DrumBeat: November 27, 2007

$100 oil and the 'S' word

Industry experts offer mixed opinions on speculative investment's impact on oil prices. Some say it's marginal, that strong demand and limited supply are the real reasons oil prices have risen five-fold since 2002, and say additional investors actually benefit the market by adding more liquidity.

Others say the tight supply and demand situation has been known for a while, and nothing but speculation is behind the doubling of oil prices over the last year. They say there is a cost to the sheer number of oil contracts now traded on the oil exchanges, and this trading has just enriched Wall Streeters at the expense of average Americans.

Conoco cancels refinery upgrade on North Slope

Conoco Phillips says it's canceling a major North Slope project because the new oil tax denies deductions for the work, but the state revenue commissioner says the company never deserved the tax breaks in the first place.

Nigeria threatens stiff penalties for gas flaring

Nigeria's oil industry regulator threatened on Tuesday to impose hefty fines and other penalties on firms that continue to burn off gas beyond a 2008 deadline.

Oil companies in Nigeria flare about 2.5 billion cubic feet per day of gas associated with the extraction of crude because there is no infrastructure to make use of it. Only Russia flares more gas than Nigeria.

Rural Australians to pay price for climate change

A study of the costs of climate change has found rural communities will pay almost twice as much as city dwellers for the effects of environmental degradation.

Oil Trouble: How high can the price of a barrel of crude go?

The last time oil prices were this high was more than a quarter-century ago. Then, too, the Middle East was aflame. Following the 1979 overthrow of the shah of Iran, revolutionaries had taken Americans hostage at the embassy in Tehran. U.S. forces later mounted a failed rescue mission, prompting worries of escalating conflict. Now tensions with Iran are roiling again, as President Mahmoud Ahmadinejad vows to continue his country's nuclear program in defiance of the United States and other Western governments. Global demand for crude is growing, yet the business of finding and developing new oil fields is becoming more expensive. On Monday the price of a barrel of oil briefly topped $99.04—a level last reached in April 1980 (after factoring in inflation), according to Cambridge Energy Research Associates. How high can oil prices go, and what impact will they have? James Burkhard is managing director of the Global Oil Group at CERA, a private company that advises governments and corporations on energy trends. He spoke to NEWSWEEK's Jeffrey Bartholet.

OPEC Discusses 750,000-Barrel-a-Day Output Increase

The Organization of Petroleum Exporting Countries is discussing a 750,000-barrel-a-day increase in production because of concerns about the effect of oil prices on the U.S. economy, Dow Jones Newswires reported, citing an OPEC delegate it didn't identify.

There is "a lot of concern" about a possible U.S. recession with oil prices at current levels, Dow reported the delegate as saying.

Pemex begins dismantling damaged oil platform off Gulf coast

Mexico's state-run oil company has begun dismantling a damaged oil platform off the Gulf coast.

Pemex decided to take down the platform because heat from near-constant fires have made it unstable. In a statement released yesterday, the company said engineers have successfully removed the platform's drilling rig.

As the Price of Oil Soars, Many Turn to Renewables

Thomas M. Rainwater spent 25 years in what people today call the traditional, old-fashioned energy business. An engineer by training, he worked at nuclear and coal-fired power stations, was a marketing executive for a natural gas producer and pipeline, and finally a top strategist for a Canadian power-generation company with a market capitalization of $5.5 billion.

Then in July Rainwater moved to the Washington area to become chief executive of SunEdison, a Beltsville company that is building and servicing solar panels on the rooftops of warehouses, supermarkets and other commercial buildings around the country. SunEdison is a tiny fraction of the size of his former employer, but Rainwater said "there is growing recognition across the land, across the globe, that we need to do something different to fire the economy."

Shell halts oil sands mining to fix upgrader

Royal Dutch Shell said on Monday it has suspended bitumen production at its oil sands mine near Fort McMurray, Alberta, as it works to repair a fire-damaged upgrader that converts the tar-like bitumen into synthetic crude oil.

Protest causes drop in Ecuador oil output

Ecuador's national oil company Petroecuador has said that it incurred the loss of some 5,000 barrels of oil output because of a weekend protest that disrupted operations at a key production facility, Spanish news agency EFE reported Tuesday.

The state-owned oil major said that the shortfall would mount unless the facility returned to normal and may have unpredictable impact on price.

Oil Tankers Owe Strength to OPEC

Notka said the spot rates on the Very Large Crude Carriers, or VLCC’s, have jumped in the Arabian Gulf in the past few days. Last week, VLCC’s averaged $33,000 per day. On Monday morning they spiked to $84,000 per day, a level not seen since August 2006. The number of vessels being chartered has jumped significantly, limiting the supply of ships, Nokta said.

Seven Questions: The Price of Fear

Something funny has happened to the price of oil: It no longer reflects reality. The reason, according to Fadel Gheit, one of Wall Street's top energy analysts, is that “financial players have seized control of the oil markets”.

Russia agrees to Turkmenistan gas tariff hike in 2008 - Gazprom

Russia has agreed to a substantial increase in the price of gas imports from Turkmenistan, gas monopoly Gazprom said in a statement on Tuesday, amid concern that the hike could raise prices for European customers.

West Africa: Energy profile

The Economic Community of West African States (ECOWAS) was formed to promote economic and development growth in West Africa. Major exports from the region include energy products, minerals and agricultural products.

Editorial: The energy agenda

Consider the countless policy challenges that radiate from the central matter of the fuels used for transportation, heating, electricity generation and manufacturing. Chief among them is the rapid approach of peak oil, the point at which the availability of petroleum-based fuels begins to decline. As oil becomes scarce, diesel, gasoline and home heating oil become more costly. Those costs could begin to cripple the U.S. and world economies; their impacts are already being felt.

New Zealand: Campaigner Moore kicked out of council meeting

Mr Moore was making a public comment at the beginning of last night's monitoring committee meeting when his heated presentation - in which he called councillors and staff both criminally negligent and clinically insane - prompted several calls for his removal. Numerous calls for order from new committee chairman councillor Neil Wolfe were ignored by Mr Moore who continued his tirade.

...The presentation Mr Moore had been making urged council to prepare for the effects on the district of peak oil and climate change.

Rich and poor gird for climate change

People around the world are preparing for floods, droughts and other natural disasters in ways largely dictated by wealth and poverty as evidence of climate change mounts, a United Nations report said on Tuesday.

Smart appliances learning to save power grid

Researchers at an appliance lab that looks more like a utility room are fine-tuning washers, dryers, water heaters, refrigerators — even coffeemakers — to help ward off the type of colossal power failures that plunged much of the Northeast into darkness in 2003 and blacked out big chunks of the West in 1996.

If you’re a bit skeptical as to whether subtle tweaks to your dryer or dishwasher might help keep the lights on, you’re not alone. But in two related experiments, scientists from Pacific Northwest National Laboratory in Richland, Wash., found that providing homeowners with smart appliances and information on how to save money cut their energy costs but also reduced overall power consumption during peak use periods, when the nation’s aging power grid is most susceptible to breakdowns.

Saudi oil minister says pumping 9 mbpd, no OPEC comment

Saudi Oil Minister Ali al-Naimi said on Tuesday the world's top oil exporter had raised output to 9 million barrels per day (bpd) in line with OPEC's November 1 agreement, but offered no clues about the group's next meeting.

The Organization of the Petroleum Exporting Countries (OPEC) agreed in September to pump an additional 500,000 bpd from the start of this month, but that increment has failed to stop oil prices from surging to record highs near $100 a barrel.

Where EOR Succeeds and Where it Does Not: Big Thermal EOR in California, But Where Else?

Industry’s Holy Grail for EOR was to develop a series of processes that would extract an additional increment of oil, i.e. tertiary oil, after primary and secondary reserves of conventional oil fields were depleted.

However, despite nearly 60 years of R&D, followed by untold applications in fields across the U.S., only one group of processes, miscible gas injection (MGI) successfully extracted significant volumes of oil from fields with light or medium weight oil. But these successes were restricted to productive formations with unusually low permeabilities. MGI did not improve oil recovery to an appreciable degree from formations with moderate or good permeabilities.

John Michael Greer: Adaptive responses to peak oil

One of the occupational hazards of writing a blog on the future of industrial civilization, I’ve discovered, is the occasional incoming missive from somebody with a plan to save the world. My inbox fielded another of those the other day.

Localise and go organic to avert post-peak famine - Heinberg (podcast)

Agriculture must localise and convert to organic production methods without delay if the world is to avoid famine, according to a leading thinker on peak oil.

Ford Chairman Says New Fuels Are Developing Too Slowly

The chairman of Ford Motor, William Clay Ford Jr., expressed frustration Tuesday night at the slow pace of alternative fuel development, saying industry leaders expected better progress by now.

Big Oil PR blitz suggests the un-reformed industry just wants to be friends — so shut up!

Ever since Americans were forced to juxtapose the devastation of New Orleans with the record-breaking oil-industry profits that followed, companies like British Petroleum, ExxonMobil, ConocoPhillips, and Chevron have ramped their advertising campaigns into overdrive.

In Miles of Alleys, Chicago Finds Its Next Environmental Frontier

Chicago has decided to retrofit its alleys with environmentally sustainable road-building materials under its Green Alley initiative, something experts say is among the most ambitious public street makeover plans in the country. In a larger sense, the city is rethinking the way it paves things.

Fuel quest may create food crisis

THE world is in danger of running out of basic foodstuffs, according to a leading Australian economist.

The shortage will create further dramatic price rises in essential grains such as wheat and corn, accompanied by a tightening of supply, says ABN Amro Morgans chief economist Michael Knox.

Mr Knox blames much of the supply and price crunch on the international demand for grain to be used to manufacture bio-fuels such as ethanol.

"Some people worry about the world running out of oil. They should worry about the world running out of food," he said in a recent paper.

Can crude oil price be stabilised?

At a recent oil and money conference in London where important figures in global energy with over 700 participants brainstormed to assess the state of the global petroleum market, little did they know that Hubert peak oil output prediction some decades back will stare the world in the face so soon. Peak oil output according Dr Shokri Gbanem, chairman of the peoples committee of the National Oil Corporation (NOC) of Libya is not about the time at which oil will be exhausted, but the time at which production can no longer be increased to cope with increasing demand and the only way the oil price can go is up.

Harrop: gasping at gas

The faulty forecasts, Groppe says, reflect a reliance on the flawed work of the International Energy Agency. His group gathers its own data.

For example, the IEA last year forecast a major rise in production by nations outside of the Organization of Petroleum Exporting Countries. The actual increase was tiny.

"The Saudis made a mistake taking the IEA forecast seriously and cutting production when they should not have done it," Groppe said.

Iraq’s Uncertain Oil And Political Prospects (Part 1 Of 2)

It is common knowledge that Iraq has the second-largest proven oil reserves in the world, with no less then 115bn barrels, and probable reserves of around 250bn barrels. But why is that Iraqi oil does not account for more than a fraction of global oil supply? In fact Iraq has made an average of no more than 2.0mn b/d of its oil available to the world market for almost 27 years, with the exception of a few spells when production exceeded that.

UK Facilities Face Energy Crisis

"It's a time of great change; we've witnessed a shift in emphasis. No longer is data center capacity being driven by space alone, it's now about availability of power," says Peter Knight, CEO of Adept. "In addition, significant consolidation of data center operators, absorption of old capacity and a shortage of new sites being built mean colocation now carries a scarcity value. With demand outstripping supply it's clearly not a buyers market, meaning the corporate sector will be under serviced. London is suffering particularly badly because of soaring demand."

Israel: Delek chairman Last warns Ben-Eliezer of fuel crisis

Sources inform ''Globes'' that Israeli fuel companies are warning the Ministry of National Infrastructures of a pending fuel crisis because of problems in the transport of fuel from Ashkelon fuel terminal to Ashdod.

Peddle new chair of APTA

The steady climb in fuel prices continues to be a challenge for truck drivers and trucking companies.

"The more expensive fuel gets the higher the cost of transportation gets, especially road transport."

And the price of fuel is expected to continue to rise.

Nepal: Farmers protest petroleum shortage in Dhangadi

Locals in the far-western region took out a jar rally in Dhangadi Municipality, Kailali to protest the ongoing petroleum crisis in the region Tuesday morning.

They also staged sit-in at the regional office of Nepal Oil Corporation (NOC) demanding supply of petroleum products since 10 in the morning.

Local farmers were enraged after they could not get diesel in the current wheat farming season.

China economic planner says fuel shortage to ease 'very soon'

China's fuel shortage will ease "very soon" because the government is requiring refiners to increase crude runs and lift fuel supply limits to some regions, the country's economic planner said Tuesday in a statement on its Web site.

China: Fuel oil futures surge 4.4%

Spurred by rising global crude oil prices, Shanghai fuel oil futures yesterday surged 4.4 percent, the biggest one-day increase since early 2006, reaching the highest level since the contracts began trading in 2004.

North Dakota needs more fuel opportunity

Here is an interesting twist; North Dakota now produces about 125,000 barrels of crude per day; just under half of that is refined in-state to fuel products; the remainder of the crude and much of the refined product is piped out of the state (amount not specified at the meeting).

During this shortage period from late summer to present, the pipeline terminals at Fargo and Grand Forks have been out of product or severely limited.

As a result, tanker trucks must go to Alexandria, Minn., or further, to wait in line sometimes for 12 hours, to get product and haul it back into ND. This gasoline and diesel product may be the same product produced at Mandan, now being hauled back.

Michigan's road-fix shortage: $300M

The projected funding decline is linked to shrinking state gasoline tax receipts and the completion of a three-year, $800-million Granholm administration program that used bonds and private investment to accelerate work on some key road improvements intended to foster economic development.

"The condition of our roads will get worse as each year goes by -- actually as each month goes by -- and they're already in bad shape," said Mike Nystrom, a construction industry spokesman who co-chairs a state coalition that has pressed for a 6-cent boost in the 19-cent state gasoline tax and 10-cent increase in the 15-cent diesel fuel tax to shore up road repair revenue.

Thailand: Bio-fuel use soars in first 10 months

Consumption of alternative energy has soared with bio-diesel use skyrocketing by over 1,000 per cent and natural gas for vehicles (NGV) more than doubling.

Mettha Bunthuengsuk, director-general of the Energy Business Department, conceded that NGV is now unavailable for sale in some areas since there is a shortage of gas cylinders.

Oil prices continue to fall: Traders bet OPEC will raise output next week

Many traders believe Saudi Arabia is pushing for production increases against opposition from Iran, Venezuela and other OPEC members. CNBC reported Monday that Saudi Arabia has already boosted its oil output. Analysts said that confirms reports last week by two research firms that found OPEC production is rising faster than expected.

But Vienna’s PVM Oil Associates noted that OPEC’s seaborne oil exports in the first half of November dropped 340,000 barrels a day from the second half of October to 22.48 million barrels a day.

No need for now for December OPEC output boost: Qatar

There is no need for OPEC to boost oil output when the producer group next meets on December 5, Qatar's Oil Minister Abdullah al-Attiyah said on Tuesday.

"My personal belief is that for the moment there is no need to increase production," he said.

India's refining hub to be largest in world

The expansion projects will bring their combined refining capacity at Jamnagar to 1.9m barrels a day, the largest in the world in a single location, outstripping hubs such as Rotterdam and Singapore and those in China and South Korea, according to figures compiled by Fesharaki Associates Consulting and Technical Services, Singapore.

The plants at Jamnagar will mostly handle crude imported from the Middle East for refining and re-export, underlining India's growing role as an offshoring hub not only for computer services but also for more traditional industries.

Some OPEC Members Seek Non-Dollar Payment For Oil

Venezuela will continue to push a proposal within the OPEC to find a new reference measure for crude prices and to eventually demand payment for crude in some other currency than the dollar, the country's oil minister said Tuesday.

"We're working on a scheme to, first of all get paid in an alternate currency (other than the dollar) and to search for a new crude reference," Oil Minister Rafael Ramirez said during an interview on state television. "The Brent and the West Texas Intermediate (crude indicators) are both pegged to the dollar," and that's no good, he said.

Gazprom plans underground storage near Berlin

Russian gas monopoly Gazprom said Tuesday it had bought mining rights north of Berlin that would allow it to build Europe's biggest natural-gas storage site.

The controversial North European Gas Pipeline (NEGP), to be built under the Baltic Sea, will supply the gas from Russian gasfields. It will be injected under pressure into the rock in Germany till it is needed.

Where the wild things are

Grubb is heading for his favourite patch of wild food on the creek - a plum grove, which he says yield the sweetest, most delicious plums he has ever tasted, "like eating cherries". He says his interest in weeds sprang from his work as founding editor of EnergyBulletin.net, an online site dedicated to the proposition that petroleum production has peaked and that our present way of life cannot continue indefinitely.

During his years as a voluntary researcher on peak oil, Grubb began to wonder how city dwellers would feed themselves if agriculture based on petroleum products - chemical sprays and fertilisers, long-distance trucking and refrigeration - became unviable. Other countries have turned to their sources of wild food in times of crisis. Grubb says that before the Argentine economy collapsed, for instance, the government distributed edible weed pamphlets.

Global Warming: Where the Candidates Stand

Where the Democratic candidates stand

Where the Republican candidates stand

Australia: Climate is right to tackle impacts of environmental change

The election campaign was largely devoid of debate about national security, and one of the neglected security issues was the impact of climate change. There are now few sceptics about global warming, given that the effects are apparent even to flat-earth proponents. The focus is now on how rapid (or delayed) climate change might be, the extent to which human countermeasures can mitigate the effects, and consideration of best and worst case scenarios.

New Australian leader prepares to ratify Kyoto

Australian prime minister-elect Kevin Rudd said Tuesday he was working on fulfilling his campaign pledge to ratify the Kyoto Protocol on climate change, but a law expert said he could face problems.

Rising sea disrupts flights in Indonesia

Indonesia's environment minister said Tuesday that global warming was to blame after the capital of Jakarta was partially flooded, forcing thousands of people to flee homes and cutting off a highway to the international airport.

Bush welcomes Gore to White House for talks on climate

President George W. Bush on Monday welcomed defeated Democratic presidential rival Al Gore to the White House for the first time since 2001, celebrating Gore's Nobel Peace Prize and discussing global warming.

Poor in need of help from global warming

Floods, droughts and other climate disasters will rob millions of children of the decent meals and schools they need unless rich nations pony up $86 billion by 2015 to help the poor adapt to global warming, an expert panel warned Tuesday.

The U.S. government needs to cover $40 billion of that spending, which will "strengthen the capacity of vulnerable people" to cope with climate-related risks, according to the report commissioned by the U.N. Development Program.

Sarkozy calls on China to join global 'New Deal' on environment

French President Nicolas Sarkozy Tuesday urged China, one of the world's major polluters, to join in a worldwide "ecological and economic New Deal" to fight global warming.

Climate Obstacles Ahead

The good news on climate change is that the world wants to do something. It's no longer just the Europeans and a few fellow travelers; a recent survey suggested that 96 percent of South Koreans and 66 percent of Ukrainians regard global warming as an important threat. The latest report from the Nobel-anointed Intergovernmental Panel on Climate Change got the blanket media coverage it warranted. In the United States, business and congressional leaders have decided action is inevitable.

Then there is the bad news: None of these fine sentiments will matter unless a critical mass of countries unites around a real policy. And unity is miles away. Former Treasury secretary Larry Summers remarked recently that today's climate debate is like the U.S. health-care debate of 15 years ago. People agree that action is essential, but they disagree so fiercely on the details that action may prove impossible.

IEA report released. Oil production up by 1.41mbd in October for new record of 86.43mbd.

Which is exactly why RR was right to tell people to be cautious to cry Peak Oil right now, now those who have been screaming it will lose that much credibility. Best hopes that it doesnt hurt mitigation efforts and alternative energy hopes.

The real peak is still intact! That is Peak Oil instead of Peak All Liquids. 74,298,000 barrels per day was produced in May of 2005 and is unlikely to be breached by October 2007 production.

At any rate, when we talk of the US peak, we speak of 1970, not June of 1970 or August of 1970, just 1970. Likewise, in the future when we talk about the World Peak we will talk about the year oil peaked, not the month. The average for the first eight months of 2007 world production is currently over 700,000 barrels per day below 2005 production. When the last four months come in, they will not even come close to lifting 2007 production above the 2005 level.

I am calling 2005 as the year the world oil production peaked.

Ron Patterson

Exactly. That's the evidence so far.

Exactly, the 86.43mbd is clearly all liquids, not just oil. When natural gas peaks, then production of other liquids will probably peak as well, and total liquids will begin to fall.

The real peak is still intact! That is Peak Oil instead of Peak All Liquids. 74,298,000 barrels per day was produced in May of 2005 and is unlikely to be breached by October 2007 production.

Are you sure about this? If so, why?

At any rate, I think Peak All Liquids is the more economically relevant number, not Peak Oil (Crude + Condensate), because it is All Liquids that drives the economy. And if this is so, and All Liquids is continuing to grow, then who cares about Peak C+C?

You might be right about May 2005 or even 2005. But you have shifted your emphasis from the peak month to the peak year in light of a possible new peak month of October 2007.

I don't discount the utility of tracking C+C, and monitoring its peaking. It is easier to define and measure C+C, as opposed to All Liquids, the definition of which seems to be expanding with time. But as I said earlier, the economy is driven by All Liquids, not C+C.

This has been argued a lot. I, personally, think C+C is what we should be watching. It's what Deffeyes based his prediction on. For good reason, IMO. Hubbert's work was based on geology, and was never intended to model things like ethanol production.

And others have pointed out that using "all liquids" has some double-dipping, since the oil used to produce ethanol is essentially counted twice.

Didn't Deffeyes also define the peak as an average over a 6 month period?

If he didn't he should have. What if the production data were reported weekly, or daily. Where is averging in all this, to discern the trend from the fluctuations? The trend is flat production. It'll take months or more to say otherwise. It's only years from now, averaging out the noise, that we'll put a month/year on peak. But it'll be academic.

It was either Cambell or Deffeys who said that peak should be indicated by whether producers are able to sustain production for at least 5 years.

I also think that this event develops on at least year-long scale. Month to month variations are too minute to indicate (almost) anything - pretty much like following day-to-day price variations.

I would appeal though that we should be equally fair on both sides - a dip in output in one or several months is as much a proof to the "peak-oil-now" theory, as much as a similar short-lived growth is a proof to the opposite.

Hi Leanan,

I agree, C&C is what we should be watching. No matter what line is selected below, peak C&C has probably passed in the year 2005.

click to enlarge

The forecast from 2007 to 2012 is the same for all three lines, (red, green or black) as it is based upon new projects. These new projects include those in this list, which is under development, http://en.wikipedia.org/wiki/Oil_Megaprojects

For more information please see my October world oil forecast http://www.theoildrum.com/node/3064

My own opinion is that world C&C will be between the red and green lines. The black line is shown because some people believe the USGS resource estimates.

The current trajectory of the URR is "aimed" directly at 2200 GB.

But for a laugh, you ought to include the EIA's IEO 2006 projections.

using "all liquids" has some double-dipping, since the oil used to produce ethanol is essentially counted twice.

As is the oil used to produce oil.

Everything in "all liquids" is a direct substitute for a major use of oil. EIA and IEA both refer to all liquids as "oil supply". Looking at that number is the only reasonable thing to do.

More importantly, though, since looking at the all liquids number is what everyone else does, it accomplishes nothing to obsess over a different number, except maybe to make peak oil folk look a little out of touch. Nobody else cares about some arbitrary subset of the oil supply, and you'll just hurt your message if you insist they should. It'd be as foolish as insisting that the peak was years ago, since on-shore conventional peaked years ago.

It's also utterly pointless and unnecessary. The important idea is that oil supplies are having trouble satisfying oil demand; the minutiae of month-to-month production levels does not matter in that overall context, and obsessing over it just distracts people and undercuts your message.

Pitt the Elder wrote:

Everything in "all liquids" is a direct substitute for a major use of oil. EIA and IEA both refer to all liquids as "oil supply". Looking at that number is the only reasonable thing to do.

I disagree completely with your statement. The various liquids in the reports are not equal in their ability to produce energy from each barrel of product. That's because there's less energy in a barrel of ethanol or propane than there is in a barrel of crude or products like diesel or JP5 fuel.

Adding all these into a total distorts the facts about the energy available. Without getting into a further discussion regarding the EROEI for oil vs. ethanol, just summing the energy available over time would be better than a total in barrels. That approach would certainly give a better picture of our situation.

Even better would be some attempt at an EROEI analysis, since, as we all know on TOD, the amount of energy required to produce corn ethanol is much higher than that required to drill a hole in the ground. And, were there to be an EROEI approach, this would also capture the fact that oil is no longer being found in large quantities by simply drilling, but now is recovered by major industrial enterprises placed far off shore. This would show that it's becoming ever more difficult to supply the energy demand of consumers outside the small world of the energy producing sectors. To do this would provide all who were interested with a much better grasp of the reality, without there being a need for detailed understanding of the sort we see here on TOD.

E. Swanson

"All Liquids" measures by volume and not by energy.

NGL & ethanol have expanded in recent years, making up (in part or in whole) for declining oil production. But each has just 60% the energy density/volume of oil.

Also, oil intensive operations (Alberta tar sands) have increased. Although most energy used is NG, quite a bit goes toward diesel for those monster trucks !

So "Peak Liquid Energy" appears to be in the rear view mirror.

Peak Liquid Energy Exports certainly are !



One indicator of the scam-ish nature of the "all liquids" category is that it includes "orimulsion," which includes WATER!

Raw bitumen has an extremely high viscosity, between 8 to 10 API degrees, at ambient temperatures and is unsuitable for direct use in conventional power stations. Orimulsion is made by mixing the bitumen with about 30% fresh water and a small amount of surfactant.


That's just one category of "liquids" to be suspicious of.

Oh...and don't forget Refinery Gains!

I wish someone could explain "refinery gains" in such a way that I could understand what is meant by it.

Simple answer: When crude is processed, some of it gets "fluffed up." By that, I mean the density is decreased. So, if I take a gallon of oil, and run it through a hydrotreater, for instance, I may come out with 1.2 gallons of lighter products (but containing the energy of around 1 gallon of oil).

but containing the energy of around 1 gallon of oil

Is this true? It was my understanding that there is some added energy from the hydrogen used in the process (ultimately coming from NG). Probably this depends upon the efficiency of hydrogenation but I would suspect it would be somewhere in between, probably 1.1 gallons of oil.

This is interesting to me, as if we implement a low-cost non-FF method to produce hydrogen (like high temperature electrolysis in nuclear reactors) we could use it to produce light hydrocarbons starting from abundant low-grade carbon source like coal. I would give this path an order of magnitude higher probability than straight hydrogen economy.

Is this true? It was my understanding that there is some added energy from the hydrogen used in the process (ultimately coming from NG).

True, and that is why I said "around." But I was trying to keep it relatively simple.

In hydrotreating there is added hydrogen. In other refining processes (cat cracking, coking) there isn't.


Refinery gains are simple, speek, at least as I understand them. The denser longer chain hydrocarbons are cracked producing less dense shorter chain products. Think of it like fluffing a pillow - you put a hundred barrels of crude in, the junk from the bottom of the barrel is 'fluffed', and you get a hundred and six barrels out ...

One indicator of the scam-ish nature of the "all liquids" category is that it includes "orimulsion,"

No it doesn't - orimulsion hasn't been produced in about a year.

In any event,there is no evidence that are current path is sustainable -- none. And what if we haven't peaked? We don't have the time to be debating how many angels can dance on the head of a pin. The world is in a world of hurt regardless of whether or not the peak was in 2005 or will be in 2020. We have already dilly dallied well beyond the point at which we could have taken effective remediation measures, unless one things that coal will save us all.

What interests me here is which side has really changed the terms of the argument mid-stream?

Of course, implicit in that is simply the question of the Net Energy we can produce, in particular those that can serve as Liquid Transportation Fuels. But since many of the 'alternative fuels' are produced with heavy inputs, you either have to count the EROEI shifting in this new output number, or in some other way acknowledge that you are double-counting a great many barrels, since they are produced once and then are basically 'converted' into an alternative fuel.. while both barrels are included in the tally of All Liquids output.

That is of course before anyone bothers to consider deducting the costs that the Increasing volumes of freshwater and other natural resources that get eaten up in the process.

The debts are piled high on top of this 86 million figure, but with the correct blinders on, that all doesn't have to be considered part of the equation..


But since many of the 'alternative fuels' are produced with heavy inputs, you either have to count the EROEI shifting in this new output number, or in some other way acknowledge that you are double-counting a great many barrels

That's come up a couple of times lately, I've got a few ponderances (the main one is #4):

#1 Non-alternative fuels, likewise are produced with 'heavy inputs' - although much less so, doesn't exactly the same argument apply? Shouldn't we automatically deduct the barrels produced used in producing the barrels?

#2 Isn't this the whole "do you count the energy used building the tractor / the oil-rig" question again, just in a more direct way?

#3 Is it not actually impossible to set any meaningful number in terms of energy inputs used, and therefore isn't it better to not try - better to know at least what the number is counting, even if flawed, than to add in what essentially would be guesswork? [This will for me forever be regarded as the Lindsay Lohan question]

#4 Finally, and this is actually where this train of thought started - lets say one barrel of ancient-bio-diesel is extracted and refined in the US, and is used as an input to a US farm which produces one barrel of less-recently-deceased-bio-diesel.

Do BOTH barrels get counted as contributing to GDP? Does the barrel of dino-diesel, in the course of being made into a barrel of eco-diesel, actually 'do work' in some abstract probably not-really-real but fundamental-to-the-economy accountancy speak?

If the farm is contributing nothing in terms of net energy, isn't it meanwhile supporting the farmer and family and farm suppliers? Do we ignore, when talking about EROI for biofuels, the small amount of 'processing gain' between input and output of roughly equal energy, which supports the local economy.

I dunno, I just find this stuff curious, and almost too hard to think about for some reason I can't quite grasp.

If a fuel requires FF inputs its derivative rather than alternative, right?

Re: Almost too hard to think about for some reason I can't quite grasp

EROEI is a fallacious concept because all energy is not created equal. Suppose that we used metal return on metal invested (MROMI) to decide which metal to produce. Now suppose for sake of argument that it take 10 pounds of iron to produce 1 pound of gold. The MROMI is therefor .1. Obviously using this reasoning no gold should be produced.
This is the reason EROEI is too hard to think about. It makes no sense, even if 99% of the posters here believe in it. It is fallacious. It is impossible to determine which form of metal/energy should be produced without taking into account market prices. When prices are left out of the equation, it all becomes nonsense. So don't strain your brain, just realize that EROEI is pure bullshit.

Please elaborate, I'm eager to understand your take on EROEI. Seems that unlike your metal example, there is a common denominator with energy - joules, BTUs, etc. Hard to figure, to be sure, but still not the same as metals.

This post is enticing, yet fallacious in its fundamental nature.

EROI is a simple and easily understood concept: How much energy do you have to put in to get a certain amount of energy out?

Let me state this in human terms. If I eat a grape I get a certain number of calories. The ones in the dish here next to me require very little energy to recover. If I had to walk to the grocery store (twelve miles) in order to get them I suspect I would have a negative EROI for the process.

If oil shoots out of the ground when you poke a stick into the soil you've got a very good EROI. If you're burning five barrels hauling, drilling, and refining for every six you recover the EROI is very poor.

The use of the example comparing iron used to gold produced is not a good comparison. Iron is used for some things, gold for others. They can be exchanged for a small set of uses but mostly they are not fungible, as one can't build a skyscraper out of gold and iron is not going to be found in bank vaults as it is far too common.

One can argue the minutia of oil vs NG vs various non FF electricity production schemes but energy is basically fungible - if you need heat to crack heavy crude into something lighter gas, oil, or electric can do the job. Some just happen to be more efficient than others based on a variety of factors.

SCT, good example. I was thinking, if I work all week for x $, and it takes that same x $ to pay my food, shelter, and tranportation, I'm treading water. If any of those costs go up, and my income stays the same, I'm in the neg eroei, or, if my costs stay put but my income goes down, same neg. eroei. Of course our global energy scene is based on way more complex inputs etc., but the concept is simple and, over all, I think you can safely apply the concept..


You're talking finances there, flexible child's toy, and while there are parallels EROI does not play - you have an input, you have an output, and there is no room anywhere in the mix for a central energy bank printing BTU IOUs.

I have suggested in the past that GDP and DJIA are just so much nonsense now; all that matters are consumable calories and usable BTUs.

Sorry, bad example, but used only to flesh the concept. Maybe too simple. I should have used the pv example. More energy too produce the pv system, sans subsidy, than the system provides. And, as ff prices go up, the cost of producing pv system rises correspondingly. No hope ever for that being a singular solution. Neg eroei. Thanks for the kick in the butt. ;^)


"...all energy is not created equal."

Sure, to a small degree, but using a pound of Gold next to 10 pounds of iron really doesn't illustrate the scale we're talking about.

Instead of metals, maybe you could get a fairer comparison using food, since it as another energy source has higher and lower value ways to get calories, nutrients,etc..

You seem to argue that price is the only thing that makes any of these calculations matter.. This may be somewhat true in a time of surplus or at least sufficient supply, but not if you're facing scarcity. Are you still going to 'grain finish' a cow if you're facing severe food shortages? No, that cow's back to pasture, and your formerly cheap grain stock will be keeping food in the larder for another month.

Energy return is THE name of the game, once those fat, old margins have dried up.


There is a common denominator to the major forms of energy, generating electricity. Today electricity is being generated from oil (all types), coal, natural gas, hydro, wind, nuclear heat, geothermal and solar. There is little or no economic use for several of these energy types except for generating electricity.

Electricity is the most useful form of energy (liquid transportation fuels are arguably as useful).

All types of energy have unique values and applications that hey are best suited for. And oil has retreated from electrical generation and other energy sources have substituted for it. But even in it's niche application, transportation, oil can be replaced by electricity (with infrastructure investments) and light hydrocarbons (different engines).


thanks for that. I forgot that energy industry itself uses a lot of energy.

I tried to calculate "peak energy" (my comment below the page), I forgot that:
* for every 6 boe generated by wind/solar industry you need at least 1 boe (do anyone have better figures?? I have only these bad estimates what I can barely recall)
* for every 10 boe produced from tar sands you need maybe 8 boe energy?
and so on.....

this means that if we add new energy capacity, let's say equivalent of 10 million boe, we actually need perhaps something like 0.5 million boe for doing that. It goes to energy infrastucture (fixed energy "cost") & operation. We should be able to calculate this better, we know EROEIs of every energy type & we can estimate the possible additions in energy production by energy type.

lets say one barrel of ancient-bio-diesel is extracted and refined in the US, and is used as an input to a US farm which produces one barrel of less-recently-deceased-bio-diesel.

That would be a very bad assumption.

The majority of the energy used in producing US ethanol is natural gas, both for fertilizer production and for the fermentation/distillation heat. The amount of actual oil is quite small. Indeed, there's no reason to assume the amount of oil used per liquid btu of ethanol is greater than the amount used per liquid btu of oil itself, especially considering how other ethanol producers (notably Brazil) tend to be much more efficient than the US.

That doesn't mean it's a good idea, of course, but there is a fundamental difference between "barrel of oil equivalent" and "barrel of actual oil".

Good summary (sans the hair-splitting of this thread).

The composition of the peak is fairly irrelevant. What matters at the end of the day is the price of whatever stuff goes in the gas tank.

And the # of miles you get for whatever liquid you pour in.

Since ethanol has 60% of the energy/volume of gasoline, 10% ethanol means 4% fewer miles and one or two more fill-ups/year for most drivers.

All Liquids were not created equal.


That's just hair splitting. I didn't say per fill up, did I?

All Liquids were not created equal.

Exactly, and the cost to the user incorporates this factor.

the cost to the user incorporates this factor

*NOT* with ethanol !

From memory, a 51 cent/gallon federal subsidy.

Most buyers are unaware of the reduced energy/gallon, so market knowledge is lacking.


Are you sure about this? If so, why?

Calorie, I did not say sure I said unlikely! Now the last time I checked, the two words had two entirely different meanings.

It is not a question of what is the more economically relevant number, it is a question of when oil peaks verses when natural gas peaks. Natural gas is not nearly as fungible as oil and is used for entirely different purposes.

When people ask when the US peaked, they are talking about oil, not natural gas. Natural gas, in the US, peaked in 1973 and that is probably the year that US All Liquids peaked as well. But no one ever asks that question, with good reason.

And you have not been following my posts very closley. I have stressed, several times, that 2005 will likely be the peak year. I have also stated that May of 2005 will likely be the peak month but that the average for that year will be the most important.

Again, I have not shifted my emphasis. I even offered to bet Robert Rapier, $100, that the average crude oil production for 2005 will be greater than the average for 2008. He declined to accept my bet.

Months jump up and down due to maintenance and pumping from storage. Only the long term average is truly important.

Again, I have stated, many times in the past, that the month is not that important. I stated, many months ago, that the peak month may be July 2007 or some other month, but that were on the peak plateau right now!

I really resent you accusing me of changing my position when I have done nothing of the sort.

My position is this, and it has not changed in over two years.

1. May 2005 is very likely to be the peak month in Crude Oil production.

2. Year 2005 is even more likely to be the peak year and the peak year is the more important of the two.

3. We are, in my opinion, definitely on the peak plateau right now! And that, dear hearts, is the most important point of all.

Ron Patterson

Ron, please provide references to one or more of your previous posts at least one month old in which you emphasized that 2005 is very likely to be the peak year, without also mentioning May 2005 in the same breath, and I will stand corrected.

Calorie, you are getting too sarcastic with this post. I haven't the time to search the thousand or more posts, seeing how slow the web site is responding right now.

I have stressed, over the past two years, that the peak plateau was the important point, the point we are at right now. Many of my posts have stated this line:

We are at peak oil right now! Meaning, of course, that we are on the peak plateau right now. Other times I have been more specific saying: We are on the peak plateau right now! I would have not said now if I were speaking only in the past tense. Also I have stated, many times, that though the peak month is likely May of 2005 but 2005 will be the peak year. Of course I mentioned both in the same paragraph, simply to emphasize that the peak year was the most important.

If you had been following TOD a little closer, you would have known that. And I don't care whether you wish to stand corrected or not, you are simply wrong. You should not post such crap about other people's position when you haven't a clue as to what the hell you are talking about.

Ron Patterson

I have a personal experience with "Peaking" that might be illustrative... ^_^

A couple years back my wife and I took the cogwheel train to the top of Pikes Peak.

The top of Pike's Peak is pretty rounded over, in fact it is a plateau about 300 yards in diameter, that has the train terminus, a large gift shop, and a handful of service buildings, and a parking lot.

The closest thing to a "Peak" was a cairn of stones near the middle, so I went and stood on it. Nearby, there were snowbanks that might have been higher yet.

It can be argued that the cairn, being man made, was not really the "peak", and that the snow, clearly mounded by snowplow, was not the "peak" and I might not have really been to the actual "peak" of Pike's Peak.

On the other hand, I know for a fact that if I had walked 200 yards in any direction, I would be heading downhill fast.

what a great, visual, analogy - simple and to the point

i shall steal that and mentally file it under my 'easy, powerful, analogies' rubric. thanks.

I think you're being unfair. We've debated C+C vs. all liquids extensively, starting over a year ago. It's not like people are suddenly cleaving to C+C because the All Liquids numbers don't support their position. I would say most (but not all) of us decided long ago that C+C are the numbers to watch, for a variety of reasons. We aren't suddenly changing our positions now.

Actually, I thought this debate was long over, except for details like potential double counting concerning ethanol from corn, or biodiesel from soya.

However, it is true that ethanol from Brazil or rapeseed oil from Nothern Europe has a place in a regional economy dependent on IC motors for agriculture/transportation - it is just that it is a fairly minor place. And it is this reaching for the last sip of something to burn which tends to buttress the argument that peak oil has arrived.

If this was a discussion about peak tobacco, this subject would be equivalent to discussing what is left in the ashtray and found on the ground as part of total tobacco production.

If this was a discussion about peak tobacco, this subject would be equivalent to discussing what is left in the ashtray and found on the ground as part of total tobacco production.

Yes, that is right. We drank all the champagne and wine and even the beer.

Now (in an attempt to kid ourselves) we are starting to reclassify Sterno and Cooking Sherry as "Beverages".

Ron, please provide references to one or more of your previous posts at least one month old in which you emphasized that 2005 is very likely to be the peak year, without also mentioning May 2005 in the same breath, and I will stand corrected.

Talk about a distinction without a difference. Ron is right. We are only talking about monthly data because we are still so close to the probable peak year.

Regarding C+C versus Total Liquids, I have an idea. Why don't we match the volume measurement up with the price? In other words, we match the volume of crude oil, or C+C, up with various crude oil prices.

The most recent EIA data show that the total input into US refineries was 15.2 mbpd. Of that 15.2, crude oil accounted for 14.9 mbpd, or 98% of total inputs. Somehow, I suspect that refineries are concerned about the liquid that accounts for about 98% of refinery inputs.

I even offered to bet Robert Rapier, $100, that the average crude oil production for 2005 will be greater than the average for 2008. He declined to accept my bet.

Since my name was invoked, let me weigh in on a few points. First, I did not decline Ron's bet because I think he is right, I just don't want another bet to keep up with for a year. I think Ron is wrong, and 2008 production will be higher than 2005.

Second, I do think Ron has said that 2005 would be the peak year, but it is disingenuous to suggest that much ado hasn't been made here about the peak month. It has been, so it is curious to see just how quickly some people are willing to dismiss this IEA report. This is a prime example of the some of that lack of objectivity that I have noted before. And there is a very good chance that with production up 2 million bpd since August (I wrote something up about this today, before JD made his post above), there will be a new C+C record (with an even better chance for December).

Third, the correct answer is neither C+C nor all liquids as the accurate measure. The correct answer is somewhere in between. From my perspective, it would be all liquids minus the fossil fuels (let's say natural gas and petroleum) used to make those liquids. In other words, something like "net liquids."

Fourth, Ron, you have consistently gone out on a limb regarding OPEC's inability to increase production, and that limb is cracking:


I have studied every OPEC chart and concluded that only Saudi Arabia, of the OPEC 10, has any spare capacity, and I am not sure that they have that much.

Yet Petrologistics and Oil Movements both say exports are substantially up. And now OPEC is talking about bumping up production by another 750,000 bbl/day? Do you think they are merely bluffing?

Anyway, when the November OPEC production numbers come out in December, the cat will be out of the bag. And OPEC at their December 5 meeting, will come up with some lame excuse as to why they will not increase supplies.

And if they do raise production? What then? Will it mean anything to you? If you can't say "Yes", then you aren't being objective. It's becoming hard to deny, Ron, that OPEC did have spare production, and likely still does.

I think those who remain bullish short-term on oil are taking a huge risk with the news that has been coming out. I wish Moe_Gamble would weigh in here. I asked him a while back what his sell indicators would be, but he didn't answer. I would be interested to see if he is starting to shift his opinion short-term, or he continues to bet on further rises in the short-term.

While determining the time of Peak Oil is important, and certainly interesting, here's what is more important:

1. When supply fails to meet demand - likely now
2. When net exports fall - WT's ELM - also happening now

Any slight uptick in supply won't affect either of these problems much.

-edit to mention - There's a major cold outbreak poised to hit the upper midwest. And my local weather gal (Boston) mentioned the possibility of a significant snowstorm in the NE around next Monday. As they say, stay tuned.....

When supply fails to meet demand - likely now

I completely agree with that, and this was the whole argument behind the Peak Lite concept: Rising production, but still failing to meet demand. The effect is the same as Peak Oil.

Robert, the lions share of the new OPEC gains comes from Angola, Iraq and Saudi Arabia. I acknowledged that Saudi had some spare capacity and my statement was about the OPEC 10. Andola and Iraq are not part of the OPEC 10.

I believe the IEA numbers are considerable different from the EIA's C+C numbers, so let's just wait for them. But in the meantime, I do not believe that the OPEC 10, outside of Saudi, has very much spare capacity. And I do not believe that, after this increase, Saudi has much if any left.

I cannot make it any plainer than that. And my bet still stands. I will bet anyone $100 that the average C+C number for 2005 will be higher than those for 2008. $100 just ain't that much people. Someone please take me up on my bet.

Looking at the October IEA numbers, they have OPEC crude up 410,000 barrels per day but OPEC liquids up 570,000 barrels per day. NGLs were up 160,000 bp/d. That is one hell of a jump for NGLs just from OPEC. At any rate, of that 410,000 barrels, 100,000 came from Saudi, 100,000 from Iraq and 120,000 from Angola. That means only 90,000 came from the other 9 of the OPEC 10. I think Robert, that I am still correct in my assesment that of the OPEC 10, only Saudi has much spare capacity.

But for non OPEC the figures are for liquids, not crude oil. So we will have to wait for the EIA data to see if the rest of the world had such a momentual increase in NGLs as did OPEC. If so, then the October C+C figures will come nowhere close to the May 05 figures.

So let's just wait for the EIA data, shall we?

Note: I checked OPEC's own web site ant their numbers for C+C match what the IEA reported for Crude. But the OPEC site does not give All Liquids numbers. So there is no way we can verify that vast jump in OPEC All Liquids. At any rate we know 160,000 bp/d of the OPEC increase was for Liquids and will not add to the C+C figures. Another reason I think the 2005 record will not be breached.

Ron Patterson

I believe the IEA numbers are considerable different from the EIA's C+C numbers, so let's just wait for them.

Does the IEA report C+C? If so, what is their record number?

I think Robert, that I am still correct in my assesment that of the OPEC 10, only Saudi has much spare capacity.

That would be a bit of a shift in your position, though, as previously it was "I am not sure that they have that much."

Regardless, I don't want to get into a long argument about it. As you well know, I took a lot of grief for arguing this year that Saudi had spare capacity. (Some of the March threads around this theme are a kick to read now). And as frustrating for me as that was, all I was trying to accomplish was for us to be more careful about making definitive statements. We may very well see October revised down; perhaps substantially down. So the point is not "Woo-hoo, a new record. Everything is OK."

The point is, let us continue to fight the good fight, but without setting ourselves up for the critics. I have gotten this message across to a lot of people without ever coming across as an extremist. IMO, this is the best way to communicate the message. I even sometimes mention "billions dead", but I also mention that 1). I don't think this has to be the way; but 2). I understand (and I explain) the argument in favor of it happening. That way, you get the message across without being that (crazy!) person who told them that all is lost.

Fundamentally, even though I am a near-term peaker, I have a different approach than probably 80% of the readers here. And it unfortunately puts me on the defensive a good bit of the time when I post here, and it results in a lot of pot shots in my direction. That's why anymore I mostly just lurk.


For what it's worth - even though I disagree with you on 'best tactics' around the net effects of risky predictions - I for one hugely value your contributions.

I'm sure I'm not alone!

You come across as a facts based kinda person, and you shouldn't need to feel defensive, it's good to see you challenge and be challenged, and as you can easily point out, you're currently a few "Told ya so" points in credit.

MEES released their October OPEC crude numbers yesterday. It was indeed a huge production jump. (Angola isn't included.)

Wow. If I'm reading that table right, the big jump came from...Iran?

The result of the gasoline rationing?

Iran is up this month 9% over the YTD average, the previous month they were down 5%. Iraq is up 13% over their YTD average and the previous month they were also up 6%. Iran and Iraq seem to fluctuate more than the rest from month to month as well.

Yeah, looking at it again...Iran has a lot of variation in their numbers. (Iraq, too, but I think we know why that is.)

Kinda funny that Iran, one of the OPEC members who have been against increasing production, came to the rescue. ;-)

You have to wonder...why now? If it is accurate.

1) They want the money? (in Euros)

2) This spurt was floating storage...not unlike 2006.

3) Maybe they know they are about to be invaded and want to cash in some 'stocks'

Where is my crystal ball...damn...I know I put here somewhere.

I'm thinking it's probably just random. Perhaps the high prices prompted some of the increase, but just looking at their monthly numbers...I would guess they don't have that much control over what they produce. Their production is often below their quota, and has been for years. Perhaps being mostly closed to IOCs, and subject to sanctions, they have maintenance issues.

Keeping gasoline in the US around $3 per gallon prevents energy independence from becoming a main issue in the 2008 elections.

And why would Iran want that? They keep trying to talk prices higher, and for good reason. They see it as their defense against attack.

Opec’s own Monthly Oil Market Report is out. (Click on the PDF logo and the October production figures are on the very last page.) And OPEC says that output for the OPEC 10 was up 290,000 barrels per day. The IEA gives the exact same number. (Of course they do because they got their figures from the OPEC report.) MEES however, says the OPEC 10 was up 720,000 barrels per day.

The OPEC 12 was up 410,000 barrels per day according to OPEC.

How can this discrepancy be explained? What does MEES know that OPEC themselves do not know. Remember, OPEC has a tendency to exaggerate their numbers. Can anyone explain why MEES’s increase for the OPEC 10 is 2.5 times what the IEA and OPEC says their increase was?

The difference is of course Iran. The OPEC monthly report says Iran production was up 50,000 barrels per day while MEES says they were up 560,000 barrels per day. That is one hell of a difference!

I must add that MEES has done this at least once before. A about a year or so ago MEES had Iranian production up about half a million barrels per day more than anyone else. They explained that Iran "produced from storage" that month. You will remember that Iran once rented tankers to store oil. Everyone else ignored this reported increase and I suppose they will ignore this MEES reported increase as well.

Ron Patterson

But how long can they sustain any increase of that magnitude?

And, if that spare capacity is in Heavier crudes, can anyone process it? (as Ace suggests)

Do you think it will be sustained?

And it would have to be, as we need the extra oil NOW to get thru winter demands, but with only a small break, we enter into DRIVING season with below average gasoline stocks (and possibly low crude stocks as well).

So, if OPEC/KSA cannot keep production up at a new high of about 1MMBPD above current, forced demand destruction will occur via price.

This why I think the Triple Yergin is still in sight.

EDIT: Would just love to be wrong...we need more time.

"At any rate, I think Peak All Liquids is the more economically relevant number, not Peak Oil (Crude + Condensate), because it is All Liquids that drives the economy."

Well, that is true, but we should track C+C anyway. Remember, we are talking about peak oil, the finite energy source that is essential to our CURRENT economy, not peak economy.

Both do not need to come toghether, but for that we must make a transition. I may be wrong, but it seems that the need for that transition is the reason this site exists.

"Are you sure about this? If so, why?"

I guess ramping up ethanol increases the double counting in total liquids, opposed to the C&C figures. Ethanol requires a lot of fuel to produce compared to its' relative value

Sure, an all liquids peak looks great, but unfortunately we are in fact hastening our starvation.

Edit: All liquids peak is like burning top soil. Bon apetite

At any rate, I think Peak All Liquids is the more economically relevant number, not Peak Oil (Crude + Condensate), because it is All Liquids that drives the economy. And if this is so, and All Liquids is continuing to grow, then who cares about Peak C+C?

Because ethane, propane, butane and pentane from NGLs isn't "oil." Ethanol isn't oil (particularly when oil or coal is used to run the processing).

Besides there is a really easy way to dispel the idea that peak oil has already occurred...six-contiunous months of C+C production at greater than 74.3 MMBPD.

Likewise, in the future when we talk about the World Peak we will talk about the year oil peaked, not the month.

Then can we agree that nobody here should be talking about "May 2005" or "June 2006" or any other arbitrary month that may or may not show a peak?

Peak Oil instead of Peak All Liquids.

Why do people insist on this distinction? It appears to be an attempt to "stay right" in the face of contradictory evidence, which is not a reasonable way to approach anything.

The oil burned to produce ethanol is double-counted, but so is the oil burned to produce oil, so that's not a sensible reason, especially since Brazil produces a lot of ethanol with a little oil. Even the US's ethanol production uses a relatively small amount of oil (most of the energy is from other sources, and so shouldn't be counted here).

Each of the non-oil liquids is a direct substitute for oil in a major use (e.g., NGLs and ethylene feedstocks), so it can't due to fundamental usage differences. There's an energy density difference, which is a fair point, but there's no indication that that matters for chemical feedstocks, and that's information we'd need to have to properly discount non-oil liquids.

Moreover, it's pretty obvious that world oil markets are really "all liquid" markets. The EIA and IEA both use all liquids as their "oil supply" values, and the all liquids value is what traders discuss. Think of what would happen if C+C dropped by 5Mb/d while other liquids rose by 10Mb/d - would "oil" prices go up or down? From the perspective of almost everyone, that's 5Mb/d more oil.

Obsessing over the month-to-month movements of an arbitrary subset of oil supply is an excellent way to ensure peak oil stays fringe. The real issue is that oil supplies are having trouble meeting oil demand, and a narrow focus on irrelevant details does nothing but obscure and undercut that message.

if C+C dropped by 5Mb/d while other liquids rose by 10Mb/d - would "oil" prices go up or down?

Oil prices would be up if other liquids were ethanol & NGL.

Energy value is +1 MB/d (10 Mb/day of ethanol & NGL = 6 Mb/day - 5 Mb/day of good old oil), but offsetting this is usability.

One can blend only so much NGL into gasoline, especially summer blends. And we are close to that mark.

We cannot blend that much more ethanol into E10 gasoline and ethanol must be transported by rail, not pipeline.

Despite the slightly increased energy, the negatives of the new liquids would force a premium on the smaller oil stocks available. OTOH, ethanol and NGL prices would plummet.


I wouldn't get too excited AD.

A new HIGH in 'ALL liquids' is not a big deal, as ACE and others have called for it to happen and possibly more than once.

Yes, if this number isn't revised, we will have a new All Liquids peak. But, if it can't be sustained...there we are on that lovely plateau again.

Once again, we seem to be arguing about days, when it is far past that point, and even the media and petroleum markets are beginning to understand how tight supply is.

There is no growth left in the system.

it surely looks like it, there is no growth in the system because depletion etc. production decreases and demand increases at the same level (or more) than new production additions... (see my calculations below)

peak energy!

I think they'll only lose credibility from those who refused to give them any in the first place. (which is of course a logical impossibility)

I firmly believe those making predictions have made a solid and significant and observable nett contribution towards peak oil awareness, and therefore the follow-on mitigation and alternative energy drives.

That seems so obvious to me, I can't see how others don't grasp it. What will back up your case is if there is now criticism from quarters which had previously not been critical.

Of course all the usual anti-PO crowd will feed this into their anti-PO stream, but that in no way signifies a loss of credibility.

Ho hum,

Well,you can reduce it to 86.33.IEA had Mex at 3.46,when actual was 3.36 as pub by Pemex.

Yes, there are often significant adjustments from the initial numbers. I wouldn't make too much of it till next month when this month's figure is revised. However, it is an impressive number all the same and tends to counter the most extreme of the peakists.

In addition, if history holds, the EIA number will be significantly less, may not be a new high, and we'll be back to discussing who is more accurate.

Agree. Barely worth the thread it was presented on...hehe.

We have to wait for EIA. Until then, no new peak (all liquids aside)

At the risk of making a complete idiot of myself, I predict that the EIA will, in December, report a substantially (i.e. - 1mb/d) lower figure in their - customarily much more careful report - on October production.

Furthermore, since almost the entire reported month-on-month increase comes from just those three parts of the oil-producing world that are farthest from Paris (i.e. Kazakstan + other central asian republics, Russia and China), and divides, rather neatly into around 300 kb/day for each of these three, I strongly suspect wilful manipulation of the supply data in a northly direction.

The obvious motivation would be to dethrone the previous peak and spike the guns of peak oil cassandras everywhere.

Furthermore, since almost the entire reported month-on-month increase comes from just those three parts of the oil-producing world that are farthest from Paris (i.e. Kazakstan + other central asian republics, Russia and China), and divides, rather neatly into around 300 kb/day for each of these three

You're simply wrong.

Not only is your knowledge of geography rather suspect (it's less distance from Paris to Kazakhstan than to New York, much less Houston), if you take the time to read the table in the actual report, you'll find these major contributing regions:

1) Middle East: +260kb/d
2) China: +200kb/d
3) Former Soviet states: 160kb/d
4) Africa: +140kb/d
5) USA: +80kb/d
6) Russia: 70kb/d

Not only did you totally miss the region providing the largest increase (which Paris is rather close to, not that that matters), none of the regions you picked out are anywhere near 300kb/d, and one of them - Russia - isn't even a quarter of that.

In fact, given how completely and utterly wrong your claims were, I'm suspecting that you didn't even bother to look at the report before making them. Which, in a post alleging "wilful manipulation", is rather ironic.

The figure they give for Chinese production is false. China has announced a figure more than 200 tbpd less.

Their number for Mexico is higher than Pemex claims, too.

The link for Global Warming: where the candidate stand, require some login process.

The league of women voters has such a list also. I found it at the energy blog.

When you fix links, this message will self-destruct in 5 seconds...

(i.e. remove me:-)

It may require registration, but registration is free. Use BugMeNot if you don't want to register.

try here for candidate positions w/o login requirements:

Thanks to Jim Fraser aka The Energy Blog for posting this two weeks or so ago.

There are some posts at http://globaleconomicanalysis.blogspot.com that explains how mortgage rates can and recently have been increasing despite the recent Federal Reserve rate cuts.

The post titled "LIBOR Rates Show Stress" is one.
"Curve watchers continue to point out that mortgage rates on 30-yr fixed and 1 year arms are above where they were a year ago in spite of 75 basis points in cuts by the Fed."

I believe, foreign central bank demand for US Treasury paper has been/will continue to determine US lending/ borrowing costs. Our gov'ts fiscal irresponsibility has shifted control of this important facet of our economy out of our hands to foreign central banks.

It's no surprise that US Fed rate cuts have not reduced US Mortgage rates. The Fed continues to be primarily motivated to prevent a recession resulting from the credit crisis:

The Committee’s statement noted that, while economic growth had been moderate during the first half of the year, the tightening of credit conditions had the potential to intensify the housing correction and to restrain economic growth more generally. The Committee indicated that its action was intended to help forestall some of the adverse effects on the broader economy that could otherwise arise from the disruptions in financial markets and to promote moderate growth over time.

October Fed Meeting Minutes

Alan FBE... have you done any pondering over NaS batteries for trains? I don't know how large of a battery it would take for a certain distance at a certain grade, but it seems like it would allow you to put electric trains in areas without having to establish at least certain sections of overhead or third rail lines. The battery would of course be topped off when operating on third rail/overhead power and could absorb regenerative braking when on or off grid.

Why not lead acid batteries ? Weight is not that big a deal with locomotives.

The switch in technology has largely prevented the use of battery locos elsewhere in the world (remember, we are talking about a MATURE technology, with perhaps 100,000 miles of electrified rail in operation today, and 10,000s of miles operating for many decades). I have heard of switchyard locos operating off batteries and little more.

And the French set the goal of "not one drop of oil" for their SCNF rail system on 1/1/2006 (twenty years to completion) and there is talk that they might use battery locos for some spur lines.

Of course, extremely high diesel fuel prices have not been the norm so far.

Overhead electrification is not that expensive and the challenge to the USA is to electrify about 32,000 miles of main lines. (The DoD has classified that many miles as strategically necessary), Once that is done, we can tour France, Japan, Switzerland, Germany, Russia etc. and see how they handle little used spur lines.

Best Hopes for the first 10,000 miles of electrified US railroads,


Alan, have you got any leads on research examining the relative impact of rising diesel prices on truck vs rail freight transport?

(Since you guys are talking about trains, it's time for my first post!)

I can't point to any in-depth research, but trains are more fuel efficient than trucks, so railroads should have the edge.

Although modern diesel locomotives have a fuel efficiency in mpg of roughly an order of magnitude less than trucks (say 1 mpg to 10 mpg), they have a pulling power of roughly 2 orders of magnitude greater (1 loco can pull, say, the equivalent of 100 truck loads). So alltogether they have an mpg/load of roughly an order of magnitude greater than trucks. That's very imprecise of course (only 1 significant digit) but you get the idea.

In context with all the other economic factors inherent in your question, I can't speculate how significant a difference fuel prices make, but I have difficulty imagining that higher diesel prices don't increase railroads' competitiveness vs. trucks by some factor, however large or small.

That's also without even considering that railroads ultimately can electrify and obtain their energy from sources that don't involve diesel fuel.

That's a good simple comparison.

About three or four years ago I was travelling from Kansas City to St. Louis and got stuck in a traffic jam (both directions) during nightime road contruction. I
could see perhaps 50 to 100 trucks also stuck in this jam that was about three miles long. While creeping at 1 to 2 mph I saw a train pass on the parallel railroad line. While doing around sixty mph the one locomotive was pulling 110 "roadrailer" truck trailers and using two people to run the train. This is transporation efficiency at its best.

I am looking for current or recent research that considers such factors as value of goods carried, distance of shipping, and so on.

I've begun to search through academic journals, but so far haven't found much. Any help would be appreciated

You use the batteries to move the train through sections that aren't as easy to electrify as the areas that you charge the train in.
Or, you could just use the diesels to run through those areas and settle for using the diesels less than if you didn't electrify the trains.
You pay your money and you make your choice.
Buses are different. It's expensive to string wires all over a city. Buses don't produce smog either, if they are electrified by nuclear power plant base load over night. The way to go.

There is an intermodal newsletter where I have found that roll on-roll off trailer shipments are flat, containers are exploding. Have to get back to you later on link.

As for nicely packaged academic reports, *PLEASE* let me know if you find any.

I have gotten used to taking a supposition that appears reasonable (How did Switzerland survive a 6 year oil embargo ? Has anyone determined what rail lines are essential ? What is the energy ratio between heavy trucks, diesel RR & electrified RRs ?) and finding, via Google, etc. that raw data and working from there. Also I know some VERY knowledgeable people :-)

Best Hopes for Academic Resources,


There is an intermodal newsletter where I have found that roll on-roll off trailer shipments are flat, containers are exploding.

Exploding train bits? Sounds like a national security problem.

"Why not lead acid batteries?"

Poor cycle life.

"Overhead electrification is not that expensive"

Depends on how you define expensive. Some of the figures you've quoted here before seemed pretty high. In long, flattish stretches it may be possible to eliminate vast amounts of line and rely on batteries and smaller powered stretches. Having the battery backup would also help guard against disruptions caused by vandals in certain lengths of track and reduce the amount of copper necessary in an era where copper is likely to be highly sought after.

There is a sandpit/quarry along the route our tram takes which is tied into the rail network. They use a Vollert Robot for shunting in their own yard, and it seems to be battery powered (the Robot is also available as a diesel).

However, everything else I have seen is either electrified or diesel - and the number of diesels have been declining for years, though with the opening of the German rail network to other companies than the Bahn AG, you do see the occasional long haul diesel.

The diesels in this region which continue to be used are generally for shunting, or short distance hauling - that is, larger diesel shunting engines which are used for a few cars over relatively short stretches, for example the sand from that quarry, or production from the Mercedes A-Klasse factory in Rastatt to local destinations, such as the Rhine harbor in Karlsruhe.

Previously, diesels (both commuter two car units and 'real' locomotive pulling/pushing passenger cars) were also used for various local/Black Forest routes in this region, but all those spurs have been electrified, and now run with the KVV's dual system trams. The Black Forest routes in this region tend to get a good amount of snow, and run along fairly steep hills - nothing extreme, but certainly nothing trivial either. The advantages of electrification were quite clear, and by now, the diesels are no longer parked in the Karlsruhe yard. I assume that they were sold, but the Bahn now has a habit of scrapping locomotives at a loss, to prevent its competitors from buying them, and then using them on routes the Bahn has written off. Sometimes, to see a 'free' market at work, you just need to note what happens when a company is freed from its previous boundaries, and is allowed to pursue a profit, as the company defines it.

KVV, the local transit conglomerate is very upfront in saying that it will never run at a profit in purely monetary terms, but that everyone in the region benefits from the cleaner air, reduced traffic, and affordable transit routes - especially students, families, older people, and those who like to spend a night enjoying themselves without having to worry about driving afterwards. Not to mention those wanting to see more of the region, and those travelling longer distances by train or plane - after all, it is no problem to get to Karlsruhe, and then take an ICE to the Frankfurt airport - the ICE is almost always faster than a Porsche on the A5/A6, and likely costs less with 1.40 euro a liter gas - definitely much less when you factor in the cost of parking (not that most Porsche drivers worry about such details, of course).

Essentially, at least this region of Germany is developing an all electric system, as diesels just don't seem clean or cheap enough to be worth using, even on what were considered marginal routes.

Alan, GE's Hybrid locomotive cuts both emissions and fuel consumption by up to half by capturing the 207 ton train's braking energy and using it to supplement the diesel engines to accelerate or climb steep inclines. GE created its own 1000 pound molten salt cell, which combines sodium with a metal chloride. That recipe allows more current to flow through it than other batteries, so it can deploy 2000 hp in less than a second. See www.ge.ecomagination.com for details. The Evolution made its debut in May and will go commercial in 2010. GE is making real progress on the train and windmill front that we will need in the future. Way to go GE.

from the GE website:

That stored energy can be used by the crew on demand – reducing fuel consumption by as much as 15 percent and emissions by as much as 50 percent compared to most of the freight locomotives in use today. In addition to environmental advantages, a hybrid will operate more efficiently in higher altitudes and up steep inclines

Certainly a step in the right direction, but not a revolution.

The latest GE loco is about 2% more fuel efficient than the previous model. (The hybrid is 2010 ?)

New emissions requirements are reducing 2007 and later model heavy truck fuel economy by, reports vary, from 6% to 10%.

These two trends will widen the fuel economy gap between diesel truck and diesel rail.

Best Hopes for Electrified Rail,


The New York Times has this article on China and the French nuclear company Areva:

China Deal Gives Lift to Revival of Fission

Sorry if this has already been posted.

Everett, this is a fascinating wrinkle on the energy game. The biggest nuclear power deal ever. The French will keep this up. Where is the U.S.?

Steve LeVine, author
The Oil and the Glory

Hello Stevelevine,

Yep, I have posted on Areva before. With the addition of their key position on phosphate mining and uranium in Morocco--they seem to be getting well-positioned as a possible biosolar mission-critical company as we go postPeak.

Yahoo 5-year stock chart for AREVA: $127 rocketing to approx. $830 [currently at $750]:


Phosphorus [Element P] is threatening to severely squeeze the Dieoff bottleneck, P peaked many years ago:

Peak phosphorus
by Patrick Déry and Bart Anderson

He estimates that U.S. peak phosphorus occurred in 1988 and for the world in 1989. There are no substitutes for phosphorus in agriculture.

It is sobering to note that phosphorus is often a limiting nutrient in natural ecosystems. That is, the supply of available phosphorus limits the size of the population possible in those ecosystems.
More Phosphorus Readings:


IMO, I think the world will be truly stunned how much of our postPeak energy will ultimately be directed to recycling P & K, and other essential trace agro-minerals from all sources to avoid Liebig Minimums. Before FFs, Britain alone sailed guano halfway around the world and annually immigrated 3.5 million dead humans to replenish their topsoils.

Isaac Asimov wrote about the criticality of P too:

In fact, Isaac Asimov, an important science writer, has defined phosphorus as "life's bottleneck." This is true even though phosphorus is by no means the rarest mineral element. If you have a miniscule amount of something but only need a tiny, tiny bit of it, then that's less critical than if you have a fair amount of something, but you need a lot of it...

Asimov noticed that some mineral elements are more common in organism bodies than in the surrounding environment. Obviously that organism has needed to concentrate that element in itself. The degree of concentration of that element in the organism's body, then, becomes a good indication of these two things:

how much organisms need that element
how available it is in the environment
Asimov noted that phosphorus composes about 0.12% of an average soil, yet a much greater percentage of an alfalfa plant's body, about 0.7%, is phosphorus. Therefore, the "concentration factor" for phosphorus is about 5.8 (0.7/0.12).

No other mineral element even comes close to having a concentration factor as great as phosphorus's. The closest is sulfur with 2.0, then chlorine with 1.5. All the rest have less than a factor of 1.

Therefore, if there are more and more organisms needing mineral elements, or if the living ecosystem is more and more depleted of its resources, which mineral element will come into short supply first?


And since phosphorus is a mineral element that organisms absolutely must have to stay alive, it doesn't much matter whether there is enough of all the other elements...
As noted before: those that control NPK could potentially control the world. Keep thinking: hen and eggs, hen and eggs, hen and eggs....

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

Thanks again Bob. Good idea! I'll get myself some hens.

Interesting stuff Bob! :)

Thanks for that, Bob. Best Steve

an alfalfa plant's body, about 0.7%, is phosphorus.

Considering that an Alfalfa root system can go down 70+ foot, like a tree, this is not a surprise to me.

Computer Glitch Leads To Brawl At Kmart

The store was running a promotion in which it would give away $10 to anyone applying for its credit card, but the computer glitch led to everyone's application being granted -- bestowing up to $4,000 in instant credit to anyone who applied even if they shouldn't have qualified.

Once word started to spread about the so-called "free money" Saturday, witnesses said things got pretty nuts inside the Wauwatosa store.

"They were having a big fight. Two ladies was jumping a lady over credit cards," witness Sylvester Wilson said.

Nearly a dozen Wauwatosa squad cars responded to the call just before 11 a.m. Saturday for what was called a large fight in progress.

"It was a nice brawl. It came from inside to outside. If you go up there, you'll see hair, earrings, all pulled out on the ground," Wilson said.

It wasn't even money. It was credit.

I think this is my favorite part. After the store ran out of applications:

One witness told police someone went to another Kmart, got some applications there and was selling them in the Wauwatosa Kmart parking lot for $20 apiece.

I am not surprised. to allot of people credit cards = free money so this was bound to happen.

FOMALOL...That is rich! Mass hysteria, herd think, and then some join the fray just because they are ticked off about their lot in life. But, the quick thinker took advantage of the situation by going to another store to get free forms that could be sold at a hefty profit. Sound familiar?

If the machine was approving "anything" you could just sign-up using fake information and then it would be "free money", but you could also describe it as "fraud"

This reminds me of the three shoppers who were crushed to death when the first IKEA opened in Saudi Arabia. They were offering vouchers.


Ah, that's how it is free money. Thanks Glenn. I was slow on the uptake in my previous post below.

I didn't really understand that story. Wasn't all that happened is they were granted a line of credit without a credit check? How does that equate to free money?

If you aren't going to pay off your credit card I guess it could be construed as free money, but then the line of credit would be appealing only to those people who can't otherwise get a credit card. Most of us can get a new credit card any time we want, or alternatively we could just stop making the payments on the cards we already have if we wanted "free money".

So are we to assume the rush on K-mart was by a horde of people who can't get a credit card, because they have a past history of never paying them off? (Hence their interpretation of a credit card as being free money)

More fun with credit...

Subprime cards' high fees can add to debt troubles

The credit crunch has made it harder to get loans, especially for those with bruised credit. To fill that gap, a breed of credit cards, often called subprime — and some critics call predatory — has increasingly sought out consumers. These cards offer only a slight amount of credit, yet charge steep fees. Among their targets: young adults with little credit history and families struggling to climb out of debt.

In the first half of this year, direct mailing of such cards jumped 41% over the same period in 2006, according to Mintel International Group, a research firm. Millions of consumers are being hurt, says a new report on subprime cards from the National Consumer Law Center, which has another name for them: fee-harvester cards.

One such card offers a credit limit of just $250. Yet applicants automatically get socked with a $95 program fee, a $29 account set-up fee, a $6 monthly participation fee and a $48 annual fee — a total of $178, the report said. Available credit left for the user: a scant $72.

That's probably why I'm getting all these credit offers lately.

I still read it as desperation, to try to get money moving. In the last Great Depression, money was just not moving. People didn't have it, generally, if they did they kept it where it was safe - under their mattress. Money was just not moving. WWII got it moving again, by paying workers decent wages, taxing those wages and war material profits, gov't buying lots of war materiel, and so on. In effect a huge Potlatch ceremony with a lot of deaths too.

Predatory credit has been around for a long time, Merchant of Venice and all that, but the oligarchs are especially desperate these days.

Yes, it is rarely discussed that prosperity depends on both the money supply and the velocity of money. We must look back at past claims of increasing prosperity by understanding whether money was made to change hands more quickly - and whether or not that was a good thing.

For instance, anything that destroys the mental defenses against impulse spending: credit cards, instant credit, one-click buying.

I think there's a point at which increasing velocity ceases to be a benefit for humanity, but I don't know when we passed it.

I still read it as desperation, to try to get money moving.

I read it as naked greed, cruelly exploiting the desperate, poor, vulnerable, or foolish.

That kind of offer isn't about "helping the economy" - the amounts of money involved are too small to make any difference, and the terms are too awful to attract anyone with the money to make a difference. That kind of offer is about fleecing people.

"That kind of offer is about fleecing people."


I get these and every once in a while I sign up for one. $300 limit, but Oh, wait! There is a $60 program fee, some insurance, and other "decorations" I don't need ....

I don't understand the concept of "program fee" and I'm working on this patience meditation thing. Signing up for these is an excellent chance to improve my patience. I get the rep on the phone, I'm real polite, but I flat refuse to pay the sign up fee. I've got one of those $300 specials from 2002 that has advanced to a $2,300 limit because I kept paying it off in full. I recently tried again because I wanted a higher limit (hey, for business, I was paying it off in full monthly!) and they now won't give on the pretty little fee.

"program fee" translated = "we are charging you $60 for 23c of work setting up the credit line"

I was a terrible "deadbeat" for them for the first three or four years, paying in full each month, but now I'm the other sort :-( Even so I should be free of them in a month or two and I'm considering just cutting it up, as I'm not selling much equipment any more nor do I travel. Emergency fund? I'm disciplined enough to have it for that purpose, but we shall see how things progress. The first week of January is going to be more about ethanol based hangovers for bankers ...

$300 limit, but Oh, wait! There is a $60 program fee, some insurance, and other "decorations" I don't need ....

I find that simply calling and saying I'd like to cancel the card will not only cause them to waive the annual fee, but offer me all sorts of other stuff... and I'm a total deadbeat, taking their perks and paying them off each month.

In fact, it's kind of a pain when I actually DO want to get rid of a card to hear all the offers they try to make to keep me from doing it.

That's because you pay your card off each month. They know you have other options.

The "subprime" cards target people who can't get regular cards. The whole point is the various user fees, since with such a low limit, they aren't going to make much money off transaction fees.

I just watched an offbeat video from our library entitled "Faust"

It was a variation on the Dr. Faustus myth in which the Dr. makes the classic "Devil's Bargain"

Why is this relevent to predatory credit card practices???

Sign on dotted line, we will be back for your soul later.

China was happy and proud to be awarded the venue for the Olympics.
Huge investments were made.

Now, it appears it will be an organizational nightmare and will only serve to focus attention on pollution. Performance in most sports will be mediocre. The Australians, the Swiss, are contemplating flying athletes in and out just in time for their events. The Americans will wear masks!

Heat, humidity, pollution, it will be an explosive cocktail.

trib. ge. in french.... bbc .... int.herald.trib

Yes. Bejing was a poor choice for the Olympics.

I have spent a few months there and it is a dirty(read dusty), polluted, water poor, disorganized city.

This was purely a bargaining chip in the WHO and US spy plane fiasco.

I can imagine they will 'sweep' the streets of any human 'unplesantness' just before the olympics.

I read they are working on garbage and the spitting habit of the Chinese. WHO has published many articles on this last topic (airborne diseases.) Of course the people will be dealt with last.

You know, I just haven't seen it. I've been to Beijing four times in the last eighteen months, and the air near the Fourth Ring is usually pretty comparable to San Jose's today.
Pollution is an all-encompassing word that means nothing in itself. That opacity in Beijing air is Mongolian inorganic dust, blown down from the North. When I go 50km out of town, the air is just as dense - It's not city pollution! Here in San Jose, the "pollution" includes vast amounts of pollen, which bothers me lots more than that dry, dry Beijing dust. Not that silicosis is anything to dismiss, but it's a different animal than the effects of ozone or NOx.
My father-in-law's retirement community in Beijing has seen the replacement of its coal-fired boilers with NG in the past year, and the same thing is happening all over town. Very little coal is burned inside the city, or upwind of it.
Of course if I'm stuck in traffic I come home with a carbon monoxide headache, due to the poor emissions controls on the older cars and especially trucks. But the whole area is so awash in money now that the roads are filling up with shiny, clean, monstrous new cars, all of which are built to modern emissions standards.
So FWIW, I'll wager than Mexico City in '68 was a lot worse for the athletes than Beijing will be next year. I've seen or heard no concrete evidence that Beijing currently has problems with photochemical smog that are worse than, say, Riverside's.

It certainly is possible that Mexico in 68 was worse.

That doesn't save the athelete's heading there next year.

Beijing is in the east of the country, the coal is in the west of the country. Fifty miles outside of Beijing is still east of where they are burning the coal. The soil dust is as dangerous to breathe as the coal ash, anyway.
Before the pollution limits came in and forced the coal plants to add precipitators, the coal ash in the cities was as bad as Beijing.
San Jose and Los Angeles are in basins that concentrate and preserve the smog. Beijing isn't. The air blows right through.

Now, it appears it will...serve to focus attention on pollution.

You say that like it's a bad thing.

China is set to become the world's biggest polluter sometime next year. Having a major international prestige event focus massive amounts of internal and external attention on their pollution problem is great! The more attention is paid to that, the more pollution will be curbed, and the more the environment wins.

Water deficit plagues city, but not the L.A. River

Meteorologists are predicting a La Niña winter, which typically means scant rainfall in Southern California.

To the east, an eight-year drought is racking the Colorado River Basin. To the north, a judge's ruling protecting the delta smelt could curtail water deliveries from the Sacramento Delta by 30%.

The snowpack last week was 3% of normal for this time of year in the Sierra Nevada, said meteorologist Kevin Durfee at the National Weather Service.

"We're bone dry right now," Durfee said.

Last week, the Metropolitan Water District announced that it would buy large amounts of water from Central Valley farmers at higher than normal prices in hopes of staving off water shortages. The district, which imports water to serve 26 cities and water agencies, warned that rate increases might be in the offing

Divonne-les-Bains (a village in France near Switzerland) is a tourist destination. Its main calling card is water - thermal baths, thalassotherapy (a misnomer in this case), fountains, etc.

I can’t swear to the genuine quality of the baths, not having investigated or sampled them, but the drinking spring water is bottled and sold to Saudi Arabia. Two weeks ago, a snippet in the paper related that Divonne is running out of water, and an accord has been set up: they will pump water from the Lake of Geneva (Lac Leman) to drink.

Local story - because I like those posted by others, all the ‘from the ground’ stuff.

For those who want numbers, the region (bassin lémanique) comprises about 1.5 million ppl. About half a million get their tap water from the lake, though that is hard to figure, as the lake is a ‘swing producer’ exploited mostly in the summer. The markup on the ‘spring’ water must be? 1000x, 2000x or more? Wild guess.

wet (=watery) tourist site

Sounds a bit fishy to me. Divonne-les-Bains is in Switzerland not France. The famous bottled water "Evian", comes from Evian-les-Bains on the other side of Lac Léman (Lake Geneva).

I cannot imagine either of them running out of spring water unless it has not snowed in the Alps for the past few decades.

No one in their senses would drink lake water when there is plentiful spring water nearby. I used to swim in it when I went to school in Montreaux in the 1960's - it tasted ok.

I can garantee you that Divonne-les-Bains is in France, I live just nearby in Geneva. And I saw that news too, about the French people stealing our water with the blessing of our authorities ;)

The building frenzy in the french area around Geneva is astounish and there's too much people there now for the sole spring water.

Sorry. You are right. Divonne-les-Bains is almost bang on the border.

I know something about the building going on in that area. The ancient farmhouse with an apple orchard that I spent time in as a kid (150 rue du Lac, Montreux) has been transformed into a couple of quite ugly apartment blocks and nearly all the trees in the garden were chopped down - there are only few left.

Also, the meadow behind that used to have cows with bells has been built up. Between the town and the mountains is an autoroute on stilts (E27 and E62). Charlie Chaplin lived a mile away. My dad once sat next to him on a plane. It was a very pretty area.

Sorry to hear about Montreux. The degredation they call development has also wiped out my home town. You could probably drop me in the middle of it and I wouldn't know where I was.

Hello Burgundy,

Thxs for the link! Yep, the SE & SW US are in a insane race to see who can hit the dire societal Liebig Minimum of extreme water shortages first-- winner gets MSM coverage of their machete' moshpit and massive out-migration to wetter geographies further North.

Could CA,AZ,NV,NM, plus GA,AL,FL, et al, swing the national election in Nov. 2008 to the Pres. candidate that stupidly promises desalination plants and water pipelines from Cascadia and the Great Lakes?

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

I will point out that I am slightly less than a mile from a mile (1.6 km) wide river, a 100' (30 m) deep for 3/8ths of a mile (600 m) and that water moves as fast as a man walks (faster and higher in the spring). And I drink filtered water from that river.

Best Hopes for adequate (but not *TOO* much) water in New Orleans.

Hello AlanfromBigEasy,

Yep, wouldn't that be ironic if Nawlins is quickly rebuilt, then over-crowded, from a huge in-migration of parched Las Vegans, Phoenicians, & Atlantans seeking clean, cheap water!

You drink filtered Mississippi River water? Filtered is nice, but agricultural runoff is probably pretty strong, isn't it? What nice amounts of toxins it must have by New Orleans...

As a child my town had a well, the water tasted great (turned out they later discovered it had some naturally occurring radium in it, probably why I glow in the dark if the black light is willing). My relatives who lived in Burlington (Iowa) drank that Mississippi river water. It was nasty tasting stuff then; I could pick it out anywhere we went where they used it. Now, well, Alan, you're a bolder (thirstier?) man than I.

The solution to pollution is dilution :-)

Lots of time to bioremediate on the way down.

And we filter it VERY well :-)

Actually the taste is pretty good (better than Phoenix for sure) now (not so good 40 years ago with older filtering technology). Perhaps it is the secret to our cooking ? :-)

A series of massive settling ponds are a first step (more time to bioremediate). We have quite low levels of nitrates and phosphates in our water compared to those cities closer to the source.

Best Hopes for not TOO much water,


Food. Forget about how much it costs to take the car to the beach for spring break.

Food is likely to get scarce and soon.

I don't think average Joe has a clue how dependant farmers have become on oil and gas to produce what we eat.

Food expenditure, in high income countries (japan, us, singapore, south korea, the EU, just to make a mix) is about 5 to max. 15% of family budget.

That rises in Mexico, Chile, Turkey, etc. - 15 to 30%. And it goes up and up, at subsistence level, every cent is spent on food.

Historically, the amount of family income spent on food, in the developed world, has sunk from about 50% post ww2 to 7-11% - that is Europe and off my dirty cuff, very rough.

That % is rising as I write. For those who spend 5% there is no tipping point until ...? 10? 15%? For those who spend 20% a 5% increase is already dire. For those who spend 80% the rising prices spell sacrifice of a kind most of us cannot imagine.

Some recent numbers can be seen here (off the top of google): *PDF*:


for the visual, some pictures of weekly food consumed:


Thanks for the summary, Noizette.

A post worth bookmarking. Great links.

caught this on yahoo finance

Welcome to Turbulent Times

by Robert Kiyosaki
'high gas prices.

The Center of Our Lives

Both articles emphasized that oil and gasoline prices are causing unrest all over the world, even in oil-rich countries. Governments have had to choose between allowing prices to rise, as they did in Myanmar, or subsidize fuel costs to keep prices low, as in Iran.'

It costs governments money to keep fuel prices low.


not the typical MSM article!

Note that Kiyosaki himself is still getting richer, and he expects the rich to thrive no matter how bad things get.

The fact of the matter is that they will still be 'rich' no matter if it's a inflationary or deflationary enviroment since they start out with more they will still end up with more then someone not 'rich'

"I believe the world economy will continue to inflate, which means prices will keep going up. Whether we enter a depression or -- more likely -- a recession, there will probably be hyperinflation and life will become very difficult for the Gilberts of the world.

Not only will fuel costs continue to go up, so will food costs. As our dollar drops in value, countries like India and China import more food from the United States. This is bad news for Gilbert, although I've done very well investing in companies that produce and export food to the developing world."

Thanks for the article link. It sounds like Kiyosaki is another vote for hyperinflation not depression. And I fully agree that during the coming upheaval, many will get richer but the majority will get poorer. Investing in food production and export sounds like a good call too.

Hyperinflation would lead to depression. Whether the money supply is inflated or deflated has nothing to do with whether the recession/depression will take place.

RE: Rising Sea Disrupts Flights To Indonesia...

There certainly is a lot of water out there and its hard to get ones mind around just how much. Here is a good mental picture that might help.

'Think Not 'Global' Warming - Think 'Oceans' Warming'

'The oceans are simply unfathomably immense!
Their mass is actually incomprehensible, being
70% of the earth's surface (310 million cubic miles).
If you could stack water 100 cubic miles long and
100 cubic miles wide, that column would reach
31,000 miles into outer space. That is truly an
astronomical amount of water!'

Note: I could not get a link for this article to print but if you wish to read the entire piece type in the title in search.



Rising Tides! Wow. Rare event, maybe, hopefully...but astonishing.

Jakarta is smack in the middle of a risk area, so they had better get used to it...

Columbia University have a good set of maps of high risk areas http://sedac.ciesin.columbia.edu/gpw/lecz.jsp

Thames Barrier closed to prevent flooding

THE Thames Barrier has been closed for the third time this month to protect London from a combined high tide and tidal surge

And a bit of data from wikipedia below to show why this is unusual:

Before 1990, the number of barrier closures was one to two per year on average. Since 1990, the number of barrier closures has increased to an average of about four per year. In 2003 the Barrier was closed on 14 consecutive tides.

"The Thames Barrier is meant to be lifted once every six years, is now being lifted six times a year."
David Cameron, speech to the Conservative Party Conference. Blackpool, 3 October 2007

Hyper Inflation: Crude Oil and Gas The Next Fed Made Bubble To Come In 2008

"...I have NO DOUBT THAT BY NOW YOU GET THE FULL PICTURE about the next US & world economic crisis which is going to be THE WORST EVER IN 100 YEARS : while gasoline is going to hit $ 4.6 (or higher) at the top of green wave 3 (oil around $ 190) , it is not very hard to figure out gasoline hitting $ 6 (+150% from current price level with oil around $ 250) or $ 7 (+190% from current price level with oil around $ 300) maybe even $ 8 (+230% from current price level with oil around $ 340) at the end of green wave 5 into the year 2010 (rough estimate) ….. But why not $ 9 (with oil around $ 380) ?….."

DEBKAfile Reports: US steps up fuel supply activity for Gulf forces

"It was also reported Saturday that The US Navy’s Military Sealift Command has tendered for four tankers in November – instead of the normal one or two - to move at least one million barrels of jet and ship fuel between Gulf ports from Asia to the Gulf and between the US Diego Garcia Indian Ocean base and big US Gulf bases in Bahrain, Kuwait and Oman.

The fuels to be moved between Gulf ports include the high flashpoint jet fuel JP5, used to power F18 fighters aboard aircraft carriers. DEBKAfile’s military sources report that the US heavy B-1 bombers are based on Diego Garcia along with heavy ordnance for bombing fortified underground targets, such as Iran’s secret military installations

Shipping and oil industry sources suggest CENTCOM, whose area includes the American Fifth Fleet’s aircraft carriers cruising the Persian Gulf and Arabian Sea, may be stocking in extra fuel ahead of extended operations off or on Iran’s shores. "

The Market Oracle article has lots of graphs and pattern analysis of how gasoline and oil seem to show signs of a major price breakout. Also worth noting the discussion on pending hyperinflation and possible US attempts to feed a car bubble (to replace gas guzzlers). Worth a read...

I know Debka is one of those "iffy" sources, but more often than not they do break stories well ahead of the MSM. Take it with a grain of salt, but the fuel movements sound like either war preparations OR stocking up NOW before the price really runs up out of control ;-)

From Fortune:

Don't look now: Here comes the recession

Nouriel Roubini, an economics professor at New York University who has been predicting the collapse of the housing bubble for years, wrote recently that not only is a recession inevitable, he also sees "the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before."

Such a meltdown, he writes, would include bank runs such as the one seen earlier this year at Britain's Northern Rock and the bankruptcy of some broker-dealer firms.

It ends on this cheery note:

Merrill Lynch's Rosenberg is less sanguine than Griffin, but he too discounts the voices of doom. "We've had consumer recessions before," Rosenberg said. "The world doesn't end." Let's hope not.

So, this is *JUST* a consumer recession.

Yet, another singularily focused individual.

Credit crisis, Currency devaluation, resource tightness(being gentle),etc.

Yep, just a consumer recession.

Those pesky consumers, if they only would spend more...sorta like speculators, if they would only spend less! ;P

Best of luck with that.

Nigerian Tribune: Shell’s divestment plan and the Niger Delta question

According to the story, the Company wants to sell its $900 million worth of interests in Nigerian offshore blocks, OML 125 and OML 134 as it restructures its business in Nigeria and reduces its investments in the Country.

Shell is focusing its mind on reducing cost after shutting in about 400,000 barrels per day in the Western Niger Delta, since February 2006. This is well over a year ago and the situation is not encouraging at all, either for Shell or for the Country. This might have informed its recent measure to begin to divest from some investments that it might have classified high risk. For both the Nigerian government and Shell, the circumstance in the western Niger Delta is a lose –lose situation.

This won't help with total world liquids numbers...

I read every post by Nouriel. Yes, since 2005ish he has been dead on about Housing and Econ.

A couple to read.

Liquidity and Credit Crunch in Financial Markets is Back to Summer Peaks, Only Much Worse and More Dangerous


The Stealth Public Bailout of Reckless “Countrywide”: Privatizing Profits and Socializing Losses


Samsara: Nouriel is almost always dead on but IMO he is shouting in the wilderness. Crony/insider capitalism has risen to such "South American" heights in the USA of 2007 that again IMO any attempts to deal with oil depletion will be rife with corruption.

I agree, but he has validated my own views early on, (sold my house at the top late 2004) and like TOD it is only good for those who read.

You can lead a man to Knowledge,
But you can't make him think

I liked this sentence, first of last paragraph, from Roubini’s blog:

The lesson of this sad and sleazy episode is that when profits are privatized and losses are socialized we get sleaze capitalism and corporate welfare that becomes public bailout of reckless lenders.


Over the Thanksgiving holiday I read "Conspiracy of Fools", by Kurt Eichenwald, about Enron. I had a few issues with the book, but overall it was worthwhile and instructive.

The most interesting point seemed to be why Enron failed. It wasn't so much overt criminal behavior - there was some, and people went to jail for it, but the direct loss to Enron from that was probably less than $100 million. More than that, Enron made some normal bad business decisions, like overspending on risky foreign projects and launching a failed water business. However, any very large company will make some bad decisions, and the losses from those bad decisions were not large enough to swamp the company. What really sunk Enron was the way that they played games with their finances.

Early on, Enron made the decision to use the "mark to market" method of accounting for reporting their company's finances. "Mark to market" is reasonable if you have a market to value a product, like there is a stock market which values my 401K plan. Even then, there is a risk, because the market can go down, but it is still a reasonable approach to use, with caution. However, in Enron's case, they used "mark to market" on products they planned to develop which were not publicly traded. Enron itself was the entity that specified what the value of the product was. Needless to say, this led to endless temptation to inflate the stated value of the company's products.

Then - and this was what eventually did them in - Enron set up multiple entities which were off their books that they used to unload areas where they took losses. That way, the losses did not need to be reported on their quarterly public financial statements. These entities had names like Chewco, Jedi, Raptors, etc. The only significant store of value in these off-book entities was Enron stock. The entities should have been hedged against a fall in the Enron stock price, but the setup was very complicated and they were not properly hedged. When Enron's stock price fell, Enron became liable for the entire loss and had to make up the debt in these off-book entities. They ended up having many billions of dollars of obligations that their board of Directors never really understood. The company collapsed rapidly over about six weeks in late 2001.

I see some parallels between Enron and the credit crunch today. Banks have used "mark to market" on these mortgage debt packages, but there is not really a market that can fairly evaluate the value of these debt instruments. Many of these debt packages are so complicated that one wonders if anyone fully understands them. When a drop in value becomes apparent, it sets off something of a ripple effect/downward spiral.

One difference between Enron and today's credit crunch is that the government did not bail Enron out, but I suspect the government will go to the mat to bail out the major money-center banks. They already have, to a certain extent. I'm not sure how this will affect the final outcome.

Banks have used "mark to market" on these mortgage debt packages

They actually use mark to model, not mark to market. The model is provided by the ratings agencies hired to rate the securities. No market involved at all.

I remember someone referred to it as "mark-to-make believe" :)

Now what would it look like if an entire country were operated on Enron principles?

For more on the mark to model issue, take a look at this article:

Spirals of death


I'm happy to see that Roubini finally gets the recognition he deserves. His website is victim to real bad lay-out disease, which hurts his visibility even more than his daring predictions. Not that he's wrong more than 5% of the time, he's got it down.

It's a bit strange, too, to see economics pop up in the Drumbeat so often, bit like stray bullets, while the Finance Round-Up is here at TOD. I'm sure we'll see times soon when finance will push counting oil barrels off of all front pages, but today it does not yet. We're trying first to make y'all spend your entire credit card space on the new born savior with the beard and the red suit.

Come All Kings, you're on your own.

Corn ethanol is not such a great idea, except as a pathfinder towards new technologies; however, lately it has become fashionable to blame it for ills not of its making.

World grain production, just like oil production, has become inelastic. World population has finally caught up with the Green Revolution. Norman Borlaug, the leading figure behind plant breeding that resulted in the Green Revolution, admitted some years ago that the Green Revolution was not a final solution to the problem of hunger but a way to buy time to bring down the human population growth rate.

Wheat, which is not involved in ethanol production, has seen its prices triple, while corn prices have only doubled. Three-fifths of U.S. corn is used for domestic animal feed. In spite of the demand for ethanol production, the USDA expects corn exports to increase to 2.25 billion bushels this year, the highest level since 1989.

It is true that the reasons for grain price increases are many. Wheat is up because of low yields in some growing regions, particularly Australia. Corn acres are up in the US at the expense of soybean acres, adding to the squeeze on soybean prices partly caused by biodiesel production (mostly in Eroope) and also by lower yields in China. Wild price swings are due to the disappearance stockpiles, but long term, the writing is on the wall -- unless a biofuel crop is identified which truly has no impact on food crops (unlikely).

Algae. Can be done on land unsuitable for food production. The US would need to devote 60,000 square miles to algae ponds or 8.2 sq mi a day for 20 years.

I'd like to believe algae to biodiesel will pan out. Closed bioreactors might never be cost effective. Open air ponds have all sorts of issues, including species contamination, nutrient requirements, water quality requirements, moderate temperature requirements, massive infrastructure requirements, etc. It's a lot more that just adding another tractor attachment to the farmer's toolkit.

Legislators want state to plan for oil shortage

A coalition of state lawmakers has issued a report that concludes Connecticut is "completely unprepared" for what experts are forecasting as a sharply constrained supply of oil in the world.

"However, early intervention can and will mitigate the severity of impacts on the state and our people," says the report from the Peak Oil Caucus of the General Assembly.

"We can expect municipalities will be affected seriously," the report says. "The cost of heating municipal public buildings . . . will strain budgets. Likewise, the cost of maintaining other energy-intensive municipal operations such as sewage treatment plants and vehicle fleets will become more difficult. Municipal and state government will be pressed to afford their normal schedule of repaving and maintaining black-top roads. The cost of asphalt for paving closely follows the rising price of oil."

Connecticut may be "completely unprepared", but at least they have started talking about it. I bet most states are way behind them...

Electrifying a Low-carbon Future

A new interim report published today by the WBCSD Electricity Utilities Sector Project.

The report, Powering a Sustainable Future: Policies and measures to make it happen ( 1.4 MB) (and its technology solution booklet Powering Sustainable Solutions: Policies and measures 718 kb), highlights that many low-carbon solutions exist today, but warns that their development and deployment at a sufficient scale to reduce the carbon intensity of electricity production and increase consumption efficiency will not occur without the right regulatory and market frameworks.


Hurried posting from work, don't know if this has been posted already, apologize if so:


A fairly interesting link, which I don't think has been posted here -


The math is about as frightening as it is fairly straightforward.

Rubin again, on a matter discussed recently on TOD:

Dim prospects that 'energy efficient' will pay off: CIBC

Improvements in efficiency have done little to reduce actual energy consumption, as consumers take advantage of those gains to drive bigger cars farther, or heat larger homes, CIBC World Markets Inc. economist Jeff Rubin says in a new report.

In a study released today, Mr. Rubin described an “efficiency paradox” in which technology improvements allow for better energy efficiency, but those savings are lost to greater consumption.

I'm starting to think Jeff Rubin must hang out here. First he came up with an increasing internal consumption/declining exports idea that sounded an awful lot like Westexas' ELM. Now this rather Jevon-y sounding thing...

well one can find out.
take a sample of ip addresses and look to see who gave them out/owns them. if the ip address is owned by someone in the area he lives in or works in then there is a chance it might be him.

A lot of times it is even easier. Visits from Goldman Sachs, Merrill Lynch, Fidelity, etc. show up explicitly in my StatCounter. For instance, a visit today from Deutsche Bank looks like this:

IP Address
Country United States
Region New York
City New York
ISP Deutsche Bank
Returning Visits 24

And I agree, Jeff Rubin looks like he has gotten some of his talking points from TOD. I have noted that his net exports argument sounds almost exactly like WT's.

Getting TOD ideas into the mainstream is a sign of its success - something to be celebrated!

It's more important that the ideas get out there, than that any one person or group be credited. That credit will come, be assured.

BTW, looking at the weblogs for Energy Bulletin, I continue to be surprised at the people who are following peak oil: large corporations, national oil companies, the military, news organizations, people at different levels of government.

The message is getting out, faster than I ever though possible. Even WT, I notice, is saying that The Iron Triangle is developing some cracks.

Energy Bulletin

And almost all of us, myself included, are building on prior work by someone else anyway.

I too am surprised at how fast Peak Oil articles are spreading. If the one on net oil exports that I referenced down the way is published, it will be pretty big news.

are building on prior work by someone else anyway.

Yup. In acedemica, one cites sources. When one is selling their services as 'an advisor to the unwashed masses on energy issues' what is said salesman's position to bring up 'Hey, O got this idea from' or to bring up people who have a different position on, oh, say hydrogen?


Why don't we all just send Mr. Rubin a little note and say,

"Hey, how about giving a shout out to those you got the info from??? Jeffy"

How about Acknowledging WT and TOD for "Your" ideas?

Have him get a some emails in his inbox and say:

"We know where you READ"

John Carr

Had another chat today with a major MSM print reporter who is working hard on a Net Oil Export story. We will see if it gets published.

It's interesting to check out the site statistics and see where people are coming from:


Is the Decline of Base Production Accelerating?

from The Oil Drum :: posted by Stuart Staniford
November 20th, 2007

From the CIBC site

In the past, the efficiency paradox has been used as an argument against efforts to promote greater energy efficiency and conservation. That is not our intention here. On the contrary, for a world facing the twin challenges of oil depletion and global climate change, there has never been a more urgent need for both. But in order for total efficiency to actually curb total energy usage, as opposed to energy intensity, consumers must be kept from reaping the benefits of those initiatives in ever-greater energy consumption. Otherwise, energy usage will be the beneficiary of our best efforts towards greater energy efficiency.

Couldn't have said it much better myself. Although I would have said the bit about consumers differently. First - I would get rid of "consumers" altogether. It's time we became humans again. Hopefully, we have something better to offer and to live for than consumption. Then I would have said it something like

"But in order for total efficiency to actually curb total energy usage, as opposed to energy intensity, we must enable people to maintain a good quality of life while reducing overall energy consumption."

To me this can only be done through structural economic and living arrangement changes. It seems like there are some on TOD that disagree with that.

Humans must be kept from reaping the benefits of those initiatives

It just sounded impossible when it was "consumers"; now it sounds sinister. Necessary, but sinister.

I didn't like that whole sentence, that's why I changed it.

However, instead of impossible for the original I would say it is inevitable.

Putting oil into the SPR is one partial solution.


This is what I was saying in yesterday's Drumbeat.

However, the term "customers" in the article makes me think the whole thing will be approached back to front. Rather than repearing the systemic faults - overpopulation, consumerism/corporate rape of our resources - the implication seems to be just patch the wound with forced controls: "consumers must be kept from reaping the benefits of those initiatives in ever-greater energy consumption". It might be the only realistic way of approaching it currently, but it would be far from ideal.

How does one "repair" overpopulation? The very repressive Chinese government has mostly managed to limit the population to one child per couple but this has produced its own unlovely set of dynamics. As for reduction I am intrigued to hear your proposal, even if it be modest, for the means by which we might reduce the population of those already born.

See my vision of the USA in 2034. A number of positives emerging, but only after the Terrible Tens.

Suicides peak at 8x current rates, life expectancy drops by almost a decade, birth rates drop to 1.21/women.

Good enough for you ?


As for reduction I am intrigued to hear your proposal, even if it be modest, for the means by which we might reduce the population of those already born

That's easy, since everyone dies of old age. No action required.

The really hard problem is persuading people to have fewer kids.

Both the right to life and right to bear children are declared universal human rights, so we have to rely on people taking voluntary action.

Perhaps "addressing" would have been better :P As Bob noted, reducing births is all that is required. And although I see that as an ideal step I do not see it as realistic in our current cultural climate... my proposal would only be to start educating people about the consequences of overpopulation... but again, I see that as a slow uphill battle.


This is an excellent question - sorry for getting to it so late, this now being already Dec. 2.

re: "How does one "repair" overpopulation?"

I can't find my favorite articles, but here (below) are a few that point to a direct - and perhaps often overlooked - route.

Let me propose this (for the sake of argument): It is men who can do the "repair".

All men, any man, anywhere, in any circumstance where he interacts with other men and/or with women.

How? Unequivocally and under all circumstances actively promote the full legal rights of women (and girls). (And, I'd say - this has a "cultural" aspect, as well.)

As a practical example, there are clinics devoted to women's health, shelters in need of volunteers, and opportunities in just about every US community and worldwide. (Or, you could spend five minutes/week doing action letters on women's rights at www.aiusa.org.)

This means, for eg., first understand the effects of the stats - the 1/3 of women (and girls) worldwide who have been "coerced into sex", etc. What this does for one's ability to function? to make wise/positive decisions - and to protect oneself from further abuse? To gain an education? Legal rights and cultural norms are fundamental. If women (and girls) are no longer at risk, the entire problem takes on a different cast.

Two cents, sincerely offered.

Part 1 - Environment, women and population: an integrated reality


Ending Violence Against Women
Population Reports, Dec, 1999 by Lori Heise, Mary Ellsberg, Megan Gottemoeller
Around the world at least one woman in every three has been beaten, coerced into sex, or otherwise abused in her lifetime. Most often the abuser is a member of her own family. Increasingly, gender-based violence is recognized as a major public health concern and a violation of human rights.
The effects of violence can be devastating to a woman's reproductive health as well as to other aspects of her physical and mental well-being. In addition to causing injury, violence increases women's long-term risk of a number of other health problems, including chronic pain, physical disability, drug and alcohol abuse, and depression. Women with a history of physical or sexual abuse are also at increased risk for unintended pregnancy, sexually transmitted infections, and adverse pregnancy outcomes.

In as much as 90 percent or more of child sexual abuse cases, the child knows the person who commits the abuse (Finkelhor, D., H. Hammer, and A.J. Sedlak, Sexually assaulted children: National estimates and characteristics ,in Juvenile Justice Bulletin. In press, Office of Juvenile Justice & Delinquency Prevention: Washington, D.C.) ).

Hello TODers,

Ya know, a little Peak Outreach in France to foster greater cooperation and paradigm shift couldn't hurt. IMO, it would help put these kids and young adults behind permaculture wheelbarrows vs molotov cocktails and shotguns:

86 Police Officers Hurt in Paris Riots
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

In a way, the things happening in France are testing the city/countryside argument of where to be when the SHTF.

The people I know in Paris are certainly becoming uneasy about the economy, security (both job and personal), house values and increasingly food prices. They've also been sorely tested by transport problems, train, car, et al. People trying to travel (eg. to airports) and depending upon deliveries from afar, have also been affected.

Here though, in the countryside, we're totally unaffected by most of the things troubling those in the cities.

I was also thinking that should something happen to force people from the countryside into the cities, then the plight of those already in the cities will also worsen. Therefore, the countryside is the better place to be, initially anyway, with a contingency for a move to the city. Those looking to ride-out the storm in the cities are liable to be under continuous stress with few options and can only look forward to worsening conditions as the crisis deepens.

Something to think about for those contemplating what to do.

Hard to believe that they don't just surround them and mow them down, when police officers are getting shot at.

This is Europe, not the Wild West :)

Last time we tried such draconian solutions, it got a little out of hand. Hitler and all that unpleasantness. A violent nation state is vastly worse than a violent mob.

I'm sure Sarko is rubbing his hands with glee, just the kind of situation he needs to ratchet up his control over the State. I wouldn't be surprised if he tried to extinguish the flames with petrol. What better way of distracting the French from his "reforms", than by getting them all hysterical about the enemy within.

Striking during a state of emergency would be seen as disloyal and treasonous, tarnishing the Unions and sapping support from them.

Police officer shooting here draws immediate and drastic measures, but indiscriminate shooting of civilians, even in times of social unrest, has not happened since the Vietnam war protests.

The French Muslim population seems, at least from this side of the pond, to be a ticking bomb. Their youth have less opportunity than the other citizens of the same age, and that is a recipe for disaster even without the economic, energy, and environment issues we have now.

The French governing class has yet to learn that the way to deal with a minority underclass is to imprison a major part of the young male cohert for dealing in/smoking marijuana.

Police officer shooting here draws immediate and drastic measures, but indiscriminate shooting of civilians, even in times of social unrest, has not happened since the Vietnam war protests.

Not to middle class white folks it hasn't (I'm not sure it was generally indiscriminate then, either). But in any urban area there are plenty of examples that might infer that police still are quite trigger happy at times when they shouldn't be. These generally have to do with class and race.

Indiscriminate tasering on the other hand...

I think the Paris police have shown amazing restraint.

When police officers or the public are shot at in just about anywhere in the world, it draws RETURN fire, and the response of heavily armed tactical units which respond quickly and harshly.

Even in the UK where sidearms are not carried by the average patrolman.

I'm more inclined to put these radicalized kids on armored Hussite war wagons and Mongolian cavalry ponies. Cavalry battles on the streets of Paris. Good practice for the future.

I agree as always super390, the longer the inevitable is put off, the worse for Europe in the end. Let Martel The Hammer become a hero to young French kids, let the Moslem invaders saddle up and begin their Jihad, it's never too early! Let French housewives go to marksmanship school and get used to potting an invader on their morning market walk, let's get things going. Let some innocuous habit of the Moslems be used to put 'em in jail, where they will be fed ham'n'cheese sandwiches. Let the book The Camp Of The Saints become required reading in French schools the way Moby Dick is here. Let it begin!

And extrapolating on that trend before too long the roadside dinner wagons seen near U.S. construction sites will be offering dishes like cream of fleam, a thinly sliced totoneila tartare, and the ubiquitous Sacred Cow Burger.

You say "Let it begin!" and I say "Why is this happening on my watch?"

Sooner or later you get your wish, fleam, and it scares me to death.

Categorizing the rioters in the Paris ‘banlieues’ as Muslims is incendiary, discriminatory, and largely incorrect.

For example: there were massive strikes in France in the public sector recently - Anglos did not call the strikers Catholics, or Protestants (they will have been mostly Catholics), nor was ‘white men’ used (train drivers, and lawyers, for ex). No, they were called ‘transport workers’, union members, and so on. Now of course one could argue that the relevant definition here was professional due to the very nature of the ‘strikes’. One might also argue that these were non violent protests - but that in fact is not quite true, though the lawyers were extremely polite and only dressed up in chains and sang out of tune.

The young men (only men) who riot in the banlieues are:

1) poor and unemployed - roughly, come from a population that is on the average 25% or more unemployed,

2) live in ‘ghettoes’ of a kind,

3) are French - second and third generation immigrants,

4) are actually not so badly educated but face exclusion, discrimination, and police harassment, and yes, at the same time, the police have been, facing rioters, very restrained,

5) Universally adhere to the core foundations of the French Republic, they have said so in every statement they have made, every discussion they have had with authorities, of course, afaik,

6) they have no ‘muslim’ demands and despise sharia law,

7) they are ‘muslim’ only through a group-belonging mechanism, many (most?) are essentially secular, often non-believers, or are ‘muslim’ the way my neighbor is ‘catholic’ - she is twice divorced and goes to church twice a year and refuses to contribute money to the church, yet believes in angels.

Allah makes these young men laugh. They want jobs!

Such labelling in the US - targeting Baptists, or black born again Christians, or whatever, might even be actionable.

These young men face another difficulty that is usually left in the shade. 2nd and 3rd generation immigrant women in France - of *any* religious or ethnic background- are not rejected - they can get an education (and boy do they go for it) and then be accepted in function of their ‘aspirations’ or ‘educational qualifications’ or other achievements.

Sarkozy has several of them - *all women* - in the upper levels of his Gvmt. These girls ‘integrate’, ‘leave the ‘community’ and either stay single or marry Frenchmen or other EU types (not all of course, generalizing to make a point...) This is because they make nice and are considered malleable - anyhow not dangerous. They can work, obtain jobs, often in the heatlh/social/educational sector, but not only, they can become film makers, lawyers, singers, surgeons, etc, they can leave the ‘banlieues..’ - which leaves the boys or young men without potential mates, facing girls who ignore them, buckle down to the books, and count the years to get out and rise up. This provokes terrible violence which is directed towards the French state, and its primary manifestation, the police on the street; as well as to repressive measures and violence towards - their sisters, often under the guidance of elderly preacher types who see opportunity to rise in status and grab some hard cash.

-i apologize for the long rant. please. stigmatizing muslims - because world wise, they are sitting on large oil reserves - is pathetic, not worthy of americans.

I'm very concerned about the Muslim population in Europe.
This is one aree the US has done a better job. At least here the Muslims seems to be assimlating better! Ever since the Van Gogh guy got murdered in The Netherlands because of his documentary exposing the way women were treated its become obvious this issue is a ticking time bomb across large parts of Europe. Paying these families to return to place of origin is a good idea!!

I'm very concerned about the Muslim population in Europe.
This is one aree the US has done a better job.

I asked Mr. Romney whether he would consider including qualified Americans of the Islamic faith in his cabinet as advisers on national security matters, given his position that "jihadism" is the principal foreign policy threat facing America today. He answered, "…based on the numbers of American Muslims [as a percentage] in our population, I cannot see that a cabinet position would be justified.



If you are reading Leanan's excellent work today, I want to let you know that my Firefox, run on a mac, keeps freezing up when I visit R-Squared Energy Blog. It seems to be getting hung-up on an image from amazon.com.

Maybe it's just me, but others may be also getting frozen out.

If anyone has suggestions on how I can fix my problem, all are welcome.

If you are reading Leanan's excellent work today

While I usually keep my mouth shut (I have learned over time), I read Drumbeat 365 days a year.

I want to let you know that my Firefox, run on a mac, keeps freezing up when I visit R-Squared Energy Blog. It seems to be getting hung-up on an image from amazon.com.

Hmm. If I look at my StatCounter, 159 out of the last 500 visits were using Firefox 2.0.something (I didn't realize it was so popular), 30 out of 500 were on a Mac, and 6 out of the last 500 were Mac/Firefox 2.0... But, one of those navigated through 3 different pages, and another through 2. It looks like almost all Mac users use Safari 1.2, though.

Those ads are truly more hassle than they are worth. Anyone else had any trouble?

No trouble here with Firefox on XP. Though I use the adblock plus extension so I rarely see any ads.

It seems to work fine with Firefox 2.0 and XP for me.

I visited with the Konqueror browser on Linux and it reported a JavaScript error from googlesyndication:

Error: http://pagead2.googlesyndication.com/pagead/js/graphics.js:
Error: DOM exception 7

I tend to stick with Safari 2.0.4 at work. It seems to be the least buggy for me (no definitive testing done)

Google - generate energy cheaper than coal

Big Google annouce today.


"The newly created initiative, known as RE[less than]C, will focus initially on advanced solar thermal power..."


Glad to see Google installing lots of solar power: If Google ever puts my proposed 'unlucky button' on their search homepage--I think their stock would double again very quickly. But maybe some other search engine provider will breakthrough this first to reap the financial gain. Who knows?

Another comment: I got a real kick out of the 'stop-shopping preacher' movie keythread. I hope the movie producer Spurlock moves next to a 'stop-golfing permaculture Grim Reaper/preacher' movie! A key scene might be where Tiger Woods tees off, followed immediately by a 100 people in the crowd dousing themselves in fake blood as the Reaper/Preacher rants and raves for plowing the golf-course!

Any professional screenwriters here on TOD?

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

Hello Leanan,

Big thxs for your Newsweek toplink [love the image of the guy considering self-immolation or blowing his brains out with a gas pump!].

Quote from article: "Oil is kind of like the new gold."

DUH!!! Can CERA still find people willing to pay bigbuck$$ to have this astounding revelation revealed? /snark

Wait til people figure out NPK is the 'true gold'--I sure wish our politicians would pass legislation for stockpiling fertilizer, seeds, grain reserves, and wheelbarrows & bicycles while energy is still cheap. A civilization that cannot generate sufficient postPeak food surpluses to allow job specialization will quickly fall apart.

Thus, I would imagine any strategic nuclear missle targeting would include hitting the P & K mines with bunker-busters to close the mineshafts and/or wiping out the very capital-intensive beneficiation process factories on top, plus taking out Haber-Bosch natgas facilities. This would essentially force a country to use every bit of its remaining FF-resources and SPR to try and get these NPK process flows back onstream.

When Israel purportedly hit the Syrian Phosphate/Uranium enrichment infrastructure back in Sept.--was this an initial strike at imposing a Liebig Minimum in Syria?

Has anybody yet figured out what truly happened back then?

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

When Israel purportedly hit the Syrian Phosphate/Uranium enrichment infrastructure.....
Has anybody yet figured out what truly happened back then?

Yes, some people know exactly what went on.

And they are not going to be posting about it on the public internet for any of us pleebs to read.

Citigroup to Raise $7.5 Billion From Abu Dhabi State

Nov. 27 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, will receive a $7.5 billion cash infusion from Abu Dhabi to replenish capital after record mortgage losses wiped out almost half its market value.

With the purchase of a 4.9 percent stake, Abu Dhabi, the largest emirate in the United Arab Emirates and its capital, would rank as Citigroup's largest shareholder ahead of Los Angeles-based Capital Group Cos. and Saudi billionaire Prince Alwaleed bin Talal, data compiled by Bloomberg show.


I love the CNN headline for this story:

Citi hits the sovereign wealth ATM

Npr said it like it actually was. i's not a infusion of cash. it was liturally bought out by Abu Dhabi State and they now own a controling share. in essence it's no longer a company of the united states.

Hello TrueKaiser,

Excellent point! I expect them, and other countries' Sovereign Investment Funds [SIF] to do the same for NPK companies, and other critical resources. IMO, it is just a matter of time.

It really was not much of a surprise to me. durring the 80's the japanese were doing the same. infact there was a long running gag at the time that if the japanese were interesed in your comapny your going to strike it rich.

Supposedly this is the main reason the stock market is rallying today.

Now look under the surface:

1. Abu Dhabi fund is NOT buying shares - they are getting securities that is convertable to shares in 2010. IN THE MEANTIME, they will receive 11% interest regardless of Citi performance!!! This is a junk bond, and it is amazing that CIti had to offer this much to get some desperately needed capital.

2. As furhter confirmation of their desperation, Citi is restricting Outbound wires to $2000 per day or $10,000 per month. (While still happily receiving $100,000 inbound).


Hi, I was kind of astonished when I read the news today about Abu Dhabi saving the troubled Citibank??
Can the average Citibank customer point in the world map where Abu Dhabi is?
The Saudi Prince that in the 90s dumped billions in Citibank was not a good enough lesson for fellow oil rich middle east moguls?
I kind of think this is the product of political influence, the US Government asking for a little help from its (small base of) friends!!

My point above is that CNN is spinning this as Citi hitting the ATM, while the reality is that Citi had to offer 11% penalty interest rates. A big difference. And this causes a stock market rally?????


Sovereign Wealth Funds' Might Grows

The decision by the world's largest sovereign wealth fund to invest billions in struggling Citigroup has highlighted the growing economic power of Arab Gulf states, awash with money because of high oil prices.

U.S. officials have voiced concerns about such funds' secrecy in the past. But the injection of money by the Abu Dhabi Investment Authority could help stabilize Citigroup Inc., the United States' largest bank, as it struggles with billions in losses from America's mortgage crisis.

The tension illustrates the broader dilemma the U.S. faces in deciding how to deal with such sovereign funds: It relies on their capital inflows to bolster the U.S. economy, but some officials worry that foreign ownership of key U.S. companies could jeopardize national security.

EW DOOMSDAY:The Next Fed Made Bubble to Come in 2008

If you ignore all the "wave" talk and ignore the graphs...read what this guy is saying...yikes if true!!

People who use capital letters and bright colors to predict the future give me the creeping freepies.

And people who ......... use more than ..... three periods for ....... an ellipsis.

And I also don't ever recall someone closing a written piece of work with their birth date.

Talks Are Set on Ending Battle of Iraq

With the eyes of the world focused on the Middle East peace talks in Annapolis, Md., President Bush's war tsar, Lieutenant General Douglas Lute, quietly announced that the American and Iraqi governments will start talks early next year to bring about an end to the allied occupation by the close of Mr. Bush's presidency.


Not that that is a timeline or anything. Jeez, couldn't have done that three years ago?

TPTB must have concluded that the mythical "vast Iraqi oil resources" are nonexistent.

I ain't holding my breath...

vast underground resources are useless to the aboveground people if the aboveground people can not get at said underground resources.

Iraq is not a good place to be aboveground these days.

Ugh. Sick.

Kinda invalidates every single argument made by the US administration for why the troops must be left there, or timing of withdrawl, if those reasons suddenly dissapear at, or are overridden by, the end of the presidency.

"Situation on the ground" my rude bodypart

Hello TODers,

Home price drop largest on record

The S&P/Case-Shiller National Home Price Index fell 1.7 percent from June, marking the largest quarterly decline in the index's 21-year history, S&P said in a statement.

The futures market for the S&P Case-Shiller Composite Index is indicating home prices down another 5 percent in 2008, he said.

On the teleconference, titled "Current & Future State of U.S. Housing Market," Shiller said he is not able to predict the bottom for the U.S. housing market at this point of time.

"We do not know where it is going to go from here," he said. "I would hope that it would motivate people to start thinking about hedging their real estate risk."
Forgive my ignorance, but how the hell does one go about hedging their real estate risk? Ripping out non-productive hedges from your frontyard, then planting carrots and tomatoes? Reverse mortgage your property?

Forgive my ignorance, but how the hell does one go about hedging their real estate risk?

Very good question Bob.

And it sounds like he is waffling on decline rates and bottom.

More like double digits in 2008. No bottom in 2008.

2008 will be free fall for housing and USD. Super spike for Gold, Silver and Oil. Skip ahead to Hyperinflation.

Depression is much more a reality than many are willing to admit.

but how the hell does one go about hedging their real estate risk?

Uh, I did it by selling mine in 2004.

Read Nouriel Roubini.


It is clear that the US economy will enter a recession unprecedented in history. The top US banks are essentially bankrupt, and the only way to prevent a run on them is for the government to step in and purchase their worthless SIV's. This will lead to further devaluation of the American currency, a lower standard of living for Americans, and eventually bankruptcy of the entire nation. The rest of the world is realizing right now that they cannot trust the Federal Reserve to stop printing the US out of their debt obligations. As bad as this as recession/depression is, it needs to happen so that the general public realises that fiat currencies are fraud at a government level. A return to asset-backed currencies will prevent any credit crisis from ever happening again, as all investment will have to be backed by real assets.

All of the problems being witnessed are not due to flaws with capital system, they're not due to greedy investors, the rise in oil prices is not due to speculators. At the most superficial level they are the problem, but the real problem is central banks themselves.

This might seem a little extreme, but I would argue that it would take an unprecedented recession/depression to get the general public to realise the damage that central banks cause and that surviving PO will require a return to a sound International monetary system. The issue of PO cannot be dealt with until governments are prevented from committing the fraud that is "printing money from thin air". Hyperinflation is not going to help us deal with PO, its only going to make matters worse.

Check this out, http://www.mises.org/story/2787

It would be nice if the US would elect a President who understood economics... I wonder why you never hear about that guy on the news.

Hello TODers,

I guess the CA real-estate buyers will be out in force once the average price drops another $400,000!

WAITING IT OUT: Eric Broida is interested in buying a nearby house, but doesn’t plan on doing so until the asking price drops another $400,000. The price has already been cut several times by the sellers, from the original $4.6 million to $3.6 million. Broida, above, at his Pacific Palisades home. “People tell me I’m crazy [to think prices will keep falling], but that’s what they told me in 1992,” he says.
If a postPeak depression is getting started: I hope the newspaper eventually re-interviews him when he is lamenting how badly he overpaid for this property when the going price is less than $100,000!

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

I like Housing Doom, mostly 'cause its got D00M in the name, but they take it further by filling the site up with doomerish news. This is an out of character bright spot - it seems the federal government is bailing out Countrywide Bank, ensuring that everyone still gets bonuses and stuff despite the things they've done:


So not to worry, Mr. Totoneila Sir, someone from the federal government will be along to help them shortly.


Congressman: Stock Market Will Eventually Collapse

Ron Paul says martial law provisions in place to deal with economic discord

The Texas Congressman cited the repeal of the Insurrection Act as opening the door to a declaration of national emergency and martial law which could be instituted for any number of reasons, including civil disobedience in the event of an economic downturn and a run on the banks.

"If in 6 months or a year there is total chaos who knows what they might try to do," said Paul.

The presidential candidate also slammed the abolition of Habeas Corpus as a "very dangerous sign" that plans were being laid for martial law.

"Why would they change them (the laws) if they didn't plan to use them," concluded Paul.

Why indeed?


Predictions from Ron Paul from 2002

He may be too honest to get elected, but man, the way he grilled Bernanke on the stand...I may just have to burn a vote on him.

You know, theres a few things this guy says that make me cringe and I just can't go along with. But there's an awful lot he says that I really REALLY like.

Mostly, he's honest - and how can anyone give up an opportunity to put a bone fide honest politician in power? And what a way to send a signal to TPTB that democracy can still work despite all the marketing and focus groups and clever psychological games they pay millions for.

Almost makes me want to be American so I could vote for him. Well, nearly almost kinda.

Seems to me that it's getting towards where so many people are going to waste their votes on him, they might not be so wasted after all.

Here ends my one and only

Please vote Ron Paul if you're American. Thanks.
-The Rest of the World

ps: Please get him to keep you guys in the UN though, okay?


90%+ of thinking voters here in the US get it. Hang tight. If we don't start WWIII before the election, god willing we'll elect someone who won't.

Then we'll spend the next freakin decade eating the humble pie we ordered.

$100 oil and the 'S' word on CNN Money at top

But one source familiar with the oil markets said that while the physical number of oil barrels available is limited, there is no limit on the number of contracts that can be written. So just because there's more money chasing oil contracts, that in and of itself doesn't necessarily guarantee higher prices.

Comment on TOD article This Week in Petroleum 11-21-07 a few days ago.

For stocks, as for actual physical oil, there is a limited amount available, so the more investors, the higher the price goes. For futures contracts, there is no limit whatsoever on the number available - and so the number of investors in and of itself CAN NOT cause an increase in price.

Hmmm, coincidence, surely...

Into the past we go... Back to the oil shock of '74. From The Argus (Freemont/Newark, CA), Sunday, March 3, 1974, Page 3:

Some of the most unusual behavior has been evidenced at the gasoline pump. In McLean, Wa., for example, a gasoline station owner … said several women have offered sex in payment for gasoline.

"I've been offered bribes by women," he said. "They'll trade themselves for a full tank of gas…" He quickly added he had turned down the offers.

Others said customers offered things like chocolate cake, whisky and beer.

Hmmm... Guess it might be time to open up my own gas station. ;o)


graywulffe in CVO, OR

All kidding aside, would you actually accept an offer from someone who cares so little for their health? Think booty cooties that can jump. Makes a picture, doesn't it?

I was thinking about all that lovely whiskey... Honest! Er, ethanol... ;o)

I'm with you--stay away! Payment in gold, please (or something like that).

I mainly posted that blurb to point out the extremes some people are willing to go to get the "precious juice" out of the pump during shortages (and I'm not lost to the Freudian interpretation of this sentence).

Reading the news from 1974 reveals some interesting human responses to an energy crisis. I'll probably add more details in future posts.


Reading the news from 1974 reveals some interesting human responses to an energy crisis.

Would you consider collecting them to make a front page post on TOD? Because 'memories' of that time posted under said thread would be interesting.

Possible merch opportunity for The Chimp Who Can Drive... "Sex for Gas" T-shirts.

The guy in McLean, WA may simply be the only gas station owner who has reported it.

Decent EROEI, though, and a decent metaphor for our entire dang civilization.

good compilation of news. Thanks! I was especially thrilled about this Nigerian oil fields where they just burn natural gas and do not make LNG products from it. Sad!

It helped me because I tried to figure out are we approaching peak energy soon.

Am I right but it seems like "year of the peak natural gas"
will also be year of the peak energy?

I estimated the maximum energy production _increases_. I used
EIA & BP statistics in estimating these.
Correct me (with explanations) if im wrong.

MB = million of barrels oil equivalent (boe)

Energy production changes 2008, 2009, 2010.. & demand, yearly:
+0.5 MB renewables: solar, wind, hydro etc, excluding peat which is also renewable source of energy
(about 0.7 % increase, maximum possible? very optimistic)
+1.5 MB nuclear (historical maximum increase, EIA)

Liquids, additions & decreases for each year:
+1 MB LNG & natural gas (0.8 MB, eroei 70%??? + 1.5MB for 3 years:
* gas burned in Nigeria+Russia+other world during extraction of crude, 1MB or more
* gathering methane 0.5MB (bad estimate???) (tipping points etc.)
+0.5 MB Coal (CTL)/ yr (about +7% increases possible, with 50% eroei, source: BP statistics)
* South-africa + China production
+6 MB new oil production 4 MB according to "Megaprojects"
* 6 MB estimate used (not reported ones, in the megaprojects wiki, I just added +50%)
* megaprojects database includes +0.5 oil shale, tar sands (1.5 increase, very optimistic)
* +0.5MB "microfields", entrepreneurial extraction of depleted fields (USA), algae to oil
+0.5 MB biofuels (BAD estimate, wood, peat, corn ???)
+0.5MB "spare capacity" & floating stocks, SPR (you possibly can release more oil to system by logistical innovation)

-5 MB oil depletion (7% yearly (average))
-0.5 MB oil quality deprecation (harder to extract oil needs more energy, BAD estimate)
-1 oil production crashes (S-A: 500kb/d every year, russia: same?). BAD estimate: no-one knows when Russia crashes,
S-A decline 500kb/d is fact?
-4 MB estimated increased energy demand based on population increase. Depends on possible recession.

= 0 MB.

so the ENERGY GAP is likely but avoidable if we do all we can. Does not sound good if there are supply distruptions!!

Is there any other possibilities to increase energy production? are my "maximum production" estimates wrong?
Please help me and tell me if I am!! :)

best regards,


forgot that average EROEI of biofuels is 4:1 or maybe close to 3:1.. Sometimes as bad as 1.25:1

EROEI of tar sands & oil shales is 1.5:1

therefore must add:
* -1MB energy consumed for conversions (0.4MB biofuels, 0.6MB tar sands/oil shales)

Folks, here from today's Globe & Mail is an example of a developed nation husbanding its resources.

At least that is the net effect.

But it appears in the news as Greedy Government Makes Royalty Grab, Pissed-Off Energy Company Cuts Back Drilling.

Canadian Natural slashes spending, blames royalty hike

I have yet to see a single geologist or oil biz type (like Matt Simmons) suggest this. And yet, it's obviously a powerful tool. Far more powerful, than "virtuous" forms of conservation that all fun afoul of Jevons paradox.

...And politically quite doable.

Everybody talks their book. ( Except me :-) I own shares of Canadian Natural and took a hit today)

Jeff Rubin has been talking about peak oil for quite a while. Here is an article quoting him extensively about it back in 2000.

Can baking soda curb global warming?

Some scientists have proposed compressing carbon dioxide and sticking it in underground caves as a way to cut down on greenhouse gases. Joe David Jones wants to make baking soda out of it.

Jones, the founder and CEO of Skyonic, has come up with an industrial process called SkyMine that captures 90 percent of the carbon dioxide coming out of smoke stacks and mixes it with sodium hydroxide to make sodium bicarbonate, or baking soda. The energy required for the reaction to turn the chemicals into baking soda comes from the waste heat from the factory.


Normally these things have some horrible downside, but I can't see one in the case.

How stable is sodium bicarbonate?

and how much energy does it take to implement the process and how much sodium bicarbonate are we talking about?

As a rule of thumb, coal is mostly carbon so any carbon compound output has a mass greater than the coal burned. If transporting coal to power stations is straining rail lines, transporting a greater amount of sodium bicarbonate or (CO2) away from the power station is a huge undertaking.

I guess that is the Achilles heel in any CCS scheme.

Energy usage has risen fastest where energy efficiency gains have been the greatest

"We're not saying don't become more efficient, what we're saying is don't count on it to solve your (global warming) problems," said Tal.

"The implication is that intensity targets won't work, that you need to have absolute targets."

That's because of a perverse "rebound effect" noticed by energy economist Daniel Khazzoom following the OPEC oil shocks, which postulates that the greater the efficiency with which a natural resource is used, the greater the demand for its usage.


"The paper by CIBC World Market economists Jeff Rubin and Benjamin Tal (TSX:CM) suggest..."

wow, Jeff Rubin's covering all the bases.

World's sunniest spots hint at energy bonanza

America's space exploration agency has located the world's sunniest spots by studying maps compiled by US and European satellites.

The maps can also gauge solar energy at every other spot on the planet.

The maps could help guide billions of dollars in solar investments for a world worried by climate change, widely blamed on burning fossil fuels that could mean more floods, droughts, heatwaves and rising seas.

Satellite pictures could also help site offshore wind farms -- wind speeds can be inferred from wave heights and direction. Farmers might also be able to pick new crops, or estimate fertiliser demand, by knowing more about how much solar energy is reaching their land.


The problem is, the climate is expected to change (but nobody is sure how!) - so, what was a good location in the past is not necessarily a guide to the future?