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DrumBeat: November 1, 2007
Posted by Leanan on November 1, 2007 - 9:03am
The odd dynamic of expensive crude oil and weak gasoline prices is turning into an ugly headache for Exxon Mobil.Like other oil refiners, Exxon Mobil has been battered by high crude prices because gasoline prices have not risen proportionately. For instance, from May to October, gasoline prices actually fell 45 cents a gallon. In turn, this imbalance depresses refining margins--the spread between what a company pays for crude and what it earns from the refined products.
What oil shock? Truck sales gain, cars fall
Most automakers post better sales of light trucks, weaker sales of car models as GM opens lead on Japanese rival Toyota.
Automakers trying to turn gas-guzzlers green
Whether it's a Hummer that runs on vegetable oil or a hydrogen-powered car capable of breakneck speeds, mechanics are increasingly looking at ways of developing eco-friendly cars that retain the macho appeal of gas-guzzlers, experts say.
What happens when the last drop of oil drops?
Houston had its Mad Max moment last month, when well-heeled investors and policy-makers convened on the oil town to talk about the post-oil world. The conference was built on the idea that the globe is fast approaching the moment of “peak oil”: the point at which oil reserves start to decline.
Prof says politicians blinkered on peak oil
A UBC researcher believes elected politicians swayed by the "moneyed elite" are preventing greater action on climate change and peak oil.
Venezuela Oil Min: OPEC Oil Currency Basket Is Working Proposal
Venezuela's oil minister said OPEC is considering a currency basket to price the oil produced by its member countries - a discussion they will take up in their upcoming meeting."That is a proposal we're looking at," Oil Minister Rafael Ramirez told reporters Thursday.
Giving thanks for $100 oil: The upside of soaring energy prices
NEW YORK (MarketWatch) - There is no doubt about it, peak oil is here.If you haven't felt it yet just wait a few months.
Old man winter is about to knock on may of our doors and so will the heating oil and natural gas bills, likely to be 30% to 40% higher than last year.
With an economy already reeling from high agriculture prices, a subprime housing problem and mounting debt, the specter of high gasoline and heating costs is likely to break the bank for many Americans.
Places to see before they disappear
4. Amish CountryDon't get us wrong; in 20 years, there will still be Amish people, and there will still be places known as "Amish Country." But, chances are, both will be very different from their traditional versions.
The key culprit? The ever-skyrocketing price of land. Amish families typically have an average of seven children, which translates to a fast-growing population -- a population that's running out of room to expand. Because rural regions have become more popular with average Americans, many places that were farmland 20 years ago are now subdivisions, factories, and office complexes (not to mention a fair share of Amish Country tourist condos). Basically, the Amish need more land, but that land is now scarcer and more expensive.
Australia - Clean coal a furphy: Dr Karl
Celebrity physicist Karl Kruszelnicki has described clean coal as a "complete furphy" and likened it to Nazi propaganda."Goebbels, the Nazi propagandist, said if you're going to tell a lie, tell a big one, and this is a beauty," Dr Kruszelnicki said today.
The scientist is running for the Senate on the Climate Change Coalition ticket.
Chevron Indonesia plans to expand geothermal power
Indonesia, Asia Pacific's only OPEC member, is tapping alternative energy sources to meet rising power demand and to cut consumption of expensive crude oil as its own reserves dwindle.
Iran: Minister urges reducing gas use
Iran's caretaker oil minister has called for preventing excess gas consumption as the country braces up for the bitter winter season."A 10-percent drop in gas consumption equals the budget allotted to build twin south Pars gas projects," said Gholam Hossein Nozari at the opening ceremony of the Ghadir petrochemical complex in Asalouyeh, Bushehr province.
Berkeley to finance solar arrays for homeowners
Here’s the game-changing aspect of Berkeley’s proposed Sustainable Energy Financing District: When you sell your home the solar array and the tax surcharge stays with the property, passing on to the new owner. In other words, there’s little risk that you’ll lose money by going solar. And given that a solar array generally boosts your property value — in California, at least — you’ll likely to come out ahead. (When Green Wombat’s Fortune magazine colleague, Michael Copeland, installed solar on his new Berkeley home, the appraised value immediately jumped nearly $13,000.)
Solar energy boom may help world's poorest
A surge in investment in solar power is bringing down costs of the alternative energy source, but affordability problems still dog hopes for the 1.6 billion people worldwide without electricity.
Toyota looks to next-generation hybrids
Since he was a teenager, Takeshi Uchiyamada's dream was to make a car. But as he entered his 50s as a Toyota engineer, he had all but given up hope he would ever head a project to develop a model.In 1994, he finally got his dream. Little did he know that the car he was about to design -- the Prius -- would revolutionize the global auto industry.
OPEC Production Increase Fails to Halt Rise in Crude Oil Prices
OPEC's decision to increase oil production, which took effect officially today, is failing to stop surging oil prices because there is no real supply shortage in the market, the group's ministers said.
Syria raises gasoline prices by 20 percent
Syria raised gasoline prices on Thursday by 20 percent, a state-run newspaper said, as the Arab state faced a decrease in oil production while oil rose to a record above US$96 a barrel on world markets.
Taiwan refiners to raise fuel prices over 3 pct
Taiwan's two refiners, CPC Corp, Taiwan and Formosa Petrochemical Corp, said on Thursday they would lift domestic fuel prices by more than 3 percent, resisting pressure to moderate hikes.
Canadian Natural reins in drilling program
Canadian Natural Resources Ltd. , the country's No. 2 energy producer, plans to cut drilling of natural gas wells in Alberta by at least 30 per cent and as much as 50 per cent in 2008 and beyond because of higher royalties that will be charged by the province starting in 2009.However, the cut is far less than the company had previously threatened.
Conoco to seek arbitration on Venezuela on Nov. 2
ConocoPhillips expects to file a request for international arbitration on Nov. 2 over compensation for oil operations seized by Venezuela, the U.S. oil company said in its quarterly report filed with regulators on Thursday.
Yemen's Offshore Fields May Triple Its Oil Reserves, Bahah Says
Yemen, the smallest oil producer in the Persian Gulf, could triple its hydrocarbons reserves by developing its offshore oil fields with help from international companies, the country's oil minister said."We have 10 billion barrels of oil in place based on the areas currently in production," Khaled Bahah said today in an interview in Dubai. "Studies made a decade ago in the Red Sea areas suggested 22 billion barrels of hydrocarbons in place."
Forests losing the ability to absorb man-made carbon
The sprawling forests of the northern hemisphere which extend from China and Siberia to Canada and Alaska are in danger of becoming a gigantic source of carbon dioxide rather than being a major "sink" that helps to offset man-made emissions of the greenhouse gas.
American Airlines hikes fares, cites fuel prices
American Airlines said Thursday it raised U.S. round-trip fares by $20, the biggest in a series of hikes carriers have pushed through in recent weeks as oil prices have surged.American, the nation's biggest carrier, said it raised ticket prices on flights within the continental U.S. by $10 one-way in an attempt to recover some of the costs associated with the rising price of crude oil and jet fuel.
To battle global warming, restore mass transit funding
The San Mateo County Transit District, which operates the SamTrans bus and paratransit services and is a partner in Caltrain, has struggled with budget deficits for the past several years, as have transit agencies throughout the state. We saw the spillover funds as an opportunity for local transit districts to get help balancing budgets and supporting new avenues for improving and increasing transit ridership.Instead, the governor and the legislative leadership, faced with their own budgetary crisis, allocated $1.3 billion of the spillover funds to other critical state programs, leaving transit agencies with a fraction of the money they expected.
The Cassandras who thought sky-high oil prices would derail the world economy and stock markets have been confounded. Share prices are back on a strong rising trend, at least for the time being, while global growth is predicted to be an encouraging 4.8% next year, according to the International Monetary Fund (IMF) – not as high as previously expected but close to a record rate (the IMF’s slight downward revision to its previous forecasts was due to problems in the American housing market and the global credit crunch rather than because of any oil price-driven slowdown).
Crude Rises to Above $96 on U.S. Supply Drop, Dollar
"The magnet of $100 is still strong," said Rob Laughlin, a senior broker at MF Global Ltd. in London. "Prices are soaring after the data showed another decent crude stock draw, while with the weak dollar OPEC members are downplaying the need for more supplies."Crude oil for December delivery gained as much as $1.71, or 1.8 percent, to $96.24 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since trading began in 1983. It traded at $95.67 at 11:13 a.m. London time.
What is driving oil prices so high?
Oil prices have surged to record highs above $96 a barrel.Prices have more than quadrupled since 2002 and are currently 40% higher than at the start of the year.
What factors are causing this unremitting increase and what are the likely consequences for consumers and the global economy?
Mexico sees smaller oil windfall in 2007
Mexico expects a much smaller budget windfall from foreign oil sales this year, due to lower production levels and disruption to exports from bad weather, a Finance Ministry official said on Wednesday....State-owned oil monopoly Pemex reported a 5.9 percent year-on-year drop in oil output in the third quarter, due largely to declining yields at its Cantarell oil field, and exports have been hit this year by a series of storms in the Gulf of Mexico.
Bolivian Senate okeys more diesel fuel imports from Venezuela
The Bolivian Senate approved an amendment to an energy agreement that will allow to import more diesel oil from Venezuela in view of fuel shortage in Bolivia, according to an official news release issued Wednesday.
Venezuela’s Gas Prices Remain Low, but the Political Costs May Be Rising
hanks to a decades-old subsidy that has proven devilishly complex to undo, gasoline in Venezuela costs about 7 cents a gallon compared with an average $2.86 a gallon in the United States.
UK fear of winter energy crisis is bad news for Russia
The UK’s energy infrastructure is literally creaking at the seams. Top this off with problems importing gas from mainland Europe because of a lack of pipelines to cross the sea, and you can see why energy costs way more in the UK than it does elsewhere in Europe.What does this mean for Russia, you ask? Simple - it means that energy - or, rather, Britain’s lack of energy - is going to be high in the public consciousness. And where do the public think their energy comes from? Yep, you guessed it - Russia.
On January 2007 the average price for a barrel of oil was just above 50$ whilst it reached almost 90$ in mid-October, an impressive 70% increase without a major catastrophe or war in between. Already the international investment houses, such as Merrill Lynch and Citigroup, predict the average price to reach well above 90 USD and certainly do not assume for a radical change in the current day upward trend.Moreover, according to Matthew Simons, the President of the investment bank Simmons & Co, prices might triple (Reaching above 200$!), if certain events take place in parallel. For instance a Turkish invasion in the Kurdish-dominated Northern Iraq, a war in Iran and widespread terrorist attacks by the global Jihad networks; might bring the economy to a phenomenal recession.
The necessity of protecting the natural world
Humans already use most of the land on the planet. In many places in the world the competition is between the land-poor and the land-rich. This is a political problem which needs to be solved without further trashing the natural environment. Some systems are more equitable than others and the Anglo-Celtic system used in most English speaking countries is worse than most. We humans have to share the land we already have more equally with each-other. If we insist on growing our population then the competition for land will be increasingly severe. We have already taken enough from other creatures and need to give some (a lot) back. Land for wildlife is not a luxury. The perception that it doesn't 'do' anything needs scientific countering with a thermodynamic explanation. That explanation is that Life is the only force that can reorder spent energy.
Hike in gasoline taxes will do what they did in 1980s, generate an energy crisis
In the 1980s, Congress passed a windfall profits tax on U.S. energy companies. We saw domestic production decline, gasoline prices rise and our dependence on foreign fuel imports grow worse every year. There’s absolutely no reason to think that higher taxes today would have any different outcome.
Interior Raises Royalty Rate for New Gulf Leases
The Interior Department said this week that it is boosting the royalty rate for new oil and gas leases in the Gulf of Mexico, the second increase in less than a year.
Court ruling could save oil firms billions
A federal judge in Louisiana has thrown potentially tens of billions of dollars in federal offshore oil and gas royalties into question, siding with a Houston firm in a dispute over how much authority federal regulators have to assess royalty payments.
Senate Floor Next Stop for Law of the Sea
The Senate Foreign Relations Committee voted 17-4 this week to approve the U.N. Convention on the Law of the Sea.The action clears the way for a first-ever Senate floor vote on the 25-year-old treaty, which has been ratified by more than 150 countries.
...Many Venezuelans consider the subsidy a birthright even though it bypasses the poor, who rely on relatively expensive and often dangerous public transportation. Economists estimate that it costs the government of President Hugo Chávez more than $9 billion a year.
Sea swallows Sydney icons in new Green ads
The ads will be rolled out across Sydney’s street furniture this week including telephone boxes and are complemented by a You Tube ad and online advertisements on major news websites. The dramatic street ads show the Sydney Opera House and Luna Park engulfed by rising sea levels and urge people not to ignore the threat of climate change.
Americans suffer when major oil companies put taxpayer money to unintended uses
For the mere act of blending at least one part diesel to 1,000 parts biodiesel, a blender can receive a government tax credit of $1 per gallon of biodiesel produced. At least some blenders have figured out that the law is written in such a manner that they can import biodiesel from South America (receiving producers credit from countries like Argentina), add a little diesel in the U.S. (receiving the $1/gallon blender credit), and sell the biodiesel in Europe (receiving additional subsidy in Europe).
Power from pond scum (audio)
The National Renewable Energy Laboratory is going to restart its research into algae as a replacement for oil and gas. In fact, the lab is going to team up with Chevron for the project. Michael Montgomery reports.
The humble hatchback makes a comeback
One reason behind the recent surge in enthusiasm for hatches is the rising popularity of small cars in general. Tom Libby, senior director of industry analysis at Power Information Network in Westlake Village, Calif., says that sales of small cars have been driven by the rising price of gasoline. Thus, up goes the hatch market as well. “Hatchback sales are up about 20 percent in the last two years,” Libby says.
Total chief warns on oil output
The world’s capacity to produce oil will fall well short of official forecasts, the chief executive of Total warned on WednesdayIn an unusually stark prediction for the head of one of the world’s biggest oil companies, Christophe de Margerie, CEO of the French group, said it would be difficult to reach even 100m barrels a day.
The International Energy Agency, the rich countries’ watchdog, in its “business as usual” projections, has said oil supply will reach 116m barrels a day by 2030, up from about 85m b/d today. The US government has a similar forecast of 118m b/d in 2030, including a relatively small contribution from biofuels.
Mr de Margerie, however, said while forecasts could always change, “100m barrels [per day] . . . is now in my view an optimistic case”.
He added: “It is not my view: it is the industry view, or the view of those who like to speak clearly, honestly, and not . . . just try to please people.”
The conference's first session saw a brief discussion of peak oil, the idea that we're closing in on a peak in terms of liquid fossil fuels that can be produced on a ready basis. The idea we may be near peak was considered a subject for "kooks" not so long ago, but it's being taken more seriously today, says Thomas Homer-Dixon, one of the panel's participants.
China Unexpectedly Raises Fuel Prices as Oil Surges
China unexpectedly increased fuel prices by as much as 10 percent in an "urgent step" to help the nation's oil refiners cover surging costs as crude touched records above $96 a barrel.To "guarantee domestic refined oil supply and promote energy conservation," gasoline, diesel and jet fuel prices will rise 500 yuan ($67) a metric ton starting today, the National Development and Reform Commission said late yesterday. China Petroleum & Chemical Corp., Asia's largest refiner, surged in Hong Kong and Shanghai trading.
Oil's records headed for gas pump
"In early November, consumers will spend $100 million a day more (on gasoline) than at the beginning of October — and right before holiday shopping season," he says. "Not a welcome development at all for retailers or consumers."Americans appear to be cutting back, using less fuel five of the past six weeks than they did a year earlier, according to U.S. Energy Information Administration data.
Motorists burned 0.6% less gasoline overall the past six weeks than a year ago.
UK energy savings 'miscalculated'
Energy savings in UK households could be up to 30% lower than previously thought, jeopardising efforts to cut the nation's carbon dioxide emissions.The UK Energy Research Centre (UKERC) blamed the miscalculation on "rebound effects" from energy-saving measures.
As people cut their bills by using more efficient devices, they tend to spend the extra money buying additional goods that cancel out some of the savings.
The Peak Oil Crisis: After The Peak?
Among the recent insights into what is about to happen is the likelihood that the major oil-importing counties, especially the United States, will have to contend with “peak exports” as well as oil depletion. This means that no matter what the rate world oil production declines — 4, 5, 6 or more percent a year — the importing countries will have to contend with a rate of decline far worse due to the inability to find oil available for import.The implication here is that we are going to have rapidly falling oil and gas imports no matter what happens to world oil production. Indeed there is evidence that world oil exports are already falling and that the importers are starting to live off of their stockpiles — a situation that will not last for long.
IEA says oil prices will stay 'very high,' threatening global growth
The rapidly growing appetite for fossil fuels in China and India is likely to help keep oil prices high for the foreseeable future - threatening a global economic slowdown, a top energy expert said Wednesday.The unusually stark warning by Fatih Birol, chief economist of the International Energy Agency, about the impact of Asia's emerging giants comes as the agency prepares to issue its influential annual report next week, which will focus on China and India.
OPEC to Halt Yearlong Oil Cuts But Markets Want More
Starting Thursday, the Organization of Petroleum Exporting Countries will officially ditch a yearlong policy of cutting production, giving world markets more crude to ease record-high oil prices.At two meetings at the end of 2006 and after a 25% drop in U.S. oil prices, OPEC scrambled to reduce its production by 1.7 million barrels a day, or 2%, of global demand to reduce inventories and pull crude prices above OPEC's unofficial target at the time of $60 a barrel.
This strategy has worked well for OPEC: Global oil inventories have dwindled to normal levels and crude prices have stayed above $60 a barrel the past seven months, delivering OPEC a flood of oil revenues.
Last week, our intrepid correspondent hit the Association for the Study of Peak Oil (ASPO) convention in Houston…and he reports that, unsurprisingly, the news was pretty bleak.
Now, I'm no peak oil doomer (by the way, when you're talking with peak oil types, be sure to use the word "doomer" frequently -- they love it!), but it seems to me this is a slightly pinched perspective on the oil problem. Transportation represents 69% of our oil use; light vehicles are 61% of that; thus, what all these folks are discussing, personal vehicles, are about 40% of overall U.S. oil consumption.
Higher Oil Prices Blamed on Peaking Production (with video)
As oil prices reach record levels, industry observers ponder a future of increased demand and a possible peak in production. A European group announced last week that world production peaked last year and will decrease steadily in the years ahead, even as demand continues to grow.
Exxon Mobil Earnings Fall With Gasoline Profits
Exxon Mobil Corp. said on Thursday its third-quarter earnings declined 10 percent, missing expectations on sharply dropping profits from the production of gasoline and lower natural gas prices.
Angola sees oil output near 2 mln bpd by end 2008
Angola expects to produce about two million barrels of oil per day by the end of 2008, compared to the estimated 1.65 million bpd it now produces, a senior official with the state-run Sonangol oil firm said on Thursday.
Nigeria wants small firms to bid for oil rights
Nigeria wants to favour smaller independents in future auctions for oil drilling rights rather than major companies like Royal Dutch Shell and ExxonMobil, Nigeria's sector regulator said on Thursday.The comments came after Western multinationals boycotted three auctions since 2005 because of toughening terms, concerns over the fairness of the process and uncertain exploration prospects in Africa's top oil producer.
At some point before 2050, satellites collecting solar power and beaming it back to Earth will become a primary energy source, streaming terawatts of electricity continuously from space. That's if you believe a recent report from the Pentagon's National Security Space Office, which says confidently that we will see "a basic proof-of-concept within 4-6 years and a substantial power demonstration as early as 2017-2020".
Emirates airline executive rubbishes Gore's climate film
A top executive of Dubai-based carrier Emirates on Thursday rubbished Nobel Peace Prize winner Al Gore's Oscar-winning documentary on climate change, saying he did not believe the film's scientific theory on global warming."Don't talk to me about global warming... I just do not buy it whatsoever," Maurice Flanagan, Emirates executive vice chairman, said at a regional aviation conference in Singapore.
Religious leaders act on climate change
A coalition of religious leaders urged Congress on Wednesday to ensure that the poor and most vulnerable are protected from the effects of climate change.The appeals comes as lawmakers in the coming months plan to consider legislation that would combat global warming.
Fires spew tons of global warming gas
In one week, Southern California's wildfires spewed the same amount of carbon dioxide — the primary global warming gas — as the state's power plants and vehicles did, scientists figure.A new study by two Colorado researchers shows that U.S. wildfires pump a significant amount of the greenhouse gas into the air each year, more than the state of Pennsylvania does. It raises questions about how useful it is to plant trees to offset rising carbon dioxide emissions and soothe environmental consciences.
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When you cannot solve the whole problem, solve parts.
German tariff buy backs, or “Solar Lifeboats”. German energy industry was de-monopolized, anyone generating solar electricity can be a power company, selling electricity to the grid at 20% over the cost to buy electricity. They now generate 14% of their power from solar and created 100,000 solar industry jobs.
Economic lifeboats.
To the people in lifeboats, the Titanic's sinking was just a terrifying inconvenience.
I am new here so please forgive the total ignorance. I can see that Peak Oil will result in higher prices but haven't we seen a massive increase since the 1970s for instance without great economic upheavals? What would be different in future?
Availability
Even at its current price, oil is still a bit cheaper than it was at its height in the 1970s, once you account for inflation. We're only at the beginning of the peak-induced run-up in oil prices. Just be patient. In the next 4-8 months you'll start to see major disruptions because of both the price and availability of oil.
Let's get rid of this now.
Inflation is theft and over 80% of us have
not kept up.
The reason for inflation in the first place.
So people like the DoD and the Top 10%
can use "inflation adjusted".
For the rest, it's no accident that 1974 were
the "Bottom 80% "s best years.
Arkansaw of Samuel L Clemens
Don't forget slacks, checks and big collars..Imagine if it was 'The Rockford files' forever....heaven
What happened in the 1970's at the end was the finical markets started to create a worldwide system of oil distribution. The system would created the petro-state, nations that are exporters of oil would be supplied with vitally everything they need. Monetary Inflation was ordered to be under control by the Reagan and in the 1980's and Saudi Arabia started dumping oil on the market - in part some speculate to kill the burgeoning alternative energy movement fostered by Carter but then halted on a governmental level by Reagan.
The upshot is even as as oil increased in price over the years after the 1970's it was under the level of inflation. In the 1980's and 90's the western economy made a transition from heavy industry to information and implemented MPG demands upon cars and enforced the 55 mph speed limit. This heaped curb demand somewhat. In the 80's and 90's within world wide financial markets hard goods such as commodities went out of vogue (oil included).
Now the world wide oil market is simply tapped out. They will never be able to pull out of the ground any more oil then they do now no matter what extraction technology we have to use, in fact we are now seeing declines that will not stop in our lifetimes. What that means to the world economy is, in part what we endlessly debate.
Welcome, Stephan...the vast difference is that we'll see a "fight for a decreasing supply".
That is, as the amount of Oil we can get goes down (it will never actually run out to zero, but it'll get so close we humans won't be able to tell the difference) then the problem becomes"who gets the supply?"
If certain business in the US have their way, Bubba The Big Boned "pickup" driver is owed all the Oil he can buy so he can continue his excessive consumption, because the entire US economy is now so dependant on excess consumption of everything to keep said US economy going. This allocation of resources to Big Bubba is over and above everyone else's trivial requests for Oil to supply unimportant things like fuel for farm machinery. This is especially the case for requests from "other" countries and the "awful foreigners" should realise that the US is far more important than they are and should be grateful for the crumbs they might get and if they keep complaining, welllll (etc). There's plenty in the US who question this alleged logic, as the US' own farmers are also last on the list, it seems.
The farmers are having the last laugh as they change their primary crop from wheat (for food) to corn (for ethanol fuel), and so everyone's food is now more expensive. Wheat prices have rises 120% in this calendar year (2007) alone, thanks to this very trend.
Now, this is what they call "free market rationing" - it's rationing based on price. Whomever can pay for the higher price will get the fuel. If you can't pay (say, like a farmer) then you won't get anything.
So the difference between what happened in the 1970's is that:
#1. That was caused by politics; this is caused by physics (geology) - politicians can be intimidated; physics cannot.
#2. The 1970's DID see great economic upheavals. The "old" pre-1980's central idea was a technocracy based on engineering, which had been the way things had been since the 1790's (yes, you read that correctly...think of when the industrial revolution started). The engineers did not take much notice of the geophysicists when they said ( as M King Hubbard said) that the US - then the world's largest Oil producer - would reach a peak of Oil production in 1970, which it did. When the engineers assumptions (of an ever-cheapening energy supply) ran squarely into the reality of the dead opposite, they came to a shuddering halt. The Economists had been given a huge gain in social articulateness, thanks to the Second World War and the way that engineering had been given it's orders by Economics in the period: war production meant shortages meant economising in the building of everything.
This "new" paradigm of suddenly increasing energy prices, well, heck, the engineers were flummoxed - no-one had told them to expect any such thing! So, given that putting the economists in charge had worked so well in WW 2 , HEY, let's try it now.
The 1970's were the last decade that engineers held any sway, and that was little more than a losing battle, too. By the time that Margaret Thatcher was elected, and then Ronny Ray Gun, the economists had won. This was to be a technocracy, not an engineer lead one, but one where the Economists were in charge. Now, the economy could be predicted, shaped, changed...MOULDED, made into something that would never depend (yada yada yada)...and everyone would be the beneficiary of it. If they could pay. The near Civil War that Thatchernomics unleashed on Britain was only solved by the North Sea Oil which Maggot Hatcher dumped on the world market at US$10.40 per barrel at a time when the Free market was trading Oil at US$40 per barrel. So much for the idea of governments never interfering in the free market. As the North Sea Oil flowed, Oil prices plummeted, thus driving down fuel prices, thus driving down social discontent. Hey, this economist lead technocracy MUST be good, right? So, the economists ideas of greed being good must also be OK, right?
Welll...greed will Drive Oil prices up, (and thus fuel prices) and when it does watch the Social Discontent go through the roof. By the time Margaret Thatcher was finished with Britain, it had been made over so it was so much less self-sufficient in everything, especially money. It was so much more dependant on the largess of complete strangers (the traders in the Free Market) in a way that will come back to haunt it, rather badly.
What North Sea Oil did for Britain, Cantarell did for Mexico and North America in general: an economic BOOM. As the confused post-Empire economically battered Britain of the 1970's became the Cool Britannia of the 1990's, so too Mexico went from complete basket case to merely being economically backward. Watch the reversal of these trends in the next few years.
This (the North Sea Oil and Cantarell Oil) is why the Economic mess of the 1970's became the spin-doctored upbeat 1980's, the frenetic 1990's and rising energy prices is why the years of this decade are so confused, bewildered and dissatisfied.
Cool Britannia no more. North Sea Oil is in massive decline. Cantarell is well on it's way to becoming CAN'T tarell. The two Oil Fields which allowed the Economic Rationalists and free-marketeers to crow about how they had defeated the forces of anti-globalisation and so forth...well, those two Oil fields are gonners. Expect the Economists to be shortly dethroned and somebody else put in their place.
The mechanism of 1970's chaos is back - rising energy prices and those in charge insisting they shouldn't - and is going to cause lots of problems, shortly.
I, myself, do not believe that engineering will be allowed back in charge. For one thing, the powers that be like to make a Quick Buck and engineering is a slow, steady income. Probably ever-more-outlandish schemes will be tried such as the Elf-Aquitaine scandal, where (according to Carl Sagan):
"High French officials, including a former president of France, arranged for millions of dollars to be invested in a scam (the Elf-Aquitaine scandal) to find new petroleum reserves from the air.
http://godslasteraar.org/assets/ebooks/Sagan_Carl_Does_truth_matter_-_Sc... (PDF WARNING...reference about 1/3rd of the way down the page)
The scandal developed into a full-blown political scandal after the various corruption of the ELF company was revealed.
Get used to Elf-Aquitaines in every part of the world, shortly. You have been warned.
They [Germany] now generate 14% of their power from solar
Link please.
Alan
http://www.boston.com/news/world/europe/articles/2007/07/30/cloudy_germa...
This is the closest stat I Could find that was relevant.
Looks like currently Germany gets about 13% of its power from renewables, not just solar.
Another quote from the article:
Makes you wonder why Germany has one of the highest electricity tarrifs in Europe. I pity the German customers if their government presses ahead both with liberalization and its stated goals for electricity from renewables.
That is absolutely true. However, this in turn is creating an incentive for Europe to build solar farms in North Africa, connected to the European grid by undersea lines. Labor-intensive solar thermal replacing oil in North Africa as the main source of political power could be the first good thing that has happened there since whitey started pointing cannon at them. Oil just doesn't produce enough jobs within 3rd World societies... and even LevinK doesn't want them Moslems all building their own nuclear reactors.
I don't think it matters what I want or I don't want.
It is my opinion that energy exporting countries will be the first to turn to nuclear and press ahead with it - their domestic resources are way too precious to burn at home when their whole economy depends on exporting them. Russia already got the idea and commenced a program for doubling its nuclear generation within 20 years.
IMO the only thing we could do about this is try to control the process not to foster proliferation - and as much as I dislike the Bush administration the GNEP initiative is the best idea that has come around for doing it.
As to whether energy exporting countries will turn to solar instead I am a little bit sceptical. Even if solar costs come down there will need to be some kind of energy storage to make it work on very large scale... Building pumped hydro in the desert is hardly an option and other options like hydrogen or batteries are either inefficient or too costly even for the Arab sheiks.
If you were in lethal need of a lifeboat, I doubt you would complain that it cost too much to have had the foresight to build one.
It may be that if there is a great die off, people with foresight, might be survive.
And it may be that "the luck of the draw" with a zillion things nobody considered correctly is the final arbiter of what is future "good taste."
Did you see Saved by the Sun on NOVA? Germany is on schedule to have 30% of it's electricity produced by renewables by 2020.
Here's the segment on Germany - http://www.youtube.com/watch?v=wKFZyu1mjQE
Alan asked a fairly concrete question - how much is produced by solar in Germany now.
Your answer is that Germany is "on schedule" (yeah) to produce 30% of its electricity from renewables in 2020.
Given that the term "renewables" lumps together hydro, biomass, wind, waste, solar etc. you can hardly call this an answer to his question, can you?
Didn't you say you weren't going to post here any more?
Lots of people say that.
Yes but I like the quality of information you provide too much.
German energy industry was de-monopolized
So 4 major suppliers, who own the entire grid, are "de-monopolized"?
Now it's called oligopoly ;)
There are indeed four major suppliers. Two of them are owned by large state-ownned companies from France (EDF) and Sweden (Vattenfall). But the two big german suppliers RWE and e.on have as well a lot of utilities abroad.
There are as well around 4 suppliers which entirely supply renewable electricity. For example, I pay my bills to a supplier which is a co-op owned by its customers and interested people, where nobody can get a majority of. After 5 years - they promise - every new customer's got a newly built capacity (so far this coop has 65,000 customers).
---
The german in-feed law is the most effective law to support the renewable energy industry and its technological development. I prefer paying a higher price for electricity. Using (which means paying for) renewable elctricity means not paying money to big suppliers and normally not paying natural gas bills to Russia or somewhere else.
And: It is necessary to have this industry now.
matthias, berlin
De-monopolized does not mean no big companies. It means there are niches where small companies are allowed to sell their abilities.
The US communications industry and the Internet has major players but it does not exclude a YouTube from forming.
Innovation is likely to come from the fringe.
What we are currently doing, has not solved the problem. So it is likely something we are not doing will have to be tried. Maybe a whole bunch of things need to be tried.
Monopolies do not allow economic Darwinism.
Solar is peaking power. Solar should sell for a lot more than 20% over baseline power.
Oops, that's 20% of retail power, not wholesale power. So I guess it's not so bad.
Remember, the rich first class passengers didn't die, but they did lose all their luggage.
Beginning of a sea change?
As posted above by Leanan, the Voice of America (can't get more official than that) covered the ASPO-USA conference in Houston - with video even.
Fatih Birol, chief economist of the IEA, is ringing alarm bells, saying that in writing the coming annual IEA report, he had experienced "an earthquake" in his thinking. Also see David Strahan's interview with Birol, in which Birol said the IEA is "reviewing" the oil estimates from the USGS.
Sadad al-Huseini, former head of exploration and production at Saudi Aramco, said that oil reserves were inflated by 300 billion barrels of speculative resources.
And I see today that oil has jumped above $96/barrel.
Bart
Energy Bulletin
Yes, but...
http://news.yahoo.com/s/afp/20071101/sc_afp/environmentclimateaviationemiratesgorefilm_071101070424;_ylt=AiSupOMZ774xOeJizHauiM9rAlMA
He must have some credentials other than an administrative position with some rich guys? He must know something we don't??
Yeah, he knows how much of his annual salary is at risk if people stop taking far-away holidays in Dubai to reduce their carbon footprints.
--
Jaymax (cornucomer-doomopian)
Deleted
Bart,
It has been two years to the day since Matt Simmons and Jim Kunstler participated in a joint presentation in Dallas that I proposed and helped organize. Following is an EB link to a transcript of an interview with Matt and Jim on the local NPR station, prior to their joint appearance that night:
http://www.energybulletin.net/19686.html
Insofar as I know, this is the only joint appearance to date by Matt and Jim, and it's interesting to go back over their comments and realize how prescient their predictions were. For starters, oil prices are up about 60% since 11/1/05.
I suppose that I should not have been surprised at the media response, but I was. Other than the local NPR station and the SMU student newspaper the local media coverage was zero. Boone Pickens somehow found time in his schedule to appear, but all of the Dallas/Fort Worth MSM establishment was mysteriously unavailable. (BTW, I showed Boone some of my early "Hubbert Linearization" work, and his assistant was on the phone with me the next morning at 8:00 A.M., asking me to come by and brief his staff on the method).
The basic--and obvious--problem for the MSM is that they are highly dependent on selling advertising to the auto, housing and finance sectors. However, with all of the Peak Oil/Peak Export bombshells dropping around us, I would think that it is going to be extremely difficult for the MSM to continue to largely ignore the issue.
Meanwhile, the Yergin/Lynch and ExxonMobil factions continue, in effect, to encourage Americans to proceed with buying the SUV to commute to and from their suburban mortgages. What is interesting about their position is that while the near term Peak Oil arguments can be refuted with a simple number--we will either exceed the global average crude + condensate production number in 2005, or we won't--the Yergin/Lynch faction can argue that Saudi Arabia is still "voluntarily" cutting production, even when they are down to 5 mbpd.
I suspect that the hard core Cornucopians, especially those financially dependent on an infinite earth model, are never going to acknowledge that we live in a finite world. The challenge we face is that people are conditioned to believe, and would prefer to believe, the hard core Cornucopians.
FYI, Michael Lynch is presenting a program in Houston this month, sponsored by the API, on coping with the coming crash in oil prices, down to the $40 range.
BTW, I think that you guys run the best Peak Oil related informational site on the web.
"(BTW, I showed Boone some of my early "Hubbert Linearization" work, and his assistant was on the phone with me the next morning at 8:00 A.M., asking me to come by and brief his staff on the method)."
I hope you billed them at a suitably inflated rate.
I also hope, as others have recently said, that you continue to grace these pages. It becomes clearer by the day that your's is the most important contribution to the credibility of The Oil Drum.
Echo ,ELM is the extra-shocker that will speed up the little shit when it eventually will be hitting the fan..
A lot of people seem to think, or wanted to suggest, that I have been using the HL method to support preexisting conclusions, and that is simply not the case. Virtually all of my conclusions and work have been based on the HL method, principally on Khebab's work.
I thought that Deffeyes made a good quantitative case for a near term peak in his second book, in which he outlined what Stuart called Hubbert Linearization (HL). I thought that Simmons made a good case that Saudi Arabia was more depleted than most people think, but what convinced me about a near term Saudi peak was the HL plot. I applied the method to Texas, the North Sea--and later with Khebab's work, to the Lower 48, Russia, etc. The post-1970 and post-1984 Lower 48 and Russian case histories were very compelling (Do a Google Search for In Defense of Hubbert Linearization).
I think that a lot of the resistance to the HL method comes from people whose own preexisting views on Peak Oil are challenged by the HL method. Consider conventional reserve estimates. Even major oil companies operating their own fields, e.g. Shell, have been forced to write down their proven reserve estimates.
The HL method allows us to take two knowns, or at least the two numbers that we have the most confidence in, production and cumulative to date, to derive a mathematical estimate of URR, without having to rely on the smoke and mirrors estimates that we get from a lot of oil exporting countries.
My ELP recommendations (see link below) and the ELM grew directly out of my conclusions based on the HL work. BTW, the talking heads on CNBC were just talking about being shocked, shocked, about falling world oil production. They said that is was "reviving" the whole Peak Oil debate.
I can't be any clearer than I have been. If you are on the discretionary side of the economy (especially auto/housing/finance), I think that you are going to just get crushed.
... the discretionary side of the economy (especially auto/housing/finance)
That is the most frightening thing I've seen in print today. Yes, I know its coming, but ... yikes.
look at the crushing financial stocks took today. the unwinding in finance appeared to defy gravity and common sense, but the rapidity of the fall has been breathtaking.
http://www.energybulletin.net/28400.html
I had forgotten this little tidbit, from early April of this year. Riyadh Bank, in Saudi Arabia, warned in a research report that Saudi production would average only 8.44 mbpd for 2007. The EIA puts average production for 2007 at 8.6 mbpd to date.
And it hasn't. Now, lets talk about that 'Dog Leg Up' in KSA, and your failure to take it into account with your HL, shall we?
Party Guy, you are my best new friend.
This very topic was the subject of some lengthy discussions between yours truly, Robert, Khebab, Stuart and PG.
Robert,
Would you care to enlighten my good buddy about "my" failure to take it (the infamous Dog Leg Up) into account with "my" HL?
Robert says he's gone for the day. Would you please post a summary? (You don't mind blowing your whole day here, do you?)
Texas and the Lower 48 as a Model for Saudi Arabia and the World (2006)
http://www.energybulletin.net/16459.html
Okey dokey.
Let’s start with the HL plot that Khebab did in the captioned paper (I had zero input into constructing the Saudi HL plot):
http://static.flickr.com/52/145149302_924470eaa7_o.png
The points that Khebab used to estimate Saudi URR (C+C) are color coded in green. Now, watch out, here is the question that I tried strenuously, and I do mean strenuously to get Robert to answer:
What portion of the post-1990 Saudi data points did Khebab discount in the above Saudi HL plot? (Hint: the first green dot is 1991).
Who wouda thunk that such an innocuous question would have caused so much commotion?
Now, to clarify, I have discussed the “Dogleg Up,” in considerable detail, but all of this came after the captioned article, and my comments were primarily in response to Robert’s critique of the HL method and in response to allegations that the “Dogleg Up” meant that Saudi Arabia has vast reserves. In fact, the 2006 and 2007 Saudi data points are falling back along the slope of the line that Khebab showed in the above HL plot.
BTW, my first (HL based) warning of an imminent decline in Saudi production was in January, 2006, in my first post on Net Exports.
<theory type=conspiracy>
Well obviously the Saudi's are aware of the impact TOD is having -- even if unacknowledged -- in the consciousness of the oil markets, and their recent voluntary production reductions have been carefully set to match Khebab's plotted line, thereby ensuring that the price of oil continues to escalate through the quiet, unacknowledged spread of the peak-oil-meme, while maximizing retained Saudi reserves.
</theory>
No? Oh well...
--
Jaymax (cornucomer-doomopian)
FYI--I should add that Khebab has started adding 95% probability boundaries to the most likely HL based predicted production curves--which he used for the ASPO-USA presentation.
And if 2005 does turn out to be final Saudi peak, I have acknowledged that there was an element of luck involved. However, none of this was relevant to "the question."
The only thing that needs to be said 'again' is that KSAs URR has increased by over 25% since 2002, and that its HL is completely unstable and thus, can not accurately predict their URR or when they will peak. Nuff said.
I'm a little confused here. First, I was accused of ignoring the "Dogleg Up." Now, I am being accused of using the "Dogleg Up?"
In any case, the data points from 1991 to 2007, inclusive, are pretty stable, with the exception of the 2003, 2004 and 2005 points. But compared to the Texas plot, it's vastly more stable even with the 2003, 2004 and 2005 points. But again, regarding the first accusation, nothing was discounted after 1990.
Regarding the "Can't predict the URR or peak" assertions, I have an idea. Let's observe some data, form a hypothesis, make a prediction, and see how it turns out. Come to think of it, I think that is what we did. So far, the 2006 and 2007 data points are falling along the predicted slope.
Deleted as image http://afterpeakoil.com/car385_226848a.jpg not displayed
The HL model is an excellent model, and makes sense to anyone familiar with models (professional sports bettors, for example). I think the problem with the HL resistors is they don't understand models and concepts like probability. If you can't make a statement that is already 100% verifiably accurate, they don't want to make it. But you can't live that way in a world where you have to plan for the future. You have to make decisions based on probabilities, even though you can never know for sure what's going to come.
What I have admired about your advice is that you have stressed probabilities. You've come up with advice that won't hurt if the peak is delayed, but will prepare people for the greater-than-even probability that a crunch in usable actual real-world supply is imminent.
The HL model is an excellent model, and makes sense to anyone familiar with models (professional sports bettors, for example). I think the problem with the HL resistors is they don't understand models and concepts like probability.
At the risk of starting another fight, I can assure you that I understand both models and probabilities quite well. I have built and run complex process models throughout my career. It doesn't matter how your model looks, or how fancy it is. If you can't feed it data and have it consistently spit out a known answer - in other words if it is not validated - you don't really have a model. You have a dowsing rod. And I have fed actual data into the HL and showed it giving the wrong answers. Many times. And I am not alone in that assessment. Khebab and Stuart both have extensive modeling experience, and their thoughts on the HL model are pretty much the same as mine. If you don't believe me, e-mail them and ask for their assessment of the HL. Do you really think that we all don't understand models? For crying out loud, for the last 3 years my previous job title was Models Engineer. Guess what I did?
As far as probabilities, let me ask you a question. If someone wanted to bet me at the beginning of the season that the Cowboys would win the Superbowl - and gave me even money - is it a good bet if I take it? I would say yes, even if I lost the bet, because the odds were stacked in my favor. Or do you consider a lost bet by definition a bad bet, regardless of the initially estimated probabilities?
On the topic of probabilities, I have a brain teaser. Not topical to the above, but fun to discuss. Let's say you have 3 shells, and a ball is under one of them. In other words, shells A, B, and C. I pick A. You show me C, and the ball isn't there. Do my odds improve if I now switch to B? Please elaborate just a bit on your answer.
First of all, it doesn't matter that you're a Models Engineer. What exactly do you model? I'm certain it's not oil prices.
Of course you can find specific wells where production hasn't followed the HL model, just as you can find specific football games where the outcome isn't what a profitable sports-betting model would predict.
Individual outcomes don't make or break a model. No successful model in the history of successful models will "consistently spit out a known answer"--instead, it will be right a little more often than it's wrong.
So, the existence of wrong answers for particular wells, even many times, does not make the HL model a bad model.
Regarding your proposed Superbowl wager: You are saying you would take an even-money wager in a circumstance where your opponent has considerably less than a 50% chance of winning, so obviously that would be a good bet.
Regarding your bet on oil prices hitting $100, I would not have made a bet that oil would get this high this fast either. But I would also definitely not have made an even-money bet that prices wouldn't hit $100--that is why I said you made a terrible bet. There were way too many risk factors, from the probability of Ghawar decline to the possibility of hurricanes and political instability to the probability of dollar declines, for you to make an even money bet on that. You may still win the bet, but it was a bad bet regardless.
No successful model in the history of successful models will "consistently spit out a known answer"--instead, it will be right a little more often than it's wrong.
You know, that is proof positive that you don't have the first clue about modeling. If you are gambling, where slightly better than 50% is good enough, that's one thing. If you are modeling processes - for instance if you are modeling to design a piece of equipment - you damn sure better have a model that is better than 51% accurate. If it can't demonstrate that it can take the input and spit out a known answer more than 90% of the time, you have crap. I can't accept a 20% risk that my $40 million piece of equipment won't work. Otherwise, you are just gambling, and you don't know whether you were right or wrong until you have made an expensive decision.
Regarding your proposed Superbowl wager: You are saying you would take an even-money wager in a circumstance where your chance of winning is considerably less than 50%????? Robert, you had better never make a wager again.
Don't be silly. I bet against the Cowboys, even though they are my favorite team. Tell me whether it was a good bet. $1,000 on the Cowboys to win the Superbowl. Even money. I bet against.
But I would also definitely not have made an even-money bet that prices wouldn't hit $100--that is why I said you made a terrible bet.
Which shows that you don't know anything about probability. The market put the odds of $100 oil at 1 in 17. I got even money. The guy who bet me even money made a terrible bet. Why? Because had he put that money into commodities, he would be up over 10 times his money.
I tell you what--you elaborate on your shell game first, as you did with your Superbowl bet, so I can come back and make fun of you.
Since you misread the bet, the joke's on you. But I gave you all the information you need on the shell game. It is a probability question. Can you answer it? I got it right, with the explanation, the first time I saw it. Can you?
I model for a living, Robert. I'm a professional gambler. I've made millions at it, while you're still stuck in a crummy middle-class job.
Your error when it comes to HL is that HL isn't about modeling to design a piece of equipment for a specific well. That is not what Westexas is using it for. He's using it to predict future overall production and prices. You do not have to be right over 90% of the time on individual wells for HL to work as a model for overall production and prices. I'll think about exactly what percentage of the time you would have to be right to win at bets on production and prices, but it's nowhere near 90%.
Regarding the Superbowl wager, when I re-read your post, I realized you had bet against the Cowboys, and edited my post to reflect that this would be a good bet.
The market was wrong if it put the odds of $100 oil by the end of 2007 at 1 in 17. The market's error in setting the odds doesn't make your own bet right. It just makes both you and the market wrong.
I model for a living, Robert. I'm a professional gambler. I've made millions at it, while you're still stuck in a crummy middle-class job.
LOL! I wouldn't otherwise mention it (a couple of others on the board do know, because they helped me weigh the decision), and I have never, ever alluded to my income on this board, but I recently turned down a near 7-figure job in London. I have had several other offers in that range. I guess I just like my crummy middle-class job too much. I am hoping they bump me above minimum wage soon, so maybe some day I can be like you.
That is not what Westexas is using it for. He's using it to predict future overall production and prices.
That's wrong. Way wrong. It has been used to make very definitive statements.
The market was wrong if it put the odds of $100 oil by the end of 2007 at 1 in 17.
Who is to say? If the Cowboys win the Superbowl, then maybe they should have been 1 to 1 odds. That's what you don't seem to get. Odds in hindsight are pretty meaningless. I can always rationalize that my odds of getting struck by lightning really were higher than 1 in a million - because I got struck by lightning.
I wish you would take a crack at the shell game. And tell us your strategy for selling your positions.
I'm glad you have good job opportunities. I've always identified with your love for your family and your desire to protect them from the difficulties coming.
If HL has been misused, then this discussion will help clarify how best to extract value from it. I didn't really think about it until now, but I think we need a paper on HL as a gambling type of model. I think that's what's been bothering me with the discussions to date on the topic.
That's the point. There actually are ways to say. You don't have to wait until the game is over--you can actually calculate the probability and that calculation has value. I think we can calculate the probability that HL is right and the degree of certainty on that probability. And that can help us make good bets and good decisions on what to do.
If you're serious about taking positions in commodities, I do have some advice. You can find honest and complete information on legitimate trading strategies (including info very close to my strategy for selling my positions) in a book by Curtis Faith titled Way of the Turtle.
Of course you can find specific wells where production hasn't followed the HL model
You know, the more you talk, the more you expose. What is modeled with the HL are countries. States. The world. And I have attempted to validate it many times. Without success. That's how I know it doesn't work. I am not guessing. I have plugged in the numbers. There are some cases that it worked OK with. But there are many others that it blew up on. So, if you use the HL to call a Saudi peak, how do you know whether it is correct, or whether that's going to be a case in which it blew up? You don't.
I guess we just have a very different view of modeling. The kind of modeling I do is used to make decisions on how large a distillation column should be, or whether a line size is going to be large enough. Or how we need to run the crude unit for the next two weeks. Those models must have a high degree of accuracy. It's not like gambling, where 51% can make you rich. 51% can kill people in my business.
Exactly. HL models countries, states, the world. Not pieces of equipment for specific wells.
It's done a great job with U.S. production.
I agree with you that it's done a poor job with some particular wells. For example, I'm sure everyone agrees that the expected HL curve has been thrown off in cases where geology was unusual, or where technology was used to suck more oil out more quickly.
But that doesn't really affect its overall value as a model all that much because the specific factors that can skew results and HL's predictive power are well-enough known.
Again, statements like "I have attempted to validate it many times. Without success. That's how I know it doesn't work" are absolutely meaningless in terms of HL's value as a model. You would have to show that it fails too often to have predictive value.
We know enough about Saudi geology and production methods to be able to have a good idea about how predictive HL will be. We can't know exactly what's happening in Saudi Arabia, but we also don't have to accept HL in blind faith in the Saudi case.
I wish I had read this paragraph first, because I would have been kinder in tone throughout this discussion. You are right, this is the source of our disagreement. I understand that the modeling you do requires a much greater degree of accuracy. What I'm saying is that we don't need that degree of accuracy to make good-enough predictions on things like overall production and oil prices. HL works pretty well as a gambling model in this situation we're all in where there's no way to know exactly what's coming.
I am slipping into bad habits again. My 5-year old is crying and asking why I won't play with him. I hate to tell him that it's because I am arguing with Moe_Gamble. My 11-year old needs help with his homework. And the wife "wants to talk." So, I am banishing myself for a while.
I may do a TWIP next week, and I have a post ready to go if I lose the bet (or at year end if I escape and win it). I have had most of it written since summer, when it looked like I was going to easily cruise to victory. Basically just background stuff; explaining why the bet was a no-brainer for me. Other than that, I am shutting down the computer and taking care of priorities.
Did you mean for this to be a trick question? Normally, the problem would state that after you picked A, now I say I am going to show you another shell that doesn't have the ball under it, and then I do so. You didn't say that bit, you just said "You show me C, and the ball [doesn't happen to be] there". Which is not quite the same - and affects the odds and whether switching is a good idea.
Anyway, I think you're absolutely right about the HL as a predictor - it's not. I think people who think it is a predictor don't understand selection bias, and they don't understand how to separate knowledge gained in hindsight vs knowledge gained from a predictive model. Just to add some balance to all the "HL detractors don't understand blah blah blah" posts.
The question is exactly as stated, but I will try to be more clear.
Let's say you have 3 shells, and a ball is under one of them. In other words, shells A, B, and C. I pick A, but we don't turn it over. So, I still don't know whether the ball is under A.
You turn over C, and the ball isn't there. So, it is either under A or B. Are my odds better if I now switch and choose B instead of A?
You have clarified that which I did not question, and you failed to clarify that which I did question. It's like I'm having a discussion on TOD or something!
Well I've just woken up and am without coffee so shouldn't chime in, but 'greenish' has no major credibility to lose.
The relative odds on A vs. B do not change.
Interestingly, I think the absolute odds would vary depending on the state of knowledge of the person performing the experiment for you. If that person had no knowledge of which shell the pea was under, and picked up one at random which was shown to be empty, then the odds for the remaining two are 50-50. However, if the experimenter knew the location of the pea, then turning over the empty remaining one does not change the situation, so the odds of having chosen correctly are still 1/3 for each covered shell.
No. This is the famous Monty Hall Problem. You should switch.
Ah, very good. That's why I don't open my Etrade account before coffee.
No. This is the famous Monty Hall Problem. You should switch.
I first saw it in a Marilyn vos Savant column in Parade Magazine when I was in college. My immediate reaction was, "It doesn't matter; probability is still 1 out of 3." But then I started thinking about the fact that you would not have been shown the location of the prize, so the conditions change. You then have to think about the new conditions and the initial conditions. I wrote in with the correct answer (and reasoning).
Look at a sampling of the people who got in wrong. You have lots of Ph.D. mathematicians swearing that she is mathematically illiterate:
http://www.marilynvossavant.com/articles/gameshow.html
I finally simulated it to verify my answer. It just goes to show how things aren't always what they seem.
Or that probability just isn't something that people intuitively understand. Otherwise, who would buy lottery tickets? ;-)
They not only don't understand probability, they get it terribly wrong.
There's an entire research field of neuroeconomics in which scientists essentially present people with various gambling problems. People never make the right bet for the probabilities. Usually it's because they are too risk-averse.
The 100 door with 98 doors opened analogy makes a lot more sense. Now I understood why people thought that way. Increasing your odds from 1 in 100 to 1 in 2 is very understandable in reasoning why you should switch.
I would have thought that your chances if you switch would be 99 in 100, your chance of picking the correct door first off is 1% the chance of him not opening the correct door are 100%.
I was initially convinced that the correct answer is always to switch, but now I believe that this is false. What convinced me that switching was the correct answer was the analogy when the problem was extended to 100 doors, however, this is an incorrect analogy. In this version Monty is providing you with a LOT more information - he is showing you 98 doors to your 1.
Also, the premise was that Monty is not opening doors at random, but rather he knows where the prize is and is opening doors with this knowledge, and therefore one can take advantage of this information to improve one's odds. However, this is also false. As played, one picks a door. Regardless of whether one's choice is correct, Monty ALWAYS opens another door, and this door is ALWAYS empty. Clearly one of the other two doors is always empty, and therefore Monty has not given you ANY new information. If you act on it, you act at random. Note that if Monty had shown you both other doors (which is close to the situation where he shows you 98 doors), then you would have additional information.
What happened when Monty showed you the empty door is that the problem has been re-framed. There were only ever APPARENTLY 3 doors - in reality there were only 2, because Monty was ALWAYS going to eliminate one. So your original odds were 1/2, and still are after Monty shows you the empty door.
Lesson: don't be too quick to jump on the bandwagon of the "truth", as told to you by the voice of authority. Think for yourself.
Robert, gracious of you to admit your own initial confusion on encountering this. I love stuff that exposes flaws in the way I perceive! Delightful!
I will note that it was not entirely clear to me from the wording that the person running the experiment had perfect knowledge. Had the action of uncovering one been random, it would have made no sense to switch.
Does anyone disagree with this? I still haven't had any coffee...
You are exactly right and that is what I tried to get Robert to clarify, to no avail.
No, the wording does not matter in this case. Whether the experimenter intended to reveal an empty shell or not doesn't matter; in this scenario an empty shell IS revealed and you still have the new information that P(C)=0.
If the question had been, "you pick A, and the experimenter will reveal B or C at random, will you switch?" it's a different question, because it includes the scenario where the experimenter may reveal the pea, so you can lose before getting to choose again. In any scenario where you have the possibility to choose again, switching is a correct solution.
In fact, a general answer for this type of problem is to re-choose randomly among the remaining possibilities.
Paradoxically, if you randomly re-choose your original answer your odds have improved!
You're right. I was considering the scenario where randomly the pea is revealed, except we've already gone past that possibility here. oops.
What I don't get about this problem is why they always make the explanation so damn complex that you end up more confused.
Here's my take:
You always get two chances to pick a door(or shell), the first door is A,B,C (3 options) the second choice is always stick with your first pick, or change (2 options) - 3x2= 6 possible routes through the game.
The prize is at position A.
So, if you always change, you get a 2/6ths chance of winning the game, if you always stick, you get only a 1/6th chance of winning. QED: always changing doubles your 'luck'
Counter-intuitive, but simple enough really?
[edit: of course, at the point of making the second pick, it becomes 1/3 chance of winning if you stick, and 2/3 if you change - but I think having the permutations listed makes that more comprehensible]
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Jaymax (cornucomer-doomopian)
Indeed, brute force is the best way to reveal probabilities! Except, you should replace 2/6 with 2/3, and 1/6 with 1/3.
That's what I call an understandable explanation! Thx
Actually, if we assume Monty (or your invisible omniscient hand) is an anti-social doomer intent on teaching me a lesson in the futility of gambling for easy money, he could alter the game by agreeing only to show me the empty shell in the cases where I have already selected the correct shell.
I think this is the way the game was originally played - sometimes he gives you a choice, sometimes he doesn't. If he knew I was savvy about the probabilities and really wanted to eff me over, he would only give me a choice in cases where I selected the correct door, knowing I would switch given the odds. From my perspective, by switching I have taken advantage of the newly created 2/3 odds, but in reality he has reduced my odds to zero. In this way he could thwart me every time.
That's why plans never survive first contact, the odds are constantly changing as things develop.
It took me a while to get my head around this. Now I think I understand exactly how it works, but at some level I have to admit it still doesn't make sense to me. What exactly makes such a seemingly simple thing so counter-intuitive? The odds are constantly changing, and it seems we cannot figure out what is relevant and what is not.
Can you imagine that, in a games show, the contestant actually asked the host, "Do YOU know where the car/ball/pea is? Because my plan depends on that knowledge." I can't.
There's no need to ask. Obviously, the host knows where it is. Otherwise, he might reveal what's behind Curtain #2, to find it's the big prize that's supposed to be secret until after the choice is made. That never happens.
It sort of depends on how the hypothetical problem is described. If it is made obvious to the contestant that the first door to be opened doesn't reveal the great prize, then yeah. I visualized a games show where one of the doors was opened, with the host feigning ignorance of what was behind it. In that situation the contestant could conceivably think the host really didn't know, even though on reflection that would seem implausible.
I think it would reduce the drama of the situation if the first door to be opened didn't at least have a chance of revealing the prize. What's the point of saying that, "now I shall open this door to find there's no prize behind it"?
This I think, is where the most confusion comes in - and why so many people argued against the conclusion. If the host didn't know which door the prize lay behind, and did have a chance of revealing it, then there is no reason to change you initial choice if you do happen to still be in the game. If the host does know and always opens a door that has no proze behind it then your odds change, since there is no chance of being kicked out at that stage, and the other door becomes the winning one 2/3 of the time.
"You can never solve a problem on the level on which it was created."
Albert Einstein
"What exactly makes such a seemingly simple thing so counter-intuitive?"
A good question - there's a suggestion that being utterly rational must actually be counter productive in terms of human genetic survival.
An excellent, if mind-bending book on this kind of mind£&(% and how we're all way less rational than we like to think (which is probably fundamentally why it's so annoying that something we can see is simple, somehow isn't), is Irrationality: The Enemy Within (at Amazon)
There are useful analogies (I think) to why it's so hard for people to get their heads around peak-oil - the strong, natural, and yet utterly irrational resistance people have to a very simple concept.
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Jaymax (cornucomer-doomopian)
Here is the easiest way to see it for me: If your initial choice was correct, then by switching you must of course lose. If your initial choice was incorrect, then by switching you must win. Because your initial choice was most likely incorrect, it is better to switch.
I nominate this the best response. I was beating around the bush with this concept but it didn't gel until just now.
The reason to switch is that your first guess was likely a wrong one.
I find the explanations from those other two people severely lacking. They're so verbose and obfuscated I wonder if they've just deluded themselves into thinking they know why it works that way.
Again, that depends on whether you "happen" to still be in the game, or if you are always still in thegame after that first door is revealed.
"You can never solve a problem on the level on which it was created."
Albert Einstein
The Monty Hall problem is incorrectly specified, an importent part of the problem is that Monty Hall knows which doors have a goat behind them rather than a prize. Robert doesn't state whether I know there's a ball under cup C or not before I show it to him. This changes the probabilities.
Richard C
Yup. Speek tried to get that point clarified, too. You're right, this is a key point.
Riddle answer:
Yes.
Your odds improve if you change guesses because now your odds are 1 out of 2 instead of 1 out of 3.
Your odds of being correct are now 2/3 if you switch versus 1/3 if you stick. You can tell this because the probabilities must sum to 1.
It was only when I realised this that I felt I had understood the problem.
Fascinating question! I couldn't see it until I read comments by others. Perhaps that's what it takes get 7 figure salary offers....
FWIW, I think Robert stated the problem perfectly well on both occasions.
"On the topic of probabilities, I have a brain teaser. Not topical to the above, but fun to discuss. Let's say you have 3 shells, and a ball is under one of them. In other words, shells A, B, and C. I pick A. You show me C, and the ball isn't there. Do my odds improve if I now switch to B? Please elaborate just a bit on your answer."
It's important whether I know in advance of showing you C that it doesn't have a ball under it. If so, the switch to B improves my odds, if not, there is no change. Since I know the problem, I'll not elaborate and spoil anyone's fun.
Richard C
At the point at which the person gets the choice of switching or staying, it doesn't matter at all if "Monty Hall" knew where the ball was before he turned one over.
The "special case" where MH reveals the ball location is eliminated either by a) MH purposely avoiding that choice or b) MH accidentally revealing it, in which case the game has no further meaning. If the player has a choice (thus the game still makes sense), the relative odds of staying vs. changing are not affected by the knowledge of MH.
Hey, how can anyone doubt this guy. After all he has been dead on with every prediction he has made in the last three years. Errr,.... or was that dead wrong with every prediction he has ever made?
I am reminded of the story of the Wall Street trader in 1929. Previously he had always been wrong with every trade he had made. His buddies turned to always taking the opposit position of him and doing very well in doing so. So one day in October he decided to sell everything. His buddies promptly bought with every dollar they had.
Then of course the market crashed. He kept all his cash while his buddies lost all theirs. They asked him "what happened?" "Well", he said, "I realized that every time I made a trade it was wrong. So this time when I picked up the phone to buy, I thought of that, and sold instead."
One of these days Michael Lynch will decide that he has always been wrong with every prediction he has made. He will open his mouth to say ....again, "The bottom is about to drop out of oil prices and the oil production is about to skyrocket." Then he will realize he has always been wrong and say the exact opposite..
Yeah right! Fat chance of that ever happening. ;-)
Ron Patterson
What about your prediction record? Where can I find that?
You are a real smart as aren't you Echelon. However you can find my prediction record right here on this list. I have been predicting ever since I joined this list, almost two years ago, that we are at peak right now and that May of 2005 was very likely the peak month. WestTexas, myself and a few others had the courage to call the peak almost two years ago when everyone else was hedging their bets.
That is my prediction record and anyone who has been a member of this list for that long can verify that this has been my position all along.
But let me quote Sldulin who wrote this of you Echelon on October 25th.
But you haven't learned your lession have you Echelon? You still lead off with abuse and you still come off looking like an ass.
Ron Patterson
Typical of people with horrible prediction records. They obfuscate. I didn't ask for your peak oil prediction.
In fact I only used two sentences to make it easy for you. Apparently your reading skills are as bad as your prediction and spelling abilities.
Here's my prediction. You won't answer this post. Or you will have one of these jerks like Engineer-Poet answer for you.
Let me try again.
Where is your prediction record? I just want to look it up. I'm assuming since it is so good, it would be in a table format with notes from all the important people testifying as to how good it is.
westexas has nothing to do with your prediction record. Nor do I.
And for that, nor do other people who think I'm an ass.
Your prediction record stands by itself.
Where is it?
Westexas, oil service stocks have had sharp declines recently, basically because they have warned that business will be slow through the next quarter. Gould of Schlumberger said that part of the reason was delays in projects in Nigeria, and also in Siberia (due to winter weather). Another problem was the slowdown in drilling for natural gas in North America due to the drop in natural gas prices. But beyond that what was surprising is that higher prices are just not triggering much new drilling. Places like Angola are going to come up with a few drops more, that's about it.
I find it hard to believe that industry people could take Michael Lynch seriously at this point, and not only because of his gross incompetence as a price-predictor so far, so his role has to be conventional think tank propaganda. Even Skrebowski's Megaprojects production predictions have fallen short every single year due to project delays (due to immense drilling difficulties, which of course is exactly what Hubbert pointed to). And anyone with an ounce of sense should have realized some time ago that these problems would be continuing and contributing to further production delays, shortfalls and higher prices.
Today Rigzone announced that OPEC was removing all voluntary production cuts of the past two years effective today (Leanan's link is above), so that should soon put a stop to all the arguments about voluntary restrictions causing the production shortfalls and price increase. I think the extra production, to the extent it occurs, will be in grades of oil that we are currently not prepared to refine, so it won't make any difference. By the time we're prepared to refine it, we'll just be deeper in the hole.
It's true that de Margerie of Total and others say that countries are sitting on some of their best remaining resources right now (score one for Asebius and others who predicted hoarding), and of course even in the U.S. we are sitting on ANWR and the continental shelf.
But that production looks like it's going to be saved for the future, so it looks to me like we've hit the crunch.
In thinking through investments, I think e&p companies are going to be having a tough time (declining production, higher royalties, limited access to the best resources). With drilling on the decline, I think we may have seen peak real earnings for oil services companies as well. I think too many refineries are competing for declining amounts of the grades they can use. Eventually some of them will go out of business and raise the crack spread, but I don't like any of them except maybe those already prepared to handle heavy oil (on the Macro Man blog, someone mentioned "Greek high-complexity refiner MOH GA sporting div yield of 7% & EV/EBITDA of 9x").
I can't see anything to do but trade the commodity itself and adopt your lifestyle suggestions.
And in other news ...
The Texas Railroad Commission announced a 100 percent allowable for next month.
Today Rigzone announced that OPEC was removing all voluntary production cuts of the past two years effective today
What is the reference for that? I have been searching Rigzone for 10 minutes. All I can find reference to are stories about the 500,000 additional OPEC barrels that are supposed to be effect today. Removing all the cuts should be some story, but I haven't found it.
Leanan posted the link above in Drumbeat, but here it is again for your convenience: http://www.rigzone.com/news/article.asp?a_id=52294
You're right, it doesn't say they're restoring 1.7 million barrels a day today. It says they're adding 500,000 barrels per day (no evidence of that with tanker bookings, by the way) and that they may add another 500,000 a day at the Riyadh meeting. But OPEC is also pointing out that the addition of 500,000 barrels per day today isn't changing the price. I strongly suspect that's because it's a grade of oil that not enough refineries can use, which is why OPEC keeps blaming refinery capacity.
I saw that story, but it doesn't say they are removing all voluntary production cuts. That's why I thought you must be referring to something else. In fact, that story says:
(You edited while I was writing, but this was my response to your unedited post.)
Robert, I don't think they are producing the same grade of oil that they "voluntarily" cut, which is what is causing the problem with prices. That is why OPEC keeps saying it's a problem of lack of refinery capacity. OPEC is saying, correctly, that the extra 500k barrels per day that started today isn't making any difference in the price. And they're saying that another 500k barrels won't make any difference. The extra oil isn't usable right now.
And it's not that it's not needed--the demand is there. It's that it's the wrong grade for what we're able to refine.
I strongly suspect that's because it's a grade of oil that not enough refineries can use, which is why OPEC keeps blaming refinery capacity.
No. They are blaming refinery capacity and they point to crude inventories as evidence. Because crude inventories are normal to above normal in most places, after having been in record territory in the U.S. for quite some time, and gasoline stocks are low, they say "Clearly you can't process the crude quickly enough, so it wouldn't help if we produce more." (This gets into the whole debate about why I think their cuts were managed). They have a point, but the barrels that refiners are buying are now costing $90. And OPEC is very disingenous to suggest that putting more barrels on the market won't stem the price rise. That's ludicrous. If they have it, and can show the market they have it, that would cool things immediately. And that's a risk factor that I hope you feel comfortable with.
Regarding your risk factor comment: If they have it, and can show people they have it, I short oil and make money that way. It doesn't matter to a trader whether the price is going up or down, you make money both ways. You clearly do not understand commodity trading and risk factors, and you should not pretend you do.
Crude inventories at a five year average would be very tight in terms of the increase in consumption that's occurred during that time.
If it was really conventional refining capacity that was limited, and not a shortage of "conventional" oil (causing refineries to compete for limited supplies to keep in motion), crack spreads would be higher as they were last spring.
Also, the document on which you are relying to "prove" that inventories are at normal levels relies on data from August. Inventories have declined sharply since then.
If they have it, and can show people they have it, I short oil and make money that way. It doesn't matter to a trader whether the price is going up or down, you make money both ways. You clearly do not understand commodity trading and risk factors, and you should not pretend you do.
LOL! So, OPEC shows the world they have crude, and you suddenly find this out at the same time as the rest of the world, but you now short crude and make money? I hope you hear this news immediately, and can react before the rest of the entire world who has the same bright idea. Yeah, I think I understand that risk factor. OPEC is a wild card, and not predictable. They could at the drop of a hat cost you a load, and everyone else will be trying to react at the same time that you do.
But, I would like to see you go on the record. What is your target price for oil? If it rises, when do you sell? If it falls, how far do you let it drop? What's your plan? Share it with us, so we can see how well it works out.
Also, the document on which you are relying to "prove" that inventories are at normal levels relies on data from August. Inventories have declined sharply since then.
You are again talking out of your nether orifices. Look at yesterday's crude inventory report. You will see that the U.S. - the biggest customer of crude in the world - has inventories above normal as of last weekend. Again, inventories are down - from record high levels. And again, if you want to see what low inventories look like, look at gasoline inventories. The August report that you are talking about is from the OECD, and we don't have more recent data on overall OECD than that. Signs are that they have come down, but again, they have been in good shape. So talk about your financial acumen all you want, but the comments I have seen from you regarding actual oil and gas operations, inventories, etc. have been incredibly inaccurate. So you "should not pretend" that you know anything about them.
You don't have to predict the future to make money trading. That's not how it works. Winning commodity traders typically do not strive to sell at the top or buy at the bottom. You buy or sell because of various simple indicators that have proven predictive in back tests, not because you think you know the future.
Read Way of the Turtle, by Curtis Faith, if you want to understand the basis of trading decisions and how winning traders make money. There you will see that winning traders don't set target prices.
Of course I follow the crude inventory report. Inventories are at their lowest since October 2005. Inventories at Cushing haven't been so low since 2004. I think Westexas is right that using a concept like the 5-year average is inadequate for assessing supply. If refineries were well supplied, oil prices would be lower and refinery profits would be higher.
I realize that was the most recent OECD report you could get, but that does't mean its info isn't outdated.
Perhaps that is because 1.7 million barrels was never cut. The very first cuts took place in November of 2006. In October of 06 the OPEC 10 produced 27,500,000 barrels of oil per day. The new quotas, later removed, was based on August 2007 production. That month the OPEC 10 produced 26,730,000 barrels per day, Down 770,000 barrels per day from the month before the first cuts went into effect.
Of course the OPEC 10 had been in decline since its peak in September of 2005 and was down 840,000 bp/d from that point before any cuts were inituated. But of course all those cuts were because buyers could not be found for their oil. (Snicker, snicker!)
OPEC 10 peak production in September 05 was 28,340,000 bp/d C+C. Also all figures above are C+C.
Ron Patterson
Hello Jeffrey (aka westexas), Thanks for the background on the "early days" of peak oil, and for the compliment to Energy Bulletin. EB is very much a joint effort, with contributions from TOD people and others in the PO blogosphere. Leanan's Drum Beat is invaluable. Best of luck to you all.
Bart / Energy Bulletin
So the pentagon wants to put giant targetable microwave beaming satellites in space for energy production.
Suddenly, the rush towards that US missile protection shield makes alot more sense - it's got nothing to do with protection from Iranian missiles, it's to stop those darn Ruskies usin' 'em for practicin' their target shootin'.
On a side note, the item says they're safe, because the microwave beam is only 1/6th mid-day solar energy when it hits earth - so erm, what's the point exactly?
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Jaymax (cornucomer-doomopian)
Yup. Notice how they are lacking calculations for the extra heat added to the earths envelope.
But hey, why worry ? The movie about how beamed power is warming the earth won't hit for 200 or so years - right?
Presumably the power will be available 24hrs/day regardless of weather, justifying the low transmission rate. Still, it doesn't make a lot of sense to me that much effective power could be transmitted with those low energy densities. Wikipedia http://en.wikipedia.org/wiki/Solar_power_satellite has an article about this -- sounds pretty boosterish. Big problems with getting all that stuff into space -- but of course, we could manufacture it on the Moon and drag it to Earth orbit, and that would be cheaper. (?)
I like reading about this sort of stuff when its well written Scientific American articles. Seeing it discussed endlessly here is not nearly so pleasing. The dubious cornucopia of space based power collection depends on things we have not yet developed and which will never be developed due to above ground issues wrecking our economy first.
This isn't aimed at NeverLNG in particular, I just think that maybe its time to do an Olbermann style "World's Worst Energy Solutions" - we could have a separate Drum Beat for space based power collection, abiotic oil, cold fusion, perpetual motion machines in disguise, and ways to harness the baited breath of TAD as he frantically searches for the next energy horn of plenty.
SCT, have I ever promoted Abiotic Oil? Nope. Have I ever pumped Cold Fusion? Nope. Perpetual Motion? Nope. Do I think that there is huge potential in algea based biodiesel? Yes. Bussard Fusion have a shot? Yes. Cellulosic Biofuels? Yup. Cheap widely available solar power? Yes. Plug in Hybrids? Yup. Great electric rail transport? Yup. I believe these things realistically have a shot of being a part of our future. Just saying SCT, please do not misrepresent me. Best hope for honest representation of each others views.
I did not mean to imply that you were in favor of such foolishness, I was just noting that you are exothermic, at least on a small scale, and a portion of that energy could be captured for other uses.
NeverLNG -
I am quite familiar with the solar power satellite, having been with Arthur D. Little in the early 1970s when Peter Glaser was actively touting the concept and trying to get funding for further study.
No matter how light you make the satellite solar collector and no matter how much economy of scale you can achieve by mass-producing the lift rockets needed to put it into space, the inescapable fact of physics is that it takes one hulluva lot of energy to put a pound of payload into orbit. So regardless of what costs are involved, the energy payback period for such a system must be enormously long, such as to be prohibitive.
Let's face it, the only advantages of a solar power satellite is that it eliminates the need for storage, is not affected by weather, and collects more intense sunshine. In my humble opinion, it would be far better to expend resources on developing better PV collectors and solar energy storage systems here on earth.
Lookto me like NASA is searching for another mega mission as it becomes increasingly clear what a bust the space shuttle has been.
Yes, but how do you use THAT as a weapon, while simultaneously getting public supprt because your 'solving the problem of ever increasing energy bills'??
Honestly, if you were Russia, would you let the US put these things into space? After all, the game never ends / when your whole world depends / on the turn of a friendly space-borne "la"-"ser". [10 points] ( I'm so sad)
(oh, and the net heat input thing - good point Eric)
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Jaymax (cornucomer-doomopian)
No one?... Really?... Austin Powers?... The Spy Who Shagged Me?... the Alan Parsons Project?... Turn of a Friendly Card?... Dr Evil, big laser in space?... Air quotes?... No?... oh well
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Jaymax (cornucomer-doomopian)
(oh, and the net heat input thing - good point Eric)
That 'net heat' thing also applies to fusion. If we DID get fusion 'too cheap to meter' - some of that liberated heat energy should be applied to adjusting carbon levels in the air.
I think I was misread to seem to be in favor of this proposal! Quite the contrary. It makes no sense, and these posts have demonstrated the reasons why. I was just hoping to get a debunking thread going, since it was posted in the DrumBeat.
Clearly the only beneficiary of such a scheme would be the military and their contractors.
no, there's bigtime venture capital being raised for it. A potential large donor to one of my projects decided to throw her money into space-power satellites instead. D'oh!
Hey, I like space. I get along well with astronauts & scifi authors and back in college really enjoyed O'Neill's plans.
But receding horizons have receded well past this idea I'm afraid. That doesn't mean people won't get rich off pushing it though.
Ok so now we're in my area of expertise :-) The concepts you're talking about are theoretically possible if we developed massive launch infrastructure or a large production facility on the moon. The moon isn't nearly as easy as you make it out to be due to the potential lack of fuel supply and the orbital mechanics involved.
The big problem with either scenario is the lack of existing infrastructure and the political and economic factors. It takes time and money to build that infrastructure (either more facilities on earth, an orbital assembly facility, or a lunar production facility). It takes a LOT of time. I don't care about throwing dollars at it. You have to train people, build the stuff, and then begin production.
Could we do it? Yes. Will we? I highly doubt it. People won't fund it until the first price shocks hit and then it's already too late.
We could build a huge solar powered linear accelerator on the Nullarbor Plain and just launch stuff into a solar orbit and then let a smaller linear accelerator on the payload put it into earth orbit.
That would work, would not pollute the environment, and would be financially feasible.
And if I ever sell a patent and get really, really, rich, that's what I will do.
There is another way to do it. But I agree that it's probably too late to start over with an entirely new space transportation infrastructure.
The alternative is tether-based transportation. The idea of it is that an orbiting satellite can deploy long tethers of equal mass, one pointing towards the Earth and one away. The bottom of the down tether is moving slower than orbital velocity. The top of the up tether is moving faster than orbital velocity. So a spacecraft in a suborbital flight can catch the bottom of the down tether, climb all the way to the top of the up tether, and obtain a big speed boost. What I find fascinating is the balancing game of the physics, with the satellite losing altitude as vehicles went up the tether, and gaining altitude as payloads from outer space arrived, presumably manufactured on the Moon. There is very little energy expended if you set that part up properly.
If the satellite was in geosynchronous orbit, you could make the tethers so long that the bottom would touch the Earth's Equator. The math has already been done on this; we know how wide the tether and how strong the material would have to be in order to withstand the enormous tidal stresses and local weather.
Only recently the development of ways to manufacture fullerene fabrics, networks of carbon atoms, has made it possible to get serious about solving the strength issue. Since there's plenty of other uses for such materials, if we weren't facing a larger economic/ecological crisis there was a good chance that the materials for a space elevator would have been developed over time. Now I can't see how it could be done unless a large country with surplus wealth and a vast number of PhDs tackled it as a Manhattan Project. The US can't even build dikes or manage forests anymore, and the rest of the world wants the personal goodies they see on TV.
Another question from a newbie:
I have in-laws who farm in North Dakota. They're obviously sitting on the knife's edge when it comes to fuel supplies--particularly diesel fuel. I was discussing the problem with them last weekend and it occurred to us that we really had no idea how many fingers there were in the energy "pie."
The particular question was about the distribution system. There are obviously pipelines from the wellhead or the import terminals to the refinery and from the refineries to the regional supply terminals. Who owns those pipelines? Do the refiners own and control distribution once the product leaves the refinery? Is there generally a separate corporate entity that controls distribution in the pipeline?
I started looking at the pipeline network a while back and it is quite complex. Some are dedicated to a certain product, while others passes batches, perhaps with high viscosity "slugs" between them. The country is divided into five PADDs - Petroleum Administration Districts for Defense. The pipeline network is dendritic, rooted at refineries, and in no way respects the PADD boundaries.
I did not look at ownership but I suspect it is a blend given the merger and acquisition craze in this country. The natural gas transmission facilities are owned by many and various entities per this Wikipedia article. No similar resource exists for liquid transport.
http://en.wikipedia.org/wiki/List_of_North_American_natural_gas_pipelines
http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_m...
http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_m...
I guess they'll just have to satisfy their frustration with generalized anger at the "system." They're willing to accept the "peak oil" concept, but they're not happy with how the declining resource is allocated.
That may change. If things get really bad, farmers may get higher priority.
In the meantime, it sucks to be at the end of the pipeline, which is where the Dakotas are.
On the bright side, there's talk of building a new pipeline, for Canada's tar sands production. They won't be at the end of that pipeline.
During the '70s in Ontario Canada, farmers received heavily discounted gasoline. It was tinted with dye to prevent resale. In fact, my understanding is the farmer was not allowed to use it in the family car.
I don't know how well the program worked overall. As a kid, I saw the pretty gasoline several times and it wasn't being poured into tractors. My parents' farmer friends were God-fearing folks of the highest integrity. They lived and breathed a strict moral code that still gives me the willies, but somehow.....
They are still doing that here, with diesel. It's dyed red, and is supposed to be for farm use only. I don't think it's discounted, but it's not taxed. Or not taxed at the same rate.
Some do sell it to truckers on the sly, but they'll be in trouble if they get caught.
There was an article recently from the UK, where they found 1 out of 5 diesel cars was using dyed fuel that wasn't supposed to be used for personal vehicles. They are now checking people's tanks at parking lots and the like.
Absolutely shocking! {sarconol}
Time was when people wouldn't get caught with red diesel - they'd filter it through fuller's Earth first.
(I understand that the dye used keeps being changed, every time a new solvent for it is known)
AKH
And still in Ontario.
I get around 20 cents a litre off for my Tractors, equipment.
And, yes...it has occasionally found it's way into my VW.
In the UK we have Red Diesel, which is simply that - diesel sold to agriculture with red dye in, and zero-taxed. Use for non-ag purposes gets you hit with eyewatering fines or jail. The program appears to have worked well for a number of years, but then we have a very small number of people eligible for it as a % of the population, and losing their right to it would probably cost them the farm as they couldn't compete if they had to buy tariffed fuel.
In Iowa the red diesel goes into a large saddle tank in the back of the diesel truck and the regular stuff goes into the tank. Clever plumbing is occasionally employed which permits the tractor filler in the back to interface to the vehicle's fuel pump.
Wiki Fuel Dyes....
http://en.wikipedia.org/wiki/Fuel_dyes
Solvent green is people
RobertInTucson
I haven't escaped from reality. I have a daypass.
It won't have to get Really Bad(tm) before farmers get priority. Once people realize that we genuinely have an opponent in the form of our own consumption we will go on something of a war footing and the first step will be securing our food supply.
Well, in a reality based world this would be the case. Given that Bush lingers in the White House perhaps we'll have a broad nuclear attack on an innocent country in an effort to win their hearts and minds ...
What I can't figure out is why farmers in North Dakota don't simply invest in more fuel tanks?
Shortages are likely to be of relatively short duration.
The greater worry is price. i.e. If your friends are farming marginal land (low yield per acre), they are vulnerable to the rising costs of inputs with ag prices just not rising enough to offset them.
Source?
In a market economy shortages are rare and of short duration.
Market regulation can make them worse. And often things are helped by relaxing the regs. (As happened in North Dakota)
http://www.truckertotrucker.com/trucker/1/2007/07/North-Dakota-Allows-Tr...
Note: I'm no cheerleader of capitalism. These are just facts of life in a market economy. :-)
In a market economy shortages are rare and of short duration.
And where is this Market Economy of which you speak?
But of course! Shortages of oil will eventually stir the invisible hand of the market to put more oil in the ground. Of course some will say only God can do that. But those of us who believe in the invisible hand of the market realize that the market is God!
Ron Patterson
There was no shortage of food in the markets during the Irish Potato Famine. There were just millions of people without enough money to "demand" the food that was being exported to England.
And soon the Invisible Hand made these "potential consumers" invisible as well.
But there were no shortages in the markets of Dublin in the 1840s. For those with enough money.
Alan
Likewise, there was no shortage of food in India in the famines of the late 1800's; it was being exported to England. Do we see a pattern here?
Transport was somewhat more expensive in those days!
Can you please let me know the source of your assertion
This begs the question, if not via price, how do you allocate scarce resources? If at the beginning of winter, a population only has enough food for half to survive, who gets it? Those wise enough to have sufficient stores? Those with the most guns? Those who are related to the government bureaucrat? Or those with the most money? Clearly none have a good outcome, because 50% (or more) of the population perish. At least when price is used, high prices encourage the farmer to keep producing the next year. If the government is going to confiscate his crop and give it to their cronies, the farmer is not going to work as hard to produce as much as his land will yield. Same goes for oil. High prices will not mitigate peak oil, but they will prevent production from crashing as fast as it otherwise would. For example, if the government put a price cap of $25 on US produced oil, drilling would cease, and we would experience double digit decline rates within the year. High prices are certainly not painless, but the alternative is much worse. I'd rather have a little oil at high prices than no oil at a low price.
And if I'm in the 50% that you must regrettably sacrifice doing things the rational way, why should I not rationally pick up a gun and start spreading that sacrifice around? You can't preach a lack of social obligation to the poor and simultaneously tell the poor to die quietly out of a sense of duty.
What happened in Ireland was specifically the use of free-market ideology by Englishmen who wanted Ireland's "non-entrepreneurial" population exterminated to "modernize" the survivors. That's no different than the Final Solution in my eyes. I'm not inclined to die without taking a few Ubermensch with me, and screw saving the planet so my executioners can rule it forever.
S390 (Grown up S370?)
Future bumper sticker? (for bicyles?)
Eat The Rich
Here, Here! or is it Hear, Hear!
Its a good thing you are not in the US of A - such talk could be considered the talk of a domestic terrorist.
When the Irish were dying by the hundreds of thousands, the British were taxing food imports and doubling the cost to protect the value of farm real estate in Britain from cheap American exports like maize, rice, wheat, oats, rye, and barley.
Without the 'corn laws', there would have been no famine because the farmers would have been displaced by sheep and there would have been plenty of food to go around to the ones that were left.
Which is what happened to Ireland when the 'corn laws' were repealed. Which is why there are so many Irish in America.
A great example of shortages being rare and of short duration was the shortages during the Hurricane Rita evacuation from Houston. Fuel was available within days, and widely available within a week. When free markets are allowed to ration limited supplies by price, shortages do not occur because the limited supplies go to those willing to pay the most. Shortages occur when prices are not raised enough to initiate demand destruction. During Rita, station owners were reluctant to raise prices because they were scared of being charged with price gouging. Thus, they opted to keep prices below the new equilibrium, and they quickly ran out of fuel. In the future, even as supplies diminish to fractions of the current supply, there will be a price level at which supply will equal demand, and shortages will be averted. That price will be very high, and many will not be able to afford it, but technically, there would not be a shortage. That doesn't mean that there won't be problems, there will be, it just means that true shortages in properly functioning markets are rare. Of course the odds of us having a properly functioning market in the future seem quite low, given the nature of our democracy, but it's an interesting thought experiment nonetheless.
Just to clarify, I am not saying the market will solve everything, clearly they won't. All I am saying is that the pain caused by peak oil induced energy constraints are going to be there with or without free markets. I just happen to think that free markets will lead to a wiser and more productive use of the remaining supplies than will some government price controls or rationing scheme. That's not to say every drop will be used wisely and productively, just that on average that will be the case.
I just happen to think that free markets will lead to a wiser and more productive use of the remaining supplies than will some government price controls or rationing scheme
I will point out that a free market exported food from a famine area to an area with plenty of food.
Alan
And more recently free markets have made food cheap and widely available. In a majority of the world, starvation is almost unheard of. Food is now so cheap foolish GOVERNMENT policies encourage burning it as a liquid fuel.
My knowledge of historical famines is nonexistant but I suspect that 1840 is not very comparable to the world of today. How do you know that it was exported to an area with "plenty of food"? Did the exported food rot on the shelves at its destination, or did it sustain the English population that would have starved in place of the Irish? If this was the case, the problem was a food shortage period, not so much the free markets allocation of the limited supplies.
Even if this was not the case, could/would have the government done a better job? I am not arguing that free markets will arrive at an optimum solution, only that they will in general arrive at a better solution than the alternative methods of resource allocation. You have already seen first hand in New Orleans how good the government is at allocating resources.
I get a bit restless with the concept that Free markets will always be better then the Gov - under all conditions and all times for all circumstances.
Sounds like religion. No offense.
I wouldn't go quite that far, clearly governments have strengths and markets are not infallible. If faith in free markets sounds like religion to you, what is the alternative? How is faith in government solutions any different?
An enlightened agnosticism when it comes to it.
Faith needs to be put in a place where it can connect one with the sacred. Political and economic systems are not the place to play out spiritual longings and beliefs. Use one system to move to the next phase the discard it, parallel to Buddhism’s “Expedient Means” Handle the tool but understand you must - at some point put it down.
I don’t think you feel government can do anything at all. A class of non-corruptible civil servants is vital for civilized life. Most free marketers do not believe this and will never believe in that simple fact.
I worked both sides of the coin in my life as a low level flunky for the City of Los Angeles Cultural Affairs department but most of my working life was and currently is for private industry.
Do I think hauling six computers (three donated) with a city issued station wagon to a kids art center in Canoga Park (20 miles out) was worth it? In capitalistic terms nope - but I was glad our tax dollars were not going to the Blackwater civil serpents.
It takes a lot of money to have emergency services trained, and with equipment in good working order and trained personnel at the ready to provide services at an equal level for most of the city - I do not want to live in a world where the poor die in fire and riots while the wealthy enjoy the best equipment and protection nor do I want to live in a world where the poor suffer needlessly for the want of a few tax dollars.
It meant people who acted white (unlike the Irish) got fatter than they otherwise would have. Inequality of income means that the luxuries of one man are worth more than the survival of another. Don't give me that crap about the cost of labor adjusting downward to solve the problem - the Irish were forced off their land to another market, but many simply died waiting for the market to adjust.
The world of 1840 was very comparable to the corporate whorehouse of today in one respect - ideology. Is there any crime of the rich that you will not make an excuse for? Ireland's population fell from 8 million to 2 million under market policies. Do you have no shame about this Holocaust, this genocide?
P.S.- Green Revolution = petrochemical-based fertilizers. Food won't be cheap for long.
Super390
You nailed it. I am endorsing genocide. Seriously though if you are rejecting capitalism, surely you have a better system in mind. Please share it with us. And once again, I am not saying that free markets can save the world from the inevitable misery to come. There is no happy ending, only slightly less miserable ones.
Alternative - Government rationing in an emergency. The USA did this during WW II and still managed to win the war.
I do believe that this approach will significantly reduce misery vs. a free market. Ireland could have stopped all food exports and saved, perhaps, an extra quarter million from starvation. And used state funds to subsidize imports, saving many more.
BTW, the price signals to oil companies are currently saturated. $350/barrel will bring little if any additional oil to market above what $250/barrel oil will bring.
Best Hopes,
Alan
Best hopes indeed!! This alternative would require competent leadership, which we seem to have a true shortage of. The 2008 candidates could hardly be worse than Bush, but with a few exceptions, they seem to be a bunch of gutless hacks. I won't be holding my breath.
This alternative would require competent leadership, which we seem to have a true shortage of.
and
You nailed it. I am endorsing genocide.
I therefore ask:
What should be the punishment for poor leadership?
.
I don't really understand all this talk about a free market, If I use soldiers to force you off your land and then plant crops to sell to my "friends". if I change the rules to say you owe me money for merely existing, how can that be remotely described as a "Free market". What happened in Ireland sounds more like a policy of deliberate genocide than a market failure. If that kind of behaviour can be ascribed to the "free market" then everything can and the only thing that exists is a "free market" so there's no use complaining about it.
It's hard to pick a place to start.
Start with the Irish famine of 1846. This was from a potato blight, transferred from mainland Europe. There was not a question of market economics solving it, most affected were barely above subsistence. It actually began in the food riots of the 1790's. These riots were the result of the increasing cost of wheat, and resulted in a complete diet shift by the Irish to potato. This tuber enabled the Irih population to explode, from 2 to 10 million if I recall correctly. As it was all based on a single variety of potato, it was an accident waiting to happen. Within 18 months, 2 seasons, nearly every potato in the land, planted or in storage, was reduced to pulp.
Alan is correct, the government continued to export grain. It had only loathing for the plight of the Irish. Newspapers of the day wrote of the Irish as near savages who ate this tuber, this excrement buried in the ground. And not their diet, of a grain on a stalk that further rose up into bread.
The speed that it occurred is frightening today, and that a government could be so demonic to their subjects.
The problem is that you're not taking into account human nature. People become scared and start to hoard. You end up with runaway prices as a relative few with large financial resources suck up everything that becomes available. This does happen in Hurricane zones (I've seen it first hand) but it's usually a temporary effect because the supply is still there, it's distribution that's interrupted. In the case of peak oil, we're talking about the supply failing.
It's largely a function of the rate of decline. If the demand is constant and supply output falls gradually, you could wean a society off of oil. If demand rises quickly and/or supply drops quickly you end up with major shocks because the system can't adapt fast enough to absorb the changes. Everything I've read on this site and others tend to indicate to me that the various factors are working in feedback loops to generate the latter scenario. (I'm a systems engineer so I tend to see things as high level interactions)
You are probably right in the former case or even long term in the latter if our market driven systems survive those shocks (big if there). The short term in the latter case is a whole lot uglier.
The people with money after a crisis are not necessarily the people with money before a crisis. It is possible that most of the (elderly, symbol analysist, trustifarian) wealthy will not survive a peak oil famine.
The market WILL ultimately resolve the shortage, if supply doesn't increase (which I agree it won'), demand WILL be reduced, one way or another.
--
Jaymax (cornucomer-doomopian)
No, the market WILL NOT (necessarily) resolve the problem. The market will reduce the demand to meet the new and very high price but what it will not do is resolve the shortage. Just as is pointed out above, the market did not resolve the food shortage during the Irish Potato Famine.
Come on! Just because we can, with the price, make demand equal supply, that does not resolve the shortage. You should know better than that! The people eventually resolved the shortage of potatoes in Ireland by starving to death.
Likewise with the diesel problem in North Dakota. The market may price the diesel so high that the people can no longer afford to buy it, and don't. That will reduce demand until it meets supply but the people will still feel the shortage. And if the diesel stays high enough long enough, they will go bankrupt and get out of the farming business. And if worse comes to worse they could suffer the same fate as the Irish potato farmers.
Ron Patterson
Exactly, the market corrected the situation, demand was reduced. (From memory it was about half starvation, and half emigration?)
Here's the less flippant version:
I don't think it's fair to let people who promote the free-market as an ideology get away with seeing death and suffering as something somehow separate from market based demand-destruction - it's just the extreme end of the scale.
Ultimately, demand is destroyed, the shortage gets resolved, the 'market' if one chooses to see it as such, is ruthless, and doesn't stop at how one spends discretionary leftovers of fiat currency.
If geological effects are to be regarded as 'within the market' then so should biological effects - it's a closed system. If geological effects are excluded - well, lets leave fantasy to the storytellers.
--
Jaymax (cornucomer-doomopian)
Perhaps you are correct Jaymax, but somehow I cannot reconcile death by starvation as being part of "the market." Perhaps you can. In that case we will have to agree to disagree.
Ron Patterson
You're just overlaying hackneyed words on top of real-world events. You're describing "the market" in an anthropomorphic way; as if it is sentient and making these decisions for us. The market is just a series of individual human interactions, each driven by the participants' own greed.
Change the word "market" to "greed" in your entire context and you might be on to something. I agree that rationing in a time of scarcity is the only equitable solution. Hell we are well past the the time that rationing should have started, had we any concern for the well-being of people living in poorer nations.
We are already like those English munching on muffins while Ireland starves. That's us, today. All this other crap is dancing around the point and trying to save our own skin.
Nope, you're fundamentally misunderstanding me - please explain how being wealthy enough to buy food in the knowledge that doing so is starving others, is not an "individual human interaction, ... driven by the participant's own greed."
I agree with your sentiments mostly, other than your attempting to somehow avoid seeing the 'market' as the mechanism. Your statement that "You're describing "the market" ... as if it is sentient" - is pretty much the polar opposite of what I believe.
Greed is just a genetic survival strategy - greed plays a part choosing who wins, who loses - it cares - the market doesn't - it just finds balance, regardless of consequence (because it's not sentient, not caring, not human-like)
had we any concern for the well-being of people living in poorer nations. - You might, I certainly do, infact most people do, individually. But it seems often that somehow the collective 'we' doesn't actually give much of a damn.
I have no solutions - but I do know that no matter how much you or I might talk about rationing, that talk is unlikely to affect whether it happens, or affect much of anything.
Debating the nature of the way humanity seems to operate - what 'works' and what 'doesn't' - any why - those words are worth spending time on, 'cos the understanding that follows might just be useful in the coming storm.
--
Jaymax (cornucomer-doomopian)
Maybe the farmers in ND are just waiting for the market forces to kick in and supply them with their fuel.
I don't live "in a market economy", I live on a planet with an exploding population and rapidly diminishing natural resources.
That "market economy" planet does sound nice though...
They have all sorts of worrys--they're farmers, after all. They farm in Western ND and they and their neighbors have a bumper crop of wheat with high prices--one of those years that can keep a farmer afloat--and now many of them are having problems getting the crop harvested. Timing is everything for a farmer.
Total Crop Failure in Australia.
Report from last October:
http://www.kordamentha.com/downloads/KMResearch_Unit/Publication%20615%2....
• AWB downgraded its forecast for the Australian wheat crop on
25 October 2006 to between 9m – 11m tonnes which compares to its
July 2006 forecast of 18m – 20m tonnes and its September 2006
forecast of 12m – 15m tonnes.
As this year's drought has been just as bad
and insult to injury, it's now raining to hard to get the crop out, the final number should be less than 9 mt.
This from last year:
http://www.theaustralian.news.com.au/story/0,20867,20944865-643,00.html
"ABARE expects 2006/07 wheat production to tumble 61.2 per cent to 9.74 million tonnes"
which was the final number.
Best site I've found so far for Ozzieland:
http://www.infarmation.com.au/news/07/10/article13900.asp
BTW, World Grain Councils like IGC and FAO
are about as realistic as the USGS on oil production.
Arkansaw of Samuel L Clemens
I have heard in a couple of places that the USDA is over estimating the U.S. wheat harvest. What do you think and do you have any references?
I'd like to see those stories indicating an overestimate of US wheat crop, if you have the time to find them.
Wheat has been slipping for weeks to about $8 today. Several reasons have been cited over the weeks-Russian exports increasing, traders walking away from high contracts, and a strong US crop.
I don't see much at this point to rally wheat stocks. The Australian crop is slipping some more, but its troubles are accounted for on the world market, it seems. As expected, record prices this summer are leading to very high spring wheat plantings this fall. USDA was estimating 6% increase, from last year which was high, in mid October. From my very unscientific "windshield surveys", I expect even more and suspect final USDA acreage planted figures will further drop the price.
But it all leads me to some off the wall speculations. World grain stockpiles reached their lowest levels this summer, but could that be the bottom? I don't know, but it is interesting to find countries walking away from their wheat contracts. Shortage spiked the price until it got too expensive, then demand destruction in grain, increasing stockpiles?
At this point, as countries are not re-booking contracts with the somewhat reduced price, it doesn't appear likely that contracts will be exported, so stockpiles grow. Climate change only exacerbates the effect. Much higher FF prices also tend to keep that price higher next year, even with adequate moisture, especially in countries that subsidize production. Leading to the same situation as the 70's-80's-millions of starving people unable to afford mountains of grain stockpiles.
"The Australian crop is slipping some more, but its troubles are accounted for on the world market, it seems."
The Ozzie crop will be less than 9 mt.
The lowest Ozzie Est (and you have to look hard to find it) is
12.5 mt.
The World Grain Councils like the IGC and FAO are still working with 22 mt.
Green light for grain imports
2 Nov 2007
Livestock producers have been given the go-ahead by the federal government to import grain to feed their stock. A shortfall of 2 million tonnes is being predicted following the latest downward revisions to the nation's total crop production by the Australian Bureau of Agricultural and Resource Economics. Approval has been given for the importing of 12 types of stockfeed including wheat and rye from Canada, wheat from Britain, maize and sorghum from the US, maize, sunflower, sorghum and wheat from Argentina, and soybean from Paraguay.
The Australian, 2/11/2007
Total Crop Failure.
CBOT has a reputation for crushing Bull Markets.
Goldman and NNYMEX tried to do that with the Crude Market
Tuesday.
Didn't work.
Arkansaw of Samuel L Clemens
Dunno but here's a clue:
Source: http://futures.tradingcharts.com/chart/CW/M
--C
Energy consultant, writer, blogger www.getreallist.com
You won't find them.
The expectations are for 59 tons.
multiply times 37 for bu.
For some reason CO and ND did OK.
But Kansas OK and AR did not.
And East of AR was below avg.
April freeze and drought the culprits.
All of the above comes from rail loadings, TOD local comments, knowing critical wheat growing conditions and
local observations.
You'll have to pay $3000 or better to get this info in a source.
There is no such thing as insider info in Commodities trading.
Arkansaw of Samuel L Clemens
I'm taking a geography class at a community college. The other day we were discussing the Middle East and a student asked the teacher to explain peak oil. She gave a thorough explanation and a couple other students chimed in. Someone asked "What's next?" and we went on to view a slide show of those islands at Dubai.
You should by pleased your instructor knew about and was able to explain Peak Oil, for many do not. Which JC do you attend?
A global financial markets trader comments on the effects of the crack spread on the economy and risky assets:
http://macro-man.blogspot.com/2007/11/energy-blues.html
The low crack spread is dictated by the same voice that guides heliBen. Quick. Act surprised.
Which one will break the deal first?
Searching for Black Gold in an Unlikely Place: 'My Job Is to Get the Oil for Israel,' Says Born-Again Christian John Brown
When god's president is shuffled off to The Hague for war crimes can we pretty please have a MSM moratorium on ass kissing articles pandering to the disloyal Christian Right?
And ABC should have its broadcast license sold at auction for that crockumentary they did on 9/11 ...
http://en.wikipedia.org/wiki/The_Path_to_9/11
"And ABC should have its broadcast license sold at auction for that crockumentary they did on 9/11 ..."
Why? All the other MSM outlets went along with the Hollywood fantasy of 9/11 impossible events.
"You can never solve a problem on the level on which it was created."
Albert Einstein
From Golda Meir:
Let me tell you something that we Israelis have against Moses. He took us 40 years through the desert in order to bring us to the one spot in the Middle East that has no oil .
That's not true. Moses led the Jews to the Sinai, which had plenty of oil. It was the hotheads who attacked the Philistinians that abandoned the Sinai and moved their nation to the natural marchlands of Egypt and Mesopotamia and Anatolia, the 'cockpit of the Middle East'.
It's like comparing Peak Oilies to Cassandra. Guys, Cassandra was right.
I recall this story/video from several years ago. Unable to sleep in a motel.
Must be a slow day for "found oil" stories.
It's an update. They claim they've found evidence of hydrocarbons. They think if they only drill deeper, they'll find oil. And now they've gotten a drill that can do it. They'll be drilling down 18,000' next spring.
Dead Sea Oil: Last year: possibly a small field of circa 4m-6m bbls. So it has some potential.
http://www.jpost.com/servlet/Satellite?cid=1159193368922&pagename=JPost%...
''Oil has been discovered in the Dead Sea area, Dr. Eli Tenenbaum, an official from Genco, the national company responsible for drilling in the region, reported on Wednesday. Tenenbaum stated that the amount of oil could reach commercial levels.
"We noticed that the pressure in the area was very high and when we opened the tap, oil started flowing freely for several minutes," Tenenbaum told Channel 10.
Tenenbaum said that the workers washed their hands with the "black gold" when they made the discovery. "We hope it was the first of many [such discoveries]," he added excitedly.
Not far from the drilling site, the crew spotted an oil reserve that Tenenbaum described as "very attractive," which they believed contained between four and six million barrels, worth an estimated 300 million dollars.
The operation began 10 years ago but was put on hold since it was not deemed economically viable. However, due to the recent soaring oil prices the discovery of new oil sources became necessary.
Genco was drilling at a depth of 2000 meters.''
Given that the Dead Sea is in a rift valley, wouldn't that tend to cook out any buried hydrocarbons?
On the other hand, I would think that it would be a prime location for geothermal. Why isn't more being done with that?
I believe it is a failed rift valley, the horsts and graben forming a basin. It is a relatively small structure, so the likelyhood a major finds is small. Useful at these prices, but small. The geothermal gradient does not look to be an issue.
BTW: I believe the Pharonic Egyptians used to get tar from this area. Large gobbets of the stuff used to float to surface and would then be hauled in. And I seem to recall from somewhere a war was once fought over it...
Don't rift valleys tend to be relatively young, too?
They are drilling sideways. LOL.
Do they have enough time?
Hello Leanan,
My idea of searching for black gold in an unlikely place:
http://www.soilandhealth.org/03sov/0302hsted/030212campbell/campbell%201...
--------------------------------
What would the reader think, if he were asked to invest in a gold mine from which all of the ore had been taken out, and, at the end of a year, it had all replaced itself? What would he think, if he had, attached to his mercantile establishment, a warehouse in which, as fast as the goods were removed for display and sale, they would replace themselves without the expenditure on his part of one grain of energy or one cent in money!
------------------------------
If you are a TOD newbie-->Please see the astounding photos in this link!
From the link below bat guano is currently fetching $5-9/lb, cheaper in larger qtys, more for high phosphorus guano. The bathouse in the toplink generated 2 tons/yearly =4000# x $5 = $20,000 yearly, with no effort--I wouldn't call that lagniappe--that is some serious $$$.
http://www.biconet.com/soil/batguano.htm...
As mentioned before: I am no expert, but guano prices/values could skyrocket postPeak and if bathouses work--that is some very serious barter material. It is already a felony in many states to harm bats and their habitats. Does anyone know if we are trying to replicate this harvest again?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
But who will harbor the stagnant water to breed the mosquitos for the bats to eat? Can I get some money for my mosquitos that your bats are dining on?
I've only been back here 3 months, but I have this evil plan to eventually raise chickens (for manure eggs and meat) off of all these damned grasshoppers we have here. Even if I have to gather the hoppers myself I'm sure I can collect many lbs of them a day, and I know which ones to collect and which to leave alone (the type called "lugger" is really overpopulated) and could keep the chickens in a nice safe chicken house....
Keep in mind we all shit solid gold, fertilizer-wise, if we can just deal with the pathogens factor.
Where is it that you are so thick with grasshoppers?
Chickens? I'll suggest (once again) the use of a black soldier larva fly pit.
Process your waste, stablize it (the waste becomes maggot fecal material and if you build your system with worms at the base of the pit then you'd process the material yet another time) and get food for the chickens.
http://nespal.cpes.peachnet.edu/sustain/fly.asp
http://www.ibiblio.org/ecolandtech/SoilWiki/message-archives/composttea+...
http://www.esrla.com/brazil/frame.htm
I have suggested in posts on previous threads that the simple expedient of erecting bat houses above compost piles would have the effect of:
a) greatly enriching your compost and boosting the fertility of your garden
b) decreasing your insect population
c) increasing your local biodiversity and health of your local ecosystem.
Plus, it spares you the trouble of shoveling the bat guano, and eliminates any smell issues.
Pretty good results for a few pieces of wood and a few nails.
The mortgage mess continues...
Foreclosures double
Forecast for the indefinite future: deflationary trends in the auto, housing and finance sectors and inflationary trends in food & energy. Note that housing prices are falling in nominal terms (even worse in inflation adjusted terms). So, not everything is going up in dollar terms.
Larry Kudlow yesterday: "Sell Oil! Buy Financials!"
For new readers, my advice:
ELP Plan (April, 2007)
http://graphoilogy.blogspot.com/2007/04/elp-plan-economize-localize-prod...
The time to watch will be End of January and February.
This when the upcoming "Christmas Retail Therapy on Credit" bills will roll in, and people will be begin to default in numbers never even considered in history.
Coincidentially, it is usually the coldest time of the the year for 80% of the population of the globe, and we will still be struggling through our first oil shock in 30 years.
Expect housing prices to decline in double digits 2Q next year.
Hello Leanan,
Thxs for the info. Check out the following national foreclosure graphic from Yahoo:
http://news.yahoo.com/photo/071031/480/cf8dd4cb1f9d44ceb0b3765376ae55ca;...
Hardest hit areas were in the west and Florida: has the migration to Cascadia, New Vermont Republic, and the Great Lakes now started?
If memory serves, I recall that the Oregon governor is famous for encouraging visitors, but doesn't want people to move there. Seems like a future Earthmarine mindset to me!
Your toplink on "The necessity of protecting the natural world" reads to me as a Thermo/Gene manifesto, or a veiled appeal for new-thinking on what is actually required to protect the environment from Human Overshoot.
Speculation: eventual rise of Secession, the Earthmarines, biosolar habitats, and Second Foundation?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
"China Unexpectedly Raises Fuel Prices as Oil Surges"
Inside the article there are mentions of the need for higher prices to relieve shortages and long lines at the pumps, cargo delivery delays in Shanghai, and murder in the gas lines.
Signs of things to come.
There is a long list of countries that are going to be forced to raise thier internal prices.
Venezeula is another...they don't want to...but selling barrels internally at 7 cents a gallon is just ABSURD.
Pakistan, India, Bangladesh, parts of Africa, etc, etc. Subsidizing oil consumption is going to get very difficult in the near term...
And create tons of demand destruction. This is the future of the FREE MARKET...demand destruction. No more cheap oil!
But it's not cheap in China; the last time I was there about a month ago, gas was equivalent to a US dollar a liter. And on top of that, there are so many toll roads that's it's even more expensive to drive there than it is here in California.
It used to be that air travel inside China was a great bargain, but in the past year the prices have risen so much that they're comparable to internal US flight costs. Like I said, about a month ago: Beijing to Chengdu, equivalent to $300 USD. That's serious money to the locals.
Oops, another screwup, I'm off by 3dB: Gas is close to $0.50 US per liter in Beijing, which is still a far cry from the $0.07/gallon in Venezuela. And that RT ticket to Chengdu is indeed $300 USD.
It's not quite that expensive yet, though it is relative to average family income. Even with this latest adjustment that took effect today, the price of 93 RON gasoline (~89 R+M/2) in Beijing is now 4.94 yuan/liter (http://www.morningpost.com.cn/article.asp?articleid=134219). That equates, at 7.5 yuan/$ to about $0.66/liter or $2.49/gallon. Sinopec and Petrochina have the latitude to vary the pump price 8% around the central price set by the NDRC.
Water wars: Man killed in fight over watering
"Munter, who appeared distraught and close to tears, was to remain in custody until his next court appearance on Nov. 15."
I wonder what other pressures caused Munter, who's age is given as 36, to flip? And how many others are in his position? I predicted Australia would be the first "western" country to succumb to climate change, and economic pressures caused by peak everything. Just how close is the general populace to breaking like Munter, or is this incident just odd and isolated?
People flip when they feel like they're the only ones suffering. When everyone is having a hard day the dynamic changes dramatically.
Hello SCT,
Yep, Hans Selye's GAS, or the too many overcrowded rats in a box syndrome. We are genetically wired to flip out when things get too bad [PDF warning]:
http://www.regmorrison.id.au/
---------------------------------------------
To summarise: Selye’s GAS is now running at full throttle and accelerating globally, as shown by a graph of the global population growth rate (UN data). Our abrupt growth-rate decline since 1967-8 indicates that zero population growth is likely by 2030 followed by accelerating collapse thereafter. It seems that our hormonal controls have been reset to produce our first global fecundity decline for at least 10,000 years, and perhaps the first since our species appeared almost 200,000 years ago.
-----------------------------------------
IMO, this is an outstanding author and very well done website.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
We've seen something like a 50% drop in sperm count for human males over the last several decades - it correlates pretty closely with the onset of the chlorinated hydrocarbons we're putting into the environment. I have not seen any cause/effect documentation for this, only correlation and conjecture.
This 6 minute audio interview from platts (thanks ot Energy Bulletin, on declining APIs of oil available cusing an increased need in refinery capacity for haevy crude of 18 million bbls /day in future.
http://www.platts.com/podcasts/news/index2.xml?src=energybulletin
This link thanks to ODAC on how for heavy crude reifing more oxygen will be needed(or was it hydrgen?) and that for that you need to have more natgas.
http://energytechstocks.com/wp/?p=448
“Without a video the people perish”-Is. 13:24
Thanks, Galactic for those links!
The link for SRI's 2007 Hydrogen Report
http://www.sriconsulting.com/SRIC/Public/NewsEventsArt/PR_Articles/Oct07...
states that "the inferior quality of today’s sour crude feedstock available for refineries will drive consumption of hydrogen in excess of 40% over the next five years".
Hydrogen is required to upgrade heavy oils into transport fuels and also to remove sulfur to produce low sulfur diesel and gasoline.
Can world hydrogen production increase by 40% over the next five years to meet SRI's forecast demand increase? If so, how much will the price of hydrogen increase and would carbon dioxide emissions be a constraint? If not does that mean peak hydrogen production will occur soon?
The SRI report further states "Approximately 96% of all hydrogen is from fossil fuels, with natural gas being the most frequently used at an estimated 49%, followed by liquid hydrocarbons with 29%, coal with 18% and electrolysis and other sources at about 4%." So, hydrogen comes from fossil fuels.
How much fossil fuels are needed as a supply? According to this UIC report, 5% of US natural gas is needed plus lots of carbon dioxide emissions!
http://www.uic.com.au/nip73.htm
"In the USA, 11 Mt/yr of hydrogen production has thermal energy of 48 GWt, and consumes 5% of US natural gas usage, releasing 77 Mt CO2 annually".
The UIC report is in close agreement with SRI report hydrogen forecast, SRI is forecasting 40% increase in five years and UIC 10%/year:
"Hydrogen is already a significant chemical product, chiefly used in making nitrogen fertilisers and, increasingly, to convert low-grade crude oils into transport fuels* . Some is used for other chemical processes. World consumption is 50 million tonnes per year, growing at about 10% pa. There is a lot of experience handling it on a large scale. Virtually all hydrogen is made from natural gas, giving rise to quantities of carbon dioxide emissions.
* Eg (CH)n tar sands or (CH1.5)n heavy crude to (CH2)n transport fuel"
According to the EIA, North American and US natural gas production peaked in 2003, so that might require importing natural gas or importing the transport fuel from those countries which are increasing their natural gas production.
http://www.eia.doe.gov/emeu/international/RecentNaturalGasProductionTCF.xls
Wow! Very worrying indeed. This may turn out to be a positive feedback loop with enormous consequences, possibly along memmels' scenario.
A increasing % of oil will need more and more NG-derived Hydrogen, while less and less NG will be (locally) available.
Now, someone tell me, why is it I am a fast crash "doomer"
Regarding the above-mentioned news article:
It reminds me of an old Wall Street joke. A stock broker jumps out the window from the top floor of a skyscraper on Wall Street. An office worker looks out his open window and sees the broker falling through the air, and shouts out to him, "Are you okay?" The jumper shouts back to the office worker, "I'm doing just fine...so far."
He seems to have forgotten that Cassandra was right. No one believed her, but she was right.
that's what i always say about the boy who cried wolf - eventually there really was a wolf, people seem to forget this...
--
All these memories will be lost in time
like tears in rain
I think the boy who cried wolf story is told only from a certain perspective -- namely that the villagers assumed that the boy was playing games with them, because there was no wolf to be seen when they approached.
Maybe if it was the boy's story who got passed down, he would have said that he had seen all the signs of a wolf, and even saw the wolf itself, but the wolf hid itself every time at the commotion of the villagers approaching.
We see the signs of wolves approaching. And the signs get lost in the commotion of debate about what wolves, where, and when.
But its true isn't it? If you'd asked me in 2000 (and I'd been peak oil aware then, of course, PO aware since '04ish) that oil prices would go from the $10-$20 range to the $90-$100 range by the end of '07 I would have predicted hard times ahead, Great Depression MrkII, etc. We are currently experiencing anything but - bursting housing bubbles aside.
So the question is why?
The answer is (one possible one anyway) is that we are using 1/2 the oil per dollar of GDP that we were during the all time inflation adjusted oil high in the early 1980s. So in a simplified analysis for oil to have the same economic impact it needs to reach double the inflation adjusted price. The actual figure given for this in today's dollars varies but call it $101.
So does that mean the pain isn't going to really kick in until we hit $202. Some time next July...
But then the world didn't end in the 80s either.
IMO the shit hits the fan with physical shortages. People will pay almost anything to keep driving.
For those of an historical bent, there is an excellent summary just published by heavy-hitters Tom Englehardt and Michael Schwartz of how -- and why -- we got to where we are in the Middle East.
http://www.antiwar.com/engelhardt/?articleid=11842
Fairly concise but heavy on facts and quotes, it covers U.S. policy development in the ME from WWII to Greenspan's "it's all about oil" comment. Highly recommended. You can scroll down past Englehardt's intro to get to the main article.
Here's General Abizaid's take on the US military presence in the Mideast:
http://news.yahoo.com/s/ap/20071101/ap_on_re_us/abizaid_middle_east
He says "we" could be there for the next fifty years. Is this his prognostication on when the oil there will finally run out?
It's interesting to hear our political and military leaders make statements about fighting the long war. It's as if they have completely discounted the democratic process (what if US citizens decide that they don't want to fight a 50 year war of attrition?) and expect that foreign powers -- who will ultimately be competitors for those putative oil resources -- will continue to finance the American War Machine.
Oil Shockwave II is going on right now.
Leanan: Just my opinion, but it is kinda scary when this is a listing of America's "elite". It is evident that the same people that put the USA into this deep economic hole will be entrusted to lead it on the climb out during the post-peak period. It does not look good for this reason alone.
CNBC talks about this then plays their own shockwave game.
http://www.cnbc.com/id/15840232?video=584953549&play=1
Ron Patterson
Interesting they chose May 2009.
That is about the last kick at the cat for a new All Liquids title...per Ace. But IMHO, and in Ace's from his comments, it looks like that has a low probability of happening.
And now Early 2009 seems to be ASPO's new Peak as well.
Just saying interesting (coincidence?) choice!
Perhaps someone can help me find a graph, I have seen a couple of times linked from this site, but can't seem to find it now that I need it for a presentation.
It shows CO2 emissions, atmospheric CO2, ocean temperature, and something else, for 1000 years from present. It is a good illustration of the long-term effects of CO2, lasting centuries after the ff's are gone.
Thanks in advance to anyone who knows the source and can point me there.
If we do go to fuel rationing, here's the technology...
Gas station customers can now ‘pay by touch’
Gets out hacksaw...
That is just scary. That's why I pay cash. Heck I do everything cash these days, don't have a bank account since Homeland Suckurity says I can't.
National Bank of Coffee Can Under The Bed = the bank of the future. If you don't like the bastards, stop paying 'em.
You shouldn't worry so much.
These scanners are really foolproof, and nine times out of ten, as long as your records check out, your hand is immediately returned to you.
Seems France has released 285000 tons of crude from strategic reserves due to shortages.
It would also seem that the French Government released refined products from their strategic reserve in a separate release Monday.
Well I guess that answers part of my question from Monday:
http://www.theoildrum.com/node/3155#comment-256243
Obviously the Government is very busy behind the scenes ensuring some kind of stability in price and supply. It echoes the building energy crisis in the UK where everyone is saying there is no problem. It would seem that like Climate Change, we're further down the energy crisis road than we thought.
Burgundy, that's radical. Do you have a link for that? I'd like to use it in an argument above.
agreed, I would like to see a link as well - thx
Maybe this one?
France Releases 285,000 Tons Crude From Strategic Stocks-Government
-best,
graywulffe in CVO, OR
Thank you
thx, just google - simple as that :-))))
Sorry, I don't have a link but here's the article:
Releasing crude reserves because two refineries are down doesn't seem to make sense. But as chaos takes a grip, I guess things look increasingly bizarre to the onlooker even when they are logical. However, to me it looks like resilience has become wafer thin and sudden shortages of all kinds of things will begin to appear randomly and quizzically.
Your right, it doesn't make sense as they write it.
They have a shortage of crude in the system...that is why you release from a SPR. Everything else is fluff!
Unless they released a refined SPR product...gasoline, diesel...and it was quote wrong. That would make sense if refineries were down.
Does anyone know if France has refined products in its SPR?
Apparently France has a jet fuel reserve of 55 days, this is not required by IEA agreements, in addition to the 90 day reserve of internal consumption of crude:
http://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves#_note-6
This amounts to about 3 days of crude consumption if my math is correct.
http://www.eia.doe.gov/kids/energyfacts/science/energy_calculator.html
We've said that the Soviet Command Economy is now in force.
You'll be able to buy gas at a certain low price but only
at stations in DC and at 7:30 in the AM.
Outliers will be left to fend for themselves.
It's impossible to have gas at $2.89 while Crude is at
$95.93.
http://carolynbaker.net/site/content/view/194/
"Oil has already peaked. Production began declining in 2006, and is now diminishing at a rate of 7% per year. The latest studies show that natural gas, coal and uranium will soon follow. (Steep decline in oil production brings risk of war and unrest, says new study. The Guardian, October 22nd, 2007. http://www.guardian.co.uk/oil/story/0,,2196435,00.html)
What, you mean you hadn't heard?
Overall, energy prices are going to keep going up. And as the price of energy goes up so will everything else. At some point, the economy will crash. Hunger will become a problem all over the world, even in once prosperous nations such as the US.
Global Environmental Outlook 4 has just been released. This is a publication of the United Nations Environment Programme (UNEP) produced by 390 experts using data compiled over the last two decades. They warn that we must act now to safeguard our own survival and the survival of future generations. (Save the planet? It's now or never, warns landmark UN report. AFP, October 25th, 2007. http://www.afp.com/english/news/stories/071025154020.bbqhb66q.html)
http://www.culturechange.org/cms/index.php?option=com_content&task=view&...
Contraction
To date, we have been unwilling to acknowledge our perilous and unsustainable situation; much less have we been willing to take meaningful action to address it, even in the face of overwhelming evidence regarding the disastrous consequences associated with inaction -- as the window of opportunity, during which the resources required to take meaningful action are still available, continues to close.
While the specific scenario associated with our impending contraction cannot be known with certainty, it is safe to say that in the likely event of an apocalyptic contraction, American life will approximate a Hobbsian state of nature: "solitary, poor, nasty, brutish and short".
Arkansaw of Samuel L Clemens
The Chinese React to High Oil Prices:
http://www.chinacartimes.com/2007/11/01/chinese-reactions-to-oil-price-h...
Love it! Same reactions 'Murricans have!
I like the ones about bike factories lol. We're heading into an "Age of scavenging" in the US and with a failed US Dollar, cheap junky bikes from China area going to cost even more than they do now, it's going to be a great time for younger people to think about learning how to make bikes - it was a good enough trade for the Wright Brothers!
Well there's a non energy intensive material that the Chinese have quite a lot of, bamboo...I beleive the Wright Brothers used it as well. Then again maybe the pandas won't like my suggestion too much.
Flavio Deslandes, a Brazilian industrial designer at the PUC-Rio University, has designed a bicycle made, essentially, of grass specifically, bamboo.
http://www.aboutmyplanet.com/environment/bamboo-bikes/
Here's a bike-builder's school in Oregon that was featured in Homepower #116 for putting an 8400 watt PV system on its roof, supporting the company's electric needs, and showing the financial side being very doable for small biz.
http://www.bikeschool.com/ashland.htm
The article where I found out about them, "Small Business, Solar Success" (p26) is 'Pay per view' at Homepower's archives now, or I would have linked it. I don't begrudge them charging for the value their content has.. but I wish it were still avail to share.. I think it promotes the mag better.
Bob
edit; Here's their Solar Setup described, etc..
http://www.bikeschool.com/solar.htm
I work for Discovery / HowStuffWorks.com. I asked Marshall Brain (founder of HowStuffWorks) about Peak Oil yesterday. He wrote something in his blog today.
http://brainstuff.howstuffworks.com/2007/11/01/is-there-a-cure-for-peak-...
Rather disappointing...
Maybe some oildrum contributers would like to respond to him via email???
Marshall Brain is right. Some of the ideas he throws out are known not to work but his point is that only one world saver has to work to save civilization.
RobertInTucson
I haven't escaped from reality. I have a daypass.
"..only one world saver has to work to save civilization."
Piece of cake!
I think he should write a piece on How Rhetoric Works,
and more so on how his rhetoric about PO works.
Basically, he creates a nonexistent strawman and then crows with glee at having knocked down his own self-fashioned acumulation of hot air.
I think he should write a piece on How Rhetoric Works,
It's already been written. This is a very good piece that I highly recommend for anyone who reads/watches the MSM news or listens to what the Gov. has to say.
25 Rules of Disinformation: How to Fight Back
8 Traits of The Disinformationalist: What to Look For
http://www.proparanoid.net/truth.htm
I posted a rebuttal but I bet $100 that he won't post it to the site. That article really showed how uninformed he is. I told him he owes the readers of his blog an apology for posting such crap.
I haven't been able to find a free link for this story, but Dante at PO.com says Dow Jones is reporting Mexico's Pajaritos Oil Port remained closed today, due to bad weather.
The 600,000 barrels of shut-in production may now be closer to 3 or 4 million barrels.
Here's one Leanan:
http://uk.reuters.com/article/oilRpt/idUKN3064287920071030
The math doesn't seem to add up either way, hopefully we can make some sense of this.
[edit] here is another article adding to confusion:
http://www.ogj.com/display_article/310889/7/ONART/none/DriPr/1/Pemex-res...
Pajaritos remained shut Nov.1, but a port official said it might reopen at midday if the weather improved.
Meanwhile, Pemex expected to reopen wells Oct. 31 and resume normal production of about 3.1 million b/d, including 1.7 million b/d for export, according to Pemex E&P Director Carlos Morales.
I think these articles may conflate production, storage and shipping. And causality/tense. Oh well.
At the end of the last article, something I wasn't aware of:
The flooding was thought to have caused a leak in a 10-in. natural gas pipeline after soil support was washed away, according to Pemex officials. Tabasco officials said the pipeline had exploded. There were no deaths or injuries.
The first article is from Tuesday.
The second one is dated today, and is presumably more accurate.
In the 7-11 here, they now carry 1 gallon plastic jerrycans.
Today, across the aisle from them, I saw an advertisement for Jolt energy drink, which had on it a guy riding a bicycle the front fork of which was attached to a lawnmower. Clearly a staged contraption, but the idea was there.
I also realized recently how much anime, for instance the new Gundam series now running in Japan, assumes the end of oil and then explores potential futures based on that.
Maybe not a sea change yet, but the swell's there.
Here is a post by Jim Willie on the machinations of Goldman Sachs in the oil and commodities markets.
I highly recommend it to those of you trying to understand the oil markets and what makes prices go up and down. It is one more part of the puzzle.
http://financialsense.com/fsu/editorials/willie/2007/1101.html
Francois.
Moe Gamble alluded to it upthread but it needs to be highlighted...
From the Drumbeat:
Total chief warns on oil output
Here is clear example of
Deferred Productionwhich will tend to move the peak closer to the present but at the same time flatten it into more of a downward sloping plateau. Now, little old me has been predicting this for some time on this site based on 5 or 6 economics courses I took 20 years ago.It is impossible that the oil industry didn't understand this dynamic. What is more likely is that they didn't think it would kick in so early!! Let's hope that it was real early.
good call :)
I would add that the Drumbeat story:
Canadian Natural reins in drilling program
...also supports the argument for Deferred Production. The Alberta government is taxing the heck out of them, so they cut back. The government said when they announced the royalty grab that they knew the taxes could cause production growth to slow.
Deferred Production is definitely an issue. Hopefully analysts will find a way to estimate its impact on future production.
FROM exxon's crude nightmare...
Maturing fields also hampered yields, as oil production fell 4.3% in the quarter.
We expect this little glitch to be temporary as xom expects peak not before 2030... or, did they mean everybody else will continue to expand while they contract?
I'm on dial-up and haven't had any success searching for this: What kind of car does Robert Rapier drive? I believe he's the one who mentioned that he had a car that gets 50 mpg...
The continuing saga of the collapse of Northern Rock (UK lender):
http://news.bbc.co.uk/1/hi/business/7073556.stm
“Northern Rock and the Bank of England expect that by the end of the year the Rock will have borrowed £30bn from the central bank”. That’s £500 for every person in Britain, over $1000. For just for one lender, not one of the biggest. You can imagine the problems if more big lenders in the UK or USA need similar bail-outs in the next year.
Like they say up the thread, it is the beauty of the "free market". Giant bonuses while your scams are riding the wave, taxpayer bailouts when it crashes and burns.
Deleted, posted on wrong day. :-(