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DrumBeat: September 15, 2007
Posted by Leanan on September 15, 2007 - 9:19am
ASPO's Stuart McCarthy on peak oil hitting the Australian mainstream (audio)
Stuart McCarthy of the Association for the Study of Peak Oil and Gas talks to GPM's Andi Hazelwood about Queensland's new leadership, Andrew McNamara's recent appointment to Minister for Sustainability, Climate Change and Innovation, McNamara's "Queensland's Vulnerability to Rising Oil Prices" report three years in the making and today's coverage of this landmark report in Brisbane's Courier-Mail newspaper.
THE world is not about to run out of oil, according to Queensland's new Minister for Sustainability Andrew McNamara."But it is about to run out of cheap oil," he said. "The degree of social dislocation, the degree of pain, will depend on how urgently we respond . . . in the end we will have to adopt a kind of wartime mentality (to oil use)."
He said the report commissioned by the Government on the looming peak oil crisis warns that rising oil prices will continue to fuel inflation and interest rates, placing further pressure on so-called "mortgage belt" families in outlying suburbs.
Statoil & Petrobras Sign Long Term Cooperation Agreement
Statoil and the Brazilian oil company Petrobras have signed a long-term strategic collaboration agreement for exploration and production as well as biofuels.
Analysis: Solar energy in Uzbekistan
The technical potential of solar energy in Uzbekistan is immense and is estimated to exceed by 400 percent the country’s annual energy needs of 65 million tons of oil equivalent. The problem for Uzbekistan, as with many alternative energy sources, is the relatively high start-up costs.
Delmarva continues to balk at wind farm
Delmarva Power said a proposed 150-turbine wind farm poses extra costs and risks for its customers, setting the stage for a potentially contentious review by state officials who had hoped to move quickly toward a final contract.
Pioneers Can Secure Our Future
Russia, Canada, and the United States are rushing to the North Pole in a pioneer-like land grab for an estimated 25 percent of the world's unknown oil and gas reserves. One wonders when we will learn. Oil and gas are not forever. We need to change course and save some to ensure a secure energy future.
BP all but leaving South Dakota
There will soon be a lot fewer of those green BP signs at gas stations in South Dakota.That's because BP America says it's leaving most of South Dakota and all of North Dakota, Wyoming, Louisiana and Texas. The company has decided to focus on areas closer to its refineries.
S. Dakotans face more pain at pump than most
Gasoline prices, which had fallen well below $3 per gallon in August, spiked this month in South Dakota and now are among the highest in the country, baffling consumers and frustrating analysts who say a vulnerable economy could weaken on a surge in prices at the pump.
Water needs for potential oil shale industry could complicate things
America's thirst for oil is threatening to add to the thirst for water in the West.Meeting the nation's energy needs also is threatening water quality in the region, speakers said Friday at a seminar in Grand Junction on energy development's impacts on water.
Ruling May Disperse Shell's Alaskan Exploration Fleet
Shell will start releasing contract workers and soon could disband its offshore drilling fleet due to a federal court order blocking the oil company's plans to drill exploratory wells this fall in the Beaufort Sea.
UK: Pumping up the high cost of driving
Roads bosses are pushing ahead with Aberdeen's bypass, which they aim to complete by 2012.But you can't help wondering if people will still be able to afford to drive by then.
Analysis: Mideast turns to nukes for water
The idea of using nuclear-powered desalination plants is becoming popular in the Middle East and North Africa, where tension over water rights has gone on for millennia, but it is controversial, and without significant foreign assistance it may turn out to be a mirage.
Mexico and Oil - A Double Whammy for U.S. Economy?
With the sub-prime mortgage mess grabbing all the headlines, it is easy to take your eye off the ball and miss some other important investment themes lurking underneath the surface.One of these themes could provide investors with a great opportunity while at the same time, add to U.S. economic woes for 2008. The theme is Mexico and, specifically, Mexican crude oil production.
Pemex tax break to cushion Mexico's oil woes
A new tax break for Mexico's Pemex will be no quick fix for the oil titan's woes, but it should spur some fresh production to cushion the blow from declining yields at the Cantarell oil field.
Bill Letting Kazakh Govt Quit Oil Contracts Seen Passed in September
An amendment that will give the Kazakh government the right to pull out of natural resources contracts if there is a threat to national security and national economic interests is to be adopted in the next two weeks, a Kazakh lawmaker told Dow Jones Newswires.Valeriy Kotovich, one of the lawmakers who initiated the amendment, said the government has already expressed its support for the amendment which also aims to help Kazakhstan in its dispute with the Eni SpA-led (E) consortium over delays and rising costs at the giant Kashagan oil field in the Caspian Sea.
Asian naphtha buyers cool to Saudi term offer
Asian naphtha buyers are cool towards Saudi Aramco's unusual term offers for October 2007-March 2008 supplies, as the premium levels were deemed too high in the current bearish market, industry sources said.
Russia eases Turkey gas shortfall
Russia's Gazprom said Friday it supplied Turkey with an extra 35 million cubic meters of gas after a pipeline blast hit supplies.
Nigerian gunships attack oil delta gang
The Nigerian army attacked a suspected criminal hide-out in the anarchic oil-producing Niger Delta on Friday using helicopter gunships and ground troops, an army spokesman said.
China's Coal Prices May Increase on Environmental, Safety Costs
Coal prices in China, the world's largest producer and consumer of the fuel, are likely to rise as authorities strengthen regulations to improve environmental and safety standards at mines, a government official said.
A carefully constructed compromise on a draft law governing Iraq's rich oil fields, agreed to in February among the various political groups, appears to have collapsed, The New York Times reported from Baghdad.
Water crisis squeezes California's economy
California farmers, who produce half the nation's fruits and vegetables, say they will idle fields and cut back on planting lettuce, cotton, rice, and more.Silicon Valley computer-chip makers and other industrial/commercial users say they will rethink manufacturing processes that use water, or dramatically raise the price of products they sell.
Environmental awareness taking root in conservative Christian churches
Environmentalist are often envisioned as tree-hugging, granola-munching types whose politics lean far to the left.But environmental awareness is also spreading into the pews and pulpits of conservative Christian churches.
Arctic ice loss: Northwest Passage now open, says space agency
The Northwest Passage, the dreamed-of yet historically impassable maritime shortcut between Europe and Asia, has now fully opened up due to record shrinkage of Arctic sea ice, the European Space Agency (ESA) said on Friday.It released a mosaic of images, taken in early September by a radar aboard its Envisat satellite, which showed that ice retreat in the Arctic had reached record levels since satellite monitoring began in 1978.
Bush aide says warming man-made
The US chief scientist has told the BBC that climate change is now a fact.Professor John Marburger, who advises President Bush, said it was more than 90% certain that greenhouse gas emissions from mankind are to blame.
The Earth may become "unliveable" without cuts in CO2 output, he said, but he labelled targets for curbing temperature rise as "arbitrary".
Panel Faults Emphasis of U.S. Climate Program
An effort by the Bush administration to improve federal climate research has answered some questions but lacks a focus on impacts of changing conditions and informing those who would be most affected, a panel of experts has found.
Financial issues obstacle as UN desertification meeting winds down
Despite agreeing that climate change and desert spread must be tackled together, a UN conference on desertification threatened to end without a concrete outcome on Friday as participants struggled to agree on funding, a spokeswoman said.
Greenland sees bright side of warming
Top scientist Professor Minik Rosing was stunned to hear the news from his native Greenland a few days ago.The main weekly newspaper, Sermitsiaq, was highlighting a quarrel between shop owners and farmers about the price of potatoes.
"The price of potatoes was a headline," says Professor Rosing. "That would have been a hilarious joke in Greenland a few years ago."
Climate change fuelling appeals for humanitarian aid: UN
The United Nations said Friday it had launched a record number of appeals for humanitarian crisis aid this year due to a growing number of catastrophes linked to climate change.
States are closer to trimming autos' CO2 emissions
When historians finally take stock, Vermont may look like the mouse that roared – the tiny state that brought the nation's mighty auto industry to heel by requiring cars that emit fewer greenhouse gases.
Brown strikes green deal for state's benefit
THE ENVIRONMENTAL agreement between Attorney General Jerry Brown and ConocoPhillips is a clear demonstration of Brown's ability to use the threat of litigation for a public purpose.Brown persuaded the oil company to pay the state $10 million to offset greenhouse gas emissions from the expansion of its Rodeo plant.
Al Gore heads to Emmy red carpet for Current TV
Six months after achieving Oscar glory for his climate change documentary "An Inconvenient Truth," former Vice President Al Gore is headed back to the red carpet for the Emmys, U.S. television's highest honors.
Gaz de France wants to join Nabucco pipeline project
French utility Gaz de France wants to join the European Union's flagship Nabucco gas pipeline, the French gas giant's chief operating officer Jean-Marie Dauger said here Friday.
ConocoPhillips and EnCana have teamed up to develop facilities to refine heavy sour crude, oil so thick it has to be melted with steam and mixed with lighter oil to flow through pipelines. The pairing is an equal partnership called WRB Refining and is now processing the heavy oil that comes from Alberta, Canada.
Negotiations on importing gas from Iran progressing - Bahrain
The talks were preparatory and focused on the means to transport gas from Iran to Bahrain, indicated the minister, revealing that one of the ideas was to use sea pipelines to transport gas.
Iran to privatize 3 drilling companies
Three drilling companies will be privatized, said a National Iranian Oil Company (NIOC) official, MNA reported.
Hundreds of North Sea drilling workers involved in a wage dispute have rejected an improved pay deal.More than half of the 2000 workers voted not to accept the 5-per cent rise offered by the United Kingdom Drilling Contractors Association.
IT'S not Doomsday yet, but if we don't act now it soon will be.That's the message from mounting evidence about the looming oil crisis confronting Australia.
The bottom line is that the world's oil production is close to peaking, with demand for the product soon to outstrip supply.
QUEENSLAND is heading for an oil shock. And it is not a matter of if, but when.As crude oil prices hit a record high yesterday, an as-yet unreleased Queensland Government report warns of massive social dislocation, rising food prices and infrastructure headaches because of rising oil costs.
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For good DownUnder commentary, check out Big Gav at PeakEnergy:
http://peakenergy.blogspot.com/
Peak Energy is great. Recommended.
This subject is really beginning to hit the mainstream... I just caught the end of (UK) BBC Radio 4's "Any Answers" (the listener-response sister show to the flagship "Any Questions" political discussion programme).
There was a sequence of impassioned peak-oiler contributions, mostly very well-argued and compelling to hear. The familiar drumbeat of climte-change discussion is acquiring a whole new angle....
Regards Chris
I just got an email that contains the following:
I believe the area referred to is the Falkland Islands
Now this may be a very naive question, however, does anyone know what this underground X-ray might be all about?
.....we all get a lot of emails making improbable claims.
So not only is there a huge oilfield there for us to grab - but purely by coincidence, there's a whole new fantastic way of detecting oil reservoirs, rendering obsolete all the other methods that have been painstakingly developed over the last century!!!
Phew, and I thought we were really in trouble....
Regards Chris
If they ask you to invest any money DONT DO IT :-(
There is no technology that can pinpoint 10 billion barrels of oil.
You need a lot of seismics, basin analysis, exploration and appraisal drilling. - It has to be done the hard way.
As for the Falklands, so far, not so good. Exploration has been limited, and nothing much has shown up so far.
A bit more on the Falklands:
http://www.desireplc.co.uk/pdfs/journalpart1.pdf
Worth a read actually. It gives you an idea as to what is involved. 6 well exploration drilling campaign in 1998.
Shows encountered, looks like a lake and river system in a rifting phase.
Some more drilling in 2008 I think.
Thanks CreosoteChris and Muddlogger. I was just wondering if there is something we are missing out on at this site!
Thanks Mudlogger
If the Brits are going to start recovering oil from there, I think we'd better re-christen the, er, Malvinas Basin (in the interests of diplomacy).
Regards Chris
Ha!
I wonder if, 25 years after the Falklands War, we could re-take it after another invasion....
If oil was found on the Falklands in sufficient amounts to go for serious extraction , I think we would need Argentinian help for support anyway. Unless we build support systems etc on the Island.
When I think of the lush green prehistoric algae oceans, the cause of oil – I’d expect these alga pileups to occur in bays, gulfs and lagoons brought there by currents, and becoming more stagnant in shallower waters … Actually more or less just where we observe the oil locations/- findings of today - according to today’s geology ..
Whatever oil found on land today – used to be ocean floor…
The Falklands are not in the right place for oil, in the middle of a large ocean
Am I wrong?
At first glance, the Falklands basin described in the .pdf is similar to the North Sea Viking graben.
Essentially, it looks like rift valley. Where Horst Blocks have parted and a graben has slumped. Similar to the African Rift Valley, or the Rhine Valley.
Tyically you get fluvial and lacustrine systems, lake beds, channel sands etc. Sediment and organic matter accumulates, which under the right conditions, can lead to oil generation, resevoir and trapping. But, as an above surface structure Total Organic Content (TOC) may be quite small.
They drilled 6 wells, Hydrocarbons shows were present, I dont know if any wells gave successful tests (flowing, flaring).
Dont hold your breath. It looks encouraging (in so much that they hit clastic sediments of the right age range and types), but it will be a while yet before reserves get booked - if any.
I got a call right before I started reading TOD from someone claiming to be from Texas (with a thick Texas accent) wanting me to invest in four oil wells that were being brought back to life. I was flat amazed because I'd never received any sort of solicitation before on that number ...
I've talked a bit with oilmanbob and it turns out that there are lots of small wells that aren't cost effective for the big boys to work which could be brought back to life by a very efficient wildcatter.
I read an article a few years ago which explained how a drilling company in Kentucky used a Gieger counter to find the best place to drill. It said that the presence of oil caused a drop in the natural background radiation. They claimed to have never drilled a dry hole using that method.
Oil billions beckon Falkland Islands
http://news.bbc.co.uk/1/hi/business/6571431.stm
"We could be looking at 5 to 6 billion barrels of reachable oil"
World Proved Reserves of Oil and Natural Gas (Jan 2007)
http://www.eia.doe.gov/emeu/international/reserves.html
Falkland Islands, Oil:0, NatGas:0
Falkland Oil and Gas presentation May 2007
http://tinyurl.com/yvnt82
Underground X-ray is probably a misnomer for 2D-seismic, which they've used in the Falklands extensively, according to news reports.
In one day, Northern Rock, one of Britain's top-3 mortgage lenders, has lost $2 billion in deposits, as well as 30% of its share value. $500.000 withdrawn physically from its branches. Wonder how much of that was in cash. You need armored trucks, lots of them, to carry that sort of dough.
Latest: Northern Rock has slammed the doors shut in customers' faces this afternoon. That'll work miracles for confidence. Monday morning should be something to look forward to.
Arkansawyer
Notice those in line are older.
Know there's an online run as well.
Yeah, the term bank run seems a bit out of place, it's more of a bank, shuffle judging from the pictures.
Still, it's the older people who are most at risk, they often have more money parked in their accounts. Northern Rock for many of them holds their entire life savings, as well as their pensions. While "authorities" are urging people to remain calm, they're now thinking: "I'll feel much calmer with my money in my pockets, thank you very much".
Arkansawyer
Not everyone can do this.
This is going to escalate.
The significant thing about it being mostly Older olks is that They are the ones who Remember what a bank run was.
I had my knowledge filled in by my parents from the 1930's in the US. I got a refresher course when visiting Argintina 6 months after they devalued. Corregated steel "Curtains" over the bank windows and such. It didn't matter how much you had in the bank, you could only withdrawn something like 1000 a month.
Most people will be learning for the first time what the Term Bank Holiday means.
The whole confidence game is fading like a mist.
Real Money Hurts When You Drop It On Your Foot
Arkansawyer
In the meantime - and most certainly NOT coincidentally - the ECB had to pump in 75 billion euro ($104 billion) into the market yesterday. This was 3 month money and it was a record. They might as well issue credit cards, eh? In case anyone hasn't figured it out by now, the ECB is doing the Fed's laundry...
Posted by Hellasious at Thursday, September 13, 2007
SuddenDebt Blogspot
'the ECB is doing the Fed's laundry...'
Yes, that is one way to look at the situation. Another take on it is that Bush served his 'base' caviar tax cut sandwiches while serving CDO/plunging dollar sandwiches to the rest of the world...including 98% of US citizens.
In an article by David Pilling in Tokyo in the FT We have:
A lot of what was said about Japan's property prices in 1990 has been recently been repeated for the UK - e.g. "the country is small and overpopulated with planning difficulties", "the economy is going to boom for ever".
Personally, I found the visit by Mrs Thatcher to Mr Brown at 10 Downing Street this week to be a watershed. It will bring no end of bad luck to Mr Brown and the UK's paper-chase "economy"
I must agree that tax cuts lead to excessive consumption. Also the US Government always spends the money more wisely than taxpayers do. Taxes should be raised by 10% per year for the next 5 years.
The reason for the lack of liquidity is that the Chinese government and other bondholders are holding all this money leaving less for others. The Fed needs to print more money and buy treasury securities with it. This will make it less attractive for currency manipulators to hold treasury securities. That will relieve stress in the financial system.
This is Britain. Probably two people formed a queue and everyone else joined it to be social.
RobertInSantaBarbara
I haven`t escaped from reality. I have a daypass.
That's how it worked in Soviet Russia. If there was a line forming, people would join on the assumption that there must be something worth lining up form.
I doubt that they ever had a bank run though.
One elderly couple interviewed have accounts that allow only £500 ($1000) to be taken out each day and £45,000 on deposit. They intend to come to the bank each day for the next 15 weeks to get it all out! Phew
I wouldn't be at all surprised to see news items coming up about an increase in muggings and home burglaries. All that cash lying around....
Wouldn't it be a lot easier to just walk into a different bank down the street, open a new account, and write a check from your old account to transfer your funds?
These are deposit accounts, not chequeing. Some of the accounts are online only ... and guess what ... you can't get online ... if you have the same systems in the USA beware! Confidence in Northern Rock is now gone, hence the near $4 biilion run on it in the last two days.
Northern Rock is a Building Society type of bank lending to people buying houses, and it is the UK bank most heavily financed by CDOs etc, the market for which has completely dried up. Worse, they were lending mortgages for 125% of the value of the property to first time buyers! The UKs own version of sub prime lending.
This is a very serious situation with a serious systemic risk! ... which is why the Bank of England has done a big bail-out ... they have never before helped a bank by taking mortgages as collateral in this way because of the risk of 'moral hazard' ... dangerous times!
Xeroid.
'Global Credit Crunch Reaches New Dimension'...
http://www.iht.com/articles/2007/09/14/news/mortgage.php
Don Sailorman, where are you when we need you? Can the Fed fix this mess with thier all powerfull monetary tools?
...snip...'While other European banks have gotten burned by investments tied to shaky U.S. mortgages, known as subprime, Northern Rock said it had only a small subprime exposure in its portfolio. Instead, the bank ran into trouble because the credit squeeze undermined its business model. Northern Rock relies heavily on raising money in the capital markets, rather than consumer deposits, to finance its mortgage lending.
"The problems are potentially much wider now," said Jonathan Loynes, an economist at Capital Economics, a consultancy in London. "This means we have to worry about a wider range of institutions that aren't directly involved in this credit crisis but are in a way innocent bystanders."
The British government said it had authorized the Bank of England to provide a "liquidity support facility" of unspecified size to Northern Rock, based in Newcastle, England, which has expanded aggressively in recent years.'
Meanwhile, back at the ranch...Greenspan is busily blaming Bush for basing economic policy on politics...But wait, the Fed is independent of the Federal Government. How could Bush be at fault? Where does the buck stop?
http://www.bloomberg.com/apps/news?pid=20601087&sid=amfeUB4gqTWw&refer=home
...snip...'Greenspan saved his harshest analysis for the current president. Soon after Bush took office in 2001, the president set about implementing a campaign promise to cut taxes, a policy Greenspan said he believed at the time wasn't well conceived.
``Little value was placed on rigorous economic policy debate or the weighing of long-term consequences,'' he wrote.'...snip...
...snip...'Sept. 15 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan criticized President George W. Bush for following an economic agenda driven by politics instead of sound policy, with little concern for future consequences.
Soon after Bush took office, Greenspan wrote in a new book, it became evident that the Treasury secretary and White House economists would play secondary roles in decisions on taxes and other issues.'...snip...
River,
No, they can't. And since the Fed created it all, you have to wonder if they would if they could. Greenspan saying he didn't realize what was happening till late 2005-2006, that's a bold-faced lie, all the numbers are at the Fed desks every single morning.
What cuts off their powers today, moreover, is the birth of the non-bank financial system. TOD:Canada's Sep. 11 Round-Up has an excellent piece from Asia Times by Henry Liu that explains how that came about:
Bank deregulation fuels abuse
The first major banks, that are also lenders, to fall now are the biggest gamblers: Countrywide in the US, and Northern Rock in the UK."Northern Rock relies heavily on raising money in the capital markets.." One word translation: leverage.
Another very good piece from Asia Times is this:
Ilargi, before I started posting Henry C.K. Liu essays, I dont believe anyone on TOD was aware of the man. Imho, Liu is a genius. I have been reading his essays for years and have many of them cataloged in my favorites. The first place I visit each day is ATOL, second is Juan Cole (informed comment)...then a bunch more.
I was poking fun at Don Sailorman and probably should not have. He used to be on TOD every day trying to convince us all that the Fed was going to take care of all these monitary problems and that everything would be hunky-dory. Well, I dont think so!
Am getting ready for the Gators vs Vols...later. Only sport I every watch...SEC Football! Have a nice day :)
I also have been impressed by Liu's output, and yes, he does seem to have a genius quality. Definitely a man worth paying attention to. Unfortunately, the world is populated by average clods and fools, so using genius to predict what will happen is usually fruitless. I found this out the hard way in the stock market; when all conditions and indicators show that a stock must go up, it can just go down - FOR NO GOOD REASON. Lots of things happen for no good reason; a reason, yes, but the distinction between good and bad reasons is not always transparent to the majority, and society is by definition a majority function.
Most things that happen, happen for a reason, but the quality threshold for reasonship can be quite variable. Rather than search for the best reason, it is common to attach great significance to the reason which suits one's hormonal and attitudinal state at the time.
Don Sailorman has been a wise and well spoken contributor on the economic front, and seems to occupy a well reasoned middle ground. That said, when the wheels come off, all sorts of reasons come to the fore of the panicked mind. There is a saying, 'don't bet against the Fed'. It's a bit like the golden rule, 'He who has the gold makes the rules'. While crooked, it's still the only game in town.
If betting against the Fed becomes a good position, sheeesh!! No matter how wacky US economics looks to us, try Chinese, Japanese, or Euronomics on for a while. Try Spanish real estate, or Russian equities or ....... that's why Johnson and Johnson or General Widget look good; the numbers work. The numbers that don't are 15 million barrels a day imports from ELM challenged jurisdictions with dicey juri.
Isn't there something in the Bible about building on sand?
Reading this brings me back two years ago, unable to sleep as I turned page after page of The Long Emergency. All of these financial shell games were laid in that book several years ago....damn.
Petrosaurus, I do not read Liu to attempt to profit from his economic predictions. I read Liu for his 'take' on various economic moves by the Fed, China, ECB, et al. When I read Liu I feel that he is giving his honest opinion...Whether he is right or wrong is another matter that should be weighed and determined by any who read him. I read what many economists have to say and make my own decisions after consideration...for my own enlightenment. If I wanted to be in 'the majority function' of society I would probably not be a reader of Liu.
'Don Sailorman has been a wise and well spoken contributor on the economic front, and seems to occupy a well reasoned middle ground.' I heartily disagree. Don was wrong about the vulnerability of aircraft carriers to modern missle attacks and he is wrong about the Fed being able to 'fix' a problem that lies largely outside bank regulation and has been exported to foreign central banks. The 'funds that bundle and lever' were created to circumvent banking regulations and the 'ratings companies' were their accomplices. Fractional reserve banking requires the confidence of depositors and banks in order to maintain liquidity and stable markets. I appears to me that confidence is beginning to crack in places. We will see in the next two years just how much power the Fed has to stop an avalanche. As you pointed out yourself people and markets are not always reasonable...witness the lines of people in GB trying to get their money withdrawn from an institution that may or may not be in financial trouble...maybe 'FOR NO GOOD REASON.'
'Betting against the Fed?' Do you think that TOD readers read economists to glean information that will make them better stock market players? If I misread you about this, sorry. I am not a 'churner' and have been invested in the market for a very long time...Probably a Buffet type without his brains! The market has treated me well but I know that can change instantly. I consider economics, war, politics, PO, all one subject. I consider CC as a related but different subject. I believe we should all read and weigh as many opinions as possible on both of these subjects. Sorry for the long winded explanation of why I read Liu...and others.
Thanks for the comments, which I don't see as a disagreement. Liu is analyzing honestly the actual situation which is rare amongst the usual economic tea leaf readers. We both read him for the same reasons and see the same thing. As to Don Sailorman, I'm just responding to his easily grasped explanations of the basic workings of finance which I have considered an asset. Regarding the stock market, I was just using that as an example of how an overreliance on logic and reason can discount the social capacity to act against its own best interests.
As to the Fed, the house always wins - unless it burns down or collapses - but it uses your savings to do so. While the amounts currently under siege appear daunting, in the grand scheme of things over time, they are rather paltry. The amount of our money degraded by the above the sticker price inflation since the dotcom crash dwarfs anything the sleazy types have managed to squander. Whether you like it or not, money IS debt, and there is a long standing relationship between the cumulative federal debt and the actual inflation. Actual inflation has been consistent with a doubling of the national debt during the last two terms. If you compare that with Canada's number which has purportedly gone down slightly, you can see why the 'loonie' has gone from $.65 to $.95 and may rise further. Deficits are just taxation by inflation, and postponing the realization of the inevitable inflation just results in ugly situations - like now.
Just how a supposed 2.5% inflation rate, calculated upon the price of Chinese goods, can cut your money in half in eight years is about to be demonstrated. Believing in fractional reserve banking is like being somewhat pregnant. Reserves of what? Fractions of what? Fractions of confidence, I suppose. It's a debt service game played out in the future and the PO future looks a bit gloomy. But it's a nice day for a bike ride here.....
Northern Rock Experiences Second Day of Withdrawals (Update3)
uhhh Suicide Prevention??
Hello Spudw,
latest update:
http://www.thisislondon.co.uk/news/article-23412360-details/Northern%20R...
---------------------------------
Northern Rock: Savers demand their £1.5bn in cash
• Police called in to calm crowds of anxious savers
• Under-siege cashiers dish out chocolates
• Beleaguered Northern Rock boss: 'I'm so sorry'
Police had to be drafted in as the "great run" on Northern Rock bank continued - and its crisis-hit chief executive apologised to the thousands who spent hours queuing to get their money back.
Officers were called in to one of its biggest branches in Glasgow as ugly scenes developed.
-------------------------------------
For my personal safety, I think this coming Monday morning, I will make a discrete cash banking withdrawal from my Asphalt Wonderland's 'Ponzi-Bank' before the waiting outside crowd get unruly in our blazing summer heat.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Wow, the cops are even wearing bullet proof vests. And here I thought nobody had guns over there.
"I thought nobody had guns over there."
Not guns .... but knives!
Xeroid.
I thought nobody had guns over there
http://www.newsmax.com/insidecover/guns_england/2007/08/26/27556.html
This is a typical response to gun bans.
According to a TOD thread yesterday, a report should have been released yesterday on the B-52 "accidental" cruise missile incident. Has anyone seen that report?
Don't hold your breath.
Air Force query into B-52 incident to continue
I too await the Air Force's expanation of the B-52 incident with bated breath, and am anxious to see how they are going to explain this one away.
We should keep a close eye on what develops, and I hope that those several TOD's with direct experience in the US military's nuclear weapons protocol will be available to comment on the Air Force's findings.
About the only 'innocent' explanation I can think of is that once a nuclear weapon is slated for decommissioning, it then falls outside some of the more rigorous security measures applicable to weapons actively in the arsenal and its handling is thus more vulnerable to mistakes and procedural 'freelancing'. That's probably a pretty lame explanation, but the only one I can think of that doesn't involve a deliberate circumvention of protocol by someone VERY high up the chain of command.
Another take on this B-52 incident is that it was not a mistake. The US was sending a message to someone or nation that we are cocked and loaded. When my brother was in the Air Force during the 80’s, he worked on planes with nukes. He mentioned that it is almost impossible to have any movement of nukes out of the bunkers without lots of people knowing about it. Many checks and balances.
More like half-cocked and loaded (as in inebriated).
Joule, I was on a Navy flight crew that did some things that, to this day, are still top secret. I would not expect many military ex flight crew members to come forward with info about the handling of certain weapons systems and if they do...well, they could be hauled into court and, perhaps, do some time in the pokey. If you look around on the internet you might be able to find out a lot of info without anyone going to trial or jail.
River - I posted a comment on timeline of related(?) events to Cid Yama in today's (Sept 16) Drumbeat http://www.theoildrum.com/node/2982#comment-238920. I'll ask you if a reasonable man would not question the time-coincidence of two events, here in US, and Israeli bombing in Syria, both involving nuclear warheads? Or is the B52 event just the revolt of the Generals, expressing the feelings of CENTCOM head Fallon?
I'll bet they're hoping that in a couple of weeks the public will be occupied by more pressing matters, such as Brittany going back into rehab...
PLAN, PLANt, PLANet
Errol in Miami
Posted this early this morning on yesterday's Drumbeat where Congress was informed the weapons were unguarded for 10 hours at Barksdale before they were noticed by ground crews and that one may be missing.
http://www.theoildrum.com/node/2974#comment-238595
According to a TOD thread yesterday, a report should have been released yesterday on the B-52 "accidental" cruise missile incident. Has anyone seen that report?
Ya, I heard they were going to make the announcement right after they announce the results of the Anthrax Letters investigation findings.
Or maybe not that soon.
:-)
Arkansawyer
Someone got caught. And someone knows.
Someone cannot be punished.
So Someone will have to be rewarded.
Bulawayo is largely ethnic Ndebele. Much of Harare, and most of Mugabe's ZANU-PF party, are Shona.
Another thing for those of you in areas with large Latino populations and low rainfall to think about.
A brief review of Jim Kunstler's upcoming novel, World Made by Hand:
From the book description:
Interesting. Fiction is probably a better way to reach the masses than non-fiction.
Especially if it gets made into a movie starring Brad Pitt or something...
Lawrence, thanks a million for the reference. I seldom read fiction but I would not miss this book for anything. Greatly looking forward to it. I am pre-ordering it right now.
Ron Patterson
The Minneapolis reference is probably from Kevin Costner in the movie "The Postman" where he lied that the reconstituted United States was supposedly governed from.
So I was talking to my buddy's new girlfriend this morning and we got on the subject of babies. Here's one quote that really stood out:
I am trying my darndest not to get on the Peak Oil, DieOff, d00m3r conversation. I'd hate to crush an innocent 19 year-olds dreams like that... =/
Hi supdw,
Well, you know...there are a lot of babies already born ...in need of parents.
And, the thing that always strikes me is...well, what happens really depends a lot on how people act, right? So, to know about "peak" and then talk about "what we can do"...? Not necessarily a dream-crusher, more like doing a friend a favor.
(Or what?)
Her comment was kind of double-whammy, first because it was about making more people, and second, because she said "we always want more of everything". I have done many friends the "favor" of enlightening them about peak oil and collapse, but they usually end up condemning me for ever mentioning such a horrible thing. Sigh... {=(
Have her watch Nate Hagens' presentation at ASPO once it becomes available.
EIA very optimistic for 2008
I have been doing a little work with the EIA's Short Term Energy Outlook for World Petroleum Supply.
http://www.eia.doe.gov/emeu/steo/pub/3tab.html
Using their figures for "All Liquids", they expect production to increase by 2.88 million barrels per day in 2008 from the average so far this year. That is 84.17 mb/d average for the first six months of this year verses an expected 87.06 mb/d average for next year.
They expect production to increase every quarter from now thru 2008, with production reaching 88.13 mb/d in the fourth quarter of 2008, an increase of 3.95 mb/d. That is, by the end of next year the EIA expects world oil production to have increased by almost four million barrels per day. Are they dreaming or what?
But I found one thing very interesting in their figures. They expect China to have peaked in the second quarter of 2007. In other words, according to the EIA's estimate, China has already peaked!
The entire report can be found here:
http://www.eia.doe.gov/emeu/steo/pub/
And you can click on Table 3a, 3b, or 3c to get their estimates for World, Non-OPEc and OPEC production respectively.
Ron Patterson
In other news, Northern Rock is expecting a stellar year in 2008.
The NPC report was presented in Houston on Thursday. I posted a note on that on yesterday's TOD.
One of the really interesting points that came out of the presentation, however, was regarding the EIA. The implication was that the EIA apparently makes their projectoins mostly by determining what they think demand will be, and then assuming that supply will match demand. I hope they are putting more science into it than that, but maybe that explains why their projections are more optimistic than most of the others.
I'm demanding my own personal "Mr. Fusion" device in 2008. Do you think the EIA can come up with that for me?
They used to be quite open about it. Richard Heinberg points out in his book 'The Party’s Over. Oil, War and the Fate of Industrial Societies' points out, the EIA, in its 2005 annual statement makes the following admission: “These adjustments to the USGS and MMS estimates are based on non technical considerations that support domestic growth levels to meet projected demand levels”.
In other words supply projections are simply adjusted to meet demand projections!
anecdote/question
My sister's husband is a refinery maintenance person employed by Matrix Services. He spends the winters doing "turn arounds" when the refineries shut down for maintenance. Usually the refineries here in NW Washington keep him very busy, but this year Matrix told him they're going to have to send him out of state for work - I think Cali and Wyoming were mentioned.
Is it possible that the refineries will run all winter without shut downs, or does it sound like they're scalng back? I wonder what would be a good way to research this.
POSITIVE FEEDBACKS AND THE OVERPOPULATION PROBLEM
And today we see a little die off action all across sub-Saharan Africa.
http://news.bbc.co.uk/2/hi/africa/6994995.stm
I wish there was something to be done for the people there, but in reality they may be better positioned than all of the rest of us, as their lifestyles are not so far from what a post peak world might provide.
Re the ConocoPhillips environment levy…this is cruel and inhumane treatment like home detention for Paris Hilton. The money is going for tree planting and taking old cars off the road. No doubt the ex-owners of the cars will suddenly decide to travel by bicycle from now on. The trees won’t succumb to drought, fire or disease nor will any fossil fuels be used in planting them.
This is all fuzzy and feelgood. Not only that it costs a lot less than not emitting in the first place. Better to take a $5m ‘fine’ than a $500m cut in revenue due to carbon taxes. Offsets are largely bogus; hopefully we will wake up to this as the stakes get higher.
Norway oil production in steep decline
http://www.bloomberg.com/apps/news?pid=20601072&sid=aQzLkAVeJr48&refer=e...
" The oil law is one of several crucial pieces of legislation and wider political agreement that the Bush administration has been pressing for to show progress toward creating a functioning government and healing the country's sectarian divide. "
Don't you just hate it when your Marionette's strings keep burning off? We didn't start the fire,-- did we?
Nice try, Mr. Potus..
How did Ben Franklin, Thomas Jefferson, George Washington, et al, ever manage to draft a constitution without an oil law? It must have been difficult...
| The problem will solve itself.
| But not in a nice way.
Of course if there -were- troublemakers protesting King George's attacks on the Colonies back in old London-town, their Carriage-Stickers probably read 'No War for Trees!'
It's funny that the old King's Mark on our best tree trunks looked a lot like the Appalachian Trail markers that now adorn some of our forests..
Mind you, Magna Carta - originally drafted in 1215, but much amended and expanded subsequently - was mostly about resource conflict and how to regulate it - forests, rivers, water, fish, land, estates, inheritance, etc ... was ever thus.
Study: 'Confuse-reframe' sales pitch works
A U.S.-led international study has found consumers can be easily confused into buying a product by a new sales technique called "disrupt-then-reframe."
The study found a confusing sales pitch -- such as one utilizing technical jargon, complex terminology or large product assortments -- increases "cognitive closure," with the consumer eager to accept subsequent easy-to-process or unambiguous information.
http://www.physorg.com/news108973841.html
Well, THAT explains a lot about American society, politics, and entertainment, and perhaps religion.
OK, so now that we've done the confusing version of peak oil, the world is ripe for the simple one. Any suggestions?
Gasoline, Heating oil, NG, and food very expensive.
Gasoline, Heating oil, and NG and food hard to get.
No job, wallet empty.
The End.
I took $400 out of the ATM today and stuffed it under my mattress. I don't like the way those UK pensioners are panicking. Could be contagious.
Now Paulson is off to UK tomorrow. Presumably to help?!? Maybe he'll teach them how to use the word "contained" in every sentence.
I wonder if Paypal is subject to such things? I've seen the bank collapse here before - FDIC took care of it all. Yes, "the" bank, we only have one here ...
PayPal is a nightmare. They've been sued by New York, California, and many other states for their shady practices. They act like a bank, but they aren't covered by the regulations real banks must follow. And no FDIC coverage.
I use PayPal for the convenience, but I do not keep more than a few dollars my PayPal account (usually zero). I have it linked to a checking account that I also do not keep much money in, because PayPal has been known to suck money out of people's accounts for no reason. (Errors, "fraud investigations" that really just an excuse to freeze your account, and fraud by its employees, who are not vetted and trained as real bank employees are.)
Paypal is close enough for me to go knock on the door if I have a problem and there is an EVP's business card around here somewhere. If you were a divorced father with a crazy, compulsive spending ex wife you might have a different view of Paypal :-) Point taken though, silver coins as old as I am are the right thing to be holding.
I took $400 out of the ATM today and stuffed it under my mattress. I don't like the way those UK pensioners are panicking. Could be contagious.
Hmm...seems like it already is...
"I took $400 out of the ATM today..."
The Ministry of Truth; it must seem quite hip and
cutting edge for the Australian state of Queensland
to have a Minister of Sustainability.
The problem is that 24/7 Queensland digs up millions of tons of coal with giant bucketwheels and loads it on to ships bound for Japan, China and South Korea. I guess coal doesn't make greenhouse gases when someone else burns it.
No need to guess why we didn't sign up for Kyoto either.