DrumBeat: November 2, 2007

Crude oil rises $2.44 to settle at a record high $95.93 a barrel

Refinery problems contributed to Friday's gains. Operations at a 172,000 barrel-per-day Petroplus Holdings AG refinery in England are expected to be limited for a month due to a fire earlier this week. And Chevron Corp. said Friday its 330,000 barrel-per-day refinery in Pascagoula, Miss., will run at reduced rates until early next year due to an August fire.

December gasoline rose 9.63 cents to settle at $2.4395 a gallon on the Nymex, and December heating oil rose 6.14 cents to settle at $2.5737 a gallon.

France's Lagarde calls on oil producers to 'restock' the market

French finance minister Christine Lagarde has called on oil producing countries to 'restock' the market to fight against 'speculation'.

'I am going to ask the executive director of the International Energy Agency to encourage them to do a little more. Obviously we need resources available to put an end to these speculative movements,' she said in an RTL radio interview.

'Today, there is no particular reason to have such increases in petrol prices,' she said, adding 'there is clearly a speculative element that explains this increase in prices'.

Gulf states move to deter revaluation bets after Fed cut

Saudi Arabia and other Gulf oil producers followed a US interest rate cut by lowering some borrowing costs yesterday to try to relieve pressure on their dollar-pegged currencies without stoking inflation at home.

Wanted: Oil workers

In the next three or four years, there's expected to be a 30 to 40 percent shortage of technical and professional oil workers in the Untied States, according to Damon Beyer of Katzenbach Partners, a Houston-based management consultancy that specializes in the energy sector.

Arizona nuclear plant on lockdown

Security officials at the nation's largest nuclear power plant detained a contract worker with a small explosive device in the back of his pickup truck Friday, authorities said.

The worker was stopped and detained at the entrance of the Palo Verde Nuclear Generating Station, said U.S. Nuclear Regulatory Commission spokesman Victor Dricks. Security officials then put the nuclear station on lockdown, prohibiting anyone from entering or leaving the facility.

World Toilet Summit gets down to business

Though it includes such ideas as a solar-powered commode that runs without water, the 2007 World Toilet Summit is no bathroom novelty show.

Participants at New Delhi's four-day gathering of experts, toilet aficionados, and even royalty from 44 countries are grappling with health and sanitation issues that endanger almost one-third of the world's people who don't have toilets.

OPEC raises oil output in October: Reuters survey

OPEC raised oil production last month in response to record-high prices above $90 a barrel and in advance of a formal deal to lift supply, a Reuters survey showed on Friday.

OPEC's 10 members bound by output targets, all except Iraq and Angola, pumped 26.98 million barrels per day, up 180,000 bpd from September, according to the survey of oil firms, traders, OPEC officials and analysts.

Super-spiked: The oil price should fall — eventually

BACK in 2005, in an apparent flight of fancy, analysts at Goldman Sachs predicted a “super-spike” in the oil price to $105 a barrel. On Wednesday October 31st, the prediction came as close as it ever has to fulfilment, when the price of West Texas Intermediate reached $94.74 during the New York day and breached $96 after hours. But the investment bank’s seers are no longer sure that it will hit their mark soon: the “downside risks” to the price, they had warned investors the day before, were “gaining momentum”.

Ecuador says high oil price due to speculation

"High prices are due to market speculation," Oil Minister Galo Chiriboga told Reuters. "Oil producers have no relation with that speculative process."

Go Small, Hit Big: Oil Juniors Beat Majors in Q3

In stark contrast to the performance of the integrated oils, single source operators or pure players (upstream) have been showing the positive effects of current oil market developments. American, European, Asian and Arab players have reported record profits, largely based on the fact that they don’t have to beat lower refining margins. Small seems again to be beautiful, on all levels.

American Airlines fare hike matched by United, US Airways

UAL Corp.'s United Airlines and US Airways Group Inc. matched a $20 round-trip domestic fare increase led by American Airlines to help combat record fuel prices, according to FareCompare.com.

How China boom could go wrong

CHINA is industrialising, demand for iron ore, copper, nickel and aluminium is surging, so commodity prices, profits and share prices of resources companies are going ballistic.

The bulls are on the run in the resources sector with no apparent end in sight. But is that so?

Drunken skipper jailed for 12 months after North Sea rig collision

A Polish sea captain was jailed for 12 months on Friday after crashing his ship into an unmanned gas platform in the North Sea while drunk.

Zbigniew Krakowski admitted being nearly three times over the legal alcohol limit and entering a 500-metre exclusion around the Viking Echo gas platform, 40 miles north-east of Cromer.

Toyota offers lightweight solution to cut emissions

Japanese auto giant Toyota Motor Corp. is showcasing a new hybrid concept model that is packaged in carbon fibre to reduce weight, fuel consumption and emissions.

The four-seater "1/X" (pronounced one-Xth), with a 500cc engine, boasts a potential fuel efficiency twice that of the Prius, Toyota's popular hybrid vehicle.

Australia: Drivers switch to scooters and motorbikes

MOTORISTS are so fed up with congestion, petrol prices and parking shortages that an increasing number are considering changing to motorbikes and scooters, according to a new study.

UK Coryton refinery at half output after fire

Petroplus said on Friday output had fallen to nearly half its usual level at its refinery at Coryton in southen England, which was hit by a huge fire two days ago.

The company added that it would take up to a month to resume full operations at the refinery, which has a capacity to process 220,000 barrels of crude oil a day.

OPEC fears may hike price

Crude oil may rise next week on speculation that OPEC won't increase production as fast as consumption grows this winter.

Opec is ready to fill shortfall in crude supply if required: Attiyah

Opec’s decision to increase oil production, which took effect officially yesterday, is failing to stop surging oil prices because there is no real supply shortage in the market, the group’s ministers said.

Oil and its peaks

About 25 years ago (my God, I'm old!) I was having dinner in New York with a stockbroker friend who was telling me that oil was headed for US$100 a barrel. I said that I didn't think it would ever see US$40 again in real terms. As of yesterday, I'm still right (and my friend is still rich, which proves that it's better to be a stockbroker than smart, although both is preferable).

Analysis: Russia dangles nuclear carrot

UPI International Correspondent As Russia and China quietly maneuver for control of the Caspian region's vast energy reserves, both are looking ahead to a post-hydrocarbon world and beginning to cooperate on nuclear power.

Chevron Profit Falls as Oil's Gains Squeeze Margins

Chevron Corp., the second-largest U.S. oil company, said third-quarter earnings dropped for the first time in five years after a glut of gasoline pulled prices lower and refinery crude costs climbed to a record.

Drivers say they’re resigned to the inflated prices

If gas prices were lower, several things in John Jackson’s life would be different.

For one thing, the Carlisle resident said, he would probably choose premium gas for his Dodge minivan. For another, he would keep more of his appointments at Lebanon Veterans Affairs Medical Center.

Malaysia: No Escaping From Rising Energy Cost, Says TNB Chief

Tenaga Nasional Bhd's chief executive officer Datuk Seri Che Khalib Mohamad Noh says the country needs to face the fact that the cost of energy was rising globally and that there was no escaping from it.

"We can't run away from this problem. Not only Malaysia, many other countries are also facing the same problem and everybody has to look at the way energy prices are going up, in a more realistic way," he said.

Kenya: Retail fuel prices to be controlled

Energy Minister Kiraitu Murungi plans to invoke the powers vested on him by the Energy Regulation Act to regulate fuel pump prices.

Kiraitu says his Ministry is closely monitoring international crude oil markets and will not hesitate to implement retail price controls if key petroleum players continue increasing prices unfairly.

China fuel price rise not sign of loosening grip

China's first oil price increase in 17 months should end fuel shortages that were unnerving the country's leaders, but it leaves Beijing no nearer to the market deregulation needed to ensure stable long-term energy supplies.

How India plans to tackle oil price rise

It is understood that the government has three options for controlling the crude oil price rise. One is to cut the customs and excise duties; second is to issue additional bond against the higher under recoveries and the third is a mix of both and a slight increase in oil prices.

Fuelled up and belching, but main parties look the other way

In Europe, car advertisements may soon carry warnings about fuel efficiency and carbon dioxide emissions. In Japan, one in five cars is a hybrid. In the US, Congress wants to significantly tighten fuel efficiency standards.

But in Australia, at a time when people are buying bigger cars and driving further, the main political parties have failed to tackle greenhouse gas emissions from transport, environment groups say.

Analysis: A 'super grid' for Europe?

Europe’s electricity grids are old and often not capable of providing trans-border, much less trans-continent energy security. Yet one German energy expert has come up with a visionary scenario that would overhaul the grids, increase energy security and at the same time help avoid climate change.

Gregor Czisch’s dissertation has rattled the energy world. Its main claim: Given the political will, Europe could within a few years meet 100 percent of its electricity needs from renewable energy sources, at no cost difference to today’s fossil fuel-based system. The scenario includes the construction of a high-voltage direct current European super grid linking all countries in Europe, and the continent externally to Africa and the Middle East.

French fishermen strike over rising fuel costs

Fishermen at one of France's main ports went on strike on Friday to protest against the rising cost of fuel and demand state aid.

Almost all the 300 boats based around the northwestern port of Guilvinec in Brittany took part in the strike and organisers said they hoped fishing fleets along France's Atlantic coast would join their protest.

Hot coal to rally more, but cheaper than in 80s

Record coal prices have plenty more room to rise in their demand-led rally as the fuel is still cheaper in real terms than in the 1980s, those in the industry say, with costs to be passed on to electricity consumers.

"We're going back to the prices of the late 1970s/early 1980s in real terms but the difference this time is that demand is surging and we've got a genuine coal shortage," said Jim Lennon, metals and mining analyst at Macquarie Bank.

Australia: Airlines worried about jet fuel supply

AIRLINES claim they are being kept in the dark about potential fuel supply problems and worry that this leaves them unable to adequately plan for disruptions.

Diesel shortage disrupts trucking industry in China

Economic powerhouse China is coping with a fuel crisis that is disrupting the trucking industry and threatening to send diesel prices soaring.

Petrobras cuts off gas for 24 hours in Rio amid fears of Brazil energy crisis

Brazil's state-owned Petrobras cut off gas to its large customers in Rio de Janeiro for 24 hours, leading to fears of an energy crisis in the country.

The president of the Industry Federation of Rio de Janeiro (Firjan), Eduardo Eugenio Gouveia Vieira, told daily O Globo that the interruption in gas supplies had set off alarm signals about the energy shortage.

Surging fuel prices are test for Belarus - Lukashenko

Belarusian President Alexander Lukashenko sated that power generation became a major world problem of the 21st centaury. "Shortages of electricity, gas and oil become a cause of international tensions and conflict," he stated at the 1st Congress of Belarusian scientists on Friday.

"We already see runaway increases in prices of fuels; and it's a test for Belarus, because we have no oil and gas fields of our own," Lukashenko said.

Cooking fuels in India cheapest in entire South Asia

Cooking fuels kerosene and LPG are priced the lowest in India in the entire South Asia with small and less prosperous nations like Nepal and Bangladesh charging a rate closer to market price.

Living With $3-A-Gallon Gas

They say you can get used to anything. Maybe. I never did take a liking to those C rations. But as far as I can tell, we've got used to gasoline costing $3 a gallon. It doesn't stop us from buying cars or going on vacation, it isn't making us demand tiny minicars. The hysteria is gone. We shrug and pay the price.

High oil prices spur action in refinery, pipeline plans

As oil hovers around US$90 a barrel, the race is on to more heavily tap into the world's second-largest oil reserve, and South Dakota - a major ethanol producer that typically sits on the alternative side of the fuel industry - is finding itself at the crossroads of two major oil projects.

One is a 590,000-barrel-a-day pipeline with plans to deliver Canadian crude to Patoka, Ill., and Cushing, Okla. The other is a proposed refinery that would be the first new U.S. refinery location in more than 25 years.

Supply for both projects would come from the oilsands of northern Alberta, home to some 175 billion barrels of crude, putting the region second only to Saudi Arabia in terms of the world's oil reserves.

Duke Energy faces water shortage

Duke Energy Corp. engineers at the McGuire nuclear power plant on Lake Norman, N.C., need the water level in the lake to be above a certain point in order for the plant's backup safety systems to work but the recent drought is causing problems.

China: Oil imports 'less than 60% of consumption by 2020'

China will try its utmost to keep its annual oil imports below 60 percent of its total oil consumption by 2020, a researcher with the country's top oil company said yesterday.

"I can assure you that China's oil and gas production is still huge because of the reserves potential. Currently China's production is rising to its peak season, which may last 30 years," Zhao Wenzhi, director of the Research Institute of Petroleum Exploration & Development affiliated to China National Petroleum Corporation (CNPC), said yesterday.

China energy-intensive industries still growing too fast - state planner

China's energy-intensive industries are still growing too fast, according to an official with the state planning agency, the National Development and Reform Commission.

The Oil Rush to the Caspian Sea (The Oil and the Glory book review)

The Good A fascinating look at the players and intrigue behind major Caspian region oil deals.

The Bad Lacks a firm assessment on just how important this area's resources are to the global energy picture

The Bottom Line A very good book that fills gaps in our knowledge about a vital subject.

Diesel spill in Veracruz sparks threat of Pemex ban

Mexico's Petroleos Mexicanos (Pemex) has been warned it may no longer be allowed to operate in the state of Veracruz following criticism for its poor response to recent accidents and oil spills.

Veracruz State Governor Fidel Herrera Beltran launched the criticism, saying Pemex's various accidents this year have caused losses in the state estimated at 8 billion pesos ($750 million).

UN Food Agency Regrets 'Crime Against Humanity' Label On Biofuels

The FAO, which has issued at least one report this year on how biofuel production has been causing food prices to rise, said, "We regret the report of the Special Rapporteur has taken a very complex issue, with many positive dimensions as well as negative ones, and characterised it as a 'crime against humanity'."

Why Egypt wants nuclear energy

Mubarak said that the aim of the programme was to diversify Egypt's energy resources and preserve its oil and gas reserves for future generations. He also pledged that his country would work with the International Atomic Energy Agency (IAEA) and would not seek nuclear weapons.

Consumers will pay price for ethanol subsidy: report

The cost of everything from tortillas to cereals and cornstarch will rise in Canada because America's policy of subsidizing ethanol to cut dependence on foreign oil has led to rising demand for corn, says a report.

The $100 oil bet: from blue collar to blue chip

Industry insider and writer on oil Matthew Simmons bet $5,000 with a New York Times columnist that oil prices would reach $200 in 2010.

Simmons calculates that $65 a barrel translates to 10 cents a cup, still 10 times cheaper than bottled water

Others use less refined analysis.

"I'd bet on oil going up because governments are crap and refineries get on fire," said Charlie Ryan, a gas worker spending his evening at a betting shop in London's gritty Mile End.

The odds of oil prices hitting the $100 mark by Christmas day are 13-8, according to bookmaker Cantor Index.

Western oil majors hit profit ceiling

EVEN as oil prices continue their climb to the stratosphere, profits for Western oil companies appear to have peaked for the moment - as underscored by a surprisingly weak earnings report from Exxon Mobil.

The reasons include aggressive governments that are grabbing a bigger slice of the oil pie and stingy consumers who are making it hard for companies to pass on higher prices.

Russian tankers heading for the Arctic

The new company's fleet will consist of 113 vessels. The company has plans for another 32 consisting mostly of tankers and several modern ice-class liquefied gas carriers to be added in the next three years. There is no doubt that the fleet's main task in the next few decades will be to transport hydrocarbons from the Arctic shelf.

The Philippines: Strong pesos softens impact of high oil

Local business groups on Friday downplayed the effects of the current oil price spike on their operations, saying the continued strengthening of the peso was compensating for it.

"Overseas Filipino workers are off to our rescue and they are doing this at their own expense; they have to send more dollars to keep up with the usual value of their remittances," said Alberto A. Lim, executive director of the Makati Business Club.

Can India gamble on oil price?

Since the mid-90s, oil experts have agreed upon one thing that no one has a perfect crystal ball to predict oil prices. Most forecasts made by experts and institutes like the International Energy Agency, the US Department of Energy and the World Bank for 2010 were in the narrow range of $20 to $30 per barrel. It looks like all of them are likely to be proven wrong.

Australia - The Real ‘PPP’: Populism, Probity and Peak-oil in the River City’s Tunnel Deal

Cheap oil has proved costly for previous transport infrastructure investments. Among these is the Fremantle Passenger Terminal, built in the early 1960s at a cost of £1.5 million, approximately $30 million in today’s dollars, to accommodate growing demand from passengers arriving from Europe during the “populate or perish” immigration era. What Western Australia’s planners did not foresee was that growing world production of cheap oil was simultaneously triggering the explosion of cheap international air travel. Within two decades passenger arrivals plummeted to two per cent of their 1965 peak and the facility became largely redundant.

Jeremy Leggett: Sunny side up

As the price of oil soars ever closer to $100 a barrel, a mass market for solar power and other cheap renewable energy is rapidly emerging.

Kenyan slum saves trees, cleans streets with big trash oven

A new UN-sponsored program is placing giant, garbage-burning ovens in one of Africa's biggest shantytowns.

Found in Phoenix

But in late 2007, it is no longer farfetched to connect the dots between environmental health or even foreign policy and smart controls. Indeed, Paul Ehrlich, another ES advisor and president of Building Intelligence Group, spent the first part of his keynote address laying the foundation for exactly that line of thought. Climate change, the concept of peak oil, carbon dioxide emissions per capita … again, not typical subject matter at HVAC seminars.

Green roofs start to sprout on urban homes

Green roofs have taken root on numerous commercial buildings across the country, but now people are exploring the possibility of planting a little shrubbery atop their own homes.

Unfolding commuter convenience

Sensing that the broader market is finally ready to accept fold-up bicycles as one antidote to global warming and rising obesity rates, Bike Friday hopes that its tikit, which retails for $1,195 — compared with an average cost of about $400 for folding bikes — will turn more people into bike commuters.

...“We want to be part of the solution for global warming, climate change and peak oil,” she said. “We want to make it easier for people to ride bikes where they want to go, instead of driving cars.”

Oil crisis exercise bares US 'impotence'

It's August 2009, oil prices have topped 150 dollars a barrel and a secret uranium plant has been detected in Iran.

Tehran and Caracas are slashing oil exports by 700,000 barrels to punish the west for sanctions, and the US military is ready to move its entire Pacific fleet into the Middle East to counter threats.

It may be tomorrow's headlines, but on Thursday a high-powered panel of Washington insiders acting as the US president's national security council found they would face almost impossible choices and be powerless in such a case, baring the United States' growing inability to lead in global crises.

"In this kind of hostile environment (Iran and Iraq) would have the upper hand," said Gene Sperling, who played the treasury secretary in the exercise.

It "would make us look impotent," he added.

"This scenario could start tomorrow," said retired general John Abizaid, the former US Central Command chief.

See also: Ex-U.S. officials play out mock oil spike crisis

Energy Expert Sees Hazard in Costly Oil

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 on Wednesday.

The unusually stark warning by Fatih Birol, chief economist of the International Energy Agency, about the effect 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.

In preparing the report, Mr. Birol said he had experienced “an earthquake” in his thinking.

Raging oil prices will settle down

Fortunately, the consensus view on Wall Street is chances are slim that oil will surpass $100 a barrel and stick for any length of time.

A severe housing slump and attention-getting credit crunch are tapering U.S. economic growth, which will trim energy demand and bring prices down to around $70 to $80 a barrel, predicts Fimat analyst Antoine Halff.

US EIA: OPEC Needs to Pump More Oil to Avoid Stocks Shortage

The Organization of Petroleum Exporting Countries will need to pump more than the additional 500,000 barrels a day agreed in September to avoid tight crude and product inventory levels, the head of the U.S. Department of Energy's data section said Thursday. "If no additional supply by OPEC is agreed we will see a shortage in the first quarter of 2008 in inventories. We will see higher draws from inventories," Guy Caruso, who is administrator of the DOE's Energy Information Administration, told an energy conference in Dubai. "US stock inventories for the winter are going to be very tight," he added.

In Texas, a muted oil boom

The North McElroy oil field here in West Texas has long been a tableau of rusty tanks and worn-out pump jacks. "NOT IN USE" is painted across broken electrical panels affixed to an abandoned building. With oil prices setting records, years of neglect finally appear to be coming to an end. The energy company Apache is drilling new wells. Workers are flocking to this sparsely populated part of the state, living in motels and trailer parks. Dishwashers and teachers are fleeing their jobs for $60,000 salaries in the fields.

But for all the new wealth and activity, the best the industry can hope to accomplish is to slow the decline of U.S. oil production. The good times here are not nearly as good as they were in the last big oil boom, in the 1970s and 1980s, and nobody expects that they will get that way, however high prices rise.

Exxon Mobil's $3.6 billion verdict thrown out

The Alabama Supreme Court on Thursday threw out nearly all of a record $3.6 billion verdict that the state government won against Exxon Mobil Corp. in a dispute over natural gas royalties.

The calamity of Iraq has not even won us cheap oil

We knew the war was built on lies - but to have increased petrol prices as well as terror will surely seal history's verdict.

Chinese oil giants to import more diesel as domestic fuel prices rise

China's oil giants Sinopec and PetroChina moved yesterday to more than double diesel imports this month after Beijing unexpectedly raised domestic fuel prices by up to 10 per cent, giving profit margins a fillip.

The main suppliers to the world's second-largest energy user are seeking to buy an extra 120,000 tonnes of the fuel in November, trade sources based in China and Singapore told Reuters, adding to the 90,000 tonnes they have already purchased and potentially lifting imports to their highest in three years.

Big Trouble for Big Oil

"Gasoline prices can't keep pace with the sharp runup in crude oil prices," says Fadel Gheit, senior energy analyst for Oppenheimer & Co.. "Going forward, whatever an oil company can get for crude oil [production], it will forfeit at the pump."

'MidEast Oil Forever?': Part I

Eleven years ago, I wrote an article for the Atlantic Monthly with various predictions and warnings on oil and energy technology and climate. Since those subjects remain hot today -- concern over oil prices and peak oil is at a three-decade-high, and Shellenberger and Nordhaus have reignited the technology debate with a variety of historically inaccurate claims about the clean energy R&D message -- and since this is probably the best thing I wrote in the 1990s, I am going to reprint it here. It is a long piece so I will divide it up into several posts.

From the Office of Congresswoman Kay Granger, 12th District of Texas, R-Texas

Dr. Sabonis-Helf said that oil is the most widely used energy source in the world and that the U.S. is the biggest consumer worldwide. She said we expect to see a 43 percent increase in oil demand between 2003 and 2030, and a 15 percent increase by 2010. And since oil does not power our homes, this rise is expected to come from an increase in the number of cars being purchased.

With demand increasing globally, the world market is facing two potential threats: capacity and catastrophic events, such as a terrorist attack.

Legislature begins planning for oil shortage

Lawmakers led by Rep. Terry Backer and Sen. Bob Duff on Thursday warned of potential dire consequences if Connecticut ignores the soaring price and plummeting worldwide availability of oil.

Study Reveals that Nitrogen Fertilizers Deplete Soil Organic Carbon

To understand why yields were lower for plots that received the most nitrogen, Khan and his colleagues analyzed samples for organic carbon in the soil to identify changes that have occurred since the onset of synthetic nitrogen fertilization in 1955. "What we learned is that after five decades of massive inputs of residue carbon ranging from 90 to 124 tons per acre, all of the residue carbon had disappeared, and there had been a net decrease in soil organic carbon that averaged 4.9 tons per acre. Regardless of the crop rotation, the decline became much greater with the higher nitrogen rate," said Khan.

Clinton, Wal-Mart push 'green' cities

Former President Bill Clinton told more than 100 mayors Thursday that stopping global warming depends on them demonstrating that it makes economic sense. He said his foundation is teaming up with Wal-Mart Stores Inc. to save cities money on environmentally friendly supplies by buying in bulk.

Bill McKibben: The Unsung Solution

From his desk in an office in Chicago, Jeff Smith has a bird’s-eye view of the American landscape. Combing through a huge database of information compiled by the EPA, he can, almost literally, peer down every smokestack in the nation and figure out what’s going on inside.

And what he sees is heat. Waste heat—one of the country’s largest potential sources of power, pouring up out of those smokestacks. If it could be recycled into electricity, that heat would generate immense amounts of power without our having to burn any new fossil fuels. By immense, I mean, speaking technically, humongous. Even after he’s winnowed the nation’s half a million smokestacks down to the most likely customers, that leaves twenty-five thousand stacks. “An astronomical number,” Smith says.

Global warming bill advances in Senate

Lawmakers took the first step Thursday on a bipartisan global warming bill that would impose mandatory cuts in greenhouse gases from power plants, industrial facilities and transportation.

Is the latest climate change bill getting warmer?

When it comes to passing climate change legislation, the U.S. Senate has plenty of options to choose from - nine bills to cut greenhouse gases have been rolled out since the start of the year. Yet none has managed to achieve a groundswell of support among key activist groups.

A new Finance Round-Up has been posted at TOD:Canada.

The credit crunch that has been unfolding in slow-motion all year appears ready to make headlines again as equities experience a sharp sell-off. As Ambrose Evans Pritchard says, the evidence that something serious is underway is already present in abundance. Losses and writedowns are mounting, and problems seem to be spreading to bond insurers, which will further impact on the value of insured bonds.

Trillions of dollars of off-balance sheet activities are increasingly coming back to haunt the banking system, as downgrades come in thick and fast. 'Discounted' is the new 'contained', but these losses are neither fully discounted nor contained.

Ambrose Evans-Pritchard: The sky has already fallen

If you are a bear, you must accept that you will always be wrong in polite society, and you will continue to be wrong all the way down to the bottom of recession. That is the cross that bears must bear.

Over the last three months we have seen a rolling collapse of speculative debt and real estate across half the global economy, yet friends still come over to my desk at the Telegraph, with that maddening look of commiseration on their faces, and jab: "so when is the sky going to fall then, eh"?

Well, excuse me. The sky has fallen. The median price of new homes in the US has crashed from a peak of $262,6000 in March to $238,000 inSeptember. This is a 9pc drop nationwide.

The slide in existing homes is catching up. They have come down from $229,200 to $211,700 in three months. (National Association of Realtors). Yet we have barely begun to see the default hurricane as Teaser rates contracted in 2005 and 2006 on floating mortgages kick up venomously over the winter, peaking around in the Spring of 2008.

Merrill Lynch has just confessed to a $7.9bn write down on CDO subprime debt and assorted follies, nearly double what it suggested three weeks ago....

....It is true that stock markets have once again decoupled from the realities of the debt markets. But they did this in the early summer, when the Bear Stearns debacle was already well under way. They caught up famously in August.

Nobody I talk to in the City credit trenches believes for one moment that the crunch is safely over. Indeed, they think that we are edging back to extreme stress levels, and the longer it goes on, the worse the damage.

It's true, there are millions upon millions of people like me, who have essentially failed, who can't keep up with massive debt at 30% interest, and who have, and are being, forced to gear way down and live on a fraction of what they've been living on and to simply stop paying the CC bills and stop using CCs at all.

If in the US economy I am the equivalent of one tiny capillary in the system's big toe, I have just shut down - NO blood flow. Enough of this and you get limb or body death.

People who have lost jobs and small businesses, who have been stung as badly as I have, maybe (although not in my case) who have become religious and read what's in the bible about usury, are I think in most cases not likely to become credit-slaves again. Remember the generation that went through the Depression? Never ever borrow, keep their money under the mattress? That's what I'm becoming. That's what a lot of people are becoming - all but one of my creditors seem to have not quite figured out that those dollars I owe them will never be supplied. Those dollars are out there right now being treated as real, being bought and sold and traded and counted on. The CC companies are continuing to send me nice little bills, hoping I'll find the money somewhere to get right back on schedule paying them, because they're really screwed without that money. Well, hope all you want guys, because the money's not here and it's not going to be. I actually suspect a full 1/4 of the American populace is going to be in my situation soon. I also suspect that there's going to be a very strong anti-usury sentiment in the US soon so that even those who can afford to pay the CC companies and banks to screw them, won't.

The Crunch is far from over - it's barely beginning.

I'm getting increasingly frantic calls on my two debts, too. One car payment, one credit card. They slipped last month but I'm busy enough now to catch up. I don't know how important my credit rating is going forward - assuming I continue to be employed the credit card will be gone within the next quarter and they car will get paid off. After that ... an acreage ... and rent to own is really common up here. What else would I need it for?

You're right about the capillary effect - I've talked to some of my telecom equipment dealer buddies and they're all displaying various shades of despondent. They'll come back a bit as the bankruptcies start after the first of the year, but if there aren't capital budgets to drain their warehouses its just so much junk :-(

SCT - pay 'em off if you can. Play a banjo by the roadside, beg, do whatever you can do pay 'em down if you can.

That's where I ran into trouble - even working my butt off at what's really well paid work, better paid then I'll probably ever see again, I was still falling behind by a significant amount. Then they raised the rates MORE.

They sure seem to be trying their best to drive people into BK if they can.

Starting NOW, don't use your CC for anything. Stop any and all activity that feeds the bastards. In fact stop all spending you can avoid.

Example: We have a beat-up ex-fleet truck here with the most abused steering wheel I've ever seen. I will reconstruct it today and that means stripping the rubber coating (that's left) off of the metal frame, wrapping that with some spiral-cut rubber tubing I prepared yesterday, then the outer covering is going to be, if I can make it work, an old 15" bicycle tire a friend gave us. If it works it will be COOL. All parts stuff that's lying around. And I will return the $7 wrap kit I got at the Kragan's, just to get my $7 back where most people would say shine it.

Stopping all possible spending hurts the economy sure, but the economy wants to use us all up and will crash anyway so it's time to start looking out for No. 1 and that means You and Your friends, family, tribe, neighborhood, etc. Out in California it means You. Out here I'm already learning is different, it means the network of friends one has and out here the networking is amazing.

My limit is two day's pay and customers are chasing me around this week and next ... no worries there - should be gone by the end of the year.

My big thing this week has been pulling out every little online service thing ... I had $100/mo going off into stuff I wasn't paying much attention to ...

I was paying $70 a month just to have the net when I was in Sunnyvale. Right now I'm paying $20 a month for dial-up but mostly not using since I seem to have access to someone's wireless, free, and am using the free-net which I can Telnet into and use and have an email address on that.

Even $20 a month buys a significant amount of food so I am thinking about dropping the ISP ....... but I'll probably keep it...

Most people are paying over $100 a month just for connect, because it's part of their cable or they're getting reamed for DSL. Plus the computer cost and upkeep, I'd say it's conservative to say the average subject-of-the-Empire is putting $150 a month into the ability to surf the 'net.

I'm just not sure IT is the career of the future.....

Here a little DSL (256k) is $33/mo with phone service, which we have anyway.

I was paying, between DSL here, cable, Vonage, and cell a grand total of $400/mo for my business. If LongLines would get moving with some EVDO up here I'd whack it all back to $60/mo, as is its down to $95.

But I was talking about stuff like LinkedIn and things of that sort - sign up, use it a few times, and they keep riding you. I do like Paypal for this - virtual credit card number, dies the next month, and that is that.

Yes, I realize Paypal is EvIl!@!@! and they're hooked to the bank that has not much money in it :-)

I pay $150 for TV, DSL, Local and Cell Phone. Its not so bad :P

Wow, here’s a shocking quote:

Oil producers, including the Organization of Petroleum Exporting Countries, are powerless to stop prices from reaching $100 as few countries can produce more crude, Oman's energy minister said yesterday.

Oman's Mohammed bin Hamad al-Rumhy said he didn't know of one oil-producing country that isn't at maximum output.

``Maybe Saudi could produce more, but the lack of spare capacity is a major factor,'' he said in a phone interview from Muscat yesterday.

In the great battle between Jeffrey Brown (peak now because KSA has peaked) and Robert Rapier (“peak lite” now because KSA still has spare capacity), I’d say the recent bombshells have been supportive of Jeffrey’s side of the argument.

Oh, they're just saying that. Trying to drive up the price of oil, y'know. ;-)

(That is a great quote. Yowzah.)

Though this really still cuts down the middle of the "Peak" vs. "Peak Lite" debate and would be hard to ascribe to one side or the other. It should be noted though, that "Peak Lite" should manifest as an early warning sign of the peak itself while extraction becomes much harder, but technically not impossible. Pretty good indication of "Peak about now" though - and that's plenty close enough.

Leanan-- this is totally off the wall, so ignore it if you want. For the longest time, I thought your name was Leanne-- never looked closely. Is your name or web-name derived from Leanan Sidhe, The Dark Muse?


C'mon...show the graphic!!


Just a little reminder that since the end of ASPO-Houston, given 84.5Mbbl/D extraction rate for all liquids, another billion barrels are no longer available, and from today til year-end that will be 5 billion barrels used up. We seemed to stall just short of the 1,000 barrels per second rate. Will global extraction for 2008 make it past the 30Billion bbl mark (@82.2mbbl/d) one last time? And at what price? If demand from the USA/The West lessens due to recession or increases in conservation/effiency, will we see that demand taken up by China, India and the other booming economies that can now rely on their internal markets to maintain growth, and thus see the continued rise in oil and other commodity prices?

"We seemed to stall just short of the 1,000 barrels per second rate."

People, let that slowly penetrate your brain. Think about it. Amazing!

The Leanan sídhe seeks the love of mortals. If they refuse, she must be their slave; if they consent, they are hers, and can only escape by finding another to take their place. The fairy lives on their life, and they waste away. Death is no escape from her. She is the Gaelic muse, for she gives inspiration to those she persecutes. The Gaelic poets die young, for she is restless, and will not let them remain long on earth--this malignant phantom.

Figure I'm a short timer here anyhow, so what the heck ...

The problem will solve itself.
But not in a nice way.

Weirdly, though, it's not in the link you provided.

It's here, though.

Bloomberg does a lot of fast editing of their news stories. Here one minute, gone the next. I'm glad they left the quote in one of their stories.

I do love this quote on their survey of analyst predictions, also from Bloomberg:

Respondents have predicted price drops in the previous 16 weeks. Prices have declined in five of those weeks. The oil survey has correctly predicted the direction of futures 52 percent of the time since the survey's introduction in 2004.

...in other news, Bloomberg investing in a coin to replace its oil analyst survey.

I was looking at the same data and thought "useless".

And some economists still gloat with that data!

Perhaps good if you're a commodities investor and spread your bets evenly, but as for showing the true trend of the price - utterly useless.

Yeah, I have been doing practically daily rewrites of the full written report on Net Exports. I am inclined to wait and post it after oil crosses the $100 mark, assuming that it does it in the next few days.

While Peak Oil references are creeping into CNBC discussions, they had Matt Simmons on today, they also had a guy from the Economist Magazine talking about vast oil reserves, and then vast alternative energy sources.

Check out our "Economist" slide in our ASPO-USA presentation.

A suggested weekend homework assignment.

Take a look at your family budget and how much you are currently spending on food & energy, and make two assumptions: (1) Your income drops by 50% and (2) Food & energy prices increase by at least 100%.

I just increased the garden by a factor of 4.The news of the last several weeks has me thinking of 2x that.

Good job...I started a medium-sized garden this Spring and just got my composter built and is decomposing stuff now (probably not much through Winter).

The added bonus of building your own garden is that you avoid the ever-increasing incidence of harmful bacteria and other diseasing causing agents showing up in our food supply, which I attribute indirectly to cost-cutting measures in the food industry due to high cost of energy.

I'd like to add that you just cannot lose by doing this sort of scenario analysis (and change-making) in your life.

Even without Peak Oil any individual (or set of individuals, for example people in Flint, Michigan, or Houston, or California after the aerospace busts) can experience 100% declines in income for indeterminate amounts of time. I have, more than once.

And we've already seen a 2x increase in gas prices since 2002.

So WT, please don't stop reminding us. We can't know the future but you can take some stochastic whacks at it every once in a while.


NervousRex you are right - my income's down 100% right now, although $150/month food stamps means it's not down to zero right now....

and in California it seems everyone goes broke once every 10 years, the smarter/luckier ones seem to plan and save for that, I wish I had. Just a vehicle I could live in low-profile and going out and learning some "homeless skills" would have helped me a lot.

But it seems now the whole country is about to become Flint, Michigan.

Hey fleam-

Just a vehicle I could live in low-profile and going out and learning some "homeless skills" would have helped me a lot.

Some good "homeless skills" advice can be found here:


Have a job at the moment, but practicing these skills and ELPing as fast as possible "just in case" as I don't know how long it will last. Good luck brother.

Yes the Possumliving book rules, I have it copied onto my computer.

Since discovering PO I've found myself giving change to, and to some extent befriending and hanging out with the homeless, marginal, and down-and-out. Also remembering and drawing on ways of doing things from my own poor past - funny, in real economic terms I was less poor back then, at my "poorest".

I still can't figure out for the life of me what ELP'ing is, but I think it refers to listening to Emerson, Lake, and Palmer, great band really!

Really? Seriously?

ELP - Economize, Localize, Produce.

Graphoilogy post on ELP

I was unsure of sharing this (so out of norms in our society), but last August 16th I got my electric bill and I was NOT happy with it ! From memory, 697 kWh and over $70 (I am on level bill but that was the actual cost before levelizing).

I can certainly afford three times that much, but I prefer not to spend my money on just raw energy for a variety of reasons.

The next day, I decided to live without air conditioning (not quite so radical, first winter after Katrina was w/o natural gas, no hot water, window heat pump in other room, and that not till early January).

The first week was difficult (New Orleans, mid-August), but then my body adapted (and I made more trips to Sophie's for her home made gelato & sorbets :-) (4.5 blocks away).

ASPO-Houston with their meat locker temps was a bit of an adjustment. Last month was 198 kWh :-)

Best Hopes for Energy Efficiency AND Conservation,


My last electric bill was 560kWh and $150, but it covered 3 months for my family of four. (Not that we need much aircon in UK) In fact, we only used
480kWh but the bill was estimated (too high as usual).

We use natural gas for heating with solar for hot water (wood stove backup).

I want to fit solar PV, but we don't have enough roofspace left after the solar hot water. A 2Kw(peak) set-up would reduce average bills to zero.

Alan I'm not sure how Nawlins compares with Hawaii for temps and humidity, but aren't they close?

I grew up in Hawaii with no AC, house had no AC, schools had no AC, when I became a young adult some of the places I'd go that were newer had AC like libraries, some restaurants, so I had some tiny exposure to AC.

One thing I'd do in the rooming house I lived in was I got a little "muffin" fan about 6 inches across out of an old computer or something, it was 110VAC powered, soldered a cord onto it, and perched it on the window - it circulated enough air to make a big difference. It used very few watts and was also useful for working late into the night on circuit boards, I'd have it blowing on me and my eyes would get much, much less tired.

One thing you can do is wear as little as possible, eat less, sleep naked, and part of it is a mental thing.

I dunno a $70 electric bill, ouch!

Fleam: check out these two web sites.
August temps For Hon and NO. Ten degrees for both temp and dew point. Go to the bottom of the pages. Gulf waters are about 90 f and Pacific about 80.



This summer in Houston I've been averaging maybe 300 kwh, for $40-something. But that's because I don't cool most of the house. I bought a Chinese mini-split air conditioner from ebay and got local AC guys to install it in my living room. They'd never seen one before. It was expensive, but it replaced a window unit that had ruined the window, and the new window greatly improved insulation in this largely uninsulated 1916 house. If I could afford it I would get one or two more mini-splits, but until these become common knowledge in the Sun Belt I won't see any good deals.

From the article above...Even though I’m in Florida, I’m glad to know others are thinking ahead and that I’m not the lone Ranger in my thinking.

Australia: Drivers switch to scooters and motorbikes
MOTORISTS are so fed up with congestion, petrol prices and parking shortages that an increasing number are considering changing to motorbikes and scooters, according to a new study.

Concerning ELP, I am happy to report that my new scooter finally got low enough in the gas tank to add a gallon…62MPG! My F150 is getting mad sitting in the driveway.

I caught Mat Simmons on CNBC early this morning. It's fun to see Joe Kernan squirm and get so visibly upset by Simmons' cold logic. They can't even let him lead the questioning. At the end he tosses in the old 'Won't the tar sands save us' question. He's clearly confused and disallusioned by what's happening but as a 'journalist' he has no right to have such emotional attachments to one side or another.


But as a human being he has every right to be horribly dismayed.

I don't think he's dismayed because he 'gets it'. He's upset because people keep coming on his show and clearly explaining that his cornicopian view is rubbish and he wishes they were wrong. He's going through the emotional trauma of having to change his view, not because he wants to but because the price of oil just keeps going up.
This will be played out for many people in many different ways in the future I'm sure.


Not taking sides, trying to analyze.


1) Lack of spare capacity can be temporal (anybody have data on projects projected to come on-line in coming years)?

2) We should concentrate on trying to understand the reality, not fitting reality to our pet hypothesis. Working through falsification of multiple hypothesis, even if cumbersome, is the only way.

3) Scientific approach may be moot to many, but for me at least, that is the only thing I have - otherwise it's just as Dirty Harry said it about opinions and...

& Thanks for digging up that quote!

The link no longer has the quote. The link currently is:

Post Bloomberg November 2, 2007 00:29 EDT

The Bloomberg Report above that originally quoted it was November 2, 2007 08:31 EDT

It also posts on FXstreet.com

It's an important quote. Thanks.

From the NYT article up top:

But for all the new wealth and activity, the best the industry can hope to accomplish is to slow the decline of U.S. oil production.

Where have I heard this before?

Of course, the writer didn't connect the dots, to-wit, what happens when the world is at the same stage of depletion that the US was at when we peaked?

Interestingly enough though, one of the talking heads on CNBC, Bob Pisani, has mentioned peak oil two days in a row. He said that with Chevron joining ExxonMobil in showing lower crude oil production in response to higher crude oil prices, it was further evidence for a peak in world oil production.

As I have said many times, we can make money finding smaller fields post-peak, but we have not been able to make a real difference.

The IHT/NYT article also has a nice graphic:


Interestingly, there are at least five articles about oil in today's NYT (Leanan's already picked up most or all of them). As one who has been critical of the Times' coverage of oil, I'm pleasantly surprised.

Tapped Out, but Hopeful: A Break in Texas’s Oil Decline
A War Game Supposes Scarce and Risky Oil
Government Cannot Halt Oil Incentives, Judge Rules
Citing Oil Prices, Asia Starts Reducing Fuel Subsidies
Energy Expert Sees Hazard in Costly Oil

The shrub and his merry band of criminals have no right to lead anyone. They should all be in a secret prison somewhere.

Google Rumsfeld Snowflake Memos:

Iraq as Shock Doctrine is going great.

Arkansaw of Samuel L Clemens

Secret? Public!

Bring back the Stocks!

No, even better, and getting past my Brutal, Calvinistic Cultural instincts..

Give them a first-rate trial, and if shown guilty in a verifiably legal court proceeding, imprison them in a humane, (High-Security) facility with healthy food and access to Libraries, Education and Rehabilitative Counseling Opportunities, along with all of their cell and jailmates, who must represent the full spectrum of our society's prison populations. No Country clubs, but no Torture either. No Exclusive treatment, but completely INclusive, instead. Prisoners rights must be protected and championed. Wouldn't that be a shocker!

Bush's challenge to the Senate Hearings for the new AG were so backwards, insisting that if he were to express his views on Waterboarding, that the 'Terrorists' would be able to prepare for it and gird against it or such.. While the real US experience of having US policies of Fair Treatment actally saw Nazi soldiers giving up to Allies, because they knew they'd be fed and not mistreated. I think it's the 'Art of War' where one of the first things you do is to undermine your enemy's will to fight.

Long live the Bozo.. under lock and chain!

On a related note, my father served in occupation duty in China. The Imperial Japanese Army would NOT surrender to the Chinese, knowing that none would ever return to Japan.

Instead, the US Marine Corps landed and handled the surrender and shipment back home of the Japanese, and then left as the Chinese Civil War broke out.

IMHO, defeating the Japanese Army in China would have taken years and millions of lives. The humanitarian reputation of the US military (despite a lack of in some island campaigns) was a great boon for all concerned.

Best Hopes for Salvaging Our Reputation,


Slightly of topic, but I was saddened to read of the passing of Paul Tibbets last night. Many may think he was a monster, some may think he was just the instrument of national policy. Nevertheless he performed the duty asked of him by his country. I am sure that there was a terrible burden associated with his actions, but played a significant part in saving millions of lives. He earned his place in history.

I was saddened even further when I mentioned his passing to my wife and children and had to explain that he was the pilot of the Enola Gay, to which they responded, what was that. sigh


Well.. don't hate me for this EJ, but I would have missed question one as well. Q-2 I was all set with, even tho' there is now some skepticism by some now that WWII actually ever happened. It has been suggested that Reagan just created the whole thing from his movie career to help him defeat the so-called 'USSR', which I'm personally doubtful ever existed. It was actually a conspiracy by globe-manufacturers to save a few bucks on certain ink colors.

Sorry.. I'm a little insane this week..

I asked my Dad, who is a much better student of History than I am, what were some of the Stories Events from History he thought would make the best Movies or Mini-Series? I would love to see a series of well-done histories on film, as long as they were dedicated to History as much as Theatricality. More 'I Claudius', than '300' or 'Gladiator'..

Your point's well taken, tho' who can blame the Japanese soldiers from rightly guessing the likely behavior of the Chinese either. Talk about a vicious circle!


Hmm... this must be what Amon Goeth meant in "Schindler's List" when he said that his eradication unit would make the Jews of Krakow into a "rumor".

War criminal. Obeying orders didn't excuse the Nazis.

Irony: His name was Paul Warfield Tibbets.

M. Tibbits

Why, I think that would only be ironic to Miami Dolphins fans.

I think Japanese army tried to fight in China when Soviet army attacked, but quickly capitulated. From wikipedia: "The attack was made by three Soviet army groups. In less than two weeks, the Japanese army in Manchuria, consisting of over a million men, had been destroyed by the battle-hardened Soviets."


The reason for Hiroshima and Nagasaki.

To get Japan to surrender before the Soviets entered.

Arkansaw of Samuel L Clemens

Didn't it also have something to do with a sincere belief that avoiding the half a million or more Allied casualties [maybe vastly more] that would have resulted from an invasion of the home islands of Japan was a good thing?

Odds were the above was a factor, along with a 'public demonstration' for the benefit of both the US and others, of what a fission weapon could do.

Like so many things that happen around us, there are many reasons for them to happen - we can only guess the "why"

I have the Sawyer foundation book on the Sawyer company WWII contribution to the Manhattan Project. The Sawyer company was the goto company for molds. The Manhattan project contracted out the explosive and plutonium and uranium molds and Sawyer was a bunch of smart people who immediately spotted what they were for.
The Sawyer people had the uranium implosion molds on the dock when Truman nuked Hiroshima. He could have got four cities instead of one because implosion bombs are so much more efficient that gun bombs, but he wanted to nuke Japan before the Russians got them to surrender by themselves. It would have been too embarassing, not to mention that the Russians might have gotten troops into Honshu if the Japanese surrended too quickly.

&BEFORE the Soviets entered? LOL, they would have had to drop the bomb in late 1938, then, because the Japanese had attacked the Soviets in the East long before the Soviets were attacked in Operation Barbarossa by the Nazis....if the Nazis and Japanese had co-ordinated the attack, they miiiiight have won.

See here:


and especially:


This was where Lt. Gen. Georgi Zhukov was really put to the test, viz:

(quote)In 1938 Zhukov was directed to command the First Soviet Mongolian Army Group, and saw action against Japan's Kwantung Army on the border between Mongolia and the Japanese controlled state of Manchukuo in an undeclared war that lasted from 1938 to 1939. What began as a routine border skirmish—the Japanese testing the resolve of the Soviets to defend their territory—rapidly escalated into a full-scale war, the Japanese pushing forward with 80,000 troops, 180 tanks and 450 aircraft.
This led to the decisive Battle of Khalkhin Gol. Zhukov requested major reinforcements and on August 15, 1939 he ordered what seemed at first to be a conventional frontal attack. However, he had held back two tank brigades, which in a daring and successful manoeuver he ordered to advance around both flanks of the battle. Supported by motorized artillery and infantry, the two mobile battle groups encircled the 6th Japanese army and captured their vulnerable supply areas. Within a few days the Japanese troops were defeated.
For this operation Zhukov was awarded the title of Hero of the Soviet Union. Outside of the Soviet Union, however, this battle remained little-known as by this time World War II had begun. Zhukov's pioneering use of mobile armour went unheeded by the West, and in consequence the German Blitzkrieg against France in 1940 came as a great surprise.
Promoted to full general in 1940, Zhukov was briefly (January - July 1941) chief of the Red Army General Staff before a disagreement with Stalin led to him being replaced by Marshal Boris Shaposhnikov (who was in turn replaced by Aleksandr Vasilevsky in 1942). Ironically, this led to a relative non-accountablity of Zhukov's military role in the huge territorial losses during the German 1941 invasion of the Soviet Union thus ensuring his presence "in the wings" for Stalingrad. The question of how much he could have done had he held command earlier is still much discussed.(unquote)

from: http://en.wikipedia.org/wiki/Georgi_Zhukov

The battles around the Manchurian border involved the Japanese using biological warfare against the Soviet troops, and was really quite vicious. This was one of the reasons that Zhukov's arrival from the east (with train loads of battle-hardened troops) was able to turn the tide against the nazis in the Second World War

Oh come on...

Talk about spinning history. What about

The Soviet–Japanese Neutrality Pact refers to a pact between the Soviet Union and Japan signed on April 13, 1941, two years after the Soviet-Japanese Border War (1939). The Soviet–Japanese Neutrality Pact refers to a pact between the Soviet Union and Japan signed on April 13, 1941, two years after the Soviet-Japanese Border War (1939).

and then

The Soviet Foreign Minister Molotov informed Tokyo of the Soviet Union's unilateral abrogation of the Soviet-Japanese Neutrality Pact on April 5 [1945]. At two minutes past midnight on August 9 [1945], Tokyo time, Soviet infantry, armor, and air forces launched an invasion of Manchuria. Four hours later, word reached Tokyo that the Soviet Union had declared war on Japan.

In the context of this discussion (motivating factors for dropping atomic bombs), referring back to 1938 is disingenuous. To what extent the decision and timing of the nuclear attacks on Japan were driven by the Russian aggression against Japan in 1945, we'll never really know. It seems to me near-certain there was at least some.

Jaymax (cornucomer-doomopian)

Peak Oil has been big on CNBC this morning

They had Matt Simmons on saying oil has peaked and saying the price of oil should be much higher. Then about an hour later they had Vijay Vaitheeswaran, author of the book “Power to the People”, telling us that there was plenty of oil and all the other corncopian arguments. And his latest book is called "Zoom: The Global Race to Fuel the Car of the Future,”

Matt Simmons on CNBC
Crude Realities: Discussing peak oil, with Matthew Simmons, Simmons & Co. international chmn and CNBC's Becky Quick

Vijay Vaitheeswaran on CNBC
Running on Empty: Insight on whether the oil supply will head lower, with Vijay Vaitheeswaran, The Economist correspondent/author and CNBC's Carl Quintanilla

Vijay's last line on the show: "Oil does not have a bright prospect, mainly because we are going to leave it in the ground because we get something better." Well hell, isn't that wisdom for the ages? And the stone age did not end because they ran out of stones either.

Vijay even has his own Yahoo Groups mailing list. I am a member but haven’t posted there in over a year. I still check it occasionally. They average about one post per day so there is not much going on there. Denis Frith, who is a member of several Peak Oil lists, is about the only peaker who ever posts there. And when he does he gets pounded by all those who say that we have enough oil to last for centuries, Vijay among them.

Vijay is a strange one. Not only does he say that there is no problem with the oil supply but at the same time he is one of the biggest champions of the Hydrogen Car and the so called Hydrogen Economy.

One more point. I have been listening to CNBC all morning and I heard the term “Peak Oil” mentioned many times. The cat is out of the bag. They are actually talking, and talking a lot about peak oil on CNBC.

Ron Patterson

That cat is poised to become a Lion over the next couple months.

US ratchets up the Iran rhetoric again today. All according to script.

CAD$ break 1.0717....weehoo. Except if you are an exporter...doh.

What is a plausible scenario in which the US Military actually defeats the Iran military? Without nuclear annihilation, rendering the victory useless, that is?

You first have to define defeat, or what constitutes US victory.
Extra credit would include an explanation of why the cost of lives and national treasure has to be made to defeat them.

Fat Man
Herman Kahn and the nuclear age.
by Louis Menand


“On Thermonuclear War” (Bruce-Briggs suggests that the title, an allusion to Clausewitz’s “On War,” was devised by the publisher) is based on two assertions. The first is that nuclear war is possible; the second is that it is winnable. Most of the book is a consideration, in the light of these assumptions, of possible nuclear-war scenarios. In some, hundreds of millions die, and portions of the planet are uninhabitable for millennia. In others, a few major cities are annihilated and only ten or twenty million people are killed. Just because both outcomes would be bad on a scale unknown in the history of warfare does not mean, Kahn insists, that one is not less bad than the other. “A thermonuclear war is quite likely to be an unprecedented catastrophe for the defender,” as he puts it. “But an ‘unprecedented’ catastrophe can be a far cry from an ‘unlimited’ one.” The opening chapter contains a table titled “Tragic but Distinguishable Postwar States.” It has two columns: one showing the number of dead, from two million up to a hundred and sixty million, the other showing the time required for economic recuperation, from one year up to a hundred years. At the bottom of the table, there is a question: “Will the survivors envy the dead?”

Kahn believed—and this belief is foundational for every argument in his book—that the answer is no.

Arkansaw of Samuel L Clemens

And I have always considered this to be exhibit A for how it is possible to be both super intelligent and utterly insane.

Several...and none.

It's not the military you need to worry about.

Last thought on the subject...we're still thinking linearly...like they intend to win!

As it has been said before, Iran isn't a great prize oil wise...so, maybe this is all just a smoke screen to cover peak oil and position for other moves.

Look at the black box and try to guess what is inside? It is clear from the output of the machine Iran is part of thier plan...but how??

Iran is number 2 in NatGas and Iran is the Opec cartel's number two oil producer.

Arkansaw of Samuel L Clemens

Nat Gas is a tricky prize.

But they only export around 2MMBPD. And in the case of conflict this will be reduced.

I cannot emphasize, this is NOT their plan. Antagonizing them is, attacking them might be part of it...but taking their oil isn't....yet.

Oh, Wack-job radio version of "the Plan"

Poke the rest of the world so the US gets attacked with nukes, then in the 'sue for peace' ask for the debt to be forgiven! (This dude was the one who proposed it http://worldaffairsbrief.com/)

(Hell, there could be some form of plan "there is nothing that happens in Government that is an accident" to 'there is no plan - just reactions' We, the pleabs, have no idea of what 'the plan' is.)

This link did not connect the 'dude who proposed it', but to a site with many links to other subjects.
The posting for Operation Keelhaul says that Roosevelt sent back the two million East European refugees, deserters, collaborators, infiltrators, prisoners of war, etc.
Roosevelt was dead before the end of WWII. That was Truman.
I stopped looking after that.

No, the author of that web site was the one who decided that one can somehow tie the debt of the US of A to a nuke war and call it "the plan". (Vs *A* plan and yet another thing called "a reason" in an attempt to explain what seems to be senseless actions)

It has the virtue of being the 1st time I'd heard such, and could be on some planners list as a "positive". *shakes head*

I dug around for the name, found his web site and posted it. I did not dig around on his web site, I see no reason to add more data that may or may not be true to convince me that the 'people in power' have lied to the underlings. I already know that people lie to others.

Wack-job pertaining to who.

Just to be sure.


Arkansaw of Samuel L Clemens

The United States can not engage in a ground war in Iran without a draft. I would expect the moves to be an air war aimed at newkuLAR efforts and the branding of the Revolutionary Guard as a terrorist organization opens up the possibility of savaging their infrastructure to weaken them.

I'm pretty sure Iran is toast. Agreed they cannot engage in a ground war without a draft.

A few scenario's:
-there will be a draft
-no ground war, but war anyway
-Israel to strike first, Iran responds, drawing the US in
-some terror event, blamed on Iran, the nukes come out (not of the electricity generating kind)

The increasing rethoric is very disturbing. And knowing that it would be disasterous to start a war with Iran is exactly the reason you cannot trust the present US administration to refrain from it.

Note that the Oil Shockwave wargame supposes a draft.

War in Iran. Gasoline rationing, at $5 a gallon. A military draft. A Chinese takeover of Taiwan. Double-digit inflation and unemployment. The draining of the Strategic Petroleum Reserve.

They've nailed the optimist scenario.

Can China really move against Taiwan without having massive trouble with the United States, Japan, and South Korea? I would say that would be hugely provocative towards the United States ...

Just like the Balkans in the second decade of the last century ... one little tap in the wrong place and the avalanche starts.

Taiwan who?

Taiwan's toast (IMHO), They just don't know it yet.


Off Grid, Off Mainland, current profession:Beach Bum

Why bother INVADING? The Chinese can just BUY the darn place!

"I would say that would be hugely provocative towards the United States ..."

So? The US VP has stated the war is not gonna end in our lifetime, and his assistant, better known as dubya, recently has been lobbying for support to unleash WWIII

If they re-institute a draft, they will get war, and it will be on the streets of the US.

If there is one thing that can get aging boomers off their rear ends and back on the streets again, in common cause with the draft age kids, this is it.

And this time around, the "silent majority", hard-hat wearing, anti-peacenik types are indeed silent, for they are all in the nursing homes or cemetaries by now.

Israel does not have a plausible Iran attack option. They might be able to carry out a few sorties, like they did on Osirak in Iraq, but not enough to have any real effect in Iran. They would have to violate either Saudi or Iraqi airspace to do it and would have to refuel over one of these countries. The Shiite Iraqi government, which is friends with Iran, is not enough of a puppet of the US to let them get away with that. That would be an act of war against Iraq or Saudi Arabia. Israel does not have any interests that would be served by that. If Cheney/Bush want to go after Iran, they are going to be on their own.

Not sure I agree with that - I think they could repeat the recent Syria sortie - out over the med - refuel before they go feet dry over northern Syria or southern Turkey - get permission from the US to cross Iraqi airspace (not like the Iraqi's have anything to stop it) - and strike their targets in Iran

if they lead it out - any response by Iran (unleashing Hezbollah in southern Lebanon, overtly supporting Shiite's in Iraq, silkworming a few tankers in the gulf etc.) allows the US to engage in follow-up raids from the air - taking out additional targets including Kuds Force etc.

now - it would be really really stupid - but so far our leadership has shown itself perfectly capable of being really really stupid - so I'm not holding my breath that this sort of scenario won't happen - oh, and my guess is this way Bush would get congressional approval too - cowed Dem's would hand it over quite quickly I think...

Is it plausible that the USAF dropped a tactical nuke on the Syrian site and Israel just played a support role?

'USAF struck Syrian nuclear site'
Nov 2, 2007 10:30 | Updated Nov 2, 2007 19:20

The September 6 raid over Syria was carried out by the US Air Force, the Al-Jazeera Web site reported Friday. The Web site quoted Israeli and Arab sources as saying that two US jets armed with tactical nuclear weapons carried out an attack on a suspected nuclear site under construction.

The sources were quoted as saying that Israeli F-15 and F-16 jets provided cover for the US planes.

No it isn't plausible. If an atomic weapon had been used, the fallout [in a literal sense] would been front page news every day since the event.

There is a possiblity that the U.S. was a direct participant, but unlikely because the Israeli air force really doesn't need the help. Accordingly, what would be the motivation for the U.S. signing up for such a political risk when Isreal is fully capable?

One general observation as a total outsider: It appears something very strange did occur and the media is either not in the know or is employing amazing restraint.

It's about twice as far to the border of Iran as to where the Israelis struck in Syria and about four times as far to the nuclear sites in the interior. Do you think Turkey would let Israel attack Iran through their airspace?

Iraq is a sovereign country, right? Their government is Shiite led and has counted on Iran for military materiel support against the Sunni insurgents and militias. You think we can just give Israel permission to attack Iran through Iraqi airspace? And to refuel over Iraq? Don't you think that that would put the Iraqi government in a pretty untenable position in the Muslim world, letting the arch evil Israelis attack a Muslim country through their airspace? The Iraqi government is not that stable.

How many sorties do you think Israel could carry out that way? That's an awful long way, they do not have that many tankers and the tankers would be very vulnerable to Saudi F-15s. They might be able to whack the hornet’s nest but that’s about all.

Iraq a sovereign country? you're joking right? Hmmmm, they didn't do so well kicking Blackwater out - and my guess is they just plain wouldn't be told about an Israeli incursion - I mean, it's gotta be the US AWACS and ground-based installations that are watching Iraqi airspace (and there must be an awful lot of traffic up in the sky)

and yes, I think it would put Iraq in a horrible position vis-a-vis the rest of the muslim world - and I can't think of anybody more likely to make that mistake than Cheney/Bush

the Saudi's would never attack over Iraqi airspace - they aren't going head-to-head with the US over wacking the Shiites in Iran - are you kidding? they would LOVE to see Iran smacked down some - their internal position with a rather large shiite minority on the coast really demands it.

and I think "whacking the hornet's nest" is precisely what the Israeli's are likely to do - provoking a response that will allow the US an excuse to hit more targets

not like the Israeli's are going to worry about their image in the region at this point...

provoking a response that will allow the US an excuse to hit more targets

So an outrageous provocation by the Israelis would help the Bush administration sell the idea of attacking Iran? Why would our ally doing something, no doubt with our approval, that would be nearly universally condemned and cause the likely fall of the Maliki government give us a pretext for further attacks? And the Israelis would be supported by the Saudis? Hmm... I just don't get this Republican logic. Is the idea just to drag us into a general war? And how does this help the Israelis?

no, whatever response Iran had to an Israeli attack on Iranian nuclear facilities would help Bush Co. sell a follow up attack on Iran

universally condemned? a) since when has that stopped the Israeli's? (e.g. attack on Iraqi nuke site, recent attack on suspected Syrian site, incursions into Southern Lebanon, cutting off West Bank enclaves etc.)
and b) Europe's rhetoric hasn't been all that soft on Iran either - they may be perfectly happy to see somebody else take out Iranian sites...

and where did I mention Saudi supporting Israel? - I said Saudi wouldn't attack Israeli jets going to or returning from Iran - especially if the Israeli's didn't violate Saudi airspace - but you would have to be rather grossly ignorant of Shia-Sunni regional politics to not know Saudi has no desire to see Iran emerge as the greatest power in the region

and I believe the Neocons have spelled out their desires to attack Iran very clearly - starting long before the Iraqi war - and as seen in recent Rumsfeld memos seeking to "link Iraq and Iran"

Israel does not want to see a nuclear-armed or regionally super-power Iran - that would be their motivation - which they have demonstrated before

I think is only one of a few possible scenarios that the Bush admin will use to get in a war with Iran

or do you think that it's all just words?

or do you think that it's all just words?

No, I think the Bushies want to attack Iran. Some of them are stupid enough that they would like to have anyone with them, even if it has to be Israel.

I just don't think that Israel has any plausible attack options. Iran is too far away and they would have to operate through hostile airspace to get there. I have heard American military experts suggest that we would have to fly 2,000 - 3,000 sorties to do the kind of damage that would really set back Iran. In addition to nuclear sites they would need to take out all kinds of air defense and command and control targets to gain control of the air battlefield. Israel is just not logistically capable of that.

I also do not think you appreciate how much political damage it would do to the US if we let Israel attack through Iraq. And I question whether Saudi Arabia would really tacitly support Israel over Iran as your description suggests. The Saudi may fear Iran and consider them rivals but they are still Muslims (sort of) while to all Arabs Israel is evil incarnate.

Finally, what would be in all this for Israel? Iran is not 1980s Iraq or more recently Syria. Israel does not have the military capability to really hurt the Iranian nuclear program. So what would be their goal? To unleash the dogs of wars?

Its all a neocon fantasy. No one is going to make this easy for us. Our allies do not think launching another unprovoked war would be in their interests. Russia and China think Bush is such a dangerous loose cannon that they have to come to Iran's rhetorical defense. No one but the loons in the Republican far right think its a good idea. So we should be really worried.

I disagree. They have about 200 nukes. And a strike at Iran's nuclear facilities will cause a counterstrike, as well as a Russian/Chinese response.

And what Iraqi gov are you talking about?

i find it ironic that the docudrama about a nuclear war named 'threads' started with a conflict in iran.

Not ironic. Scary.

Ah, but Canada exports commodities.


Have you checked out the new Fox Business channel? I watch neither CNBC nor Fox, but I wonder whether CNBC will increasingly take a "peakist" view of the oil industry and whether Fox will take the opposite view in an attempt to differentiate themselves.

Naw, I haven't checked them out but I will. I simply don't like Fox. When I watch a news channel I watch CNN or MSNBC. I like them both as both have both right and left leaning reporters. Fox is just way too far right. Bill O'Reilly is a joke.

That being said, it makes no difference which side CNBC or Fox takes, the data will trump all opinions. But I do find it interesting that there seems to be more and more peakers every day.

Ron Patterson

Mike Lynch posts to Vijay's group PowerToThePeople.

I posted a short note to Vijay’s group this morning, similar to my post above but shorter. It was my first post there in over a year and a half. I got a quick reply from Mike Lynch.

I heard peak oil mentioned, too, but don’t take it any more seriously than the typical broker’s comments (or the ads with the lady advising everyone to buy gold). Oil production is up sharply in October from early estimates, probably passed the supposed peak of May 2005 that Matt keeps talking about.
Mike Lynch

Well there you have it, Mike says October production will take out the May 2005 peak. That peak, C+C, was 74,298,000 barrels per day. Any takers on whether he is right or wrong? I am predicting now that he will be way off, off by at least half a million barrels per day.

Ron Patterson

The US is headed toward a cliff, and Yergin/Lynch and ExxonMobil, in effect, are urging us to press down even harder on the accelerator. High oil prices are temporary! Party on dude!

BTW, for the sake of argument, if October matches the 5/05 rate, what about net exports?

As we pointed out at ASPO, if Saudi Arabia maintained their 2005 production rate for 70 years and maintained their 2005 to 2006 rate of increase in consumption, their net exports would decline by about -10%/year over a 25 year period, hitting zero net exports in 2036, with total consumption of 108 mbpd in 2075.

The US is headed toward a cliff, and Yergin/Lynch and ExxonMobil, in effect, are urging us to press down even harder on the accelerator.

That comment reminds me of the ending of the movie, "Thelma & Louise". It's going to be a long, cold winter for some of us.

I'm glad my propane delivery guy finally showed up, but the $2.93 per gallon hurt just a bit.

E. Swanson

I paid 2.80 gallon last week. Upstate NY

Well westexas, I'd argue the world is headed toward a cliff.

Anyway, I would realy like the bright, numbercrunching people on this board to take a good look at this reply from ace to galacticsurfer http://www.theoildrum.com/node/3174#comment-257894

Significant, if you'll ask me.

A cliff? And not an undulating plateau? Seriously, at this point decline modeling seems to be the most important work anyone could be doing. ELM will be exert a powerful effect but would have to be considered with other variables. It would seem that HL has been effective in predicting US and world peaks, so I would expect good modeling would emphasize geology over market, political, or strategic considerations. Granted there are still a hundred variables to consider and some of the most important have to be inferred, but it SHOULD be possible to do a comprehensive survey of the state of depletion of all known resevoirs, ranked by size, factoring in such things as falling EROEI and falling API, and do some projections. A cliff? Or a plateau? Is there any more important question to be answered right now? I mean, I like to wave my hand and make broad projections as much as the next guy, but it's more of a Rohrschach test than analysis.And I just can't accept that a Black Swan renders makes an attempt to quantify decline meaningless. All complex organizations strive for stability, I think you're always better off assuming gov'ts want to preserve the status quo.
From my perspective any decline modeling by any person/organization that has not accepted and internalized PO 2005/2006 lacks credibility. So, that begs the question, what is status of intellectually rigorous, non-delusional decline modeling?

An undulating, sinking, sort of mild downhill. With Americans back to walking or biking or (the horror!) carpooling not because gas is all that expensive, but because they can't afford it. $3 gas isn't that expensive, but right now the people cutting back are those who have lost their jobs, lost their health (remember NO safety net in the Empire) and thus their jobs, lost their houses, illness, divorce, you name it. Those are the ones cutting back.

Remember in the US it's hard to climb up, easy to fall down!

The economic Depression will overshadow the effects of Peak Oil. The only way the Empire's subjects will experience any sudden effects of peak oil is all or most of the rest of the world gang up on us, isolate us, as well they should, and cut off supply.

An undulating cliff?

Sorry to read about your current economic situation, but welcome back. The living memory of the great depression is just about gone and it appears more and more likely that most of its lessons are likely to be relearned in a manner that will at least rhyme.

I think there's need for debate about how ELM will apply itself globally to importers.

And while the predictions out to 2030 or so are enlightening in terms of how steep the trends are - we all know that if this theory holds, no predictions out that far really count for much.

So, what's in store in the next five years from ELM - I believe that should be the focus of much of the debate (note I didn't say all).

It seems to me, that even with steady or initial slow decline in production for the next five years, ELM is going to bite hard - so what will that mean for the world?

eg: The US imports something like 60%? Presumably some countries are at 100%, and other importers only need to worry about 10-15% - that's going to be significant in terms of how hard different peoples, and from a global perspective, different economies are hit.

Hypothesis: Even with sharp declines in exports, richer nations (US, Europe, China) will initially still be able to afford to get all they need, (note: not want) and so their interlocked economies will hold together (other economic issues notwithstanding!) for a short while. Meantime, a large number of much poorer oil importing countries will go to the wall, with human suffering of horrendous magnitudes, broadcast in the western nightly news to a decreasing, but still substantial number of viewers of HD plasma TVs.

Jaymax (cornucomer-doomopian)

If I were a betting man, I would take his bet, and Robert's last one (which seemed to be more of a pissing match to me at $10,000, I would take a gentleman's bet of $100 on any of these...isn't that really the point).

BTW, It's Nov. 2nd...where is that OPEC Oil...what not here yet...when then...just started pumping...really...so 44 days then? Ugh. I think I have heard this one before.

Scream or meditate...hmmm. In the big picture, 500 KBPD won't help at all anyways, even if it shows up.

Oil production is up sharply in October from early estimates...

We won't really know whether production passed the earlier peak, because we don't have independent verification of production.

The governments of Dubai (http://www.zawya.com/printstory.cfm?storyid=DN20070715000464&SecIndustri...) and Venezuela have routinely overstated production by something like 50%, and we have no idea whether countries like Saudi Arabia are accurately reporting on production. All we have are tanker counters, and they are not a reliable source (see Matt Simmons in http://www.evworld.com/article.cfm?storyid=884).

Never bet on any outcome where the only source of information on the outcome is your opponent.

Moe, thanks a million for posting this link.

This is a really great audio interview with Matt Simmons.
The above link is part one of the interview. This link leads to part two:

Thanks again,

Ron Patterson

A question I would be interested in views on:

Are oil price changes from here on likely to be determined by amount (eg $3 more this week) or percentage (2% change this week)?

The reason I ask is because of the predictions for $150 by 2009 etc. The assumption seems to be a slow dollar by dollar increase over years. However if the viewpoint switches to a percentage one (akin to share portfolios, etc.) then we've no reason not to expect $150 before the end of 2008, based on 2007.

There is a theory regarding share prices that companies attempt to maintain them in range that maximises price growth, and is out of the penny share or extremely expensive ranges (eg a price of '411' is better than '21' or '9012'). By doing this the behavioural psychology switches in buyers minds and price movement is enhanced.

Is oil on the cusp of moving from one mental model for pricing to another?

Anyone trying to predict future oil prices should first attempt to predict the yearly depreciation of the US dollar. What they don't mention on CNBC is that if the US dollar had held its high against the Cdn dollar reached in 2002, oil would be $54 right now. To answer your question, no, you will not have daily moves of $1 when oil is over $1000.

Of course, as I noted yesterday, not everything, e.g. housing (and more broadly the auto/housing/finance sector), is going up in dollar terms.

In regard to Matt's bet, I think that they were using $200 in constant 2005 dollars.

I continue to think that housing and SIV's are wiping out $'s faster than the Fed can create them.

See Merrill Lynch for details.

Arkansaw of Samuel L Clemens

Re housing, the only exception will be areas with foreign money interest. If the US dollar continues the slide, one can expect NYC, Hawaii, SF real estate to put in a bottom. Already Hawaii is starting to look cheap (with the Yuan at 7.45). What will prime Hawaii RE go for when the Yuan is at 3 to the dollar?

Is oil on the cusp of moving from one mental model for pricing to another?

Yes, it is starting to be priced as a depleting resource with no good substitutes.

That's very different from a model based on just needing to ramp up investment in order to bring plentiful but hard-to-get-at oil to market.

It's a paradigm shift. The sooner it happens, the better.

It wouldn't be hard for an economist to whip some mathematics to give us a flavor of what that shift means (using fairly simple models). Wouldn't be pretty.

That is another mindset change that depends on realisation and tipping points.

The one I'm particularly looking at here is pure market abstract - what are the size of the numbers and how do you deal with them.

At present we move +/- $1-3 a day. The same was essentially true when we were down at the $20-30 level.

I'm wondering if the $100 has more impact than just the number and the resistance level - does it mean that big news could mean $5-10-20 daily movements in future. To me part of that is concerned with how people talk about movements and what their mental models are. These things are rarely smooth.

Almost all players in the oil markets are professionals. $100 will have little psychological impact. That's more of CNN thing.

As per usual, day to day volatility would increase with geopolitical instability and stretched supplies.

But it could also decrease with time if the system develops a lot more storage capacity. In fact, it would decline markedly immediately if the US gov announced that they would use the SPR to smooth prices in the same way governments intervene to smooth moves in their currencies. But Cheney said a couple of days ago that they won't do that.

Its interesting to see the ways market players are described as professionals - yet they ARE driven by numbers, support levels, etc. - you can see it in the statistics of how they trade. Its also interesting to note the story I pointed to above where industry analysts consistently do no better than chance at predicting the market movements.

I'd be prepared to bet that the volatility shown above once oil is above $100 will be greater than that shown below it.

In fact I'm already thinking that $201.0 by 2010 is a good bet.

....where industry analysts consistently do no better than chance at predicting the market movements.

That's analysts as a group. But there are people who have been beatin' the heck out of the markets for decades. Ol' T. Boone for instance.

I'd be prepared to bet that the volatility shown above once oil is above $100 will be greater than that shown below it.

For sure. At least for the early months/years above $100. But that's not because of the psychology of $100. It's because the forces that have driven prices to such extremes are rather unstable and it will take a while to sort out.

I peak at the upstreamonline link about once a day now but I only learned of it a few weeks ago. Are these large swings normal? It seems like I see changes on the order of 5% daily, but its up and down, and not all types move at the same time. Is this more volatile than normal?


As many have said...we have entered a time of HIGHLY VOLATILE markets.

5% could be construed as volatile.

Right, there's a lot of poker in the markets right now.

Damn pesky speculators.

Wait...isn't there always speculators. Nah...they just popped up to screw with everyone...thought it would be fun.

Yah..that's it. No supply problem here. :P

What happened with Gold/Silver in 1980.

The markets went to a number that got little old ladies
turning in their heirlooms.

Since gasoline can not be hocked, turning in their Standard of Living
will be the marker.

GS and NYMEX tried to break the Markets Tuesday.

Little Noticed Margins were increased as GS said take profits.

Didn't work.

Arkansaw of Samuel L Clemens

I'm not so certain that it is yet being priced as a depleting resource. If it were, wouldn't the market be in contango rather than backwardation?

Commercial traders keep waiting for the price to drop for the season (airlines refraining from hedging fuel, etc.), but shortages keep feeding the high spot price. So we're in backwardation. Next year, when we're looking at the need to build gasoline inventory for the summer driving season, we're more likely to see contago again.

Tennessee town has run out of water

The severe drought tightening like a vise across the Southeast has threatened the water supply of cities large and small, sending politicians scrambling for solutions. But Orme, about 40 miles west of Chattanooga and 150 miles northwest of Atlanta, is a town where the worst-case scenario has already come to pass: The water has run out.

The mighty waterfall that fed the mountain hamlet has been reduced to a trickle, and now the creek running through the center of town is dry.

And their solution to the problem depends on cheap oil:

Three days a week, the volunteer fire chief hops in a 1961 fire truck at 5:30 a.m. - before the school bus blocks the narrow road - and drives a few miles to an Alabama fire hydrant. He meets with another truck from nearby New Hope, Ala. The two drivers make about a dozen runs back and forth, hauling about 20,000 gallons of water from the hydrant to Orme's tank.

Running water is only available 2 hours a day, from 6-9. Residents have to do anything requiring water during that window (washing clothes, cooking, showering, etc.).

I know from talking to immigrants that in Russia and Pakistan families often have a large water tank suspended from the ceiling of the kitchen. They fill it during the brief time water is available (a couple of hours day).

For some immigrants that tank is a potent symbol of backwardness and stagnation. But that is likely the future of drought stricken areas. Pressure sucks, but a least they have water 24/7 if they are careful about their usage.

Every time we empty a plastic bottle, I fill it with water and store it down in the basement.

# of days supply ~ 2 liters person/day

I think you're underestimating water requirements -- they're more like 4 liters/day unless you're in cool shade and not exercising.

I have never seen a house in Russian without a running water, but I know that some remote villages do not have it. But even in cases like that people do what they been doing for thousands of years: build a simple well. Russia is mostly a rather wet place (and even that would be understatement) so one does not have to dig deep to hit water.

Yes, in Russia drought is not an issue. But they do, at least in some places, use a storage tank when water is offline.

The tank, I believe, is called a tazik.

Hello Leanan,

Thxs for the info. FEMA's mission-statement reponse is....???

What happens when, not if, this SE drought affects millions? The drought map is not looking any better,IMO:


Is FEMA purposely ignoring mitigative responses such as municipal scale humanure, drastically higher water prices, planned evacuations to the Great Lakes, etc, etc? Or do they 'prefer' to bide their time: to let the situation get out of hand to the point of massive water-dispute shootings, hydropower blackouts, nuke plant shutdowns, etc, etc, in order to impose Martial Law and other draconian measures?

What would Asimov's Foundation predict and direct as the optimum decline path, paradigm shift, and ecosystem re-equilibration? Second Foundation's likely response is key to overall plan; integrational effects need accounting for cascading blowbacks' differential rate of change.

Wild & Crazy Speculation: a dirty bomb in Atlanta, or thereabouts, would get the people moving to Detroit, plus allow the re-installation of SE Martial Law & the military draft again.

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

The drought comes and goes. A long time ago I made an animated GIF of about seven years of it, which I posted here.

I'd be willing to automate this so it would be made current every week, but I'd like it in a more usable form than a gigantic GIF. If someone could point the way to a animated GIF to avi or mpg conversion tool I'd get right on it ...

Hello SCT,

Thxs for responding. Your Quote: "The drought comes and goes."

What is key is the drought's severity and duration: Nature has the upper hand here by far--I strongly doubt if the US could throw enough money and resources at this in a timely fashion if the drought continues to spread. We couldn't build new dams, canals, and cross-country pipelines fast enough in a crisis--IMO, easier to move the millions to the water in Cascadia, Great Lakes, etc [if the people already living there will allow it]. They can then move back later, if desired, when the drought is over.

Besides, the people in the Northern States have already said that they will not allow pipelines from the northern rivers and lakes to go south.

This just in on Google News:

Bush vetoes $23-billion water bill
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Cudos to Simmons for his bet.

For too long it has seemed that the pessimists were traumatized by the Club of Rome thing. (Is that why Robert Rapier's bet taker is anon? Or did RR bet fleam and it's an IRS issue :-)

I mis-spoke yesterday when I stated that Germany was generating 14% of their electricity from solar. I talked with Nina in Herman Scheer's office. He is the leader of the German Lifeboat Policy.

Here are the details she provided:
3% of electricity in Germany has been provided by solar PV in 2006.
- they are ahead of schedule to reach
- 300,000 installations
That is 2 billion kWh whereas it was only 64 Mio. kWh in 2000.
It gave a huge boost to the RE deployment in Germany.

They are creating the market:

Captured 8.5 billion Euro Economic Value from Exports

Create 250,000 jobs that are independent of oil

If we build enough lifeboats we might just make it.


Six and a half billion passengers and we have life boat materials for two billion, and that assume that the unlucky four and a half billion don't rock the boat while the lucky two billion are trying to board.

What's a Peak Oil aware billionaire to do? Richard Rainwater warned us back in December, 2005 of what was coming. It's interesting that he is integrating himself into small town life in an agricultural area.


"I just want people to look out. 'Cause it could be bad."

WT, and I mean this as a joke, but some days I wonder if you a really a sophisticated 'bot' that patrols TOD threads searching for 'key worlds' to then pounce with a generic cut/paste response that you've used for two years now :P

As opposed to a sophisticated 'bot' that patrols TOD threads searching for 'key words' to then pounce with a generic cut/paste response to the effect that we should not worry about finite energy resources?

I'll say this your damned consistent in your message.
And increasingly proven correct.

When you find the "key worlds" can we emigrate there before it's too late?

"we have life boat materials for two billion"

And of course, I know you're just trying to make a point.. but I wonder what the point really is.. it sounds like 'Why Bother?'

One good snark deserves another..


No link, but the two billion was derived from numbers related to NPK and soil condition globally, rather than any FF related thing. I am not a human file cabinet so I didn't keep it, but it does get brought up here periodically.

I mis-spoke yesterday when I stated that Germany was generating 14% of their electricity from solar

It should be noted that solar reaps a lot of criticism these days because it sucks up most subventions in Germany, compared to far less energy than wind.
Whether Germany is a good location for solar energy is at least questionable.

Germany sucks as a place to put solar collectors. It is a testament to the quality of the policy and individual effort that they are much more successful than we are.

I believe no matter what you circumstances, being prepared will improve them.

My recommendation to nearly everyone is be self-reliant. If you want something to be available in a time of great change start providing some of it yourself now:

  • electricity, solar (wind is a manifestation of solar)
  • drinkable water, have a well and purification
  • security, get trained and know your neighbors
  • food, try to grow 1/3rd of your own

None of this may be needed. But training for uncertainty provides a certain degree of control with facing uncertainty.

One good site for solar calculations is this from the European commission:

Is Germany putting any where as much effort into sustainable food production as they are in electricity? Personally I like eating and avoiding starvation that using electricity. Life without electricity would be less fun, Life without food is impossible.

The German culture is much better than the US at getting going on necessary projects. Not that they are perfect, but you can rest assured that the German people and leadership are very conscious of their surroundings and their needs. There is much more consciousness about food and health there than here, too.. (that's hardly setting much of a bar, though..)

Good time to think about the mote(s) in our own eye, nicht wahr?


The simple answer is yes. The more complicated answer is also yes.

Germany practices a number of sustainable or near sustainable (hard to stop cheap imports while not cutting down your own wood, for example) directions.

For example, organic food is growing increasingly common in all stores - and in a few things, such as carrots, the split in volume seems 50/50.

Germany is also very big on local products, and local markets to sell those local products to local consumers. And local here really does me within walking/bicycling distance in many cases - towns are generally surrounded by farm fields.

Speaking very broadly, Germany follows sustainable practices for a couple of reasons -
1. No European country voluntarily depends on its neighbors for any strategically necessary amount of food. The key here is strategic - in other words, European countries have centuries of warfare behind them, and they are not giving up such well tested practices merely because food from somewhere else seems cheaper. The analogy to see in action is Russia and energy supplies - and notice German preparation in terms of energy generation, building insulation, etc.
2. If you live within your means, you don't need to invade other countries for resources. After all, countries that engage in such practices and lose have their leaders hung as war criminals.
3. You have to be pretty stupid to live without the long term in mind, and for whatever their flaws, Europeans have no problem seeing the long term. Doing the right thing? Europeans are human, like everybody else. Denying the long term? Not something Europeans can easily grasp, even as it happens to America.

Reason No. 4 that I may add is the reminiscence of need during post WW2 that is still alive in the older generation (and in not-so-old people from the new Bundeslaender, the former GDR.)

In the eastern states actually there were no real food shortages AFAIK, but the society was short of many products important for daily life (such as medical products.) On the other hand there was a strongly localized private economy of neighbor-help in the GDR which was sometimes really astounding.

Germany sucks as a place to put solar collectors

There are good places for solar collectors in Germany (a little generalized maybe - those strips where they grow wine). DER SPIEGEL has some details (for those of you who read German. Maybe this article will appear in the international section of the paper some day in English; sometimes they translate their articles.)

Says free market wishful thinking from here.

No, that's what it would be if they were just talking about it.. they are actually doing it, and have a growing installed capacity, regardless of what future interruptions might do to the attainment of this goal.



You're most welcome.

There is such a habit of looking for 'What's wrong with this picture?', that anytime someone comes in with a 'What's right with this picture?' it is automatically jumped on simply for not fitting the 'Eliminate the Negative' action-model.

ie, what is working, what is positive, where is the Flow that you can be aiming your Kayak towards, instead of just obsessing about the rocks you want to miss..

'It takes TWO.. Two slices of bread to make a sandwich'
- Tom from the Bronx

"You've got to Ac-cen-tuate the Positive,
E-lim-inate the Negative
Hold On, to the Affirmative;
Don't mess with Mr. In Between.."

And who the heck is Mr. In between??


I like the kayak correlation. I paddle white water boats.

I mis-spoke yesterday when I stated that Germany was generating 14% of their electricity from solar.

Thanks for admitting when your data was incorrect.

You are welcome.

Did anyone else notice this row?
It seems the Ukrainians have seized a refinery in which the Russians have a stake.

I posted an article about it the other day. Very confusing situation. Near as I can figure, it's a battle between shareholders.

Hello TODers,

One million people affected by Mexico floods

MEXICO CITY (AFP) - Rescuers worked Friday on saving hundreds of thousands of people trapped by the worst floods ever recorded in Mexico's southern state of Tabasco, with more than one million residents affected.

The oil-rich state the size of Belgium is now 80 percent underwater, officials said, adding that they expect more rain in the coming days.

"New Orleans was small compared to this," said state Governor Andres Granier, comparing the disaster to the flooding caused by Hurricane Katrina in 2005.

Rivers continued to swell due to the non-stop rain, and more than 850 towns have been flooded in the Gulf of Mexico state, officials said.

"Of the 2.1 million Tabasquenos, more than half are suffering from this serious problem that has not been experienced in the history of Tabasco," Granier told reporters late Thursday.
There are quite a few onshore oilfields in this area, but I am unaware of the before-storm bbl/day output. My guess the wells have all been shutdown, and any area electricity is shutoff to reduce electrocution for anybody wading. It would be interesting to know if the oil-ports are also shutdown for lack of electricity, but maybe they have their own on-site generators to run the pumps.

Tabasco Is Strategic [1996 status--need current status: BS]

Tabasco is important in the national context because it is strategic to economic and political control. With a fifth of the country's oil reserves, Tabasco's deposits are second only to those in Mexican territorial waters. Tabasco's petroleum production is valued at approximately US$1.9 billion per year. With 926 oil wells, Tabasco has nearly a fourth of the 4,000 in all of Mexico and has 3 of the country's 9 gas processing plants.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Considering the recent news..
.a town in Tennessee is out of water,
Mexico hit with huge flooding,
Atlanta may run out soon,
Raliegh,NC may be next..Falls lake was always to shallow,even
when I boated it back in the 80s,
All the wildfires in California.

So it appears to me that we are seeing the beginning of what is to come.....and that from here on out there will always more and more bad news of a crashing planet and starting its death throes as its populace stands by and watches.

It is starting and will only get worse...

airdale-you can still call me a doomer and there will be lots more who will become doomers...I hope I am wrong enough so that we get a least one more year before it gets too bad
I need just a little bit more time to get more prepared..just another year is all I ask..for the sake of the "Class of '57".

PS. Tontoneila , always with the doom and gloom man!Where that bottle of scotch now?

Hello Airdale,

Thxs for responding. Not doom and gloom--just factual reality in the news reported straightup-- it is a beautiful day in my Asphalt Wonderland: snowbirds are massing in huge, inebriated swarms on our area winter-lawn golf courses!

As for the bottle of scotch--cannot afford it, such is life.
My now-deceased father use to love a snort of Pinch brand scotch, he called it a 'Pinch of Reality'.

I drink beer periodically, but always do my half-empty Peakoil Shoutout as I consume my version of the 'Nectar of the Gods'.

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

The most reliable and credible projections (whatever that means, we're talking about WEATHER) I've seen for the southeast US indicate that our AVERAGE precipitation should not be much different than historic norms. Here in WNC, we're supposed to actually be UP 1" by 2050 - yipee!! ;-)

However, they also say that we can expect much more VARIABILITY in the future.

It looks that what we've got right now is some of that "variability". Got it in spades, if you ask me.

In a few years we'll probably be complaining about "biblical" floods and soggy fields.

I have the NOAA weather channels programmed into my mobile 2 way ham rig...and on the scanner at home..last night they gave the local 'observations' which is rainfall amounts ,temps ,etc...and so help me they said we had 35 something inches here so far this year and were a slight bit behind our average..

Now this is an out and out lie...I and others keep rain guages and we have had about 14 inches so far this year...we are way way behind for 2007...so why are they lying?

We are charted in the drought monitor as Extreme..I looked at the latest weather pattern maps for averages over the years and we are in a 48-50 inch pattern.

So something is wrong. Frankly I no longer believe the USDA on crop projections and now I am not too sure about NOAA..

Two years ago a severe thunderstorm hit my county. I had the scanner on..not one warning..trees were down everywhere.the nearest city had a huge blowdown...yet not a single word or warning until 45 minutes after it had passed over this us.

I guess I should have lost faith back then.

Katrina sealed it for me and weather reporting accuracy.

Totoneila (aka Bob Shaw)

Wouldn't it be interesting if Phoenix and the Valley had a plan like Germany with say 2 to 3 KW pv on all the built out houses. Last time I was up there, there must have been at least a million or more houses up there. Even if a lot of them went into forclosure, just let APS take over maintance, and look at the free power they would get. -:)

Hello Old Hermit,

Thxs for responding. Yep, if our local leaders had any forethought: the sunny Southwest should have been the leader in solar PV and solar hot water, along with mandatory clotheslines, and mostly Eco-Tech housing needing very little AC/heat. Bicycles on tree-shaded paths with periodic PV-powered tubes full of cooling A/C would have been nice too.

Instead, we paved the ground for biodegradeable McMansions and suntanning booths, pointless golf courses gobbling water, HOA's outlawed clotheslines, and countless chrome penises flacidly limping the pubic lice through the failed clusterF#@k.

Why would APS invest in roof-PV on an empty house? Even if they did, the crackheads would scavenge it in less than 48 hours.

Sorry-- a little gloomy tonight at this late hour. I off to bed for some shuteye.

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

BBC is saying:

300k people are trapped in their homes Katrina-style
100% crop loss in Tabasco
70% of the land in Tabasco submerged

Twenty-one people died last week when storms forced an oil platform into another rig in the Gulf of Mexico.

Dozens of workers had to leap into the water.

The storms have forced the closure of three of Mexico's main oil ports, preventing almost all exports and halting a fifth of the country's oil production.

What are the chances oil breaks $100 on Monday?

I hope the French fisherman keep their ships in port. Give the piscine a break.


I haven't escaped from reality. I have a daypass.

Wasn't it a strike by French fisherman and truckers over fuel prices that started that craziness in the UK a few years ago, when store shelves emptied, gas stations went dry, and the prime minister was mobbed by an angry crowd?


The fisherman are being told : you should have invested in new and more efficient motors for your boats. And they reply : with whose money ? We live on the verge of insolvency since 5 years.

And it seems that more and more people are getting angry at the fuel prices. I heard of demonstrations about lowering taxes (about 80% of the price). It is alwas interesting to watch the french situation. There will be a big strike on Nov 16. It is about the age of retirement and the amount of pension but I bet that the high fuel prices will be part of the emotionnal drivers.

FYI : the cheapest price today in my town is for diesel at $6.12 and the most expensive is for unleaded gasoline at $8.12

Euh ?

"Piscine" in french means "swimming-pool". Perhaps you meant to say "poisson" which means "fish". Perhaps you made a word-play between french and latin, in latin pisces is fish (you know that because of the constellation and the astrological sign), equating the big seas with a "piscine", a swimming-pool for fish ? :)

Let's assume that Saudi Aramco is correct and there is enough supply to meet demand. If true why is the price of crude rocketing towards $100/barrel? Perhaps for the first time in modern history Wall Street has finally realized while there is currently enough oil to meet demand it is actually a scarce commodity. This is a new concept for Wall Street.

A few years back if you had asked Wall Street what their outlook for oil supply was in the coming years most, if not all, would have said that there will be plenty of oil to meet demand. Perhaps all that is happening now is that Wall Street has finally realized that oil is actually a scarce commodity and it has been undervalued for decades (think back to Simmons and his 10 cents a cup analogy).

So get your mind around this. Currently there is enough of oil to meet demand. The true price of oil, due to its scarce nature, is really worth in the neighborhood of $100/barrel. When real supply constraints kick in, probably in the next year or so, the price will zoom up like we have never seen before. I was thinking the current rise in price was due to supply constraints but I think what is happening now is actually just a readjustment to price in the scarce nature of a vital commodity - something new to Wall Street.

Maybe I am stating the obvious here. But if the re-pricing of oil lately has nothing to do with real supply constraints then the coming price run-up when demand does exceed supply will be far greater than most of us figured. Perhaps The Oil Drum, by getting its message out, has actually educated some Wall Street investors as to the true scarce nature of oil thus helping to boost prices. Food for thought.

What is your explanation for the price of gold? Maybe there should be another blog site titled THE US DOLLAR IS CRAP.

The dollar is crap - I agree with you there. I was just taking KSA at their word, which is more of a mental exercise than true belief mind you.

I fully expect our house of cards to fall and I am not convinced that this whole sub prime mess was not engineered by the government to manage the decline of the economy. If you know what will happen in a post peak oil world you will not want to be a bystander - you will try to manage the collapse and perhaps this is one of their methods.

Cheney once said to a reporter that he and the administration were the actors of the current reality and we, the common folk, are simply the audience. This convinced me that the Neocons don't care what impact their decisions make - they just ant to be the ones influencing world events.

Gold pricing has been and is continuing to be significantly influenced by the peak in gold production in 2001. It's fairly meaningless to compare anything to gold these days, if one's looking for a tangible, consistent basis for comparison.

Jaymax (cornucomer-doomopian)

Gold is a vote of no confidence in paper money of all sorts.

If the the Euro or the British Pound or even the Elbonian Dinar represented a stable store of value and a liquid medium of exchange, who would want to hold gold? If gold was trending lower over the long tern in a price domoninated in Euros Pounds or Dinars it might just be about the USD, but that isn't the case [sorry no URL for Elbonian Dinars.]

Accordingly I believe that the good news for the average US citizen is that there is an excellent chance that the US dollar will return to parity with both the Euro and the Loonie. The bad news is that this might only occur at the point in time when all of these currencies are worthless.

The dollar is tanking now not soley from decades of mismanagement [and boy has it been mismanaged since at least the 1960s] but from the interaction of that mismaneagment and interst rates the are too low to offer enough incentive for foreign dollar holders to continue to enable the mismanagement game.

At the same time the average american consumer is suffering from the burden of servicing current debt loads even at interest rates at absurdly low levels given ongoing grinding inflation and the risk of default imposed on lenders.

Excessive debt [and in particular excess foreign held debt / dollars] is the problem and something has to give.

Sailorman and a lot of others are convinced that massive inflation is a foredrawn conclusion.

I think the inflation / deflation debate remains to be settled. The debt load can be reduced through either defaults or inflation. Ben and his helicopter fleet are feverishly working the inflation angle. Collateralized debt obligations and the underlying poor quality of debt packaged into this crap are part of the strong argument for a deflationary crash as dollars are debt and defaulted debt with no collateral is worthless.

Stir in peak oil and the resulting emphasis on fuel, food and other consumables is deflationairy everywhere else in the economy. And the winner is?

Anybody knows what is the price of oil relative to gold? If gold could not be mined anymore it could become a perfect currency. In other words it would be a currency with no inflation. Yet in reality gold is mined, so it's not perfect (there is some inflation) but it's probably much better then most other currencies.

Unfortunately it's not that simple. When gold was the basis for the monetary system, deflation was a common problem. This is because a growing economy needs a growing money supply so that the growing amount of goods and services can be efficiently exchanged.

But historically the supply of gold could often not grow or could not grow fast enough to match the growing economy. So prices had to fall. Deflation can be as damaging as inflation. For instance, a person with gold could watch their purchasing power increase from year to year, even if they contribute nothing to the economy, not even lending their gold out at interest. Essentially they could earn money doing absolutely nothing. That is not good.

Despite how it appears, money is a very complicated concept. There are no easy solutions.

I wonder what would happen if we linked a currency to the Calorie, or the BTU? Those are constants, and they won't vary much against the amount of work a person can accomplish in a workday.

Would it show a useful effect on the price due to the EROEI of different energy sources?

Would it reflect the difference between doing physical labor and desk /mgmt work?

The energy contained in food in addition to the energy required to make it?

OK, gotta go make some food.

Watts as money:


The only problem with BTU, Calorie or even the kWh as money is the lack of stable storage for all of these.

While gold is stable and all kinds of shiny - it is not all that 'useful' per say to the average person. Silver has more use to average persons with its heavy metal toxic nature able to kill bacteria via contact.

Ask and you shall receive:

Someone posted this over at PO.com. It's a translation of this Dutch link.

Diesel shortage around the corner

Oil-traders and gas stations in the Netherlands and Belgium are struggling to get their hands on some diesel fuel. Insiders say large oil depots in Roermond, Venlo, Wageningen, Cuijk and Geertruidenberg are already empty.

....Gas stations aren't completely run out of diesel yet, "but it shouldn't take much longer, gas stations usually have around a three or four days worth supply in storage", said Pieter Peeters, director of the Van der Sluisgroup in Geertruidenberg, the biggest independent oil trader of the Netherlands.

Oiltrader Frans van Rijswick in Roermand says the problems all started when two big refineries in the Netherlands and Belgium started doing maintenance at the same time and when a third got production problems.

...Peeters says there is no reason to panic, but the the situation is very serious. "The whole circle of production and delivering oil is so close cut, that there's pretty much no room for mistakes. Plus the fact that trading houses in the port area try to store as less as possible because they are waiting for better times."

He said he's never heard of shortages in the Netherlands before.

Not heard of any shortages in Belgium yet...yesterday, I was biking/jogging in Brussels and the traffic was as mad as usual...

In late september, I was discussing with a collegue and predicting shortages for end of winter or summer at the latest. He replied me it was impossible, that we still have oil for 40 or 50 years, and that I was an integrist because I said that car place in the society will be reduced a lot in the next decade.

If this article is right, I will be wrong...because I predicted that fall and begin of winter would be fine.

And China's now suddenly out there shopping for all those extra tons...

It's not much better for gasoline. According to Dante, gasoline imports into NY have declined sharply over the past few days. Perhaps related to that British refinery fire?

Drop in imports next week then? That could make for an interesting Wednesday petroleum report.

Amazing how so many refineries in so many countries shut down for maintenance without much advance warning. Yet Gasoline is cheap and Crude is expensive.

The price of diesel is sky high in Phoenix, today I saw several stations at 3.49/gal. In comparison regular gasoline is still 2.69/gal.

As little as a month ago diesel was a little less then regular.


Duvernay sees Petrobank tech juicing output

Petrobank is already using THAI at its Whitesands facility, an oil sands pilot that has had promising results and is expected to lead to a commercial development. The company is talking to "a number of parties" within North America and outside the continent, "positioning itself in a wide fairway" of opportunity, Mr. Bloomer said. He added that he expected Petrobank to secure another partner within the next six months.

Thanks for posting that article antidoomer. I sent it to Leanan hoping she would include it today. You've obviously been following THAI/Petrobank since Gail and I wrote about it Aug 27th. http://canada.theoildrum.com/node/2907
Perhaps you joined the party?


Yup, it's a really interesting topic, enjoy reading up on it.

I also saw this number from the blog link:


Petrobank said the THAI process - a combination of vertical air injection and a horizontal well that uses combustion to release stubborn heavy oil from underground reservoirs - could potentially unlock 70-80 per cent of the heavy oil contained in the property, a quantum leap from the 8-10 per cent recovery rates the property has seen using traditional cold-recovery techniques.

70-80% versus 8-10%. Wow, if true, that's phenomenal. I believe Oilmanbob touched on how much of the US abandoned fields could be tapped using this tech. Anywho, cool stuff.

Firstly – THAI looks like a very intriguing principle indeed – but a big Q or two-

A-will the very sensible FIRE-triangle be fulfilled throughout a big scale underground extraction with that method ?

I’d like to add one more side to this TRIANGLE - concerning underground fires – making it a square … because

B-where are the combustion-gases (co2 ,exhaust) going, from the advancing fire-front deep UNDERGROUND in muddy/earthy/sandy heavy-oil envirnoment … yes where is it going in a big scale and controlled manner ?

ps – CO2 is used as a fire-extinguisher for confined spaces… and I feel at this stage there may be a saturation-problem made up from CO2 in this process ..

… this Petrobank-animation does not show where the CO2/exhaust is going … hmmm!? http://www.petrobank.com/hea-thaianimation.html

Are A and B actually taken care of?

Hi Paul, As per your triangle model to create a fire, that being fuel, heat and oxygen, I do not see how this scale issue you mention

scale underground extraction with that method ?

gets in the way.
As for the CO2 combustion gases, they literally co-mingle with the super heated bitumen. That bitumen falls to the horizontal producer well through gravity. The gases provide "gas lift". Ergo, no pumps are required to lift the bitumen to the surface through said horizontal well. There is therefore no CO2 "saturation" problem. So yes, both A and B can actually be taken care of.

I most respectfully suggest that you read the article that Gail the Actuary and I wrote mentioned above.
Along with all the good questioning replies, it will hopefully answer most of the questions that you and others may have and perhaps even ones that you may not have thought of!

Q : How do you start combustion?

A : As with SAGD, both well bores are preheated with steam to initiate oil mobility. Upon injection of air, spontaneous ignition of heated oil will occur. Athabasca oil is extremely reactive as demonstrated in numerous laboratory fire-tube tests and field pilots. The ability to initiate combustion is a proven process.

Q : How do you know the oil will burn over the horizontal well and not in a different direction?

A : All reservoir fluids (liquids & gases) move in response to pressure gradients created by injection and production operations. Injected air will move toward the pressure sink created by the removal of fluids from the horizontal well. The flow streamlines will always be between the injector and the producer and the air (and hence combustion front) will have to follow the streamlines. In the case of Athabasca bitumen, the cold immobile oil outside the heated mobile oil zone acts like a container along with the cap and bottom rock.

Q : How will the well bore be designed to deal with sand production and the potential for plugging/erosion?

A : Sand screens or slots will be designed for minimal sand production and the well will be drilled at a low angle to minimize erosion at the turn. Oil will coat the well bore base in any event and moderate sand erosion. Plugging is not expected to be a problem as no fluids or sand will accumulate in the well bore because of high gas and oil velocity. Coiled tubing will be installed for plug removal.

Q : How will the pumping system be designed to handle Combustion Gas with a high gas/oil ratio?

A : Gas lift will be provided by the high gas-oil ratio. Also, water will be in the gas phase and contribute to lift. No pumps will be required.

The Oil Drum


1observer thanks for your reply – and definitely you understand this better than me being acquainted to the theories and practicalities involved…

Now, my approach is straight forward – just from my “narrow” understanding of nature – and then some

1- Making a working pilot project under Ideal circumstances – and a corresponding explanatory animation is one thing …
2- But … Making a BIG SCALE real commercial plot ONLY based on the ideas mentioned under pt. 1 is a complete different matter …. As I see it.

WHY ? … well “the combustion thing” …

As I understand you, everything from - start till finished - in this THAI-process inside this ever increasing cavity – is “self-maintaining – and self-adapting ….” There is nothing ever coming close (in my mind) to be functioning like that in the real world (or more correctly underworld).

This THAI-process is confined by the fire-triangle, Boyle-Marriott’s- and Murphy’s laws and a “hell of a lot of other random not controllable laws” … not explained anywhere … keep in mind the CO2 is a fire-extinguisher – and in reading you I understand IT will just stay down there …(??!!??) –
Remember the gas-mixture is actually changing ALL THE TIME – “making the fire-triangle” not possible at some ….. Stage …. (this is chemistry)

- that’s my take on THAI, and BTW , being from Norway myself, I see Statoil is gonna use this method for their patch ( if my memory serves..)

And let's keep EROEI and trickyness away - at least for now....

You're welcome Paul. First, let me say that the process which you are questioning (in situ combustion or fire flooding) has been in use for over seven decades globally. And again, the CO2 and other gases e.g. nitrogen, co-mingle with the hot bitumen and are produced together through the horizontal producer well. The gases provide the lift to produce the oil at the surface whereupon they are seperated. The dilemma that THAI addresses with fire flooding is how to control the direction of a fire flood in a non homogenous reservoir. This has never been done before until now. The Whitesands project in Alberta has been continuously producing oil since July 2006 using THAI. Specifically, THAI creates a low pressure sink into which the fire flood is drawn. Please. Read the Oil Drum article. It will address most if not all of your concerns. By the way, there are no Athabasca oil sands that are an "Ideal circumstance" to produce oil. They are the toughest conditions on the planet in which to extract oil other than shale oil (more appropriately known as kerogen, which is not actually oil). Finally, Statoil is to my knowledge not using THAI.


We have yet to see if the direction of the fire can in fact be controlled as advertised in a commercial-scale facility. We also have yet to find out if the fire can be extinguished when we want it to be. All it takes is a tiny crack to thwart both. THAI is interesting, no doubt, but IMHO it's far from being a safe and proven method on a commercial scale. Let's not get carried away here.

Energy consultant, writer, blogger www.getreallist.com

Chris, what you refer to is those “hell of a lot of other random not controllable laws” … not explained anywhere ...


Hi Chris, The evidence at Whitesands so far (16 months of continuous fire flood) suggests that the fire front is advancing down the low pressure sink. For now, there are three well pairs in operation. As for being "commercial", each well pair (vertical injection well and horizontal producer well) is a seperate entity. From my understanding of the process, it matters not whether there be three or thirty wells as far safety is concerned.
As to extinguishing the fire flood, that's easy. Just cease injecting air into the reservoir and the fire will go out. I think Paal's (Sorry Paal, I just realized that I have been misspelling your name. My apologies.) necessary conditions for a fire demonstrated that fact clearly.


On a Drumbeat earlier this week was a link to an announcement of an informational session held by the Connecticut Legislative Peak Oil and Natural Gas Caucus, which was co-founded by a state representative and senator. The hearing was held Thursday (and I was unfortunately unable to attend as I had a previous engagement to be mauled by my dentist.)

However, I did contact my own local representatives encouraging them to attend, as well as contacting the founding members of the caucus, thanking them for working on this issue. I heard back from CT State Senator Bob Duff, who wondered where I heard about the meeting. I let him know about the Oil Drum and gave a strong plug for the original content here- and he let me know that it's in his bookmarks now.

The best thing to come out of this in my opinion is that the meeting has received strong coverage on the CT NPR station. My wife (who avoids the topic when at all possible) has heard two segments on NPR since yesterday covering the meeting. Having suffered through enough of my own grandstanding to know the story, she told me that the coverage has been a fairly accurate accounting of the situation we're in- enough so to be alarming to the general listener, which in my opinion is just what's needed.

Apparently the meeting focused on the mitigation effort being made in Portland, Oregan- so my next step is to investigate just what they've been up to out there. I would love to hear anything from members here as to the Portland effort as well.



Their focus is on acquiring mineral resources, energy resources and investments in private equity houses, where they can get big and cheap stakes in companies.

Today, it was announced that China is seeking to make major investments in a large number of private equity firms. This is logical, and it follows the pattern that they have set in the last few years. They have been accumulating MINERAL AND ENERGY assets in Africa and Latin America.

They do not mind investing in countries with corrupt governments or wars going on. They are more than happy to invest in stable African and Latin American countries like Tanzania, Kenya, Uganda, Brazil, Peru and others to secure raw materials. They are after nickel, coal, zinc, copper, iron ore, oil and precious metals.

Political risk is not their big concern. Their big concern is to get the raw materials to allow 300 million more Chinese (in the case of China), and countless more in other countries make the transition from countryside subsistence farming to urban dwelling and its blue and white collar jobs.

No wonder precious metals, base metals and energy continue to rise...the demand continues to grow. We estimate that there will be continued demand for years to come.



The IEA (International Energy Agency) hints that its new crude oil forecast (to be announced soon) will be much higher than the previous price forecasts have been. Failing to buy the peak oil thesis for a long time, the IEA has been making low-ball estimates of global energy prices for the whole five years we have been shouting about higher oil prices. This was because they believed what the oil producing countries told them. Of course, the oil producing countries had a vested interest in trying to sell the world that they could increase production and keep oil prices down so consumption would stay high.

Now even the IEA has seen through this paper thin argument, and will announce that oil prices can go much higher because the amount of oil which can be produced in the world has PEAKED.

Absurdly unlikely though it is, can you image the reactions if the IEA report on the 13th says something like 'global conventional petroleum liquid supplies may have peaked and are unlikely to return to levels seen in 2005/6'

Not this month I'm thinking...
Jaymax (cornucomer-doomopian)

Ya...I was wondering about that little bit about the IEA as well. What does the author know that no one else does?

Hello Dragonfly41,

Thxs for the link, I posted it at the Yahoo Finance POT-stock message board. I think the Sovereign Wealth Funds [SWFs] are slowly moving multi-billions into biosolar mission-critical stocks like POT for future 'hen & NPK eggs'. Of course--No proof.

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

In the pre Iran war times I was digging around the pre Iraq war stuff and found this little beauty.


Bin Laden was, though, a product of a monumental miscalculation by western security agencies. Throughout the 80s he was armed by the CIA and funded by the Saudis to wage jihad against the Russian occupation of Afghanistan. Al-Qaida, literally "the database", was originally the computer file of the thousands of mujahideen who were recruited and trained with help from the CIA to defeat the Russians. Inexplicably, and with disastrous consequences, it never appears to have occurred to Washington that once Russia was out of the way, Bin Laden's organisation would turn its attention to the west.

Died of natural causes just like David Kelly

Passivhaus - CHP - Wind - Light Rail - Cycle - CSP - Biomass gassification - PV


My name is not Buddy! And it's not IncrediBoy either! That ship has sailed. All I wanted was to help you. I only wanted to help! And what did you say to me?

Fly home, Buddy. I work alone.

It tore me apart. But I learned an important lesson. You can't count on anyone. Especially your heroes.

I was wrong to treat you that way. I'm sorry.

See? Now you respect me, because I'm a threat. That's the way it works. Turns out there's a lot of people, whole countries who want respect. And they will pay through the nose to get it. How do you think I got rich? I invented weapons. And now I have a weapon only I can defeat. And when unleash it, I'll get--

[laughing] You sly dog! You got me monologuing. I can't believe it. It's cool, huh? Zero-point energy. I save the best inventions for myself. Am I good enough now? Who's super now? I'm Syndrome! Your nemesis and...

~ See? Art IS the lie that tells the truth! (Picasso)

You could also find some interesting stuff about how Everyone from JFK to GB1 work to give Sadaam HIS superpowers! They must have misread the adage about 'Keeping your Friends close and your Enemies Closer'..


The Guardian commentary suffers from one problem - it assumes that America actually wants cooperation with Moslems.

Have any Moslem countries tried harder to cooperate with the West than Turkey, Malaysia and Indonesia? Where has it gotten them lately? If Dubai sponsors both CentCom and al-Jazeera, we consider it ungrateful. The minority that has turned to Bin Laden has accurately figured out where we're really coming from - they just have no practical or humane solution to replace our economic empire.

Our government has a LONG history of not cooperating with anyone for the long term; Ho Chi Min, The Shah of Iran, Saddam, many South Americans, Africans, etc. No discrimination based on race or religion here, they BS everybody equally, including their own citizens.

I'm not saying other governments don't, but the 'holier then thou' thing isn't working so well any more. Others are starting to see that the emporer not only has no clothes but he knows it and is to stupid to understand why it's so cold out.

To obtain something one can:

1) use talk
2) use money
3) threaten force
4) use force
4a) use so much force no one is left to oppose you

The 'holier then thou' angle is talk. If talk no longer works - where is one on the list above? And, what happen when 4) does not work?

Quite the load today - I've seen this error a dozen times. I guess maybe the rest of the world has noticed the peak oil problem?

Internal Server Error

The server encountered an internal error or misconfiguration and was unable to complete your request.

Please contact the server administrator, support@theoildrum.com and inform them of the time the error occurred, and anything you might have done that may have caused the error.

More information about this error may be available in the server error log.
Apache/2.0.59 (FreeBSD) mod_fastcgi/2.4.2 Server at www.theoildrum.com Port 80

Yeah, we're being hammered. That, and we've posted some articles with some humongous graphics. SuperG is installing another server or something, that's supposed to help.

We will see what happens on 11/11 eh?

It just seems weird that the MSM would make such a dog and pony show about the supposedly coming "cyber attack".

ATM's are probably not going to be affected. LOL.

More endangered destinations - see 'em before they scorch or drown!

Including: Athens, Manhattan, Malibu, the Great Barrier Reef, Boston, Tokyo, and of course, New Orleans.

Never mind that flying to these places will only hasten their doom...

pumped 26.98 million barrels per day, up 180,000 bpd from September

Woohoo! Those 128k barrels will surely save us.

Including: Athens, Manhattan, Malibu, the Great Barrier Reef, Boston, Tokyo, and of course, New Orleans.

I haven't been to Athens or Tokyo yet (or New Orleans either, but it's too late for that). Now I suppose I'll never get there.

My current fantasy is to build a He-lifted dirigible and beome a modern-day Phineas Phog or Captain Nemo, cruising the world at 1500 feet. Now all I need is a few 10s of millions of dollars and to convince my wife I'm not mad (the latter perhpas being the dicier task).

Apparently, traders aren't impressed, either. Oil is up over $95 again. Another record could be in the offing.


Everything else goes up, but Dubai 1M is down? Something posted here recently indicated there was a lot of H2 required to process heavy components into things we can use. We're not at peak NG yet but perhaps peak oil effects are working here? Maybe less NG available because its being used to pressurize oil fields? Or less NG available in region as a component of declining oil production?

Its interesting to watch, along the lines of how it might have been cool to stand on the fantail of the Titanic and check out the separation of the rear half of the ship from the front, right before it slid beneath the waves.

My recent post about H2 in response to Galactic Surfer(GS)


GS posted this link to an interesting 6 min audio interview with Larry Chorn, Platts chief economist, who discussed the declining crude oil supply quality - ie more heavy sour crude production.

These two reports by SRI and UIC forecast big increases in hydrogen production due to the increased demand by refineries which require hydrogen to upgrade (add hydrogen) and remove sulfur from these heavy sour crudes to meet rigorous emission standards.

SRI, 40% increase in five years
UIC, 10%/year

I don't know much about hydrogen production but given that the SRI report says that "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%", is it possible for hydrogen production to continue increasing or is peak hydrogen production about to occur? If hydrogen production cannot increase at the forecast rates, how will refineries process heavy sour crude at the required production rates?

A constraint mentioned by the UIC report is that significant amounts of carbon dioxide are produced by the commonly used steam reforming method.

The UIC report says "If gas also becomes expensive, or constraints are put on carbon dioxide emissions, non-fossil sources of hydrogen will become necessary". That could be a big challenge as the SRI report says that only 4% of hydrogen production is from non-fossil fuels.

The UIC report also said that in the US, hydrogen production uses 5% of natural gas production. '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.' Since USA/North American gas production seems to have peaked in 2001, it must be getting harder for the US to increase hydrogen production using natural gas.

In addition to heavy sour crude requiring more hydrogen for refinery processing than light sweet crude, the yield of transport fuels is less than 40% of the barrel. See the vertical bar with API 21 for very heavy oil and contrast to a yield of about 60% for light sweet crude, API 39.

click to enlarge
source - http://fuelfocus.nrcan.gc.ca/reports/2005-07/overview/crude_slate_e.cfm

Can anyone get a copy of the SRI report?


Most interesting chart. Maybe you can answer a question for me.

As refinery feedstocks change from conventional crude to other "liquids", what impact is that going to have on propane supplies?

What I am particularly wanting to know is: to what extent is there "flex" between gasoline and propane production, and to what extent does this "flex" change with feedstock? From your chart, I can see that the C3/C4 fraction (from which I assume propane comes) varies a bit between feedstocks. How hard and fast are those fractions?

I have a feeling that there are people looking at the shift to other "liquids" feedstocks as a way to continue - or even increase - the supply of gasoline. Especially as the heavier feedstocks appear to yield a smaller fraction of gasoline, the pressure to produce more will undoubtedly be intense. But those of us who use propane still need our propane, too. If potential feedstocks for propane production are at risk of being diverted to gasoline production, I'd like to know about that sooner rather than later.

In any case, it looks like the outlook for propane supplies might depend more than anything on the condensate outlook - am I correct in that?

The EIA says that propane is a byproduct of natural gas production (natural gas liquids) and oil refining.  Wikipedia expands on the latter, claiming that propane is produced during the cracking of heavy petroleum fractions.

You may actually be in luck.  Heavier oil means more cracking, which may mean more propane per unit of gasoline.  I can see a prospect for co-fuel systems for many vehicles to make best use of propane (and butane, for spark-ignition engines).

I can see a prospect for co-fuel systems for many vehicles to make best use of propane (and butane, for spark-ignition engines).

Hrmmmm, use BTUs directly for heating or cooking *OR* use BTUs for moving a vehicle?

I'd like to see a vote on this one is heating/cooking a BEST USE for propane, or is the claim of using it in vehicles the BEST USE?

I vote for heating/cooking. And point to science (direct use of heat VS its use expressed via conversions) and to the documents about deforestation and air quality of cooking with wood/wood like products VS using gas products.

Sorry as I am to say it, add NC's Outer Banks to that list as well.

The ribbons of sand will still exist, of course, but they'll be moving miles to the west as the sea level rises. The present version, with all of its tourist infrastructure, won't last for much more than a couple of meters of sea level rise.

One of the great ironies will be the Cape Hatteras lighthouse, moved from the encroaching shore at great expense, and supposedly now "safe" for hundreds of years, may have to be moved again in just a few decades.

Agreed, the OBX will be screwed. That will be sad for me and my family, I have great memories of yearly childhood vacations on the beach there, and take my own family there often now. Of course by the time this happens, I fear I will have much more important things to worry about than the beaches being washed away.

One thing I can not get my arms around is why can’t the majors raise the price of their refined products to keep their margins and to reflect the higher price of crude oil? In my mind, the only way this could be occurring is if demand for gasoline is falling faster than the refineries ability to reduce production to match demand, or if they are purposely “eating” their margins to keep the price of gasoline lower to prevent political push back. I don’t get it. The majors are getting killed on refining margins, but they seem not to be passing on the increased price of crude to their gasoline buyers, when in the past they seemed to do that with no problem.

The majors are getting killed on refining margins, but they seem not to be passing on the increased price of crude to their gasoline buyers, when in the past they seemed to do that with no problem.

I think that they had marching orders NOT to.
For the "Greater Good" of the country

But, the high prices are taking a toll, Gasoline just popped to around 1.00/ltr again in GTA area.

And, gasoline futures are heading up all week:

BTW, Crude (WTI/Nymex) 95.93.

And if they'd only stop having those refinery problems that are to blame for the rise in crude prices! Yes, it's not only you who have noticed a waddle and a quack. Quack spreads?

I don't get it. How do refinery problems contribute to the rise in oil prices? It's like saying "the especially harsh weather will lead to a decline in food prices." Do these people even read what they write before they hit "save"?

The 'if they'd only' is probably a hidden [Sarcanol/] tag..

Well, I would guess that if the current crude price level persists for another 1-2 weeks ( which seems highly likely given the Mexico outages of this week that will likely constrain any crude inventory build that would help calm the market ), the cost of gasoline will indeed rise to $3.20 to $3.30 to reflect this. That said, prices have been rising for the past couple of weeks - at a time when demand moderates and prices soften, it's just that the pump price has yet to catch up with the spot crude price.

It strikes me that refiners, having had substantial margins earlier this year, can afford a month or two of tighter margins - whatever happens they're going to have a good year; I would guess that the hope is that crude prices will fall back to the $80-85 range, thereby forestalling a decisive breach of the $3 per gallon mark - which is going to be politically awkward.

World crude prod flat, new refineries everywhere (even in the us... no new ones, but lots of expansions of old ones). A glut of refineries, expected post po, causes intense competition. This will get worse as eg sa builds new refineries to handle heavy sour/vanadian crude from manifa, which will replace their existing sweet light crude, meaning less crude/more product exported.

Plus, gov controlled china product prices means more profitable for companies to export product, meaning more product available, however this is changing because china is allowing price to rise, thereby increasing local product suppies/less exports.

"A glut of refineries, expected post po, causes intense competition."

I wonder, are mergers profitable for the majors? Imagine being the last chairman of Shell... telling the shareholders "Sorry, nobody wants us."

Dreamin's still free.

A great question. The integrated oils have at least a partial offset.

But what's in it for a Citgo [in the U.S. at least] or a Tesoro? With gasoline supplies tight, small reduction by either would become a big deal in a big hurry.

We've got a big travel event coming up here in the US - Thanksgiving. Lots of people on the road and in the air. I wouldn't be surprised to see a big run-up in gasoline prices just before Thanksgiving.

Concerning the above link by Leanan The Oil Rush to the Caspian Sea (The Oil and the Glory book review). There is another, and even better review of the book on the web.

The Oil and The Glory: The Pursuit of Empire and Fortune on the Caspian Sea by Steve LeVine

A Russian deputy energy minister initialed the document as a witness, and the Azeri government interpreted his action as a signal that Moscow "recognized this contract and that this oil field is Azeribaijan's," said Aleskerow, the chief negotiator. Just how wrong he was became clear before the signatories had even left the palace: Declaring that Moscow abhorred "unilateral actions" that "contradict international law," the Russian Foreign Ministry said that the Kremlin did not recognize the deal.

When the resource wars start, this will likely be the very first place where they break out. The area is totally landlocked and getting the oil out, if Russia objects, will be very difficult.

Ron Patterson

Ron, Very interesting : "The area is totally landlocked and getting the oil out, if Russia objects, will be very difficult."

Let me just say..........AFGHANISTAN?

"When the resource wars start, this will likely be the very first place where they break out. The area is totally landlocked and getting the oil out, if Russia objects, will be very difficult."

The Resource Wars started on 911. We lost.

Azerbaijan has joined the SCO.

Iran is the logical pipeline route.

Russia, Iran, China, Pakistan, and India-what a formidable alliance.

Arkansaw of Samuel L Clemens

Even a cursory look at the geography of the region should make it painfully obvious that the US is never going to get its hands on Caspian Sea oil if Russia doesn't want it to. And Russia doesn't want us to ..... other than by selling it to us on their terms.

So, fuhgeddaboutit.

The US will only achieve a 'moment of clarity' when it fully realizes that it is never going to solve its own energy problems by trying to militarily dominate oil-producing regions so as to control their oil resources.

It should be quite obvious that such is a recipe for perpetual war ...
debilitating, resourse-destroying, and morally eroding perpetual war ... and no country in the history of mankind ever ultimately benefited from being in such a state.

'Energy security' does NOT equate to taking other people's oil.

I think Pakistan and India as allies is a pretty incredible stretch.

*ring ring
"Moes tavern"
"Is there a Pete there, last name Coyle?"
"Hang on I'll check"
"Pete Coyle? does anyone know Pete Coyle"

(you kinda have to say it fast)

Reminds me of the same joke set at Joe's Clam Bar, but the caller is looking for Mike Hunt.

I think his name was "P.K. Hoyle".

Not oil per se, but macroeconomics: You might have seen some odd numbers out this week, that US real GDP grew at a 3.9% rate in the third quarter with inflation at just 0.8%. Those numbers are due to a quirk in the way they're calculated (see http://www.marketwatch.com/news/story/inflation-low-because-oil-prices/s...).

Basically it's because the price of imported crude rose over the quarter but retail gasoline prices actually fell. The rise of import prices subtracted about 1.3% from calculated inflation (don't ask), and inflation is then substracted from nominal GDP growth. So more reasonable figures would be 2.1% inflation, 2.6% growth. They still seem like surprisingly good figures to me, but at least they're not insane....

Assuming the crude/gasoline spread collapses at some point, expect the accounting quirk to reverse itself, yielding a deceptively high figure for inflation and low for GDP growth.


I love the ad for the Terracard. Classic. The basic idea is that mass consumerism is sustainable, which it clearly is not. That sort of thing will work great as long as it is exclusive enough for it to have no impact. Boutique environmentalism!


Financial Sense - FINGERS OF INSTABILITY Part 11: Meltdowns

In conclusion, my good friend Clyde Harrison sums up the situation quite well: “The fed cut short rates ½ of a percent 6 weeks ago, the ten year bond is down 6/100’s of 1 percent so no help for the mortgage market, the dollar is down 3 %, gold is up 7%, crude is up 12%, so Goldman Sachs, Bear Stearns, Citigroup and Merrill were helped, the public was hurt”. “The dollar dropping by 3% means prices will soon be higher at Wall Mart, and gasoline will be higher the next time you fill up” additionally, he said “Its good to have friends in high places”. Clyde is an Oracle of the obvious. They cut interest rates ¼ % percent today, gold will move, crude will move, the dollar will move, and many other markets will move.

And the keynote speaker at the World Toilet Summit will be... (drumroll) ... Senator Larry Craig!

Sorry, couldn't resist.

Just heard on the french radio station france info on their main news program at 9:30 pm local time.

There are heating oil shortages in the area around Toulouse (where EADS builds the Airbus). Il had to restart my wite's computer to post this, but I couldn't find any written links on google news or france info's site.

The news was told with a lot of interviews of retailers who seem to have difficulties to satisfy customers, some get their tanks half full, others are put on allocation. They seem to indicate that the situation will last until January 2008 at least. I am puzzled by the fact that no other news outlet picked this up. I will try to check the local press.

Christine Lagarde should watch her own country first before pointing to speculation for the current crude price ! (But she also said that people should drive less to lower demand !!!)

You have to include the http:// if you're going to post a link using HTML. Otherwise, it looks like a link, but it doesn't work.

(I fixed it for you.)

Thanks very much.

I finally found a written link about the shortages (sorry text in french but easy to understand). It seems that the situation in France is as tight as you posted about the Netherlands, Belgium and Luxemburg. In some places shortages both of Diesel and heating oil have already occured as seems to be the case in Bretagne and the surroundings of Toulouse. It is not yet on TV MSM but "France Info" is a major state owned radio station. So now we have 2 sources to confirm this situation. Scary (very). Half of my patients have to drive more than 20 km, sometimes 100 km to come to my office since I work in a rural area of France. Most of my patients (and the taxis and ambulances) use diesel cars. See why I believe PO will impact us badly ?

The reasons for the shortage (official answer) :
- a refinery down in Normandie for more or less expected heavy maintenance(and Leannan posted the link about the refinery maintenance at Feyzin, Lyon)
- a new norm about sulfur content in heating oil
- high demand because of the cold weather
- people doing exactly the opposite as refiners (reported by R. Rapier) : they think the price is going to skyrocket and so they order their heating oil to lock in the what they think is still a low price

Time expected for recovery : a few weeks or more.

The government clearly downplays this but is now trying to tell people to drive less, officialy only to save money but also to reduce demand. It seems to me that we are very far from a speculative situation driving the prices not ?

Easy to understand if you speak French! ;-)

I ran it through Babelfish, though. If I understood it correctly, one of the reasons there's a problem is that people are buying more fuel than expected. They are afraid the cost is going up, so they're trying to lock in the price.

Thanks for the translation.

If Americans ever start worrying that prices will spike or gas will run out, look out! The gas pumps will be sucked dry overnight.

Precisely what Matt Simmons warned us about at ASPO/Houston.

Regarding the impact of speculators, and comments by OPEC, other governments' officials, and "experts" blaming speculators for high oil prices, here is a link to a graph that shows the relationship of speculative net long positions to oil prices: http://www.blackjackforumonline.com/images/impactofspeculators.gif

Alan Greenspan has suggested in the past (without proof) that volume of net speculative longs is responsible for high oil prices, but you can see plainly that volume of net speculative longs does not correlate well with price.

This graph was provided in a March 2007 article on the factors driving oil prices. The article was put out by the Oxford Institute for Energy Studies. The sections on studies of the impact of speculation on oil prices are well worth reading. Here is a link to the study: http://www.oxfordenergy.org/pdfs/WPM32.pdf

To summarize, the article says:

"...it is possible to make three broad generalizations. First, prices appear to be less volatile than speculative positions. Second, there is no common trend between prices and speculation. In other words, there is no persistent pickup in net long non-commercial positions coinciding with oil prices trending upward."

The article also cites a 2005 study by Haigh et al. that examines the role of hedgers and speculators in the oil market. The authors found that speculators provide liquidity to hedgers (industry people who need to hedge fuel costs, production people who need to lock in prices, etc.), not the other way around. They also provide evidence that large speculators have little influence on oil prices, in part because they "do not buy when prices are low and sell when prices are high and hence do not cause the overshooting of oil prices."

This week's Commitment of Traders report from NYMEX (http://www.cftc.gov/dea/futures/deanymesf.htm) shows that there was a significant increase in both speculators' net longs and commercial traders' net shorts for the week ending October 30. "Nonreportables" (small traders) also added net short contracts.

There's an interesting story embedded in the data. The way that large speculators added to their net longs wasn't by adding long contracts. They added only 2411 long contracts from the previous week (in other words, they weren't looking to buy at these high prices). What happened was that they also closed 20,683 short positions last week, and that's how their net longs increased.

What happened was that large speculators had significantly increased their short contracts the week ending Tuesday, October 23. Then, on Wednesday, October 24, the weekly inventory report came out showing that crude oil inventories had fallen by 5.3 million barrels.

Incidentally, commercial traders significantly increased their short positions just in time for the Goldman Sachs announcement this week that it was time to take profits. It will be fun to see next week's COT report, to see what happened on Wednesday when the inventory report showed another sharp decline in supplies.

Thanks for your analysis.
Khebabs work with your and other comments earlier this week were also very helpful to better understand the current situation.

Andrew Leonard at Salon asks, Should Bush open up the oil spigot?

Massachusetts Democrat Edward Markey, chair of the House Select Committee on Energy Independence and Global Warming, held a press conference on Friday. His main purpose: bashing the Bush administration over the head with the handy club of oil prices. In between pointing out how the price of a barrel of oil had risen from $26, when George Bush took office, to almost $96 dollars today, he also called for the President to send a message to "energy speculators" by allowing the release of crude oil from the Strategic Petroleum Reserve (SPR).


I still think that their best course of action is to repeal the Laws of Thermodynamics.

Depress the price to stimulate demand. At the same time misuse and deplete the SPR. Blame Bush for geology [there are plenty of other things for which should be lambasted.] It's obvious that Markey deserves a Nobel Prize for Economics.

OK, I think peak oil has just officially become mainstream. I'm dating someone who works as a department manager at Wal-Mart and the fact that oil was $100 a barrel was brought up in one of their meetings today complete with some talk about what it meant for them business wise(!)

It doesn't sound as if this is some top down corporate thing, its just the local leadership noticing that stuff is happening, but if its down to that level we're one visible incident away from even the greeters knowing the game is up.

And today the Sacramento Bee ran a fairly long front page article that continued to another page on oil price and energy issues. Never once mentioned peak oil, long term supply limitations, production plateau.

Morons! Soooo Frrustrating!

I just got off the phone with Shelby from http://relocalize.net and we're getting our own group here. I am blessed to live in a place where newspaper, radio, and TV advertising is free for such things.

We've got community, we've got land, we've got water, and we've got enough wind to blow the stink off Newark and still keep the turbines moving. The thing we do not have and are going to need in about a minute and a half is a way to reduce VMT. That'll come first with ride sharing as people get sensitive to the price of gasoline but what I hope to see is the grain elevators (co-ops) pushing wind projects to electrify the rail that services them.

I'd also like to see a drive to compel the railroads to let dual mode (road/rail) hybrid passenger vehicles have access to the tracks for town to town runs. When my mom was in grade school she used to ride the train from Osgood to Graettinger once a month with an older sister who was going to get her hair done. The round trip cost a quarter and included a hot breakfast on the train in route(!) I don't think we'll reproduce that but small packets of people moving on existing infrastructure, similar to Bill's J-Pod concept, could be a very good thing for this part of the world ...

I'd also like to see a drive to compel the railroads to let dual mode (road/rail) hybrid passenger vehicles have access to the tracks for town to town runs

Gadgetbahn from Japan


Isn't this the same vehicle that the railroads use now for track service, only with a cab instead of a truck body? As such, I'd imagine their fuel economy is poor, and that their use constrained by scheduled trains. Any comments on fuel or scheduling bottlenecks?

Yes, the railroad inspection pick-ups (decades since I have seen a car with retractable RR wheels) use a very similar system. Safety rules would never allow such a set-up for passenger use in the USA.

The safety requirements for rail are MUCH stricter than for roads. Even operating without freight trains, pick-ups & vans would need to be much stronger than built for head to head collisions with each other.

The Bush Administration is trying to kill off EMUs currently in service (they cannot be replaced) by requiring that they meet the same standards as locomotives.

EMUs are self propelled electric multiple units (they can operate singly or in trains).

As I have noted before, the Japanese have a cultural fascination with gadgetbahn. Some of them work fairly well. I would let them do the experimentation and work out the issues.

You say gadgetbahn dismissively but I will humbly disagree, at least in the context of my geographic area. We have 52,000 people in an area of 1,866 square miles - that is to say its slightly larger than Long Island, but has 1/70th the population density. I would think a machine like that, with twenty seats, would be just perfect here.

Our rail typically has one three to eight car train a day except during harvest, which we see a few weeks of fifty car trains. There isn't a lot of congestion in this state except for the interstate links so dispatch won't be that big of an issue for most areas.

Our schools are shared facilities any more instead of each small town support a school. All day long there are shuttle buses all over this state moving small groups of kids. Replace fifteen mile commutes with five blocks on each end and electrified rail in the middle.

A vehicle could start at the senior citizen's center, which every small town has, and make a grocery store run. Doctor's visits and the like could be batched up as well.

The cost of such a vehicle is within reach for smaller employers in the region. A coalition of Estherville, Iowa based manufacturers would be running such a machine fifteen miles out on each of the rail lines that service the city. I could see such a thing rapidly growing to a multicar system and then buses in town - the transition to proper light rail from a "gadget".

The important things here are that we'd be getting electrified rail and we'd be doing it with wind turbines using cultural and financial structures that are already in place. We get our telephone, power, fuel, and grain handling from cooperative efforts. The only thing innovative in this plan is getting the railroads to provide the service.

So ... not being a wise behind here, but please do tell me your reasons why this is not a good approach ...

In my earlier post. I mentioned safety rules. The US rules do not allow EU or Japanese equipment (TGV, regular passenger trains. etc.) to operate here. Something advocates have disliked for a long time. The use of cars/pick-ups for RR personnel only for track inspection was basically grandfathered. In the past, there was little concern about employees, only passengers is my read of historic regulation.

IMHO, an EMU would work nicely on scheduled service. Perhaps too many seats (about 80). Just roll back new Bush Admin regs.


Perhaps we will one day accept the same risks on rail that we routinely accept on the roads, but that day is not within sight.


Some additional thoughts (I am going to be in a free training session all day today).

Offer the RRs property tax exemptions for dual use (better yet, buy the tracks and offer them trackage rights). Other states have done this to keep tracks from being abandoned.

An ideal is a loop route (no terminal points), I did not see a clear loop from the map you linked, but I may have missed something.

Have the electric co-ops electrify the tracks and sell "power at the wire".

$100 oil will get some attention, but not enough to act. Millennium Institute model shows $350/barrel in 2011. Point out the attractions *IF* they have a plan ready to roll as oil goes up. Attractions to industry, people moving in.

IMHO, sell the idea that "If oil stays above $250/barrel for a year, what do we do ?" "We can make this corner of Iowa a magnet for industry and people with some simple investments as oil prices climb"."We can boom as much of the rest of the nation busts"." Live here or in Manhattan if you want to live without a car, some people & industry will chose Iowa" (a slight exaggeration but not by much).

Get some local utility linemen to figure out how to build electrification infrastructure cheaply.

Brookville will build some copies of the SEPTA EMUs (batch of 4 say).

Get some passing Presidential candidate to say something nice about non-oil transportation.

Promote the concept of "Non-oil transportation".

Best Hopes,


In post Khmer Rouge Cambodia, they used left-over tank (that's battle tank not water tank) parts to make what they call "Norries" .

This has to be the MOST unsafe form of transport ever.



But it's what we'll all be back to Post Peak Oil

Have you ever seen any numbers for what kind of MPG an inspection vehicle can get when riding on rails? The idea of a rail-based bus service does have some intrigue to it..

Which is to say, I guess, do railcars need to be quite as heavily designed as they are? or.. Would an inter-town, rural commuter system benefit from a lighter, more flexible 'Trolley equivalent' on a more frequent basis, instead of a longish passenger train on a less-frequent or variable schedule? With the possibilities of the signal and switching tech today, I'd think such a thing would be more feasible.

Bob Fiske

Hello SCT,

Thxs for the info. My hope is that a Peak-Outreach mgmt. at Wal-Mart would have their greeters handing out Peakoil posters, introducing biosolar item promotions with 'Green Light Specials', and electric/batt vehicle/scooter owners would get preferred parking and/or a discount on purchased permaculture goods such as garden tools, bicycles, and wheelbarrows, etc, etc. Of course, bicycling to/from the store garners the largest total discount.

I would also like bars and cultural/sporting events to promote my Peakoil Shoutout as a new cultural tradition. Besides the traditional, single person, half-empty beverage shoutout: they could also have drinking games or marketing contests.

Some Examples:

Sports bars--anytime an Exxon or BP commercial comes on the tube: if you notice, you start chugging your brew only if you are already past half-empty and qualified yourself by earlier shoutout. First person to empty his glass, then shoutout Peakoil again--free refill.

Football halftime shows-- hundreds of people come on to the field with pedal generators, stadium then goes dark, then these people pedal like hell, constantly shouting Peakoil, while trying to relight the big Omnivision TV screen to feebly display 'Peakoil'. Medics then offer oxygen to the totally exhausted pedal participants.Sponsored by Powerbar and Redbull energy drinks.

If you mention Peakoil while just car-shopping [no purchase required] at a dealership: they have to give you a voucher equal to 1/2 tank of gas for your old-car. Hummer dealerships required to give you a voucher for a full tank for a Peakoil Shoutout. In exchange: test-drives limited to a single thimbleful of fuel.

Thermo/Gene Collision branded condoms? Olduvai Gorge travel agency to promote dark, nightime hikes down the Grand Canyon and other steep trails. [No cheating by hiking during the light of a full moon!]. 'Braille trails' for real postPeak simulation thrills, with gloves and kneepads for the safe, rocky descent by ancestral four-legged crawling motion?

EDIT: to add additional dramatic wording! =)

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

Bob I hope things are going OK with you. It's good to see you posting here.

The mountain bike I got used for $100 here and put some bux into to get the 'no mor flats' tube things for, is a good vehicle for buzzing around chino valley here. If I need to go to "town" which would be Prescott, it could be a day to ride in, stay a night or two, then ride back. 25 miles each way which isn't bad for a seasoned rider.

I'd love to see a shuttle that goes once a day into prescott, I'd gladly ride it, one can walk wherever one needs to go in Prescott itself - right now I typically park the vehicle somewhere safe and then just hoof it everywhere, it's fun.

My car's turned into the repo guy but I get to use vehicles around here a bit. I don't want to use 'em more than a little unless I'm bringing in some $ to contribute to the costs though. Mainly I want to do things so that I can get by with bike-only if needed.

I've been away from the PHX area for several years now but as I remember it it's kind of hard to love. You might want to consider this area to live in, it doesn't seem to be much more hopeless than most of the US, the local college teaches farming, and everyone's so damned NICE it's amazing.

I live in anti-Phoenix, Bob :-) I can park within a stones throw of the door at Wal-Mart the day before Christmas and unlighted outdoor trail hiking starts as soon as I get around behind the machine shed. No steep grades, but in my tribe we cultivate in random distribution a crop known as "bob wire", which is very scratchy and perhaps named in your honor.

I did mention peak oil to the last two car salesmen to whom I had the misfortune to speak. One brushed it off, while the other turned the same color the shallow parts of Marble Lake get right before all the fish enter a state of silent meditation with their little tummies in the air.

Half full drinks are the cause of much shouting here now, but its generally quite incoherent after it happens once or twice. Iowans run to fat, so I think the pedaling thing is a no go here ...

FYI, Congressman Bartlett spoke about peak oil on the floor of the house last night:


Now, I want to go through a number of quotes from five different sources actually. One of those is a very famous speech given by Hyman Rickover, the father of our nuclear submarine. He gave this speech 50 years ago, the 14th day of this May, in St. Paul, Minnesota, to a group of physicians. He was incredibly prophetic in that speech. There's a link on our Web site to that that you can simple do a Google search for Rickover and energy, and this speech will pop up. I will tell you, it is the most interesting speech that I have ever read. You'll be fascinated by it.

Just a quote from this speech: ``Whether this golden age,'' and boy is this a golden age, and he notes in this speech, by the way, that the amount of energy that we have available to us represents a huge amount of people working for us. The energy in a single barrel of oil represents the work of 12 people working all year.

When I first saw that, I said, it can't be. But then I thought of how far that gallon of gasoline or diesel, by the way, still cheaper than water in the grocery store, how far that takes my Prius, I drive a Prius, takes my Prius nearly 50 miles. How long would it take me to pull my Prius 5 miles? I could do it. If it was on the level, I might strain and do it very slowly. If it was uphill, I'd have to have you come along to do it. But how long would it take me to pull my Prius 50 miles? An incredible amount of energy. This is indeed a golden age, this age of oil.

He noted that every housewife 50 years ago had available to her the work equivalent of 34, I think he said, faithful household servants. I think it was 700 manpower efforts push your airplane through the sky, and 100,000 the train down the track and so forth.

``Whether this golden age will continue depends entirely upon our ability to keep energy supplies in balance with the needs of our growing population.

Possession of surplus energy is, of course, a requisite for any kind of civilization, for man possesses merely the energy of his own muscles. He must expend all his strength, mental and physical, to obtain the bare necessities of life. A reduction of per capita energy consumption has always in the past led to a decline in civilization and a reversion to a more primitive way of life.''

The next quote is another one from Hyman Rickover: ``High energy consumption has always been a requisite of political power. The tendency is for political power to be concentrated in an ever smaller number of countries. Ultimately, the nation which controls the largest energy resource will become dominant. That control today is represented by having the necessary dollars to purchase it. Tomorrow it may be indicated by who, in fact, owns the oil fields. If we give thought to the problem of energy resources, we act wisely and in time to conserve what we have and prepare well for necessary future changes. We will ensure this dominant position for our own country.''

I would submit that we have done none of this. We have not acted wisely. We have not anticipated today. And it was absolutely inevitable that there would come a day when the supply of energy would be inadequate to meet the demands for energy, which is why it's roughly now 93, $95 a barrel.

Of the 435 members, how many were present to hear his speech?
The problem will solve itself.
But not in a nice way.

Congressman Bartlett is my man in Congress - period


Hyman Rickover's speech was indeed a good speech. He was a thoughtful man, an intellectual military officer of the rarest type, a thinker as much as a warrior.

But....reading his works, on energy, on strategy, on naval power, require that the reader also exercise some thought. Reading and thinking at the same time is now becoming a rare art indeed.

Rickover, first of all, was speaking with an agenda. There was never any doubt about Hyman Rickover's belief in, allegience to, the cause of nuclear power. Rickover felt it was the true path into the future. He certainly had no doubt about the power of technology, and to him the possibility that we would have been in the year 2007 and still not seen the fruits of both fission nuclear power and fusion nuclear power would have been unthinkable. How could we have proceeded so slowly, he would be wondering.

There is another point. Here on TOD, it is often pointed out that national power and wealth and energy production and consumption are tightly related. But this is a very complicated relationship. If energy production can be increased, but by way of efficiency and better process control, energy consumption restrained, does that make for a poorer nation because it's energy consumption per capita has been held flat or even declined? One would think not. Higher production of energy coinciding with lower consumption of energy means lower prices of energy, if we accept the normal rules of supply and demand. But how could that be possible, given flat or declining oil production, and harder to find and flattening natural gas production.....?

Notice what I was just able to do? I am willing to bet that many readers did not notice the rhetorical trick I used. In fact, I will stop at this sentence, and let my readers point it out, and return later to see if anyone spotted what is one of the most common errors in reading Rickover and the prophets of what I call the age of energy of confusion....

Thank you, Roger Conner Jr.

There is another point. Here on TOD, it is often pointed out that national power and wealth and energy production and consumption are tightly related.

Ok....lets let that stand. Because:

But this is a very complicated relationship.

Yes. Yes it is. Because some lumps of High sulfur coal and a kWh of electricity will give the same heat, but the quality of a kWh of elecrtricity of a higher 'quality'. And the kWh can be even more useful than heat if it is used for moving motors, or say powering part of the internet so I can make this post *wink*

If energy production can be increased, but by way of efficiency and better process control, energy consumption restrained, does that make for a poorer nation because it's energy consumption per capita has been held flat or even declined?

The data says no. Look at the 'increase' in the 'wealth' of the United States where exactly that happened.

*whips out Jevrons paradox, lays it on the table*

One would think not. Higher production of energy coinciding with lower consumption of energy means lower prices of energy, if we accept the normal rules of supply and demand.

And here is where it falls down.

1) "normal rules of supply and demand"
Errr, there are so few places where such exists. Even if a bunch of people claim it does.

2) Energy existence, demand, and pricing could be considered broken if the pricing was FAR under the "actual cost" - where the costs are dealing with the waste (CO2, fission by products, effects on land/animals via extraction from the photon conversion processes.

Good attempt at leading about by the nose - and the only reason I responded is because you asked for a response. Although I don't know if you wanted "The base assumptions are incorrect" then a talk about the pricing of limited things as unlimited.....


And thanks for the response, which was well thought out and interesting to read.

Note at the closing of my post, I did something else that is, as you would call it, "leading by the nose", something done with great regularity in articles, the media, and on discussion boards...I transmuted the word and concept of energy into a narrow discussion about oil and gas. This is often done, using a very in depth and respected original source, such as Rickover's speech, about energy, and converting smoothly and silently into whatever position I may be trying to support concerning oil, gas, petroleum or fossil fuel in a narrow sense.

This makes for an interesting question/concept: Can a nation get richer while it's ENERGY base shrinks? My bet is the odds are not good of that happening.

But, can a nation get richer while it's OIL AND GAS base shrinks? If, as Rickover said, the correct adjustments are made, it very possibly could.

The one thing my difficulties in algebra taught me....when the equation gets complex, the exact symbols, terms and construction of the equation become all the more important to recheck.

Thanks again for you reply and comments.


This makes for an interesting question/concept: Can a nation get richer while it's ENERGY base shrinks? My bet is the odds are not good of that happening.

The only way it can possibly happen is if wealth is not measured via the flow of money, but more in the way of art or humans doing good things to other humans. Like good preventitive medical care.

Where each watt of energy is used 'wisely' and not for, say, a plastic toy promoting a movie.

I would like to see Roscoe be President Ron Paul's Energy Sec.