DrumBeat: January 22, 2008

A Bush visits a Saud, but much has changed

RIYADH: The Saudi monarchy once depended on the United States to protect its reign and its oil from foes like Saddam Hussein. These days, President George W. Bush needs the world's biggest exporter of crude more than it needs him.

With oil at about $90 a barrel, the U.S. economy at risk of sliding into recession and American banks trying to raise cash to ride out the subprime-mortgage crisis, Bush has become a supplicant for Saudi financial help. He also needs the kingdom to get behind his Palestinian peace push, to keep Iran at bay and to support political stability in Iraq.

Is peak oil good news or bad for hydro and seismic operators?

Senior oil executives have traditionally avoided any talk of geological constraints, but now even they admit the industry is in fundamental difficulty. A growing number believe output will never exceed 100 million barrels per day, including Christophe de Margerie, chief executive of Total, Shokri Ghanem, head of Libya’s National Oil Company, and James Mulva, boss of ConocoPhillips. Sadad al-Huseini, who until 2004 ran exploration and production for Saudi Aramco, recently claimed global oil production has already reached its ultimate plateau and that output will start to fall within 15 years.

This new openness only reflects the obvious reality; for all their power and profits, the world’s biggest oil companies are in trouble. For many, production is already falling. And most are struggling to replace the oil they do produce with fresh discoveries – although not for lack of trying. A recent study by analysts John S Herold showed that the world’s 230 biggest oil companies raised their upstream spending by 45 per cent to over $400 billion in 2006, but that oil and gas reserves inched up by just 2 per cent. The report concluded that peak oil would force oil companies to choose from four options: “try to become a dominant participant, find a niche operational talent, harvest assets, or liquidate quickly.”

Total faces 'huge cost issues' in Iranian gas project

ABU DHABI: The French oil company Total said Tuesday that it was facing budget problems on a major liquefied natural gas project in Iran and that it was reviewing plans with the Iranian government.

"We are reviewing the project with the Iranian government, and it could take some time," said Philippe Boisseau, president of gas and power at Total, said during a renewable energy conference in Abu Dhabi, adding that Total is facing "huge cost issues."

Suncor says fixing odor problem at oil sands

CALGARY, Alberta, Jan 22 (Reuters) - Suncor Energy Inc said on Tuesday that clearing up odor problems at its Firebag thermal oil sands operations in northern Alberta will cost about C$200 million, but it hopes to complete the work later this year, allowing it to boost output at the site.

Ecuador: Gov To Invest $2.39 Billion In Hydroelectric Projects

QUITO -(Dow Jones)- The Ecuadorean government will invest $2.39 billion through 2011 to develop four hydroelectric projects using revenue from the Feiseh oil fund, Electricity and Renewable Energies Minister Alecksey Mosquera said Tuesday.

Whole Foods sacks plastic bags

There's a familiar question that Whole Foods will stop asking shoppers: Paper or plastic?

Tuesday, Whole Foods will announce plans to stop offering disposable, plastic grocery bags in all 270 stores in the USA, Canada and United Kingdom by Earth Day — April 22. That means roughly 100 million plastic bags will be kept out of the environment between that date and the end of 2008, the company says.

High gas prices: Recession-proof

Contrary to popular belief, Americans facing a looming recession should expect little relief in the form of lower gas prices, experts say.

Despite recently falling oil and gasoline prices, strong worldwide demand, refinery shortages, and OPEC production cuts should keep gasoline well above $2 a gallon in 2008.

Slower consumer spending and rising unemployment - traditional harbingers of an economic downturn - are unlikely to drastically reduce energy prices. Oil isn't expected to fall below $60 a barrel from its current level of $90 and gasoline should bottom out around $2.30-2.50 a gallon from around $3 currently, experts say.

Halliburton Wins $683 Million Pemex Drilling Contract

(Bloomberg) -- Halliburton Co. won a $683 million, three-year contract from Petroleos Mexicanos to manage drilling and completion of 58 wells in southern Mexico.

The land wells range in depth from 3,500 meters to 6,500 meters (11,500 feet to 21,300 feet) in depth, Halliburton said today in a statement on its Web site.

Truckloads of gas en route to Inuvik

Fuel trucks are on their way to Inuvik, N.W.T., to ease a fuel shortage in the Arctic town, Mayor Derek Lindsay said.

Petroleum supplier Imperial Oil has contracted five trucks to drive from Alberta to Inuvik to deliver fuel.

Lindsay said it has been difficult to find enough trucks for the job, as most vehicles have been tied up with work in Alberta's oilpatch.

Fuel shortage forces hard choices

GAZA CITY, Gaza Strip — Doctors at Shifa Hospital, the primary health care center in Gaza, say they will soon be forced to make hard choices as to which life-saving equipment — incubators or dialysis machines — must be shut down as the hospital's generators run out of fuel.

Israel Allows Some Supplies Into Gaza

The Israeli defense minister, Ehud Barak, announced Monday night that he was lifting some of the restrictions imposed on Gaza and that on Tuesday morning he would allow delivery of a week’s supply of industrial diesel fuel for the local power station, as well as 50 trucks of food and medical supplies.

Iraq makes good on Kurd oil blacklist

Iraq's Oil Ministry has reportedly cut current and will block future deals as part of a blacklist of firms that have signed oil contracts with the Kurd region.

Companies will not be able to purchase Iraqi oil or bid on upcoming projects in Iraq's oil and gas sector if they have signed any deals with the Kurdistan Regional Government since February 2007. That's when a deal was reached -- and a few months later rejected -- by the KRG and Baghdad on the oil law.

News blackout for giant new Nigerian oil ship

A giant new oil production vessel has arrived at the Agbami field off the coast of Nigeria, but U.S. company Chevron has imposed a news blackout due to security fears, industry sources said on Tuesday.

The California-based company is afraid that armed groups in the Niger Delta might try to attack the billion dollar ship as it is being hooked up to oilwells on the seabed, causing delays to its mid-year startup.

Pemex 2007 Oil Output Falls 5.3% on Storms, Cantarell

Petroleos Mexicanos, the state- owned oil monopoly that accounts for 40 percent of the government's budget, said daily crude oil production fell 5.3 percent in 2007 and fell short of the company's goal.

Output fell to an average 3.08 million barrels a day because of storms and a decline at the company's biggest field, Mexico City-based Pemex said today in an e-mailed statement. Hurricane Dean in August and high winds in October shut down production in the Gulf of Mexico.

Nepal: Massive hike in prices of diesel, kerosene, LPG

KATHMANDU - The government Monday considerably hiked the prices of diesel, kerosene and the cooking gas as part of its ongoing efforts to aid repayment of dues to the Indian oil supplier in order to end the festering fuel shortage in the country.

Nepal students burn tyres to protest fuel hike

KATHMANDU (Reuters) - Hundreds of students burned tyres and brought traffic to a halt on the roads of Nepal's capital on Tuesday in protest against a steep hike in the price of cooking gas and diesel.

The Nepal Oil Corporation, the state-owned monopoly, raised prices of diesel, kerosene and cooking gas on Monday by up to 20 percent to cut losses. It was the second rise in three months.

Any color...as long as it's pink

Saudi Arabia may be about to allow women to drive. The car industry gets ready for a windfall.

Do we know what we're doing?

Take for example, the proposed Department of Energy salt dome project near Richton slated for storing 160 million barrels of oil. Sounds simple doesn't it? Just dig a hole in the ground, create jobs, and bring money into the state. No big deal, right?

The DOE plans to place roughly 250 miles of pipe lines, which will be used to pump fresh water from the Pascagoula River to Richton for solution mining, and then pump the resulting salt slurry south to the Gulf of Mexico near Pascagoula.

...Solution mining involves injecting water into the salt dome, dissolving the salt into a slurry brine and piping the waste to the Gulf. This particular project will require 50 million gallons of fresh water every day, for five years.

Albania to Build Major Wind Farm

Albania is to host what is expected to become Europe's biggest onshore wind farm when it is completed, according to plans announced by the Italian Moncada construction company.

The project, which has already been approved by the Albanian government, will have a total generating capacity of 500 megawatts, Moncada said on Monday.

More cities get on board with hybrid buses

Mass-transit systems across the USA are accelerating orders for diesel-electric hybrid buses, despite an extra cost of more than $100,000 per bus.

Four U.S. cities recently ordered more than 1,700 hybrid buses, General Motors, one of two major manufacturers of hybrid bus systems, plans to announce today. The orders include 950 for Washington, D.C., 480 for Philadelphia and 300 for Minneapolis and St. Paul.

Last month, New York City's Metropolitan Transportation Authority — which began experimenting with the buses in 1998 — ordered 850 with systems from GM competitor BAE Systems, MTA spokesman Charles Seaton said.

Florida’s growth machine runs out of gas in suburbia

Can it be mere coincidence that Florida’s housing depression coincides with spiking oil prices?

When you think “subprime,” think “suburbia” — as in miles of streets and stucco boxes where there is no “there” there. Fueled by easy credit and once-low gasoline prices, Florida’s housing boom has gone bust. Nowhere is that more evident than in this state’s suburbs.

Europe, Cutting Biofuel Subsidies, Redirects Aid to Stress Greenest Options

Governments in Europe and elsewhere have begun rolling back generous, across-the-board subsidies for biofuels, acknowledging that the environmental benefits of these fuels have often been overstated.

But as they aim to be more selective, these governments are discovering how difficult it can be to figure out whether a particular fuel — much less a particular batch of corn ethanol or rapeseed biodiesel — has been produced in an environmentally friendly manner. Biofuels vary greatly in their environmental impact.

Why is the Fed so worried about inflation? Also: How come profits for oil refiners are falling?

Why is the Fed worried about inflation when typically it is caused by too few goods being chased by too many dollars. Isn't the problem now is that inflation is tied to the rise in energy costs — something over which we have little control?

Prince saves his energy in dramatic appearance at climate conference

In the many years in which the Prince of Wales has attended official functions he has never appeared quite like this. At the alternative energy conference in Abu Dhabi he was not exactly there in the flesh. There was no video link either.

Instead, delegates were treated to a full-size, walking, talking, fiddling hologram of his royal highness, who made a brief speech then vanished back into thin air.

Environment damage of rich countries on poor

A study has revealed the extent to which poorer countries are trampled by the huge environmental footprints of the rich.

The environmental damage caused by rich nations disproportionately impacts poor nations and costs them almost £920 billion, on par with or exceeding their combined foreign debt, according to a first-ever global accounting of the dollar costs of countries' ecological footprints.

Israel: Eilot Region pins energy hopes on solar collectors

The Eilot region, at the southeastern edge of Israel, is likely to become the first part of the country, along with the city of Eilat, that is not dependent on polluting energy resources. Instead of oil- or coal-fired power plants, the region's electricity will be produced from clean, renewable sources - first and foremost, the sun.

An Oil Giant's Green Dream

If the idea of an Arab oil power like Abu Dhabi supporting fossil fuel alternatives sounds a bit like a heroin dealer trying to sell methadone, think again. Virtually alone among its Persian Gulf neighbors, Abu Dhabi has embarked on a serious program in alternative energy research, backed with oil money. In 2006 it launched the Masdar Initiative (the name means "source" in Arabic), a multi-pronged scheme that includes a collaborative research institute with the Massachusetts Institute of Technology, support for solar and other kinds of green power within the city itself and a clean energy investment fund worth $250 million. The idea behind Masdar — which organized the Future Energy Summit — is a radical one: prepare Abu Dhabi and the UAE to move beyond fossil fuels. "The UAE wants to be more than just an oil-producing country," says Marc Stuart, the co-founder of the carbon-trading firm EcoSecurities.

Eco-risks loom as arctic oil activity grows

OSLO (Reuters) - Exploitation of the Arctic's huge oil and gas wealth poses a growing danger to an icy wilderness that can recover only slowly from heavy oil spills, a report by the eight-nation Arctic Council said on Monday.

Nigerians demand taxes at gunpoint

LAGOS, Nigeria, Jan. 21 (UPI) -- Norway's largest oil company paid its Nigerian tax bill at gunpoint, a company spokesman said on Monday.

StatoilHydro's Nigerian taxes had been in dispute over real estate estimates and payroll concerns in Lagos, where the company's Nigerian headquarters are located. Armed police and tax officials, however, appeared at the office in force last week and StatoilHydro personnel responded by writing $800,000 worth of checks.

Brazil's state oil company announces discovery of giant gas reserve

SAO PAULO, Brazil: Brazil's state oil company said Monday it has discovered a huge natural gas reserve off the coast of Rio de Janeiro that could be as big as the recently discovered Tupi oil field.

Venezuela boosts oil investment

State oil company Petroleos de Venezuela SA will spend $15.6 billion on oil-related investments this year, a 56 percent increase over last year, the country's oil minister said Monday.

Oil Minister Rafael Ramirez said the higher investment is aimed at helping PDVSA meet its goal of increasing crude output to 5.8 million barrels a day by 2012.

CERA’s depletion study: the “good news” about running up the down escalator

Depletion never sleeps. Consider the enormous implications of a 4.5% decline rate. If you start with 85 million barrels a day in 2007, but lose 4.5% each year, by 2017 you’ve lost 31 mbd. That’s the equivalent of losing the world’s four largest oil producers: Saudi Arabia, Russia, the USA and Iran. By 2030, you’ve lost 55 mbd, or as much as all the non-Opec nations now provide. Remarkably, CERA finds this to be “good news.”

Saudi Arabia remains China's top crude supplier

BEIJING (MarketWatch) -- Saudi Arabia consolidated its place as China's top crude oil supplier in 2007 after its exports growth outpaced that of nearest rival Angola, data from the General Administration of Customs showed Tuesday.

The Middle Eastern kingdom is now likely to pull further ahead, as it chases a target of exporting 1 million barrels of crude a day to China by the end of the decade. That would equal more than half of Angola's current total exports to international customers.

ConocoPhillips buying 50% interest in Canada pipeline

ConocoPhillips said Tuesday said it would pay an undislosed sum to TransCanada Corp. to exercise an option to buy a 50% interest in the Keystone Oil Pipeline.

Gas rig workers ripped off: union

SKILLED Filipino workers on a $1.6 billion gas project on the North-West Shelf are being paid less than $8 an hour, undercutting both local wage rates and the amounts promised in their contracts, the Australian Workers Union says.

Chevron Refinery's Flares Still Polluting, Report Says

Chevron's Richmond refinery has increased its flaring by 80 percent since 2005 when the Bay Area Air Quality Management District passed a new rule limiting harmful refinery flaring to emergencies, according to a report released Monday by an environmental justice organization.

The organization, Communities for a Better Environment, studied data from the five Bay Area refineries and found that Chevron's Richmond refinery and the ConocoPhillips refinery in Rodeo were each emitting 30 to 50 times more pollution than the Shell Refinery in Martinez, according to CBE Senior Scientist Greg Karras.

China, Japan and World Food Insecurity

Resource-poor Japan - and much of the rest of the world - may be at a crossroads before too long. Much depends on whether China can keep its ever-surging demand for grain in check.

MPs' warning on biofuels angers Brussels

The EU yesterday denounced a House of Commons report calling for a moratorium on the increased use of biofuels and made plain it would stick to mandatory targets for the use of biofuels in transport when it unveils a climate change package today.

Oil sinks to 6-week low on U.S. recession fears

LONDON (Reuters) - Oil fell to a six-week low on Tuesday, dragged lower by a stock market plunge and fears a slowdown in the United States could have a much wider impact than previously thought.

Speculative funds have begun to sell positions in oil markets and other commodities as they readjust portfolios, analysts said.

U.S. crude fell to a low of $86.11 a barrel, its weakest since December 6 and by 7:43 a.m. EST was trading at $87.40.

OPEC could reduce production to preserve revenues - CGES

While US President George W Bush and other leaders of oil-consuming countries are asking OPEC oil ministers to produce more, there is a danger they might turn in the opposite direction and reduce production, the CGES said.

OPEC members have become dependent on the higher oil revenues of recent years and may attempt to keep them at the current level by reducing production to keep prices high, it added.

OPEC: U.S. recession fears cloud oil demand outlook

LONDON, Jan 22 (Reuters) - Mounting concerns over a U.S. recession have obscured the demand outlook for OPEC's oil this year, the producer group said on Tuesday, adding that high prices could inflict further pain on consumers.

World Oil Demand to Reach 118 Mmbpd by 2030: UAE Minister

A senior energy official of the United Arab Emirates (UAE) said on Monday that the world's oil demand will reach 118 million barrels per day (bpd) by 2030, the official Emirates News Agency reported.

The forecast was made by the UAE Energy Minister Mohammed bin Dhaen Al Hamli in his keynote speech at the World Future Energy Summit 2008, which was held from Monday to Wednesday.

Hamli assured the audience that the world's oil resources are sufficient to meet the heavy forecast increases in demand for decades to come.

Serbia agrees to Russian pipeline deal

BELGRADE, Serbia - Serbia said Tuesday it had agreed to a multibillion dollar gas pipeline project as part of an energy deal with Russia that would boost Moscow's control over supplies to Europe.

A majority stake of the Serbian oil monopoly NIS will be sold to Russian energy company Gazprom. Russia would route part of the gas pipeline through Serbia, as part of the deal announced in a short statement by the Serbian government. Financial terms were not revealed.

Nigeria warns on oil contracts

Nigeria has warned energy companies it wants to complete its planned renegotiation of contracts covering offshore oilfields in the next three months, saying record prices mean western groups are having "a ball".

It is the first time Nigeria has come up with a timeframe for renegotiating the complex agreements, which the government signalled it would review late last year in an effort to secure a greater share of profits from offshore production. The urgency will put the oil majors under greater pressure.

FAO sees record world food prices staying

ROME, Jan 21 (Reuters) - Record food prices are unlikely to ease in the foreseeable future, as high grain demand and low stocks mean the world remains vulnerable to possible food shocks, a United Nations expert said on Monday.

Transition - another buzzword or real change for Cornwall?

Don’t be put off by terms like peak oil, powerdown or energy descent. You don’t have to be an environmental expert, but you do need to be interested in helping to make your local community more sustainable. Other transition groups in Cornwall have been encouraging local foods and allotments, or encouraging their town to abandon the use of plastic carrier bags, so everyone can contribute something to the success of a local Transition group. It only takes a handful of people to get things going. The key thing is that your group shares concerns about our seemingly hopeless and unsustainable dependence on fossil fuels, and when put together with the impact and risks associated with climate change, there is a collective desire to find local community solutions.

EU climate change plans to cost 60 billion euros: Barroso

BRUSSELS (AFP) - European Union plans to cut greenhouse gas emissions could cost at least 60 billion euros (86.6 billion dollars) a year, European Commission President Jose Manuel Barroso said Monday.

"Taking action is not cost free, although we think we can limit the cost of our proposals to around 0.5 percent of gross domestic product," he said, according to remarks prepared for delivery in London.

Climate change threatens N. Ireland's Giant's Causeway

BELFAST (AFP) - The Giant's Causeway, the spectacular rock formation on the Northern Irish coast, could soon become difficult to access due to climate change, a report warned Tuesday.

The iconic world heritage site, one of the province's biggest tourist attractions, will be under threat if sea levels rise and storms worsen, said the National Trust conservation organisation, which owns and manages the site.

Red Cross refocuses aid budget on threat of climate change

"For many people, climate change tends to be seen as more of an environmental, scientific or political issue," IFRC policy and communications head Encho Gospodinov told journalists.

"We believe it must also be seen as a humanitarian issue, first and foremost, an issue that is already impacting on the lives of millions of vulnerable people around the world," he added.

The Financial Markets Roller Coaster Ride Thread

NIKKEI down 5.65%
Hang Sing down 8.65%
CAC 40 DowN 0.84%
DAX Down 2.2%
FTSE Down 0.34%

Fed Cuts Rates By 3/4%

"May you live in interesting times!"

"May you live in interesting times!"

...and attract the interest of important people

hi Alan, thanks for the 'heads up', I never knew about the last half of that curse, but sounds right on ... these are times again to keep ones head down. (but maybe with just the occasional pot shot over the parapet:)

"We must feel the mercy of the angels in all this, not fret about the magic money.

The history of bubbles is long and well-known for hundreds of years yet the very sophisticated and powerful people at the top of global society have decided yet again. to create bubbles and blow them up as much as possible. To(day) will bring ruin to many here in America. They will run to the rulers and hold out their hands and beg to be saved from the follies of the rulers. The rulers will go to Death and demand more gold, more power and more land. 'Make us gods!' they will order, sternly. And Death will flick a finger and more wealth will vanish. Poof."


The Slide into the Gorge gets steeper.

Nice to see someone in good mood this morning:)


Erin go Brea. May the Luck of the Irish be with us all.

How's that.

Thanks McG.

Another excellent source of info is the video "The Money Masters." It will be the education you never got in school. Warning, it is a long documentary at 3.5 hours. But those will be the most important 3.5 hours you ever spend in your adult life.

It isn't in the public domain, but can often be found on google. Sometimes you can find parts of it elsewhere. The last time I looked, the whole video was at: http://video.google.com/videoplay?docid=-515319560256183936&q=money+mast...



Public borrowing smashes forecasts to hit record high

Britain's public finances worsened yesterday as record borrowing figures cast doubt on the Government's ability to counter any fall-off in economic activity.

There also are things moving in the background. BofA and Chase just raised the rates to 25% and 21% even for prime people with the highest credit scores. Clear intent of taking away remaining lines of credit or get a major premium.

The result of these attempted bailouts is going to be stratospheric real interest rates and will transition the economy from a stall into a flat spin.

Read column2, the banks are bankrupt, all their reserves are in BORROWED money.


Why aren't people more alarmed than they are? Is there any way this ends well?

They don't know how to be alarmed.
For a generation the way to get along has been to smile and be empty-headed.
News is a term that no longer has meaning.
The type who hangs here has sounded the alarm too many times and we are, in terms of the normal world, nuts.

One way or another the system has to reset. I do not feel like I can predict how it will reset, we all have a opinion on how we would like it to reset but it's anyones guess how the cookie will crumble.

All one can do is to try and place odds on the various likely scenarios and allocate resources and time accordingly.

It isn't so easy to fight on your feet when surrounded by hordes of people that rather live on their knees = hard to soar like an eagle when surrounded by turkeys.

Let's see. They did bupkis in school and slid through on automatic A's and games where no score was kept. All ended well. Then they took jobs paying huge wages for zero skill and little effort (though that gravy train has diminished.) All ended well. Meanwhile, they watched tens of thousands of hours of TV where the good guys virtually always won. All ended well. They even persuaded themselves that they would live forever ("toxins" aside.) All ended well (the ones no longer here have no say in this.) And all the while, they steadily became more prosperous - indeed, many who brought nothing of value to the party nonetheless conjured up palatial houses and shiny cars out of thin air. All ended well. And now the Fed will keep the party going with a giant bailout. All...

Gee, is it even conceivable that anything whatsoever might not end well?

BAC up $1.45, JP Morgan Chase up $1.29, Bear Stearns up $5.45. What Me Worry?

In aggregate, reserves are on borrowed money, but individually they are not from what I read there. It would be nice to see which individual banks are in trouble - too bad they don't publish that (except for quarterly earnings).

chase offered me a rate of 3.99%* until the balance is paid. i have been paying their account down asap, that apparently made them nervous .

* with a $200 max fee

musashi, I must be stupid, because to me the spreadsheet showed that the banks are almost fully covered by NON-borrosed funds [ie., column 2].

You needed to go all the way to the bottom of the second chart. The last two enteries demonstrate that things went very wrong in January [the last two lines on the chart] with negative nonborrowed reserves in the last line.

Also note the large "term credit auction" numbers. My understanding is that this is a new inovation designed to limit the stigma of financial institutions borrowing directly from the Fed.

BBC News Business: (Robert) Preston's Picks, FED ALERT IS RED ALERT

If it looks like panic at the Fed, smells like panic at the Fed, and quacks like panic at the Fed, well many will say it is panic at the Fed.

And what if the evasive action doesn’t work?

What if, after the Bernanke bounce, stock markets continue to fall, financial markets remain relatively illiquid, banks remain reluctant to lend and the US economy continues careering towards recession?

Then the players in the global financial souk will begin to fear that the US authorities “hav’nae got the power”, to quote Scotty.

Which, in the battle between the doom-mongers and the optimists over prospects for the global economy, would represent a disturbing victory for the forces of darkness.

When the BBC begins to use the word "panic" it looks as though people, even journalists, are starting to pay close attention.

The ruse is up. The coyotes are howling in the winderness.

"The ruse is up. The coyotes are howling in the winderness."

Surely they will figure out a way to blame the coyotes...

Federal Reserve makes emergency rate cut
Three-quarters of a percentage point cut biggest in recent memory


Yup...but doesn't look like it is going to help much.

Ya think they may have to cut another 50 bp in less than a week...nah, er, maybe!

These markets don't need STIMULUS...they need RESUSCITATION!

Although the thought occurs: We've all been saying that infinite economic growth on a finite resource base is impossible. Sooner or later there must be a transition from a growth economy to a steady-state economy (and probably with a pretty steep decline during the transition). At some point, starting very soon, the financial markets are going to have to start adjusting to this reality. Artificial tricks to continue to prop them up only delays the inevitable, and assures that the crash will be even more catastrophic when it does occur.

Meanwhile, has anyone noticed that lower interest rates with higher inflation (whether acknowledged in official statistics or not) is hardly the formula to encourage the increased savings required to provide the increased capital required for the massive investments in FF E&P, more nuclear power plants, renewables of all types, and energy efficiency including Alan's EOT?

Agree, with converging crisis...we may be witnessing a HISTORIC event...

The END of GROWTH! in 2008.

"Auld Lang Syne"


"Raise a glass!"

How about the third option - EMBALMING the bits that are making such a stink?

Rate cut will keep the Dow propped up, but it will have the effect of devaluing the dollar some more.

In fact that has been the pattern. The Dow, when measured by the Euro, has been down the last 7 years. I like to point this out when people say "Well at least the stock market is doing OK"

Interest rate can only be lowered so far before it has no effect anymore. Then what will the Fed do then?

The rate is now %3.5 with another %.5 on the way. At some point they could be down to %0 at that point the Fed OMC will be unable to add to liquidity, then they would lose the tool of lowering rates to prop up equities.

with inflation at 4.5% or more, this is negative interest (for those who can get the 3.5% rate.)

Are we going to see a "dollar carry trade"? Is USA going the way of Japan?

Sure...maybe...but then what happens to Japan?


Yes and as of right now the US markets seem to be responding to the 'good' news by only being off slightly whilst the rest of the world just took a big fleecing. India/China take a 12% hit. I'm wondering a bit if the US markets didn't benefit slightly from being closed for those two sessions. (3/4% emergency rate cut probably didn't hurt)
As in perhaps some money rotated in to buy depressed US stocks this morning.
As you say the dollar has to be hating this and gold will eventually gain after people quit taking their profits out to balance the stock losses.
Still it seems inequitable that the stocks 'here' wont take the same beating since it's really the consumer/subprime debacle (largely here) which is the engine sucking fumes behind it all.
And of course behind that is the ff and commodities demand/supply crunch that is starving that engine. I'd bet that those buying in to US stocks right now are short covering or are going to be sorry in a week or two if not later today.

I gotta admit I was wrong. I was counting on Bernake and the FED to be "on holiday" and not even much know about this issue until today.

I was thinking it would be a couple of weeks before they would counter. I figured calling the FED in on this would be kinda like calling the police to take a report - its not like I figured they would come post haste sirens blaring.

I am impressed that our government did see this and nipped it before the whole system came down.

I thought I was gonna make a real killing today. Shorting stocks.

Didn't do near as well as I thought. I barely covered my trading losses. I was preparing for the doomsday that didn't happen. I still think it likely would have melted down had the FED and our President not shown action.

With so many of my neighbors in debt up to the yinyang, this is NOT a good time to pull the plug on them. I like them and I really did not take any delight in having new neighbors.

I didn't make any money, but I am extremely happy to miss the meltdown.

>I was thinking it would be a couple of weeks before they would counter.

You do realize that the Fed meets next week? The Street expects the Fed to make another 50 bps cut next week when they meet.

There is a good chance that they will remain agressive cutting rates until they get down to 1%. How fast, depends on how many more sell offs occur in th near future.

Hardhat, time will tell whether it might have been better if Bernanke and the Fed Reserve were on holidays. They are taking a sizeable risk here and if this doesn't work, then the crisis, I'm afraid, will quickly cascade into an avalanche.

I, like you, don't relish seeing others in misery. Moreover, although I live outside the U.S. and have a reasonably stable job (as much as clergy ever do), yet I suspect this will effect everybody in some way and not nicely. And I am first to say catastrophe is something always to be avoided not embraced.

Yet one of the beauties of this blog is that often uncomfortable realities are at least discussed here. Most people are too busy with their daily lives to pay much attention to what happens outside their cloistered world. When they do relax, they seek to escape reality. The MSM is infotainment & likewise is in the business of pandering to the latest cause de céléb, or celebrity, or scandal, or prattle from the nearest talking head.

The next couple of days may tell us more. The meltdown may have been momentarily postponed not cancelled. My advice, keep investing in a way that may benefit you in the long run.

The powers-that-be are playing with fire and a lot is at stake here. Murphy's Law tends to kick in at the optimal of conditions. And Old Man Murphy tends to be downright frenetic when conditions are less favourable.

My wife calls me pollyanna b/c I tend to default into optimism. Lately, my gut and head tell me to be on the lookout. Hope for the best and expect the worse.

Thanks, Zadok.

There sure is an art to investing, as the reactions of the market seem so illogical. One would think, given the knowledge that oil is in limited supply, that research into alternative energy sources would be top on the list.

Yet, we all see our mugs getting emptier and emptier, yet seem to think our Saudi barkeeps will keep pouring. It seems only a few of us recognize draining kegs and know that its gonna be several million years before the geological cycle that produced our brew reiterates.

As a member of the Clergy, I know you have seen scripture concerning this. Its the only thing I have to go on for sanity. I feel as if I were the engineer on the Titanic, knowing gravitic displacement and water flows, and knowing from the very start the inevitable consequences of what is happening. The Bible notes there is great pain in knowledge. I understand.

Its clear to me darned near all of the other people on this blogsite see this as well.

The problem is that most in the general public do not see this and consider us a basket case. Doomers.

Its painful to see corporate business give resources to a guy who buys yachts, sport cars, and multi million dollar homes instead of trying to use those resources to research things like solar driven refrigeration.

I am hoping my investments pan out so I can have enough money to investigate things related to absorption and intermittent cycle ammonia refrigeration. I don't mind it if things don't work out as planned if I am working with my own money. I still get the experience and closure to a dream of why if didn't work. Or I will go to my grave and meet my maker, knowing I had work here to do. Even if no one else thought it was important.

I do not want investors involved because I want to spend every minute working on the thermodynamics of the system - which I am good at - and I do not want to spend time propitiating investors - which I am not good at.

With your background, Zadok, you know my analogy, but I linked that word as its not in common use and this is a public thread.

I have Asperger's syndrome - some say a bad case of it - and far happier in a lab, miserable in a cubicle. I usually have a hard time getting along with the "tie guys", who like what I consider mindless drivel about hollywood stars and sports. Personally, I would just as soon spend my days perfecting minimal energy usage residences right here at home in my own residence. A lot of us here feel this.

Unfortunately, it takes someone with both the technical skills to do this, and the interpersonal skills to get the financing for it. Having one skill without the other leads to the waste of resources - intellectual or financial - we see. I do not think we have much time left to squander resources before the tanks run short.

My best wishes to you hardhat.

The problem is that most in the general public do not see this and consider us a basket case. Doomers.

Just like the prophets of old.

Further consolation may come from knowing that the prophets could see things others could not or would not, were social outcasts, and were readily denounced as doomers. Their role was not to tell the future (contrary to popular belief in some circles) but to point out the realities of the present and to warn people about hard consequences stemming from their actions.

TOD is a refreshing prophetic voice. IMHO, that's what makes it relevant.

The basic problem is that paradigms are shifting big time, but TPTB are pretty much continuing to operate under the old paradigm. What worked before will no longer work, but they don't realize that yet.

We've seen this happen before, but never has the paradigm shift been so huge and profound.

Maybe you can write a book instead: "You can profit from the coming total collapse of civilization"

So they unloaded the shotgun this morning to avoid armageddon and now the market has turned into a ho-hum yawner. I guess they can say 'mission accomplished' - for now. It does demonstrate how dead set they are about letting this market clear itself and start to rebuild. It would be nice to know specifically what they know that we don't.


Even though the Fed cut rates by 75 basis points in an emergency session, traders are pricing in an 82% chance of a 50 basis point cut on the regularly scheduled Jan. 30 meeting.

- Briefing.com

More like they launched a WMD and the market is giving them the finger.

They scalped the bears that have not yet learned not to do business with pigs. That's all.

How convenient for them that most of the trading sites froze up for a while, eh? LOL

It's very funny that you described it that way... was just watching CBC Newsworld... they had the Chief Economist from ScotiaBank on talking and, no lie, he said the Market is basically giving the... And He silently raised both of his middle fingers to the camera... to the Fed.

I nearly spit out my lunch! Clearly there is no much faith in the Fed right now... and the Bear market has taken hold.

Is this one YouTube yet? I sure hope someone captured it - we might be about to sink, but moments like this will retain their value throughout it all :-)

Canadian rate cut this morning, 1/4 %

The US went this alone.

It's every nation for itself.

With China now at the wheel.

After an initial drop (of 400 points), American stocks seem to be recovering somewhat (now at a loss of about 120 points) in the wake of the news from Bernanke and the boys of another 3/4 point slash.

Yes, it's every nation for itself.

What will be telling is how the Asian markets will react to this news tonight. Particularly since they seemed to get hit hard and the U.S. not so hard. The hemorrhaging is skewered to say the least. Will China and India be so overjoyed that they'll jump on the euphoria bandwagon? A lot will be decided by how they will try to recover some of their losses? Perhaps through currency manipulations and strategic calculations?

I suspect this is going to play out in very unexpected ways and have some very unintended consequences.

Countries don't have morals, they have interests. So IMO I don't think anyone is going to help Uncle Sam out of this mess through the kindness of their hearts.

Yes, we do live in interesting times, and considerable interest has been aroused in the minds of some very important people.

Likening stock markets to Casinos, I would keep my eye on the craps table. The craps will see more than a fair share of action.

The US went this alone.

if so, wouldn't the dollar index have dropped like a stone?

It's every nation for itself.

when was it not? yet the major $ holders may still have a lot of interest in common. the timing just couldn't be better - ML King saved the day. the two-day slaughter in other markets must have forced other CBs to cooperate on the emergency rate-cut.

With China now at the wheel.

even if that is the case, they will try to avoid any ugly event as much as they can at least to the end of August.

The Bank of England and ECB, two very important players, still have not cut and are still issuing language like they may hold or even raise. I am not saying they will do that but this was not a concerted action amongst all major central banks at all. This was a desperate "hail Mary" by Bernanke. Thankfully, it appears to have worked, at least for a while. Bernanke made his name by arguing persuasively that the Great Depression could have been averted if the credit spigot had been opened far wider. Now he gets his chance to prove that theory. He's holding the line but you also have to remember that (a) we are below 12000 and (b) that adjusted for inflation, just to stay even, the 2000 stock market high of 11,750.28 would need to be 14077.14. That's just to break even over 8 years. No profits. No growth. And yet we are down 16% roughly from the break even point.

If you don't believe me, just plug the numbers into the Federal Reserve's own inflation calculator yourself: http://www.minneapolisfed.org/Research/data/us/calc/index.cfm

Bernanke has held the line today. Good for him, and frankly, with a decent sized 401K and no options on my 401K plan to move it anywhere I consider safe, I'd love to see us not go down in flames. Otherwise I am out of the stock market. But Bernanke still has to address the implosion of the monoline insurers as well as the next phase of defaults that are starting, even beyond mortgages. He has his work cut out for him.

This is not over and the Fed is going to have to prove it can handle this or calls like Ron Paul's to dismantle the Federal Reserve will grow even louder in the face of a financial collapse.

To work, carbon tax must sting

Most Canadians tell pollsters they're concerned about climate change. Many insist they'd like to do something about it, and would even pay for measures to reduce greenhouse gas emissions.

But propose actual cash amounts – 25 cents a litre on gasoline, perhaps, or a $10 daily commuter toll – and support evaporates.

Tax emissions or miss targets, PM told

In its 77-page report, the national panel said the federal government must quickly introduce some form of tax if it hopes to meet its own goal of cutting greenhouse gas emissions by 65 per cent by 2050.

"Our job is to push government, and not just the governing party, but Parliament and Canadians and industrial leaders and provinces into ... workable solutions," Murray said. "You need some sort of a price mechanism that's significant."

The report acknowledges there will be "pain" for Canadians as fossil fuels are slapped with a tax based on their carbon content. That could mean a 50 per cent increase in electricity costs, a 60 per cent jump in natural gas costs and a doubling of gas prices by 2050, the report predicts.

Once the world economy realizes that we are past Peak Oil and that climate change is a REAL BIG problem, the only logical solution would be to ration FF's and then reduce supply in an orderly manner. Taxes on oil of the sort used on gasoline in Europe would be difficult to implement in Canada or the U.S., as the price of oil is very inelastic and can be expected to begin a steady rise as demand exceeds supply.

There's no easy solution that I can see and the sooner governments make the necessary changes in the way things are done, the better. With rationing, at least the average person will be able to acquire some energy, instead of being priced out of the market by the top income earners. Also, there's nothing like a shortage to get folks off their ass and make the changes in their daily lives, like adding insulation to their house or investing in new, more efficient devices.

E. Swanson

Rationing is the logical solution, but the US government doesn't do "logical" except as an absolute last resort, when all else has failed.

A high gas tax with full per-capita rebate is much, much more flexible and easy to implement. And also much better at supplying need, and keeping the last hundred gallons at the station for someone who really needs it (ex: bleeding from the head and on way to hospital).

Where did I say GAS rationing? No, I think we will need to ration ALL FF's, including heating oil, jet fuel and coal for electric power generation. Besides, gas tax with rebates dilutes the impact and does nothing to slow the inflation as everybody (companies are "bodies" in a legal sense) try to maintain their level of consumption by passing the cost on down the line. This process was so painfully evident after the twin oil shocks of the 1975 and 1980, with the ultimate losers being the farmers and others who were unable to pass on the increase in their costs. Farmers especially were hit hard back then, as they sold their products into a world market and had to accept market prices, thus lots of them went out of business. Those shocks were relatively minor disruptions and were temporary. After Peak Oil, the shortfall will not improve with time, only worsen. That's the problem.

E. Swanson

In actuality higher marginal prices for consumers work. A lot of the seaborne shipping companies are cutting the speeds of their vessels, in order to save on bunker fuel costs. Any rational business will try to maximize profits by tuning its practices. Those that are most successful at that process will benefit from the fuel tax regime, as their cut in fuel costs, plus rebate will be positive.

The thing I like best about rationing is that it pushes prices close to the cost of current production. There is not much incentive for exploration and little money available to do it. With gasoline and oil near $0.50/gallon and with us all using less, there is more money available to make the transition comfortable. Paying for better insulation, getting nice presents for the car pool driver, switching to a plugin hybrid even though you haven't run the wheels off your old car all look easier with more money in your pocket. Even gas and coal might come down a bit since only the cheapest fields and mines will operate.


Rationing IS logical, but acts to increase the net decline rate for the man on the street. How fast can he react to changing circumstances?

We've built an interconnected and brittle world, it'll break in the most unexpected ways.

Wasn't it Churchill that said that you could always count on the Americans to do the right thing after they'd exhausted all other possibilities? Prescient.

Just received my investment tax receipts for 2007, it went down by 3%! I should have invested more in Canadian funds.

BTW, I miss these financial roundups on TOD:Canada.

You should have listened to those two guys that were constantly warning about declining net oil exports.

Didn't someone say their theory is "garbage" or the like?

Sell all the energy intensive stuff to the Yerginites!

There MUST still be some pockets of 'Irrational Exuberance' out there. Must find and exploit!

(The image coming to mind is of those colonies of microorganisms on the Seafloor that 'Depend on the Kindness of Thermal Vents and Fissures' )


Op-Ed piece in the Dallas Morning News, in praise of the automobile:


John Semmens: Fuel hikes won't spur public transit
People's time is too precious to give up cars
09:50 AM CST on Tuesday, January 22, 2008

. . . Inflation-adjusted gasoline prices more than doubled during the 1995-2005 period. In theory, an increase of this magnitude should have driven many Americans to alternate modes of transportation. Instead, auto travel increased 23 percent. This was twice as fast as the 11 percent population growth. . . .

. . . The hope that rising gasoline prices or increased gasoline taxes will substantially increase public transportation use is unrealistic. Far from being disparaged as an "energy waster," the automobile should be hailed for its ability to save our most precious resource: time.

John Semmens is a research fellow at the Independent Institute. Contact him through www.independent.org.

the automobile should be hailed for its ability to save our most precious resource: time.

LMAO!!! This guy has obviously never sat in bumper-to-bumper traffic for hours. Somewhere there is the statistic about average traffic moving at 11 mph, slower than average traffic in the year 1910.

Laugh all you want. But what's not so funny is that very little public transit will get you around in a US city any faster than 3-5 mph, taking into account all the time wasted walking and waiting. The number of people who live next to an express subway stop and work next to another express stop on the very same line - and never need to make the trip off-hours when the service is poor or nonexistent - is vanishingly small. Most of us have access only to local buses, which arrive sporadically, traverse circuitous routes, wheeze to a stop at every bloody corner, and do nothing at all on Saturday or Sunday. When they do "run", a misnomer if there ever was one, they're barely faster than walking and much slower than cycling or jogging; though they may be less tiring if you are lucky enough to get a seat.

So except for those whose time is worthless, most will find their car to be the least worst alternative, and will find buses, especially, to be utter rubbish. This is not limited to Dallas: European cities with wall-to-wall people, confiscatory taxes, comparatively sky-high gasoline/diesel prices, and even underground metros, nonetheless overflow with cars.

Welcome to the real world, at least as it is for now.

Yeah, but there's a truth in what Semmens is saying. Use of oil via use of cars makes people more productive. This is one of the ways use of oil produces wealth at all income levels. Whether people are calculating the exact wealth potential of their oil use or not, they feel it.

This is why oil demand is so inelastic, and why the price will not be taking any big falls beyond the normal variation along the trend line.

When I look at the current price of travel for business purposes (in my case, poker tournaments), the price of oil remains a complete non-issue. Even at current prices, it remains an insignificant factor in relation to the potential earnings from the travel.

Yes, personal auto travel increases "liquidity" in the labor markets. Workers can cast the net more widely for employers, and employers can cast the net more widely for workers.

Lots of us miss them, Khebab. But that matter appears to be closed. Hopefully Stoneleigh and ilargi will be opening their own website soon. Makes it harder as I have to bounce between yet more sites.

/sarconal on

But hey, this is not a financial site, right? Right? I mean, NOBODY would come here for financial advice, right?

/sarconal off

Stoneleigh's and ilargi's work are certainly missed.

Tickerforum is currently down.

What other sites besides globaleconomicanalysis, carolynbaker, and ml-implode are recommended?

Any news on when Stoneleigh and ilargi will have a new site up?

Their absence has been quite annoying. Can we at least find out who the parties are who ran these guys out of here? I'm in the mood for a witch hunt.

Nobody ran anybody out. They decided to leave. Stoneleigh said she would post here in the DrumBeat when they found a new home.

Whoever made them feel unwelcome made a big mistake. I would bet that the majority of TOD regulars looked forward to them, as I did.

It was nothing like that.

And I'm sure they'll be posting somewhere soon. It's not like leaving TOD means they've been silenced. They said they got an offer from LATOC. They were also considering starting their own site.

I guess I missed all of the excitement. I have heard references to the issue, but wasn't really aware of what happened.

I guess that's the right place for them. I'm BTW very impressed by todays DDB (Doomer Drum Beat)

Our new website is The Automatic Earth.

We've put up a few articles in today's Debt Rattle, and there'll be more to come tomorrow (and hopefully every day thereafter).

Thanks for letting us know. Interesting title...

May I suggest that it would be appropriate to add this to the Blogroll?

These are the days of miracle and wonder....

Stoneleigh, Ilagri, I visited your new website, read through, like it very much. I dropped it in my favorite economic sites and will be a regular visitor. What you were doing here and are now doing there is needed. Good luck.

Thank! I've added it to my Yahoo bookmarks.

Book-marked it. Thank you for letting us know, found your contributions very valuable.

Nobody ran anybody out. They decided to leave.

That's simply not true. Not that I wish to talk about it.

We'll resume posting later this afternoon, in an as yet undisclosed location.

I don't want to wash dirty laundry in public, but we didn't just decide to leave. I can stay, but I was asked to write original analytical articles (rather than Round-Ups) and to focus on energy. Finance articles would need to be explicitly energy-related.

The reason we had been writing primarily Round-Ups recently, and focusing on finance, was that we saw a serious and rapidly developing situation and felt the need to cover it in something approaching realtime. Aggregating financial news in such a way as to convey the big picture seemed to us to be the best way to do this. It's not that we aren't interested in energy - we're big picture people who are interested in everything - but the financial situation seemed to be heading for criticality (and poised to rewrite much of the energy debate IMO).

We wish to continue doing what we did before, as we are a team and feel we were filling a need. In order to do that, we are starting our own blog, which is very close to launching. If I have time on top of that to write articles I think TOD may be interested in then I can do that too, but time may be in short supply.

It wouldn't surprise me if there happens to be a strong correlation between the C & C peak in 2005, the resulting high oil prices, and the present economic Decline. With a Capital D.

the financial situation seemed to be heading for criticality (and poised to rewrite much of the energy debate IMO).

What got panties into a knot in one short sentence.

Musashi, I can see where you are coming from. I have said many times that PO is not going to take place in a vacuum. Some seem to prefer that it would do so. Scientists and engineers love their graphs, formula, charts, but are not as fond of attempting to predict irrational human behavior. 'Only a fool would search for reason in the confines of the human heart.'...anon.
Do you recall when Cheney visited the KSA some months ago? Abdullah gave the US an ultamatum: create a two state solution between Palastine/Israel ASAP or our discussion is finished right now. Cheney hemed and hawed but agreed to go forward and get it done but nothing of substance has happened...Just as nothing happened on shrubs recent visit to the KSA.
Abdullah meant what he said and he is through talking to this administration. Certainly he will take modern weapons for rapidly devaluing dollars, but who wouldnt?

Do you recall when Cheney visited the KSA some months ago? Abdullah gave the US an ultamatum: create a two state solution between Palastine/Israel ASAP or our discussion is finished right now.

As I 'memer the tale, Bush and Abdullah ment in 2002-2003 over the same matter. Bush said no, The King said, then we are done and stood up to leave. Bush's handlers (Condi being one) huddled, then Bush talked about how he must have been misunderstood, and yea, he;d work in that thing. The King then made some statement about how he had the word of a Bush and that was good enough.

Definitely let us know when its all ready...can't wait. None of the other financial sites/blogs came close the the effectiveness of the Finance roundups.

You have to be BIG PICTURE...it's all inter-related. Food, Oil/Energy, Economy, Climate, POPULATION, war, politics, etc.

Miss your roundups and comments deeply.
Will visit your new site, but the convenience and relevance to TOD was awesome.


Please revisit this with the TOD staffers and come to some sort of understanding whereby you are linked here daily or can return to post as you were doing. The work enhanced TOD enormously and being here gives it wide circulation during these critical times.
Us peak oil financial realists oughta stick together :-)

With all due respect to Stoneleigh and Ilangi, I think the editors made the right decision is not dedicating a significant amount of the content and commentary of The Oil Drum to a topic that really seemed to have no direct link to peak oil. Additionally discussions of this sort almost instantly deteriorate into bouts of horrible investment advice, as evidenced below. There is no shortage of bad investment advice on the web or in unsolicited emails. No need to add to it here.

Clearly economic and political issues can not be separated from peak oil and I am not suggesting that those topics are not important. However, the near obsession with the housing crisis, crash of the dollar and global economic malaise has much more to do with the doom mongering proclivities of peak oilers than it does with peak oil itself.

Again, I do think there is a place for the good efforts of the two posters. I hope their new website is a success. They may well be right about the future. But I don’t think the obsession with prophesized economic doom added much to the site in terms of commentary or membership.

Hi Jack,

I like your point about the problems with giving investment advice (or, even with what appears to be/could be easily interpreted as being same).

re: "However, the near obsession with the housing crisis, crash of the dollar and global economic malaise has much more to do with the doom mongering proclivities of peak oilers than it does with peak oil itself."

In general, I'd really be interested in your take on what's going on now, btw.

One question, do you think these events (housing crises, dollar crash, economic malaise) are a direct result of "peak oil"?/(or peak energy or something along these lines?).

If so - (or, even if not, I suppose) - do you see any constructive action possible? If so, on whose part?

Is your point that it's adding to fear, rather than to constructive action, to discuss these? Or...? (is that what you mean by "prophesized economic doom"?

I hope you will post more frequently.


As far as we know the Laws of Physics apply to everything - banking and finance is no exception.

The specific law that has been ignored by the bankers/hege-fund-operators is the second law, put simply it states 'there is no such thing as a free lunch' - somebody, somewhere, always has to provide it.

This means that we always have to add energy to any system to allow it to continue working.
In the case of the banking system the 'free lunch' of interest has to be paid by somebody - overall it is paid by the economy growing, there is no other way.

In order for the economy to grow it has to consume more and more energy - this is no ordinary growth it is exponential growth. As we have seen on TOD consumption of oil, the most important energy source for the world's economy (with as yet no adequate alternatives), has not grown at the required rate of around 2% a year for nearly 3 years now!

If nobody is 'paying for lunch' then 'lunch' can't happen.

No growth of primary energy = No growth in economy = No growth of banked deposits = no growth of debt etc etc etc.

The world is a compicated place, but TOD editors please note, primary energy and banking are intimately linked and it is part of your mission statement:

'The Oil Drum's mission is to facilitate civil, evidence-based discussions about energy and its impact on our future.'

I don't think there is any evidence that shows that the laws of physics apply to everything. In fact, the Ricardian theory of trade explicitly states that there is a free lunch. Groups of people specializing in what they are good at and trading between them create more value than if they did not specialize and trade. The increase in value is not a function of energy.

I know that people insist that there is an energy theory of value - that all economic growth is only a result of humans exploiting a finite energy base.

In my opinion, and the opinion of traditional economics, this is wrong. Now, clearly mankind's ability to exploit energy resources has been a key to growth. But innovation, trade, and societal structures have also played important roles. The theory that diminishing availability of energy inevitably leads to diminishing growth is a theory, although an interesting one. Not only is it unproven, it doesn't seem to have much evidence in support of it.

It seems obvious to me that growth can continue, in theory, even if energy supply shrinks. If we had 10% less energy tomorrow, but stopped eating meat entirely, reduced the weight of cars, taxed energy, etc. we could be even better off.

In reality, this is much more difficult, but no one knows if we can do it or not. Physics does not explain finance, or many other aspect of our reality. If I write this comment and you read it, Aniya can still read it as can many other people. Enjoy your free lunch. I'm buying.

Can I suggest you take a look at this paper by Robert Hirsch


In particular this approximation

%Change in GDP
----------------- ~ 1
%Change in Oil Supply

Any comments?

Within the context that it is presented, I won't say he is wrong. First Hirsch appears to use this formula only because he needs to establish a relationship between oil and GDP. This simplistic formula does do that. Hirsch does not give any theoretical foundation for why it might work. He says it is only based on historic events of 1973 & 1979 and that precision is impossible. Finally he says this is an order of magnitude number "10 is too big, 0.1 is too small".

Nothing I have said is invalidated by the range he gives. My claim is that change in GDP/change in oil supply = < 1.0. It seems obvious that Change in GDP/change in oil supply equals anywhere near ten is preposterous.

Over the short periods of time in his sample, I am sure a formula like this, even with a much tighter range (say 1.2 to 0.8), would be fairly accurate. However, there is no reason to think it is meaningful beyond describing a short-term reaction to a severe oil shortage.

Additionally, although I like Hirsch, I won't take what he says of faith either. So “Hirsch said it” does nothing to convince me. The formula appears to be a wild ass guess, and I don't think I could make a better one. However if Hirsch is claiming that this simple formula governs the relationship between oil and GDP inevitably and forever, he need to explain why.

I agree I don't think Hirsch is arguing that this will remain true in the long term (at least to oil as the primary energy source) if we are to move forward beyond a fossil fuel based economy, but for the moment I find it to be at least interesting given the current turbulence in the financial markets.

The theory that diminishing availability of energy inevitably leads to diminishing growth is a theory, although an interesting one. Not only is it unproven, it doesn't seem to have much evidence in support of it.

Actually there is plenty of evidence (I lived through such a scenario in the 1970s) when, to use the economist's term 'all else is equal' which is more or less reality over a short period of a few years.

Efficiency 'gears' the use of energy, it does not mean you don't use any energy - efficiency is not a free lunch it is a cheaper lunch.

Take the energy away from your specialists trading between themselves and you will find there is no trade. Technology and energy are not the same thing - one needs the other. It's the energy that makes everything work.

It seems obvious to me that growth can continue, in theory, even if energy supply shrinks.

We're back to thermodynamics again - you really should try and understand physics, sadly although it does apply to everything not many peolple understand it's implications for everyday life.

There are limits to how much efficiency you can get out of any system - if you are at maximum efficiency (or can't improve it rapidly enough, as currently) and your system relies on growth in energy input + efficiency (as the world economy clearly does), then no growth in energy input + efficiency (as we have seen for the last three years) results in no growth of output.

The economic system (and especially the finance system) we have put in place (and explained, at least in part by economic theory) relies on growth in energy - I'm not making this up, just look at the graph for supply of oil or the total primary energy use come to that. Compare your lifesyle with that of people in a third world country - you use much more energy, that is not a coincidence.

Enjoy your free lunch. I'm buying.

QED - you prove my point, somebody always has to pay, this time it just happens to be you. :-)

Unfortunately, I agree with most of this. Yes, efficiency (etc.) may only act as a gear to energy inputs. I would never claim that a modern economy can not function without energy, or that a severe reduction in supply would be without impact.

I do think physics explains a part of economics, but not all - which you state above as well. Of course the corellation between energy and GDP has been strong, but corellation does not ensure causality or predict the future.

As I get richer the amount of energy I consume goes up. But so do the number of shirts I own, yet no one would claim that the increase in shirts is the cause of my wealth.

Growth in energy + efficiency is what allows economic growth - sadly, there are limits to both.

The only reliable statistic we have for oil to know whether we are at limit of it's growth is the 900% increase in price since 1998 while the world economy only inflated by maybe 30% - indicating a high probability of peak about now since that's what we predict will happen as we run up to peak.

On a day to day basis we are stuck with the job, house, car, etc that we have - it is very difficult to increase efficiency very rapidly, certainly not at the rate of 900% in ten years. As engineers and scientists know there are thermodynamic limits to the use of energy - for example, many of our power stations already run close to maximum efficiency.

So, if the supply of energy is limited (and no adequate alternatives are available, as now) collectively there is only one option, use less - AKA recession! 'Snake oil merchants' in charge of the banking system is just a side show!

While I tend to agree with your main point, I find the rest less convincing.

Perhaps if you pick the lowest point that oil ever fell to and the compare to the top, and use only spot markets (as opposed to average delivered price) and compare in dollars, you can get a 900% increase. Similarly, if you picked the highest point in the 70s and use some other currency, you might find it fell. Obviously both are meaningless.

I do agree that overall energy prices have probably exceeded growth over the last decade or so and may in the future. Efficiency is very hard to measure. Yes, cars take time to transition, but pricing could make someone choose to buy a valuable piece of art rather than fly their whole family across the country to vacation. That would lead to a energy savings far in excess of 900% and not impact growth at all! Google amounts to a lot of GDP and not much energy.

Get used to growth. It ain't going anywhere.

Get used to growth. It ain't going anywhere.

I hope you are correct - my future depends upon it! I can't tell you what will happen in the future, only what can't happen. I can tell you that in the last three years we have not increased world usage of oil and many countries are now struggling economically because of that - the USA or China or India is not the world.

According to the EIA of the top 15 importing nations, in 2006, only 4 used more oil (let alone the 2% increase historically required for BAU) the rest all used less - not good evidence for your point of view.

But, I have a plan B which assumes you are definitely not correct in the long term.

Eventually I am correct, I do not expect the laws of physics to be broken, that is my 'faith' - what I don't know in detail is the timescale - for me, long term is ~30 years, for my son ~60 and grandchildren >80, will you still be be correct in 80 years or even 2?

the USA or China or India is not the world.

I know, I live in Thailand.

I also agree that something has to break sometime. The questions are when will it happen and can we adapt. I don't really have an answer to either. My point is that it is simplistic to just assume the answers are now and no.

it is simplistic to just assume the answers are now and no.

I agree with you totally - that's why I spend several hours a day studying the situation.

But, increasingly, to me it looks like a 'multiple worldwide disaster' is occuring now - there is plenty of evidence in favour of, and not much against, this hypothesis. Saying positive things instead of admitting to problems is not a viable strategy.

So, with regards to energy supply at least, I think it is better to have my own 'plan B' rather than relying on the government - I have the time to visit my parliament and, now I know how it works, I can tell you the UK government (and the current 'free world' system in general, based on unquestioned never-ending exponential growth) does not fill me with any confidence, actually quite the reverse!

We live in a world of specialists - very few have the slightest idea how the world in general works, and that definitely includes the politicians.

There will be substantial change, can we adapt? ... yes some people will ... that is not the problem ... the problem is all those who can't adapt.

Hi Aniya,

I always appreciate your good questions. I work in the investment field and am extremely sensitive to the difficulty of trying to say what investment strategy is best for an individual in an ideal case and the damage that could be done if the advice is wrong. How people should invest is determined to a large degree by factors such as depth of knowledge, risk-tolerance, time horizon, etc. In the Chartered Financial Analyst (CFA) system, one can have their qualifications revoked for giving investment advice without understanding the individual needs of the person making the investment.

I think it is dangerous to tell someone who you know little about to “Buy gold”. Yes, it could be the right strategy, but people have been saying “Buy gold” for as long as man has known about gold. Over the course of most of our lifetimes, it has not been a great investment. Anyone who has investment experience is aware that putting all of your eggs in one basket is risky. I am aware of the issues facing our society and believe in peak oil. However, over a long period of time, I personally would not hold a large portion of my wealth in gold. I do think equities (for example) will provide better returns in the future, as they have in the past, but then I don’t think the end of the world is coming. I could be wrong. So could the others. But at least I admit it. And I would not advise someone I don't know to buy any stock or portfolio.

As for what is happening now, I do not think it has anything at all to do with peak oil. Again, I do believe that we will never produce more oil than we are producing now and that this will drive energy, food and other prices up. I do think this has impacted the economy and will do so even more in the future. But claiming it is a cause of the current subprime/housing/CDO crisis seems to require journey’s through a bunch of doomer/anti-capitalist theories with a heavy dose of faith.

I have thought the US was heading for a recession for some time. But so have Merrill Lynch and Morgan Stanley. Like many, I am skeptical about the ability of the world to just keep going unaffected by the US. I think this could lead to a crash of 1929 proportions, but think it is highly unlikely. I also think we could escape pretty easily and that that is also unlikely. At the end of the day, I think this is a cyclical recession caused by a credit crisis much like the dozens of others we have experienced in the past.

The US has transferred massive amounts of wealth to Asia and oil exporters over the last decade. Part of this is just natural competition and part poor policy. I expect that the US will bounce back, but may not recover what it has lost. But so what. This is what humans have faced since humans starting facing stuff.

I object to the obsessive doomer porn economics because I think it is faith-based, not drawn from a objective analytical approach. The process seems to be:

1) Someone believes life as we know it is morally wrong and will meet its end in a fiery doom
2) They then latch on to any indication that looks like the collapse of life as we know it
3) They see every indication that anything is going wrong as proof the end is near (electricity blackouts in Bangladesh, strife in Mexico, shrinking food stocks, economic downturns) and that they were right and all those idiots who didn’t listen to them are going to get their deserved punishment.

Any similarity to other end-of-the-world faiths (like Christianity) is unintentional, but obvious. Read a few of the posts below. Cid Yama virtually declares “I know the future” and anyone who disagrees is wrong. Sounds like a faith-based approach to me, and I don’t take things on faith. In fact, I often see faith as a proxy for lack of reason.

I am not claiming that everything will be fine. I don’t disagree with the rational doomer approach of Leanan and others. I don’t have an argument that says society can go on forever or that Tainter (for example) doesn’t present an excellent framework for understanding the end of various civilizations, or that these theories don’t provide some predictive value for how ours will end. I think the concept that exponential growth and finite resources inevitably clash is useful and to some degree irrefutable. However, how a theory proposed by Malthus 200 years ago can be read to mean the world is ending right now is harder for me to grasp.

I do think that peak oil and related issues (including complexity, strain on resources, climate change, population) threaten mankind and the planet. I think that there are faith-based views, equally distributed on both sides, that say everything will be fine (ideological cornucopians), or that the end is near (ideological doomers). I am equally opposed to both.

I also think there are very important rational approaches to these issues that are characterized by doubt, evidence, discourse, and analysis. Only from these can a solution come. When they are drowned out by ideologues, the value of The Oil Drum diminishes.

I miss the finance round up as well. I didn't know they were made to feel unwelcome here. To me, the financial crises is a symptom of PO and should be part of the discussion.



OK who wants to do something about it?

Depends on what the options are. What do you have in mind? I don't see that there's much to be done.

This is the first time that I have posted in the two years that I have
been reading the oil drum. I now feel that this matter should be fixed. I enjoyed reading the financial news.I also consider it to be part of PO and should be part of the discussion. We need to have an Oil Drum
Financial section.


Just because you have four wheels does not mean you are on the road.

Nice post, Earle.

re: "...this matter should be fixed."

Do you have any ideas to propose to the parties involved?

Perhaps some "third sider" mediation would be helpful.

How about a TOD member vote?

I know this is site is not meant as a model of democracy and nobody need take any notice but if the authors wanted to know how the readership feels then maybe a vote would help clarify it.
Something along the lines of "TOD should feature financial threads such as those previously supplied by Stoneleigh and Ilargi" Y/N.

I know my answer would be "Y" I think it is relevant to PO as I disagree strongly with Jack who argues above that financial growth can continue indefinitely irrespective of falling energy input.

In any case you don't have to read the round-ups, they would be in a seperate thread. I don't read the threads I am not interested in. I don't have time to.

Carbon, Coventry, UK

How about a TOD member vote?

How about not.

When the members have the same level of stake in things as management then yea.

Otherwise - its their sandbox and we are their guests.

The comments section of the drumbeats end up being financial threads. I would be in favor of threads devoted to finance just to get the financial discussions out of the drumbeats.

If people are thinking about investing for retirement, I think the chances of actually being successful are very slim. There is too much of a chance of financial collapse.

Both stocks and bonds are likely to do poorly. Once earnings are declining because of peak oil, the "net present value of future earnings" for stocks will be very low, so valuations will be much lower. Long term debt is unlikely to be available, because investors will realize that the economic situation is likely to decline in the future. Existing debt will still need to be paid off, however, making for a very bad cash flow situation.

Government bonds will do all right for a while, but eventually the same day of reckoning will come for it. When it becomes abundantly clear that future decline is inevitable, it will not be possible for the government to issue more bonds. It will then have the problem of paying off existing bonds, without new debt.

Gail, as part of a full disclosure, do you have a 401K or retirement accounts? I just think its fair if people are saying their is going to be a financial collapse we should know if they actually believe what they are saying. Who knows there could be people here making financial decisions based on what they read at TOD (I hope not) but if they are they should have full disclosure when such apocalyptic predictions are made.

Would you agree that similar requirements be made for "Don't worry, everything will work out fine.." predictions?

I can't see why Gail should have to describe her personal investment porfolio on the Web. We know that these posts are a mix of 'Opinion and Suggestions', and not some kind of legally binding financial advice.

At least we know her first name and her trade. What's yours?

Bob, Astronaut

I continue to invest in my 401K cause i'm in it for the long term and believe the future is electric.

Scott, Consultant

I think Gail's correct that stocks and bonds are both going to be bad retirement investments. But I agree that 401ks and IRAs are still a good idea, because you need to shelter money from taxes.

I have my own IRA money, and the IRA money of everyone in my family (plus all of my friends who ask for my advice) in commodity-related CDs and royalty trusts. The CDs are 100% FDIC insured. The return is based on the return in a specific commodity index, or a subset of that index. For example, my family members' money is in fairly long-term CDs where the return will be based on the price of gold, oil, and the ag components of the GSCI.

Yikes!! If IRAs don't work, does this mean baby boomers are going to have to rely on the good will and generosity of their children???

Good Lord have mercy on us all!!

Yeah. And it would teach the younger folks this lesson - to improve your odds, have as many kids as possible. Just what's needed to help with resource problems - runaway population growth. ...zzzzzzt... Dang! Just touched the third rail of resource politics! ...zzzzzzt...

Ok, Ok. I'm not an astronaut.. (technically speaking).

Bob, Starship Captain

That wouldn't be Financial Consultant would it. You know, the ones that lose their income and their jobs when everyone gets doomerish and starts pulling their money out.

Explains a lot.

For the record, I am totally out. No 401K, no invesments whatsoever. Only a fool, an idiot, or an insane person would still be in equities.

Psychologist, Semi-retired

I've parked my car, and ride my bicycle or walk everywhere now. Have been for the last year. The only good investment is in personal infrastructure; i.e. well, solar panels, windmill, heat pump, non-perishable food storage, etc. I have 2 side-by-side properties in a rural setting on a lake both paid off. Provide your own utilities and your return is the money saved from the bills you no longer have to pay. Pay off your property and your return is the mortgage you no longer pay.

and believe the future is electric.

Forgive me, Scott... but I have to admit that the first thing that flashed into my mind when reading this was the movie "The Green Mile".


Actually, most of my retirement funding is in a defined benefit pension plan. It is guaranteed by the Federal Pension Guaranty Corporation. If we get into hyperinflation, it will have exactly the same problem as Social Security. It will pay benefits, but they will not be worth much.

I have other funds as well, but very little is in a 401k. I had my own one-person company for a several years, so some are in a self-directed IRA plan. When I formed my company, I was able to roll what had been in my 401k plan into my own IRA. Even with the greater flexibility this gives, I don't have a great deal of confidence in my ability to invest for the future.

Gail, Suppose you had began purchasing 1 oz of gold per month at age 21 and continued until age 65. If gold were selling at $900 per oz when you turned age 65 you would be sitting on a real $475,200 in gold. If gold drops to $450 oz (the current cost of mining an oz) so what? If gold increases to $1,800, so what? An oz of gold, to me, is a measure of energy...be it manual, food, or FF. To me gold is simply a bridge across the troubled waters of inflation of fiat currency. If, in addition, you had invested a like amount in a retirement account (indexed to inflation) you would be in the enviable position of sitting on a large amount of cash plus a substantial amount of gold.

I have never liked the idea of putting all of my eggs in a single basket. Putting away a bit of gold has been my means of remaining sane when the world of finance has gone mad...as it has recently and in the past. Until a few months ago I would leave several thousand dollars remain in my savings/checking accounts. No more. I leave only enough in bank accounts to cover monthly expenses. I have absolutely no faith in the Fed, Wall St or any bank at this time.

BTW, I am not a gold dealer...I started out as a coin collector when I was a kid and US BU $20 gold coins could be purchased for $50-90... and things sort of snow balled from there. Not all hobbies are money losers! :)

Actually, most of my retirement funding is in a defined benefit pension plan. It is guaranteed by the Federal Pension Guaranty Corporation

That's very unfortunate Gail. The PBGC is paying pennies on the dollar for failed Pension plans. The PBGC exhausted its cash reserves during the last recovery.


"The PBGC is not funded by taxpayer money; it covers pensions using premiums paid by viable companies."

"Things started getting dicey at the PBGC in 2002, when the single-employer fund dropped from a $7.7 billion surplus to a $3.6 billion deficit. Things deteriorated even faster last year. By August, the deficit had increased to $8.8 billion."

FWIW: If you have the option, it may be prudent to cash out your pension into 401K\IRA and then invest very conservatively. I would also be very concerned since a lot of pension plans began to invest in very risk investments chasing yield when Greenspan lowered the rates to 1%. Lots and lots of Pension money was invested subprime, oversea markets, and into hedge funds. In my opinion pensions are extremely risky. My guess is that you can do a far better job investing your own money.

I am also very concerned about FDIC insured bank accounts. the FDIC only has $30 Billion in reserves plus a $50 Billion Credit line to the Treasury department. Theortically the Gov't can authorize a bailout, but what if it takes months or years to figure it all out. $80 Billion is nothing.

On Friday this report (below), the major banks have only $200 Million in "non-borrowed cash reserves". I think if this gets out that the banks have no money, we could see an old fashion bank run and bank holidays.



Be conservative. Have 10%(+) in PMs. In Your Possession. Bottom line, play a small hedge against all electronic money.

Do you have it in your possession? Then Who has 9/10s of the law?
(ie possession is 9/10s of the law cliche.

Remember, by this time next year, 40 million(+/-) homes will have a mortage bigger than the current market value. Under water. A large deflation of house prices.

Many of those were thinking of using that large house as a cash-out retirement investment intended on being used in the next 5-10 years.

That won't be happening.

Instead of Remember the Alamo
Remember Northern Rock.

Only 10% in PMs? If the banking system makes a huge kab00m doesn't one stand to lose everything? I mean, it would be like this big, global, uberdivorce, feeding attorneys and impoverishing everyone else. How about everything in PMs, less enough cash to carry one for a few months?

Got a friend who was seriously planning to just get run down by all of this, but now she is listening, and I suggested taking all of it off the table. I'm no expert, but I see the writing on the wall, and I hope I'm not doing her a disservice ...

Only 10% in PMs?

Actually, I would recommend pulling out all your 401's and pensions, Pay the pound of flesh in taxes on it, then you are clear of the beast. They won't be worth anything in 10-15 years anyway.

Put it all in Au/Ag, use it in 3-5 years for some farmland or something real.

I don't have any faith in Electronic money in the long run.

But nobody but us chicken littles believe this stuff.

I know someone who believed what they were seeing, Believed in their logic and bought all the Au/Ag they could in 2004 at $400/$7 oz. Now were they doomers or smart investors? Gold near $900 and Silver at $16?

Now, how much did those smart investors who left their 401's etc alone, make on Their investments since 2004?

Bottom line is this.

What do you really think your retirement/investments will be worth in 10-15 years. What will the $ be worth....

But your money where your head/heart is.

As I've been saying, most Boomers are going to be "aging in place" - they just don't know it yet.

Timing is everything, of course. We all know that the long-term direction is likely to be down, but it makes a great difference whether today is the first day of a forever downhill life, or whether things are going to continue to bounce around on a plateau for a few years yet.

For the sake of argument, let's assume the latter for a moment. Forget about double digit yields, we've probably seen just about the last of them. Assuming that TPTB are going to move heaven and earth to keep things held together enough to avoid a total collapse (and let's get a grip on reality here, oil is still under $100 and gasoline is still under $4, it isn't TEOTWAWKI quite yet), it might be possible for people to manage funds locked into their 401K accounts in such a way as to at least preserve most of the value of their portfolios for a few years. Even a loss of a few percent a year is not the end of the world.

Those of us under 59.5 years old still have a wait before we can pull our funds out without that 10% penalty, plus there are taxes to be paid on the withdrawals - if one is still working (which is true of most of us in our late 50s/early 60s), that will all be at one's top marginal tax rate. Some of us might have some money in annuity-type investments that only allow withdrawals over a ten year period.

Thus, the trick is to figure out what the risks are, and thus to maximize your values. If you are absolutely convinved that that everything is going down the drain non-stop starting today, then your best bet would be to go ahead and bite the bullet and withdraw anything you can get your hands on net of taxes, even though you'll take a big hit and may only end up recovering around half of your portfolio. BTW, if you have guessed wrong, if your timing is off by a few years, you will have really shot yourself in the foot big time. And need I point out that no one really has that type of absolute certain knowledge about the future?

On the other hand, if one bets (and it is a gamble) that we're going to bounce around for a few years on a plateau with a merely "bad" economy, then it would make good sense to just invest one's portfolio very conservatively, and plan to start withdrawing your retirement funds as soon as you were past that 59.5 year threshold, being careful not to withdraw so much as to put one into a higher tax bracket. Of course, there is the risk with this one that a sudden plunge out of the blue will leave one with nothing at all.

Of course, it doesn't have to be all one or the other. One could withdraw part of one's portfolio, take the penalty hit on that portion, and leave the rest in the 401K in the hopes that the worst will happen later rather than sooner.

(All of the above assumes that you can come up with a plan for investing your proceeds. I assume that for most of you you'll be looking at precious metals as an important part, though maybe not all, of that portfolio. That's a whole separate discussion.)

It is a gamble any way you go. No way am I going to tell you what to do, I'm trying to figure it out myself.

I bet my 401k on the whole thing going to pot, with a loss that is greater than the taxes and withdrawl penalties... I closed out my 401k completely back last Summer. I'm pleased with my decision.

And need I point out that no one really has that type of absolute certain knowledge about the future?

I do. Only a person blinded by their ideology, or in massive denial can't see what's coming. Reality Bites, whether you acknowledge it or not.

If you are absolutely convinved that that everything is going down the drain non-stop starting today, then your best bet would be to go ahead and bite the bullet and withdraw anything you can get your hands on net of taxes

Then you should be short ..
There are numerous ETFs geared to profit from
falling markets and declining prices ..

Triff ..

Please tell me what I am missing in this fear of investing idea,
I have an IRA at Schwab. I buy PBT which pays a dividend of over 1% of your total ivestment per month [ 12% / year ] Then I take the same amount of investment and short Lehman Bros or Morgan Stanley. This makes about 15% each month.
If the market heads south, it's just another oportunity to profit. In all my years of trading, this has been the easiest play ever. Even better because the market falls and then bounces back to be shorted again. I tade about twice a week.
Come on folks, profit from your market knowledge.


Then Schwab AND your IRA cease to exist in the meltdown while the dollar becomes worthless.

And the meltdown occurs, uh when? You might be a wee bit dooomerish there. This is not Armageddon yet. I suspect we'll still be paid in dollars an buy bread with dollars for at least 6 more months [irony]
I'll take my chances in the market along with all those people who really have to have dollars, like Soc. Sec people.

Government bonds will do all right for a while, but eventually the same day of reckoning will come for it. When it becomes abundantly clear that future decline is inevitable, it will not be possible for the government to issue more bonds. It will then have the problem of paying off existing bonds, without new debt.

For those holding on to gov't bonds for yield are already losing due to inflation. Perhaps if one is trading on bonds for rising bond prices have made out OK. Although the most important factor is employment, not retirement investments. Few Americans have sufficient saving to whether retirement anyway.

As far as the gov't issuing new bonds, thats not ever going to be a problem. They simply print money or have the Fed buy them via repos to create virtual money. This of course has a serious ramification: inflation.

For the short term its likely we will experience a bit of deflation. Eventually the gov't will get tired of deflation and just start printing money. The questions remains:

Can Asia decouple its economy from the US? If they can, the dollar is in deep trouble as the US would suffer a deflation and inflation at the same time. Deflation for all goods and services sold or made at home, and inflation from rising imports. I don't think the US can revamp its exports to make a declining dollar pay off. If such a situation plays out, the US could be out-priced for energy. This weeks global sell off suggest that Asia may not be able to decouple.

You are doing better then most.

These days it is not about return on investment.

It is about return OF investment.

More then happy to take the haircut for being 100% liquid and sleeping like a baby at night. Let the pigs slaughter each other, the time to move will come.

I agree.

IMO, the ongoing decline in net oil exports is vastly more important than the ongoing financial turmoil. Consider the following article about Mexico, which has been previously posted, but look at what is happening (note that they are talking about gross, not net exports):

Production: Down

Exports: Down

Cash Flow From Export Sales: Up

Domestic Consumption: Up

Even if consumption had remained flat, I estimate that total liquids net exports would have been down by a double digit percentage. Mexico is in the "red zone," with consumption close to 50% of production at peak production. I expect their net exports to approach zero by 2014.


Mexico's crude oil production fell 5.3 percent in 2007, year-end figures show
2008-01-21 22:26:34 -

MEXICO CITY (AP) - Mexico's crude oil production fell by 5.3 percent in 2007 as compared to the previous year. . .

. . . Though export volumes declined, total export revenues grew by 9.3 percent to around US$38 billion in 2007--the highest level in Mexico's history--largely because of a rise in prices. The average price for the market-basket of Mexican crude rose by US$8.62 to US$61.66 in 2007.

Crude export volume ran at about 1.69 million barrels per day, the lowest since 2000. December exports slipped to 1.5 million barrels a day, down from 1.9 million barrels daily in November.

Domestic gasoline sales rose by 5.9 percent, the company said, and natural gas production reached 6.058 billion cubic feet per day.

Without net oil exports, what will happen to projected earnings by publicly held companies worldwide?

Of course it is.

But money has been the mirror.

The US Empire became an Empire thru oil.

Every World Socio Economic Event (SEE) has mirrored an Oil Watershed.

Today marks the steepening of decline into the Olduvai.

PO, GW, POP Overshoot get buried in the SEE.



I was just plugging in the Pemex numbers on consumption. It looks like net oil exports probably fell at about -15%/year in 2007.

OPEC picked a hell of a time to start tooling around. Stupid converging catastrophes!

Suppose it's too late to convince them to switch to CNG, or GTL? Bit selfish of them to not use all that juicy gas they've got in the ground.

I wonder if offering to convert their vehicle fleet to gas would be cheaper than the value of these declining exports of crude.

Juárez police commander killed in ambush
By Daniel Borunda / El Paso Times
Article Launched: 01/21/2008 04:02:06 PM MST

A Juárez police commander was killed in an ambush-style shooting outside his home this morning, police said.

The slaying of Cmdr. Francisco Ledezma Salazar, 34, was the second police officer killed in as many days in Juárez. On Sunday morning, Lt. Julian Chairez Hernandez was killed when gunmen fired as many as 24 shots at his patrol car.


"The MSCI EM Latin America Index sank 8.3 percent" yesterday.

No word on today.

I just don't think Mexico can handle the stresses on it.

In my former life as a management consultant, we used the acronym SEE for Significant Emotional Event. Of course it was used in the context of managing people and it seems quite relevant in this context, too. I predict more people will be experiencing SEEs and they (us) will react one of several ways: blame, justify, judge.

Blame others for what has happened (to you.)
Justify actions (yours and/or others.)
Judge what has happened in order to support justifying and blaming.

All three are convenient blocks to accepting reality and getting on with the game. Watch what people write and say - see if they are doing one or a combination of the three. Interesting? More like unbelievably predictable.

Time to power wash the dog run of all the shit and piss and the lingering smell of an unkempt house.

So when are declining exports really going to show up on the MSM radar screen (I mean headlines, not just a passing mention in an op-ed piece)? When are we actually going to hear a US President or Presidential candidate talking about declining exports?

I figure that it will take a minimum of 12-24 months from that moment to get a consensus that it is a real problem and that something has to be done about it, and then another 12-24 months at a minimum to actually decide what has to be done (which will initially be ill-informed, ill-conceived, and inadequate), and then another 12-24 months at a minimum to implement this initial, inadequate mitigation response. Then another 12-24 months at a minimum to discover that the intitial response is indeed totally inadequate and ineffectual. Then a further 12-24 months to decide what we really should have been doing and must do now to an even more draconian extent because of the lost time since then. Then a further 12-24 months to implement the more serious, draconian actions that really must happen. Then a final 12-24 months to discover that the problem is even worse than anyone imagined.

What a marvel of efficiency the US government is!

Remember Nixon and Project Independence?

We've already gone thru all those phases. Maybe we just need to fast forward to 1980, when Carter was trying to get the public's attention about our addiction to oil. Instead, we got Reagan, who didn't think much about the reality of the situation, mouthing the typical NeoCon Republican rhetoric about Free Enterprise solving the problem, if only Big Government would get out of the way. Well, here we are, again in the middle of the swamp with the water rising rapidly and wondering, "Where are the life boats?" as the calls go out for more Government help to save our butts.

Does anybody else think it's amazing that there are still folks out there that are trying to find another Republican presidential candidate that will continue Reagan's Legacy? They didn't get it then and they still don't get it now. What will it take to shake them back to Reality? We can't keep going the way we have been living. We are like the alcoholic that tries to cure his hangover by popping another beer in the morning. You can't solve an addiction problem by handing out more of the addiction product.

E. Swanson

Reagan did more (less?) than not think much about the problem. He actually removed the PV panels Carter had installed at the White House. Once installed, PV panels cost almost nothing, so Reagan wasn't trying to save money or anything like that. He was making a calculated statement. Oil companies were big contributors to Reagan's campaign. He paid them back by undermining everything Carter did to try to reduce our oil dependency.

In many, many ways what we are seeing today is the culmination of the "Reagan revolution" and Reaganomics.

These were Solar water heater panels, not PVs.


I’m no fan of Reagan, but this urban legend was already dealt with.

In 1977, Jimmy Carter had solar panel installed on the roof of the West Wing, on top of the Cabinet Room. These were removed in the Reagan era because of leakage problems, but around 2002 were reinstalled by the second Bush administration, along with new solar collector systems on the Swimming Pool cabana and groundskeeping building.

I'd originally posted something about removing the Solar Panels as being part of his first official act, and I found references to that in many location on the web (including some I've found to be reliable in the past) but 30 minutes of furious Google incantations did not locate an official account of the action.

Anyone have a pointer to the actual facts on this?

Today provides a convenient gauge for, from "radar screen" to consensus, length
of time."

Bear/Merril started this "Cascading systems to failure" activity the last week in June.

How many times have you heard the word "contained" and "turning the corner"
since then.

"Run like a bunny" indeed.

Is anyone keeping track of total world exports enough to put it on a nice graph?

With total liquid production remaining static for 3 years now, PO deniers can still deny. If total exports are falling 2 to 4% already, that has to be a harbinger of PO right?

IMO, the EIA has the best data, but the detailed 2007 data won't be out for a while. Extrapolating from year to date data in 2007, it certainly looks like the top five are going to show an accelerating net export decline rate in 2007.

There is this: http://netoilexports.blogspot.com/ Scroll through to find graphs of net exports of top 16 & 20 countries. Also tables and comments, including a bit of CERA sarcanol at the top today...

A good source is the Net Oil Exports blog.

The most current chart is here.

I just checked his site, and **whew** the crisis is over!! What a relief. Time to get back with uber-consuming and do my part to mitigate the current recession. He says, and I quote,:

I'll be deleting this blog in the morning and moving to Montana.

CERA(Cambridge Energy Research Associates) published a paper this week showing definitively that oil production capacity will increase by 2 mbpd per year for the next decade. When I started this blog I was under the impression that oil was at or near a peak. I was worried. I thought I might try to partially document the issue. I was wrong. I'm relieved.

CERA has an excellent record forecasting oil production, particularly in the last 3 years. I can't see how demand can possibly catch up to this flood of oil we are about to see. Net Oil Exports are going to shoot through the roof. I called this one wrong.

The blogspot address is there for the first person that requests it. But I'm done.


Just in time, too. Had me going, there.


This will never show up on the MSM, which is why we're all here on theoildrum. The MSM is part of the corporate culture which will obfuscate this issue.

And 2014 is just 7 short years away! Time will fly by faster than most of us will realize. John

Unfortunately the Mayan 2012 seems to come first.

2014 is six years away, not seven. It's 2008 in this universe. ;)

I've updated my charts, it does not look too good:

An Update on Mexico Export Land Model

On the subject of net oil exports, the article Leanan posted up top about Saudi Arabian women being allowed to drive may impact Saudi exports.

IMO, the financial crisis is intrinsically linked to high energy prices.

energy is a minor problem. it's the credit markets that are the problem. people bought in the suburbs because the higher gas prices and long commute was worth it when home prices were going up 15-20%. gas prices are nothing when homes are going up $30,000 a year or more.

"energy is a minor problem"

sure guy - then why hang out here at The Oil Drum?

The suburbs started before WWII, but really took off after the war because of the GI bill among other things. The suburbs have been continuously expanding for over 60 years. The absurd run-up in home values occurred only after Greenspan triggered the housing bubble to keep the economy from faltering after 9/11 (the more cynical among us will say it was to help the Republicans with elections in 2002 & 2004).

The suburbs in this country are a product of cheap oil (though I will agree that the recent run-up in housing prices helped offset the even more recent run-up in oil prices for the relatively small percentage of people who bought suburban houses during that period), and the end of cheap oil is a bigger long-term problem for suburbia than the credit markets. Even if we hit 25% unemployment because of the credit meltdown, suburbs will thrive except in the most economically depressed parts of the country. I don't think that will be true when gasoline is over $10/gal.

"At its most elemental level the human organism, like crawling life, has a mouth, digestive tract, and anus, a skin to keep it intact, and appendages with which to acquire food. Existence, for all organismic life, is a constant struggle to feed—a struggle to incorporate whatever other organisms they can fit into their mouths and press down their gullets without choking. Seen in these stark terms, life on this planet is a gory spectacle, a science-fiction nightmare in which digestive tracts fitted with teeth at one end are tearing away at whatever flesh they can reach, and at the other end are piling up the fuming waste excrement as they move along in search of more flesh. I think this is why the epoch of the dinosaurs exerts such a strange fascination on us: it is an epic food orgy with king-size actors who convey unmistakably what organisms are dedicated to. Sensitive souls have reacted with shock to the elemental drama of life on this planet, and one of the reasons that Darwin so shocked his time—and still bothers ours—is that he showed this bone-crushing, blood-drinking drama in all its elementality and necessity: Life cannot go on without the mutual devouring of organisms. If at the end of each person’s life he were to be presented with the living spectacle of all that he had organismically incorporated in order to stay alive, he might well feed horrified by the living energy he had ingested. The horizon of gourmet, of even the average person, would be taken up with hundreds of chickens, flocks of lambs and sheep, a small herd of steers, sties full of pigs, and rivers of fish. The din alone would be deafening. To paraphrase Elias Canetti, each organism raises its head over a field of corpses, smiles into the sun, and declares life good."

Escape from Evil (New York: The Free Press, 1975), pp. 1-2. Ernest Becker

There are only four great questions in life:

What is sacred?

Of what is the spirit made?

What is worth living for?

And what is worth dying for?

The answer to all of them is the same,

Only Love.

- Johnny Depp, as Don Juan de Marco

.. Life is Good. What a piece of work is man.


They may be the great questions but the problem is that there are no satisfactory answers outside of fantasyland.

Tell your wife that. I dare you.
Tell the kids if your REALLY fearless.

Love is not 'Fantasyland', while I'm not surprised to hear this response.

I just wanted to put a counterpoint to that tragic 'Nature, Red in tooth and claw' comment up there. As Old Rose said in Titanic.. "Thank you for that fine 'forensic' analysis, Mr. Bodine. Of course the
experience of it was somewhat less clinical." It's worth being aware of the Point of View that one takes. It is why I flinch every time I hear people who claim that they are part of this construct called the 'Reality based Community'.. we need to temper our perceptions with a healthy dose of humility.


'The Eternal Tao cannot be spoken, and that which can be spoken is not the Eternal Tao.'

Tell me why I shouldn't delete this as off-topic silliness.

It's pretty close to being thoroughly off-topic, I admit it..

EXCEPT.. that there seems to be plenty of Leeway when one wants to post any manner of 'Human Nature is simply voracious, nasty and cruel.. and "REALITY" is about blood and death.' That narrowly negative interpretation should not get to stand as 'This is really what the world is about.' It's not, and it's not a useful key to how we can take on the problems that are coming. As flakey as it might sound spoken out loud, people will do a lot of things for LOVE that they wouldn't do for money. Sound like a bad Beatles tune? Sorry.. apply it to yourself, not to your view of what 'Joe Sixpack' would do.. since you exist. He is a figment..

That particular 'blind-man' (Earnest Becker, in this case) is grabbing some part of the elephant that I think I'd rather avoid, thanks, and using it to define life.. You didn't call it silliness when the 'slithering esophagus' was grinning over the field of cadavers, after all. Is that what gets us through this challenge, reducing our understanding of ourselves to some grotesque description of the crime of eating?

It's fine, of course, if you need to kill it.. but I find these Clinical Deconstructionists to be so self-righteously devoid of spirit and life.. I just have to toss a shovelful of living compost into that barren soil.

Thanks for your indulgence, Leanan.

EXCEPT.. that there seems to be plenty of Leeway when one wants to post any manner of 'Human Nature is simply voracious, nasty and cruel..

I don't see it that way at all...unless they offering a scientific argument, and are making it relevant to the topic.

What you seem to be offering is almost a religious proclamation, and it doesn't seem to be particularly relevant, either.

Hope is "Irrelevant" - Official :-)

I'll leave it with this.

I find it as relevant as any of the threads that attempt to look at Human Motivation, if we are trying to get a grasp on what we are able to do next, what we are likely to do, or perhaps most pressing, what it is that would impel our neighbors and quite often ourselves into more meaningful participation in dealing with these problems.

It's psychology, over and over again.. and I don't think I'd need to cite a clinical study to convince anyone that we have a 'spirit'.. not in the 'immortal soul' sense, per se, but surely states of encouragement, discouragement, passion, devotion, strong connection to other people in our lives. I think we need to consider what actually drives people to choose what they do, but the most 'Sciency, Clinical Analyses' don't often sound very true to my ear..

"A Joke is like a Frog. You can dissect them both to see how they work, but they usually die in the process."

I think literature is just the form of Psychology that tries not to kill the frog.

alright.. [/esoterica]


Hi Leanan,

Do you mean just Bob's post - or the whole thread, starting w. Chimp?

What was the topic? :)

'The Eternal Tao cannot be spoken, and that which can be spoken is not the Eternal Tao.'

glad to see that. however, the translator obviously didn't have a clue of what LaoZi was talking about...

Pulled the line from memory.. don't know if I muddled the transl.. but I've always understood it to mean that Human language and understanding is insufficient to ever fully describe 'the way'.. the Fullness of 'Truth'. I included it to reemphasize how this Orthodox-Science credo about being 'Reality-based', is I suspect nowhere near being able to encapsulate 'the eternal Tao'..

What did you get taught it meant?


you didn't muddle it. it almost can be said that one who truly understand won't attempt to translate, one who attempt to translate don't understand. as according to LaoZi: those who know don't talk, those who talk don't know.

ask yourself: was LaoZi human? did he know about the Dao? if he didn't, then how did he know the true Dao cannot be expressed in human language? if he did, then in what way?

now, how can Dao be taught if Zen - with only some partial and rather superficial grasp of Dao - can only be discerned rather than taught?

then there is the ancient Chinese language which most Chinese themselves couldn't really understand - like aged wine, so many layers of taste, forever open to new interpretations.

those who said all later philosophers were merely making footnotes for Plato obviously didn't know or understand LaoZi. but then, who can blame them? even Confucius couldn't understand.

I find translations vary quite a bit. The original text is cryptic, and intentionally so because it describes a mystery.


Hi Chris,

re: "I find translations vary quite a bit."

Of which Chimp's post and Bob's response are examples.

The texts vary as well.

The original text is cryptic, and intentionally so because it describes a mystery.

what is the original text? these so called cryptic text were not even there in the oldest bamboo stripes from the Chu tombs. then what is that mystery? did LaoZi know or not? one of the worst thing ever happened in China was to confuse the mystic and religious Taoism with the true wisdom of LaoZi as one and the same.

Slashdot has a story frontpaged that would seem to appeal here:

Telecommunications bringing us closer together rather than allowing us to sprawl?

"Technology makes it more fun and more profitable to live and work close to the people who matter most to your life and work. Harvard economist Ed Glaeser, an expert on city economies, argues that communications technology and face-to-face interactions are complements like salt and pepper, rather than substitutes like butter and margarine. Paradoxically, your cell phone, email, and Facebook networks are making it more attractive to meet people in the flesh."

By the way the comments yesterday under Stuarts post "The Fallacy of Reversibility" were the best. Explores the future scenario better that almost anything else posted.Recommended reading.

Airdale - So SOrry to hear about your RC. My paps went through the same thing but we still had many a good time together.

I still got that 6er of buckhorn and a fifth of ethanol if you ever make it out to the Oregun.


Many of us sense and have commented that PO may never be seen as such; the economic impacts will be more apparent for many, but much of the stress of PO and converging crises will be experienced in other ways, camouflaged in issues about other peoples and nations: Hispanic immigrants, Arabs, Russkies, Chinese, etc.

Conspiracy theories of various sorts are one answer; *they* don't want people to know because it would upset financial markets ;->, etc.

Apart from conspiracy theories, though, what are peoples' thoughts on why PO won't be experienced as such?

Because people don't understand thermodynamics. Even intelligent, well-educated people.

Case in point: Steorn. "The problem wasn't the Second Law of the Thermodynamics, it was friction!" (I wish I had a dime for every time a would-be perpetual motion inventor said something like that.)

As Jared Diamond points out, human memory is relatively short. A few decades, maybe a couple of centuries. We tend to assume that the way it is now is the way it will always be. And our experience has been expansion, growth, and technological progress. The idea that this can't continue is completely foreign to us. We aren't used to the idea of limits. Why should we believe it's different this time, when we've always innovated our way around limitations in the past? The thermodynamic argument won't convince the average person, and without that, "Malthus was wrong. The doomsayers are wrong this time, too" sounds very reasonable.

AKA, Linear thinking in a nonlinear world.

Man oh man, ain't that the truth.

Guilty as charged as to Steorn

and I consider myself more jaded than most

never happen again, I hope

From Mish's site:

Commodity Boom Over For Now

Commodity prices are set at the margin and with China slowing, and much of the western world in or headed for recessions commodities have likely peaked or will soon do so.

Yes I know all about the China story, but who doesn't? As various carry trades unwind, and leverage is reduced, we may soon find out how much commodity prices constitute real demand vs. speculation.

This view is sure to have people asking me about gold and deflation once again, so here is my opinion: Gold is money and thus gold should do well in deflation. However, there are 10,000 hedge funds out there leveraged Lord only knows how much in gold, commodities, equities, and everything else, so sharp pullback should be expected as that leverage is unwound. Gold will likely recover from this pullback as will oil. The latter because of peak oil.

For now, global recessions trump peak oil, an unwind of leverage is likely to trump gold, and recessions will easily trump commodities, especially base metals. All bets are off if Bush attacks Iran.

IMHO, Gold isn't going to collapse - yes, it pullback a couple times...but look to it being UP DEC 31st, 2008 potentially significantly.

Gold UP today...$13 bucks at the moment. Which is another disconnection for a sell off day.

Looks like more than few are selling off and moving to gold, held back by those who are covering by selling.

Not a good sign.

BTW, the commodity recovery looks to be a driver on the TSX gains.

PeakTO ... and I think the commodity recovery was driven by the surprise 1/4 pt. rate cut. Fiddle fiddle fiddle.

In the old days gold traded and physically changed hands. All of it.

These days much of the gold traded doesn't.

It sort of makes one wonder how much gold there really is, who has it, and what happens when everyone wants delivery on their paper or electronic gold shares.

In a honest world it would send the price of physical gold sky high, but these days most people are POS that walk away from their word or obligations, so it is also possible for the price to collapse.

Might as well flip that gold coin, eh?

It is possible, of course. SO I should re-word. I don't think it will.

If (and when) we get to the stage where there are LARGE Scale defaults on commodity deliveries...it will be a very bad day indeed.

IMO, we are a ways off still from that event, I hope. Although, it could be on the distant horizon.

Sure. It may never happen at all. But is is one possibility.

To go all in on something it either has to be an almost sure thing or one has to be in a very bad position. Better to let the pigs bleed each other out and see what it looks like when most of the cards are on the table.

IMO, people just don't "get" depletion. Yes, the global economy is going to shrink. However, global oil supplies are shrinking too. And the economic downturn will slow down new production from coming online that would otherwise have partially offset the depletion. There will be less capital available for expensive new oil projects (and that's the only kind there are any more). Projects already under construction will be delayed. Marginally profitable oil production will shut down. Some producers, especially those with Soveriegn Wealth Funds, may elect to curtail production.

Oil prices may soften for the first half of the year, if demand destruction outpaces depletion (and net exports) AND there are no major weather-related disruptions to supply AND there are no major political disruptions to supply.

The other area I think Mish gets wrong is food. The supply pressures on food will be enormous this year, even if ethanol production declines. I agree with him about base metals though, at least those that are not supply constrained. I will acknowledge that Mish does believe oil will recover from any leverage unwinding. It is his "global recessions trump peak oil" statement that I have issues with. I think that's true only if global economic contraction happens significantly faster than global oil depletion.

My personal opinion is that growth in oil consumption will occur, or at the very least remain flat as long as population growth continues. The only exception to this is if a radical change in fuel economy in the US fleet occurs. Until the average MPG of the US fleet is over 40mpg, oil consumption in the US will continue to grow as our population does. With the long life of a vehicle in the US, (my youngest car was born in 2000, my oldest in 1985) even if CAFE was at 40mpg tomorrow, it would take a long while for the US fleet average MPG to get anywhere near that.

.. it would take a long while for the US fleet average MPG to get anywhere near that.

I think that's why the Hirsch Report said you had to start 20 years ahead of peak. If you start at Peak, You're toast.

(BTW that would have put us back around the time of Carter's Sweater Speech)

Does Mish understand the exponential function re: Bartlett? I think that "if" China growth slows from 11% to 8% it matters little - each year their total demand (of a commodity) will be greater than the prior year; and in 4 years the demand "increase" is greater than the "increase" demanded in the last year of increase at 11%.

Thanks for that Jbunt.
Mish is so stuck on deflation that someone needs to yank his head out from his A**. Deflation from where exactly? Maybe a bit in US in some sectors but we have 2.2 Billion people getting their first credit card and they currently have 25% savings rate. There is going to be no global contraction in credit.

Emerging markets are emerging until they stop emerging, we see how it plays out.

There is a program coming up on the History Channel called simply "Crude".


Go on a sweeping adventure into the mystery of the history of oil. Where does it come from? When will it run out? Where is it driving us? This amazing fluid that powers our lives has made a 160 million year journey to reach our gas tanks and plastic bags. Learn about Earth's extraordinary Carbon Cycle, and the role of oil in current concerns regarding the environment. The Oil Age we now take for granted began less than a century and a half ago, and it could be over in our lifetime.

Times are:

Sunday, January 27 08:00 PM
Monday, January 28 12:00 AM

Note: This is a 2-hour program.

which is according to the website is apparently for the Eastern and Pacific times (Pacific apparently has a time-shifted feed??). Although if you have the dish I don't know what you are getting, so I am thinking that folks ought to check their local provider to see what time it really comes on.

Interesting. Do you think it's that Australian documentary?

Possible. I can't find much info about the one coming up which makes it hard to say one way or another. The Australian documentary is 90 minutes, which I guess would fit with the 120 minutes allotted to the upcoming program.

I found the study guide for the program:


6. How much oil does the average American use each day? How is this
consumption broken down?
7. What is the largest oil field on earth? Where is it located? How did the
discovery of the Gwar reservoir affect the global demand for oil?
8. When did the U.S. oil supply peak? When is the global oil supply predicted to
peak? What does this mean for the cost of oil?
9. What do fossilized ginkgo plants tell us about the carbon dioxide levels of the
Jurassic period? What did this super-greenhouse world look like?
10. What are the global repercussions of our oil use? What does this mean for our
climate in the future? What are the signs that this climate change has already

2. Crude ends with a grim outlook for the future of the human race, as well as our planet.
From the depletion of the essential crude oil supply to the ruin of our climate through
high levels of carbon emission, Crude suggests that we may well face a dangerous future.
Skip ahead to the year 2050. Write a newspaper article detailing an ingenious alternative
energy source powers our homes, cars and industry. Describe how the world has changed
without its dependence on crude oil and discuss measures humans have since taken to
dramatically reduce their carbon footprint in everyday lives.

Deffeyes, Kenneth S. Beyond Oil: The View from Hubbert’s Peak (Hill and Wang, 2005)
Roberts, Paul. The End of Oil: On the Edge of a Perilious New World (Mariner Books,
Shah, Sonia. Crude: The Story of Oil (Seven Stories Press, 2006)
Simmons, Matthew R. Twilight in the Desert: The Coming Oil Shock and the World
Economy (Wiley, 2006)

We have been burned so many times in the past by programs that from the advance stuff sound decent that turn out to be utter crap. On the surface they seem to be discussing relevant things, but we won't know until we see it how good this program really is.

I watched the TV show last night Life After People on The History Channel. It was really great.

There had been some discussion on TOD earlier about the area around Chernobyl. Some saying it was nearly devoid of animal life and some saying that animal life had fully recovered in the area. The latter are correct, red deer have returned to the area in full force and wild boar are now far more abundant in the area than outside it. The film crew was there, filming the wildlife right in the area so there is no denying it.

Even the trees around the area were destroyed by the radiation but the forest is now coming back. Pripyat, the city at the site, had some 50,000 people before the accident. Now it is abandoned and wasting away. But animals and birds are making good use of the buildings.

Ron Patterson

Hey Ron, did you catch the part about Nuclear Power plants shutting down safely after 2 years? Thoughts?

Hey AntiDoomer. Me thinks you are confusing Nuclear Power plants with Hydro plants. They said the power plant at Hoover Dam would be the very last to go, that it would keep on producing power until the generators burned up because muscles would plug the cooling water pipes and that would probably happen after about two years.

There was nothing in the show about Nuclear Power plants lasting two years.

Ron Patterson


No they did not say that the nuclear power plants would keep running for 2 years but they did say that the fuel would safely shut itself down. I believe last week you seemed to putting it out there that we shouldn't build more nuke plants because if people all of a sudden couldn't man the facilities the places would meltdown, and that was debunked in last nights show.


Has no one seen the movie Repo Man,or read their Lovelock, a bit of radioactivity is good you. Could be a whole bunch at once would be good for this planet. Maybe rid the poor old thing of its chief pest.

So now you're relying for information on a cult movie, meant for entertainment. That's just silly. Hell, relying on serious films, like eg. Lawrence of Arabia, for information is silly - the screen writers are responsible for neither scientific accuracy or for versimilitude, and tend to provide neither.

Br'er Gervais, you should really see Repo Man.

It won't teach you a damn thing, but you'll like it. It may have some truth, but surely no semblance of Fact to it.

"Eat your food on a plate, son. It'll taste better."
"Do you have balloons in funny shapes?" - "Not unless round is funny"

Emelio Estevez, Harry Dean Stanton

'Art is the Lie that tells the Truth' -picasso

Didn't catch your post before responding, you did it better. BTW , next movie on my Favorites list is Delicatessen. I'll bet you have been eating there already, I think I know your type:)


This comment is probably way too late, jokuhl, but I've watched and enjoyed the movie several times. The reason for the interjection is the common use of lines from movies as some sort of nuggets of wisdom; I'm sure that there are, but most movies are simply entertainments and have no wisdom.

I think I'll ignore such comments from no on.

Of course it is silly, we are a silly people, look around you it is a Monty Python movie on crack. Take a good 'whole' look not just a scientific keyhole peepshow view, okay. Anyway all the kings scientists and all his engineers are not going to put this Humpty dump of a world together. Place making is an art! :)

Well no, it was not debunked. They did say the nukes would safely shut down, but left us hanging at that point. They never discussed what would happen next. Cooling water must continue to flow even after the plant has been shut down.

They never even discussed what would happen to the spent fuel rod storage area. The rods, when removed, are extremely hot and must be closely monitored for at least six months.

The show was very negligent in that respect. They just shut the reactor down and left us hanging right there.

Ron Patterson

You sure it wasn't just 'challenged' in last night's show?

If you DO buy that bridge.. don't put it in my backyard, thanks.


So antidoomer, what kind of pleasure do you take in harassing Ron on this subject? What are you accomplishing other than exposing your immaturity?

I'm just pro nukes Bruce, pure and simple and that is it, and like LevinK, hate to see lies spread about nukes when for the time being they are a great way for the US to create domestic power.

So that excuses sophomoric behavior? You did the same thing yesterday, calling Ron out. You had a chance to contribute technical information in that earlier discussion and you didn’t. Show some class.

If it was really 'Pure and Simple', then I'd be pro-nukes as well.

Bob, Springer Spaniel

After 37 refuelings at i7 nuke stations,5 years building them,and some experience in dis-mantling them...I can say ,from experience,and training,that we should not build any more bigger than a sub plant.The simple reason is the consequence of a "oh shit"moment...and they ALL have those moments.

I though about telling you about some of those,but its old history...

Is that why we don't have a lot of stories available with which to challenge these "Nuclear has a clean record and is safe" proponents? I know other guys who've worked in the industry, and they also oppose it now, but the witness to it is so quiet.

The point is, there's a lot of Future out there, and people are working hard to stamp 'Nuclear Powered' onto it. I do hope you've at least chronicled your experiences and your conclusions of where it's appropriate, where it's not ready or not as safe as we're told, etc.

"it's old history" - well, knock wood on that one.. some of it has a long future, too. I'm not too worried about punishing past mistakes, but about revealing the blind-sides that have not been exposed and addressed. The industry has so much power behind it, that I worry that it's far too effective at muting dissent and sweeping inconvenient skeletons under the rug.


What we're really worried about is not those "Oh, shit" moments, but those "OH, SH..." moments

Like the Mayor of Hiroshima's "what the F..."

You have to take the bombs and dangerous waste as well as the power, it's a complete package.

I believe you about the "oh, shit" moments. Life is full of them. But I also believe that even the worst case scenarios, that noone has even thought likely are safeguarded against.

The mere presence of containment building is a proof that scientists and engineers admit there are scenarios they may not have accounted for. After all it is calculated against worst case power excursion, steam explosion or a melt down - things, which in theory should not happen, but in practice, who the hell knows.

I know for one - it is physically impossible to prove something can not happen. At some point of time you have to accept that some events are just too incredible to be worth considering.

Hey Ron, did you catch the part about Nuclear Power plants shutting down safely after 2 years?....No they did not say that the nuclear power plants would keep running for 2 years but they did say that the fuel would safely shut itself down.

Once again, you are all over the place.

Is your language that bad when you are hocking your consulting services Scott?

Darwinian, I think you meant 'mussels'.

I found it fascinating as well. My fiancee wouldn't watch - it sounded too apocalyptic to her - she was afraid it would talk about some disaster that would kill everyone, but that wasn't the point of the program at all. The focus was really more on how all of the structures that we have built need to be maintained, and how quickly nature would reclaim that which we have built without maintenance.

Yes, that was fascinating. Pretty good FX, too.

Interesting that hydroelectric would last the longest without maintenance.

Darwin, I need to apologize for my tone the other day. I am planning a piece explaining why I am so sensitive on the subject, but it's been quite busy for me these days, so it will have to wait.

BTW thanks for bringing the Chernobyl wildlife topic again, I received quite a nasty comment for claiming exactly the same thing. I'm not too familiar with the studies on the topic, but I vividly recall a movie showing deers wandering in the deserted town... makes you contemplate how we humans impact nature with our mere presence and how it is able to recover when we withdraw.

No problem Levin. I hold all opinions tentative. I will turn on a dime if I think I am proven wrong. And I often have been proven wrong in the past. I used to be on a lot of geology, biology and paleontology lists. I was the world's strongest advocate of the impact theory of mass extinctions. Then one day I watched the Princeton University lecture listed below:

December 4, 2002 - Public Lecture Series (a Louis Clark Vanuxem Lecture)
Vincent Courtillot , Universite Paris 7: "Mass extinctions in the Phanerozoic: a single cause and if yes which?" http://www.princeton.edu/WebMedia/lectures/

That did it! I took back everything I had ever written on the subject and became an advocate for the the volcanic theory. Hard evidence is simply something that cannot be denied, though many people will try.

In the past I have waxed and wained on Nuclear Power Plants. If someone does a documentary, or writes a book on what really will happen if a nuclear power plant must be abandoned and shows that it is truly safe, then I will go back to where I was a few days ago, a strong advocate for nuclear power.

Ron Patterson

The unanswered question back then was for how long the reactor has to actively cooled before it can be said it is safely shutdown. I suspect we will need a nuclear engineer to answer this but I think 1 hour should be used as a rough guidance:


When a nuclear reactor has been shut down, and it can be considered that nuclear fission is not occurring at a large scale, the major source of heat production will be due to the beta decay of these fission fragments. For this reason, at the moment of reactor shutdown, decay heat will be about 6.5% of the previous core power if the reactor has had a long and steady power history. About 1 hour after shutdown, the decay heat will be about 1% of the previous core power. Because the decay heat production rate is dependent upon the half-lives of the various fission products in the core, it will slowly decrease over time.

The removal of the decay heat is a significant reactor safety concern, especially shortly after shutdown. Failure to remove decay heat may cause the reactor core temperature to rise to dangerous levels and has caused nuclear accidents, including the nuclear accident at Three Mile Island. The heat removal is usually achieved through several redundant and diverse systems, and the heat is often dissipated to an 'ultimate heat sink' which has a large capacity and requires no active power, though this method is typically used after decay heat has reduced to a very small value.

In TMI they basically did not have any kind of cooling during the several hours after shutdown. This caused intense heat to accumulate and partially melt the fuel rods, and since it was impossible to let water in at later stage (because of the resulting reaction with the exposed fuel) they had to vent it through the atmosphere.

The Union of Concerned Scientists produced an interesting report (pdf) a few years ago about assessing the risks of nuclear plant safety. I considered it to be quite informative, though I don't recall the report addressing shutdown timing of safety.

Say Ron, have you read the book Ubiquity? It's a light read on a heavier subject, complexity, and is interesting on impacts vs. vulcanism vs. what-have-you....


No but I will look it up on Amozon.com. Thanks


but I vividly recall a movie showing deers wandering in the deserted town

Wildlife wandering about != healthy critters.

Yes, but the question is how much actual contamination there is. Here are some links:

(page 50 has some actual numbers from sample measurements)

If the zone was a death trap it would not be where most of the wildlife would be found (aside from their remains). The fact is that there is a near absence of certain species *outside* the zone.

No, but they're much healthier than the populations competing with humans (which in most cases, don't exist anymore).

Let's see. Several years ago there was some buzz about a girl who loved to speed through the empty streets of Chernobyl on her cafe racer (crotch rocket). She took pictures, posted them on the internet, and told of her experiences getting into and out of the area. Interesting reading. Wild mules were all about. And she photographed her radiation readings occasionally.

Here it is:


"Kiddofspeed - GHOST TOWN - Chernobyl Pictures -
Elena's Motorcyle Ride through Chernobyl"

Due to the replies below I humbly remove the above as a suggestion to read about the city of Chernobyl.

The picture for Chernobyl isn't as rosy as it might seem, according to this: Chernobyl 'not a wildlife haven'.

The study, which recorded 1,570 birds from 57 species, found that the number of birds in the most contaminated areas declined by 66% compared with sites that had normal background radiation levels.

It also reported a decline of more than 50% in the range of species as radiation levels increase.

Leaving aside Chernobyl itself though, your point is still interesting as the author of another study mentioned in the article comments: "The elimination of human activities such as farming, ranching, hunting and logging are the greatest benefits."

The Human Empire exports its entropy to the world's flora and fauna?

Yes, the truth appears to be somewhere between "total wasteland" and "wildlife haven."

The documentary showed that there are some animals there, but that's not the same thing as saying the ecosystem is "fully recovered."

I don't think it is possible to find out whether the ecosystem is "fully recovered". Before the incident there has not been undisturbed ecosystem in the area to properly compare with, it was mostly urban and agricultural land - the withdrawal of humans has created unique circumstances and the new ecosystem would also be similarly unique.

I think it is obvious that in most contaminated areas there would be some negative impact of radiation. But most of the researchers do conclude: "the positive impact of withdrawal of humans far outweighs the negatives of radiation". It looks from nature's PV humans are much worse than radiation. Like you said... the truth somewhere is in the middle.

Likewise, the safety of Nuclear Reactors appears to lie somewhere between "ticking [nuclear] bomb" and "completely safe and harmless". Or, Peak Oil - "complete die-off" and "business as usual".

The mind sees what it wants to see.

That's the point. People like LevinK claiming that the ecosystem is fully recovered is an utter falsehood, coming from someone with a clear agenda to promote nuclear power. The ecosystem is still very heavily damaged. It might seem busy to Ron but how many here at TOD could tell a healthy ecosystem from a dying one? Is Ron a professional biologist qualified to make that assessment based on a few pictures? And yet those who have studied the area conclude that it IS damaged badly and still suffering for it.

First of all I never claimed "the ecosystem is fully recovered". I claimed that it is "thriving without humans". Which is not really my claim and there is much evidence supporting it.

It is not in my competence to say whether the ecosystem is fully recovered, as compared to what if there was no radiation at all. This is a subject of extensive ecological studies... the bird study looks interesting, but it does not do enough to prove that radiation is the ultimate cause. It simply assumes that it is that, and there is nothing particular to the local environment that explains it. For example you can't really compare an area deserted by humans relatively recently to an area never touched by humans - there must be a difference in how the vegetation and animal life evolve in both cases.

Thriving? How are you qualified to state what constitutes a "thriving" ecosystem? Data please? You have NONE. ZERO. NADA. You are making a bald faced assertion hoping to pull the wool over people's eyes about the effects of nuclear power gone bad. At least Dezakin doesn't play this sort of game. He flat out admits to the safety issues but counters by insisting western safety designs are sufficient, a completely different topic (and one that Three Mile Island actually lends some credence to, despite the public backlash to the incident). You, however, are trying to paint bad engineering around an extremely dangerous process (nuclear fission) as nothing much to worry about. I call bullshit. Besides, the time frame we are discussing there is no time for "evolving" (another poor use of language). You probably meant "developing".

I am going to stop though. You've been proven wrong yet refuse to admit it. That's educational in itself, though probably not in the manner that you intended.

You better stop this insulting game. Don't ask me to prove claims which are not mine, and which I have simply relayed from seeing them in multiple places. For example this is a reading from the same BBC site:

Wildlife defies Chernobyl radiation

The exclusion zone around the Chernobyl nuclear power station is teeming with life.

As humans were evacuated from the area 20 years ago, animals moved in. Existing populations multiplied and species not seen for decades, such as the lynx and eagle owl, began to return.

There are even tantalising footprints of a bear, an animal that has not trodden this part of Ukraine for centuries.

And here is the summary:

Reappeared: Lynx, eagle owl, great white egret, nesting swans, and possibly a bear
Introduced: European bison, Przewalski's horse
Booming mammals: Badger, beaver, boar, deer, elk, fox, hare, otter, raccoon dog, wolf
Booming birds: Aquatic warbler, azure tit, black grouse, black stork, crane, white-tailed eagle

Note for example that a large part of the reappearing or booming species are predators, and in particular birds of pray. Could this be part of the reason why some other species are not doing so well? Just a speculation of mine - not a definite claim but a possible factor, in the whole complex schema of things.

So, is this your "dying ecosystem"?

So you compare a BBC news article to a statistical assessment by trained biologists of species in the exclusion zone? And you somehow magically choose to take the word of the BBC article over the biologists and further, take it as far as possible in the direction that you wish to represent? Then you latch on to a predator species as the explanation for lack of other animals?

Birds of prey eat other creatures. Being birds they can fly outside the exclusion zone as well as inside. This means they statistically can and will reduce their own exposure to radioactive byproducts whereas herbivores inside the exclusion zone will be at constant risk of radioactive contamination by those same radioactive byproducts. At least initially, in the first few years, it is possible that the predators may lower their exposure sufficiently to cause some population imbalance. Further, nesting within the exclusion zone, up in the trees, may leave them less exposed to other predators, particularly ground based predators, than outside the exclusion zone.

See? There are lots of what-ifs and unless you are the person who has conducted the study and are qualified to make the assessment of the exclusion zone, then your trumpeting of wildlife is simply cheerleading for your pet industry.

Please read both articles.

They are both based on biological studies, which are just performed by different people. The second BBC article sites a study which investigates reduced populations of just a handful of bird species, while the first one is showing a vast increase in all kinds of species - birds, mammals etc.

Personally I didn't need biological studies to convince me, after watching the movie showing all those wild animals walking in the streets. But in the end people choose what they want to believe.

Please take a notice - these studies do not necessarily contradict each other. While some species are booming others may still be suffering from the contamination. But the overall picture is that the ecosystem in area is far more populous and diverse than before the disaster - and this fact can not be refuted.

Your "first" article (cited second) is simply a collection of anecdotes without any statistical data backing it. Your "second" article (cited first) references a paper in the Royal Society's Journal, Biology Letters. That's a peer reviewed journal. Your other reference is not. Further, you insist on conflating Chernobyl background radiation with human withdrawal from the exclusion zone. The two things are completely different drivers. Absence of humans will naturally provide some increase in other species entering that ecological niche. Surely this is no surprise? But that does not mean that the situation within the exclusion zone is anywhere near normal. Rather it simply means there are no humans around. You can compare the ecological impacts of human withdrawal from other areas (see recent National Geographic for examples of the north central US) without involving radioactive contamination. The area is ecologically damaged, period, end of discussion. The fact that you continue to try to pick nits over this speaks volumes about your real agenda.

The fact is that there is more wildlife inside the exclusion zone than outside it. This is a contradiction to the theory that conditions inside the zone are worse than outside.


Considering the less than 0.3 mSv background gamma radiation levels in many parts of the zone it is not hard to see why wildlife would not gradually die off inside the zone.

This not to say that specific locations which are bad for animal and human health do not exist. The village outside the zone that is mentioned in the Guardian article is an example of policy failure. Evacuations and exclusion zones should have and still must be based on local radioactivity levels and not a simple fixed radius from the source boundary.

Nuclear has not created any oil spills to kill off marine life, is not emmitting greenhouse gases, uses cheaper fuel than coal, oil, or natural gas plants, and in non-Soviet block nations had a better safety record than oil refineries and jet airplanes.

I agree but there is the problem of so-called waste which should be burned in fast breeders and if buried would cause problems in the future.

Chernobyl was a crime and not an accident. The absurd "experiment" they were conducting should have never been performed and any competent engineer/physicist would have known not to engage in such recklessness. The other terminally idiotic problem with Chernobyl was the absence of a containment bunker. It would have stopped the spread of the reactor core debris since the explosion was not that powerful.

Of course there is! There are humans outside the exclusion zone occupying ecological niches that would otherwise be occupied by other animals. That is NOT the point. The point is that statistical studies have demonstrated that the expected levels of animal populations are below what they should be, compared to similar zones without human habitation. Surely you don't think Chernobyl is the first and only wildlife preserve in the former USSR? Biologists can compare those zones directly and have done so. Go ahead and compare apples and oranges. It simply invalidates your argument.

The idea that the exclusion zone around the Chernobyl nuclear power plant has created a wildlife haven is not scientifically justified, a study says.

For the latest study French and US scientists conducted standardised point counts of breeding birds at forest sites around Chernobyl differing in levels of background radiation.

They found that species richness was reduced by more than half when comparing sites within the highest and normal background level of radiation.

Total abundance of birds declined by two-thirds when radiation levels increased, while population density decreased "significantly".

The results are the first census data reported from Chernobyl.

Ref: Chernobyl Exclusion Zone Not Boosting Wildlife

You, and others, keep comparing the exclusion zone to the human inhabited region around the exclusion zone. You cannot do that. That's bad science, ok? That's like comparing wildlife populations in the backwoods of West Virginia to Central Park. Totally invalid comparison.

Further, you create a strawman by saying that anyone said conditions inside were "worse" than outside. Worse for whom? In what way? Maybe, just maybe, human habitation is the worst impact of all on wildlife but to assert that radiation from a nuclear disaster is not a negative impact is simply short-sighted, at the very least.

This Guardian Article was linked a few days ago.. can't find it ATM, to see if it was challenged.

by John Vidal
"Moose, wild boar, roe and red deer, beavers, wolves, badgers, otters and lynx have all been reported in the area, and species associated with humans - rats, house mice, sparrows and pigeons - have all declined. Indeed, of 270 species of birds in the area, 180 are breeding.

"But it is not as simple as that. Other scientists report mammals experiencing heavy doses from internally deposited Caesium-137 and Strontium-90 radioactive fallout. One study has found mutations in 18 generations of birds; another that radioactivity levels in trees are still rising. Contamination has been found migrating into underground aquifers."

[Later in the same article...]

"Humans have fared badly. In the past few weeks four major scientific reports have challenged the World Health Organisation (WHO), which believes that only 50 people have died and 9,000 may over the coming years. The reports widely accuse WHO of ignoring the evidence and dismissing illnesses that many doctors in Ukraine, Russia and Belarus say are worsening, especially in children of liquidators.

"The charge is led by the Russian Academy of Medical Sciences, which last week declared that 212,000 people have now died as a direct consequence of Chernobyl. Meanwhile, a major report commissioned by Greenpeace considers the evidence of 52 scientists and estimates the deaths and illnesses to be 93,000 terminal cancers already and perhaps 100,000 deaths in time. A further report for European parliamentarians suggested 60,000 deaths. In truth no one knows.


As with you, LevinK, I'm just relaying an article I saw. It seems clear that the reports have not been delivered to us with any clarity.


OK, whom to believe, WHO or Greenpeace? I will relay another piece information then:


An international assessment of the health effects of the Chernobyl accident is contained in a series of reports by the United Nations Scientific Committee of the Effects of Atomic Radiation (UNSCEAR). [43] UNSCEAR was set up as a collaboration between various UN bodies, including the World Health Organisation, after the atomic bomb attacks on Hiroshima and Nagasaki, to assess the long-term effects of radiation on human health.

UNSCEAR has conducted 20 years of detailed scientific and epidemiological research on the effects of the Chernobyl accident. Apart from the 57 direct deaths in the accident itself, UNSCEAR originally predicted up to 4,000 additional cancer cases due to the accident,[3] however the latest UNSCEAR reports insinuate that these estimates were overstated.[44] In addition, the IAEA states that there has been no increase in the rate of birth defects or abnormalities, or solid cancers (such as lung cancer) corroborating UNSCEAR's assessments. [45]

Precisely, UNSCEAR states:

"Among the residents of Belarus, the Russian Federation and Ukraine, there had been up to the year 2002 about 4,000 cases of thyroid cancer reported in children and adolescents who were exposed at the time of the accident, and more cases can be expected during the next decades. Notwithstanding problems associated with screening, many of those cancers were most likely caused by radiation exposures shortly after the accident. Apart from this increase, there is no evidence of a major public health impact attributable to radiation exposure 20 years after the accident. There is no scientific evidence of increases in overall cancer incidence or mortality rates or in rates of non-malignant disorders that could be related to radiation exposure. The risk of leukaemia in the general population, one of the main concerns owing to its short latency time, does not appear to be elevated. Although those most highly exposed individuals are at an increased risk of radiation-associated effects, the great majority of the population is not likely to experience serious health consequences as a result of radiation from the Chernobyl accident. Many other health problems have been noted in the populations that are not related to radiation exposure."[44]

Thyroid cancer is generally treatable[citation needed].


Another study critical of the Chernobyl Forum report was commissioned by Greenpeace. In its report, Greenpeace argued that "the most recently published figures indicate that in Belarus, Russia and Ukraine alone the accident could have resulted in an estimated 200,000 additional deaths in the period between 1990 and 2004." However, the Greenpeace report failed to discriminate between the general increase in cancer rates that followed the dissolution of the USSR's health system and any separate effects of the Chernobyl accident.

Again how to believe Greenpeace or other sources that have vested interest in over(or under)estimating the consequences? This is definitely a gray area and in the end it comes down to whom you choose to believe.


Surely we have to consider the sources.. but you ONLY mentioned 'Greenpeace' (a convenient whipping-boy), and not the Russian Academy of Medical Sciences, which was more prominently referred to, or the Russian individuals who testified to burying the dead, to wasting villages, to their dying colleagues, etc..

Maybe they faked these testimonials, who knows?

""Everyone who helped on the clean up is now ill," says Tatiana, a senior
doctor at the Dispensary for Radiological Protection at Rivne. "The
situation is worsening. In 1985, we had four lymph cancers a year. Now we
have seven times that many.

"We have between five and eight people a year with rare bone cancers, when
we never had any. We expect more cancers, and ill health. One in three
pregnancies here are malformed. We are overwhelmed."

"A doctor in the local region's children's hospital says: "The children born
to the people who cleaned up Chernobyl are dying very young. We are finding
Caesium and Strontium in breast milk and the placenta. More children now
have leukaemias, and there has been a quadrupling of spina bifida cases.

"There are more clusters of cancers. Children are being born with stunted
growth and dwarf torsos, without thighs. I would expect more of this over
the years."

It was strange that when I was looking for articles to address this issue, that almost everything I saw was about the same Thyroid Cancers, not the Bone, little about the Leukemia.. birth defects,

I don't know.. who do I trust in this? pfaaah!

I don't know.. who do I trust in this?

Not LevinK. He's been shown to be a lair when it comes to the safety of fission reactors.

GreyZone, If one were to replace FF (CO2) with nuclear I think there would be no argument that could be made against it, but as far as I can see it will just be another addition to our power over the natural functioning of the ecosphere and for this reason merely another wasted effort like wind or solar, though nuclear IMO is the best of the three.

I stagger into these conversations half way through so don't expect this to tie in very well to the thread, but I think it is something worth discussing. To restate this: will any new energy source really be any solution to our problems given that the old sources will be used along with any new source? Increasing individual demand growth besides population numbers growth will see to it that all sources of energy will be used.

That's a good question and I've never seen a study telling us how much fossil fuel derived energy is being displaced by alternative versus how much alternative is simply additional energy consumption.

Assuming that there is no replacement and only addition, also assuming that no political action would be taken, given the reality of our political systems, the only realistic solution would be economic collapse of a degree that would eliminate our ability to use energy. The only resolution I see then would be a nuclear one as there is too much redundancy in the economic system for the type of collapse necessary to insure that the ecology would not be degraded to a point that it would not be habitable for our species along with many others. Not much of a solution, a wee nuclear war, but maybe a start in the right direction?:)

Hmmm...! That seems to have cleared the hall ... Darn, and I was going to do Grieg's Peer Gynt on the Kazoo and spoons for everyman of them too.

Grey, I have never claimed that the ecosystem was completely healthy. In fact I would not dare live there myself. I simply stated that the wildlife had returned! And that statement is irrefutable.

While I was watching the show last night I thought "But what about the Cesium-137?" You see that is the problem with the Bikini Atoll. The place is perfectly safe except....except for the Cesium-137. Now there is not enough radiation left on Bikini to harm anyone if they just lived there. But they eat the fruit and ingest a tiny amount of Cesium-137 from that food. The Cesium builds up gradually in their bodies and will eventually cause all kinds of problems.

You see plants think the cesium is potassium. In fact cesium works as a very good substitute for potassium. In potassium poor soil, as Bikini has, the coconuts still contain too much cesium-137 to eat.

Now the soil around Chernobyl may have lots of potassium, I have no idea. There may be very little Cesium-137 in the plants for all I know. But I know I would not dare eat the veggies from there. But the deer and hogs seem to be doing fine though they may later develop serious problems.

So please Grey, do not accuse me of claiming to some kind of professional when I have never-ever made such a claim myself. Learn to be a little more accurate in your posts will you.

Ron Patterson

I asked a question, Ron, not made an accusation. YOU might learn to read first.

Bikini Atoll in 1952.

That was a H-Bomb, Chernobyl was a U238/5 reactor. Do both create Ce-137?

Hydrogen bombs have a lithium hydride(deuterium) core and a plutonium sphere surrounding it to generate the heat and pressure needed for fusion, as well as the flood of neutrons needed to breed tritium from the deuterium.

Barium and krypton are, I believe, the most common successors in fission of atoms of that size, but cesium is certainly a possibility.

Seeing as how Nagasaki is a thriving city these days, I wouldn't lose sleep over Cherynobyl.

Seeing as how Nagasaki is a thriving city these days, I wouldn't lose sleep over Cherynobyl.

Nagasaki had crews that removed radioactive elements. Thus the people who did the clean up had the toxic burden shifted to them VS the future.

But hey, don't let facts get in your way.

I didn't, Eric. Do you dispute that Nagasaki has been rebuilt? Were no mitigation measures taken in Chernobyl? But hey don't let atheistic superstitions about radioactive decay get in your way.

I discovered this site a few years ago: http://www.kiddofspeed.com/default.htm. Elena is a Ukranian who lives near Chernobyl, the daughter of a nuclear scientis as I recall. She has spent time riding her motorcycle through the Chernobyl area and taking photos. The photos are pretty interesting. She takes a lot of chances, but never goes anywhere without her dosimeter.

That web site is more than a little controversial.

That has pretty well been debunked analytically - there are photos of her, her and her bike, but never her and her bike in context at Chernobyl. A clever fake foisted upon breathless unix dweebs at Slashdot, who quiver at the thought of girls in general, and have small seizures when presented with photographic evidence of a cute one riding a bike ...

It is an interesting photo essay of Chernobyl. Who cares if she did it on her bike or from a tour bus, or maybe some of both? As far as I can tell, those are actual photos of Chernobyl, some taken by her, some not. There doesn't seem to be anything fake about the content at all.

Nor, Leanan, is it saying the same thing as "there are healthy..".

It is an open system, not a closed one, so of course there is going to be a continual influx of wildlife. The site is no longer "hot" enough that we're going to see heaps of dead animals all over the place. On the other hand, those animals that wander in might end up with reduced life spans, but that would require very extensive study to verify.

That was the point of a Chernobyl study about 10 years ago. There was plenty of wildlife but few animals were living a normal lifespan. A disproportionately large number died of cancer. But that was 10 years ago.

Great show, when the Ford plant in Mahwah NJ closed about 25 yr ago there was a huge parking lot right off Rte.17 that turned into a meadow in about five yrs.

Have my doubts about Hoover dam hydro running for two years. Besides the cooling those turbines must have honking big bearings that need lubrication, no?

I wonder if the inspiration for that show was Alan Weisman's book, The World Without Us?

Global Public Media has an interview with Weisman about his book here. It's very interesing.

So what is going on with the DOW? 0.75% drop in interest, which is another dollar devaluation aimed at keeping the make believe number high, but it still looks set for a less than 12,000 close today. Will we see 11,000 by Friday?

Bonddad gets at the fundamentals - transport is taking a beating, and that is a real world "tell" for the market - how much stuff is actually being moved around is a far better indicator of how we'll things are going in reality.


Might not hurt to have another look at this one - how the Fed can inflate away debt by providing funds to whomever they pick in order to keep the economy rolling. This one is dated 5 January ...


The Federal Reserve is in a panic and is searching for extra ordinary means to deal with liquidity crisis. Quietly, insiders are perusing an obscure paper by Fed staffers David Small and Jim Clouse. It explores what can be done under the Federal Reserve Act when all else fails. Meaning how can they lend money to banks, businesses, and John Q Citizen when the retail banks won’t. Section 13 (3) allows the Fed to take emergency action when banks become "unwilling or very reluctant to provide credit". A vote by five governors can - in "exigent circumstances" - authorize the bank to lend money to anybody, and take upon itself the credit risk (Ambrose Evans-Pritchard).


Read. Understand. Be afraid. There is nothing like that in all the Fed data that anyone has reviewed so far, ever.

Non-borrowed reserves, last 4-5 weeks(i.e--banking system capital???)
Holy shit batman...


Can you give a little analysis on the data? I don't have the background to understand the raw data, much less the implications. Can you give a plain language synopsis?

I'm sure it's important, and a major change has occurred, but I don't understand what 'non-borrowed reserves' are - googling it hasn't helped me much either!

Is it easy to explain or can somebody point me to a good explanation please?

Has the Bank Bailout Begun? — Non-borrowed Reserves Turn Negative for the First Time

Not only did the non-borrowed reserves uncharacteristically drop below required reserves (the first time this has happened, at least as measured as of the end of the month, since August 1990–although I believe I saw a few weeks between August 29-September 12 of this year where this happened; although somehow the end of August report made it back to positive somehow). What is absolutely shocking is the magnitude of the shortfall.

As of December 19, the report indicates $34.841 billion in non-borrowed reserves versus $37.507 billion in required reserves (note again I am quoting the NSA numbers from Table 2). The end of December report shows $27.280 billion in non-borrowed reserves versus $40.967 billion in required reserves.

Then–amazingly enough–the January 2, 2008 report shows $11.424 billion versus $44.349 billion in required reserves. That is a level or non-borrowed reserves that represents only 26% of the required reserves! There had been nothing like this in the monthly historical data I have perused–the biggest prior deficit coming in 1984. Now hold on to your hat. I re-checked the latest data yesterday and the non-borrowed reserves is actually NEGATIVE now— ($1.387 billion) versus a reserve requirement of $38.278 billion. NEGATIVE RESERVES EXCLUDING BORROWINGS FROM THE FRB!!!

Funny I just posted the fact about the negative non-borroweds below.

Not good.

BTW, nice to see you Ilargi. Any news for us economically starved throngs?

And the dead sand
Falling on the children
The mothers and the fathers
And the automatic earth

And I believe
These are the days of lasers in the jungle,
Lasers in the jungle somewhere,
Staccato signals of constant information,
A loose affiliation of millionaires
And billionaires and baby,
These are the days of miracle and wonder,
This is the long distance call,
The way the camera follows us in slo-mo
The way we look to us all o-yeah,
The way we look to a distant constellation
That's dying in a corner of the sky,
These are the days of miracle and wonder
And don't cry baby don't cry
Don't cry don't cry

ps The Boy "World" in a Bubble
how ironic is that?

Welcome back Ilargi keep in touch.


Good to hear from you

Click on the link above ya doofus

The Automatic Earth is our new place

and then you keep in touch, ya hear?!

BTW, a minor correction from yesterday.

With a reserve requirement of 38.378 Billion, that is $127 dollars each. (using population of 300 million)

With reserve now negative, every one OWES $4.60.

Would everyone please file to your nearest bank and deposit $5 to keep your bank account up to date.

Thank you.

Gee...I wonder if you had a bank run now...would the ATM ask you for money?


Hi ilargi, thanks for the link - I think I understand it a bit more now. I missed you and Stoneleigh BTW.

I thought the banks had got around the problem for maintaining adequate reserves by creating collateralized debt obligations (CDOs) and generating AAA paper out of worthless junk NINJA mortgages to sell to pension funds and the like - seems not, oh dear, what a mess!

Northern Rock all over again - but with 'knobs on' this time maybe?

Yes, welcome back ilargi.

ditto ilargi

If I understand what this means, it is saying that commercial banks have virtually no reserves left, other than reserves borrowed from the Federal Reserve. Is that correct?

As you say, this appears to be unprecedented. I looked at this set of data for 'non-borrowed reserves', going back to the 1950s, and this has never happened before. Seems quite amazing!

If I have understood this correctly, the Federal Reserve is now having to act as the lender of last resort for the entire US banking system.

Non-borrowed went NEGATIVE last week.

I think I was saying yesterday...the banks are BROKE.

They can only hope to RAPIDLY inflate away this debt and obligations. All other options are entirely catastrophic globally.

NO ONE wants deflation...economically.

After inflating all this away...time for a new currency...say, maybe...the AMERO.

Nice name...why didn't I think of that. :P

I this mess what the Bank of England Governor likes to call 'systemic' risk of failure?

Is it coming to the banking system near me soon? ... despite the Government bailout of of Northern Rock with £2000 for every man, woman and child in the country?

I don't know much about the state of the UK reserves...but I imagine they are similar to the US at this stage of the game.

So, yes, a SYSTEMIC banking failure is possible, and is what the FEDs around the world are trying DESPERATELY to avoid.

If another shoe drops, its all over. Even the FEDS may not be able to stop it.

However, everyone hopes they will go absolutely INSANE and print HUNDREDS of billions of Pounds, Euros, and Dollars to INFLATE away this nightmare (only to be replaced by others)

when do you think they will start confiscating gold?

They don't have to this time. That is the beauty(and horror) of inflation.

when do you think they will start confiscating gold?

In my neighborhood, I suspect they will do as good of a job as they do on the war on drugs. Or as they did during prohibition.

How big is a stack of 20 gold eagles/mapleleafs? If one can't hide that, or multiples of that, one would deserve having it confiscated.

You will find a market if you wanted to sell some. Just as you could find a market for whiskey during prohibition.

Remember though, in the near future it will come to pass that offically Only Terrorists/Drug Dealers Use/Have Cash

It will be a banner on FauxNews.

(Why did you want to draw that much out of the bank in cash Mr. Jones?

Cause there's something going on here, but you don't know what it is do you Mr. Jones? B.D.)

USA the Nation Of Thin Men

However, everyone hopes they will go absolutely INSANE and print HUNDREDS of billions of Pounds, Euros, and Dollars to INFLATE away this nightmare.

On CNBC, they were syaying the ONLY thing that will work will be to bail out the bond insurers. Those people who insure all those mortgage derivitives. We are talking about Trillions upon Trillions of Dollars. That sounds INSANE to me! They were saying it is the only thing that can save the world from an historic deflationary collapse.(Yes, Ron Insana said that live on-air) Since the Banks are broke and the Fed has negative non-borrowed reserves, does that not just make the dollar worthless? I mean now, not after they bring into existence the trillions to bail out the bond insurers.

Foreign markets should go into freefall overnight. With the 3/4% rate cut, it's like Ben Bernanke hauled out a dagger and stabbed himself to death before the cameras.

I liked the comment on CNBC about $750 Trillion in global derivatives against $50 Trillion in global GDP.

In any case, a note from a reader posted by George Ure on Urban Survival. He was basically wondering if everyone is going to rush to drawn down lines of credit while they still can.


In the past there have been runs on banks because people actually have cash that they want to save by withdrawing it before the financial institution fails. That can still happen but there's another possible problem I've come up with.

Now, people have less cash and rely more on credit (debt). As the economy deteriorates circumstances will lead many to believe that they have no choice and/or realize that things are going to get so bad they have nothing to loose. You will see a run up in debt as people max out payday loans, personal loans, and credit cards. I suspect in anticipation of this the banks will start limiting cash advances, reducing credit commitments, and the amount of credit allowed to be advanced during a certain period of time. Once the general public realizes this it will accelerate the run on credit.

After all, does anyone really know the total outstanding credit limits the banks are committed to under personal lines? A panic of this type could further sap banks of working capital literally overnight.

Think it over and you're welcome to blast me in your column if you disagree. After all, I'd like to know if my thinking is wrong.

$750 Trillion in global derivatives against $50 Trillion in global GDP

That means a bailout would require 15X global GDP. In their dreams. I wouldn't be suprised to see a worldwide divestment in US Dollars. I mean like getting out the shovels and shoveling AS FAST AS THEY CAN.

So they want to socialize the losses ... to be paid off by the ruined homeowners who are all going to be underwater? Like I said the other day, strand three grifters on a desert island and you'll get back one intact skeleton and a diary with a number of recipes for preparing long pig.

If they do that then they save the banks and lose the country. Interest rates would go sky high, not only for the consumer but also on the national debt. Game Over.

Most of that $750 trillion serves no useful function and has no reason to exist. It was money printed up out of nothing, with nothing to back it, largely by the Bank of Japan and the US Fed. The government claims there is low inflation, but that derivatives market IS inflation.

I think a lot of people misunderstand inflation/deflation. Inflation isn't an expanding money supply; it is a money supply that expands faster than the goods & services produced by the economy.

The housing bubble, the stock market bubble, the derivatives bubble all represent too much money sloshing around with no place productive to go. So it goes into bubbles. None of the increase in housing prices (or stocks or derivatives) represents any new goods and services. It is pure inflation (or becomes pure inflation as soon as the extra valuation is cashed out).

That excess money needs to be destroyed to bring things back into balance. That may be deflation, but it is deflation that is countering years of inflation. Yes, it will be painful, but that's what the economy gets for years of binging.

Hello Shargash,

re: "Yes, it will be painful, but that's what the economy gets for years of binging."

re: "painful".

Do you have any particulars on this?

I'm trying to get a better understanding of this entire conversation.

Are you saying once this "excess money" is destroyed and things are "back in balance" then...

then what happens?

Sincere questions.

I have to give Ron Insana some credit for his straight talk on CNBC this morning. He used to be an employee of that network. Now he's involved in some company of his own. But he delivered the truth about the bond insureres et all in a calm an quiet tone this morning that really should have woken up a lot of people. But there was Joe Kernan shuffling papers and nervously acting busy while Insana talked. It was kind of weird actually. But no one seemed to take notice either way.


I saw that (Ron Insana) and nearly fell off my chair. Nobody said anything. I think they were stunned, then went on as usual.

video, please?

Nearly 82 billion in Term auctions so far. Wow! in 6 weeks roughly.

Holy flying catfish, Batman, looks like the Joker has robbed the kitty.

I'm no economist and I cannot tell the difference between seasonally adjusted and non-seasonally adjusted, but please indulge me to say what I think this means.

Even with the more optimistic adjusted figures ($200 Million in un-borrowed reserves) it looks like American banks would have about 66 cents available per person if TSHTF (U.S. Population 300 Million+). The other figures are even more bizarre to contemplate.

With the non-adjusted figures, does this mean that technically every American alive owes instead of holds dollars in their own money supply?

And 82 billion in term auctions. This is newly borrowed money, right?

No wonder the Fed Reserve will do anything, and I mean anything, to keep the financials afloat.

Please tell me I'm wrong.

If true, this is real dynamite. And there's a lot of matches being lit out there.

PeakTO, I was really hoping to be wrong.

About $5 each you say?

I think I'll go line up with others and hide my head in the sand and wait for the volley to hit.

If the market closes unchanged today look for arbs
to develop worldwide.

Then it'll become like gold at $35 and Nixon.

Or England Soros with the Floating Pound.

Eventually or sooner the unsustainable band will be abandoned.

Flood gates open after the dam has been breached.

reacting mostly to Staniford’s, the Fallacy of Reversibility, link, Fuel shortage forces hard choices in todays Drum beat, link.

Always been an anti-reversalist. In the education (and semi health) sector.... I realize the comparison with agri. is not evident; also that numbers and stats. can’t be done in the same way, either because the present ones simply don’t exist, or because the effects of dire energy squeezes on the health sector are not even vaguely predictable, in part because few have seriously considered them - medecine always has so many challenges facing it (eg bird flu, aids, alzheimer’s); the health community tends to view its inputs as guaranteed or rising, sees its tech innovations as marching ever forward, the poor in the third world getting progressively more, better care (Global Funds, Bill Gates’ fave charity..) etc.

The family doctor of 1850 or 1950 will never return.

The knowledge gained to 2010 will not be lost; and complete, or semi- societal breakdown, systemic collapse, will create a new state of affairs, which may provoke some reliance on ‘older’, ‘traditional’ models, as people often prefer the familiar, the mythical, it is reassuring. That adherence, though, will be of manner, of form, and not content. It will not be entirely sincere, as it will not rest on the past situation: a doctor trained as best as possible, available, wise, compassionate - that night drive thru the snow to assist at a birth, or a death- calling up the usual stereotype, using methods and meds that are now part of the past. (Leeches, anyone?)

Few realize how vulnerable the health system is.

It is impossible to predict what will be lacking first and how the med. community will react: machines, tools, meds, matériel (scalpels, sheets, a working elevator...), the capacity to keep things clean, space, transport, manpower ... and more. How organized and sensible they will be, what pressures they will be under.

Back to Iraq. Or Palestine, one sees that without electricity (duh), the system halts, and even burial cannot proceed properly. The end of life is robbed of its dignity and ritual. But these are communities under siege, being destroyed - dirty water and lack of electricity are bigger killers than bombs, from the air or the ground. Media attention is on the bombs, obscuring the rest..

In the West, a slow and managed rationing of med. care has already taken place, everywhere, either overtly (the insurance won’t pay for x) or covertly, or just ‘naturally’ but that concensus will break down.

The whiskered doctor doing his best, accepted as such, is gone, and he will never return. He will never go to a small holder, a small farmer, to take care of the daughters’ hysterical fits, hives, splayed foot or high fever (scarlet?) ..

Because that farm won’t exist. And he won’t exist. And the daughter ..well this post is far too long already.

That was a rum rumination, that was.. got me scratching my head.

Not sure why the 'Doctor making Housecalls' was what you took up in that prediction, and I can't see how you'd choose to cancel that possibility, either.

Would an Ambulance and a Medic responding to a birthing crisis out in someone's home count in this scenario, or are you trying to say that we just don't get to paint it as the classic 'Norman Rockwell' scene, where he blushingly accepts a piece of Pie on his way out to the jalopy? Will people know their doctors on a first name basis? I do.

Anyway.. I don't think we're going 'BACK' to that time, but I do suspect that some of the systems that worked in communities of a 'Pre-oil' scale might show up again.

Everything old is new again. Maybe by then, doctors will be wearing Bell-bottoms and shave their whiskers into a 'Soul Patch'..


Silly plans:
Draft Economic Recovery Program To Stop The Bush Depression

Less silly, more comment worthy:
US censors Arctic scientists' findings as it prepares for oil and gas auction

US censors Arctic scientists' findings as it prepares for oil and gas auction

It's things like this that make me proud to be an American. :-P

And I'm doubly proud that the story appears in a British newspaper. Where would we Americans be without a bootlicking press?

I only wish I knew the answer to that one! All I know is that with the sorry state of the MSM, I am on the 'internets' and avoiding the Iron Triangle gatekeepers, may they continue to lose credibility with the sheeple.

On the cusp of economic history

Is economic history about to change course? Among the chieftains of politics and industry gathering in Davos for the World Economic Forum on Wednesday, a consensus appears to be building that the capitalist system is in for one of those rare and tempestuous mutations that give rise to a new set of economic policies.

The failure of neo-liberalism

More and more, it appears that in the 21st century we are returning to the economics of the 19th, where wealth was overwhelmingly concentrated in the hands of a few owners and astute speculators.

Neither the Right nor the Left seem capable of creating a society in which all benefit from increased prosperity and economic security.

Neo liberalism and neo conservatism are one and the same, so it is this one system that doesn't work.

People get all worked up over the elections, when the reality is that all the non marginalized candidates are running for the same party.

I recently came across an analogy that compared elections to a restaurant. We vote for the waiters and waitresses, but in the end, the meal is still cooked up in the same kitchen by the same chefs...

The failure of neo-liberalism

I would really recommend reading this one.

A good job on why we won't go into Iran, Peak Oil, Financial meltdown, etc.

What is our main problem as a race?

Too many of us. What would you do about that if you were so inclined/capable?

The Post-Bush Regime: A Prognosis


OPEC not showing any signs of declining production:


OPEC's response to higher oil prices has been increased production four months in a row.

It is likely they might yet find some spare capacity.

The OPEC 11, (less Angola and Iraq) are still producing 1,032,000 barrels per day less than they did at their peak in September of 2005 according to OPEC’s own Oil Market Report just out today. Angola is the only OPEC nation capable of increasing production.

Yes they might find a few barrels of spare capacity but they sure as hell will not find one million barrels of spare capacity. OPEC has peaked. Angola has been the saving grace of OPEC, because they can still increase production. But without Angola, OPEC has peaked.

And it looks for all the world that Non-OPEC has peaked also. I have been following Russia very closely and their January production is down by 100,000 to 150,000 barrels per day from December. I may be wrong but I believe Russia peaked in 2007. China also appear to have peaked. If I am correct then that means that the worlds six largest producers have peaked. Those six are Russia, Saudi Arabia, USA, Iran, China and Mexico.

Ron Patterson

It is too early to tell about Russia, India dipped in production for a whole year then grew the next. Oman dipped rapidly then started to rebound, but not to return to its former peak. This analysis does not inlude NGL's and it ignores the fact that almost all OPEC nations increased production as prices rose, indicating they were turning on idle spare capacity as they could not have timed all their new oil projects to coincide with an uptick in oil prices. How much more capacity, it seems to be guesswork.

The ASPO peak model showed a decline in oil before peak oil plus liquids. Some analysts only looked at oil missing the NGL's.

Oil is oil and gas is gas. Peak oil means peak oil not peak gas. Oman is in terminal decline. India has been on a virtual flat plateau for about four years. There is nothing mysterious or even puzzling about these two countries. Nothing dramatic is about to happen, or has happened, with either.

The optimists tell us that Russia will increase production by about 1.5 percent in 2008 but most others say that they will struggle to keep production flat. It is not too early to tell that nothing dramatic is about to happen in Russia. And as I said, January production is down by about 150 thousand barrels per day.

Again, OPEC 11 production is still down more than one million barrels per day from their peak. That means they peaked in 2005.

Ron Patterson

Hello Leanan,

Thxs for the Nepal toplink--sad to see the students acting stupid instead of studying Peak Everything. Such is life. IMO, instead of rioting, they should be building a railbike SpiderWebRiding network so that they can uphill-import essentials without burning additional FFs.

South of the Middle Himalayas lies the Siwālik Range of the Outer Himalayas, with an average elevation of about 1,000 to 2,000 m (about 3,300 to 6,600 ft). This area of Nepal has a number of flat valleys well suited to agriculture.
Since Nepal has to import all their FFs and NPK to these lofty heights and more: the sheer physics involved might make these essentials the most expensive on the planet. Therefore, I expect things to get much worse for Nepal going forward.

Compare to Saskatchewan: potash at their doorstep once brought to the surface, phosphates from US SE and Morocco moved easily by boat, then train inland, and I believe Russian natgas-generated N-products are now available too. Thus, I would suspect Western Canada to be industrial-NPK farming far longer than Nepal, who will shortly be forced to recycle all organic-NPK to try and sustain harvest yields.

Recall my earlier post where an author claims that 3 gallons of gasoline are mfg-embedded in a forty pound bag of common NPK. I don't have the expertise to figure out how much more gasoline or diesel is required for the additional long distance energy delivery costs, but I think it would be interesting to see if an area's industrial agriculture collapse could be predicted by the total distance and elevation change from the few global NPK sources.

For example: NPK delivery by river barge along the Mississippi and Missouri may allow these areas to thrive long after NPK delivery by train to high altitude, long distance farmland in Colorado is curtailed. My weak analysis skills may suggest that Colorado needs to be a leader in organic recycling if they hope to offset the dire physics and costs of importing far-distant industrial NPK. Will Colorado see the need for a SpiderWebRiding network for humanure and urban composting in time, or is the desired 'Rocky Mountain High' the adrenaline rush from machete' moshpits?

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

Conagra Cancels Ethanol Plant Construction

Due to soaring production costs relative to ethanol prices, Conagra cannot justify building a grain ethanol plant. Ethanol was subsidized, yet was affected by oil, natural gas, and corn prices.

There are no cellulosic ethanol plants doing commercial production as the costs are too high. CERA's assertion that biofuels will replace depleted oil + liquids production capacity seems to be another CERA blunder.


Looks like Timoshenko is back at her old game of stealing Russian natural gas.

A word of caution - be aware this site is sponsored by the Russian authorities and may therefore be a convenient vehicle for information/misinformation that they wish to distribute. The agenda for many Russian oil and gas companies and for oil and gas policy, is defined centrally and does not always heed normal business convention, tax regimes or the like. Ask yourself how many times a 35 year old graduate (Medvedev) would get elected to CEO of the largest gas comapny in the world in other business scenarios. Pure talent may not be the sole distinguishing feature.

Hello TODers,

The Superbowl will be massively flushing soon in my Asphalt Wonderland as the Patriots and the Giants go head to head for supremacy. Is this the last Superbowl? Will things drastically change so much in the next year that much of what the huddled masses expects to happen will not be possible anymore from Peak Everything?

Will Cascadian Earthmarines be taking the field to defend against desperate, invading Phoenicians trying to escape their crumbling Asphaltistan? Will Atlantans, and other Southeasterners be grateful for the decrepit housing in Cleveland and other Great Lakes cities?

What will be the average price for a wheelbarrow? A cord of wood? A ton of NPK? Will all the current Presidential candidates withdraw once they realize what a huge mess truly exists? Will the banks still be functioning? Or will the electronic finance function be history?

Will the world collectively flash into imagination and mitigation, or collectively flash from the full-on nuclear gift exchange?

How close to fruition is the Thermo/Gene Collision? [PDF warning]:

If you were born after 1960, you will probably die of violence, starvation or contagious disease.

1. Fifteen years, plus or minus ten years, is when I estimate anarchy will reign in the United States. Please note that I
do not advocate anarchy. Indeed, anarchy is the worst possible future. However, our government was not designed to
solve social problems and will be utterly helpless in the face of unfolding biophysical law-driven events.
It will be truly fascinating to observe if we are locked into this trajectory, or if we can summon the desire and wisdom to optimize the traverse through the Dieoff Bottleneck.

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

Hi Bob...Some will get through the bottle neck, some wont. Some of those that do will carry on the tradition of the super bowl but the 'football' will probably be a large rock and the uniforms could be Zebra skins for one team, antelope skins for the other. How would you like to be the punter or place kicker in a football game played with a 25 pound oblong rock? Ouch! BTW, I suspect soccer will fall out of favor alltogether. :)