DrumBeat: January 4, 2008

Dealing With the Dragon

Almost all the foreign policy talk in this presidential campaign has been motivated, one way or another, by 9/11 and the war in Iraq. Yet it’s a very good bet that the biggest foreign policy issues for the next president will involve the Far East rather than the Middle East. In particular, the crucial questions are likely to involve the consequences of China’s economic growth.

Turn to any of several major concerns now facing America, and in each case it’s startling how large a role China plays.

Big oil taking political beating ahead of earnings

Large oil companies have long been a target of politicians -- mostly Democrats, who blame them for gouging consumers at the gasoline pump during periods of high crude oil prices.

The rhetoric, which in years past has resonated with middle-class voters, will get louder in coming weeks as the majors publish stellar earnings results during the heart of the primary season for the U.S. presidential election.

Executives from big oil companies "better get very thick brown bags to put on their faces when they go out in public," said Fadel Gheit, analyst with Oppenheimer & Co.

Stratfor: The real reasons for high oil prices

At Stratfor we have not commented on the high price of oil in some time, mostly because there has been little to say. While we believe that the peak oil theory – the idea that there is a only a finite amount of crude, so eventually production will peak and then fall – is correct, we do not believe such a peak will occur any time soon. Less than one-quarter of the world’s surface has been explored for petroleum to date, and advances in deepwater drilling and exploiting non-conventional crudes, such as oil sands, in just the past decade have been mind-numbing. True, the costs of extracting that crude – and the large capital costs behind cutting edge technologies – may well go up, but even here familiarity and economies of scale argue for the opposite.

Crude starts 2008 with a bang: The energy super-cycle that keeps on giving

For several years, the energy bulls have been hauling in fat profits from this sector as crude-oil prices extend their long, steady climb. The trend has made a mockery of analysts warning that this could not last. Just three years ago, many of the energy industry's own economists were predicting a downturn to more "reasonable" levels of, say, $35 a barrel.

Oil Prices Will Rise Further Yet

I believe that the supply of oil is, for all practical purposes, inexhaustible. It's just a matter of developing the new technologies required to discover and extract it, and the new technologies allowing the global economy to use it more efficiently. If there is ultimately a physical limit to the amount of the stuff hidden on Planet Earth, I'm confident that long before we hit that limit we'll have moved on to some totally different form of energy.

So why did I become an oil bull? Three reasons.

In Praise of $100 Oil

What's good for Oklahoma may also be good for America.

Oil price hits $100: Does Wednesday's uptick mark the start of an oil shock?

Adjusting for inflation, oil is now about as expensive as it was in the dark days of 1980. "At $100 a barrel, we can start calling this an oil shock," one economist said.

Perhaps. But it doesn't necessarily portend a return to Carter-era doldrums. So far, the effects of high oil prices have been surprisingly modest.

Korea: How Will $100 a Barrel Oil Impact Consumers?

From downtown Seoul cab drivers to Namdaemun Market wholesalers, Wednesday's oil spike of $100 a barrel is set to make everyday life a little harder, and pricier for average Koreans to pay their bills.

``What news to start the New Year with,'' said Ko Sang-tae, an owner of Hana Taxi, a company operating some 30 cabs in the metropolitan area. ``The rising oil price will directly eat away my profits ― that is, if there are any.''

OPEC Distances Itself From Report Raising Supply Concerns

The Organization of Petroleum Exporting Countries distanced itself Friday from a recent report raising questions about the group's future supply capacity.

The report, which appeared in the December issue of the OPEC Review published by the organization's Vienna-based Secretariat, indicated that OPEC could realistically fail to supply its share of global oil markets by 2037.

"We don't muzzle the opinions of others," OPEC's head of public relations and information Omar Farouk Ibrahim said.

Be he said that the publication "doesn't necessarily reflect the opinions of OPEC."

"The OPEC Review is an academic and research journal and it's an open forum on energy issues," he said, adding that the platform was indicative of the group's openness.

Economy and Geopolitics Decide Where Oil Goes Next

“Predicting oil prices continually demonstrates the perils of prophecy, because oil prices are the derivative of what happens in the global economy and global geopolitics,” said Daniel Yergin, chairman of Cambridge Energy Research Associates. Mr. Yergin said he could foresee oil prices surging as high as $150 in the next few years or falling as low as $40.

John Richels, president of the Devon Energy Corporation, an international oil and gas company based in Oklahoma City, said $150 a barrel was possible, but so was $55. “We have to make investments based on our outlook over a long period of time,” he said. “It is tough.”

Exploration Efforts Result in 40,500 bbl/d for West Siberian Resources

Daily oil production reached new record levels of 40,500 barrels per day by the end of the fourth quarter 2007. Total fourth quarter oil production increased by 27% to 3,130,588 barrels (2,472,980 barrels) and the average daily production for the quarter increased to 34,028 barrels per day (26,880 barrels per day). Total oil production for 2007 increased by 33% to 10,637,650 barrels (8,010,855 barrels). For 2008, total oil production is projected to increase to 15 million barrels.

Analysis: China and Turkmen energy

Before the 1991 Soviet collapse, Russia dominated the economies of the other 14 republics. In the decade and a half since, Western companies have been angling to acquire a piece of the former Soviet Union's energy assets. In the last few years, however, China has become an increasingly important regional player, and in a nasty Christmas present for both Washington and Moscow, on Dec. 28 China National Petroleum Corp.'s subsidiary PetroChina announced it will invest $2.16 billion to underwrite construction of a planned Central Asia-China natural gas pipeline.

Syria and Turkey to Build Joint Oil Exploration Company

Syria and Turkey have decided to form a joint oil exploration and development company bolstering the countries' cooperation in the oil sector, Syrian Oil Minister Sufian al-Alaw said Thursday.

With the project, the two neighboring countries will also cooperate on importing and exporting oil extracts, in addition to setting oil distribution stations in Syria, said al-Alaw, currently part of a high-profile economic delegation visiting Turkey.

OPEC oil output rises in Dec - Reuters survey

OPEC oil production rose last month beyond the rate targeted in a deal to boost output, led by a rebound in supply in the United Arab Emirates, a Reuters survey showed on Friday.

OPEC's 10 members bound by output targets, all except Iraq, Angola and Ecuador, pumped 27.39 million barrels per day, up 410,000 bpd from November, according to the survey of oil firms, OPEC officials and analysts.

The estimate indicates that the exporter group is more than delivering on a deal to boost supply from Nov. 1 in a gesture to consumer nations worried by oil prices that this week hit $100 a barrel for the first time.

For China's Orphans, Coal Is a Lifesaver

A small orphanage called Daming had run out of coal to heat its facilities in the middle of winter and the facility had turned into an icebox.

"They had run out of coal and children had suffered from severe frostbite,"Andreasen told ABC News.

Without heat, a 13-year-old girl had lost her feet.

Textbook shutdown a big Burrup hiccup

AT 8am local time on Wednesday, the alarm bells began ringing at the main electrical substation at the North West Shelf gas processing facility on the Burrup Peninsula, near Dampier.

Within minutes the huge plant, integral to a project investment of well over $20 billion, began to shut down automatically, ultimately forcing the suspension of LNG, domestic gas, LPG and condensate production. But Perth, which relies on piped gas for about 40 per cent of its electricity generation, suffered no blackouts.

North West Shelf Gas Outage Hits Industry

The restart of gas production from the North West Shelf joint venture has been delayed, with heavy industry in the state of Western Australia suffering most from the gas shortage.

Kenyan violence hits fuel supply

Violence in Kenya has led to fuel shortages throughout East Africa, as fuel destined for nearby countries remains stuck in Kenyan ports.

Delayed deliveries have hit Uganda, while the Rwandan government has ordered fuel rationing, reports say.

Many landlocked countries rely on fuel deliveries from Kenya, an economic powerhouse in the region.

Uganda: Domestic Flights Halted Over Fuel Scarcity

DOMESTIC flights across the country have been suspended. The decision follows the fuel scarcity due to the election violence that has engulfed Kenya, the main supply route.

"We are running out of aviation fuel. We can't afford to supply our domestic operators anymore. Eagle air has since suspended its flight due to the shortage," said Ignie Igundura, the Civil Aviation Authority public relations officer.

Pakisan: Energy famine to hit economy

In the aftermath of former Prime Minister Benazir Bhutto’s tragic killing on December 27, 2007, national economy is faced with an early energy crisis that had already been predicted to hit the country in 2009-10.

Although the outgoing government of former premier Shaukat Aziz paid a lot of lip service to the country’s energy security, no tangible measure pre-empting a looming large energy famine could surface until the end of its tenure on November 15, 2007. Now the law and order turbulence consequent upon murder of Benazir Bhutto, that President General (r) Pervez Musharraf termed as martyrdom, not only chocked countrywide mobility for a few days but also resulted in unprecedented power load-shedding.

Pakistan: Power, gas load-shedding multiplies people’s miseries

The protests against the unannounced load-shedding took an ugly turn on Thursday as unruly mobs ransacked the Wapda offices at Tehsil Tangi in the Charsadda district and set ablaze power transformers.

UK: Politicians will pay dearly if oil price brings hardship

The SNP government is committed to growth. It knows, in its very bones, that a sense of material prosperity is a necessary precondition for ever winning a convincing mandate for Scottish independence. So it has a deep vested interest - widely shared, notably with all the contenders limbering up this morning in Iowa to become the next President of the United States - in trying to avoid an oil-induced economic recession polluting progress on these disparate political journeys.

Samoa: Thieves steal one million litres of petrol

FIVE people in American Samoa have been charged after allegedly stealing almost a million litres of diesel from oil companies.

Indonesia: VP calls for energy efficiency

Vice President M Jusuf Kalla Friday called on the entire nation to make an efficient use of energy as the global oil prices hit a record high of US$100 per barrel.

"What we need to do this year is to make an efficient use of energy and increase production because we have decided not to raise fuel prices," Kalla said at the vice presidential office after performing Friday prayers.

Soaring Oil Price a Warning Signal for Korea’s Economy

High oil prices, high commodity prices and high interest rates could mire Korea's economy in low growth. In that case, households already burdened with debts of W600 trillion (US$1=W937) could see a further reduction in real income, fewer jobs and increased interest payments. They would also put a heavy strain on macroeconomic management by the new government, which has been elected by a landslide on a pledge to revive the economy.

Oil prices bump up cost of manufactured goods: StatsCan

From October to November, prices charged by manufacturers rose a marginal 0.6 per cent after six months of consecutive declines.

The increase was almost exclusively the result of the surging cost of petroleum and coal products, but was also affected to a lesser extent by an increase in prices for chemicals as well as fruit, vegetables and feed products.

Plastics products price rise “inevitable”

Uncertain economic conditions and rising oil prices despite plentiful supplies will see prices of plastics products increase, according to the British Plastics Federation (BPF).

The UK plastics trade association argued that despite there being “no shortage of oil,” speculation and the cold weather have driven oil prices to a “record high”.

Power supply in Delhi plunges

The New Year has begun on a not very positive note for the Delhi Government’s Power Department -- a dip in gas supply from the Oil and Natural Gas Corporation (ONGC) has led to a shortfall in power generation.

'Difficult situation' for NDRC

Policymakers working out when to link the nation's lower refined oil price to the international market are under pressure after global crude oil crossed $100 a barrel on Wednesday.

When the global price rose to $90 a barrel, a spokesman for the National Development and Reform Commission (NDRC) said it was in a "difficult situation" reforming the country's energy and resources pricing system.

Turkey: Rising oil prices threaten to choke economy

"In the next five years or so oil prices rising to $200-$250 a barrel would not surprise me," said Puru Saxena, a Hong Kong-based money manager overseeing more than $370 million in assets, half of which are invested in commodities. As the price of crude oil reached a new high, investors fled to the traditional havens of gold, which Wednesday soared past $850 an ounce for the first time since Soviet tanks invaded Afghanistan in 1980.

Tough choice: To heat or eat

THE RISING price of oil is starting to spook a lot of people — and for good reason.

On Wednesday, a barrel of crude breached the US$100 mark for the first time, and the fear is that will drive the already high price of furnace oil even higher.

Vermont Faces Heating Assistance Shortage

Meanwhile, Rep. Gaye Symington, D-Vt. House Speaker, told reporters that rising prices are putting pressure on state government -- and that the federal government is little help. She said that unless president Bush releases emergency funding attached to the LIHEAP program, Vermont will do what it has done every year -- ante up $5 million or more to supplement low income heating assistance.

...Symington said she would rather put the money into long-term energy efficiency, rather than keep on plugging emergencies. Rising prices are putting additional financial pressure on state and federal governments, as well as the poor.

High diesel prices have a troubling ripple effect

Sharp and sustained rises in diesel prices are squeezing New Hampshire businesses that rely on trucks, especially companies who are locked into fixed contracts with their customers, such as loggers.

“I can’t charge a surcharge,” said Chris Crowe, owner of CR Crowe in Littleton, who delivers logs and chips to mills and wood-to-energy plants throughout northern New England. “I’m getting paid the same price as a year ago, and in some cases, the price has gone down.”

U.S. fliers may face separate jet-fuel fees

NEW YORK — U.S. airlines may start charging passengers separately for jet fuel as oil prices inch past $100 per barrel.

"I'm convinced that you're going to see someone try to unbundle fuel this year," said airline consultant Robert Mann.

Conflict fuels power debate - Governor says conserve, industry says build plants

An energy shortage looms in Massachusetts unless it builds several new power plants or succeeds in curbing demand through conservation.

Sure signs of an alt-fuels investment bubble

I’ve written a handful of times in the past year about signs of a green backlash and a bubble in alternative-energy investments. I’m not one of those global-warming deniers, though. Nor do I think reducing carbon emissions is a waste of time and money. (After all, I spent oodles of time co-writing generally favorable articles about ethanol in 2006 and Al Gore in 2007.) I just know a good old-fashioned investment bubble when I see it. A smart idea first attracts true believers, then clever opportunists, then momentum investors and finally the rubes who invest their money at the top of the cycle. Bubbles are productive, by the way, as they usually lead to positive change. You just don’t want to be the investor left holding the bag.

Green businesses ready to navigate turbulent 2008

The prospect of recession and a consumer backlash could make for a tough year, but the green business movement is healthy enough to cope.

That biofuel may not be as green as you think it is

In this week's edition of Science, a feature discusses a recent study examining the total environmental impact from various types of biofuels. The actual study was carried out by R. Zah et al., at the behest of the Swedish government. While nearly all crop-derived biofuels emit less greenhouse gases than fossil fuels, whether or not they are better for the environment is still open for debate. Some studies have suggested that corn-derived ethanol consumes more energy than it produces, others have found a slight net benefit; most studies have found that crops such as switch grass have outperformed both corn and soy.

How well one biofuel performs relative to another can rapidly change when the total impact to the environment is considered. According to the author of the perspective, "a key factor affecting biofuel efficacy is whether native ecosystems are destroyed to produce the biofuels." The example used is that sugarcane becomes much less environmentally friendly if rainforests are being razed to make room for more sugarcane fields. If biodiversity is taken into account, then the scales would tip further away from being truly green.

David Strahan: Hear no peak

Tilting against a 30-year old Hubbert forecast for global peak oil in 2000 that turned out to be premature proves nothing. Peak forecasts today benefit from decades of additional exploration experience - in which the amount of oil actually discovered each year has fallen relentlessly - and more advanced statistical techniques.

The idea that there are “large unexplored areas” in Saudi Arabia – or anywhere else in OPEC - is simply not true, as Edward Price, a former Vice President of exploration and production at Saudi Aramco, explained at an investment conference in New York last month.

Ex-rebels Say Fresh Fighting Erupts Near Sudan Oil Area

-Fresh fighting erupted between southern Sudanese forces and Khartoum-backed Arab tribesmen near key oil areas of the country Friday, former southern rebels said, further denting hopes of an end to north-south hostilities.

Dozens of people have been reported killed since fighting first erupted late last month near the disputed Abyei oil areas between Arab tribesman and ex-rebel south Sudanese army units.

Venezuela sees "good" 2008 oil price: official

A director of Venezuela's Central Bank said Friday he expects a "good price" for Venezuelan oil in 2008, only days after U.S. oil prices broke the psychological barrier of $100 per barrel.

Armando Leon said in an interview with state television that oil prices reaching $100 per barrel "is an indicator that this year we will probably (have) a good price of oil."

China: Thoughts on uncontrollable runaway oil price

The crude facts about the crude oil could shake the average American's faith in cars. The car-worshipping nation has recently been stripped of its dream of car ownership because of the skyrocketing oil price. "They ripped me off driving to work. Forty dollars was enough to fill the tank before, but now it costs you 60: up by 1/3," an American driver complained.

In France, nearly half of citizens have turned to public transportation. Ordinary people living in these developed countries that consume large amounts of energy have no choice but to abandon their cars when oil prices soar uncontrollably like a runaway horse. The price shot up to 99.29 U.S dollars per barrel on November 21, 2007.

$100 oil might not hit China severely

Asian Development Bank's Zhuang, however, said the overall impact of high oil prices on China may not be very serious, although it may bring more pressure on inflation and corporate profits.

"China's energy use structure remains largely unchanged, with coal being its main source of energy," Zhuang said.

Agreed Wang Qing, saying the impact would probably be "moderate and quite manageable" because of China's low dependence on oil as a source of energy.

Another war for oil over the horizon; With China on the other side, in Africa?

Many Americans still wonder why we went to war against Iraq. Perhaps it was mistaken intelligence. Others have suggested it was initiated to control oil supplies. Even if oil was not the covert casus belli the Iraq war has, and will continue to have, marked effects on U.S. oil imports. Another struggle – perhaps over oil – looms in Africa. Whether this will involve us in hostilities or not depends on leaders in Washington and in China.

Hundred dollar oil to hit soft drink makers hard

As petrol prices temporarily rose above the dreaded $100 per barrel mark for the first time this week, beverage manufacturers have revealed their concerns over the possible cost implications for their operations.

The British Soft Drinks Association (BDSA) said that while rising commodity costs were never welcome, higher oil prices would not only significantly impacted transportation and energy spending, but packaging as well.

StatoilHydro shuts Veslefrikk oil platform, reduces staff at two others due to North Sea storm

Norwegian state-controlled oil company StatoilHydro ASA on Friday shut down production from its 35,000 barrel-per-day Veslefrikk oil field and reduced staffing at two other fields due to a North Sea storm with strong winds and huge waves.

StatoilHydro spokesman Gisle Johanson said it was not clear how long the production and staff cuts might last, but that the strong winds could linger through the weekend. He said crew had been cut to a minimum at the three fields, with staff reduced to 21 from 165 at the Veslefrikk field; to 51 from 93 at the Oseberg Soer platform and to 54 from 120 at the Visund field. He said nonessential crew had been flown to land or to other platforms that were less exposed to the waves.

Australia: Oil hits new record high

The latest price increase has prompted a call for the Federal Government to take the lead in preparing Australians for the possibility of oil rationing.

The volunteer-based Association for the Study of Peak Oil says global oil production could start to decline from 2012.

Convenor Bruce Robinson says it raises the prospect of oil shortages.

"We'd recommend there be oil vulnerability task forces set up to start discussing this matter [and] educating people," he said.

Pressure on Brown to veto coal-fired power station

Gordon Brown has been challenged to prove his green credentials by blocking plans to build Britain's first coal-fired power station for 24 years.

Environmental activists condemned a decision by councillors to support an application to demolish an outdated plant in Kent and replace it with another that burns coal, widely regarded as the dirtiest fossil fuel.

Where’s the beef? - report shows UK beef producers are getting short-changed

A new report from the Soil Association shows British organic beef producers are getting short-changed by their processors and some key supermarkets who are not paying enough to cover the costs of production, and choosing to import organic beef even though there could easily be enough supply in the UK. These factors are endangering the security and development of organic beef production in the UK and leading to unnecessary carbon emissions, says the Soil Association, the UK’s leading organic organisation.

The Real World: Oil at $100

Is $100 oil a cause to celebrate? The answer is, yes -- in the short term, and no -- in the long term. The answer also depends on who you are and where you sit.

Many oil exporting Middle Eastern government officials may think that the oil bonanza is here to stay. However, oil revenue is notoriously cyclical, with ups and downs wreaking havoc in the national budgetary process.

Petrodollars -- or petro-euros these days -- also have a nasty habit of causing a national addiction, crowding out non-oil sectors and making countries, business, and individuals dependent on one commodity only. This is hardly a prescription for a healthy economic model.

As Planet Earth struggles with ecological damage, America's appetite remains insatiable

Recently I watched the movie "Wall Street" in which Gordon Gekko, the ruthless and greedy corporate raider, proclaims that "greed is good". This great movie caused me to reflect on just how our nation and our society now seem to be completely under the spell of extreme materialism and rampant consumerism. Warnings abound relative to the escalating threat of global warming and the specter of huge petroleum shortages (Peak Oil) likely to happen to our planet in the near future.

But we in America, in particular, continue with our habits of non-stop consuming and wastefulness, seemingly oblivious and uncaring relative to the dangers that will face us far sooner than we can now imagine.

As oil passes $100, the question: will it stop?

Aren't the Saudis boosting output to lower prices? Is manipulating the spigot still an option in a world where China and India are demanding much more fossil fuel?

The short answer to the first question is no. While Saudi Arabia is adding new production capacity, it, along with the rest of OPEC, declined to boost its output quotas in December, precisely because of expressed worries about a slowing economy. In theory, the Saudi government has 2 million barrels a day of spare capacity – equal to the International Energy Agency's prediction of demand growth in 2008 – but the country has not yet committed to releasing more of this to the market.

Over the next five years OPEC's members are hoping to add another 12 million barrels a day of capacity. But whether that will keep pace with the rising demand from India and China, is hard to gauge. Mr. Gheit says OPEC production increases aren't needed for prices to come down. "The market is adequately supplied. It will come down.... There have been and always will be commodity cycles."

Peak nationalism: Oil keeps getting more expensive—but not because it is running out

The biggest impediment is political. Governments in almost all oil-rich countries, from Ecuador to Kazakhstan, are trying to win a greater share of the industry's bumper profits. That is natural enough, but they often deter private investment or exclude it altogether. The world's oil supply would increase markedly if Exxon Mobil and Royal Dutch Shell had freer access to Russia, Venezuela and Iran. In short, the world is facing not peak oil, but a pinnacle of nationalism.

Perspectives on US$100 oil

US$100 oil seemed to bring forth reactions similar to those of a full moon. It rattled the cages both of the economically challenged Jeremiahs of peak oil theory, and of politicians all the way from Democratic populists to conservatives obsessed with oil independence, and who seem to have forgotten the lessons of Jimmy Carter. At the Iowa caucuses, Democratic candidate John Edwards lost no time in linking US$100 oil to "corporate greed." But Big Oil is virtually irrelevant to global oil prices. The state oil companies of the producing nations are far larger and more important than the old "Seven Sisters" (whose numbers have shrunk because of mergers). Saudi Aramco has some 20 times the reserves of Exxon Mobil (which is made up of two of the sisters).

Rising Prices Put Pressure On Already Ailing Economy

For anyone who is worried about the economy, 2008 is off to a lousy start.

The price of oil briefly rose to $100 a barrel for the first time yesterday and fresh evidence emerged that the economy is slowing. To investors, the news raised the specter of stagflation, the toxic mix of stagnant economic growth and price inflation that made for hard times in the 1970s.

The heavy price of $100 a barrel

Britain could see an £18bn hole blown in its national income if oil prices remain around $100 a barrel for a sustained period, with the high price leading to soaring energy costs for private consumers, industry and public services.

Calculations by a leading research consultancy, Capital Economics, suggest the UK could lose up to 1.5% of its gross domestic product, with half of this coming from higher domestic fuel bills, meaning consumers have less money to spend on other goods and services.

High oil costs must spur fuel efficiency, says IEA

Oil at $100 a barrel should remind consuming countries of the need to improve fuel efficiency, the International Energy Agency said on Thursday as US figures showed a fall in crude oil stocks for a seventh successive week.

The IEA, which represents rich oil-consuming countries, urged its member governments to do more to curb their use of oil, for example by lowering speed limits for motorists, as crude oil prices hit a fresh all-time high of $100.09 a barrel before falling to $99.18 a barrel, down 44 cents on the day.

UK: Transport spending plans based on oil at just $50

A government document meant to underpin future UK transport policy is based on an oil price of $50 a barrel - about half the current level, raising serious questions about the logic of resulting spending commitments.

The report, Road Traffic Forecasts for England 2007, was drawn up by economists at the Department for Transport to model trends in road traffic up to 2025. Published just two months ago, it is being used to shape UK policy on roadbuilding spending, traffic congestion and carbon emission over the next two decades. But the soaring price of oil casts doubt over the report’s estimates for growth in traffic.

Simple Supply/Demand, or Price Gouging?

In a prelude of what the landscape may hold for Big Oil, May of last year saw Kentuckys Attorney General Greg Stumbo tap into the wellspring of anti-oil company sentiment bubbling just beneath the surface by filing an $89 million lawsuit against IW 50 Best Manufacturer Marathon Oil and its retail subsidiary, Speedway SuperAmerica.

Stumbo's suit charged that Marathon and Speedway SuperAmerica violated Kentucky's price gouging law and the Consumer Protection Act during the state of emergency following hurricanes Katrina and Rita in late 2005. The suit stems from a 2005 investigation of Speedway SuperAmerica for alleged gasoline price gouging, and made Kentucky the first state in the nation to file a price gouging suit under a new consumer protection law against a major oil company.

The Stealth Oil Giant: Why Schlumberger, long a hired gun in oil-field services, is becoming a major force and scaring Big Oil

Schlumberger has gone native in Russia. It has a global reputation as a leader in oil-field services, but its thriving Russian business has been built on three local outfits it has bought since 2004. In each case, Schlumberger revamped operations but kept enough of the old company intact to preserve its earthy Russian character. Schlumberger "doesn't make the assumption that the West is best," says Rob Whalley, a sturdy Briton who serves as the company's drilling czar in the country.

Swiss Inflation Rate Rises to 12-Year High on Energy

wiss inflation unexpectedly accelerated to the fastest pace in more than 12 years in December, led by higher energy costs.

Consumer prices increased 2 percent from a year earlier after rising 1.8 percent in November, the Federal Statistics Office in Neuchatel said today. That's the highest rate since October 1995. Economists forecast it would be unchanged, according to the median of 14 estimates in a Bloomberg News survey.

Nigeria: MEND Vows to Cripple Oil Exports

The Movement for the Emancipation of the Niger Delta (MEND) yesterday vowed to cripple oil exports from the Niger Delta region by providing arms including anti-aircraft gunships to the leader of the Niger Delta Vigilante Movement, Mr Ateke Tom in what it said was a renewed bid to counter any possible offensive by Federal Government's Joint-military Task Force against it.

Specifically, the support, MEND said, would be in form of providing him their fighters and making available heavy duty war machines including anti-aircraft to ensure that they present a formidable front to counter Federal troops.

100-dollar crude is good and bad news for environment

Surging oil prices are a mixed blessing for the environment, experts say. Clean renewable energy and recycling are getting a major boost from 100-dollar-a-barrel crude -- but so are coal, a massive contributor to global warming, and nuclear power, which remains shadowed by safety concerns.

People power to warm new building in Stockholm

The body heat from hundreds of thousands of people who pass through the Stockholm Central Station each day will be used to heat a new office building nearby, the project leader said Wednesday.

Australia: This drought may never break

IT MAY be time to stop describing south-eastern Australia as gripped by drought and instead accept the extreme dry as permanent, one of the nation's most senior weather experts warned yesterday.

"Perhaps we should call it our new climate," said the Bureau of Meteorology's head of climate analysis, David Jones.

UK weather office: 2008 likely to be hot

The Met Office said a powerful La Nina, the name given to the upwelling of large areas of cold water in the tropical Pacific Ocean, would probably keep 2008's temperature from breaking the global record. But it said the underlying trend of higher and higher temperatures, which scientists say indicates global warming, was likely to continue.

Calculations by a leading research consultancy, Capital Economics, suggest the UK could lose up to 1.5% of its gross domestic product, with half of this coming from higher domestic fuel bills, meaning consumers have less money to spend on other goods and services.

This is why rising commodity prices are deflationary. They shrink the economy because less money is available to spend on other things. The situation doesn't become inflationary until central banks start printing money to counter the economic slowdown.

Yes - but they are printing, aren't they? It may be disguised as "liquidity injections", which in turn is temporary loans by the central banks against (questionable) collateral at below market interest rates, but the net effect is the same - additional money is available for a while.


Indeed they are! And they started printing years before commodity prices started their latest rise, which is going to tend to blunt the effect of the latest round of printing (which of course means they'll have to print much, much more to have any effect at all).

The problem with printing.

You can't print trillions or even 100's of billions.

Unless you start adding zeros to the pound/dollar notes.

And eith the insolvency crisis we have now, actual cash on hand wil be demanded.

Not bytes on a screen.

That's deflation.

How do you see "bytes on a screen" becoming inaccessible in the short term?

If the bytes on the screen in the form of debt are no longer accepted in lieu of cash for everyday transactions as explained in papers by Fekete.

Even today there is a "spread" hidden from people in the form of CC merchant fees that so far they choose to eat.

The best example of the past is when you tried to buy for example a car and put it on a credit card for convenience, they would never take it and insist on a wire transfer because they did not want to eat the fee. It could spread to the smallest of purchases like a gallon of gas. There is precedent for it as at times in the past there have been different prices for cash and credit.

Exactly. With the Depression will come millions foreclosed on, jobless, etc. Like me, Homeland Suckurity won't let them have a bank account. They'll lose their cars since those with bad credit in the US pay 2X-3X or more for car insurance, although that practice is illegal. They'll start trading on a cash-only basis. I don't even trust paper money and plan to put what savings I can squirrel away into "junk" US silver coins. A profitable sketching or busking session downtown may be followed by a trip to the pawn shop or coin dealer, to buy some junk silver.

Also, there's a growing "get out of debt" and "frugality" movement in the US. One of my favorite TV shows is one called 'Big Spender". The hero of the show goes around in really loud Western shirts and boots, it's hilarious. He goes around to people who've applied to be on the show, who want their debt problems solved. Typically the debtor is making about $6k a month and spending about twice that. The hero tells them to deal on a CASH ONLY basis, start cooking at home, etc. So far about 3/4 of the debtors are able to make the rather drastic changes needed. The hero advocates selling off any spare Bentleys one may have, canceling gym memberships, cutting all fat out of one's life. Credit cards are cut up. Money is to be treated as REAL, not 1's and 0's.

1's and 0's are very very easy to have taken from one anyway. Doesn't anyone remember that horrible movie, "The Net"? Can't anyone learn from that potboiler that all "they" have to do is cancel your account and that's that? Oh and math equations fly around on your screen..... maybe that was another movie?

But imagine going to your ATM and you can't withdraw money, your account is canceled, and you can't get an answer. And neither can millions of others. If you're lucky you may get 50% of your 1's and 0's back like Northern Rock is supposedly giving back, but this being the US, I'd doubt it. All those 1's and 0's were once genuine US coins'n'toilet paper, and now they're gone. Those hours of work you put in earning them, gone.

Gold and silver are money. USbucks should make good compost, finely shredded.

Living where you live now you probably figured out that the old money people walk around in jeans and t shirts and drive old decrepit pickup trucks.

All the new bling crowd are just targets.

LOLZ Musash'!

Yeah the "old money" drive their old trucks and wear Dickies overalls, it's true. There are actually Priuses out here, it's hilarious! And blingin' rims are not unknown, nor are X5's.

But, since most of that "wealth" is a put-on, it won't stay away from the repo man long, my Prius sure didn't.

There's a sort of "look" around here..... jeans, about 1/2" - 1" of beard, ciggie or Skoal in mouth, lined face, sort of "kicked from pillar to post" expression. Look on kids = hungry.

Actually most of the people around here look pretty healthy and are damned NICE its' just amazing. Ate a very good b'fast burrito cooked at a small lunch truck yesterday, how nice it was to speak in English with a fellow American running her little lunch truck, lunch trailer really lol.

There are jobs here, stone mason, carpenter, stuff like that. And working with horses. Good jobs really, but you have to be reality-based. Not much future in pushing buttons.

Wise words from the depths of your cave, Miyamoto.

Sitting here with a small stack of brass $1 coins, and contemplating.

Knocking a few zeroes off of a hyperinflated currency to create version 2.0 of said currency has happened many times. Some day it will happen to the US dollar, too.

The situation doesn't become inflationary until central banks start printing money to counter the economic slowdown.

The central banks don't 'print' money, even in a metaphorical sense. They may increase the money supply by creating more credit, but this is debt money that, at some point must be repaid. When it is repaid, the money disappears again. This process is used to 'goose' the economy. Unfortunately the economy seems to be beyond the 'goosing' point and the Fed is facing a big crisis.

The only way I see of actually increasing the money supply is 'monetizing the debt' which, as I understand it, would happen with widespread debt defaults. This would in effect leave all that credit money 'stranded' out in circulation with no one calling the debts due. I'd like to hear a more educated view of this notion. I believe, if the Fed is determined to fight deflation that monetizing the debt through defaults might be one of the few effective things left. This might play havoc with credit markets though, especially when foreign entities are involved. Rock & hard place.

The range of efforts falling into category of "What Is To Be Done" is entirely contrary to the class interests of those at the Fed and other central banks. Except maybe Endless War. [Peak Oil and resource depletion is already playing out as class war.] The central banks are part of a structure built to increase consumption of resources - and to shift it into pockets of corporate and wealthy classes; they might have some of the tools they need to make thing better, but they will not. It does seem that one thing that unites the financial class worldwide is its hatred and fear of everyone else - esp workers.

cfm in Gray, ME

"Don't" is different than "can't". The fact of the matter is that FED can monetize anything it wants, whenever they want it.

Regarding the finite nature of matter and energy, it looks like cognitive dissonance is breaking out in full force. A recurring question for Peak Oil Deniers: The Lower 48, the North Sea and the world all showed lower crude oil production at about 50% of Qt, based on their respective HL plots, and the pre-peak HL plots in all three cases were quite stable. Why should we expect the world to show a materially different production profile from what we are seeing in the Lower 48 and the North Sea?

Net Oil Exports and the "Iron Triangle"
Posted by Khebab on July 13, 2007
This is a post by Jeffrey J. Brown, an independent petroleum geologist in the Dallas, Texas area.

My frequent coauthor, Khebab, is presently working on some mathematical models for production, consumption and net exports by the top net oil exporters. Based on the data that I have seen so far, it will not be a pretty picture. I suspect that the models may show that not much more than 25% of the remaining URR in the top net exporting countries will be exported.

In regard to discussions of Peak Oil and Peak Exports, I have described what I call the “Iron Triangle,” which consists of: (1) Some major oil companies, some major oil exporters and some energy analysts; (2) The auto, housing and finance group and (3) The media group.

If one resides in the oil industry leg of the Iron Triangle, and if one has concluded that Peak Oil is upon us, or extremely close, does one say, "We cannot increase our production," and thereby encourage massive conservation and alternative energy efforts, or does one say "We choose not to increase production and/or we are temporarily unable to increase production for the following reasons (fill in the blank)?"


In one of Khebab's posts last year I commented that no matter which statistical model was used, be it HL, Logistic, or what else there is, all show PO for the world somewere between 2005 and 2012.

Found this through Mike Rivero's site:

"From a Sarajevo War Survivor:
Experiencing horrible things that can happen in a war - death of parents and
friends, hunger and malnutrition, endless freezing cold, fear, sniper attacks.

1. Stockpiling helps. but you never no how long trouble will last, so locate
near renewable food sources.
2. Living near a well with a manual pump is like being in Eden.
3. After awhile, even gold can lose its luster. But there is no luxury in war
quite like toilet paper. Its surplus value is greater than gold's.
4. If you had to go without one utility, lose electricity - it's the easiest to
do without (unless you're in a very nice climate with no need for heat.)
5. Canned foods are awesome, especially if their contents are tasty without
heating. One of the best things to stockpile is canned gravy - it makes a lot of
the dry unappetizing things you find to eat in war somewhat edible. Only needs
enough heat to "warm", not to cook. It's cheap too, especially if you buy it in
6. Bring some books - escapist ones like romance or mysteries become more
valuable as the war continues. Sure, it's great to have a lot of survival
guides, but you'll figure most of that out on your own anyway - trust me, you'll
have a lot of time on your hands.
7. The feeling that you're human can fade pretty fast. I can't tell you how many
people I knew who would have traded a much needed meal for just a little bit of
toothpaste, rouge, soap or cologne. Not much point in fighting if you have to
lose your humanity. These things are morale-builders like nothing else.
8. Slow burning candles and matches, matches, matches"

And a usefulll list of preperation items. IMO very usefull in PO prep.


That's a classic, along with that report out of Argentina that used to be at Frugal Squirrel.

That report from Argentina opened my eyes to a whole different approach to the preps I have made.The only recommendation of his I have not followed in my own way is the purchase of bullet proof clothing.I haven,t quite got to the point of "up-armoring" my body ...yet

Leanan, is the 'report out of Argentina' still available? Thanks.

Dunno if the original source still has it, but the info can still be read here:


Ohh, thanks for this 'live Argentine report'. I mean that was a scary read and very well written.

Very very good stuff. When I was a kid being able to forage saved our asses. Looking back, living more off of the land would have been the best way to go - going completely wild.

This is why the Seminole Indians have never been defeated by the US.

There are two problems with the writings from the guy in Argentina.

His experiences are location specific even in the case of Argentina, and I have a pretty good idea where he lived from what he said, but it totally fails to make allowances for the enormous demographic differences with the US.

Yes, I'm sure things were pretty bad in the cities and in the rural areas, but he really doesn't say much about the small towns.

The way I remember it from when I read it his location sounded to me like he was in a specific suburb of Buenos Aires that always was rough, even in the best of times. Not quite south central LA but more then halfway there.

I have a brother and a sister that lived down there during the "troubles" and still do, and I was stationed there for a few years. My first wife was from Argentina and I'm still very good friends with the family. I know the place quite well and some of the things he writes are a bit over the top. Maybe he was a Ritalin baby.

I remember this thing floating around on the Y2K boards in 1999 - it has been around a while.

It obviously came from when Argentina was in the midst of its huge crisis. That was a few years back. They are far better off now. But when TSHTF because of declining oil, there will be no "getting better", everything will always get worse.

But by all means read this report even if it is several years old. It tells how things will be in the US, Canada and Europe when declining oil supplies cause massive unemployment. This will be how it is....until it gets worse.

Ron Patterson

All of these survivalist points miss the main point: there has to be a political and collective response to the the conditions that will confront us -- otherwise we'll be shooting each other over the cans of gravy! We are human beings, a social animal, with brains. If we don't take of advantage of that, we are sunk.

Any effective political and collective response is going to come at the local level, though.

Living in a small town, the obvious answer for us when it gets to this is to organize a militia or police auxiliary and do 24/7/365 neighborhood patrols. That, and agree that we are going to contiue to tax ourselves enough to assure that the police can be paid enough to stay on the job, and not have to be tempted to accept bribes.

I should point out that having to buy all of that weaponry and ammo and body armor and perimeter security for oneself is not free; the time and effort required to maintain constant vigilance exacts its own price as well. This is every bit as much a "tax" as is what we pay for proper police protection. You are going to pay one way or another. Collective community action is ultimately a more cost-effective way to go.

I would like to roll out an idea for people to poke holes in...

It seems to me that througout history (written since agriculture and animal domestication were developed) that communities that had food surpluses while others were hungry had walls.

In fact, the cliff dwellings in the US Southwest appear to have been a fallback once a prolonged drought hit the area. People didn't start living where commuting involved a perilous climb until circumstances compelled.

Towards the end of the classic Mayan era, stones from dwellings and temples appear to have been relocated to hastily thrown-up fortifications.

Excepting ancient Egypt (a special case), all of the cities one reads of in the Bible and the Illyad all had walls, gates, and sentries. Troy, Jerico, Jerusalem, even Rome had walls; this continued into the Middle Ages in Europe. Jamestown colony was a stockade.

My point: it seems to me that we have a large enough excess (hungry) population that rural communities will have stockades, with one person delegated from the community (call this a 'tax') to stand watch at all times. That way the rest of the population can get some work done without looking over their shoulder constantly.

Actually, I've hunted feral goats; they have a sentry. When one stands down to eat or drink, another takes his place. It seems to me that prey need sentries.

Errol in Miami

I live in a rural setting, down a "no outlet" road. (What ever happened to Dead End?) I've been meaning to have a walk down that road with my partner and ask the hypothetical question: Should TSHTF and our family and friends inquire about living out here... with us, what might our responses be and to whom?

This will signal to him a raised level of concern on my part. I am welcomed to let him know when I think major movements are occurring or about to; I'm not welcomed to talk about it daily. He agreed to "not bother" me when I'm reading TOD! Told him, "Think of it as me reading the paper and I don't want to be interrupted." It stuck. Little wins.

Your post got me thinking "how would new people to a community be regarded?" Would we trust them as sentries?

Greenhouse is next project. Might rethink where I put it.

City walls were rendered obsolete by gunpowder & artilery. Until we are way past Peak Gunpowder, you won't see them return.

For defending against lightly armed marauding bands (very few weapons & ammo greater than NATO rounds), walls can be effective force multipliers. That is a force of 15 (some older, young teenagers, etc. not suitable for foraging) can hold off a band of 100 foragers with proper fortifications.

Best Hopes that it does not come to this,


Hard to say; during the Depression, communities didn't build stockades or walls, and Hoovervilles appeared to be very open and communalistic; but society in the early '30s wasn't as atomized and disparate as today. Being cosmopolitan, I oppose tribalism; but I understand how tribalism might increase in the future. But even native tribes that built stockades around their communities for protection in the Northeast (and elsewhere) still found it essential to trade with other communities and find mates within them. (Funny how stoneage peoples understood the need for genetic diversity.) This will be equally true in the future.

Much depends on how events unfold going forward. A lot of effort has gone into the development of various Others that are to be excluded from the US Tribe in order to dominate and maintain rule over that Tribe, and some claim such behavior exemplary; I think it destructive and counterproductive. One of the triumphs of the European Nation-state is that it greatly supressed the centrifugal forces of internal tribalism; the EU can be seen as the logical evolution of such by breaking down the walls between nation-states, which are the new tribes.

It was the hope of many that humanism would replace tribalism and thus greatly weaken Machiavellian machinations. Although this might still happen, I'm afraid time has run out with tribalists like Bush, Clinton, Pelosi, Blair, Brown, and Cheney ascendant.

This is really the key point. If government has the attitude of 'devil take the hindmost' like the current administration then I can see things devolving into an everyman for himself situation. The ultra-rich will try to withdraw into gated communities leaving the rest to fend for themselves.

If government makes efforts to build community, if the vast majority of people believe they have a future through community then things could evolve like they did in the Depression. There will be enormous problems but if we can have security and we can trust each other we'll be light years ahead.

If anyone does remember it was during the Y2K runup that the big rage was 'strike anywhere' matches. What we here in the rural reddish neck areas referred to as kitchen matches.

I still have quite a few of the large boxes and many of the smaller boxes up in the upper shelve of my closet.

Still quite handy to have around. Lamp lighting, making into toothpicks, rolling a piece of cotton on the end for cleaning ones eardrums, and of course starting a fire in a wood burner.

Yet not a single word have I seen written suggesting stocking up on those matches. Odd! Odd because people are really not into 'it' as yet and not thinking. What good is a .22 rifle to take squirrels if there is no easy way to start a fire? Tinderboxes anyone?


I keep a number of magnifying glasses around helps with the age (reading) in an assortment of sizes, helps to start fires. Got a bunch of neat little plastic Fresnel lenses. I spent a lot of hours as a child, burning holes in leaves with a tiny magnifying glass. Who needs matches !!

I do keep some matches around on principle, but also have a Techno-boy's infatuation with Bic Lighters, which give me a great sense of security, also the long-nosed Grill lighters, which add to butane's usefulness, and finally, fewest in number but not importance, are my old BoyScouts Flint and Steel sets. Downright magical!


Airdale a condensing lens can work even if it has a fair-sized chip out of it, and if there's no electricity then there will be lots of cameras and TV projectors and stuff full of great lenses.

There's also the old flint + steel equation, plus magnesium etc., some people even know how to start fires with chemical reactions.

Plus lighters.....

Kitchen matches are good to have around, but they're not the only game in town.

I have been trying for a year to get strike anywhere matches and can't find any. I think they may have been taken off the market because of some lawyer's fear of lawsuits or something.

The world's oil supply would increase markedly if Exxon Mobil and Royal Dutch Shell had freer access to Russia, Venezuela and Iran. In short, the world is facing not peak oil, but a pinnacle of nationalism.

*yawn* How predictable of the Economist. If only other countries would let in big Western multinationals so they could be pillaged of their natural resources, everything would be fine.

And does the Economist really believe that Russia could have done better in boosting its oil output if Exxon/Mobile had free rein? The country was pretty much wide open to Western companies when Yeltsin was president. How did that work out for oil production compared to Putin?

Just another in a long line of neat, tidy, and fundamentally flawed reasons why the free market isn't being allowed to work correctly.

The silver lining to this cloud is that there are still quite a few opportunities available for people who are good at lying.

The worst aspect of the Economist-style position is its underlying assumptions - i.e. that it's incumbent upon oil-producibng nations to produce in a way that benefits the economies of the gas-guzzlers. "What's our is ours, and what's yours is ours also"

It is based on the belief that big business, the USA, and all the associated allies of that power block own the world, own the resources - and that everyone else should give them up, and do as the big boys demand.

It's unadulterated elitism, and it makes me think "these bastards deserve what's coming to them".

Regards Chris

No, the worst of it is that they should know better by now. Just watched 'Gandhi' and I guess they still don't get it; the Empire still exists in a proxy corporate form, for a while yet. The Economist is just a part of the central ruling group that is seemingly incapable of avoiding making a fool of itself. They will act as if those events were unavoidable, as in 'who could have known that oil supplies would someday run out?'

Who indeed. I wish I'd kept the Economist's 1998 Awash in Oil cover in a frame. Sic Transit Surplus.

It's no more than The Open Door policy restated.

None of that will help consumers or governments. The economic toll of expensive oil is just as high whether geology or politics is to blame—and the best response is just the same. Policy should encourage energy efficiency and support research into alternative fuels. Governments seeking to shield their citizens with subsidies or price caps should instead expose them to the full cost to foster frugality. All this will be hard and unpopular. But politicians might console themselves with the thought that even the most recalcitrant petro-regime is more malleable than the brute realities of geology.

I think the Economist is being very careful. It doesn't deny the Peak Oil theory but suggests that the current "peak" has a political element to it and doesn't rule out the possibility that an unconstrained peak is only a few short years away (but is careful not to actually say say that). I think the final paragraph quoted above is quite telling.

They are still using the word "efficiency" meaning we should just keep doing what we are doing just with a little less energy per unit of activity and not "conservation" which would imply doing something different that doesnt use the energy. Conservation will be enforced by shortages or price barriers.

But if the current plateau is political (as the Economist suggests) it forces us to do something right now to make up for the the gap in pumped oil. In fact if every exporting country constrained production right now it would force us to confront a very clear decline right now rather than in a few years time when geology imposes a disastrously steeper decline.

As the article says if politicians find this hard to stomach then they should consider how much worse it will be when geology really does sound the death knell.

Of course there are ways and means of responding to declining oil and some make more long term sense than others but at least the Economist is not saying "business as usual" and it knows its readers are not stupid. Ultimately is is asking world leaders to act as if the Peak Oilers are right whether they believe it or not.

That's how I read the article anyway.

Agreed. The Economist is saying "We are not in the camp of the whack job Peak Oilers, but... We should act exactly the same as if they are correct." I don't see this article calling for regime change in Venezuela, Russia, or Iran. This is a discernable shift from 6 months ago. It is calling for preparation for peak oil, whatever the cause.

The Economist's generalization are its typical schizophrenic spewage. Russia does not subsidize domestic oil prices. Russians pay almost the same price for gasoline as Americans even though they earn less than 25% of the average American income. All the same, domestic demand is growing and will sooner rather and later constrict oil exports abroad. A process that has nothing to do with western corporate "efficiency" at find oil that is not there.

Taking your example of income vs price doesn't that suggest that the Economist might just be hinting that the nation which should let prices rise more (or shock horror - start increasing taxes to discourage use) is the USA... Didn't Bush just hint that he wanted to do something about fuel prices hitting the US consumer (it's election year). Surely that's exactly the opposite of what we need now (except for help for the genuinely fuel impoverished).

You are right, there is not enough of a price/pain signal to prompt conversion to alternatives and reduce demand via lifestyle change. Gasoline in the USA and even Canada where there are more taxes is still cheaper than bottled water. Bush's concerns indicate the direction that politicians are moving: to hide the reality of the oil prices from poor dear innocent consumer who yells that it's all an oil company and foreigner conspiracy. The media, including the Economist, are doing humanity and the west in particular an extreme disservice by ignoring and glossing over the supply problems. The story that I see spewed on the CBC and other North American media is that oil supply problems are all due to above ground factors. This is complete and utter rubbish, Nigeria and other strife ridden places do not supply enough to steer the oil market.

I guess it depends on whether you're drinking Perrier or the store brand, but gasoline costs around 3.20 here now and I can pick up gallons of water for significantly less than that.

Having said that, I still agree that gasoline is priced too low to encourage change at the rate we need.


Plain bottled water, not Perrier, is about US$1 per liter, this is higher than the price of gasoline in Ontario (the cheapest market in Canada) for most of 2007.

They are talking about short term supply, ignoring the fact that this doesn't change the longer term nature of the total amount of recoverable oil. If future generations could vote, perhaps they would not favor what little we have as quickly as possible. Capitalists understand the preservation of capital; how about the preservation of natural resources especially when the burning of these resources fouls our planet?

There were many species of large animals on the North American continent before the American Indians immigrated here. It could be that these animals were killed off by the first human immigrants and that is how the Indians learned to conserve Buffalo (the Overkill theory ). The same effect is just beginning to be played out among our civilization with oil conservation now -- too bad a 100 years (WAG) down the road, if we survive, there will have to be another lesson with Uranium.

The Economist Magazine, in an article about Saudi Arabia published in August, 2006, had the following remarkable statement.

Saudi Aramco's proved reserves alone could keep the world supplied for several decades. But it is only exploiting ten of its 80 or so fields, so will be able to pump at the present rate for about 70 years even if it never discovers another drop of oil.

It was remarkable that the Economist would make a 70 year projection without even considering the effect on net exports of increasing domestic Saudi consumption.

Based on EIA data, Saudi Arabia showed a +5.7%/year increase in consumption from 2005 to 2006. A flat line production of 11 mbpd (total liquids) versus a +5.7%year increase in consumption which would result in Saudi net oil exports ceasing in about 2036. The overall long term net export decline rate (2005 to 2030) would be about -10%/year, starting out slowly and accelerating with time.

Remember what I used to have as my signature before TOD disallowed signatures?

The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett

This remains true, and apparently it is especially true for the journalists at The Economist.

The Economist is a collection of cult fanatics. They have their "faith" and want to ram it down everyone's throats. I don't understand why people feel informed when they read that propaganda rag.

It is intriguing that the Economist article seems to diminish the role of local politics in oil production as something unnatural. Politics have influenced the world oil supply for 35 years. It's going to remain part of the equation regardless of the perception that the petro-powers are meddling in the market.

OPEC's caveat today on its in-house article is interesting too. Seeing how the article so conflicts with the conveyed wisdom from Saudi Arabia, I suppose they had to distance themselves from it.

Steve LeVine, author
The Oil and the Glory

It is intriguing that the Economist article seems to diminish the role of local politics in oil production as something unnatural.

Hardly surprising, though. That's ever the cry from the free market crowd. "Above ground factors!"

Politics have influenced the world oil supply for 35 years.

Agreed. I don't buy "political peak oil" at all. "Above ground factors" have always been part of the equation. Scarcity is now emboldening everyone from Nigerian rebels to Hugo Chavez. It's only going to get worse as the supply of oil gets tighter, so it's silly to try to separate the above ground factors.

Besides...if not for those above ground factors, peak oil would probably have happened much sooner. It works both ways.

Discussions of peak oil that only consider geologic factors are like "ideal components" in circuit analysis. It's useful to gain an understanding of how things work, but it only goes so far. In the real world, things will be different, and you need to account for that. Geologic limits place an upper bound on what can be produced, but above ground factors may not allow you to get close to that. It's ok to ignore those effects when you've got excess capacity, but not when you're near the limits.

Peak Oil is about production, and the three countries listed would truly increase the rates of production of their reserves and also increase the URR's if they had the techniques/technology and the personnel of the majors. My opinion, and certainly not in keeping with the others expressed while I was out working yesterday.

Personally, I would like the situation to remain that way, since if they figure out how to maximize that production, they will do so, and the population of the earth will not have it available as we are forced to adapt to the constraints of what is presently being produced in the way it is being produced. If it is left in the ground, perhaps we, as a species, will be able to go back and get it later. A good example of that is the project Oilmanbob is/was working on, where the exact thing has happened her in the good old USA. The field was produced, plugged and abandoned before anyone knew how to overcome the loss of pressures in flowing wells. There are many more examples available out there, and I have seen many of them discussed on TOD, and specifically on Drumbeat.

The only problem I have is that the infrastructure will be lost, and trained and experienced people will have moved on to finding innovative ways to make matches, or some other worthwhile new endeavor when we need that expertise. Just as having our own equipment to do our own work in the oilfield has become necessary today, because much of what had been used was cut up for scrap, that will happen again, but in other locales. And the roads, pipelines, tankage, gathering systems and treating facilities will have to be created all over again, once new wells have been drilled.

More about Khursaniyah... There's another article here that adds this info:

"The costs of raw materials, such as steel and cement, have increased,'' said Faisal Hasan, head of research at Kuwait-based Global Investment House. "Salaries and wages are definitely rising for these projects.''

Saudi Aramco has so far completed work on Khursaniyah's water injection facilities in preparation for oil production, the company said today. Oil production wells, trunk lines and pipelines have also been drilled, it said.

And Dante at PO.com reports that PIW (subscription only, alas) has this to say:

Delay Underlines Scale Of Task Facing Aramco

Petroleum Intelligence Weekly (Monday, January 7, 2008)

Widely expected to buck the industrywide trend of upstream project delays, Saudi Aramco's 500,000 barrel per day Khursaniyah development has missed its planned December 2007 start-up date and will not produce its first oil until March or perhaps later. Aramco's struggles with Khursaniyah offer a reminder that the company might have trouble delivering its ambitious program of upstream developments on time and on budget, and may point to delays creeping into other Saudi projects.

RE: Rising Prices Put Pressure On Already Ailing Economy...

It appears that the current and near brain-dead administration is limited to...1) Starting wars...2) Cutting taxes...3) Delaying meaningful action on GW...4) Ripping up treaties and snubbing long standing allies. If this sounds like a recipe for disaster...Well, it probably is.


'Bush Ponders Move to Bolster Economy'...OR, MORE TAX CUTS COMING???

'WASHINGTON — President Bush said Thursday that he was considering whether to propose a stimulus package to shore up the economy, the clearest indication yet of a growing concern inside the White House over rising oil prices, the subprime mortgage crisis and the possibility of recession.

“I’m concerned about people losing their homes and paying a lot for gasoline,” Mr. Bush said in an interview with Reuters'...snip...

'Mr. Bush plans to meet Friday with his working group on financial markets, a panel that includes Treasury Secretary Henry M. Paulson Jr. and Ben S. Bernanke, the chairman of the Federal Reserve. The Fed cut interest rates three times last year, and minutes of its most recent meeting show that some of its members believe rates may have to be cut again to curb the uncertainty in the credit and housing markets, disquiet that in turn could depress consumer spending'...snip...

'Speaking to reporters aboard Air Force One on the way back from Crawford, Tex., on Tuesday, Mr. Bush’s counselor, Ed Gillespie, said one of the president’s top priorities this year would be making his tax cuts permanent. But Mr. Gillespie also went on to hint that the administration might do even more.

“We shouldn’t have the economy and consumers and investors wonder whether or not those tax cuts will expire; that’s not healthy at a time when we cannot take economic growth for granted,” Mr. Gillespie said, before adding, “We’ll do what we think is appropriate to continue to foster economic growth.”'...snip...

Whatever this crowd of psycos come up with will simply damage the country more than it already has...if that is possible.
This crowd HURT the America.The true depth and breadth will not be known for a long time,but the prompt effects,like a bad dose of gamma,will start to be observed soon.Very soon.And it will be impossible to hide.

"The true depth and breadth will not be known for a long time,but the prompt effects,like a bad dose of gamma,will start to be observed soon.Very soon."

Here's the list
From TVNewslies.org

As 2008 begins, here are SOME of the issues that have endangered our democracy and the lives of so many around the world. For all of 2007, there was no action, nor were there any plans to:

• Impeach George W. Bush and Dick Cheney
• End the illegal and immoral wars against Iraq and Afghanistan
• Challenge the lies about a nuclear buildup in Iran
• Investigate what really happened on 9/11
• Repeal the Patriot Act
• Investigate official misconduct by Alberto Gonzalez
• Investigate the outing of CIA operative Valerie Plame
• Charge those who allowed the torture of Iraqis
• Investigate rendition and torture of detainees
• Close Abu Ghraib and Guantanamo Bay Prisons
• Challenge the abuse of signing statements by George Bush
• Investigate the administration’s spying on Americans before 9/11
• Challenge the constitutionality of the Military Commissions Act
• Challenge directives giving George Bush dictatorial powers
• Demand accountability for billions misspent and ‘lost’ in Iraq
• Demand accountability for billions paid to private contractors
• Expose the influence of PNAC members on US foreign policy
• Challenge the lies to minimize the dangers of global warming
• Restore the constitutional division of church and state
• Protect a woman’s right to privacy
• Restore habeas corpus and the Fourth Amendment

• Demand accountability for 2 trillion missing at the Pentagon as confirmed on 9/12. Or was it 9/10?

mcgowanmc -

I think you forgot a very important one:

....Put an end to the undue influence that Israel and it's backers/lobbyists have on US foreign policy in the Middle East.....

It is this which was partly responsible for our invasion of Iraq, and it is this which has been partly responsible for the incessant drum beat for having the US attack Iran.

What's good for Israel is NOT necessarily good the US, and as is very often the case, what's good for Israel is to the detriment of the US. It's long overdue for the US to disengage it's foreign policy from Israel's.

And until that changes, nothing changes, because it is all the same policy with a different figurehead.

Strike that "woman's right to privacy" crap right now - its the source of all of our troubles in that area. Every other civilized country defines abortion, calling a spade a spade, and firmly escorts other peoples' religious leanings out of the process. The United States "privacy umbrella" implies that abortion is somehow wrong and if the nutcases can just figure out how to penetrate the umbrella then they can save the baby!

one of the president’s top priorities this year would be making his tax cuts permanent. But Mr. Gillespie also went on to hint that the administration might do even more.

I don't get this reasoning, if the tax cuts are not working now, how does making them permanent suddenly make them efficacious? I hardly think the economy is tanking out of worry that these tax cuts will expire. Bush is destined to be forever compared to another republican president - Herbert Hoover. Maybe he’ll come up with a speech that promises a “tax cut in every pot”.

EDIT:I know, Hoover is falsely attributed to the "Chicken" quote, but what the hell.

Cutting taxes is ALWAYS a good thing. Individuals know how to best use their property, not government.

Please indicate sarcasm.

I don't think PedalPusher was being sarcastic, I think he/she actually believes that cutting taxes is always a good thing. I hear the very same sentiment from people like Larry Kudlow on CNBC every day. And of course most Libertarians believe in no taxes or almost no taxes anyway.

These people never take into account that fewer taxes mean either drastic cuts in spending or drastic deficits. Then it always follows, “we can cut the fat.” Of course we could, but that never happens, we simply go deeper into debt and pass it on to our children and grandchildren. Also one man’s fat is another man’s livelihood. If we cut spending we cut jobs.

And of course we can always rob the social security trust fund. Then we could cut Medicare because old people are just in the way and a burden on society. Hell, there are lots of places we could make up for money returned to taxpayers via tax cuts.

We are going bankrupt because of the Bush tax cuts combined with the Bush increased deficit spending. It would be the same thing if your salary was cut so you increased your spending to compensate. Bush economics!

Ron Patterson

Exactly! Drastically cut the size of government! That's why I'm voting for Ron Paul. We need MUCH, MUCH, MUCH less government. There is absolutely no need at all for the vast, vast majority of these government agencies overseeing and regulating every aspect of our lives.

The larger an entity is, the more there will be waste. *I* know how to best handle my life and don't need 50% of my income going to some bureaucrats to tell me otherwise. The role of government is NOT to take care of the people. The role of government is defense against foreign attacks. It was hard for each colony to defend itself, but united as one country it made us strong. Everything else not enumerated in the Constitution is left to the states.

There, problem solved. Massively cut the Federal, State, and Local governments and cut taxes as well. It's a win-win situation for everyone except the out-of-work bureaucrats who will actually have to get a real job and do real work for once in their lives.

Would you cut out the USDA? Do you know what it was like before the government started meat inspection (read "The Jungle")? The list of important government roles goes on and on.

In Ontario we had a free market fanatic by the name of Mike Harris. His government significantly reduced the number of meat inspectors and other "meddlers in legitimate private business" so as a result we had dead stock being sold as fresh meat. This twit downloaded welfare onto municipalities a reversion to the pre-depression era. The depression resulted in municipal bankruptcy due to welfare costs. Basically, Harris was undoing policies and regulations that were shaped by necessity and not "socialist" whim.

At the same time I can't stand the language and thinking of municipal and other politicians who feel it is their automatic right to increase taxes "because there is a shortfall". By this logic everyone should be robbing banks because they need the money.

The US does not collect enough income taxes to support the most basic of needs, and has used the Social Security taxes, supposedly earmarked for the individuals who paid them or had them paid for their benefit by their employers, and used that money to pay for military, courts, prisons, and the other general purposes of government. Further cutting taxes will only further erode those benefits, and most likely over time, the Republicans will have destroyed Social Security, as they have tried since its inception.

No more tax cuts can be justified until AFTER spending has been reduced.

Are you serious? So having government steal more of my hard-earned money so they can piss it away is a good thing? Please indicate YOUR sarcasm.

The problem with a lot of Peak Oil'ers is that they assume more government is the solution: more taxes, more regulation, rationing, etc., etc. when in fact we need LESS government. Just look at the ethanol mess. People were complaining that our government needs to "do something" so the "solution" was to... burn our food supplies! Now look at the mess ethanol is causing with regard to the grain prices.

I GUARANTEE you that any action our government will take with regards to Peak Oil will be the wrong one. And you advocate throwing more of our money via taxes to this?

Maybe "our government" is incompetent, but others are not. The much-maligned France built a slew of nuclear power plants when oil was cheap and it wasn't "economic" to do that. I have a feeling we're going to wish we'd done the same.

I don't think we need less government. Jared Diamond's Collapse has some interesting stuff on what it takes to avoid collapse. Strong central government is one of the factors. It's the only way a large society can avoid the Tragedy of the Commons. Grassroots doesn't work, except for very small societies. And we are way past that point now.

Interesting, I wasn't thinking of Europe. Maybe the US is just the shining beacon of government incompetence. Just look at the BILLIONS we waste on "health care" and "public school education" and yet people are incredibly obese and our children are idiots compared to the rest of the world.

The former Soviet Union had a strong central government. Look where they are now.

The "Tragedy of the Commons" happens when there is a Commons. By privatizing nearly everything (and I don't mean turning the power over from a bureaucrat to a CEO) each individual will want to maximize his resources and not waste anything.

i.e. in a public bathroom, do you turn off the water when you wash your hands and brush your teeth? I don't like touching the dirty handles so I just run the water at full volume the entire time. It's not my problem since I don't pay the water bill. However, in my own home, I don't waste water since I pay for every drop of it.

However, a strong central government implies there will be many Commons. And as soon as you have a bureaucrat deciding who gets what, you will have corruption. Always been that way, always will be that way. It's human nature to survive by any means necessary.

The "Tragedy of the Commons" happens when there is a Commons. By privatizing nearly everything (and I don't mean turning the power over from a bureaucrat to a CEO) each individual will want to maximize his resources and not waste anything.

The problem is that you can't privatize everything. Who owns the air? And what do you do if someone upwind of you is burning coal without any scrubbers, creating acid rain that is corroding your solar panels and killing your crops?

And what do you do if it's another country that's the offender? If, say, China is blackening your skies with their pollution, or Canada is dumping slag from their tar sands operations in your drinking water? Gathering your neighbors and expressing your strong disapproval isn't going to cut it.

We, the people, own the air. Pollution is a form of trespassing. Just as it is illegal for me to walk onto your property or dump garbage on your lawn it should equally be illegal for peoples & businesses to pollute the environment. (Note: there needs to be a definition of what exactly constitutes pollution. A smoke puffing on a cigarette, though very annoying, is quite different than a smokestack pumping tons of pollution into the air.)

And we deal with foreign countries first with diplomacy, then economic sanctions, and lastly by war. If they won't stop polluting OUR country, then by default they are declaring war on us. Therefore, we must defend ourselves.

"We, the people, own the air. Pollution is a form of trespassing. "

That's right. And who represents "we the people" against the powerful corporate interests that want to pollute the air?

It's the government - or at least, it should be. You see, while I agree that the government has its nose is some places it doesn't belong, it does have a purpose beyond defense. This is not the 18th century.

It's fun to be ideologically pure, but at some point you have to realize that the world is complicated...

We, the people, own the air.

That sounds like...communism!

If they won't stop polluting OUR country, then by default they are declaring war on us. Therefore, we must defend ourselves.

That sounds like something that requires taxes. ;-)

Seriously, this post of yours proves my point.

"Ownership" works, but not in the way you think. It works in societies that are small enough that everyone feels a sense of ownership in everything. Our air, our water, our beach, our forest. Then everyone has a stake it, and everyone has reason to protect it.

However, as soon as there's a sense of private ownership - this valley is ours, that one is yours - it falls apart. Because people who won't deforest their own land or pollute their own water will do it to their neighbors. Who will of course retaliate. And the society collapses into internecine fighting.

It works in societies that are small enough...

a four letter word describing a workable world from a source of wisdom more than 2500 yrs old:小国寡民

小: small, little

国: nation, state
寡: few, single
民: people

But why is it the Libertarian party has no interest in being 'court watchers' - making sure a check via law exists.

Leanan, you forgot the biggest commons of them all, the ocean. Every nation that is able to is overfishing the ocean. Japan is the worst offender of them all. Ocean life is being destroyed because of over fishing and over whaling.

PedalPusher seems to think that privatizing everything is a good thing. Absurd! Privatize the rain forest and there will soon be no rain forest left. Of course governments are not helping much either, they are among some of the worst offenders. But in America National Parks are the only way to protect the wilderness and wetlands. But if you are a Julian Simon and put bears and moose on the same level as mosquitoes, then you are right, privatize everything and by doing so destroy everything.

Ron Patterson

Interestingly enough, there are people who ENJOY the wilderness, and will purchase large amounts of it simply to preserve it as such. Hell, take a look at the Nature Conservancy. My goal in purchasing 80+ acres of forest land isn't to bulldoze it and build a parking lot, it's to keep it natural. But, admittedly, there are plenty who are not like me. Certain people moving into my neighborhood cut down all the trees in their yard after they move in.. It's like they're scared of trees or something. *rolls eyes*

Iceland is a model of fisheries management. Sustainable is the best word to describe the results.


That's easy for them because their population is so small.

Of course governments are not helping much either, they are among some of the worst offenders. But in America National Parks are the only way to protect the wilderness and wetlands.

The US gov't hasn't really done much to preserve land since the TR adminstration (100 years ago). However there have been some private organizations, local gov'ts that have been buying up land to prevent it from being developed.

The problem with gov't today is that it has little moral ground. If voters demanded to sell off the national parks tommorrow, there would be a line of politicians willing to pass a law to sell them off. Washington is all about short-termism. Doing whatever they can to ensure another term in office and make themselves a boat load of money. They could care less about the long term of our country. This should be evident to anyone that reads the paper.

FWIW: I partly agree with PedalPusher. Bigger gov't is useless. Power need to be taken away from Washington and handed back to states and ultimate the local gov'ts and down into the hands of communities. That said, unfortunately our education system and the amount of time people waste watching TV has turned the majority of the population into couch zombies: unwilling and not knowledgable enough to make long term startegic plans. At least with many more smaller gov'ts the chances of some states making sound long term decisions is better than zero sound decisions coming out of Washington. Overall I think states have done a better job at pollution control and managing the environment in the past 50 years than Washington has. Much of the environmental regulations originated in states that moved up the chain into washington (usually padded with fribulous earmarks). I think States have much more influence over their neighboring states than Washington does. Today you have the EPA preventing California from managing its own environmental laws. And not all states have the same environmental conditions, what makes sense in one state for environmental protection does make sense for all of them.

Leanan wrote:

If, say, China is blackening your skies with their pollution, or Canada is dumping slag from their tar sands operations in your drinking water? Gathering your neighbors and expressing your strong disapproval isn't going to cut it.

Don't take this the wrong way, but what exactly is Washington doing about this today? What has it done about these problems in the last 50 years? Answer: Nothing. Thats why we are in this position in the first place.

In your opinion to do believe that washington can ever be changed so that it acts in our nations best long-term interest? I suspect that you feel as I do, that nothing in washington is ever going to change.

Finally Strong centralized gov'ts lead to totaliarianism. Too much power in the hands a few people has only one outcome: loss of personal freedoms and loss of human rights. The more control and money that is sent to Washington the more corrupt, wasteful and incompentent it will become. The only way to make an serious changes is to take Washington's punch bowl away.

Ultimately this discussion is nearly pointless, since we are well beyond overshoot, we haven't begun any real mitigation programs, we are past peak production, and not only are we facing an energy crunch, we are also facing a water shortage, a financial crisis, unsustainable debt loads, and a demographics shift (boomers retiring), and other half dozen serious issues that are being ignored. As I've advocated for quite some time take personal resposibilty for your future. Don't wait for the crew of the Titanic (Washington) to put you in a lifeboat before the titanic sinks. You will go down with the ship if you don't take any action to save yourself.

"The US gov't hasn't really done much to preserve land since the TR adminstration (100 years ago). "

WTF? I'm sorry, but you obviously don't have a clue as to what you are talking about. The majority of protected land has become protected since TR.

In your opinion to do believe that washington can ever be changed so that it acts in our nations best long-term interest? I suspect that you feel as I do, that nothing in washington is ever going to change.

I think they will change. Whether in a helpful way or not, who knows. The chances aren't good. But otherwise, we're doomed.

Finally Strong centralized gov'ts lead to totaliarianism. Too much power in the hands a few people has only one outcome: loss of personal freedoms and loss of human rights.

I agree. But I fear the alternative is worse.

Many of the cheer leaders for privatization often do not acknowledge the whole story. What they are really pushing for (but will never say explicitly) is "privatization of profits, with risk and downside borne by the public sector." Health care, the mortgage crisis, the S&L crisis of the 80's, the privatization of the Iraq war are all examples of this.

Corporate welfare in the US is enormous, but usually not called by that name.

Every country with socialized medicine spends far less per capita than the US on healthcare and achieves better outcomes. But then I'm sure facts don't matter in an emotional debate with people who already "know" the answers.

I guess all the foreclosures around me are good evidence that people know best what to do with their money. Never mind that now they are escaping debt and making everyone else pay.

You may recall that there were compelling reasons why EPA, USDA, OSHA and other institutions got started. May want to study history a little. I'm not saying there isn't waste, but they have saved untold numbers of lives and improved the lives and conditions of Americans throughout the country. Burning rivers, polluted lakes and air, literally tens of thousands of crushing deaths between rail cars because automatic couplers were "too expensive" (led to first congressional law protecting workers). You live in an anarchist fantasy world.

Every country with socialized medicine spends far less per capita than the US on healthcare and achieves better outcomes. But then I'm sure facts don't matter in an emotional debate with people who already "know" the answers.

1. The quality of healthcare is many socialize system is much lower. Folks in Canada and the UK have a wait sometimes for years for surgury.

2. If you regulate the pay of medical professionals, over the long term, few people will choose to medical careers, and some will leave to find jobs outside the country. Medical professionals (especially nurses) were immigrating to the US because of the higher pay.

3. The US has a corporate socialized medical system, Since the early 1980s companies started including full medical coverage. This has driven the costs and the buracracy of the system. This is because there is a disconnect between the patient and the costs associated with medical services. Patients no longer question about expensive tests because the costs were being picked up by the insurance company ("Its not coming out of my pocket, so go ahead and overcharge me!"). In response the excessive costs, insurance premiums rose. Had the US not adopted any socialized system, our medical system will have been far more reliable and less costly. Replacing the corporate socialized system with a gov't socialized system will only exerbate the problems.

UK & Canada spend less than half the GDP on healthcare that the USA does (from memory). If they increased to, say 55% or even 60% of US spending levels, queues would shorten to trivial levels. They currently have rationing by queue.

Switzerland (I was told the inspiration for Hillary's current proposal) was no significant queues and a hospital chain manager I know has called their system the best in the world.

So let us socialize medicine on the Swiss model (a good reason to vote for Ms. Clinton) and not the Canadian and UK models. Being the last developed nation w/o socialized medicine we can benefit from the experience of all those that went before.

Best Hopes for Properly Implemented Socialized Medicine,


BTW, fear of loss of health insurance has held back many a potential entrepreneur. Think of all the innovation and economic activity and problems solved that will blossom when we have socialized medicine and people are more willing to take a risk !

So let us socialize medicine on the Swiss model (a good reason to vote for Ms. Clinton) and not the Canadian and UK models.

Unfortunately what works in Switzerland isn't going to work in the US. Switzerland is very small country compared to the US. Any Socialized Medical systems is doomed to fail and fail into abuse and corruption. Any futher gov't involvement is likely to make the situation worse. I think if the US did go to socialized healthcare, my costs would double. I would need to pay much higher taxes and I would still need to pay for private medical coverage, and it would add an additional layer of burecracy causing medical service costs to go up even further.

For instance, lets look at socialized retirement savings. I probably paid in the neighborhood of $13K to $14K for 2007 in SS & Medicare taxes, and I will never see a penny of that money. I still have to fund my retirement plan. Also consider how the SS surplus is spent: it goes to fund the General gov't fund. Its spend immediately when my deposit is sent to the gov't on everything from Space Exporation, to the study of cow flatulence.

If you really want a Swiss quality healthcare, your best option is to relocate to Switzerland.

Also consider that gov't entitlements are large ponzi scheme. Money from current workers is paid to retirees. That works fine as long as there is growth. What happens when grow disappears? We have two long term issues that are going to impact growth. Shifting demographics as western populations increase in age, and declining energy resources.
Both will cause all socialized systems to fail when growth disappears. Soon we will be face a period of economic contraction while the number of recipients of entitlements increases. Outlays will increase for the forseeable future while revenues will fail.

What is likely to happen in the near term is that gov't will raise taxes to keep revenue above outlays, but as taxes go up, more and more business will go under as discreationary spend declines and workers must pay more taxes and therefore spend less. As more an more business fail, the gov't will have to raise taxes even higher to make up for the losses. this increases until the system collapses.

What most people fail to understand is tha European system is sustained on exports (mostly to the US). When the exports decline, cracks in their socialize systems will begin to appear. Eventually the system will collapse. This is when I expect the rise of fascism in Europe again. Today Most of Europe exists under strong Centralized gov'ts, and the majority of the population is dependant on the gov't to provide all of the basic services. Its a short leap from a strong centralized gov't into a fascist regime.

1. People in Canada and the UK have higher life expectancies and healthcare is a national right for all citizens.

I will trade our current mess for queues. They obviously aren't harming the health of those people, while here in the US we let people die for lack of insurance.

Agree with that. In fact, I wrote as much after encountering the UK health care system:


I will trade our current mess for queues. They obviously aren't harming the health of those people, while here in the US we let people die for lack of insurance.

Lots of Candians come down to the US for medical services, and pay out of their pocket. The waiting list can take years, and it no fun waiting and suffering until its your turn. A Canadian friend of my father who need heart surgury and the expected waiting list was about two years. He opted to get service nd pay out of pocket in the US rather than die.

Of course if you want Canadian socialized medicine, the choice for you is real simple: Move to Canada. Its not like you don't have a choice.

The US government is not incompetent. It is supremely good at what it does: looting for the piranha class that owns it.

Agencies like USDA are not, unfortunately, reasons to keep US government in place. They have been just as captured as the rest of the government. Toxic waste is good for you. Think EPA. Think FEMA. We've reached a point where much of what government does is harmful; at the very least it perpetuates what it wrong. Think your local DOT.

Authoritarians [Hillary, Obama, Giuliani, Romney like Yeltsin] will try to keep it together with ever more force when what we really have to go through is devolution and rebuilding [Kucinich, Edwards could play Gorby's role]. The faith based candidates will build bigger stone heads [Huckabee].

All the arguments about competence are silly. Better managers are not what we need. We need paradigm shifters.

cfm in Gray, ME

Dryki gets it - incremental improvements to stupid ideas? The operational phrase is "stupid ideas".

Our government has escaped us, and We, The People must collar it again.

Eureka!! I've found another individual who understands the stakes in this election. By my estimate, the USG could be half its size bureaucratically and could trim expenditures by $1 Trillion/Y by rolling back the Empire to its shores and returning to a sembalance of the 1930s size of the War and Navy Departments. Millions of barrels of oil and gas and their CO2 content would be saved and their emissions postponed every year. Half the monies saved would pay down the debt, and half would finance peak oil and climate change mitigation programs. Radical, yet pragmatic. And it's what we ought to do.

But the problem, as has been so well illustrated of late, is that any concentration of power and/or wealth (energy?) is automatically a target for those who would take it and corrupt it for their own uses. Humans have not yet invented a system that can prevent that for very long. The only thing I can come up with is to keep any organizations small enough that they cannot get too out of control.

The closest would be open records.

The whole 'sunlight being a good disinfectant' thing.

But you illustrate my point - unless you can think of a way to ensure those records always remain open, then you've only identified one of the things that someone who would usurp power must gain control over.

Remember that the socially responsible governments in Europe worked when the population was predominantly European. As non european immigration increases their social systems are ever less sustainable and will collapse when immigration reaches the breaking point.

Try social responsibility in places that have divided demographics like Iraq.

Even if what you say is true...I don't see eliminating taxes as any kind of solution.

Yeah, let's just cut the Iraqis' taxes. That'll solve the problem.

I didn't say eliminate taxes.

IMO people will accept high taxes when they can think in terms of a common goal.
The best example in recent history might be the cost to West Germans of integrating former East Germany. They bitched and moaned, but went along because they realized that they are all Germans.

When you have various ethnic groups everyone wants services at the expense of the others. It's human nature, it always has been like that, and it never worked.

Iraq most likely will be all better when it splits into three independent zones. Maybe we should study how it works for them.

The best example in recent history might be the cost to West Germans of integrating former East Germany. They bitched and moaned, but went along because they realized that they are all Germans.

I think they went along because they could afford it.

Agree that under pressure, societies tend to fracture along the fault lines, but those fault lines are pretty arbitrary. The factions killing each other in Iraq are the same race and religion. The difference between them is a point most Americans didn't even know existed until it blew up in their faces.

It's all about race in the US, but I could see that changing. Historically, religion has been a bigger issue than race. And it seems to be going that way again, with the red state - blue state thing. I could also foresee a future where class is the great divider.

Afford is relative, it is more a question of whether one perceives a benefit or fair value in return and as mentioned a view of one people.

Iraqui's may be one race but there are major religious differences.

My view has changed significantly over the years. As retired military my view used to be that it was strictly a class thing, in part because I'm not religious so that part to me is totally irrelevant. I was exposed to many different cultures, some I embraced and some I went along with, but never felt major dislike for any of them.

As time went by, with the first hand experience of the LA riots, the images from NOLA and some of the things I see at times during volunteer work, I realized that the only reason that there is no race trouble in the military is that there is no entitlement. It is a pure meritocracy where individuals live or die based on personal responsibility, a draconian code of justice and a level playing field where education is encouraged.

Show me that in civilian life in the US and then I would change my mind.

Iraqui's may be one race but there are major religious differences.

Not really. They're all Muslims. It's not like it's Buddhism vs. Santeria or atheists vs. evangelicals. If it was just differences that caused strife, you would not expect to see the world's bitterest conflicts between religions that are relatively similar. (Muslims vs. Jews, Catholics vs. Protestants, Christians vs. Jews, etc.)

It's just an excuse, IMO. When times are tough, people turn on each other. And even the most homogeneous group will find differences to divide "us" from "them."

I wonder if it's an evolved tendency for any large homogeneous population to develop latent schisms based on something random? It seems fairly ubiquitous. When times are good, it wouldn't be a problem, but when times were bad, it would facilitate exterminations or oppression with a minimum of social disruption.

Periodic murderous rampage may not be dysfunctional for humans any more than love and community are, just a phase shift of behavior for altered context. Having nonsensical schisms develop is probably better for the species than just running amok, since the basic functional units would not be disrupted. Catholic/Protestant, Sunni/Shia etc produce very similar behavior to adjacent groups of chimpanzees.

I'm just noodling on it.

Could be. No doubt a certain amount of tribalism is innate, but how we define our tribes is pretty random.

I was watching a documentary on the Salem witch trials last night. It noted that, according to the law of the times, the judge got to confiscate the property of anyone found guilty. It was then his responsibility to divide it up among the townspeople. (Talk about a conflict of interest.) Wealthy farmers were thus tempting targets.

And the roots of the witchhunt were likely economic. Family sizes were increasing, and they were reaching the point where they couldn't subdivide their farms any more to support the next generation. Disputes between families and within families were rising. And it wasn't so easy to expand. Turning wilderness into farmland is hard work, and the land was already occupied, even though it wasn't farmed.

It looks like Sunni and Shiite don't quite share your opinion.

Sure things tend to break down along stress lines under increasing pressure. My point is that there is no 0% or 100% answer to any of these questions, it's always in between. If you have the time and opportunity to evaluate every person individually then you can come up with a pretty firm %, when you have to look at the macro you play the odds as you view them.

We didn't try social responsibility in Iraq. Didn't want to. Had we simply toppled the government and left, the chances the Iraqis would have been able to put their own country back together were certainly better than our continued involvement makes them. South Africa was supposed to be a bloodbath too. [And I'm not saying we would have left - after all our goal was to create chaos because it was so much more profitable.]

Divided demographics can be overcome by shared destiny. What we are trying to do now in Iraq is foster the sectarian violence by arming the different parties. It wouldn't do the Iraqis cooperate to kick US out.

It does have bearing on how communities are going to have to depend on themselves against powers that want to shatter them - the corporations, the authoritarians, the surveillance state.

cfm in Gray, ME

Leanan, you are so right.

Ancient Egypt managed to have a sustainable civilization in its narrow little river valley for over 3,000 years because it had an all-powerful centralized administration VERY oriented to long-term planning and accurate record-keeping.

Government is not our problem; corruption, greed, and incompetence are.

Errol in Miami

Ancient Egypt managed to have a sustainable civilization in its narrow little river valley for over 3,000 years because it had an all-powerful centralized administration VERY oriented to long-term planning and accurate record-keeping.

Government is not our problem; corruption, greed, and incompetence are.

You really think Ancient Egypt was devoid of corruption, greed and incompetence? Time does wonders to the preception of ancient civilizations.

Go research the articles on the condition bones of egypt worker class and then tell me that you still want to live like an average citizen in ancient Egypt.

Go read about the corruption in Egyption religion, especially about how it delt with burial. ie swindling workers out of a lifetimes salary for burial arrangements.

who Gets to be the Pharaoh? You?

Switzerland is spending 31 billion Swiss francs over 20 years to improve their rail system. Several goals for that massive sum#, but #1 is shifting frieght transport from heavy truck to (hydro) electrified rail.

# Adjusted for population & currency, 31 billion Chf is equal to the USA spending slightly over $1 trillion on improving our rail systems.

Best Hopes for Long Lived Energy Efficient Infrastructure,


The problem is that politics of vested interest bend perfectly good initiatives (renewable fuel) into noisy, nonthreatening failures (ethanol). Corruption is the problem there, not the idea that we should do something to provide remediation for the problems we face.

Everyone is trying to make a buck. Including you.

Some just admit it.

Some people are more into making sure they and others around them have full bellies and light on at night - right Cow Tipper?

Judging by the reaction to your post, it seems that you are correct that most everyone here is basically a big-government socialist. They also seem to love paying taxes, most of which funds the military, not the USDA (wtf?????). Hey, if we didn't pay taxes, how could "we" get that oil under Iraq? (As if "we" would ever get it -- it is merely being stolen by a small group of people so that it can be sold to us at market prices.)


Yes, we love paying taxes and it has nothing to do with realizing that a civil society requires inputs to function. Don't blabber to us about working together towards common goals... just keep those tax bills coming!

how 'bout just cutting taxes to zero ? of course we would have to forget 'bout............provid(ing) the common defense, promot(ing) the general welfare and securing the blessings of liberty ......and forget the pursuit of happiness as well.

These things really should not be surprising anymore (and I know you're not surprised). When you read such articles, pretend you are just reading another chapter in Tainter or Diamond. The details and timing of what is happening are of course unpredictable, but the general trend is not. The Haves will work harder and harder to accumulate as much as they can, and the masses will be kept (probably willingly) clueless as long as possible.

The details are not irrelevant of course, as this process may take a long time to unfold, and it is good to be aware of what direction the immediate danger is coming from. The appearance of normalcy will be maintained as long as possible, but the society we have created is fundamentally unsustainable, and so it is unreasonable to have an expectation that it can be "fixed". In other words, such machinations are all just symptoms of a larger trend.

About Norwegian platforms shut down due to a storm, this is how a rig in beaufort 11 force winds look:


I'm seasick just watching the video!

I was looking for some video of the waves for this storm. Very cool. One thing I noticed was that the rig didn't move at all when that 30+ foot wave hit it. Immpressive engineering.

As to getting seasick, I'm one of those sickos that actually likes riding around in storms. The rougher the better. The calm stuff makes me queasy.

Makes me seasick just watching the thing. Are these platforms evacuated during these kinds of storms?

And please tell me that this was an automated camera and that there wasn't some poor sod stuck out there with a camera.

The story posted by Leanan implies that, yes, unessential crew is evacuated. A friend of mine was roughneck for some years and he has been on board a rig during a force 12 storm; the rig actually tilted over 30 degrees. And yes, he crapped his pants.

I guess it was shot from a helicopter.

"I guess it was shot from a helicopter" ... smile, try again !

Force 11 is violent storm at 56-63 kt or 103-119 km/h.
My guess is a person standing on an adjacent platform ..

Try a tanker under light ballast in a gale. LOL.

Evacuation of North Sea platforms (fixed structures as in the video) and rigs (Semisubmersibles and jack-ups) was until recently almost unheard of. Now there seems to be a policy of down manning some of the fixed installations, due to a combination of aging infrastructure and a certain amount of subsidance causing reduced freeboard. Normally you accept the weather that comes. Don't forget that the manned installations also have standby boats in attendance, they do not seek shelter whatever the weather. The crews of these boats are who you should feel sorry for.
The type of weather pictured is standard fare for winter - helicopter operations continue up to 60kts, drilling continues until the rig motion becomes too extreme.

Four Workers Hurt on Talisman Vessel in North Sea, BBC Reports

Four workers on a vessel operated by Canadian oil company Talisman Energy Inc. were injured during bad weather in the U.K.'s North Sea, the British Broadcasting Corporation reported.

...The workers were crushed by barrels of chemicals that came loose, the BBC reported. The vessel's 70 workers are accounted for, Talisman told the BBC.

Another Current Events Story:

Japan Jumps The Shark--Nikkei Collapses


TOD put out a press release today:

Oil Price Touches $100 a Barrel; Signal of Pending Oil Shortages Ignored, According to TheOilDrum.com

The price for West Texas Intermediate (WTI) oil touched $100 on January 2, 2008, a new milestone. According to TheOilDrum.com, WTI oil price has been giving a very clear signal of pending shortage for over five years now, and in breaching the symbolic $100 a barrel mark, continues to do so. Those driving the world economy have steadfastly ignored this red warning light. In doing so, they are steering the world toward an energy disaster characterized by shortages, high energy prices, inflation, growing inequity, civil unrest and famine.

The $100 a barrel price is a sign that times will never be the same again. According to TheOilDrum.com, the world is entering a new era, where the supply of energy will come to dominate the political landscape in a way that is currently not recognized by any of the leading candidates.

According to TheOilDrum.com, the world is now reaching the point where all of the oil fields of the world are in aggregate coming to peak production. As peak world production draws near, the rate of increase in oil production can be expected to stall because of constrained resources. This can happen even with rising demand. Once production falls short of what is needed, oil prices can be expected to increase, so that demand is brought in line with available supply.

We somehow need search engines to rate our press release fairly highly. This post will by itself do nothing, since "All links are automatically given the nofollow attribute, which means that they will be ignored by search engines." Links from TOD poster's web sites will help.

Gotcha, linked to it at http://mainelyenergy.com

Wow, I think I'm in love, I just watched that Cassandra youtube video linked off your site.

If you have read here frequently you might suspect world oil production (not-including natural gas liquids) has peaked, unless oil production can grow past thses numbers with a boost from OPEC spare capcity, or a boost from non-OPEC production, world oil production may have peaked. The oil + total liquids is the number in question. Increased natural gas and LNG production that generates natural gas liquids/natural gasoline as a byproduct is causing an increase in the oil + liquids numbers shown rising through 2006 and maybe 2007. OPEC oil reserves were grossly overstated in numerous cases. UAE, Kuwait, and Saudi Arabian numbers are suspected. Nigeria was closer to real reserves stated.

If the new heavy oil technology production will grow at a faster rate then the whole scenario could change. Currently there are barriers in water usage, natural gas for steam production, upgrading facilities etc., in-situ upgrading in THAI is not fully realized as the heat also melted bitumen that mixed with the upgraded bitumen, not sure what further testing will bring forth. It seems that there is enough heavy oil to provide some sort of cushion to the peak of light oil. Extra heavy oil production will only grow for some time to come.

I'd be interested on any links you have on what is happening with THAI production.

The November PDF --- http://www.petrobank.com/inv-corporatepresentation.html

has the information. You may need to view it at 100% of its actual size as there are two presentations per page.

In the lab they got a 10 API increase in upgrading. The best they can show from field production currently is from 7 API to 13 API although further testing might or might not bring further increases. CAPRI was supposed to add 6 more API that has not been fully tested either.


Here is an interesting Global Warming video that has been viewed over 700,000 times.


I think the same argument could be made for global peak oil production. I wish WE had a cool video like this to post on youtube!

Nice collection of retarded drivel in the comments for this video. Hopefully the majority of humans are not so virulently moronic. It never crosses the minds of these specimens that even if the mickey mouse hypothesis that mankind did nothing to alter the energetics of the atmosphere-ocean system is true, LOL, then it still makes sense to try to do something about it.

Not so long ago I outright deleted a YouTube account that had 800k views across 200+ videos. I just got really, really tired of ... well ... I dunno who they are, but YouTube got a pickup straight to the bottom of the barrel for those who make comments. Its the oddest bit of online culture I've seen, and I've got Usenet posts that are old enough to drive so I have see my share of odd ...

not so odd, if you think about it:

Usenet: "Uh, like, dude, you mean I gotta, you know, read stuff? No way!"

YouTube: "Oh, dude, this is, like so cool. It's, you know, TEE-VEE. On my PEE CEE. Gotta make a comment"

Just be grateful that all the comments aren't written in txt spk.


That's pretty much standard fare for the deniers though.

I got into it recently with some deniers on a bicycling forum. They would keep pulling out random links from one place or another - for the most part they aren't scientists, so they haven't a clue what the papers actually mean, but they look for something good to cut-and-paste.

Last night one of them posted a link to a Russian site with a story about how the earth is getting colder, and then made some snarky comment about how the rest of us would probably find a reason to disregard it.

Then this morning someone actually looked at the link and found it to be an online tabloid newspaper of some sort. Stories about Polish exorcisms, Hitler's love child, UFOs and something about the Russian Orthodox Church declaring the Coca-cola advertisements are satanic. I have been chuckling about this all day long.

But the deniers are generally pretty impervious to logic of any kind. They have already concluded that humans aren't responsible for climate change. The right-wing media continually reinforces this point. The latest seems to be that they declare that climate change is a religion (and that Gore is a reverend in this church). They also seem to be having a lot of trouble with this idea that consensus amongst scientists has already been reached.

The crap from Russian sources on the global warming issue is quite insane and gets spread by official news agencies such as RIA. They regularly trot out lame, obscure experts that invoke the sun and other long since dead scientific themes. This is a legacy of the Soviet era where Russian science was isolated and the cult of technological progress espoused by communist orthodoxy (ironically just as it is pushed by capitalism) selected research activity. As in all science you have to wait for the old guard to die to move on. But global warming is not a theory pushed by some scientific egos, it has taken a long time to become accepted.

As for the US scene, the appeal of Bush was apparently his folksiness instead of the elitism of egghead Al Gore. People with a brain are always in the minority and outsiders. So scientists are not too popular with rednecks. All hell breaks loose if the link can be made in the minds of these cretins that global warming remediation is a threat to their jobs. This is the full time job of Faux News and the Republican Party.

But the deniers are generally pretty impervious to logic of any kind.

That'd be true "by definition", no?

But the deniers are generally pretty impervious to logic of any kind. They have already concluded that humans aren't responsible for climate change... The latest seems to be that they declare that climate change is a religion (and that Gore is a reverend in this church). They also seem to be having a lot of trouble with this idea that consensus amongst scientists has already been reached.

This reminds me of a great quote:

"A man with a conviction is a hard man to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point."

~ Leon Festinger (cognitive dissonance theory)


I have a question to this article in the Financial Times:


They say "peak no evil" and their reasoning is explained in the graphs:

My question: Why is there no plateau in the production curve, like in your charts? There should be, no? I mean, is there oil other than total liquids, which still grows?


For one thing, they ended the consumption curve in 2005 when the plateau actually began.

This has been done many times before - selective use of data to make a point. The current administration excels at this.

SNOMM, production plateaued in 2005 and has been on a plateau ever since. The EIA shows that OECD consumption plateaued in 2004 but they also show that world consumption has increased about in par with your graph. http://www.eia.doe.gov/emeu/ipsr/t17.xls

World Consumption according to URL above in thousands of barrels per day. Keep in mind, this is ALL LIQUIDS. All liquids did increase in 2006 while C+C did not. So the chart is really in line with what the EIA reports as the chart stops somewhere around 2005.

2003 79,613
2004 82,333
2005 83,644
2006 84,726
2007 NA

I don't know how they pull that one off. But I can speculate that since many countries do not report their consumption they just guessed. The OECD however does record consumption and their figures are far more in line with a plateau.

2003 48,605
2004 49,360
2005 49,664
2006 49,310
2007 48,799 (Average through August.)

What I don't understand is how high prices killed rising demand in rich countries but had no effect in poor countries. Go figure? But if supplies really plateaued in 2005, increased consumption is impossible. Something just don't add up.

Ron Patterson

Probably just indicates that oil use in poorer countries is less "optional" than it is wealthier ones. Makes sense - if it costs you a lot, then you are probably not wasting it on things that are not essential.

There's also the fact that petroleum products are subsidized in many developing countries.

Thank you! I thought already, that strategic reserves where used or something like this.

So maybe in two years or so they will change their minds, when the plateau becomes more obvious. They should have done a little more research with more recent data, their conclusion would have been interesting.


*** Wups, sorry, ignore this ***
*** This is a duplicate from the 12/23/07 Drumbeat ***

An interesting Scientific American article on how solar could do it all. Now if only they could shave 2 or 3 decades off the time frame.

A Solar Grand Plan -- By 2050 solar power could end U.S. dependence on foreign oil and slash greenhouse gas emissions

On the following pages we present a grand plan that could provide 69 percent of the U.S.’s electricity and 35 percent of its total energy (which includes transportation) with solar power by 2050. We project that this energy could be sold to consumers at rates equivalent to today’s rates for conventional power sources, about five cents per kilowatt-hour (kWh). If wind, biomass and geothermal sources were also developed, renewable energy could provide 100 percent of the nation’s electricity and 90 percent of its energy by 2100.

We need to take any concept that can't be built using technology available today out behind the woodshed and apply an axe to the problem. Seriously. I'm not saying stop R&D, but the vested interests in the world are delighted by competing things that might work at some distant point in the future.

Solar and wind can replace our use of fossil fuels for the purpose of using them as FUELS as opposed to feed-stock for various products such as plastic, fertilizer, blah, blah. With exception to aviation and long-range nautical transportation, electric power CAN be used for nearly any form of transportation and fuel requirement. The question is a matter of how fast can we scale up, and how much of a pain in the ass will it be?

I can see it now, everybody saying, "But we can't do XYZ with electric, because of range, or blah." Yes, it can be done, it's just a matter of how much of a pain in the ass it will be. If it means that 18 wheelers have a 50 mile range between recharges, so be it. If it's longer than that, maybe it should go by rail.

The changes necessary to make the conversion to an all-electric society with our electricity generated from wind and solar may not be the most pleasant, but we'll make it. I suspect we will have some dramatic decline in GPD and hopefully population along the way, but we will adapt.

Walt: Yes, and if my mother was a streetcar, I'd have wheels. Question: when is the last time the USA did any gigantic government sponsored project such as this one which DID NOT turn into a giant trough for the connected pigs to feed at? Maybe the race to the moon 40 YEARS AGO? Why do you think there even exists a "military industrial complex"-because they are inherently evil? No-it is because, to paraphrase Willy Sutton-"that's where the money is". Start on your gigantic solar boondoggle and count the seconds until the first hammer is sold to the taxpayers for a grand. I will make a prediction right now: in terms of scamming the American sheeple, the whole response to oil depletion (the "Alternative energy three card monte") is going to make the subprime debacle look like peanuts.

when is the last time the USA did any gigantic government sponsored project such as this one which DID NOT turn into a giant trough for the connected pigs to feed at?

The massive wind energy build out currently in progress.


Ways to cope despite real estate's dire outlook

The saddest thing is the comments. Some are still hoping to sell their homes for big profits and buy bigger ones.

Remember, that's what the religion calls for - if things aren't going well, CARVE A BIGGER STONE HEAD!

HA! I just about spit out my diet coke reading your comment. I will have to remember the Easter Island analogy in the future.

LOL glad you liked it!

This comes from the discussion of the giant heads a day or two ago; I remembered reading that the largest head of all was unfinished, still sitting on the stone "keel" which is the last part to be cut away.

I would switch to regular coke :)

Drink More Diet Soda, Gain More Weight?

Fowler's team looked at seven to eight years of data on 1,550 Mexican-American and non-Hispanic white Americans aged 25 to 64. Of the 622 study participants who were of normal weight at the beginning of the study, about a third became overweight or obese.

For regular soft-drink drinkers, the risk of becoming overweight or obese was:

* 26% for up to 1/2 can each day
* 30.4% for 1/2 to one can each day
* 32.8% for 1 to 2 cans each day
* 47.2% for more than 2 cans each day.

For diet soft-drink drinkers, the risk of becoming overweight or obese was:

* 36.5% for up to 1/2 can each day
* 37.5% for 1/2 to one can each day
* 54.5% for 1 to 2 cans each day
* 57.1% for more than 2 cans each day.

For each can of diet soft drink consumed each day, a person's risk of obesity went up 41%.

Oh crap, it doesn't seem like I can ever get it right. I'm actually quite athletic with 8 to 10% body fat so a little obesity wouldn't hurt me! When I'm out for long bike rides I will usually stop at a gas station and buy a real coke. That corn syrup makes for good fuel, just not in automobiles.

Shaun - good on yer! But you're part of the tiny minority in the US who exercise quite a lot, most don't exercise at all. And you're drinking a Coke once in a while as a tonic. I drink Coke when I have a cold, it makes me feel a lot better, and the rest of the time I don't touch the stuff.

What we have in the US is people drinking soda in place of water. So they're drinking several a day. The diet sodas are really only "approved for use" in that the safety testing was done, based on one a day. But people are drinking a sixer of 'em a day! The artificial sweetener actually has a fairly large wood-alcohol component.

It adds up about the same calorie-wise, a sixer of soda a day or a sixer of beer, both add up to a very good chance of a ticket to the fat farm.

Sadly, the poorer people seem to be more addicted to soda - I can even personally vouch for this, as my family went down in flames, soda went from a once-in-a-great-while thing to an everyday essential, if possible. If not that, then we drank this horrible fruit punch made from syrup. Maybe the sugar high feels better when little else is going well in one's life.

I remember seeing I beleive in a recent Time article on junk food and fat that stress in some case sets off a trigger in your brain that makes you want sweets and fatty foods so that might be part of it, I know that when I work 45-50 hrs per week I have a stronger craving for greasy sweet foods. I'll try looking for it tonight but I'm busy right now.....ugh......hmm a milkshake would be good right about now =).


LOL! Great catch, Leanan, and that picture does tell a story.
The comments were an insight into the real upwardly-aspirational middle class America we don't hear from much on TOD.
Reality hasn't quite sunk in yet.
Todays unemployment numbers (which seem to have spooked Wall St) should be the nail in the coffin for real estate in 2008.
Without a pool of potential willing buyers working two jobs, able to access b.s. loan products, residential real estate in the US does start to look like an underfunded Ponzi scheme.
I'm looking forward to the auctions in another year, America is going to have a Giganteous Multi-Family Garage Sale!!!Garage included!

From Drudge:
Forget oil, the new global crisis is food
BMO strategist Donald Coxe warns credit crunch and soaring oil prices will pale in comparison to looming catastrophe
Alia McMullen, Financial Post  Published: Friday, January 04, 2008

A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.

"It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."

As I said, ELP. . .

"The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically,"

This "new middle class" is also trying to consume just like the American middle class - automobile, electronics, nice clothes, nice food, etc.

How soon before this "new middle class" realizes that it is physically impossible to consume like Americans? And what happens politically once they recognize that?

What happens as FWO's (Formerly Well Off's) in the US lose their jobs (or a good chunk of their income), their SUV's and their McMansions.

If that happens, we're going to have a classic religious crisis. I believe the Black Death in Europe caused religious crisis in many people, because for some reason God was punishing them and as far as they could tell they hadn't done anything wrong.

The religion of the USA being Bigger, Better, Ad Infinitum, when living standards go down there will really be a classic case of religious crisis among the FWOs. There was some of this during the last Great Depression, but back then the Have and Have-Not divide was nowhere near so wide or deep. The Haves back then still remembered keeping chickens and pumping water, shitting in an outhouse and so on. Clothes were still washed with a big bar of yellow soap and a washboard, it's just that a maid did 'em instead. There was not the wide cultural difference there is now. Now, while at the bottom in the US people are keeping chickens and using a washboard, hardly anyone remembers living like that. But it's imminent that millions will start living that way - are you going to spend $5 at the laundromat when yellow soap and a washboard are nearly free? The sounds of clucking and scrubbing will be heard all over the tent cities..... and this will be a HUGE change for the formerly middle-class who fall, greater than that experienced by well-to-do persons in the 1930s who lost it all.

Keep in mind, George Orwell, Jack London, and quite a few others either "slummed it" or actually were destitute for periods of time, they did it and were proud of it. It was not that great a leap, really. But today, try telling friends that you lived in your car for a year and watch 'em recoil.

If that happens, we're going to have a classic religious crisis.


I very much enjoy the HBO series Carnivale, which depicts the Great Depression and a battle between good and evil. It is very ... topical.

Huckabee isn't getting elected unless simultaneous meteor strikes get Edwards, Obama, Clinton, Dodd, Richardson, Kucinich, and Ron Paul gets caught in bed with either a live boy or a dead girl. Huckabee is George W. Bush 2.0 - another "god's president" and I think people have caught on that religious fanaticism doesn't make for good foreign policy. The only way the acrockalypse in Iraq continues is with a draft and that would stir people who are currently complacent.

A return to old-tyme religion is in the works for many people who have their faith tested, to be sure.

But it is only one of several things that will happen in concert.

* Elimination of discretionary income
--> job losses for suppliers of convenience, travel, many levels of luxury
--> necessary income decline for same

* Decline of necessary income for FWOs
--> necessary income decline for some suppliers of current necessities
--> eg., less bread sold, more flour sold

* Increase in cohabitation arrangements
--> higher population density increases disease prevalence

* Increase in shruburbs
--> lower access to hygiene and nutrition, increasing disease

* Increase in threats to ways-of-life/survival
--> increase in crime as people struggle to make ends meet any way possible

* Increase in mental health needs, not addressed by healthcare or community
--> increase in bizarre human behavior
--> increase in crime
--> increase in suicides

* Increase in faith-based solutions (hoping, wishing, prayer, modern economics)
--> increase in wasted energy and resources

I suspect there is/will be a surge in lottery sales as well.

The article warns that U.S. corn exports are in danger of seizing up. I hope so. Exporting corn for about $5.00 which is worth about $9.00 if you burn it is the height of stupidity.

Locally, the last train full of corn left the elevator over 3 years ago. There use to be 100 car unit trains running along Highway 18 all the time a a couple of years ago. Not anymore. It all goes to the local ethanol plants. The transport savings are huge. Soybeans are not exported either. They go to the local crushing plant and the oil from there goes to the new biodiesel plant about a half mile away. Farm prices have never been better. The North Iowa economy is booming.

And more good news: It looks like one of the 7 hog factories around my place has shut down. It was only 50 feet from a black top road I frequently use. The stench was awful. Only six more to go. Corn is too valuable to export and feed to hogs when crude oil is threatening to break $100.00.

FELM--Food Export Land Model

IMO, the two best areas to invest in are: Food & Energy. . . Food & Energy

That's a crazy thing too, considering how much more expensive vegetable oil is in comparison to diesel. Silly required consumption requirements on "renewable fuel." There's little renewable about it. Biodisel is made from natural gas via fertilizer and diesel from the farm equipment. It just uses a different feed stock than regular diesel. hehe.

Corn ethanol has little more energy value than the diesel and natural gas used to make it (questionable with irrigated corn if 1 in equal 1 out). What you see is a MASSIVE distortion of the markets by politics and welfare for farmers.

A FAR better energy policy would to be use food for people and not SUVs. Use Brazilian sugar cane for a bit of ethanol to replace MTBE and use the diesel and natural gas directly for transportation, without the waste associated with farming.

Oh, and use the gov't subsidy now going to farmers for Urban Rail and electrified railroads.

Export the corn, use it to buy imported oil.

Best Hopes for Less Political Distortion,


Economics (and other forms of numerology) have rested upon a base of ever increasing, low cost energy. This is now gone.

I look to see a lot more attention going to consumable calories and burnable BTUs, with the currency valuations falling in line with these priorities.

The ethanol muddle is just that, a muddle. Do I take it to task and make many enemies here, or so I look for incremental improvements to the (probably doomed) process which facilitate sensible results? I'd rather just see wind getting built out here but if wind turbines can go up in conjunction with ethanol and the other choice is "not at all" I guess I am in favor of a hybrid approach.

Do I take it to task

I figured you sooner rather than later you would come to ask yourself this question. Less obvious to me was whether you'd post it.

My 2 cents - No.

Meanwhile do your own thing, 'amongst them'.

People have forgotten precisely which scared cow I intended to tip when I selected my name :-) This is a good thing, given that I am the new friend to the ethanol industry.

All kidding aside, political will is as important as objective results - if we "save" ethanol plants by breaking the natgas => ammonia cycle we're doing a good thing, no matter ethanol's fate over the long haul.

Export the corn, use it to buy imported oil.

that might be a trump card the US can still play when the hording starts in oil export countries.

There is a hog farm(?) near a local interstate that can be smelled from 15 miles away.

The NIMBYs are free to eat all of the BANANAs they can catch and peel :-) We're perfectly happy with the occasional hog farm here or there and odor control has advanced greatly in recent years. We have slurry injectors rather than open air spraying and the lagoons are covered on all but one of my brother's farms.

Hello TODers,

I am certainly no game management expert, but this is potentially a more humane and efficient cull than letting starving mobs just stoning the panicked animals to death [recall earlier post]:

Zimbabwe unveils plans to slaughter excess elephants for dried meat

Harare/Johannesburg - Zimbabwe's parks and wildlife authority has announced plans to dry and sell elephant meat as a way of making use of the country's burgeoning elephant population, the official Herald newspaper reported Friday. The state-run body will apply to get a quota of elephants it can slaughter to make the delicacy, which is known in southern Africa as biltong.
IMO, the elephant meat is being made into jerky because they realize that refrigeration is mostly impossible with widespread blackouts. Convenient to gnaw on for Thermo/Gene survival while marching back to Olduvai Gorge, too.

Any ideas on the timeframe when Murkins will eagerly eat mouse-on-a- stick with Goofy Gravy at Disneyland? Oh Mickey, Oh Mickey--you taste divine...

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

Something needs to be done, maybe get Jamie Oliver in there, stat, to show the Zinbabweans how much more tender and delicious biltong can be made from "long pig".

We're rapidly approached the Cow Tipper Cutoff, in which that will stop being a bit of black humor and become a genuine news story (about a bit of blackened humorist?) ...

Delicious and sustainable.

Interesting as always that we have 'excess' elephants but not 'excess' humans.

Any wildlife which is accessible to humans will wind up eaten, unfortunately. Peak oil and peak humans will take a large toll on anything accessible, while it gives a break to those which become less accessible... though they will still have to deal with climate change and other nasty stuff.

As far as Americans eating mice and rats, I have a number of traps set aside. Not only is it a possible food source, but it would be a plausible reason for why I'm not starving... If just let myself be seen gumming down a few mice, maybe they won't guess I have a cave full of baked beans and spam. Convincing people you're vaguely crazy and dangerous may be a useful niche post-peak. A role I was arguably born to play.

Still working on the cave thing. Remarkably few undiscovered caves on Oahu.

You can always setup up residence in the Sacred Falls Canyon ... and feign a tic where you look up a lot :-)

The peak oil word is getting out! I was just warned by someone on my commute!

I ride to downtown San Francisco on the BART light rail. This morning, I was chatting with a 50 something lady about how nice it was to be warm and dry on the train rather than being on the highway in the huge wind and rain storm we're having right now. Limbs down everywhere and traffic lights out in my neighborhood.

She agreed, then mentioned we should "get used to it because gas is peaking". Took me a second, but I realized she was actually talking about peak oil. Turns out she had recently checked out "THE END OF SUBURBIA" on dvd at the San Bruno library and watched it with her husband. They're making some small changes in their lives. Most were having to do with less miles traveled and such. She had to get off just as the conversation was getting interesting, but I did manage to plug the Oil Drum as a place to read more and discuss. Hope she comes by.

On another note, latest addition to my post-oil library is a nice 1920s book on water supply engineering. Great diagrams of dams, sewers, gravity filtration systems and everything else, perfect for a small town. 500+ pages of almost-lost knowledge for the princely sum of $3. Sure beats buying lattes. Last book was a 700pp. hardcover beekeeping encyclopedia from 1936 for $7.

Library book sales are great - every library has a books for sale area, run by the friends of the library. They get given more books than they could ever fit on the shelves, and there's not much demand right now for these old-time wonders like beekeeping manuals from 1936. Little do they know these things will be pure gold within our lifetimes. So, for the price of a latte, you can pick up some great books for your survivalist library - I've even been finding the foxfire books around here. Anything 1950s or earlier on how to do stuff should be very good.

After the week from hell I got a massage yesterday. My therapist, a Iowa girl gone pure Boulder, was asking me what I do and I mentioned the wind stuff. We talked a bit, I said "peak oil", and then "you don't even want to know what is coming". She insisted she did, and she had read The Long Emergency.

She is going back to Boulder shortly, but I am now owed one speaking engagement in the Boulder area on the value of stranded wind ...

Frisco is hardly middle-america. If your anecdote were in the deep south maybe it would carry more weight.

Greetings from rural north Georgia. I meet a lot of people that get it. I have free flowing spring water on my property despite the recent drought and earth that supports orchards and gardens. The Cherokee indians chose this area of north Georgia for their council grounds for good reason. It is good here.
I have fruit trees, a garden, 10 acres of hardwood and room to grow more. I feel pretty good about what I have set back and I often come upon someone that is better prepared than I am.
One fellow in particular stands out. He currrently works in town but he is building up the property his family has ownned for generations. 100 acres with a creek 10' wide and 6" deep. He is cleaning up the old stands of apple and cherry trees. Repairing the barn and fenceline. He gave me some cherry tree seedlings last year. He gets it.
I feel blessed. I love this land because I feel it will enable me to provide for what I love most, my family.

Not sure if the "Air Car" has been discussed on TOD.

After fourteen years of research and development, Guy Negre has developed an engine that could become one of the biggest technological advances of this century. Its application to Compressed Air Technology(CAT) vehicles gives them significant economical and environmental advantages. With the incorporation of bi-energy (compressed air + fuel) the CAT Vehicles have increased their driving range to close to 2000 km with zero pollution in cities and considerably reduced pollution outside urban areas.


Is this actually viable? If so, it would seem to be the fix to keeping suburbia alive and kicking. It would also seem to be a far better alternative to ethanol.

Suburbia is contracting as we speak. The end of year results are in, this week were the secret meetings about who gets the axe, and the axe will fall over the next weeks, clipping former jobs from FWOs, putting more of those predicted million houses on the market, and in general reducing the possibility such a thing will come to pass.

We're going to see lots of things that would have been great had we focused during the Carter years and kept doing them. Sure, there will be photos, press releases, and prototypes, but the causes and conditions to make them widespread? Over the peak oil event horizon and picking up speed.

Yes, it has been talked about. My own gut says that it is largely vaporware - they have been pushing this for a couple of years now, but so far no cars...

Is it better than ethanol? That's setting the bar pretty low. But it would be hard to say until you had something real that you could test and compare.

I would hate for you guys to think the place I live is all bucolic all the time ...

The Palo Alto, Emmet, and Jackson, Minnesota county sheriffs have taken it upon themselves to round up every single speed freak they can lay their hands on. Each county had several high profile troublemakers corralled and the chief knucklehead for our county was caught two miles south of here trying to burglarize a farmhouse while driving a stolen flatbed truck with about $100k worth of aluminum concrete forms. I know the little squirt but haven't seen him since he began inhaling the zombie dust after highschool. He has been courting a functionally permanent prison sentence and with a couple of class C felonies he may have just succeeded.

One of my brother's hunting buddies from highschool today stopped to ask permission to hunt on a farm, was denied, beat the resident with his shotgun, and then as she fled in her car he killed himself on her front porch. Extenuating circumstances - one of his close friends died from cancer at 35 just a few weeks back and his father will soon pass from cancer as well.

The first paragraph is a story that gets told every few years starting when the meth moved in about fifteen years ago. The second is unusual, as suicide is not so common here and promptly hushed up when it does happen (he/she died "suddenly" and no cause is specified), and violence like that outside of a domestic quarrel or drunken exuberance is very rare.

Suicide is very common in rural America.

Social Isolation, Guns and a 'Culture of Suicide'

Death by gunfire is typically thought of as an urban plague, fueled by crime, poverty and drugs.

But rural America also has such an affliction. "Americans in small towns and rural areas are just as likely to die from gunfire as Americans in major cities," said Charles Branas, an assistant professor of epidemiology at the University of Pennsylvania School of Medicine. "The difference is in who does the shooting."

No matter the method, suicides occur at a higher rate in rural areas than in cities or suburbs, with the rate rising steadily the more rural the community. With homicides, the trend works in reverse, with higher rates in more urban areas.

The highest suicide rate in the nation is in Montana. But no one talks about it.

I'm of the opinion that if you want to get a fix on the level of extreme violence in a culture, you need to add the suicide rate to the homocide rate. Suicide == self-murder and it is devastating to family and friends.

It's not unusual for a lower value of one of the two rates to be compensated for by an increase in the other.

Canada has a much lower homicide rate than the US, but our suicide rate is higher. Among our teens especially, suicidal thinking is almost epidemic (and the number of attempts have increased massively in the last few decades).

What struck me about that NY Times article is that the "culture of suicide" is so long-standing. Montana has had the highest suicide rate in the nation since it became a state, over a century ago. And even the coroners who sign the death certificates are surprised to hear about it. It's the same in other rural areas, like Iowa. They just don't talk about suicide, so they don't know how common it is. Which is part of the problem.

And here in rural New Mexico, the story is quite the same. Kid supposedly committed suicide...hole in the back of his head and the rifle outside near the back tire of the pickup. Local police (a joke, since there basically is no law enforcement out here) are too lazy to do an investigation. Others know that the kids brother hated him and is now missing. However, we have chickens, and a garden, are putting in a solar pump on the well, have a network of friends, know how to hunt, can and put up food, and think we will fare better than a lot of folks. We are in our 60's and have been working at this lifestyle for a long time. Anyone that tells you it's easy to grow your own food is lying. It is very hard work. And I've noticed in the past few years that the pests are becoming more and more sneaky and unpredictable.

The police out here are about on the same level as Chief Wiggum and his two thick-forearmed cops.

As for the pests ..... I'm going to here voice my "bird feeder" theory of the beginning of agriculture. Maybe early humans grew plants they knew game liked, and then in hard times ended up eating the plants themselves....

I thought of this looking at all the doves at the bird feeder here hehe.

About the Economist article above ground factors are exasipating the peak oil crisis. If international oil majors were allowed free rein in opec counries, there is much more oil to be discovered there. In the US lower 48 new oil is constantly bieng discovered, although it has been well explored for over 100 years. The US has with 3% of the worlds reserves has nearly all its stripper wells. While peak oil will happen soon without above ground factors it could be posponed and mitigated.

OTOH, if the international oil majors were allowed free reign in OPEC countries 30 years ago, we'd probably be long past peak oil now.

Above-ground factors have always been part of oil production. Trying to separate them out now is silly.

You do realize that the Lower 48 is the premier example of a region peaking?

Finding new oil fields is not now and never has been in question. I am finding new oil fields--including a shallow oil pay at a depth of 1,300 feet--in Texas 35 years after we peaked. The problem is that we can't offset the declines from the old large oil fields.

In regard to the Lower 48, the post-1970 cumulative oil production, through 2004, was 99% of what the HL model predicted it would be, using only data through 1970 to construct the model.

The world is now where the Lower 48 was at in the early Seventies.

Thanks for posting the Stratfor article. At one time I was toying with the idea of subscribing, but it is now obvious that it would have been a waste of money.
No analysis there, just another bulls***-for-sale site.

Stratfor cracks me up. A couple of years ago, they predicted the price of oil would fall back to $30 by the end of the year - because China would collapse. They've been predicting the collapse of China for ten years now.

Some great news on Altairnano


Altair Nanotechnologies, Inc. (Nasdaq: ALTI), a leading manufacturer of lithium-titanate battery and energy storage products, announced today that it completed the manufacturing of battery packs to be used in a two (2) megawatt energy storage system ordered by the AES Corporation (NYSE: AES).

Is that 2 megawatts then available for 2 microseconds, 2 millyseconds, 2 seconds, 2 min, or two hours? What is the volume of water in 2 lakes?

The NYT article "Economy and Geopolitics decide where Oil goes next" is about the price of oil. In a long article discussing all influences on the price of oil except "peaking", the last sentence ends with:
"and oil is getting more difficult to find.”

Fomenting debate regarding the impending collapse of the Mexican State over at DailyKos ... complete with a poll in which 50% of responders so far say that it is simply out of the question.


They might run into a meat grinder.

LINK (pdf) 

Got some quite sad responses ... very knee jerk, you hate immigrants, can't focus on the points, etc.

I'm surprised some of those folks can operate a browser well enough to actually respond ...

And you and I will get ushered out with that crowd for having the temerity to point out that peak oil is driving that depression we just can't seem to escape, despite the occasional bits of good news.

Lots of lightweights with radical thoughts.

The data on the peak oil scenarios is convincing but at this time I do not believe that it is what is driving the economic meltdown.
There are several issues that individually can be more or less defined, but it is anyones guess how they will feed back on each other.

I lived in Mexico for some time, and as bad as things are there now I think they have a lot more flexibility then we do, so a collapse might be softer and later then most here would expect. Sort of like when Orlov compared the FSU and US.

Greetings, Dear TODers,

Would anyone like to offer a suggestion in response to this request I received:

" I was wondering if you could recommend a single article, pitched at
about the scientific american level, that describes peak oil, hubbert
curves, etc. I have many books and obviously can find many detailed
articles and website posts, but I know of no good, recent, decently
balanced, scientifically accurate review paper that I could assign to
my class."

Al Bartlett's lecture? [On Energybulletin I think.] If you get the basic math, the rest falls into place - though not without resistance. If you cannot discuss the concepts mathematically, then emotions and denial take over.

cfm in Gray, ME

MONDAY, JUNE 18, 2007
In Defense of the Hubbert Linearization Method

By: Jeffrey J. Brown

But the bottom line is that we are using a fairly objective method that takes the two pieces data that we have the most confidence in, annual and cumulative production, to generate mathematical models. And many large producing regions--Texas; Lower 48; Total US; North Sea; Russia and most recently Mexico and the world--have shown production patterns that are consistent with the HL models.

The most common response I get to all of this is simply denial. The reserve situation "can't be that bad."

All I can tell you is what the mathematical models are telling me. In a nutshell, I think that the reserve situation is that bad, and I think that we are facing the near certainty of rapidly declining net export capacity worldwide.

While reasonable people can disagree on what the annual and monthly production data are telling us about our proximity to Peak Oil, in my opinion it is a virtual certainty that Peak Oil, from the point of view of importers, is here. This virtual certainty is due to the absolutely lethal combination of flat to declining crude oil production in exporting countries and the (sometimes rapidly) rising domestic consumption in exporting countries, resulting in sometimes catastrophic declines in oil exports. For example, based on EIA data, net total liquids exports by the UK dropped at an annual rate of 60% per year from 2000 to 2005.

In effect, in my opinion the very lifeblood of the world industrial economy is draining away in front of our very eyes. The only question is how fast the patient is bleeding to death.

Hi Cid, cfm and Jeffrey,

Thank you.

Someone at Peakoil.com was looking for Stuart's pieces on Ghawar but couldn't find it. That's disturbing as it was the difinitive study. I followed the whole argument for months. You know. the one with Fractional Flow. What ever happened to him? Time for Stuart to put out Saudia Arabia in 2007.


Talking about strong central government and totalitarianism,US posters should try living in Britain, where the state is trying to micromanage citizens lives. Even edicts on how many units of alchohol you should drink in a week, and what toys children can play with in nursery school. All Americans have to worry about is the Patriot Act.

Hello weatherman,

re: "All Americans have to worry about is the Patriot Act."

Actually, it's quite a bit more disturbing than that.