back) to value as farmland - yes, definitely. The problem I can see- (i.e., with attempting to talk to developers), is the caveat, namely, that we are also looking (if we take a lot of this discussion to heart) at the possibility of significant economic disruption. So that...there's kind of a problem there. We need a certain amount of BAU in order to get going on positive mitigation paths, and yet...one may not be so convinced about BAU. It might be the case that an apparent loss now is more than worth an even bigger loss in the future. Just that convincing landholders (developers) of this - well...?

In other words, do we need new national policies, maybe even new orgs - to really accomplish this?

3) Jeffrey, do you personally know anyone (or have you done it yourself), who has put together the type of land deals you're talking about?

4) Just one more question. Who was it the other day (I was just skimming) who asked - and where does one park "the money" if one gets out of, say, the stock market? Or, in the case you're talking about here, Doug - what/where do you envision people/investors putting the money while waiting for land prices to drop?
EDIT: That would be Woodbury County, Iowa, as described here: http://www.organicconsumers.org/organic/taxbreak071805.cfm

I wonder if you'll ever be back to this page

Take any metric or area of the country, and you'll see all land is overvalued. I meant to bring it up last winter, before the currnet stats of housing declines. Beware buying the farm, and I probably agree with Don Sailorman, that the Fed will work for inflation. I just don't see it overcoming the prices now on "farms" or rural land. Every farm on the market now, except for the very large ones,(2,000+ acres) are essentially looking at the secondary home market or "estate" for their sale.

I really don't where to park the money. I believe wholeheart with ELP, esp cutting your needless consumption, but I really don't know where to park the money. Certain energy stocks seem worthwhile, but be prepared to lose. The difference with equities is that you lose them, you don't lose your home and dreams.

I'm not completely behind organic, just lean that way. Our home consumption-gardens, orchards, and meat production is that way because we prefer the taste. And for the level of effort put in, it seems senseless not to have the best. Otherwise, I'll use herbicides on occasion where exotics have me against the wall. Same with FF fertilizers. We're trying to switch over, the costs leading the way. For much of production ag, it's tough to switch.

Believe it or not, the government through the extension agents are really starting to have organic methods and advice available, depending on county. As we go on, I expect this will continue. Not to say conventional still doesn't rule the office, but it's quite a change from 10 years ago. I also understand one of the major land grant universities are offering a BS degree in Organic Ag-WSU.

Buried alive, take your insurance company stock and sell it today, buy either Sabine Royalty Trust or Permian Basin Royalty Trust, leave it in your 401K.
That way you have no tax liability, an 8% or 9% return based on the price of oil. But, research these trusts yourself. I am not a CPA or "investment Counselor", but insurance companies are going to take a huge hit from the hedge fund meltdown. This is meant as friendly advice from a non-expert, so check with your accountant.
Bob Ebersole

Much of the crappy CDO, CLO, & synthetic CDO tranche debt is held by ... insurance companies. Once defaults get high enough to wipe out the relatively slim 'equity' tranche, the holders of the lowest tranches get hammered. It is very possible that these hits could be large enough to cause the weaker firms to violate state insurance laws. Most likely, the weaker firms will look to merge with larger, better capitalized firms to avoid collapse, but one never knows.

Everyone should check out the credit rating of their insurer. If it's one of the lower rate insurance companies (such as 'A-' instead of 'A+' or 'AA'), consider changing -- the odds of an industry wide problem are non-trivial.

I've wondered about that same thing. One of the premises behind 401K accounts is that when you retire you will be in a lower tax bracket, so it will pay you better to wait and take the money out later (In addition, there is a 10% penalty for early withdrawals).

However, in a peak oil world where we will try to deal with accumulated debt as well as finance an aging population, future tax rates may be much higher than they are now. If that is the case, then it would be better to take the money out now. Now, almost every financial adviser on the planet would say that is a terrible idea, but they are probably looking at the future as being a period of continued growth.

It might not be a bad idea to diversify in a unique way: take half your savings and do with it what you think you ought to do, and with the other half do what a financial adviser would recommend. That way, whether you are right or wrong, you won't be totally burned.

Full disclosure - I don't have a great record as an investor.

The 10% penalty only applies if you can't meet certain requirements. I believe those are laid out in IRS 5329. One of the loopholes I found interesting was to take the money out as a regular periodic disbursement. The publication doesn't say how long you have to extend the payments, but I'd guess you could do it over 3-5 years and be safe.

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




You have to take an annuity over your remaining expected life, but can change that after you reach 59 1/2.

That part about the lower tax bracket is not necessarily true. I am retired and still in the same tax bracket as when I was working. The catch is that the only portion of your retirement income that is not taxable is the small part that you contributed directly on an after-tax basis while still working. This means that all pre-tax contributions, employer matching contributions and compounded earnings are still taxable as regular income.
On the other hand income from stock dividends and other investments are long term capital gain and subject to a much lower tax rate.
Of course these things are always subject to changes in the tax law and may be different when you reach retirement.

Your argument about higher future tax rates would then favor investment in a Roth 401K.

Assuming they don't change the rules on us....

Vader’s reply: “I am altering the deal. Pray I do not alter it further.”

Federal Contract Law: Ruling could make a contract’s terms into a moving target

Roth IRA: bingo. That's been my view. (Assuming they don't change the rules, as others commented.) Not only are the gains tax-free, but you can also retrieve the original contributions at any time with no tax nor penalty.

Regarding using retirement funds (or other savings) to pay off the mortgage: as I see it, if you have a fixed, low, interest rate mortgage, why pay it early? If inflation kicks in you win. Just make sure to keep enough savings on hand to make the monthly payments for a while if your income drops. If that runs out, then take retirement funds out gradually. On the other hand, if you use your savings to pay PART of the mortgage off then your monthly payments are NOT reduced (unless you re-finance) so if you then lose income, and have no svaings, big trouble. If you can pay the whole mortgage off then that risk is not there, but you may prefer to have the savings on hand for other possible eventualities. A 5%-interest mortgage is really free money, given the true rate of inflation now, let alone in a few years.


not investment advice, but "hard goods" advice. What were facing is not a matter of "getting through the night." We're not going to emerge out the other side of some horrific depression and then everything will start over again. This is a permanent change, so you want permanent solutions. "Hard goods" are not that. No matter how good they are, they wear out. So, while owning a (just for the sake of discussion)hand plow might be good, it is a, perhaps, 20 year investment. What have you left your kids?

Now learning how to make that hand plow, that's a little different.

Land, too, is different. But remember that land rights are "guaranteed" by the government and there are no guarantees about future government honesty, efficacy or even existence.

I guess I'm thinking more along the Tear up the Lawn and get dirty approach mentioned above (we're on 5 acres).

Basically ELP. The P is the tough part. Sharon Astyk currently providing inspiration. I'm still searching for my P.

My wife is a teacher (currently staying at home with kids), I'm thinking that will come into play.

Our town is small with lots of unused farm land (in NH, pop 2500). I think it has good prospects.

Meditating on my P.....

Buried Alive,
WestTexas suggested putting together a joint venture on farm land where you get carried for a quarter for organising the deal. That's the way traditional wildcats have been drilled in Texas for the last 80 years, it works. Get a farm in New Hampshire that you can buy owner finance, anything over about 100 acres would work, get it surveyed or survey yourself and do the deal. Advertise a small organic farm in New Hampshire on the internet, even blog whore here. There are probably some 70 year old people who just inherited that 100 acres from their 96 year old momma who might go for that kind of thing. Give them a fair price in notes indexed to inflation, so they won't get stung either. plus free vegetables and eggs for life. It helps the land sellers out, it helps the new organic farmer out but most of all it helps you by getting you a free 20 acres or so. As long as you don't want a big cash down it would be easy to sell to somebody who just wants a decent organic farm. They might love the idea of giving free vegetables and eggs to the sellers insted of a down payment, and if they are young and strong with kids it will help your town with new blood. When you sell a deal, take care of the other guy too, its a lot easier to sell!Bob Ebersole

I've frequently compared what Bob and I are doing in Texas--looking for small "leftover" fields--to small organic farmers.

Just as a small organic farmer can't feed the world, we can't make any difference to the world energy situation. However, we can have positive impacts on our communities, provide jobs and be net energy producers.

If you are not a net food or energy producer, you need to be thinking of what kind of essential goods and/or services that you can trade in exchange for food and energy.

To some extent, what we are seeing is a return to the "real economy," (consisting of essential goods and services) with the fantasy economy imploding all around us.

I tried to do exactly this, but my employer plan does not allow it. So I must wait until the job implodes, which should not be too long. In the mean time I've stopped contributing, and moved it all to the safest "under the mattress" fund available right at the peak. Most of the money in there has not earned much in the last 7 years.

Oh Please...

It's going to take forever for the end to come. Look, there's no point betting on the end of the world, because you're only going to be right once and won't be around to collect anyways.

However, if you read the IRS code, you'll see that in the event of a layoff, money can be taken out of retirement accounts for many items. You could pay your COBRA health care premiums for example.

Additionally, if you are unemployed, you wouldn't pay taxes on $60K except a few percent.

Get some CFL bulbs, an efficient car, and get the hell away from this site. Go out to dinner with your family, or better yet, buy dinner and go home and cook it for your family and then eat together.

This site is for paranoid old people only.

And for God sakes, diversity your portfolio!!

I did that last year with my IRA. Left brain told me it was logically correct but it was very hard to overcome the right brain fear factor. Still, the real rate of inflation exceeded the penalties.

[a lot of us, in Vermont and elsewhere, are going to find ourselves on that plan]

'Tis true; I'm busier now trying to make this place self-sufficient than when I was practicing law. On the plus side, I think I already have at least 30 years worth of projects so will have to be around for a long time just to get caught up.

We no longer live in that world

Actually we do, at least today, August 22, 2007. Our inflation adjusted GNP is at an all time high, our effective tax rate is not too far from all time lows. (I can remember when marginal income tax rates were 90% at what today would be middle class incomes).

We *MAY* not be able to in the future, *depending upon the effort we are willing to make.

But today we can do so easily, by any objective historic measure.

Yet many are willing to not perform an honorable "last ditch" defense of commitments, but preemptively throw overboard earlier commitments "just in case" things might get tough later.


Alan, do not despair.

In times of economic crisis, the nation moves left (no matter who is in power). During the Depression this happened on a truly massive scale. That's when the government got into the biz of making commitments to its citizens.

The fantasy of self-sufficiency is the first thing to go up in smoke when things get rough.

Where will the money come from? To get the answer to this, listen between the lines to those who ask the question. Did you catch the nervous quiver in the voice? In tough times, governments have been known to not only heavily tax the incomes of the rich, but also their wealth. Yup, a tax on net worth. Paid every year.

The fantasy of self-sufficiency is the first thing to go up in smoke when things get rough.

Asebius, that's a little unfair. It isn't a fantasy of mine to live like a pauper. I just figure it's a possibility that I should consider.

Maybe you are right. Maybe Bill Gates will fork over a few of his billions to help feed folks in America. Then again, maybe Bill Gates will get onto his private jet and fly away.

One thing's for sure: for better or for worse, many of us will be right here; and we'll have to make do as we can.


I'm all for self-sufficiency as a virtue. For one thing, it helps to keep ones personal freedom from being compromised. And I think one's prospects are improved by attempting to practice it.

But on this site there often seems to be complete panic about self-sufficiency! So it needs to be pointed out that very rarely in history have humans been highly self-sufficient on the level of individual nuclear families even (especially?!) in extremely hard times.

If things get bad, you won't be on your own. And this isn't just because people are sometimes nice. It's also because they are afraid of letting you get too poor.

Well, I can certainly understand that should the governing order feel sufficiently threatened, they have the power to crank up the printing presses and put money in my hands (though, I wish to make it perfectly clear that -- being a gentle pragmatist and all-around nice guy -- I'm no particular threat to anyone).

What I can't get past is the feeling that money is really nothing more than stored energy and if stored energy (as in fossil energy) isn't available, then money will be worthless. At that point, the king's scrip would have no value except perhaps at the point of a gun (a cornerstone, no doubt, of Bush's economic policy). As I understand it, this is what occurred in the South during the latter stages of the American Civil War. The government of the Confederacy was printing money, but no one was taking it.

So, here's hoping for a long and bumpy pleateau. If Bakhtiari is right, my gut tells me that all the fiat money in the world will not help us.

Alan, when I said 'we are no longer living in that world,' I was looking ahead. I agree with you that we remain a rich society by any standards but that wealth is increasingly mal-distributed (and that is precisely the word I would use).

Sure, much depends upon priorities. But as we remind ourselves every day, here at TOD, priorities aren't decided rationally.

I'm just guessing that, going forward, we're going to have to be increasingly self-reliant. I see no way around it. The next time there is a Katrina, the Feds probably won't even show up with their crappy house trailers.

Germany, despite losing two World Wars, several currencies, one hyper-inflation, two military occupations and division of the nation, kept paying retirement benefits whenever they had a sovereign government (the varied military occupiers usually did not bother).

Post WW II, they enacted a heavy tax on farmland (about the only economic sector still operating near normal levels) and used part of the proceeds to restart their version of Social Security (plus disability payments, etc.) in Western Germany three months later. (as I was told by an elderly German, since corroborated by others).

Difficult times need not mean an abandonment of commitments by an honorable people.

This brings up the issue of the character of the American people.

Best Hopes for Character and Honor,


Difficult times need not mean an abandonment of commitments by an honorable people.

Disagree. If you can't afford it, you can't afford it. And what if it's impossible, no matter how much money you throw at it? Should you go bankrupt trying to keep a "commitment" that's impossible?

This brings up the issue of the character of the American people.

Agreed. And what it comes down to is choice. We can't keep all our commitments. Which ones will we keep? Germany chose retirement benefits. Maybe we will, too. OTOH, maybe we'll choose to fund education and healthcare for our children instead. Or new energy infrastructure like nuclear power plants or wind turbines. Or food for the starving. More likely, the military will get priority.

I am pretty sure beach homes will be pretty far down the list, and I don't see that as a character flaw.


Don't forget that keeping of commitments is based not only on honor but on fear, raw fear. Rome was a truly brutal regime but Tainter reports that its welfare rate got as high as 1/3 of the city's population. Why? Fear of the plebs.

And modern societies are even more fearful. Why? Because they are even more at the mercy of members who no longer can hope for any stake in the system. Modern societies are easy to trash.

But more accurately, the rich fear socialism and in addition to the honor that at least some of them have, are highly motivated to buy off the poor.


You overestimate the degree to which this is a choice. Though they desperately wanted to, the neocons found it impossible to touch those programs.

Besides, I thought you were a believer in a big deflation down the road. If that happens, those programs could be funded by printing money to fund those programs as part of deflation fighting program.

You overestimate the degree to which this is a choice.

I don't think I do. When TSHTF, it's going to be a lot easier to cut back on the flood insurance program than on things like social security and food stamps.

Besides, I thought you were a believer in a big deflation down the road. If that happens, those programs could be funded by printing money to fund those programs as part of deflation fighting program.

I don't think they'll be able to do that. That's why I'm a believer in deflation.

I don't think they'll be able to do that.

But the barriers are simply legal and procedural. It's a fiat-money world out there, girl!

If Zimbabwe and very numerous other states can overcome those modest hurdles, how exactly would Uncle Sam be flummoxed by the challenge?

You give money to a bank during a credit crunch, it may do nothing.

You give it to an old panhandler, believe me you ain't pushing on no string!!!

If Zimbabwe and very numerous other states can overcome those modest hurdles, how exactly would Uncle Sam be flummoxed by the challenge?

We have to get foreigners to give us oil for our paper.

Sure, but that only implies that the US must avoid big inflation. It doesn't preclude preventing deflation.

Zimbabwe is essentially glossly abusing deflation fighting tools which are in reach of all currency issuers should they be inclined.

I think it's different for us, because of the special place the dollar has in the world economy, our high debt levels, and our dependence on imports. China has made it clear that they won't be left holding the bag. While nobody really cares what Zimbabwe does.

Leanan, maybe I'm having a bad day. I'm still not clear on what you are getting at! :-)

Are you saying the Chinese are counting on making a whack of money on American deflation?

Deflation prevention is not generally frowned upon. Back when Japan was deflating, the rest of the world was giving them advice on how to inflate. The Japanese chose to be cautious (to the frustration of many) If the US Treasury were to make legal and procedural adjustments to prevent, say, 2% deflation or more, how could China and the world object?

It's all for the sake of stability.

No, I'm saying China has, in their usual indirect way, warned us that if we print money like there's no tomorrow, they'll dump all their dollar holdings, even if it means sacrificing their middle class. And if they do, there will be a rush to the exits worldwide.

China backed out of that statement almost immediately when it became clear how ridiculous it was. It is not at all clear that the rush to the exits wouldn't hurt China more than the US.

IMO, you don't understand how China works. That is how they send their warnings. They don't make direct threats. They have an official make a statement one day, then have another official deny it the next. That's the way they do business.

It is not at all clear that the rush to the exits wouldn't hurt China more than the US.

Yup. But I think they're more willing to find out than we are.

You are exactly right Jack. That move would hurt them as much if not more than us.

I have to agree with Leann on this one. We have just so much time left with cheap BTUs and we need turn all of our attention to cushioning for the day when they are not so cheap. The endless subsidy of beach property has always been a concern but with a newly supercharged Atlantic storm season anything in the hurricane strike zone needs to be evaluated for utility. If it isn't vital ... it isn't vital.

Agreed, as long as they make it illegal to forclose if I drop my insurance. This subsidy of houses in places with no protection has to go, but not inside the levee in NOLA or behind the Seawall in Galveston. We have to have labor by our major ports if we expect to have any trade at all in an embargo, and that means Houston-Galveston and New Orleans on the Gulf, and the Chesapeake Bay and New York in the Northeast corridor. Its a triage thing, what are we going to do in an embargo with only 52 days of supply in the USA?

Alan's electric rail plan now!

Bob Ebersole

OMB, you wrote:

This subsidy of houses in places with no protection has to go, but not inside the levee in NOLA or behind the Seawall in Galveston. We have to have labor by our major ports if we expect to have any trade at all in an embargo, and that means Houston-Galveston ...

And upthread,

Galveston Island ... lots of million dollar plus houses that are at really excessive risk of being destroyed,

Does this mean that the average worker in Glveston is paid sufficiently that he can afford a million dollar home? This seems like the usual bs justification for the government doing something for you under the rubric of helping the little guy.

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

James Gervais,

Downtown Houston is 50 miles north of Downtown Galveston, and the beach houses are 10 to 22 miles west out the island. The owners are mostly second homes for the Houston big rich, and Houston has some real fortunes. There are quite a few of that crowd who have restored a lot of the old Victorian homes, also Docs from the Medical School and they were built originally by the cotton and timber shippers in Galveston. Galveston was the biggest city in Texas until the 1900 Hurricane. We also have a whole bunch of lower income people, service industy people in the tourism business-desk clerks,waiters, hotel maids.
The well paid working class jobs, refinery workers and skilled craftsmen like electricians ect. are people living in Mainland communities like Texas City, Dickenson, Santa Fe while the middle class live in League City and NASA-Clear Lake-Friendswood-Pearland have NASA professionals and refinery chemists and are exurban suburbs of Houston.
Bob Ebersole

The federal flood insurance covers a maximum of $250,000 for a personal residence. A number of people with $450,000 and $600,000 homes in New Orleans have had to file for bankruptcy.

Business limits are more complex, but it is difficult to get over $1 million for a business.


I think that more than likely the fedgov will honor its "committments" wrt SocSec & Medicare by direct in-kind provision of goods & services. You need medical care? You'll have to go to gov't clinics and be seen by gov't doctors who will dispense generic meds according to a standard gov't formulary -- if your condition is one that qualifies for treatment (as opposed to a condition that the gov't thinks you can just live with, or is too expensive to be worth treating with more than just painkillers). You need to eat? There will be gov't run cafeterias dispensing the minimum food that gov't nutritionists think you really need to barely stay alive. You need shelter? There will be gov't run facilities where you can sleep in a dormitory -- roof over your head, temps above freezing in winter, sanitary facilities. You need clothing? Here's your standard uniform. You need to travel somewhere? No you don't, that's too expensive, just stay where you are!

Don't like the above? Then pay for it yourself!

Ah, yes - the golden years!

You are an optimist.

No, I just think that's as GOOD as it is likely to get.

That stuff does not exist now. I know I work with the Homeless and there are not enough shelters, and the only food stations are those run by charities, and the care that the homeless are given is run by hospitals that are over booked by everyone else that does not have health insurance.

Albeit that me and the thrid wife are getting a devorce, she is in the hospital right now with heart problems. I'd estimate that her bill will be in the 30 to 50 k range when it is all said and done. 3 Heart caths, One to explore, one to place a stint, and one to explore why see is still passing out and why she has a fever. 10 days in the hospital. Lots of tests.

Medical care might be the one issue we still have to a point still not gone over the edge to nothingness. But food and shelter the Gov't does not now hand out for free.

I agree with your upthread comments, esp those regarding NOLA and other government malfeasance compensation. With NOLA, it was esp disheartening to contrast the disaster readiness payments for a young Hurricane Dean and Texas vs 2005.

But I also feel the present Fed flood policy should be terminated, and felt this way long before Katrina or present concerns of GW. In freshwater areas, it has help kill much of the function of running waters, and the program is abused to no end. I know of several recipients who have collected twice, and still build back. The attitudes I've seen, of building dream homes atop the leading edge of an outside sand bank river bend and stating "I'm insured, so what," are infantile.

The same goes for coastal development, but this becomes more problematic when dealing with ports and sea level changes. Here the entire nation depends on their services.

Alas, many of the commitments were not honorably made, but were presented as nearly cost-free by the crooked politicians who actually made them. Don't tax you, don't tax me, tax the guy behind the tree; get your revenge on the mean corporations who deliver the news that you have to get up in the morning and go to work; and all that. So - as we are seeing in this discussion - "the American people" may not identify with the commitments to the same degree as, say, some Canadian and Dutch folks I have met.

That's in addition to the plain and simple question of whether we can afford them, given the far higher proportion of claimants nowadays, the limitless and exploding nature of the claims, and the simple fact that much of what is being claimed is more expensive than ever in terms of work hours per unit. After all, the apparent real GDP may be higher, but that's largely due to chipboard and cheap Chinese-made gewgaws. Such things do not help us at all with labor-intensive items that obstinately resist productivity improvement, such as medical care, fixed infrastructure, and college education, all of which float ever higher out of sight with each passing year.

In thirty years or less, at the rate we are going, everyone will either be a hospital or nursing-home patient, or else an attendant, and there will be room for no other activity. Other items are further behind but on the same exponential curve. So something must break, and in keeping with Herbert Stein's rule it will break. Amidst the wreckage will be the broken remains of unkeepable promises, a result that will indeed be harsh. As with oil, reality does not always give us that which we feel we are owed.

Even without peak oil and climate change, it wouldn't be possible for the government to keep all those commitments.

Your government wants you to think this way as it gives them the opportunity to evade any and all commitments to you and to enlarge the amount of benefit that flows to the American elite.

It is hard to afford social security when one in every ten dollars is being spent on nation building in Iraq. And the one in ten figure is likely an under estimate of the true cost.

In the current environment you have financial firms who made out like bandits originating loans to folks who never had a hope of servicing the debt. They then packaged and resold these "securities." Yet your cash stricken government (your perception) is working hard to ensure that these same lenders are kept whole. I see little concern for the impact of such predatory lending on the borrowers (a swiss banker recently called American lending practices "insane.") Remember this is taking place less than a decade after Enron. You have allowed your government to "Enronize" the entire US economy.
Don Sailorman expects the rest of the world to pay for this situation. I think that outcome to be highly unlikely.

I don't expect the rest of the world to "pay for this situation." What I expect is that the dollar will sink to a small fraction of its current purchasing power and whoever keeps holding dollars will lose--bigtime.

Note that if I am wrong and we are headed for a deflation, then the foreign holders of U.S. dollar securities will make out like bandits. Deflation is possible, though I consider it highly unlikely. To a large extent, the history of money is the history of inflations.

Increasing inflation rewards debtors and punishes savers. Debtors have far more political influence in our society than do savers. One of the great injustices of unexpectedly increasing inflation is that it rewards reckless borrowing and penalizes thrift.

There ain't no justice. (TANJ!)

I don't think our positions are too far apart. The rest of the world isn't going to pay for our foolishness; that's why I see deflation in our future. The cost of printing money will be too high. And no, I'm not talking about the cost of ink and paper.

We can't afford Iraq, either. We've put it on our credit card bill. I fear that will not be possible when TSHTF.

I agree with you about the high costs of printing money. I do not advocate reducing the value of the U.S. dollar, but I think it is very likely to happen.

Why will foreigners continue to accept depreciating U.S. dollars? Because our dollars will still have SOME value. Also, I expect sharply increased rates of inflation to catch almost everyone by surprise: Transactions are based on expectations, and if people expect the dollar to hold its value fairly well, then they will accept it. Also, looking back to recent history, back around 1980 when the dollar was losing about ten percent of its value in a year, there was not the slightest problem in getting foreigners to accept it. (Of course nominal interest rates were at very high levels.)

The Fed will fight inflation as long as it can, in my opinion, but when faced with the threat of a deflationary situation of cascading debt defaults they will pump credit and hence money into the system--and indeed I expect that they will monetize huge and rapidly increasing federal deficits. Tax cuts and spending increases are the ways the government uses fiscal policy to stimulate the economy, and when the initial stimulus package does not work to mitigate Peak Oil, then will come a much bigger package. Note the political popularity of tax cuts and spending increases.

One big spending increase might come from adjusting Social Security and Medicare for large cost-of-living increases. Because of the clout of retired people and the Baby Boomers who soon will be retiring, I think spending on these two huge programs is likely to be maintained in real (inflation adjusted) terms--at least so long as there is a semblance of representative government in the U.S. We greedy geezers and grasping grandmas are not going to let our real benefits decrease so long as we can toddle to the polls in our walkers;-)

Some would consider going hunting when that comes to pass.

I also support US Gov't compensation when it kills or injures it's citizens, whether it is atmospheric nuclear bomb testing in Nevada & the Pacific, Tuskegee syphilis tests (denying them antibiotics so as to follow the course of the disease), imprisonment of people later found to be innocent, or victims of malfeasance by the US Army Corps of Engineers in New Orleans. I felt this way before 8-28-05 and I still believe this.

And yet, exactly how shall this be paid for?

But I understand that your pocketbook is the highest and greatest value to you.

If it was, I'd be working on my billing and not posting to TOD asking the simple question - how are you gonna pay for your "great society"?

We just have different values and yours may well be representative of a majority of Americans.

In a world of fiat currency - based on an economic model of growth which is constructed about cheap energy - excatly how will "your" model be supportable? Because I'm rather sure the present model won't last.

I look forward to your white paper.


And I'd like a pony, a zero-hour workweek, a free 15000 square foot house with free utilities and no taxes, free first-class travel to any part of the world any time, free medical care with no taxes to pay for it, and, maybe just for those fun days when the weather is perfect, the fanciest carbon-fiber bicycle made, and a Hummer with free gas to carry it to a safe place to ride. Oh, and maybe the house should be well below sea level, protected by Federally subsidized glass dikes, so I can enjoy the soothing sight of fish swimming by.

Look, we've got to stop limitlessly subsidizing people to do stupid things, one of which is choosing to live hard by the sea in a horrifically hurricane-prone area, and that's the sort of nonsense the original discussion was really about. And more importantly, we've got to stop making promises we will never be able to afford to keep, which means for example that before we can fix medical care, the American people, just like everybody else on the planet, will have to decide how much is enough and that they will say "no" beyond that limit. And we've probably got to raise taxes even to pay for the promises we think we might be able to keep, but that will be politically impossible as and when life gets harder.

We just can't afford even what we're doing now - look at the discussions lately on TOD:Canada. As the funny money gets called in or more likely just inflates into thin air, we will be able to afford it even less. And all this is before I even consider decreasing oil availability. So on days with impossibly entitlement-minded discussions such as this, I'm sorely tempted to say, just close down NOLA, order everyone out, declare the remains a national monument to stupidity, and use the Federal funds solely for resettlement elsewhere - because otherwise we're just going to do this again and again and again at ever-ballooning expense.

So on days with impossibly entitlement-minded discussions such as this, I'm sorely tempted to say, just close down NOLA, order everyone out, declare the remains a national monument to stupidity, and use the Federal funds solely for resettlement elsewhere - because otherwise we're just going to do this again and again and again at ever-ballooning expense.

Not politically possible (yet), but what we should do, and probably what will happen eventually. It would be better if it happened sooner rather than later, because eventually, there won't be funding for resettlement.

Sorry, but that's BS. New Orleans is located where the water transport for half or more of the Continental US meets the ocean. In Galveston they built a Seawall and pumped 6 to 14 feet of sand over everything behind the Seawall in 1903. It would be much better and cheaper to raise NOLA than to build a new city. You have to have labor for water transport. Period. Unless we want to abandon water transport for every major city and farm in the interior of the U.S..
Bob Ebersole

I used to think that. The problem is New Orleans is sinking, and attempting to raise it with fill will only increase the problem. That's the problem with the levees, too. They're sinking with the city.

Unless we want to abandon water transport for every major city and farm in the interior of the U.S.

I think the river is going to make its own new port eventually, no matter what we do. And perhaps we should try to adjust, while the fossil fuel fiesta is still going on.

Not that I expect this to actually happen. Nope, we're going straight into the wall, pedal to the metal.

2005 was peak sympathy, it keeps falling like a rock.

I felt the same in 2005. We need a managed retreat from the coasts. I don't think we'll get one. We're going to have an unmanaged retreat from the coasts instead.

No, it's 2007, not 1900, so what is BS is the silly notion that we still need a city there for such reasons. Please let's not wallow in romantic twaddle. As late as 1900 a typical port city was still something of a cosmopolitan crossroads cum social cesspit, brimming with throngs of thuggish, ill-behaved, and often drunken stevedores, sailors, and others, a violent and dangerous but also excitingly connected place, the subject of romance and poetry since time immemorial. But all of that has long since been consigned to the ash heap of history.

Containerization and automation took over many decades ago, replacing both the romance of the sea and the vast gangs of thugs with boring machinery. Port employment is now a rather negligible portion of port-city employment, as all you need is a comparatively small number of crane operators and the like. They could easily commute in to the actual shipping facilities from higher ground, in half an hour or less, on just a few of Alan's trains.

The bulk of the NOLA population is tied up with the tourist trap, not the port. After all, they call the place the "big easy." That moniker could never be suggested by sailing and stevedoring, which were once hard, brutal labor. No, it's about the tourist-trap nonsense, and less directly about kicking back and letting somebody else pay the bills. Now, mind you, I see nothing morally wrong with tourist traps, but then again they're all expendable: let them either pay their own way, or else die out and good riddance.

Eric Blair,
This why I think its a fair risk premium for my house:

I paid $79,500 for the house, and put about $30K into it so far, 10% down, about $20 in new electric, plumbing, carpentry, sheet rock, paint ect, so total investemnt is about $100K, I owe $70k.

The lot value, what would remain after a storm is $30 K.

Flood and Windstorm is therefore insuring about $60K worth of improvements, and I have a $5,000 deductable, so $55,000 potential liability.

My house is historic, built in 1895 and has survived close or direct hits by the 1900 storm, the 1915 hurricane, Carla in 1961, Alicia in 1982, and lots of near misses like Rita last year and a couple of dozen tropical weather systems without major damage except the 1900 Storm. The Seawall was built in front of my home in 1903, and its never been breeched or seriously compromised, so we can conclude my house is built right and the hurricane protection works, the real risk is my roof and sleeping porch, and sheetrock and furniture in a storm surge. Since I have a big deductable, the flood insurance rate and the windstorm more than cover the risk. If I owned the property free and clear, I'd go naked on coverage.

Are you trying to start a flame war with your abusive language and insults? It sure looks like it to me. I don't mind your questioning my analisis of the risk covered by my insurance, but you just also included Alan and CEO Jr. in your aspersions as well. And, I think that is pretty trollish. I think your doing this is a reaction to my accusing you of being a troll in another argument about Airedale. I've since cocluded you were right about that argument, but that your manners and attitude need a considerable adjustment, and that I wasn't guilt free in that argument. I apologise publicly to you and TheOil Drum right here and right now for my part in what went on before, I was wrong to even comment. But I think you need to look at your own behaviour and not focus on your dislike of me. I'm not going to respond to this type of comment again.

Bob Ebersole

This why I think its a fair risk premium for my house:
numbers snipped

Your numbers may be all right just and proper - if one had a far and open market. But your home exists within at least 2 government-backed market distortions.

1) The insurance industry has anti-trust exemptions. This allows 'em to get together in a room and fix premium prices.

2) The extra-special government water damage insurance.

I was hoping you'd ponder the market distortions.

The ability of the government to write and enforce laws is powerful and, if abused, is corrosive. And gigabytes of data can be put up as examples of all levels of corrosion....from a 'carbon dioxide and water mixture in glass' level all the way to 'fuming sulfuric acid in a rayon container' This forum isn't "the place" to have the discussion about how to "fix government" - but asking "should you be expecting A government" to
"do X" strikes me as fair game.

Entering an energy constrained environment and asking

but you just also included Alan and CEO Jr. in your aspersions as well.

Didn't 'member that Jr. was part of the 'I wanna be prez' and 'lets have government hand out money for poor ideas' crowd. Living on a coast with a strong chance of weather damage and expecting a home to be rebuilt by the government is a poor long term plan. Over the longer term - rising sea water seem to make the coasts toast.

I see it more as a commentary on 'I want to use the power of law to take what you have and give to my benefit'.

And, I think that is pretty trollish

I am looking for discussions about exactly HOW the present spending promises are gonna be kept, let alone future ones. (And now upthead there is!) Thus far the score is one "promises should be kept - but no idea is given how to do it" and 2 "promises won't be kept" with the TOD theme of 'lack of energy' is offered up as the answer. The 'won't be kept - duh' has the long history of broken promises as evidence. Because its REAL EASY to say 'this should be done' - having an effective plan then PAYING for that plan, well, that gets tricker.

At some point the discussion will have to change from 'should they or shouldn't they' keep up with obligations to 'ok, what obligations should be gone' - and that peering into the opaque future of what's gonna get cut and why is WHY I'm here and keep posting.

your dislike of me

Huh? I may think that someone holds a position that is not able to be backed up by logic or that their position could change once they are exposed to other data....I don't waste my time "disliking" or "hating" any one poster here. It is not worth my time or emotional energy.

OK, I'll be happy to concede that you and Mushashi are equal opportunity assholes who enjoy stirring people up. You are not interested in an honest discussion, you just like to snipe until you get a reaction. And that's the troll tribe defined.

I pay less for a mortgage than I would on rent and have tax deductions too. I can see the Gulf of Mexico from my bedroom and my sleeping porch, and I more than pay my way on the flood and windstorm insurance. And, I love the town I live in. If you are too stupid to get something out of the system, don't blame me, blame your own lack of understanding of how things work and your lack of character, morals, and manners.

And Mushashi, why did you post a link to a virulent anti-semetic website a couple of weeks ago with no relevance to the discussion and no explanation? Are you psycho or just trying to stir up trouble? What are you doing posting about something between Eric Blair or I? I think you're a troll too.
Bob Ebersole

Holy moly Bob,

It seems like you have really let somebody have their way with your hot buttons!

If you really believe these people are trolls, well, rule number one is simply don't reply. Take a breather, go for a walk, read a book, etc.

Just sayin'.

Bob - lighten up. Eric is not a troll. You're the one who's getting personal, not him.

Why don't you two cheesedicks keep my name out of your nonsense.

I am not posting here anymore and both of you are part of the reason why.

So shut your gobs up about me.

You OMB came over to TOD Canada just to make a entirely stupid, ignorant,fantasy comment that you were way way off base on just to pitch a TROLL comment at me when someone else posted what I had written.

Thats a far far reach for anyone so I label you a Troll also as well as your 'joined at the hip' buddy Eric.

And Bill Monroe was born in Rosine,Ky. I am a banjo picker and have been to concerts where he played many times. I have visited the Bluegrass Hall of Fame where he, as I stated in my text quite clearly, is enshrined. A one second google would have cleared it all up...but NOOOOOOOOOOOOooooo....

And in fact I have several books of his..not to mention vinyl and CDs.

You got it all wrong just so you could do your troll song and chicken dance.

Goodbye weaselface,

airdale--now I feel better,,payback always feels good ,more so when its truly justified

PS. Again my offers to the 'staff' to ban me or delete my acct. My actions are easily justified and OMB did post what I said he posted and in the manner I spoke...Now OMB time to do the 'fall on your sword' routine again..."Ohhh please can we all just get along...ohhhhhh...ohhhhh...."

PPS. A proud hick..and I am 'TALKING' to the ass end of that mule..something I prefer not to do......

cheesedicks, weaselface

Oh, go on....

payback always feels good

"namecalling" is "payback"? Please consider printing out what you have posted and take it with you the next time you go to see the doctor so your meds can be adjusted. You are seeing things that are not there (I did not bring up your name and you mention the Office of Managements and Budget (OMB) that makes no sense) Your schizophrenia is even showing because you advocate the use of a search engine, while in previous posts you have referred to search engine use in a disparaging manner, not to mention how "Bill Monroe" looks to part of a totally different conversation, perhaps one you are having with voices in your head?

Re-reading your post just reminds me how pointing out the flaws in what you have to say is like shooting fish in a barrel.

Oh and thanks again for the laugh.

Eric, Airdale is quite correct that OMB or Oilmanbob did come over to TOD Canada and posted a slanderous comment about Airdale. This in response to some writing of Airdale that I posted there. It was vindictive and incorrect in substance and facts.

Eric I have watched you, in particular, follow Airdale about this site deliberately and maliciously. If this is what gives you pleasure so be it, but I would be careful, you and OMB (oilmanbob) for if this site fails due to this sort of pettiness,I doubt any other would put up with you.

I find Airdale enjoyable to read even if there is from time to time the odd error in some small point. Yours and OMB's I find merely tedious and generally scroll past.

follow Airdale about this site deliberately and maliciously.

Interesting POV.

Do you have links to back up and show how pointing out wrong statements with links to back them up "malicious"?

How about show where I have 'followed' about Airdale? Please provide links to a 'following about on the internet'

if this site fails due to this sort of pettiness,I doubt any other would put up with you.

So you are then defending the use of 'cheesedick' and 'weaselface' as 'justifiable payback'?

I find Airdale enjoyable to read even if there is from time to time the odd error in some small point.

Odd error? Small point?

Is a posting referring to others as having penises made of cheese a 'odd error' or a 'small point' that is incorrect?

Yes it is isn't it.

For anyone interested I am sure they can look through your comments for instance about some silliness on grain alcohol that you seemed to think worth badgering him about. Yes Petty.

If your prose rose even to the level of an interestingly worded insulting remark, let alone a humorous one, I would leave you to to it. Tedious unfortunately is just that, tedious.
Edited,sorry Leanan no problem just searched incorrectly

silliness on grain alcohol


That is your response? When asked to provide proof to back up your claim, "silliness" is your response?

interestingly worded insulting remark, let alone a humorous one, I would leave you to to it.

For someone who claims 'concern' about 'site failure due to pettiness' - your acceptance of insulting language speaks volumes of you CrystalRadio.

I've not decided if you lack mental ability, stability or are just a poor liar.

If you are too stupid to get something out of the system, don't blame me,

your lack of character, morals, and manners.

So? you are the leech and we are the ones with no morals?

You have the ability to contradict yourself in single sentences. Not bad for someone that stands for not enforcing the laws of their own country.

OilmanBob, is remembering that I am running as a Write in candidate for the Presidental race of 2008.

I have not said much about it on TOD so as not to take up space, plus I have been busy with other things and just have not posted a great deal. Sleepless nights and the Hurricane season has gotten me posting again.

Nice to know that someone noticed though. Thanks Bob.

The two presidential candidates might just be collectivist Eveready bunnies. In that sense they are exactly the same as every one already in the race. Only thing that changes is the address on the pork envelope. :-)

Maybe if we electrify the "clusterf*(c to the White House" we can add a couple of seats.

I don't know about Alan, Or rather I do know from his postings, but I won't speak for him here. It is the Energizer Bunny you must be thinking of.

I have stated that I don't want money from anyone for my run to the top of the heap. I don't like how the President is elected, so I am almost a protest campaign, but I am serious about this.

Pork, is good with honey molasses Barbeque sauce. Not good in the countries budget. And If I can swing it, I will also push for term limits for congress and a limited salary on my own part.

Alan is smarter than me, that I do know.

Eric said,

Wonder why it is that the two posters here at TOD who talk about (or are talked about) running for Prez are also the ones who talk about how the government should be taking money from others so they can have the government take money from other places to rebuild their personal property?

Amazing how "the citizens" will be asked to conserve, but hey, the government should cover others poor planning and use whatever resources are necessary!


I am not asking the Government to Rebuild my presonal property. LOL, I don't own any.

As has been discussed at length below and above, is the fact that we do need our port cities, at least for now and we do need workers to work there. I don't think that the "Million dollar McHouses" are all that needed, but It is not my money that grew them there. If you are a worker your house should be insured enough to be rebuilt. If you are there for the fun of it, you are taking your own risks.

This might all be null and void in a Day to 50 years when our sea levels rise beyond our ability to keep the water out of our port cities.

The Government is the poor planner in this case. Usually local governments that allowed the building of condos and house right on the beach. You are talking at least 2 if not 3 or more levels of Government here. It is the system of cities, states and federal Government that is getting the Citizens into some of this mess. I know we are supposed to have a Government for and by the people, but I am not so sure about it most days.

Usually local governments that allowed the building of condos and house right on the beach. You are talking at least 2 if not 3 or more levels of Government here. It is the system of cities, states and federal Government that is getting the Citizens into some of this mess.

I'm all for being allowed to do what one wants to, so long as your actions do not harm others now, or in the future.

The problem with that position is - how can we tell what will be future harm?

If people want to have 'a place to stay' along side the ocean, by all means. But they should be aware of the risks in the form of documents and, oh say insurance premiums. IF ocean front properties become the playgrounds of the rich, that is what it is.

The State of Florida decided to mitigate the problems of home-buyers/owners by creating a state owned home insurance company, Citizens. Citizens acts as the insurer of last resort and was created after Hurricane Andrew devastated the Homestead Fl area. But, Citizens has encountered some headwinds...


'We've created a kind of utility,” he said. “(Citizen's) plan is to borrow and tax their way out of catastrophe. With assessments that will run for another nine years, we're betting this approach will protect us. I think it's a really bad bet.”

'One nuance in the change has the potential to fuel the crisis further, Bacon and Gunter agree: as a company owned by the public and, therefore, without a tradition risk capitalization plan, it cannot be rated by the national rating companies. In turn, Florida mortgage lenders typically require mortgage holders to maintain insurance with a “rated” company.

"What the Legislature forgot is that insurance is a financial mechanism," Bacon said. "And it is a system that works on rules that are the same here and in other states."

It is a problem many Floridians already face and more are likely to face. Homeowners insurance is not available on the private market, and homeowners are forced to buy from Citizens. Mortgage contracts require insurance from a rated insurance company. Citizens in not rated, thus creating unsolvable challenges for lender and borrow alike.'

Even if mortgage money is available to potential homeowners in many cases they cannot find homeowners insurance at any price. Homes that fall into the bracket between $300,000 and $750,000 and wood framed structures built prior to 1994 are the most difficult to insure.

If you think about why we are all concerned about peak oil, much of it has to do with the unspoken assumption that our government has a duty to mitigate disasters and help prevent the forseeable disasters, and its like the dilly-dallying, procrastination and outright lying by agencies such as the EIA is similar to FEMA's failure in New Orleans.
Where the conservatives are right is that we tend to keep programs that have outlived their usefulness like the farm subsidies of the USDA. And because they need a new reason to justify that shit is why they've jumped on the biofuels bandwaggon, regardless of whether its good policy or not. Evaluating any mitigation program that we adopt ought to look at what need the program satisfies, and how well it does it.


Think about it, helping to provide transportation has always been really about insuring the economic well-being of the future even as far back as the canals of the early 19th century which were doug to insure that the Europeans with their cheap water transport wouldn't get our manufacturing jobs and their farm products cheaper than ours. And the Interstate Highway system of Eisenhowers was meant to insure movement of troops in an invasion against the bombing of rails in a war.

Alan's plan will insure us against the collapse that Stuart foretells if our oil consumption has to drop more than 11% a year because of Hubberts peak. It insures us against a sudden embargo of our transportation fuel, since we import 68% of the oil we use and 70% of it is used for transportation, an oil embargo is a very serious national security threat.

Peak oil policy is insurance against a Diamond/Tainter collapse, or the military having to take all the oil and gas for a war. Alan's electric rail plan at least guarantees some freight and passengers will move in an embargo and war. Its why we can't afford to wait on this issue and must put it on the agenda of all political parties for the next election.
Bob Ebersole


But we need it in the right places and we aren't going to get it in the right places. Too much of the rail is right down along the river banks, or by the sea, in places that flood every bloody time it rains. It's a prodigious waste to put costly electrified infrastructure there. So I dunno.

Paul S. that's because of water transport, essential to world trade for 3,000 plus yearsBob Ebersole

The financial cost of a major hurricane hitting the Houston-Galveston area is one of those things I don't want to think about. Climatology says this area should get hit 4.2 times in a century by a major hurricane (Category 3+). The last such hit was Hurricane Alicia in 1983, which just made it to Cat 3 with 115 mph winds. Certainly we have never been hit in the near-peak or post-peak oil age.

Galveston itself is somewhat prepared, but the area between Galveston and Houston, on the west bank of Galveston Bay, has been built up in the extreme over the last 25 years and does not strike me as being well prepared. Cities that are basically on the edge of Galveston Bay include some of eastern Houston, Baytown, LaPorte, Kemah, Seabrook, Texas City, Dickinson, League City and a few others. There is a very heavy oil and petrochemical infrastructure here also, as Oilmanbob can confirm. The whole area is flat, and you have to go about five few miles inland to get 25 feet above sea level.

Right about the typography. Flat as a mud flat. But the fifty miles between the jettys at Galveston and Downtown Houston are vital to the energy security of the USA. We should have prepared as we built, but didn't, and we need to prepare now.

This area won WWII for the Allies. The oil from here supplied all the British and American Navies and Airforces, plus the fuel to transport men, ammunition and supplies o Normandy and Sicily. Thats why all the Fort Crockett relics are on the Seawall, the Army Aircorp, now Airforce base at Ellington, the blimp base at Hitchcock. If you think Hitler lost because he couldn't conquer Stalingrad and get to Baku, this was our counterpart it was the transportation fuel base for the Allies in WWII.Thats why Homeland Security is so worried about Terrorists here.
Bob Ebersole


I think every region in the country must have a rationale of how that region singlehandedly defeated Hitler.

I like the PNW's. A pre-1932 election promise of FDR built Grand Coulee, which ultimately produced the aluminum and the Air Force, which was the deciding factor. Without that energy there waiting for aluminum, WW2 would have gone the other way.

We didn't singlehandedly defeat Hitler, but all the oil convoys and some of the gasoline convoys went from here, the rest from the refineries in New Jersey and they were using Texas and Mid-Continent oil delivered by RailRoad.

California oil defeated the Japanese with tankers from LA and Oakland. It was the Allies who defeated both the Nazis and the Japs, and the Russians may entitled to more credit than anyone on sacrifice and struggle, and the Brits on bulldoggedness when it counted. As I said, Allies.

And why doesn't the PNW claim the Cold War too? It was their paper resources that allowed the CIA beaurocrats to function. What would the Defense Department have done without forms all those in triplicate? (sarcanol alert)
Bob Ebersole

Cold war paper was Lake states, Canadian, and NE. PNW was sawlogs, little more paper now. But I'm forgetting the south, whose paper industry began in earnest during the late 60's and 70's, towards the end of the cold war. The old Boise-Cascade, Potlatch Forests, Diamond, Champion, Crown Zellerbach couldn't wait.

Sounds like you're in the lumber business, Doug, or maybe the paper business. My grandfather, E.D. Ebersole ran the Lumbermen's Association of Texas as their Executive Vice President from 1944 until he retired in 1970. The Presidents were elected from the membership, my grandfather kept the continuity, ran the office and the lobbying in the legislature, ect., conventions and newletter. They represented all phases of the industry, the lumber yards, the growers, the mills.

I'm proud to be his grandson, he was a true gentleman and an involved ,active man.
Bob Ebersole

We didn't singlehandedly defeat Hitler, but all the oil convoys and some of the gasoline convoys went from here, the rest from the refineries in New Jersey and they were using Texas and Mid-Continent oil delivered by RailRoad.

California oil defeated the Japanese with tankers from LA and Oakland. It was the Allies who defeated both the Nazis and the Japs, and the Russians may entitled to more credit than anyone on sacrifice and struggle, and the Brits on bulldoggedness when it counted. As I said, Allies.

And why doesn't the PNW claim the Cold War too? It was their paper resources that allowed the CIA beaurocrats to function. What would the Defense Department have done without forms all those in triplicate? (sarcanol alert)
Bob Ebersole

New Orleans has the official US WW II Museum because WE won the war ! Or rather Andrew Higgins did, per Gen. & President Eisenhower, quoted by his official biographer. Hitler called him "that American Noah".

Andrew Higgins built small boats for the oil industry in the swamps of Louisiana. There he developed a craft that could beach itself and then pull back out. Without Higgins boats, amphibious landings on open beaches against opposition would have been impossible.

He saw WW II coming and ordered, using his own funds, the entire 1940 Philippines mahogany harvest that was not already committed (and a good % of the 1941 harvest).

He won the US Navy contract for landing craft against established competition (hick from New Orleans) because of unique capability to beach itself.

All personnel landing craft built by the Allies in WW II were built in New Orleans. We also built a good % of the PT boats and a majority of the larger landing craft (for tanks, etc.)

We also trained all landing craft personnel on Lake Pontchartrain.

The city converted streets to factory annexes (roofing over them, open sides, retimed street lights to speed deliveries to the eleven factories/shipyards in town, they were a higher priority than the US Navy Port of Embarkation), converted some public buildings to bunkhouses for the workers, etc.

Best Hopes for Historical Accuracy and Truth,


We really did dodge a bullet this week. Had Dean tracked a little farther north, this might not be a theoretical discussion.

Stirring the peak oil policy pot over at DailyKos today - could use some comments if you guys are registered users:


Chicken link to war against terror?

Are chicken coops the next battleground in the war on terror?

Poultry growers are protesting proposed regulations from the Department of Homeland Security that would label propane gas a “chemical of interest” and require anybody with 7,500 pounds or more of the fuel to register with the agency.

At that amount, poultry farmers who use propane to heat chicken houses would have to fill out the forms.

Thats a really great idea! I like to see that our boys in Homeland Security are on top of things. Any day we could be over run by terrorists in the guise of chicken farmers. In order to help out sagging employment numbers Homeland Security could employ a couple of idle real estate agents to watch each chicken farm in the US. Perhaps we should be watching those shifty pig farmers as well...

Total Information Awareness.

The mindset is to monitor everything. It's not to keep you safe from terrorists, but to know the resources you use and what you do with those resources. That gives them power over your future use.

They're interested in ... larger amounts? Makes no sense - I'd be more worried about the 250 gallon tanks (1,500 pounds) that could be easily fit in a minivan or under a pickup topper. Those are the ones that'll get used as fuel air explosives in tunnels.

And you can get that much by purchasing individual propane canisters at the gas station ... with cash.

Genuine terror concern (of which there are none in the continental U.S., FYI) or sneaky fuel monitoring move? Only time will tell.

that could be easily fit in a minivan or under a pickup topper.

Anyone who drives a vehicle is a potential threat. For that matter you should make it mandatory to obtain a US passport before being allowed to purchase and wear shoes.

I find it interesting that the DrumBeat articles in which shortages of electricity are ruining economies and people's lives seem to outnumber those in which shortages of liquid transportation fuels are the culprit by a consistent several-to-one margin. I find the prospect of worldwide peak electricity both conceivable -- caused by a combination of peaks in the production of all the fossil fuels and the capital/time needs to build the infrastructure to exploit alternate sources -- and scary.

I have noticed that too over the past several months. I wonder if it is because a lot of those countries rely on diesel generators for their marginal electrical supply, and cannot afford to pay the price that first world drivers can....

Some shortages have, as you suggest, been due to an inability to buy diesel fuel at world rates (note that the US/Canada, western Europe, and Japan largely quit using oil-fired generators during the oil crises of the 1970s, when they figured out oil was too valuable for other purposes to burn in power plants). Worldwide, there have been a variety of other causes over the past year. There have been droughts that have forced cutbacks on hydro generation. There have been problems with natural gas supplies. Poor countries have experienced grid failures due to theft of large amounts of copper wire. China and India seem to be in a situation where demand from economic growth has simply outstripped their ability to build new generating capacity.

It seems like they could license the design of a moderately sized wind turbines to 3rd world countries. They could be built locally to keep the costs down, and it would provide at least some intermittent power.

Stanford's work on wind resources world-wide is summarized here. Note that most of Africa, Asia, and South America have quite limited areas with decent wind potential.

More to the point, the areas that show up in the DrumBeat articles already have intermittent power. But you can't run a relatively modern hospital, or manufacturing, or small computer centers on intermittent power -- reliable base-load sources are necessary. Utility-scale sodium-sulfur batteries might help. I fully expect that eventually, Japan or China will sell them some sort of modular nukes.

This also has a lot to do with the ELM, lots of countries are undergoing rapid growth and exceeding the limits of their small capacity grids, and of course isnt helped by environmental instability and high fuel costs and the mentioned theft of copper wires due to their high prices. Unfortunatly RE tech is fairly capital intensive so is an unnattractive solution, but all the problems are getting worse and the next generation of renewable energy technology has the potential to be really impressive. Marine current turbine, large wind turbines, tidal lagoons, cheap PV, CSP, digestion of biomass. Renewable electricy has infinatly more potential than renewable liquid fuels but i think that is well known by all except a few. You can fool people but you cant fool thermodyamics and enthalpy.

Hadnt seen this before is a few days old

If global warming puts your head in the ground peak oil is going to F you in the A!!

Something new under the oceans:

"Scientists Discover Methane Ice Worms On Gulf Of Mexico Sea Floor"


"The discovery of dense colonies of these one-to-two-inch-long, flat, pinkish worms burrowing into a mushroom-shaped mound of methane seeping up from the sea floor raises speculation that the worms may be a new species with a pervasive and as yet unknown influence on these energy-rich gas deposits."

Thank you for that link. One of my earliest and sweetest memories was of my grandmother sitting me on her lap as a little guy reading me Robert W. Sevice poems. She was born in the late 1880's and loved poetry, she was trying (successfully, I might note) to get me to love words and poetry. Thanks for bringing a sweet happy memory up from my past.
Bob Ebersole

Sunspot, those worms are at only 1800 ft in depth. The much ballyhooed Jack 2 well was in 7,000 ft of water, and Exxon has a well going down in the Gulf in 8,000 ft of water.Chevron's Tahiti platformis at 4800 ft. This is only about as deep as the new Independence Hub.

Kind of shows me how little we know about it all and gives me real respect for those engineers and biologists. The Engineers are operating with robots and sensors in an environment as tough and strange as Mars and the rovers. Those biologists are incredibly brave to go 1800 ft down in an area where one tiny mistake is death in a submarine.
.Bob Ebersole

Solar Cell Innovation: Silicon Nanoparticles Improve Performance

Munir Nayfeh, a physicist at the University of Illinois, has developed a process that harnesses more out of a sunny day in the sand.

"Integrating a high-quality film of silicon nanoparticles 1 nanometer in size directly onto silicon solar cells improves power performance by 60 percent in the ultraviolet range of the spectrum." Says Nayfeh.

Applied Material's Solar Machine

It's been almost a year since Applied Materials - the Silicon Valley company that is the world's biggest manufacturer of the machines that make computer chips and flat-screen video displays - announced it was jumping into the booming solar energy business. It was a natural fit - most solar technology is silicon based and the Applied (AMAT) machines that churn out video displays can, with a few modifications, produce thin-film solar panels.
GIGS thin-film would seem to threaten Applied's silicon-based thin-film market. But Gay says GIGS thin-film processes still use layers of amorphous silicon - layers that can be deposited by Applied machines. "It grows our market," he says of efforts by startups like Nanosolar and Miasole.

There's no silicon in CIGS:
And although it's rumored to still be at least partially dependent on DC magnetron sputtering, those clever folks at Nanosolar are aiming for a purely printed PV film - which would leave Applied SOL.

Silicon, Strings, and Solar Cells

Interview with Evergreen Solar CEO Richard Feldt.

Our String Ribbon technology sets us apart and gives us a competitive advantage. We believe it will enable us to be one of the first solar companies to manufacture solar panels that can produce electricity at a cost competitive with electricity supplied from the grid.

Not much energy in the UV part of the solar spectrum, not down here at the bottom of the atmosphere, at least. Do you think you could put those Si nanoparticles atop a multilayer PV and not scatter the longer wavelengths too much to capture them? I dunno.

Agents provocateurs active at Montebello?

I think this has something to do with peak oil, I'll just let you guys tell me exactly what that is!

I'm sure energy security was a big part of the SPP agenda.

youtube video


Summary, photos and comments at reddit


here's to calmer heads

Amazing footage, as soon as there was an attempt to unmask the trouble makers they escaped into the police lines. Sure does look like the State has been caught acting against its own people, which is of course why the people were protesting.

Seems to support the idea that the SPP is not being done for the peoples' benefit and for whomsoever it is being done can rely on the power of the State to achieve their aims. So much for democracy, just another fable to keep the children quiet.

Triumvirate of collapse - Economy, Ecosystem, Energy

Sure does look like the State has been caught acting against its own people,

The "yellow triangle" on the bottom of the shoes is an interesting tid-bit in the reporting of what happened

check out this photo, watch the vid first though.


Free Image Hosting at www.ImageShack.us

I have boots with the same yellow mark. It is the trademark associated with a Vibram sole. A more interesting data point is the fact that the soles of all the boots, "protestor" and police alike, all exhibit the same sole pattern. This "coincidence" could only occur if all the footwear was purchased from the same source and issued to both "protestors" and police alike.

And if the state is willing to engage in this form of subtrefuge in order to protect the village of Montebello, imagine what the state might do to protect the global financial system from the follies of its own bankers.

Perchance, to dream of cost competitive solar power:
"This is the only working proven [solar] technology in the world which works at commercially supplying power to the grid," boasts Brenmiller.


It would make a lot of sense to use solar heat for many of the industrial processes that currently use huge quantities of energy to heat industrial processes. Wind powered compressors see http://www.generalcompression.com/ (annoying video warning) should be cheaper to produce than electrical turbines. A storage of compressed air can be fed into gas turbines increasing output as the compressor doesnt have to be powered by the turbines rotor. I have a crazy idea of a gas turbine in the nacelle of a wind turbine with it compressor powered by the turbines rotor, since the turbines are usually on farms it would make sense to have a bio digester to provide the gas, and of course you would feed the heat output to a solar preheated steam cycle :)

Li-Ion battery design 'flawed'

It won't come as much of a surprise to Sony, but the present design of lithium-ion cell batteries that power our consumer electronics is flawed, according to Japanese researchers. The startling announcement has been made by the Tokyo Institute of Technology, which claims that such batteries must be redesigned to avoid further potential dangers.

End of the Boom?

The vast flows of goods, services, technology and money have clearly done much good. But there's a less reassuring comparison with the past. The world economy collapsed during World War I and could not be successfully reconstructed in the 1920s. Britain, which had stabilized the old trading and financial system, was too weak to resume its leading role. The failure to find an alternative abetted the Great Depression of the 1930s.

Today's global economy undeniably faces some big, potentially destabilizing threats, oil being the most obvious. The world now uses 86 million barrels a day; almost a quarter comes from the Persian Gulf. The rise of new trading powers, particularly China, has altered global politics. Conflicts may grow; cooperation may be harder.

It was the tanked world economy that gave the Nazis a leg up in Germany. At the time GB was very weak militarily and economically and sent only a few divisions to France to help stop a Nazi invasion on the French western front at a time when both Germany and Russia could field well over 300 divisions each. Many fault Chamberlain for appeasment of Hitler but the man was holding a crummy hand. All of the wealth of the British Empire traversed the Mediteranean and Suez Canal, under the guns of fascist Italy. Churchill had an easier time of it once he got support from FDR and, after the attack on Pearl Harbor, a German declaration of war against the US. The problem with wars and economies is that they take on a life of their own...


On September 21, 2007 the graduate students from the School of International Service at American University in Washington D.C will be hosting a program on Peak Oil. The program will be conducted as an open dialogue with a panel of professors, researchers, practicioners, and scientists and will be moderated by a professor from the environmental science department at American University.

Currently, we are looking for additional panelists who could add their own expertise on Peak Oil to the discussion. If you would be interested in joining the panel or recommending someone else who would, please email me, Kenny Dunn, at kenneth.dunn@american.edu.

Thank you for your support and feel free to attend the event it is open to the public.

I could use some assistance. I have a neighbor who I found out today is planning on joining a group of investors to build a corn to ethanol plant. I was discussing with him the poor eroi of this process and that it was not an optimal solution to our energy problems.

He put forth the work by Dr. Ward at Argonne Nat. Lab (for USDA I believe) as proof that this process was very efficient and a better return than processing crude to gasoline. I have sent him a couple of links from RR's blog where he addresses Dr. Wards work, but I remember in depth discussions here on TOD about this issue and I would like to find the links to them to use as more data. I have tried the search function, but due to my very slow dial up link I was not able to make it work satisfactorily.

Can someone send put up a few links to the TOD discussions that discuss the real eroi of corn to ethanol?


This is a link to my article Corn Based Ethanol: Is This a Solution?

Question 8 talks about the return on energy invested. I talk about corn ethanol and I talk about oil, but I don't talk about gasoline. Oil takes about 1 unit of energy for 15 produced.

I believe what Dr. Ward says is that is that gasoline's energy is only 80% of oil. If it takes one unit of energy for 15 produced for oil, and gasoline's energy is 80% as much, then it takes one unit of energy to produce 80% x 15 = 12 gallons of gasoline.

Thus we are talking one unit of energy for every 12 produced for gasoline. This is vastly better than for corn-ethanol. Its ratio is approximately one unit of energy input for every unit of energy output. (Some studies show slightly below more energy input than output; others show the reverse, depending on the "boundaries" of the studies).

Corn ethanol has far more problems than energy return. I talk about some of them in the link above.

Edit: I notice your name is Wyoming. If you are talking about irrigated corn, as might be the case in Wyoming, the energy return for corn ethanol is far worse. Irrigation is energy-intensive, and is left out of most studies.


The guy at Argonne was Michael Wang. He's a transportation expert, not an energy expert, and his analysis fully reveals that.

Basically, Wang compared conversion efficiency to EROI, which is why his study is a favored one by those who don't understand energy, since it made ethanol look good.

For oil, he started with the energy content of the crude, then calculated how much is left over when you make gasoline, and said there was a 14% loss (conversion efficiency--always less than 1)

For ethanol, he excludes the energy content of the corn, and only counts how much energy was used to make ethanol, compared to the energy in the ethanol (EROI).

My question to people who cite this rubbish is to ask how an energy sink could have transformed the globe in the 20th century.

Anyway, you can read a deconstruction of how they got a positive EROI for corn ethanol and the misleading approach Wang used in http://www.theoildrum.com/node/2874. There's links there too.

Not the fall of Rome. The rise of Rome.

The difference between now and the Great Depression is population and culture. USA in 1929 had 100,000,000 sociable people almost all trained to work with their hands. We have 300,000,000 almost all trained to touch type.

So great grandma and great grandpa relatively easily went back to the land. They suffered all right - Grapes of Wrath is close to documentary. But they'd grown up farming, trapping, weaving, and not least slaving. They knew how to cut wood, get water, how to husband animals, how to plant and reap, and how best to treat eachother face to face.

We can no more do these things than we can grow gills and go back to the ocean. It takes generational learning, environmental good fortune, and law and order to make even hard-scrabble farming communities. What we've generationally learned is how to minimize taxes and fall asleep in front of the TV.

But there is a clear way forward for us. Rome, at its height, had about 1 million citizens, 1/2 million soldiers, and 60 million slaves. You could put Rome together with our Grapes of Wrath generation and have about half today's US numbers. Rome was without oil or electricity but it worked out because of their army.

Our army will be the social institution that works when the rest of our systems break. We can simply continue our present trend toward fascism - drafting our young before they set fire to our cities, systematically boot-breaking them, and setting them to guard everyone else. There will be famines and chaos among the proles but the rich will stay in control, the information systems will stay in place, and we Americans will be perfectly postioned to use our nuclear advantage to blackmail the rest of the world into feeding us and mining the remaining petrochemicals.

By the time the transforming chaos is over we might have about 100,000,000 citizens left maybe, about 50,000,000 soldiers, and 6 billion slaves everywhere else in the world.

Hey, where have I seen that ratio before?

Anyway skip buying farmland - that will never work out and you'll break both your back and your heart. If you want to get through the meltdown with you and your family hale and hearty, enlist now and get officer training. If you have technical skills and a degree you can get commissioned next week. You may have a little time as a civvy left ... but remember, the officer's mess has the good chow ...

"Waves On The River Of Mind"

nothing like being a cop in a police state

And the alternative is ... what?

"Waves On The River Of Mind"

Just want to get this straight. We're not hale enough to go back to farming, but we are hale enough to all become soldiers?

Soldiering is a lot easier than farming. Well, until you wind up with parts of your body blown off. But right up till then you're plumped and pampered like a prize pooch compared with farming.

Especially the hard scrabble let-me-just-figure-this-out kind of farming that's discussed above. Farmers are portrayed in the media as know-nothing hicks too dumb to do anything but follow an ass around. The fact is it's bloody hard - when it doesn't rain, or when it floods, or when the pests descend, or any number of similar gentle catastrophes turn up, all your hard work was for nothing, you get paid nothing, and you have to try again from nothing.

This deserves a thread some place here though. If you were going to farm a manageable size acreage without oil - more than an acre so you have something to sell, less than 5 so your family can manage without employing anyone - what's the surest crop to raise in the shortest time?

"Waves On The River Of Mind"

The surest kind of crop is drug crops but that only works if there is a buyer willing to pay a lot for it and such crops are destructive for the society they are grown in.

The answer of the surest crop depends on scores of local variables and it is impossible to give any other answer than it is a descicion that require considerable knowledge and research and continous improvement for every year.

I could scetch some such optimizations for some situations in Sweden but that would not be of any general use. The political implication is that the governmnet never ever should standardize crop growing and encourage all institutions that work for long term knowledge gathering, diversity and improvements.

Then again ...

"Waves On The River Of Mind"