DrumBeat: October 2, 2007
Posted by Leanan on October 2, 2007 - 9:03am
OPEC Withdraws Member Output Limits, Keeps Target Unchanged
The Organization of Petroleum Exporting Countries has withdrawn member states' new crude oil output quotas from its Web site after allegedly apologizing to Venezuela for mistakenly assigning it a sharply lower allocation.OPEC published the new output ceilings due to take effect on Nov. 1 on its site last week. The quotas appeared to be more closely in line with what countries have actually been producing in recent years, slashing Venezuela's, for example, by about 750,000 barrels a day.
However, those figures have been removed from OPEC's Web site, leaving in place only the group's new overall production target of 27.253 million barrels a day.
Angola would accept 2.5 mln bpd OPEC oil quota - official
Angola, the newest member of the Organisation of Petroleum Exporting Countries, would be satisfied with an oil production quota of 2.5 mln barrels per day in 2008, a top official at national oil company Sonangol said on Tuesday.
Venezuela sees no need for further OPEC output rise
OPEC should not increase oil production again after November, Venezuelan Energy Minister Rafael Ramirez said on Tuesday.OPEC agreed last month to a 500,000 barrels per day increase in output from Nov. 1.
Ramirez also told journalists at an energy conference in Lisbon that oil markets remained unstable and that prices are set to continue at current levels.
The realities and aftermath of Peak Oil: How concerned should consumers be?
As with any heated issue there are those who tend to be labeled optimists while others are pegged pessimists, each side having passionate arguments to support its claims. The discussion about Peak Oil and its effect on global energy is really no different. However, what is new and different is the emerging acceptance from both sides of the debate that Peak Oil is coming, which then begs the question: "Now what?"
Jeremy Leggett: Oil on the slide
"Peak oil informs everything," Zac Goldsmith said recently. "People ought to know about that, but they don't." He is right. A premature topping point in global oil production would wipe out most if not all economic and policy plans on offer at the party conferences. This is because the plans universally assume growing supplies of generally affordable oil. But as Goldsmith's quality of life report recently described, a surprised world could instead soon be facing rapidly falling supplies of increasingly unaffordable oil.
Byron King: Beached Whales and Economic Omens
Beached whales may have nothing to do with the world's exhaustible supply of crude oil...or inexhaustible supply of dollars. But I see a connection...an ominous connection.
Eye on Canadian Oil Sands Trust
The business proposition of an oil sands investment is fairly simple. The company owns an enormous supply of bitumen, perhaps 50 years worth or more — nobody knows for sure. As the price of crude oil rises, the profitability of mining and upgrading bitumen is propelled upwards on a leveraged basis, since the marginal return on an extra dollar of price is 100% less delta taxes. If you think (as I do) that over the long term the price of oil will increase substantially as we get closer to and finally pass the onset of Peak Oil, then oil sands plays are a way to profit from that trend. If you think, as most Wall Street analysts do, that the longer term price of oil will not move up dramatically then the value of an oil sands company is much reduced. In sum, it is all a matter of what the price of oil will be in the out years.
Prices have collapsed and stock prices have plummeted, but some say these are just normal kinks in an industry with a solid future.
Big plastic bags of bubbling green water hang from metal stands outside the Sunflower Electric Power Cooperative generating station. Growing in those bags is algae, a relative of the green, slimy muck often seen in ponds and streams. And it may be the key to revolutionizing the way America -- and the world -- looks at energy.
Kremlin threatens to cut off Ukraine's gas again this winter
The Kremlin reacted today to the prospect of Yuliya Tymoshenko becoming Prime Minister of Ukraine by threatening to reduce winter gas supplies.Gazprom, the state-controlled monopoly, issued a warning that deliveries would be cut unless Ukraine paid a $1.3 billion debt by the end of this month. It accused RosUkrEnergo, the Ukrainian company that receives Russian gas, of breaching the terms of a supply contract.
But the timing of the announcement raised immediate suspicions that Russia was using energy as a political weapon to punish Ukrainians for backing Ms Tymoshenko, its pro-Western adversary in the Orange revolution.
Raymond J. Learsy: Are We Ready For A Grain Growers OPEC Now That The OPEC Cartel Has Shown Us $80 Barrel Oil?
Prices for crude oil have rocketed near 800% in less than a decade, an almost unheard of leap for such a basic commodity. Many reasons and explanations for this massive increase in price have focused on the demand side (economic growth, China, India, and on). Yet it is on the supply side primarily, that has led to these incredibly vertiginous and manipulated prices. It is where the Organization of Petroleum Exporting Countries (OPEC) has played an especially nefarious role as the only player with meaningful and immediately available reserves and production capabilities able to meet world demand. Quite simply, over the last ten years OPEC has done all it could to control supply to squeeze every last penny out of the market.
ABN Amro manager drawn to oil, financials
Global fund manager Wouter Weijand isn't buying the idea that oil prices will fall precipitously."All these oil companies and all these analysts assume that oil prices will fall back to around $40-$50 (U.S.); that is in all the scenarios," he said.
However, oil prices have kept on climbing, through $70 a barrel and then $80, recently going above $80, said the senior manager of the ABN Amro High Income Equity Fund and its relatively new Canadian clone, the IA Clarington Global Dividend Fund.
Analysis: Cold War over North Pole?
What may turn into a Cold War-like resource conflict started quietly, with a vehicle called "Peace 1" some 2,500 miles below the North Pole. The Mir 1 miniature submarine, manned with three Russian scientists, on Aug. 2 planted a titanium capsule with a Russian flag into the seabed -- a symbol for Russia’s controversial claim of the vast resources that are believed to be stored below it.
High-speed rail in future for Alberta
If Alberta diverts more oil and gas revenue into a wise investment fund, my future-transforming idea for the earnings generated by this fund is to build a high-speed rail system that connects Alberta's medium-sized cities to the Edmonton-Calgary corridor.
La Niña winds expected to lift natural gas prices
Natural gas prices in the United States may get a boost in the fourth quarter from a deep cold snap produced by a La Niña weather pattern, the first in almost seven years.
One more big hurricane predicted by November
A prominent university research team on Tuesday predicted one more major Atlantic hurricane this year — as well as a slightly longer season due to La Nina ocean conditions.“We expect October-November to be very active,” said Phil Klotzbach, lead author of the Colorado State University team.
The Three Stooges of global climate change
These three conservative leaders, U.S. President George W. Bush, Canada's own Prime Minister Harper and Australian Prime Minister John Howard, were all strong opponents of the Kyoto Accord and have formed a political alliance to fight a strict successor regime to the Kyoto Accord in 2012, one that would include legal caps on greenhouse gas emissions.Bush, Howard and Harper have something else in common. They lead the three countries with the highest per capita emissions of greenhouse gases among major economies. Australia emits 26 tons of greenhouse gases per person, the United States and Canada 23 tons each. This compares to 5 tons per person in China and 2 tons in India. The European Union emits 10 tons per capita.
Wal-Mart sells 100 million energy-saver bulbs
Wal-Mart Stores Inc. reached an annual target of selling 100 million energy-efficient light bulbs ahead of schedule after heavily marketing them as a way for consumers to save money and fight global warming, the retailer said Tuesday.
Oil Could Spike to $100 Before Year-End
Oil could spike to $100 before the end of the year boosted by tight demand and supply, a weak U.S. dollar and a market structure that is a fertile ground for speculators, an energy fund manager said on Tuesday.Angelos Damaskos, chief of Sector Investment Managers, which runs two funds, including a hedge fund invested mainly in energy equities, said the oil market remained fundamentally undersupplied and that rather than pure speculation by hedge funds and financial speculators was driving oil prices higher.
Whereas countries like China would previously receive raw materials to produce goods cheaply largely for the Western world, now they are producing them for domestic consumption. "The dynamic is changing," says Richard Raymar, senior UK and Ireland analyst, quantitative asset management research, at Lipper, "Some of the goods are staying there. They are not just going in and coming out. It is about developing countries becoming developed. [These countries] are keeping resources, using them and enjoying them. It's not just for our enjoyment anymore."
Harsh working conditions mark production of Brazilian ethanol
"By the end of the day your entire body hurts so much you think you are going to die" says cane cutter Raimundo Gomes da Silva. "But it is all we know how to do, so we will continue doing the same thing, day after day, until we drop dead."Brazil's pioneering use of sugarcane-based ethanol, which fuels about 30 per cent of the country's automobiles, has made Latin America's largest country a global leader alternative energy.
Getting less attention is the squalid labour conditions of nearly half a million people who toil in the fields six days a week to supply the cane to the nation and a growing export market.
Archer Daniels Midland Eying Ethanol Plant Acquisitions
Archer Daniels Midland Co. (ADM) Chief Financial Officer Doug Schmalz said Tuesday the corn and soy bean processing giant would consider buying ethanol plants now that lower prices for the fuel have been preassuring production margins.
Proposed pipeline could bring cheaper gas
A Tulsa, Okla.-based pipeline operator has proposed a project that, theoretically, could save local residents money on their future natural gas bills.
Viet Nam: Gas prices at new high due to shortages
On Sunday, many domestic gas traders decided to raise the retail price of liquefied petroleum gas (LPG), following the global hike and a domestic shortage, according to independent market watchdogs.
UK: Fuel costs could force road haulage firms to shut down
SPIRALLING fuel costs may be the end of the road for many of the haulage firms that make up the key distribution sector in Peterborough.The warning comes after a two pence increase in fuel duty, which came into force yesterday, and may push diesel above the £1 a litre mark. It is also expected to nudge the average price of unleaded to 98 pence.
Six Mexican States Rated Attack-Risk
The Mexican states of Veracruz, Oaxaca, Guerrero, Tabasco, Campeche and Tamaulipas were mentioned Monday as most susceptible to attack by armed groups.El Universal daily reports this as a conclusion of government and security experts and federal legislators since those states host most of the 186 state-run strategic facilities.
Manufacture is a massive source of CO2 emissions. Keep a small car for a long time to be truly green.
Not so green computing: Is Windows an energy hog?
Many data centers are looking for energy efficient hardware. Mallory Forbes thinks they should be looking at the software too - and Windows in particular.
DOE: A 30-year-old adolescent maturing
The U.S. Department of Energy was not so much born on Oct. 1, 1977, as it was created out of parts of other agencies, almost as though Mary Shelley, the creator of "Frankenstein," had been a bureaucrat.The department's own archives like to hark back to the Manhattan Project and the great rush to discover (and employ) the destructive powers of the atom before the Nazis could do it.
Question of the Week: Solar Energy
Slowly but surely, however, people will begin to see the beauty of a wind turbine spinning idly in the breeze and the downright useful nature of turning that dreadful summer sun into a cool A/C. Slowly but surely things will change. At least, that's the hope. If things do not change gradually, things will be forced to change abruptly when the planet runs out of petrol. That will be, in a word, cataclysmic.
Mazda unveils new hydrogen hybrid
Mazda unveiled a new kind of hybrid vehicle on Tuesday that runs on hydrogen fuel powering an electric motor. The Japanese automaker said it will be available for leasing in Japan next year.The Mazda Premacy Hydrogen RE Hybrid, shown to reporters ahead of its debut at the Tokyo Motor Show later this month, operates on a rotary engine, which has a reputation for being quiet because it doesn't have pistons like standard engines.
Once Again, NPC Expects Too Much From EOR
In their 400+ page report “Facing the Hard Truths About Energy” (July 2007), the National Petroleum Council (NPC) projects that enhanced oil recovery (EOR) will contribute an enormous increment of total global supply of petroleum liquids. By any reasonable analysis, NPC’s projection of EOR production rates is unachievable.
However, some analysts believe that falling US crude reserves might not halt the current oil price slide."The oil market has turned the corner," said Base Commodities trader Christopher Bellew.
"It looks like the long run-up from August is now over, and as seasonal refinery work begins and weather threats ease we should see it come down."
$80 Oil Helps Some but Not All Service Companies
Higher oil prices have led to record highs for the oilfield services stock index, but it's not boom times for all companies in the sector.In the past, higher prices for crude futures have lifted all the index's components, but this time around, some are seeing shallower gains or even falling stock prices.
The increasing demand for water in the Western United States in an era of diminishing supply has put America’s highly efficient agricultural system in jeopardy. At the same time, our nation’s energy demands have led President Bush and Congressional leaders from both parties to call for more domestic production of biofuels like corn ethanol. Some agricultural experts fear that the country does not have enough water and land to both replace the declining agricultural production in the arid West and expand the production of biofuels.There is, however, a sustainable solution: a return to using the land and water of the East, which dominated agriculture in the United States into the 20th century.
Sick of single-family solitude? Craving an antidote to urban isolation? The new era of tribal living has arrived.
Mass Market for Green Homes Coming?
They built, overnight, a 725-square foot house on the lawn of San Francisco's elegant city hall that demonstrates the potential for manufactured housing to tackle a variety of urgent concerns: affordable housing, global warming, peak oil, water shortages, healthy living and much more.
Surging oil prices give oil-related studies new life
The University of Texas and Texas A&M will graduate 8 percent more petroleum engineers in 2008. This year 213 students are expected to finish their coursework. Both students and faculty suggest surging oil prices have given oil-related studies renewed life.
Project Green: The Power of the Sun
With oil prices near record highs and more companies concerned about their carbon footprints, workers are finding job opportunities in the emerging green economy. Companies are hiring scientists to work on renewable-energy technology and business people to market earth-friendly products. Even if some of these nascent companies falter, there's widespread conviction that this sector will become one of the country's hottest employers. "This is the challenge of the 21st century ... and it's not going away," says Kevin Doyle, founder of the consulting firm Green Economy.
Who Runs the World and Why You Need to Know Immediately
In case you haven't noticed, this "gradual collapse of the U.S. economy" is no longer gradual, and what Estulin is asserting confirms a great deal of the assertions made by Catherine Austin Fitts that the current housing bubble explosion/credit crunch/mortgage meltdown has its roots in the 1980s. James Howard Kunstler has also written recently in his blog entitled "Shock and Awe" that the great American yard sale has begun. In other words, as an engineered economic meltdown drives hundreds of thousands and eventually millions of businesses and individuals into bankruptcy, key players in the Big Three ruling elite organizations can buy up the train wreck left behind for pennies on the dollar - a brilliant fast-track strategy for owning the world.
Market sees new Opec price plan
International banks and analysts have hinted at the possibility that Opec will switch the pricing of oil from the dollar to a basket of currencies as the greenback sank to a record low against the euro yesterday."If the dollar were to lose its lustre as a reserve currency this could prove disruptive to the global financial system. In the Middle East the market has become concerned that more countries would drop the dollar peg with Opec potentially changing the oil price to a currency basket rather than the dollar," Merrill Lynch said in a note yesterday.
Saudi foreign assets slump to $248bn
Saudi Arabia's official reserves excluding gold declined and net foreign assets held by its central bank showed a rare drop in August as the world's largest oil exporter battles the repercussions of the dollar's fall.
Iran slashes oil transactions in dollars
Iran has slashed the use of the dollar in payment for its oil exports to 15 percent, an official said on Tuesday, amid growing pressure from arch-foe the United States on its financial system.The vast majority of transactions for oil from OPEC's number two producer are now being carried out in euros, said Mohammad-Ali Khatibi, deputy head of the National Iranian Oil Company in charge of marketing.
Russia oil exports soar in Sept, output edges down
Russian oil exports via major ports and pipelines soared in September, despite lower output, as oil firms rushed to export crude before the introduction of higher oil export duty, energy ministry data showed on Tuesday.
Support for Big Oil wanes in Alberta
Big Oil has always quietly accepted that, much like the tobacco or war industry, having a poor image is a cost of doing business.One exception, of course, was Alberta. With about a third of the provincial economy riding on its fortunes, its residents could usually be counted on to be sympathetic, particularly during big fights with the federal government.
That reservoir of goodwill seems to have vanished.
"The big projects are getting pushed back more and more," says Frank Kuijlaars, head of oil and gas at ABN Amro, a leading lender in Russia's oil and gas sector, in particular to Rosneft.Even the oil men most loyal to the Kremlin are warning against the state's growing role. Last week, Vladimir Bogdanov, president of Russia's number 4 oil major Surgutneftegaz, warned "monopolism" by the state would lead to a fall in production, while Lukoil president Vagit Alekperov earlier expressed his concern at the state' growing might.
A new world energy order is in the making, with Asia as a driving force. Mega projects are on the drawing board, affecting India as well. Among these are projects for transnational pipelines to bring natural gas to a growing Indian energy market. With the centre of gravity shifting towards Asia, India stands centre stage in Asian and global energy endeavours.
Why US is the largest Oil consumer
The U.S. market is a very regional one, and subject to its own dynamics, like hurricanes and pipeline problems. However, because of the U.S.’s large “market share” of oil consumption, severe supply disruptions, like those we saw from hurricanes Katrina and Rita, result in a draw from other oil markets, which inevitably raises prices in those markets.
LUKoil to boost production rates in 2007
LUKoil is set to exceed its projected growth rate in hydrocarbon output in 2007, the Russian oil giant's President Vagit Alekperov told journalists at a Russian Union of Industrialists and Entrepreneurs meeting today.
Belgium reopens Myanmar humanity crimes probe against oil giant Total
French oil giant Total on Tuesday faced a renewed Belgian probe into its alleged support of Myanmar's military regime as authorities reopened an investigation into the firm.
Scientists see dramatic drop in Arctic sea ice
Arctic sea ice declined this year to the lowest levels registered since satellite assessments started in the 1970s, extending a trend fueled by human-caused global warming, scientists said on Monday.
Australian Temperatures to Rise With Gas Emissions
Temperatures will be more extreme with "substantially" more days over 35 degrees Celsius (95 Fahrenheit), the Bureau of Meteorology and the CSIRO said today in a joint report. Rainfall will decrease and droughts and high fire-danger weather become more frequent under the "high-emissions" scenario, it said.
Tourism set to suffer from the climate change it generates: UN
A booming worldwide tourism industry could prove its own worst enemy by contributing to the global warming that threatens some of the planet's most prized destinations, UN agencies warned Monday.
Climate Change May Sink us This Century: Maldives
Unless the world starts taking climate change seriously and cuts greenhouse emissions, the Maldives could become uninhabitable this century, the president of the Indian Ocean archipelago says.
Arctic ice island breaks in half
The giant Ayles Ice Island drifting off Canada's northern shores has broken in two - far earlier than expected.In a season of record summer melting in the region, the two chunks have moved rapidly through the water - one of them covering 98km (61 miles) in a week.
Their progress has been tracked amid fears they could edge west towards oil and gas installations off Alaska.
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A new Finance Round-Up has been posted at TOD:Canada. An Energy and Environment Round-Up will follow in a day or two.
An inflationary future is becoming conventional wisdom, but, as consensus takes time to develop, the stronger the consensus, the later it is in the trend. A consensus is a backward-looking phenomenon of little use - except as a general contrarian indicator - in detecting the inevitable discontinuities that can abruptly and painfully invalidate all one's assumptions.
We have lived through a long period of inflationary credit expansion, and regard it as normal, but credit expansion is a self-limiting condition. Credit bubbles are merely the rediscovery by a new generation of the powers of leverage (see for instance A Short History of Financial Euphoria by Galbraith, Manias, Panics and Crashes by Kindleberger or Financial Armageddon by Michael Panzner). Every credit bubble that ever existed has eventually deflated, and this one will be no different.
We have essentially already reached the limit of debt serviceability that brings an expansion to an end. We are already seeing the tightening of credit standards, the refusal of banks to lend to one another, the frozen commercial paper, the bank runs, the redefinition of what constitutes a store of value, the rejection of financial alchemy, the debt defaults that reduce the money supply, the falling prices in the housing market, the lack of confidence - which together unmistakably herald deflation. Central banks can do nothing more than paper over the cracks for a short time, at the cost of aggravating the eventual impact of deflation.
Time to Aim High?
Stone: Interesting article but I question the endless comparisons of the USA and Japan. The USA has nothing in common with Japan at all-the USA is more like a large, powerful, rich Mexico or Argentina. Japan's deflation was directly tied to its powerful currency and huge trade surplus. I am not aware of any examples of long lasting deflation occurring in any country with an extremely weak currency and a huge trade deficit. The USA of 2007 is not the USA of 1929 (in 1929 the USA was an industrial powerhouse).
I always have to laugh at the deflation arguments. It has been more than half a century in which US trade deficit, all US wars even US corporate growth has been financed by exporting inflation to greenback holders.
The idea this could spontaneously be reversed and the FED will just stand by when credit collapses strikes me as laughable. I'd rather expect them just handing bags of freshly printed paper to everyone willing to take it, than allowing this to happen.
There is another idea about what causes deflation, or possibly better, a deflationary spiral - if there are simply too many factories producing a good, the result in the marketplace leads to murderous price wars, which result in workers losing their job, meaning less customers for the factories, and the spiral continues.
Considering that a number of regions have heavily invested in roughly the same markets, the conditions for this style of deflation, which could be considered its own form of last man standing, are somewhat given.
The Chinese are unlikely to stop simply employing a few hundred million people because the market for mass consumer goods is shrinking - instead, they will try to get ahead of the curve by forcing others workers to loss their jobs.
This style of deflation is quite likely, in my eyes - there are a lot of economies reliant on the same basic system.
Expat: Yes, Chinese goods can get cheaper. Right now the ave US family who pays for health insurance is paying $12000 a year. Does anyone foresee this bill "deflating" to $4000 a year? How about taxes in general? Are grocery bills going to deflate, along with energy costs? In Japan, it wasn't just a property and equity collapse, the actual living expenses decreased. Is this going to happen with the use of the American peso?
Sure, I can imagine a large number of Americans having their health care costs sink way below the level that is considered customary today - how much health care did many of the workers building houses over the last five years receive? And these were literally millions of workers and their families, who just happened to be illegal. Didn't stop them from making an economic contribution, and to an extent, their being willing to work for less, not only their wages but in terms of legal rights or health care, meant that many Americans had to compete at the same level.
As for food - that is a kicker, I'll admit. For the first time in human history, we are actually burning food intentionally, instead of eating it. Hard to tell whether we are willing to starve the poor to death to keep driving to the mall (regardless of how many die, it won't keep the suburbs humming), but the question of demand destruction is at least as open as the question of supply destruction. Add in climate change, and the picture is grim. I think there is little question that the percentage of income devoted to food will rise towards its historical average - for a round number, let's use 5 times more expensive than today. Which means that a lot of other economic activity will be pushed aside, as food is a basic good. The competition for that remaining income will be fierce, to put it mildly.
Deflationary spirals are arguably not measured in monetary terms, but instead in social terms - are the number of jobs shrinking, is the wage being paid less able to maintain an accustomed lifestyle, do people start living differently because there is less available?
I still lean towards deflation, if only because it has been so long since it last occurred in America. But I don't think it will be well measured in terms of dollars, and that stagflation is almost as equally likely. What deflation means in this view is that one is demonstrably poorer in material terms, as are the other people around one.
Of course, poverty is relative - I buy things which last, generally reparable, thus lasting even longer, instead of always buying items that are trashed after a brief period. If I understand current American norms, this means I'm strange, if not a social outcast. And that this way of life is to be avoided, since it is a sign of failure, compared to buying ever more stuff to be stored in ever larger homes by ever larger consumers with ever larger debt.
Bankrupt means not buying anything, regardless of price, and I think Americans have essentially bankrupted themselves. Not all Americans, of course, but the vast majority, have been actively involved in an ever growing cycle of consumption and debt, one which is likely to end, and when it ends, it will be defensible to consider it as 'deflation.' The process hasn't started yet, though possibly, the first glimpses of how it will play out can be imagined.
Expat-I think what you are predicting is a depression. You might be right.
Expat as always your words are gold.
Yes, you are very Anti-American in your buying and living habits.
Not as Anti-American as I am though, as I have, in trying to "do the right thing" and keep my biz going, only going into greater and greater debt, flamed out. I am buying very little these days, and living very simply. My bankruptcy, which will be done soon, will "destroy" about $100k dollars, which I'm sure have been sliced, diced, renamed, relabeled, and are parts of peoples' stocks and bonds and funds and so on. I feel really bad about this huge amount of money which will disappear, since if I could have only gone on longer, I'm sure I could finally flame out a few years from now and destroy 2X-3X as much! Oh well, nothing in America is worth doing so much as overdoing, and I've overdone all I could.
Yes we are just beginning to see the mass bankruptcies, not only of homedebtors but of small biz's and of students, who are ending up in as much debt as the average mortgage holder. The homedebtors run out of "greater fools", the small biz people find out the suddenly pinched or destitute make poor customers, and the students, worse of all (because their debt is nondischarable) find there are no jobs.
This will be the real surprise to the powers that be, that there's so much STUFF in America's storage units and mcmansions and garages and thrift stores, that the American public can simply not buy anything beyond bare essential foodstuffs etc for a period of years, if their worldview will only change. And change it will.
welcome back
I think you miss the distinction between nominal and real prices. In a deflation, nominal price will fall, but that does not necessarily imply that things become more affordable. Real prices are adjusted for changes in the money supply (ie inflation/deflation, which are monetary phenomena). If the money supply is falling faster than nominal prices, then prices will increase in real terms and $4000 a year for health care then may be far less affordable than $12000 is now. I would expect a similar dynamic in real estate - I think house prices will come down by 90% before a deflationary depression ends, but the remaining 10% would be less affordable than 100% is now under conditions of severe economic hardship and little or no access to credit.
The same thing is likely to happen across the board when money is scarce and hard to come by. Nominal prices will be low because there will be little money and essentially no credit, and many assets will be offered for sale at once by people trying to raise money. Most people simply won't be in a position to take advantage of low nominal prices (an opportunity is an opportunity precisely because so few are in a position to take advantage of it). It's the converse of the easy money circumstances we've enjoyed for years, where increases in the money supply have led to increasing asset prices (while downward pressure on wages and prices due to global trade and wage arbitrage kept those low).
The Fed doesn't actually give money out; it LOANS it, at interest. That is the key to understanding how deflation can occur.
Really, our current fractional reserve banking system is inherently deflationary. When I borrow, say, $100,000US to buy a house, that money is created out of nothing. When I pay back the loan, the money is destroyed. However, I don't just have to pay back 100K. I have to pay back that (the principal), plus interest. In the case of a 30-year loan, that interest will be something like $170,000US. That 170K doesn't exist, and it won't exist until someone borrows it.
The system is almost a Ponzi scheme. If the money supply fails to grow fast enough to provide money to pay back previous loans, the previous loans default, and the system collapses.
The system has a peculiar danger, which is runaway borrowing. If the rate of borrowing gets high enough, you have to constantly expand the size of the loans & the pool of people you are loaning to. Eventually you exhaust the ability to accelerate debt. The Fed can encourage debt, but it cannot force banks to loan nor borrowers to borrow.
The fact that we have moved down to sub-prime borrowers in the US is a sign that we're near the end. What would be next? Loans to the unemployed and homeless?
Most Americans are near the end of their ability to service more debt. When a critical mass of people cannot take on new debt, the money supply will cease to expand fast enough to create the money needed to pay the interest on old debts, so old debts will start to default. That will destroy money, shrinking the money supply even faster. Voila, you have a deflationary spiral caused solely by the inability of people to take on debt fast enough.
Now, it is always possible that American financiers can find enough suckers overseas to keep the Ponzi scheme going for a while longer, or maybe they really will start loaning money to the homeless.
In any case, the only way for the scheme to keep going is for there to be real economic growth at a flat rate into infinity. Peak oil, runaway debt creation, climate change, wars, as well as several other things mean the system cannot grow into infinity. The monetary system will collapse into deflation at some point. It is just a question of when & what will be the trigger.
Shargash: You are correct. My original point is that comparisons with Japan are useless. Japan had a long period of deflation with low unemployment and a very minor to nil drop in standard of living at the median. Japan had a classic "deflation" as opposed to a depression caused by the USA Ponzi scheme collapsing, which is what you are predicting. IMHO, any economy-wide deflation in the USA will be accompanied by massive unemployment, unlike in Japan.
The Fed doesn't actually give money out; it LOANS it, at interest.
True, this is what the FED does under normal circumstances.
I am simply asserting that if/when this is not enough, they will start the printing press and simply buy back whatever assets are perceived to be endangered with money created from thin air... and in the information era you don't even need a printing press - just a tiny bit of software creating electronic records for deposits which came from nowhere.
They can do it, they have the legal right to do it and they will do it if they think it is necessary. Isn't this what Milton Friedman (whose faithful follower is our Ben) said about the Great Depression? If they simply printed the money when the panic began the depression would have been averted.
Aptera is (almost) go.
http://www.autobloggreen.com/2007/09/28/aptera-is-now-accepting-orders-f...
Saw that this morning Substrate. Great stuff. Damn I want one.
There are two ways you can try to build an electric car: short and long.
Short means a phone booth on wheels. This is very logical from an urban conveyance standpoint, but Americans are not at all logical about transportation or cities. A phone booth suffers from:
large frontal area
poor drag coefficient
short crush spaces
But most electric car prototypes are built this way because lead-acid batteries make it hard to go over 30 mph no matter the aerodynamics, and it's easy to do with a crude frame & body construction.
Long means that you're going to try to make a car fast enough to get on the highway. This is absolutely essential for Americans but technically challenging. If you can get the frontal area X drag coefficient down enough you can go 60 mph for maybe under 100 wh/mile. If that makes the car longer, it creates more crush space. If you use a composite body to reduce weight so that you also use less power in the city, then you might make something that can pass a crash test. But then the price goes way up.
The GM EV1 was a composite-bodied long. So was the superior Solectria Sunrise 4-door. These attempted to carry out the long agenda with lead-acid and NiMH batteries, but composite construction was not cheap then.
I think we've got the right technology to put it over the top this time. The Aptera costs less as an electric ($27000) than a hybrid ($30000), which means it must be using very cheap batteries. But it's really more of a long, enclosed motorcycle for insurance and regulatory purposes. If GM or the Chinese can get ahold of lithium batteries at under 30 cents a watt-hour then we can get a 4-seat, 4-wheel car in the $30000 range - basically an electric Loremo with about a 10-15kwh pack. Once Americans actually get to test-drive a car like that a lot of them will find that they like electrics for their own sakes.
We really need a way to pair up the best battery license with the best composite-bodied aerodynamic 4-seater, but it's risky for undercapitalized high-tech firms to rely on each other. If, for instance, EEstor fails to deliver on its fantastic capacitor technology, it takes ZENN down with it.
I'm waiting for the Aptera specs, especially the battery.
Nice post.
I think if the economy keeps functioning and the US$ hangs in there we'll get to $.30/wh pretty soon. I think we're already at the point where a li-ion pack is a better investment over the long term than filling a car with gas. Most of these batteries now last over 5000 cycles which should take you past 15 years. How much will a tank of gas cost in 2022?
Everspring's Thundersky and PHET's LiFePO4 are already very close to your price point. I've heard as low as $.43/wh. Even at $.80/wh I think it is a very smart investment.
It does suck how the only affordable options are manufactured and shipped from China/Asia. I'm keeping my fingers crossed for some organic silver bullet to energy storage to save the day. Maybe these guys can come through on their paper/carbon nanofiber battery?
Cheap, decentralized, renewable energy storage could solve A LOT of problems.
BTW, you know about Miles Automotive's Javalon, right? 4 seats, 4 wheels, 150 mile range (probably around 25kWh), for UNDER $30,000.
If all goes as planned, should be available early 2009.
I have my fingers crossed on that one - it looks more real than Bricklin's Chinese project, and better. I went into my electric car mania with this goal in mind:
An electric with the room and performance of a 3-series BMW sedan.
So you can see why I'd like the Javlon with a 100 kw motor. But the Chinese must deliver the batteries cheaply and safely. I figure that eventually one of the Chinese lithium battery manufacturers will simply design a car from scratch around its product's limitations, while the Javlon looks to be a conversion, probably weighing close to 3000 lbs. Other than the batteries it's probably not more advanced than the Honda Civic conversion that AC Propulsion built in the mid 1990s, which had fantastic range with lead-acid batteries.
In the 1960s, Japan had a special tax bracket for microcars, which had a ripple effect of making it possible for new companies like Mazda and Honda to get started. The big payoff came when all the technologies developed for those cars began to spread to bigger Japanese cars that were imported to the US during the Energy Crisis. The Chinese government is crazy if it thinks its industry can make conventional 3000 lb cars for a living and get a foothold overseas. China needs a subsidized niche like Japan had that can redefine Chinese cars in foreign eyes as something distinctive. Obviously we would all be better off if that were to be electric cars than if it were any other kind of car at all.
Note that the first Japanese cars imported to the US in 1958 were unmitigated disasters. It took them 5 years to get their acts together. By the time Chinese factories can make good cars, America may be facing $5 a gallon or more.
$$$$$The problem with battery electric cars is that the cost of the battery has to be paid up front. It's like asking the buyer of an ICE car to pay for 1/2 the fuel he will ever consume at the time of purchase.
I drive a GEM (Global Electric Motor) car which uses lead acid batteries. These are only good for about 500 cycles or about 9,000 miles. I could buy Lithiums (Valence Technology) which would last for 90,000 miles but they would cost $15,300. The per mileage price would be about the same. Would I keep the machine for 90,000 miles?
I can understand why GM is considering leasing the battery pack for the Volt car.
You can always take out the battery pack and put it in your next vehicle...
Wouldn't that be nice. I suspect that in real life, the battery pack would be of different sizes and even voltages for different vehicles. Unless someone can point me to a UL/IEEE standard?
Nonetheless, it is probably theoretically possible for manufacturers to standardize on a single specific battery size which might be shared among manufacturers. Any specification, even a bad one, would probably be better than no spec at all.
HankF,
How many Watt-hours does that battery pack contain? Valence sucks rocks, they're belligerent to individuals (quote exorbitant prices) and I don't know why.
One of the more interesting suppliers seems to be Yesa which does LiFePO4.
http://www.yesa.com.cn/
They will build you custom packs, and they seem to run around $1/watt-hour (sometimes less) WITH BMS and charger.
I think this ebay seller "missbattery" is associated with them somehow: http://search.ebay.com/_W0QQsassZmissbattery
The strange thing about the LiFePO4 over the PbA is that many people say that you only need about half to three-quarters of the battery capacity as you do for PbA in high draw applications(like an EV). This is because PbA drops off considerably at high draw and only gives you a fraction of the standard 20 hour rating that a battery's amp-hour rating is calculated from. In high draw applications, deep cycle PbA apparently also rarely lasts its purported 500 cycles.
If it sold for the price of a motorcycle, and if there were no large cars, SUVs or trucks in existance, it would be cool.
Any pilots out there that have experience in tail-draggers? The Aperta is a tail-dragger, without wings, ready to do a ground loop! This auto will swap ends in a hurry because of the one rear wheel, the weight distribution, and less traction on the rear than the front that goes with the design...And, what about performance in downpours with standing water on the highway? No thanks, my Harleys with their soft compound Dunlops will handle hundred of miles of downpours and standing water without hydroplaning becoming excessive. If it has less than four wheels, it needs to lean in corners. Four wheels or two, take your druthers.
"If it has less than four wheels, it needs to lean in corners.
http://www.go-t-rex.com/
Tell that to the Formula 1 engineer that designed the TRex.
Performance: 0-60 mph: 4.1 sec.
Top speed: 140 mph.
Lateral acceleration: over 1 g.
And over on Metafilter:
http://www.metafilter.com/65210/Adding-up-US-subsidies-for-auto-travel-w...
The most galling subsidy is city streets and rural roads, typically paid for with property taxes.
Suburban commuters pay zero towards city streets (perhaps indirectly via their offices) while city residents that use and need lower traffic volumes pay for widening, maintenance, street lighting, policing, etc, The most abused are TOD owners and renters that either do not own cars or use them minimally, yet have high property values.
Raise gas taxes and lower property taxes and pay for all aspects of street operation (including street lighting & policing) with higher gas taxes.
Best Hopes for stopping Suburban Subsidies,
Alan
Alan,
Sounds great. Any luck getting that implemented in Louisiana? Are there any lobbying powerhouses pushing for such a change? I'd call my State Rep and Senator, but I'd probably be laughed off the phone.
Garth
In Arkansas, the cities receive money from the state and counties for road maintenance. This money comes from fuel taxes and also property taxes. You can say that the suburban owners do not pay for downtown roads directly, but they do indirectly. The businesses they work/buy at pay property taxes.
In Detroit, MI the city has an income tax for people who work in Detroit, whether or not they live in Detroit.
(I know about Arkansas, as I live there. I know about Detroit, as I work there.)
~Durandal (http://www.wtdwtshtf.com/)
New York City also has an income tax for anyone who works in the city, whether or not they live there. Precisely because commuters use city infrastructure, too.
Sadly, we got rid of that a few years ago at the behest of suburban interests in the State Legislature.
Jeff Rubin at CIBC World Markets has either been reading WestTexas's ExportLand model or arrived at it independently. He was just on CNBC, and is scheduled to give the keynote address at today's (Oct 2) CIBC Industrial Conference.
Media Advisory - America's top oil suppliers to slash exports by 2012: CIBC World Markets
As far as I can tell, Jeff Rubin's address will be at 1:00 PM NY/Eastern Time, and there will be a live webcast here:
http://www.veracast.com/cibcwm/industrials07/index.cfm
Enter code: industrials2007 for access.
==========
The sign of a truly educated man is to be deeply moved by statistics. - George Bernard Shaw
Darryl,
I saw that as well. I have no idea what Jeffrey looks like but the words coming out of Rubin's mouth were as if I was reading a WT ELM comment out loud. The anchors seemed accepting if a bit uncomfortable and joked about invading Canada. He hit all the salient points... lower production, population, internal growth of exporting countries, unconventional oil. Plus he was immediately dismissive of Arctic production and even said that flat demand was not going to be a solution to this 'problem'.
Talk about mainstream acceptance! I hope Mr. Brown has a trademark on ELM because the T-shirt sales could be stupendous.
Gary Malcolm
I have no idea what Jeffrey looks like
Actually quite handsome, unlike myself :-)
Best Hopes that Looks are not THAT important,
Alan
Alan Drake For President
Jeffrey Brown for Vice President.
Can Da Rat be Drug Czar?
The FWO (formerly well off) will tend to self medicate quite a bit, and others will seek new entrepreneurial opportunities post-Peak Oil, so that post will be a challenge !
Sure that you want it ?
Best Hopes,
Alan
Do I want it?
1) Legalize marijuana.
2) With that stumbling block out of the way, push hemp like crazy.
3) Then,in one room gather the 100 most important people in the ME, with a few facilitators. In another room, gather the 100 most important PO/GW stumbling blocks, with a bunch of us to facilitate. Give them all acid, and,...
bring peace to the ME and develop a united world action plan for GW/PO.
4) Resign, collect my Nobelly Peace Prize, and go home to my 40 acres.
Bring it on.
I thought it was interesting that Mark Haines and his cohost were initially almost speechless, as they contemplated the ELM. It reminded me of the response that some government scientists reportedly had--as their informal peak oil working group contemplated the implications of the ELM (they said that you could have heard a pin drop).
My usual acknowledgment: we are building on work by Simmons & Deffeyes, et al.
In any case, to put my "optimistic" hat on, hopefully we can start moving toward implementing Alan Drake's plans for Electrification of Transportation (EOT).
That kind of silence is telling.
The folks on CNBC do this day in, day out and have a vast catalog of 'canned' retorts ready to go for just about any situation. They've had both sides if every argument burned into their ROMs, ready for instant playback.
It's probably been a very long time since they've heard something truly new, something for which they don't have an off-the-shelf retort.
ELM is simple to understand, and is devastatingly self-evident in its logic and effect. Anyone with half a brain would be given pause, if only to look for a hole in the logic, or some way to personally dodge the effect.
I wonder how long it will be before they find someone to present the "Export Land Model Denial" arguments... On that day I suggest we chip in to buy WT a box of cigars and a bottle of his favorite!
I saw it, too. I have never seen Mark Haines and Erin Burnett speechless. Rubin jumped in and killed the dead air by answering the questions that the two of them must have been asking themselves.
They also looked shocked when Rubin said that oil prices would go to $100 and not come back down.
There are two things thing that I wish I had heard from Rubin. The first was the problem the Saudis have in balancing the need for income to keep their rapidly growing population fed and not rioting vs. the need for cheap gasoline to keep their rapidly growing population from rioting. The Saudis are facing some serious problems, no matter what happens, at least in my estimation.
The second one is that the tar sands production now depends on the supply of natural gas and clean water. Both are increasingly in short supply in western Canada. Without finding another source of energy, like nuclear (which I have read is back on the table), and cleaning up the water in those holding ponds for re-use, tar sands production really can't increase much. Of course, the EROEI of the whole project might go down using nukes instead of natgas and undoubtedly using energy to power the clean up of those holding ponds.
The whole thing amounts to the title of last night's PBS episode of "The War:" FUBAR.
I don't understand why the water used for the tar sands isn't a closed loop - the kerogen is extracted at the end of the game ... why not run it right through again?
I don't have the answer, just the question.
Sorry.
However, the usual answer is "it's cheaper."
SCT,
The water is being used to make a slurry and pump the sands with bitumen through the process, and to pump the waste sand to disposal pits. Its virtually impossible to get meaningful amounts of water out of piles of waste sand, so only small amounts can be recovered.
Watch a sand pile after a heavy rain, then you'll be able to visualise the problem. The water remains coating the grains of sand in the junk sand. Plus, its bound to be full of bitumen that can't be recovered and is likely to gum up the works of pumps, ect used to push the water.
Strip mining bitumen seems to be marginal for the energy returns anyway. The other way for it to be used is as steam in in situ steam-assisted gravity drainage processes, SAG. These seem to be a lot better for economic recovery, and don't use nearly as much water or produce nearly as much waste, which is probably toxic.If I were King of Alberta (fat chance!) I'd bar new strip mining, and charge the strip mines for clean up of that horrible mess, and try to get the companies in strip mining to close with clean-up regulations equal to the regulations that are on the US oil industry. If the companies in it loose money, T.S..Not all non-conventional methods are equal by any means, and they're creating a mess up there that may outlast the human race.
Bob Ebersole
Small quibble here. Kerogen is what is found in the green river shale and in other so-called "shale oil" deposits. The stuff found in the Canadian oil sands is true oil, or rather very heavy oil or bitumen. And that is also true for the Orinoco bitumen deposits.
It was once just like all other oil, cooked deep in the earth but there was no "cap rock" so it seeped all the way to the surface. There most of the lights either evoperated or were eaten by bacteria, leaving only very heavy oil and in some cases only bitumen.
Kerogen on the other hand, is pre-oil. That is it would become oil if buried deep enough for long enough time.
And they do recycle the water but as I understand it, after a couple of runs, I am not sure how many, it becomes too polluted with junk to work very well. Clean water works much better so when it gets too garbaged up it is dumped into the goo pond.
Ron Patterson
Thanks for the info on the "good ponds."
I guess it is then a question of whether and when the goo ponds will be cleaned up.
Bwahahah! Clean up? Clean up?!?!? That's a jolly old knee slapper, that!
Now what do I use to clean this Diet Coke from my monitor?
/sarcinol
Believe it or not, and I guess you won't, some things do get at least partially cleaned up. I personally have witnessed partial cleanups and continuing cleanups of water, which ordinarily take a considerable amount of time.
Here in the U.S., the amount of clean up seems to depend on which party has control of the EPA, which party has control of the state version of the EPA, how pissed off the locals are and whether or not plaintiffs' attorneys can make a buck on a toxic tort case.
Your mileage obviously differs.
I can't speak to the Canadian situation.
That is not a quibble and thank you very much for the correction - I believe I read that particular conceptual error here a while back - thank you for updating my meager knowledge :-)
Video of Jeff Rubin's interview on YouTube:
link
REQUEST FOR ASSISTANCE:
A very good friend of mine is running for mayor, and will certainly win next month. I am planning on inviting him to lunch sometime in Nov or Dec before he takes office, and will offer to brief him on energy issues. I would appreciate your suggestions as to the best briefing papers that I could get in his hands. I am thinking that I will buy for him a copy of that new Post Carbon Cities Guidebook that is coming out this month, and will also print a copy of the Hirsch GAO report. What else would be good? It needs to be concise, layman's language, and credible. I don't want to overwhelm him, so I've got to be very selective.
I intend to suggest that his top priority and best "legacy" opportunity should be to get the ball rolling for passenger rail service to our community, so I'm especially hoping to see Alan Drake chime in here.
Thanks
What city ?
I got Ed Tennyson to do a superb job on two alternatives for Galveston-Houston commuter rail (sometimes better to know people than know stuff :-)
Best Hopes,
Alan
We're a small town (pop. <10K) in WNC, Asheville is less than 1/2 hr away. If passenger rail can get to Asheville, that would be good enough.
Asheville could probably benefit from commuter rail, but what we really need is for the NC Amtrak lines to extend west to Asheville. Without those, we'll eventually become totally isolated.
WNC Observer,
North Carolina is committed to spending somewhere in the vicinity of a billion dollars completing the NC portion of the Appalachian Development Highway System. This project is also known as Corridor K or the Ashville to Chattanooga Highway. Most of the money will come from the Federal goverment. Tennessee has yet to commit to spending about the same money to complete their portion. Currently the highway ends about the Graham County line in NC. The portion unbuilt is the most expensive and difficult to build and will be a major threat to the forests and watershed in the area. If this money could somehow be diverted from building this road to upgrading the railroads in this area it would probably be better in the long run for the area and cheaper as well. Of course there is the question of 'private' railroads vs public highways but it would seem that somehow this could be overcome. The current railroads through this area are now running excursion trains with equipment from the last century.
TnGranny:
I am familiar with both the Appalachain Development Highway and the Gt Smokey Mtn RR. You are right, an Asheville to Chattanooga RR would also be good to have; maybe someday we will. To my way of thinking, connecting Asheville to the Raleigh/Charlotte line is the first priority. The NCDOT already subsidizes that line, so NC is not 100% dependent upon federal funding to maintain intra-state passenger rail service. Extending it to WNC only makes sense, and is also fair; after all, WNC tax dollars are helping to subsidize that passenger line, why shouldn't we also be served by it?
I always guessed WNC was Western North Carolina. I am in the Asheville area.
Just getting the city going on greenways, sidewalks, and bicycle lanes is hard enough.
Getting rail W. of Asheville to I am guessing Waynesville would be difficult with all of the mountains. Get rid of a lane of I-40 and replace it with rail. That is a plan.
Of course Asheville does not even have passenger rail service to Charlotte or Knoxville.
There is already rail there! It just does not carry passengers at the present. It did in the past. Norfork/Southern does have rail running through Ashville. All of these various excursion trains (Great Smoky Mountains Railroad, Blue Ridge Senic Railroad, Hiwassee Rail Adventures) are the remenants of the former passenger service in those areas that were abandoned because they became uneconomic for the railroad (read people started driving instead of riding the train). They are now disconnected from the main line because the railroad does not want to risk one of those trains accidentally getting out on the main line, but they could be reconnected.
In view of PO it would be a great deal more economic to figure out a way to expand/improve/electricify this rail system than to build more super highways..... Some sort of public/private partnership? The railroad still considers passenger service to be uneconomic.
The good thing about excursion lines like the GSMRR is that they are maintaining the rails and rolling stock. I can see them eventually evolving from excursion lines into commuter lines. They are typically spurs off of more heavily traveled lines, so I see them continuing to fill a perepheral niche as feeder lines to the main routes.
I am sure that Alan Drake would chime in here with the observation that freight could and should be mixed with these passenger operations.
fishey72:
I'm keeping vague about my exact location as I'd rather not publicize it. I am in a small town in WNC.
I believe the first priority must be to extend the Raleigh/Charlotte line to Asheville. WNC taxes are helping to subsidize that passenger service, why shouldn't we be served too?
Knoxville would be great, but like Chattanooga would be much further off. The only feasible route is the N&S line through Marshall, Hot Springs & Newport. There used to be passenger service along that route, long ago. Once Asheville has been tied in to the Raleigh/Charlotte line, and once Knoxville is being served by passenger rail to points north, south or west (is this even being talked about?), then it might make sense to start talking about a connector.
Once we've got passenger service to Asheville, then perhaps we could start thinking about some form of light rail electrified local transit. We have one huge advantage compared to some other metro regions: the mountains have constrained sprawl into just a few relatively narrow corridors. That is an almost perfect scenario for developing some form of a light-rail system.
I would see one line running east up the Swannanoa valley to Black Mountain. Another would run north at least to Weaverville, with a stop to serve UNCA, and maybe continuing all the way up to serve Mars Hill College, or eventually even Wolf Laurel. (Imagine: taking the tram for a day of skiing!) The northwest line would run to Leicester, the west line at least to Candler and maybe eventually to Waynesville. We need a southwest line to serve AB Tech, the farmer's market, Biltmore Square, and the NC Arboretum, and maybe continuing eventually all the way to Brevard. The south line would have to run past the hospital district, the Biltomre Estate, and at least to the airport, and ideally eventually to Hendersonville. The southeast line would run to Fairview. Of course, all of these lines would be routed through Asheville to provide optimal service within the city.
Even with the compression caused by the mountains, we do not have very high population densities around here, so probably something like a streecar or tram would work best. Frequent service by a single car would be far preferable to less frequent service by a small train. If you get spots where people are having to wait for the next car because this one is full, you just put more cars into service on that route.
Seven lines - that's all we'd need. What an enormous difference they would make!
IIRC you recently moved to Asheville? I tried to get you to e-mail me a few months ago, but you didn't respond...not sure if you saw my post or not. Drop me a line at corsairxvi at A0L dot com.
Commuter trains...it'd be really difficult (basically impossible) to sell that in this area. With all of the criss-crossing rivers, mountains, and valleys putting additional track in would be extremely costly, and the low population density doesn't help things at all. This area is still really rural. There are people that commute from Hendo, or Waynesville to Asheville but the number that do that is so low as to be discounted. For people that live in Arden/Fletcher, Weaverville, Burnsville, etc it'd be much easier to take a car all the way to Asheville as any scheme involving them would mean having to create some sort of park-n-ride scenario.
It would probably be feasible to have long distance train service in this area, but as TNGranny says here, the main lines through this area are owned by NorfolkSouthern and they transport cargo (mostly coal I've noticed). These lines run along the river for the most part. Again this would probably take the form of a few centralized hubs to serve the greater area. This is why I'm always talking about super efficient cars (Loremo, VW1 Liter, Aptera)...there's just no way (within reason) to service this areas' daily transportation needs (and wants) with rail.
Substrate:
Sorry, I must have missed that earlier post. I'll try to follow up with you. I've been in the area almost 12 years now.
Local rail transit is indeed a no-starter as long as the ICE motor car can obtain fuel at a reasonable price. Once people have few options left except feet, bike, or maybe horse, then it will start to look pretty good. It will be hugely expensive, but if the alternative is the near total collapse of the local economy, I suspect that the effort will be made. While you are right that our densities are far from ideal and the terrain does present challenges at spots, as my previous post indicated we also have advantages in that settlement patterns have been focused into a few corridors. Compare that with most major flatland cities which just sprawl out in every direction.
On a number of the routes I have outlined, we'll have paved roads with surplus capacity that could be devoted to local rail lines. Consider US 70 E & W of Asheville, for example. I am guessing that a rail line carrying single cars (a.k.a. streetcars or trams) could be narrower gauge than standard freight & passenger rail.
You are right that there will have to be park & ride facilities. Lines should be routed past shopping centers as much as possible, their parking lots can be used for commuters during the day. As this is probably the only strategy that will generate enough foot traffic to stay in business, they shouldn't complain. I can imagine that there will be a network of local shuttle buses as well that inter-connect with local stations.
In order to keep down the costs, we will have to do it all on the cheap. Maybe we could initially operate with used equipment purchased from another metro system that is upgrading to handle their own increased volumes. Eventually we might be able to build much of the body on top of the undercarriage guts using local wood. Maybe the existing metro buses could even be converted? I bet that it has been done somewhere - Alan Drake might know about that. We might end up with a "mongrel system" with a bunch of different models of cars. Forget about those sleek & shiny new Eurosystems that Alan keeps showing us -- we won't have it that good!
A deal might be worked out with UPS/FedEx/USPS, etc, to use the streetcars to also carry loads of small parcels to satellite substations for local delivery. This could provide an additional revenue stream and help with the costs.
Sorry, blended posts. It's fishey72 who I recall as having recently moved here, though the other comments were meant to add to the thread you began. You can also feel free to contact me, though my ability to "show you around the place" is a bit diminished by your having lived here and knowing your way around as well.
"Local rail transit is indeed a no-starter as long as the ICE motor car can obtain fuel at a reasonable price."
Which I imagine will be a relatively long time for the majority (interesting though that you only mention ICE cars). By the time fuel gets expensive enough for anyone to start thinking about commuter rail here, the economy will be in such shambles that no one will even try. The existing infrastructure is all that is likely to be available.
If you want to draw on the past as a way of forecasting the future, you'll find that WNC has always been a fairly isolated place, and the mountain people have historically had to rely on themselves because there were no good thoroughfares to move people and goods to and from here. If it weren't for I-40 that might still be the case.
Long distance travel, OTOH, might have a chance if they can use the NFS rail lines which go through the area. With that, you've got good proximity, but from there on you have to deal with the rest of the country's railway system.
Local rail is technically feasible, but I don't think it could ever be economically and politically feasible. When you see a $40,000 Mercedes outside a $40,000 single-wide trailer, you'll begin to understand the power of the "from my cold dead fingers" sentiment.
Yes, we could go back to the traditional, old-style isolation -- but with nowhere even remotely close to the population that is here now. Without the ability to trade with the Piedmont, at least, our carrying capacity is only a fraction of the current population. Even in the old days there was an annual flow of livestock down to the Piedmont over the drover's roads, and goods that weren't available in the mountains would come up on the return trip.
Alan:
Thanks for that! I'm going to make sure the Mayor of Galveston and the City Council get the report, so we can be ready with a plan to work on immediately. The west side of Galveston Bay and the Houston ship channel are the biggest oil import sites in the US, and home of much of the US petrochemical complex. Our national security depends on being able to get the workers to their jobs.
Since the Mayor of Houston, Bill White was a Secretary of Energy under Clinton and is a speaker at ASPO-Houston conference, we can very likely get his ear,too. Its apparent that the current Congress and Executive branch are too locked into partisan sniping to get actual action on energy until after the next election. So that's why we're working on the local angle first. This is too important to delay.
Bob Ebersole
I live in a liberal, well educated, (and I like to think) forward thinking city, and our mayor got nowhere with streetcar proposals. The cost is phenomenal. The public is not ready. Your mayor needs to start with smart, smaller scale, individually adoptable solutions. Bikes and electric scooters fit these constraints.
If you could arrange a demonstration of an electric bike powered by one of the new, powerful, brushless hub dynamos
he would see why this technology is going gang busters in China. It is cheap. It is dependable. And it works.
What's required to take it further is some modest attention to roadway development. We need wider shoulders for bike lanes (4 feet) and barrier protection in heavy traffic corridors.
Once gasoline is limited, either by rationing or price, many shorter range commuters could easily switch to cyling (as I have) or electric assistance. Public acceptance will require safe corridors. The coming high prices or rationing regimes will do the rest.
As mayor, your friend could initiate modest improvements in your municipal street grid. These would not require bond issues or public referenda. This is key. Few politicians are willing to ask for infrastructure $$$. They have enough trouble keeping police and schools funded. It's a positive step to get good cycling corridors going, and perhaps, get bike racks attached to your public buses. Bus mounted bike racks substantially extend the useful range of existing bus routes.
Thanks for your note. I am planning on getting an electric assist bike within the next year. I haven't seen any on our streets yet, though we do have a number of people riding around on conventional bikes. I'm starting to see quite a few motor scooters around town, interestingly. Since it is mountainous terrain, maybe folks are figuring that is a good option for them.
The town is currently working on a local transport plan that includes more sidewalks, trails and bikeways. You are right, we really do need more sidewalks, and coming up with the money and sense of urgency for them is a challenge. We also have a local shuttle bus that runs a retular route & schedule, and also service from one of the Asheville metro bus lines; now that these are in place, these services can be ramped up as demand grows. As I stated above in my reply to Alan, what we really need is a regional link to the Amtrak passenger line system.
My city in Ohio had about 10,000 people 100 years ago and had several street car lines such that every house in town was within a few blocks of a line. The furthest linked neighborhoods were about 1.5 miles from downtown. There was also a commuter line making frequent trips to a larger city (40,000) 15 miles away. Although there's been lots of suburban type development outside the core since then, the core of the city is still there. So long as the average person clings to the automobile, streetcars won't be able to return any time soon, but it does show that even smaller cities can (and did) benefit from streetcars.
In my searching I've found the crystalyte brushless hubs to be some of the most talked about and most recommended. This one sold by electricrider.com which they call "roadrunner" (http://www.electricrider.com/crystalyte/roadrunner.htm) seems to be a nice blend between power and leaving your bicycle pedalable, though I'd ditch the lead acid and go with a custom LiFePO4 pack sold by "missbattery" on ebay, or NiMH pack from batteryspace.com (http://www.batteryspace.com/index.asp?PageAction=VIEWPROD&ProdID=2061). A LiFePO4 pack, if sized right and treated right, should just about last forever.
The power ride store (http://www.poweridestore.com/) also sells crystalyte Journey hubs and the standard 40 series of different windings (408, 4011 etc).
Americans are suffering from a lack of imagination. We just can't imagine life without a car. If you look at the phenomenal amount of materials and energy that we waste on soon to be abandoned suburban wastelands, consider what we could do regarding EOT, with just a fraction of the material and energy currently wasted on suburbia.
If we did it in 1908, why can't we do it in 2008?
Streetcars 100 Years Ago
http://www.familyoldphotos.com/tx/2c/chadbourne_street_trolley_san_an.htm
If we did it in 1908, why can't we do it in 2008?
I think there are two answers to this.
A) It will cost a lot more to install rail today. And that money doesn't benefit established industrial and political power.
B) This is key... We're not replacing horses, we're replacing cars. So the transition is not: streetcar vs. horse, it's streetcar vs. car. It's seen as worse. Much worse. Folks equate streetcars with buses. And they hate buses. Buses require compliance with routes and schedules. Buses mean waiting around on street corners.
The reason I'm pushing electric bikes is because they are at the performance thresholds: 30 mph speed, 30-40 mile range, that might work for many commuters. What we need are modest adjustments to our existing road infrastructure. We need wider road shoulders and, in some routes, barrier protection. We can manage those things. As Kunstler says, we'll change when we have to.
Alan Drake is dead on when it comes to freight and inter-city needs. We need that rail right now. Every dollar spent improving airports and dinking around with 6 and 8 lane interchanges is wasted money. I think the streetcars will come. But I think they are phase 2 (or 3).
I agree that moving to electric bikes and NEVs for urban commuting are the best options, but even moving to motorcycles and 50cc scooters would be better than people tooling around in Escalades. But, beyond convenience, cars are status symbols. (And if that's the case, my car says "I don't give a $h1t what you think" regarding it's junky appearance and old age.)
~Durandal (http://www.wtdwtshtf.com/)
Very good points.
I would also add that the population is much higher, resources are much scarcer, and we are now dependent on the existing infrastructure in a way we were not in the past.
"If we did it in 1908, why can't we do it in 2008?" is the same kind of framing cornucopians use, implying that all it takes is guts and determination and good ol' American ingenuity. But of course, we know that's not the case. Hey, we found a Ghawar in the past. If we did it then, we can do it again.
Or maybe not.
As I said, I get two types of complaints: I'm too pessimistic, and I am too optimistic.
But Alan Drake had documented how we used to move people and stuff around with minimal oil input. So, it's not like we need a technological breakthrough.
Having said that, realistically the best that I am hoping for with EOT is to make things not as bad as they would otherwise have been.
I am not against streetcars, but I think Stuart did a pretty good job of illustrating why they will not help the vast majority of us. More efficient cars would be far more helpful, at least when it comes to mitigation. They would also be more politically palatable, and therefore more possible.
I disagree with Stuart, primarily because of the ELM (putting my "pessimistic" hat back on). IMO, large swaths of suburbia--at least as we know it--are going bye-bye (with hordes of people already walking away from their suburban mortgages, I'm not exactly going out on a limb here).
I think that we have to focus on how we--and others--moved people and stuff around with minimal oil input. I think denser housing around EOT lines is not a choice, but a necessity.
I think they are going bye-bye, too. Electric cars don't mean the happy motoring lifestyle continues forever.
Rather, they give us more time to adapt.
If by hordes you mean fewer than 0.1% of all homeowners, then yes, thats a massive horde :P
Part of the problem might be trying to get to streetcars (or any other type of electrified rail system) in one step. Implementing and expanding a shuttle bus system might be a good transition plan - get people used to riding mass transit first, so that you will have the proven ridership to support the rail system. Doing a shuttle bus system first gives you the option of trying out different routes and schedule frequencies before you make the investment in rails on the ground. It also gets you going with mass transit sooner rather than later.
I have previously described my daughter and son-in-law's search for intelligent housing along the commuter rail line between Dallas and Fort Worth. She could not be a happier camper. Her husband does not have a mass transit option, so he drops her off at the train station, about 10 minutes from their townhouse, in a New Urbanism community (one of the founders of the firm that designed the place was featured on End of Suburbia). At the other end, she has about a three minute walk to her office building. Her employer subsidizes mass transit passes. She has a transit pass for unlimited mass transit use in Dallas/Fort Worth for $30 per year, which puts her daily commute cost at about 12¢ per day.
Do ya think that someone has been (repeatedly) offering them some advice?
Wow, that sounds great.
I currently pay $163/month to ride the Commuter Rail 13 miles into Boston. I do get to pay in pretax dollars - so that helps a bit I guess. The MBTA in Massachusetts is 8 billion dollars in debt. What's the likelihood of a fare decrease for me?
http://www.boston.com/news/globe/editorial_opinion/oped/articles/2006/05...
G
What's the likelihood of a fare decrease for me?
With federal assistance to electrify the Ts commuter lines, speeds would increase by about 15%. Almost all costs are per hour and not per mile, thus all non-fuel costs would reduce by roughly 15%. Fuel costs should drop by 2/3rds or so. Use EMUs off-peak (instead of almost empty 6 car trains). Faster schedule would attract more riders & more fares. Add a North Station - South Station link and ridership would increase dramatically. Add higher oil prices for even higher ridership.
So costs down by >15%, ridership up 33+%, I could see a fare drop :-)
Best Hopes for Efficiency of Scale for Urban Rail,
Alan
"...with federal assistance..."
I think that's part of the problem as well. Our federal government is bankrupt. It doesn't have the money to do this or anything else that actually makes sense. Instead, it pours billions of dollars into trying to secure the Middle East for "democracy."
- Scott
"Try sour grapes; you might like them."
Unlimited transit for $30 a year? I think it's 12 times that much in Houston. We better make this a rivalry thing, which is the only way you ever get anything done in Houston.
Very nice! Los Angeles county, I'm paying $900 a year now ($75/month, rates went up recently) because I need a multi-agency pass. It's still way better than using a car, and if I were working I could likely get the company to pay the whole thing.
As I noted in the comments underneath his article, his better fuel economy wedge would be our primary positive reaction# for the first few years post-Peak Oil but this approach was neither an adequate medium or long term solution.
I also found his analysis flawed with respect to Urban Rail.
Best Hopes,
Alan
# Bicycles and reduced economic activity are the other short term responses IMHO.
the population is much higher, resources are much scarcer, and we are now dependent on the existing infrastructure in a way we were not in the past
These are not obstacles for a massive Urban Rail building program.
A higher population can (and should, since farmland is best used to raise crops and not McMansions) lead to increased density. Urban Rail has efficiency of scale, transporting twice as many does not require twice the resources.
We have MORE, not fewer resources today. The 1897-1916 boom was built with the primary energy sources of coal, human and animal. Coal was mined by hand (vaguely remember that 1.5 tons/12 hour day was good productivity back then). Coal was transported by thermodynamically inefficient steam train to primitive, inefficient steel mill, etc.
I am not a "new technology will save us" person, but I do recognize the impact of a century of improved technology. I believe that we have, today, well over a dozen times the resources/capita that we had in 1907 (about 30x the GDP/capita).
The existing infrastructure is both a positive and a curse. Left-over pre WW II housing is an asset (generally speaking), little housing built since 1970 is a positive IMHO. Widespread concrete plants are a positive today, and freeways are ROWs that might be reusable. A mixed bag IMHO, although inherited technology and experience is a treasure !
Note the bricks or cobblestones piled on the sidewalks to be relaid into the street.
As Alan Drake said, "If we don't try, we are certain to fail."
Ah, but the question is what do we try?
Let the market decide.
That probably will be what happens.
Which means a lot of coal in our future.
Does "the market" = subsidies and earmarks? The "market" decided in this way about ethanol, and will probably decide soon, as you say, re: coal.
Gandy dancing.
Though you saw the workers better earlier today. Guess the picture was shrunk.
People must not hate buses and light rail too much, because they are setting ridership records not seen for half a century. Also, schedules and waiting at stops are becoming less and less of an issue. GPS tracking of vehicles enables real-time arrival info available at transit stops or even via cell phone, Google mashups, etc.
If you think that the cost of labor makes transit prohibitive, consider that the average hourly wage of transit workers in 1907 was 24 cents per hour. That's equivalent to $22.40 per hour in 2006 dollars, using the unskilled wage index. Also that was before income taxes were established.
"Setting ridership records"
Whoop-dee-doo, ridership is up to where it was in 1957, in our grandparents' or great grandparents' heyday, when the population was about half its current size, and relatively few women commuted, and soccer moms hadn't been invented yet.
10 billion trips, 5 billion round trips, 17 round trips per person per year? That's a joke, a laughably inconsequential fraction of the total, considering that most people make a couple of round trips per day - including weekends when U.S. transit often shuts down. Or it would be a laughing matter except that even that trivial little bit would dry up and blow away without limitless taxpayer subsidies to make it happen.
GPS tracking and Google mashups, though nice in bad weather, are just window-dressing. If I need to be at work at 8AM, a text might save me from some sweltering, but it does nothing whatever to get me there on time. That would require more than just a message saying, good morning, we regret to inform you that once again we've been lazy, stupid, uncaring, and incompetent, and our lame excuse of the day is, oh, the wrong kind of leaves on the track. And after I'm done for the day or the evening, then, GPS or no GPS, I'm still stranded for yet another hour before the bus home is due to show up.
The only way to make transit useful is to provide frequent and reliable service with reasonable walking distances. That requires wall-to-wall people as in European or Japanese large cities; competent managing authorities; and competent operating personnel. Not one of those factors is widely available in the USA, and nowhere are all three available in the same place. Where I live, a trip to work might be 20 minutes by car, 35-45 minutes by (non-electric) bicycle - and an unpredictable 90-120 minutes by bus and that only on weekdays. On a weekend or late at night one is often out of luck or else extra-vulnerable to a mugging. Which might be the reason why that "record ridership" is so laughably low - unless one is extraordinarily lucky, the "service" is utter rubbish to be used only if one is economically desperate.
The growth in transit trips over the past decade is actually a notable phenomenon. That's because governments at all levels tilt the playing field to favor autos, and have done so since the 1920s. The automobile transportation system as a whole is 10% to 40% subsidized by U.S. taxpayers, and that's not even including externalities like the cost of pollution, global warming and oil dependency. Even so, public transit use is up 30 percent since 1995, which is greater than the increase in vehicle miles over the same time period.
Certainly frequent and reliable service is a necessity for viable transit. But while reasonable walking distances are very good, they are not a necessity, because biking and carpooling to stations is always an option. Wall to wall people is not a necessity either.
Light rail becomes viable at 9-12 dwellings per acre, which means small-lot houses, townhouses, and/or low rise apartments (see examples here). The market for those types of housing has been on the rise for several years and is projected to increase even more over the next two decades. Commuter rail is viable at 1-2 dwellings per acre, which is the average density that 68% of Americans live at.
There are quite a few towns and cities around the world that used to be completely auto-oriented, with almost no bike or transit facilities at all. Yet they determined to take hold of their destiny, and made the decision to work for change and improvement. After years of effort they are reaping the benefits of amazing pedestrian, bike and transit trip shares -- the majority of trips in many cases.
On the other hand, when what we are replacing are not cars but shoes on the ground (walking), then it won't be too hard a sell. The only question is whether it will still be possible to do by that point.
On the other hand, when what we are replacing are not cars but shoes on the ground (walking), then it won't be too hard a sell.
Exactly.
If the transition is seen as "positive" it will get support. My point is that it's too early in the game. We're not on foot today. We're in cars. As long as we're in cars, we can't see alternatives. And we certainly won't fund them.
PaulS adds some good comments. We won't build smart. We won't give basic rail a chance. We'll lard it and gold plate it to fiscal incompetence. We'll talk a lot too. But we won't listen well.
I recently watched our hometown mayor get seriously abused for suggesting streetcars. Folks wanted municipal parking garages to alleviate "congestion". They wanted more lanes to speed things, technology to synchronize traffic signals. The reality of maintaining a 9% growth rate in automobile registration was never debated.
Growth is growth.
We just need to hire retired French bureaucrats to teach us how to do it efficiently. They routinely build new tram lines in 4 years from hand wave (here to there) to ribbon cutting (two tram lines in Lyon for a new mayor, 3 years 5 months). Cost 20 to 25 million euros/km (rolling stock & maintenance barn included).
The US system (worse under GWB) is to ration by queue, support oil burning transportation (cars first in freeways, HOT lanes, HOT lanes, then buses) and have no incentives for efficient operation. It is, IMHO, designed by General Motors et al and designed to fail. No political points for efficiency in most cities.
OTOH, Millennium Institute is HQed in Arlington CourtHouse TOD (Orange Line DC Metro). Midrise next door was ground floor retail and apartment above, Flex car parking below, etc. although walkability could be improved (all 4 lights red for peds, biking seemed difficult).
When one has to look to French bureaucrats for inspiration ...
Best Hopes for Changes in Policy,
Alan
We just need to hire retired French bureaucrats to teach us how to do it efficiently.
Bring 'em on!!!
And bring their nuclear reactor friends too.
I think the real answer is to quit dinking around with HOV lanes (or any lanes for that matter). Take one or two of what's available, use them for rail. (leave one for us bikers).
That will give the die-hard motorists a fundamental incentive to ride. It's also the battle proven Lawrence-of-Arabia strategy: "No prisoners..."
Alan, help me with this one. I understand why 4 years is a short lead time, but is $11,000 or so per foot a good reasonable number for the cost of a tram line? [Double track so really $5,500?]
In the thirties, my grandmother lived in a town with 600 inhabitants just down the streetcar line from a town with maybe a thousand. These towns were located 4 or 5 miles from the edge of a small city of perhaps 10,000 inhabitants. This street car line probably never made economic sense, but at the 1920s equivalent [my guess on when it was built] of 11,000 2007 dollars per foot that line would never have been considered. Are we aiming too high with the design for light rail / tram projects that are being built or do I need to recalibrate my thinking for what things really cost?
It depends what you want.
What capacity do you want ? How fast ?
Do you want bicycle paths feeding the tram line ?
Other amenities to encourage TOD ?
Do you want air conditioning ?
How long before replacement ? Annual maintenance ?
How much aesthetics (the French build to a very high standard) ?
How smooth a ride ?
And hint, the French are NOT the most efficient builders. But in comparison to the Americans (the French have been at least 10x as effective as FEMA in New Orleans, maybe 20x) the French are wonder workers that walk on water.
The new French tram lines are beautiful, long lasting, low operating cost and follow what I consider to be "best practices" but are NOT "lowest cost".
Even at today's elevated exchange rate (which does NOT reflect comparable costs), the USA can afford 20 to 25 million euros/km (0.6 mile).
The Americans of a prior generation could have done even better, but today I would be satisfied with efficiency and effectiveness of the French bureaucracy.
Best Hopes for those ineffective process/red tape bound Americans,
Alan
Thanks. The tram in the bottom photo is visually pleasing.
I love the Metro in DC [clean, quiet, and comfortable], but the objectively nasty NYC Subway System [neither clean, quiet, nor particularly comfortable] also gets the job done. I know a large part of the difference is the period when the systems were built, but part of the difference was also the result of who was footing the bill and what they were attempting to achieve.
Best hopes for efficiency and the right balance between comfort and costs [and thanks for your advocacy of the positive and the achievable which is often missing from TOD.]
GJ :<)
Thanks for the kind words.
I use TOD to promote my concepts, as a step towards changing public policy and society.
Best Hopes,
Alan
If we did it in 1908, why can't we do it in 2008?
Besides (A) and (B) above:
We have to hold years and years of hearings where every inconsequential nobody moans and groans about having a streetcar line within sight, while, in the meantime, the capital funds evaporate. In 1908 we just built it, and if a few nebbiches didn't like it, well, tough.
We have to make every streetcar a gold-plated intensive-care ward for every disability known to medicine. In 1908 we just built a robust, affordable vehicle, and if Grandma couldn't haul herself aboard, well, tough.
We have to festoon every streetcar (and its tracks) with an endless array of expensive "safety" devices, some of which require expensive human monitoring. In 1908 we just built a streetcar, and if some late-arriving moron tried to force his way into the closing door, fell out, and broke his leg, well, tough.
We have to put components from every Congressional district into each streetcar in order to garner the votes for Federal funds, since it is only the Federal subsidy that makes any line worth building. That delays projects and drives up costs. In 1908 we just built the streetcar line, as massive Federal subsidies were rarely to be had.
And there's always the clincher, which is that once the line is built (if it ever is), the streetcar arrives when the corrupt, incompetent local authorities happen to feel like scheduling it; and when the driver, hired for political reasons and too stupid to grasp that the "noon" run should leave the town square when the big hand and the little hand on the town-hall clock are both on the 12, happens to feel like showing up.
Unfortunately, those random feelings often have little to do with the time when we actually need the transportation, and the route the streetcar takes has little to do with where we need to go. Which is why no one seems to see it as worth having unless Uncle Sucker picks up much of the tab.
So those with a disability should just shoot themselves? A torn meniscus has really changed the way I see disabled access - may you have your eyes opened also.
There but for the grace of [insert deity of choice] go us and our loved ones.
I recently gave a presentation in the Rochester (NY) area on the oil situation. The PowerPoint slides, including copious speaker notes, are available from the downloads page of my site in a PDF file. Feel free to use that material, or e-mail me directly ([my name on this site] @ rochester.rr.com) as needed.
Direct link to the 1MB PDF:
http://www.grinzo.com/energy/downloads/theoilcrunch09x20x2007.pdf
Take a close look at the Sierra Club's "Cool Cities" program. The work starts with an energy audit of the city's operations. There's a recommended software package for setting up the energy audit, which involves, among other things, entering the data from a decade or more of the city's utility bills. Generally, the Sierra Club will be willing to do a fundraising event to pay for the cost of the software, and might also be willing to provide volunteers for collecting and entering the data.
Once the audit is complete, the city will have hard information on what they are currently spending for energy, what the trends in their energy costs have been, and the areas in which they are spending the most. They will have a basis for making decisions on how to save energy, and they will have an idea of how to balance the cost of changes with the savings in lower energy bills.
Additionally, they will have a way of contacting other cities in similar circumstances that have some experience with the program, and they can rapidly get an idea on what works and what does not. In Ferndale, Michigan, for instance, the city decided as a result of their energy audit to replace incandescent bulbs in all the traffic lights with 4-watt LED lights. Not only are the energy requirements cut by a factor of at least ten, the labor costs of replacing burned-out bulbs are permanently reduced because the LED lights last so much longer.
It probably will not hurt that the mayor who calls on local Sierra Club members to help will find that the Sierra Club members will then vote for him.
Of course, it is possible to do an energy audit without involving the Sierra Club, and an energy audit does not address the advantage to citizens of public transportation or many other issues that come up with adjusting to permanently declining energy availability. An energy audit is just one useful tool, which no responsible city government should go without.
Art Myatt
Give him a copy of "End of Suburbia". I did that with my county supe.
Check this out:
http://www.climateprotectioncampaign.org/
Sonoma county has made real commitments to reduce green house gas emissions and the individual cities in the county are following the lead of the CPC. Reduced energy use and cleaner, local energy sources are happening here. One of the most powerful drivers of the progress being made is that the cities are reducing greenhouse gas emissions while saving loads of money. Very win-win for environmentalists and greedy tax payers.
Oil could spike to $100 by year's end? Man, all these spikes don't seem to have points like they did when I was boy. The current spike looks more like a staircase.
The Spike shall rise [and fall] again.
So, it will butter-knife to $100 by year's end?
I agree with the EOR piece which expresses considerable doubt as to the whether oil production can grow from 4.7 mm b/d to 20 mm b/d by 2030. I am associated with a group of investors who have carved out a stake in a small compnay called Enhanced Oil Resources, Inc. (EOR). They owns North American's largest natural occuring supply of CO2 (the St. John's CO2 dome)located in Arizona/New Mexico. It is a vast (400 square mile) geological reservoir containing aproximatley 5 trillion cubic feet of CO2. The other major CO2 domes in the U.S. (i.e. Bravo Dome, McElmo Dome, Sheep Mountain, Jackson Dome) all currently being exploited for CO2 flooding in the Permian Basin. Bravo and Sheep Mountain, long ago reached peak, and are rapidly depleting.
While investment wise, EOR, Inc makes for an attractive opporuntity, I can tell you first hand (as we have studied this extensively) that over the 40 year life of the geological CO2 dome, it can be used to produce about 2 billion barrels. Much like discovering future major oil fields, finding vast, natural occuring reservoirs of CO2 is most unlikely
Using pure and natural CO2 gas (95% CO2) is a "deal maker" in the industry as the cost to extract the CO2 is substantially less than utilizing industrial produced CO2 where its captured from the flue gas. Since the cost of CO2 is the major component in projecting the economics of CO2 flood, a natural source is what is employed in the vast majority of CO2 floods.
Industrial produced CO2 is more often a "deal breaker" for the oil company. While the technology has existed to stip the CO2 off of the flue gases and improvement in this technology have occured over the past decade, the economics for many of these proposed flooding projects (even at today's oil prices) are "deal breakers". If the plant is a new gasification or ethanol plant outfitted with the "capture" technology then the CO2 may be cost effective assuming that the transportation infracture is in place, which is a big and expensive assumption.
Then as the article pointed out, only certain oil fields are amenable to CO2 flooding. Now in this case, we are talking about billions and billions. In the U.S. alone, there are probably over a 100 billion barrels of oil that could be potentially recovered through CO2 floods. But the problem is extraction. Having sufficient supplies of affordable CO2 to extract in an economic manner is necessary. That is not the case and that is the main reason CO2 flooding has progressed slowly. If you have an affordable supply, then you are in the driver's seat. Kinder Morgan, Denbury Resources, Occidential (Oxy Permian), Apache Energy, and several other smaller to midsize players are in the "niche". All of them are looking for more affordable supply. Only Denbury is turning to gasification plants to increase their existing supply from the Jackson CO2 Dome (a volcanic supply of CO2). And in this case, the cost of the "industrial" CO2 from the gasification plant is twice the cost of their natural supply.
Its all in the economics and most of these oil companies will not proceed with a project if the cost models do not meet their standard. As oil prices continiue to rise, I expect we will see more CO2 floods and greater reliance on industrial CO2. But much like the oil sands, things will not move at a lightening pace due to the factors I outlined above and the law of receding horizons.
The Google tells the locations of CO2 domes and some large industrial sources in the U.S.
http://www.enhancedoilrecovery.info/Map_of_CO2_Projects.html
(oh, silly me, its your company's site, too :-) So you already knew about this resource ...)
If one opens the link that SacredCowTipper provided and click on Crude prices, you will see the evolution of the rising oil price environement. Only in the past 6-7 years has it been influenced greatly by "under the ground" factors. What is interesting (holding some hope for increasing production at a faster clip) is that in the early years of CO2 flooding, the economics were paper thin. Netbacks (income after all costs have been met) on each barrel of oil were less than $10.00 a barrel. With the current price environment, netbacks are in the $30-40 range. A very nice business...a profitable and attractive energy niche.
But in the Permian basin, scores of EOR projects are on the back burner because of a lack of long term, cost effective CO2 supply. Well over 2 billion cubic feet per day of CO2 in additional supply is needed now. And much more than that in the years to come to just exploit a fraction of the plethora of CO2 amenable oil fields. The most that our small company will throw off is 350 - 500 mmcf/d and one will have to wait two years for a pipeline to be constructed. Our company along with anyone else who controls a large supply of natural CO2 is essentially hording a lot of it to use for its own mature oil fields. We are buying up mature, depleted oilfields cheaply as we have the means to extract millions of barrels of oil with the CO2 supply. But this is just a small, small dent in the needed future supply.
Now if oil prices move to the $125-150 range, I would expect a lot folks will take a long hard look at exploiting CO2 from the industrial side. But part of the problem is the mindset of oil companies that assume oil prices won't get there or stay there and they price the projects under the assumption that it has to make money with oil at $40.00. We are our on worst enemy.
Paradigm Shifter,
luckily, CO2 isn't the only tertiary method that works. It seems to work best on water drive fields, and it works great on limestone reservoirs as well as sandstone. it doesn't appear to be as effective on smaller area reservoirs. And thanks for that US DOE report link you sent me, it really helped my understanding of how CO2 works. Thermally enhanced methods work well on shallow reservoirs with heavy oil, and if surfacants are going to work economicially at all, they are probably going to be best used on reservoirs with a small areal extent. Redrilling old fields to get away from formation damage from improper drilling methods will help a lot, and so will 3D seismic so we can decide how to place horizontal wells for thermal recovery and increasing the drainage over conventional vertical boreholes.
My point is there are a number of methods that work, but the size of the US resource is huge. There were originally about 2.7 trillion barrels of oil in place in the U.S., we produced about 272 billion barrels of oil so far, mostly by conventional methods when oil was cheap. Modern methods claim to be recovering about 50% of the OOIP on American fields that are still in production, and think they have the methodology to produce 65% of recently discovered reservoirs. According to the DOE we averaged only about 10% of the OOIP, so that leaves a trillion barrel target.
Tom Standin has it about right in his article linked above "Once again, NPC expects too much from EOR" in the ASPO newletter linked above. The US produced about 10 million barrels a day at its absolute greatest production in 1973, its hard to believe that EOR can get more than 2 or 3 million barrels a day out of US fields. And, its going to be expensive-CO2 costs about $10/bbl in additional production costs, and its a lot better than some of the methods. Still, with $100 crude its obvious that a lot of methods are going to be economic, at least for independents.The majors can't make money on low volume production, their overhead is much too high.
And its also obvious we need to cut our useage at least in half as quickly as we can. Its our national security-both economic and military. Our troops can no longer march to war, and jets require kerosene. With only 750 million barrels in the strategic petroleum reserve the US can't stand even a six month embargo. We're up to 68% of our oil being imported, while it was only 30% in the last OPEC embargo.
Of course. CO2 mines. Perfect.
Sort of the bizarro-world version of sequestration, eh?
Yes, it is sort of Orwellian. But the economics works and CO2 is magical with certain reservoirs. So we drill and pull it up, then inject back in a depleted oil reservoir recovering 20% of the OOIP. Half of the CO2 stays underground and the other half comes up with the oil, where it is separated and recompressed and re-injected to recover more oil. A recycling loop. Its cleaner way of producing oil than oilsands and its cheaper way of extracting oil than many deep ocean projects.
Indeed it is a strange world we live in.
Export Land Model confirmed on CNBC
Of course they did not call it the Export Land Model, but this guy from CIBC (Canadian Imperial Bank of Commerce) says that OPEC exports are about to drop by half a million barrels per day because of souring internal oil consumption and Mexican exports will drop to zero in five years. They will become a net oil importer.
This is very interesting folks, watch it here:
http://www.cnbc.com/id/15840232?video=540710330&play=1
Ron Patterson
More from CIBC’s Jeff Rubin on oil exports.
http://money.cnn.com/news/newsfeeds/articles/prnewswire/TO36002102007-1.htm
Ron Patterson
Check out the Energy Bulletin:
www.energybulletin.net
Ron: Here in Toronto, we get a lot from Jeff Rubin in the local media. Jeff has been parroting TOD for a few years now (and thus building his profile and credibility greatly). To his credit, he is one of the few MSM economists that says anything of interest, and is at this point the MSM point person for peak oil (along with Matt Simmons).
... or read the report from CIBC here
http://research.cibcwm.com/economic_public/download/occrept62.pdf
(link from the ODAC web site).
Did he really say INVADE Canada?
What a putz! In 5 years, the USA won't be able to invade CUBA...
Good Luck!
It's kind of funny. Yesterday, I joked about adding Canada to the "Axis of Evil" with the Royal Canadian Mounted Police listed as a terrorist organization.
Mark's comment was pretty revealing. If, as I suspect, Bush/Cheney begin go tiptoe out of the Oil/Peak Oil closet, their approval ratings might actually go up--at least among those Americans who don't have a family member in Iraq.
That was the first thing out of his STUNNED mouth (I won't say brain).
After hearing about losing Mexico as a supplier and 100 barrel oil.
Good times! :P
It was indeed the first thing out of his stunned mouth and it tells us a lot about how IRRELEVANT these media mouthpieces are.
How can one hold that job and be so ignorant??? Nothing Rubin said should have surprised him. At the least, he should have read Rubin's remarks or reviewed his ppt slides before interviewing him, ie: Journalism 101.
My guess is you won't see Rubin on the show for a while. They'll go back to Yergin.
I don't see how oil will stabilize at $100 if all top 5 exporters to the USA are declining ...short of horrific economic decline,,..nevermind
So, they'd better run...
Link doesn't play. Reinforces my thoughts that tv is still a bunch of garbage. Have to go to the "x"tubes for something to work.
Also written up this afternoon at MarketWatch:
Triple-digit oil prices to become norm: analyst
Ethanol Boom May Be Busting
New York Times 30 Sept 07
http://www.nytimes.com/2007/09/30/business/30ethanol.html
At last, some good news.
http://money.cnn.com/2007/10/02/news/companies/autosales/index.htm?cnn=yes
Ford sales down down down for "September 07"
SNIP
Ford Motor saw sales fall more than 20 percent in September, as the embattled U.S. automaker continues to lose market share.
The company saw its overall sales down 20.5 percent to 189,863 vehicles. Sales of light trucks, which includes pickups, SUV's and the so-called crossover vehicles, fell 9 percent, while the sale of car models plunged 38.9 percent. The decline was widespread across its brand, with only Lincoln and Land Rover posting a sales gain. END SNIP
Hey they good news is that the Lincoln town car and Land Rover sales were up. Perhaps to the companies that bullet proof them, the rich and famous don't like lime green volvo's.
That's not what I see. Seeing the Archer Daniels Midland Eying Ethanol Plant Acquisition article above confirms what i told friends yesterday when reading this in the WSJ:
What I see is that the agro-chemical cabal (ADM, Cargill, Monsanto, Bayer, Syngenta etc) is reasserting its monpoly. To achieve their goals, they flood markets with cheap corn, and then buy up suffering smaller operations.
Their grip on agriculture in North America, and abroad, is far too strong to just sit by and take losses on decreases in corn and ethanol prices. When these things happen in 2007, it's because they want them to. Motive is clear, as is MO. Take a look at GMO crops: they are indeed aiming for a monopoly of the world's crops, crazy as that may seem.
Leanan
Can you specify a link opening in a new window via html code? It's unfortunate that is not the default for TOD.
We've discussed this before, more than once. Call me old-fashioned, but I was always taught that it was bad coding to force a new window to open.
Personally, I hate having links automatically open in a new window. If I want it to open in a new window, I'll open it in a new window myself, thank you very much.
Except in the case of TOD, if one quickly clicks on a link that looks interesting, the TOD page is replaced and all the "new" comments are cleansed.
I think the proper remedy for that is to fix the caching issue.
YES!!
It was great when you could click the back button and get all the "New" tags back. I would love to see this reimplemented.
Look people, just hold the "Shift" key down when opening a link and it will automatically open in a new window, no "New" tags lost and everything is just fine.
No problem.
Now let's get back to peak oil.
Ron Patterson
just right click on link and select open in a new tab or window...
I just right click links to a new tab. By doing that, the "new" comments are not cleansed.
Incidentally, you can do this in Firefox and the new IE by just holding CTRL and clicking the link. You don't need to right click it and select off the menu.
The new fangled thing is these dad burned computers.
Reading that reply, "If I want it to open in a new window, I'll open it in a new window" got me to thinking. How does she do that?
Well, I'm not too computer savvy. Or forget all that I never knew. But once in a while, the mouse clicks. Lo and behold, right clicking over a link gives an option of opening in a new window. Will wonders never cease.
The free Opera browser allows you to right-click a link and select "Open in New Window" -- http://www.opera.com
All browsers allow that. Even Internet Explorer.
At last! Internet Explorer is finally starting to catch up. Opera invented tabbed browsing over 10 years ago.
It's faster if you click on your scroll wheel in the middle of your mouse (if you have one).
None of above does anything.
Geeks make anything work & nothing
works for Luddites.
Population-Wide Weight Loss In Cuba Resulted In Fewer Deaths From Diabetes And Heart Disease
Seems in the UK that they had to bring three oil-fired power plants on line to meet demand. Curious, it's not even winter yet.
No link sorry.
Bloomberg commented this morning that gas supply was below demand (again!)today in the UK. The Rough storage in the North Sea was being used to supplement supply.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avohEnrin07c
With temperatures lower than the last few years at this time, we could be in for a very interesting time in the UK if the winter is hard. My personal gauge is the gas storage tank about a 1/3rd of a mile from house. Dropped to the lowest level ever around 18 months ago, at the moment raised to around 2/3rds its maximum.
I'm Surprised that Chris Vernon hasn't commented on it, this is something he's been following for some time now. Perhaps tomorrow on TOD Europe.
Britain has truly major problems with its energy and transport infrastructure and economy and farming and industry and health service and schools and population and and...
Without an empire of some kind to support it, Britain is going to be in a desperate situation when TSHTF.
I have to agree. I am from the city where one of today's drumbeat articles was published: http://www.peterboroughtoday.co.uk/business/Fuel-costs-could-force-road....
What is truly frightening in the UK is how cities like ours have changed in population make up through immigration in a such a short period of time. In the last five years whole communities have moved in from Eastern Europe, Africa, Mid East and so on. (at this point let me state my father is a second world war refugee from the Baltics and my wife was born in India so my family has diverse roots) This rapid influx though is a strain on resources, housing, schooling, medical etc. Advantages for the 'economy' are a supply of cheap labour, an opportunity for 'entrepreneurs' to take mortgages on houses and rent them at ridiculous rates to immigrants who need a roof over their heads.
Whats going to happen to this wonderful arrangement when PO strikes? A lot of these immigrants from the likes of Lithuania, Poland etc may find that local grown food supplies are better and more secure back home. A rapid packing up and going home could do wonders to the UK housing bubble and whoops there goes the pound.
The Carolyn Baker article up top is pretty funny. What is the overriding culture of the USA? What is it about? How is it different from France or Sweden or Germany? The USA is about "success"-"success" for yourself, success for your children. Success means pleasing those with more power than yourself (kiss the ass above, kick the ass below). It starts in school and continues through the entire corporate work life for the vast majority of the citizens. What percentage of American citizens would love to get with the Bilderberg group and would be totally on board with the program? Maybe 99%. Most aren't invited, so they complain, but make no mistake, America is not a socialist society and most of the middle class Americans whining about the Bilderberg trip don't want to pay any taxes, don't want the poor to have any health care at all, don't want public schools to be funded, etc. Sour grapes.
Sheesh. I sure am glad that I must have some sixth sense that enables me to associate only with people from the 1% who are not and never would be on board with the corporofascist agenda of Bilderberg.
Cifman: Good point. I overstated the case greatly- change 1% to 20%. 80/20 split (IMO). What do you think the ratio actually is?
I dunno. % who would like to go along with the fabulously wealthy, omnipotent part of it, probably in your 80% range. But those who would do so after full knowledge of the squelching of freedoms and oppression of the masses that it requires, considerably less than that. I honestly don't know. Don't know who could know.
I think the constituency for authoritarianism, and acceptance of a passive role lower down a rigid hierarchy is much larger than you suspect.
Just think back over the last 10-20 years in America at the vast changes made in your life. You know when I first started coming to America the service culture amazed us Europeans. Nowadays you get ripped off EVERYWHERE. And people just take it. It's ingrained in the system. It only gets so by a long period of mild acceptance.
Look at the way people let banks treat them as just one example...
--
All these memories will be lost in time
like tears in rain
Perhaps the Germans that lived under Hitlers Third Reich might know? But, as Hitlers propaganda minister pointed out 'The bigger the lie, the more easily it is accepted'...(paraphrased). Point being, no one is given a choice of 'going along or not going along.'...They are manuvered into going along...They are sheeple...They are sheered.
10% that admit it 89+% that would publicly deny it and still do it.
Like this one?
WHO RUNS THE WORLD AND WHY YOU NEED TO KNOW IMMEDIATELY
http://carolynbaker.net/site/content/view/147/
Anyone who might see this thread at this late date ought to see Zeitgeist
Microbial Fuel Cells
http://thefraserdomain.typepad.com/energy/2007/10/microbial-fuel-.html
Energy Costs Beginning To Really Ripple Down To The Public
from the Sustainability-In-A-Desert department
From todays Los Angeles Times re new proposed taxes and charges in Los Angeles:
http://www.latimes.com/news/local/la-me-tax2oct02,0,4457495.story?coll=l...
(Most of the L.A. DWP's electric power comes from coal plants in southern Utah and northern Arizona along with small amounts from natural gas burned within the city and some hydro from the (shrinking) Lake Mead and Hoover Dam.)
Coal plants owned outright by the city. Still the bills for a modest bungalow for three people (me, Dad and GF) no central air/heat and no big super plasma TV or other toys it comes to about 40.00 per month. Add natural gas and monthly bills for home power/gas/water it comes to about $60.00
http://en.rian.ru/analysis/20071001/81814305.html
What the Russian papers say
As Western fires burn stronger, fighters hesitating to risk lives
Learsy's grain cartel op piece above:
Ag cherry Picking
Monthly grain prices were around 1.50 for corn, 2.00 for wheat on either yearly side of Learsy's chosen moment. Same with oil, around 15 either side, 97 or 99.
It blasts half his argument. Seen from today, grain is mirroring oil. The other half he blasts himself.
Sometimes I have a hard time believing Learsy is for real. Today's essay reminds me of that old song from the '70s oil crisis, Bobby Butler's Cheaper Crude Or No More Food.
The End of OPEC?
The top link above OPEC Withdraws Member Output Limits, Keeps Target Unchanged is quite revealing.
Yes, that is exactly what they will assume. If OPEC nations are not producing flat out right now, they are very close. And in November every OPEC nations will likely be producing as much as they can. And don’t expect any more production Venezuela; they have been producing every barrel they can produce for many years now. But yet, their production is still dropping, little by little, almost every month.
And with every OPEC nation producing every barrel they can possibly produce, what’s the point of OPEC at all? I would imagine that they would rather dissolve the organization rather than have everyone realize that their “quotas” are nothing more than a joke. That is because if their quotas become a joke, then the organization becomes a joke.
Ron Patterson
Most (not all) here think OPEC lost its raison d'etre several years ago... OPEC countries are now just like all others; pump every barrel possible as if there's no tomorrow.
Personally I think that OPEC is actually stronger than ever before, because members now have much more difficulty cheating and because it is slowly dawning on them that it is in their own interest to hold down production.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Tell me GreyZone, how can an OPEC member cheat when they no longer have a quota?
When the November figures come in, we will know for certain exactly how much each OPEC member can produce because they will each be producing flat out.
Ron Patterson
You seem to be assuming that because the current quotas are not published that they do not exist. This article lists the quotas and states that they were withdrawn from OPEC's website without explanation. Withdrawing them from public view does not mean there is no quota. We have not had that actual announcement from OPEC and it is certainly premature to make that claim right now lacking any other evidence. You may well be correct, Ron, but implying there is no quota system in place is something that you cannot prove today.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Actually I don't think anyone is paying any attention to quotas now. The UAE, OPEC's third largest producer, behind Saudi and Iran, is producing at their all time peak. How can a nation be at its historical peak in production and be adhering to any quota? Venezuela has been declining for years and claim to be producing one third more than they are actually producing.
No OPEC nation gives a profile that it is not producing flat out. Perhaps Saudi and Kuwait have some small excess capacity but not very much.
At any rate we should know in another three or four months.
Ron Patterson
I think we have an explanation now. See top DrumBeat story.
We did. That was the story that started the thread in the first place.
That was Jennifer Gordon, an analyst at Deutsche Bank. And I definitely agree with Ms. Gordon. There appears to be a rift going on among OPEC members. Most nations are already producing every barrel they can. But if not, they definitely will by November or December. That is why I say that when we get the year end data we should all know exactly how much oil OPEC can produce.
Ron Patterson
Reading that sure reminds me of another famous quote:
Re: Let the East Bloom Again
http://www.nytimes.com/2007/09/22/opinion/22mcnider.html
This opinion piece starts off talking about the history of farming in the Eastern US back in the 19th century.
They conveniently overlook how in the years since then, we've paved over and developed much of the farmland. Big open areas of land with all the stones and rocks already removed sure makes a great place to build McMansions!
Spin, spin, spin...spin faster, faster (damn, I'm getting dizzy):
CNN Money: Bad news is good news ...Especially if the Fed notices. In the fourth quarter, low expectations might equal solid gains despite lousy earnings and wary consumers.
This guy is the antidote to CNN Money http://www.cross-currents.net/charts.htm
Nice site and good reading...thanks.
Someone stick a finger down my throat
Here is a bit of non-spin, real world numbers...Reality is not optional...even for the neo-cons...
http://www.atimes.com/atimes/Global_Economy/IJ03Dj02.html The not-so-tragic tale of dollar/oil disparity
By The Mogambo Guru
Junior Mogambo Ranger (JMR) Juan O writes to call my attention to the disquieting fact that "oil trades at a higher number than the USD index. How funny is that? Or maybe it's just tragic."
Naturally, I craftily respond, "Tragic? What in the hell are you talking about? Who the hell are you? Where am I? Why am I tied up like this?"
JMR Juan then says, seemingly by way of explanation, "USD 79.51. Crude Oil 79.91," which I naturally take to be a code of some kind, probably a message that he is sending help and that the odds are even. I was relieved to hear this, and thus I was relaxed enough to idly notice that if the dollar index, which has been falling, was at rough parity to the price of oil, which has been rising, and now they are crossing, and that made sense, too! Oil exporters don't want dollars, see? They want units of buying power that they can use right now (like ordering some pizza and liquid refreshments for everybody), or to use in the future (to order some pizza and liquid refreshments as soon as The Mogambo goes home so he won't be hogging it all and we won't watch him eat, or, even worse, listening to him slobbering and gulping and belching while he gorges on it all).
And because these oil exporters, like everybody else, don't see the US dollar getting stronger in a real sense (because of economic vigor) or in a relative sense (because everybody else is debasing their own currencies even more tragically than we are), then the dollar going down would automatically make the price of oil rise, even though the true "value" exchanged would remain, theoretically, a constant!
So oil going higher as the dollar goes lower makes perfect sense, and I am glad that those stupid oil-exporting morons don't wake up and say, "Hey! We're getting screwed here by not raising the price of oil to compensate for the reduced value of buying power and reduced store of value of the damned dollar with which these deadbeats are paying for our oil, especially the part about the dollar being a 'store of value', so that by the time the damned Mogambo goes home and we can order some pizzas and beverages to get this party really started, the purchasing power of the dollar has dropped so much that we can't buy as much pizza and beverages as we can right now!"...snip...
Oil versus monks
America is hungry for Iraq’s oil. Burma is all about oil too. China and India are hungry for Burma’s oil. America loved the Iraqi dictator for as long as the dictator was in America’s economic interest. China and India love the Burmese military junta because the junta has promised them oil (and gas).
http://www.dailytimes.com.pk/default.asp?page=2007%5C10%5C03%5Cstory_3-1...