DrumBeat: February 16, 2008

Although pinched by costs, fans flock to Daytona

"It [the price of gas] affects our fans just like it affects everyone else," said Jim Hunter, longtime NASCAR vice president. "Some of our hard-core old-line fans used to go to six-eight races a year, but back then hotels didn't charge seven-day minimums, track prices were half of what they are now, and gas was a lot cheaper. Now I hear those same people say, 'I'll just go to my favorite few races, and I'll watch the rest on television.'"

Hunter, like many around the sport, said he thinks any drop in attendance will not be major, even with an economic downturn. Hunter was involved with NASCAR in the early '70s during a fuel shortage when NASCAR shortened races, encouraged fans to carpool and even helped service stations near tracks save fuel for race fans to come and go.

CERA: Action needed to avoid oil crisis, Hess chief says

HOUSTON -- Oil companies, oil-producing countries, and consumers need to act now to avoid the oil crisis that is coming within the next 10 years, said John B. Hess, chairman and chief executive of Hess Corp.

"It is not only a matter of demand. It is not only a matter of supply…. We need to take steps on both fronts, and we need to start today," Hess told an overflow crowd Feb. 12 at the Cambridge Energy Research Associates' annual energy conference in Houston.

Strategy change urged in Mexico

MONTERREY, Mexico — In 1978, Mexican President José López Portillo boldly proclaimed the country's vast new oil resources meant a farewell to poverty.

The nation would have to "administer abundance," he said.

López Portillo missed his chance, notoriously spending Mexico into its economic crisis of 1982 while skimming off a presidential share for a lavish retirement.

Five presidents and two more economic crises later, the opportunity has been squandered. Cantarell, the giant Gulf of Mexico oil field that has padded pockets and subsidized Mexico's government for a generation, is in rapid decline.

Mexico Business Picks Up For Oil-Service Companies

MEXICO CITY -(Dow Jones)- In Mexico the oil services business is picking up as state-run Petroleos Mexicanos boosts spending in an attempt to halt faltering production.

Srak to miss Empty Quarter well drilling target

The South Rub al-Khali (Srak) exploration company expects to complete drilling on only one more well in the Rub al-Khali (Empty Quarter) before its contract with Saudi Aramco expires in January 2009.

This means several planned wells will not be drilled, raising further doubt over Riyadh's search for gas in the region.

Central Asia’s Poorest States in Crisis

After a freezing winter marked by severe energy shortages, Tajikistan and Kyrgyzstan fear spring could bring food shortages as well.

Kazakhstan Suspends Fuel Oil Exports to Kyrgyzstan

A shortage of Kazakhstan's energy resources is the reason behind the suspension of fuel oil supplies to Kyrgyzstan, the press service of Elektricheskiye Stantsii [Electric Stations] open joint-stock company has told the Regnum news agency correspondent.

Nepal: Fuel crisis spawns protests

Irked consumers took out a rally in localities like Kalanki, Chabahil, Koteshwor and Jorpati early on Friday, chanting slogans against the government and Nepal Oil Corporation (NOC) and demanding fuel to cook food and run vehicles.

Sporadic rallies were also organized within city centers like Nagpokhari. But these were scattered through police interventions, said Sarvendra Khanal, chief of Metropolitan Police, Kathmandu.

Bhaktapur was worst hit by the protests, as agitating tractor operators blocked the major roads to vent their ire against the fuel shortage.

Bangaldesh: Local commodity market going through supply shortage

Oil prices have gone up by more than 30 percent in the last 5 months. We are paying more foreign currency to import the same volume of oil due to increased prices. This increase in oil price has not been passed on to the consumers; rather the government, in the form of subsidy, has absorbed it. How long and how much price increase the government would absorb that remains a pertinent question, given the high amount of debt papers being issued to the financial market to fund Bangladesh Petroleum Corporation's balance sheet. However, prices have started to come down recently it has already dropped to $ 88 per barrel from a high of $100, mostly due to US recession expectation among the market participants. Even though many economists are talking about $75 level for oil price, I think it's too early to say. If US economy goes through a “V” shaped recovery because of the aggressive rate cut and giant fiscal stimulus package, we will not have to wait a long time to see the oil price rising again. Increase in fuel price, will of course keep on affecting shipment cost, as well as, domestic movements of commodities and thereby commodity prices.

Soaring propane bills spur furor

January heating bills that topped $500 for some Payson homeowners have spurred a political furor, with homeowner protests and a flashpoint debate in the mayor's race.

The big January propane bills issued by SemStream reflect both a global energy shortage and the fine print in the Arizona Corporation Commission's approval of the company's purchase of Payson's unique underground propane system last year, say officials.

How Big Oil Could Help on Climate Change in Iraq

These hot spots, detected from 500 miles into space, were not sparked by bombings or by gunfire on the war-torn ground. They are neither flames of insurgency nor of combat. This is a snapshot of energy waste and the pointless release of millions of tons of greenhouse gas into the atmosphere.

This image shows the flaring, or burning, of natural gas that is brought to the surface as the Iraqis extract oil. There's no way to get the oil out without releasing this "associated" gas. Flaring is the cheap and dirty way to get rid of this combustible fuel when there are no pipelines, gas-fired power plants, or export terminals nearby.

It's time for oil price controls

History repeats again! Oil companies have released staggering earnings. When crude oil costs rise, it drags fertilizer, feed costs, food, and meat prices with it. Plastics, homes, cars, and heating prices rise. Amidst all this, oil companies prosper suspiciously.

How is it that the cost of a raw material (crude oil) rises, people use less of the finished product (gasoline, diesel) by driving less, yet oil companies make increased profits? The operative word here is "profit," not revenue.

Oil swings widely on conflicting data

In recent days, many analysts have questioned oil's price strength in the face of falling demand.

"It makes no sense," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., who suggested speculators may be behind the recent rise. "I think it's financial and it's speculative."

Energy independence in US: don’t bet on it

US President George W. Bush shocked world energy producers in 2006 when he pledged to slash America’s reliance on Middle East oil. But today one of every two barrels of oil consumed in the United States still comes from foreign suppliers like Saudi Arabia, and that picture is not likely to change much through 2030.

Feds curious about Alaska pipeline problems

Federal regulators say they are looking into an equipment malfunction at the trans-Alaska pipeline, the latest setback for a project to automate a conduit that is crucial to West Coast oil needs.

Norway: Tensions rise between fishing and oil industries

A feverish quest for new sources of oil, fuelled by high oil prices, is sparking territorial battles between Norwegian fishing interests and oil exploration firms searching for new reserves in the North and Norwegian seas.

Skirmishes have been taking place for months off the coast of Norway, as fishing vessels and seismic vessels try to work in the same areas. Last year, three fishing boats tried to prevent a seismic vessel from conducting oil exploration in the seas off Vesterålen.

Rosneft to Spend 600 Billion Rubles to Boost Siberian Output

(Bloomberg) -- OAO Rosneft, Russia's largest oil producer, plans to spend as much as 600 billion rubles ($24.4 billion) through 2020 to boost oil production in eastern Siberia, Chief Executive Officer Sergei Bogdanchikov said.

The state-owned company will spend 50 billion rubles this year and 600 billion rubles over the 12-year period as it seeks to raise annual oil output to 170 million tons by 2020, Bogdanchikov said today at a conference in Krasnoyarsk, Siberia. The company produced 102 million tons of oil last year.

Exxon Mobil extends trend of increasing its reserves

Exxon Mobil Corp. said Friday it added 1.6 billion barrels of oil equivalent to its proved reserves last year, extending a positive trend of replacing more barrels than it produced.

The added reserves for the world's largest publicly traded oil company totaled 101 percent of its 2007 output.

South Korea: Iran is stable oil supplier

LONDON (IranMania) - Chairwoman of Presidential Transition Committee, Lee Kyung-sook, says Iran is the most reliable supplier of oil to South Korea, PressTV reported.

Iran Parliament Approves $3 Billion Fuel Import Budget

TEHRAN (AFP)--Iran's parliament on Saturday approved a $3 billion spending plan to fund diesel and petrol imports during the next Iranian year, the official IRNA news agency reported.

Iran should cut dependency on oil: Haddad-Adel

LONDON (IranMania) - Iran's Parliament speaker Gholam-Ali Haddad-Adel warns against the reliance of national budget on oil revenues, urging the need for its optimal spending, PressTV reported.

One of the problems with our budget is its heavy dependence on oil, Haddad-Adel told reporters on Thursday.

Venezuela Rips Exxon, Settles With ENI

Venezuela has settled a spat with one oil giant while continuing to heap invective on another.

Venezuela requests help from U.S. senator

Venezuela's ambassador to the U.S. has asked Sen. Richard Lugar to press Exxon Mobil Corp. to drop legal measures that have frozen $12 billion in assets worldwide.

"Through tactics that can only be compared with the very discredited strategy of pre-emptive war, Exxon Mobil has clearly violated the terms of the arbitration process," Bernardo Alvarez, Venezuela's ambassador to the U.S., said in a letter to the Indiana Republican that was released by the embassy Friday. Lugar is the top Republican on the Senate Foreign Relations Committee.

Mr. Chavez's Bluff

If Venezuela's strongman cut off oil exports to the United States, the first victim would be his regime.

AEP CEO sees crisis without more coal plants

HOUSTON (Reuters) - The United States faces an electricity crisis if it eschews coal-fired power plants on its way to a low-carbon economy, said the chief executive of American Electric Power, one of the nation's biggest utilities.

Michael Morris of AEP said that he fears the United States will rely on natural gas plants too heavily if it drastically cuts burning coal to make electricity.

...Within five years to a decade, heavy industrial users will face involuntary power cuts unless more coal plants that emit less carbon dioxide (CO2) come on line, said Morris, speaking to energy executives at the week-long CERA conference in Houston.

Time is up for coal: environmental analyst

NEW YORK (Reuters) - The United States should leave its estimated 200 years' supply of coal in the ground and invest in wind farms and solar technology for its power-generating needs, a leading environmental analyst said on Thursday.

Wall Street, politicians and public opinion have all turned so dramatically against coal in the last year over climate concerns that it is probably "the beginning of the end of the coal industry," said Lester Brown.

Vietnam to slash coal exports by a third in 2008

HANOI (Reuters) - Vietnam, a key coal supplier to Japan and China, will slash coal exports this year by more than 32 percent to about 22 million tonnes to save more for new power plants at home, a government official said on Friday.

Thailand worries over food shortages amid palm oil debate

BANGKOK (Thomson Financial) - Thailand has started requiring that all its diesel fuel include a component made from palm oil, a move that could reduce costly energy imports but is driving up prices for the commodity, experts say.

US risks trade dispute with Canada on fuel

Environmental restrictions on the US government’s purchases of fuel could leave it vulnerable to a trade dispute with Canada and other exporters of oil extracted from hard-to-reach deposits.

The new rules prohibit the US federal government from buying fuels that emit more greenhouse gas during their production and use than conventional petroleum-based fuel.

The issue is the latest in a string of potential and actual disputes that will test the ability of the rules of the world trading system to regulate highly contentious global warming issues.

Australia: Meet the man to fix petrol price problems

AUSTRALIA'S first Petrol Commissioner was appointed yesterday to force oil companies into reining in their controversial pricing behaviour.

Shadow of terrorism looms over oil industry

The first hint of activity was the soft whut-whut of rotor blades, then suddenly a military helicopter, which had approached flying so low it almost skimmed the tops of the waves, rose up by the side of the platform. Ropes were tossed out and seconds later black-clad soldiers abseiled on to the landing deck, then charged down into the platform proper.

The spectators – oil workers who had slipped out unannounced – would later learn that the deployment was phase two in the battle against any terrorists potentially on the platform. Members of the Special Boat Service, the amphibious equivalent of the SAS, had already clambered up the platform's concrete leg and secured the control room where "bombs" were primed and ready to blow.

The Islamic way of wealth

The credit crunch has added a new significance to the wealth amassed in the oil kingdoms of the Middle East. While western bankers count the cost of a reckless spending spree, assets that comply with Islam's ban on the receipt of interest are growing at about 15% a year and may hit $1000bn by 2010, experts say. A quadrupling of oil prices since 2002 has inundated Arab and Islamic lenders with billions of dollars that are now looking for a home, and financial centres from Tokyo to London are clamouring for a piece of the action.

Oil, arms and a marriage of convenience

China's involvement in Sudan stretches back more than a decade and has snowballed to the extent that it now supplies nearly a quarter of the African country's imports and accounts for about 70% of its exports, mostly oil.

But despite growing global criticism of Chinese blank cheques written to the regime in Khartoum, Beijing has shifted its policy in the past 18 months. Though President Hu Jintao announced a $13m interest-free loan for a new palace for his Sudanese counterpart, Omar al-Bashir, and cancelled debt worth $70m during a visit to Sudan in February last year, his government publicly called for a ceasefire and a negotiated settlement in Darfur.

Canada's oil sands a massive disaster - green group

OTTAWA – Canada's massive oil sands are ”the most destructive project on earth” and the federal government must intervene to clean up the mess, a leading green group said Friday.

Kuwait: Breakthrough Awaited

Saad al-Shuwaib, chief executive of state Kuwait Petroleum Corp. (KPC), has made some progress in reforming Kuwait's energy industry and advancing major projects, especially downstream, since taking the reins six months ago with a promise of revamping the sector. The delayed Al-Zour refinery is moving ahead, KPC's subsidiaries are being restructured, and a new international advisory board is in place. Now, al-Shuwaib told Energy Compass in Kuwait this week, a breakthrough should come soon in upstream negotiations with international oil companies -- a development desperately needed to deliver long-term expansion.

Transocean exits shallow-water Gulf business

Transocean Inc. has agreed to sell three of its jackup rigs and equipment to Hercules Offshore Inc. for $320 million.

The Houston offshore drilling contractor said the move marks its exit from the shallow-water area of the Gulf of Mexico.

...Also on Friday, the company contracted with Simmons Cos. International to sell two semisubmersible rigs.

Once you start, where does the stampede of moralism stop?

So let me get this straight: we are supposed to boycott or protest against the 2008 Beijing Olympics, because the Chinese Government buys oil from the Sudanese regime engaged in a civil war in Darfur. I carry no torch for the Chinese authorities, but once you fire the starter's pistol for such a stampede of moralism, where does it stop?

Should the 1908 Olympics have been held in London? After all, millions were toiling under the yoke of the British Empire and Parliament had refused to allow Ireland Home Rule, leading to a boycott of the Games by the Irish team.

Global warming could invite sharks to Antarctica: biologists

BOSTON, Massachusetts (AFP) - Global warming could bring ferocious sharks to Antarctic waters, threatening a unique marine life shielded from predators by frigid conditions for millions of years, biologists warn.

Agency urges US to use pricing to fight energy woes

WASHINGTON (AFP) - The International Energy Agency on Friday called on the United States to do more to curb energy use and fight global warming, saying pricing was the best way to curb demand.

China: rich 'culprits' on climate change

UNITED NATIONS - Negotiations on a new treaty to fight global warming will fail if rich nations are not treated as "culprits" and developing countries as "victims," China's top climate envoy said.

The whole world must take action to confront climate change, but developed countries have a "historical responsibility" to do much more because their unrestrained emissions in the past century are responsible for global warming, said Ambassador Yu Qingtai.

I have been devouring the comments and reports of David Walker, the GAO, over the last few years as he was one of the only ones in government who tells it like it is.

This is not a good sign.

"Government Accountability Chief Resigns"


BushCo will not be in a hurry to make this appointment, and the selection will be in the spirit of this regime, the least qualified they can find.
"Government Accountability" under BushCo during the time the congress and he white house were
both in rethglican hands, is one of the greatest oxymoron's of all time. It has not improved much with the current crop of dem's controlling congress.
No one said late stage capitalism would be fun, but you must admit, the absurdity of the situation does occasionally bring a smile.

If Government Statistics are going the way of the dinosaur why will we need a GAO?

The Federal Government has learned an important lesson from the Pentagon. The GAO has attempted, unsuccessfully, to audit the Pentagon for as long as I can remember. Each year the GAO staff walks away from the Pentagon...shaking their collective heads...and muttering that the books are such a mess that they cannot conduct an audit.

Hey, if it works for the Pentagon why not for the entire government?

if memory serves, the GAO returns $5 to the government for every $1 they are budgeted ... and thusly they're a perennial favorite target for cost conscious Congresscritters.

Every time I have heard David walker present he has talked about his children.

I don't think we have heard the last of him.

Who ever is in charge after TSHT they would be wise to include this man at the very least in some advisory position.

P.S. I do not have high reguard for CPAs in general but this guy is very human.

Federal Lab Says It Can Harvest Fuel From Air (With a Catch)

This plan has a minor hurdle, too; the electricity for driving the chemical processes, according to a white paper describing the overarching concept, would come from nuclear power. The proposal says it’d be worth it to have a payoff of steady, secure streams of methanol and gasoline with no carbon added to the atmosphere (and a price for gasoline at the pump of perhaps $4.60 a gallon — comparable to petroleum-based fuels as oil becomes harder to find).

It's H2CAR all over again.  See my comments here and here.

Re: Agency urges US to use pricing to fight energy woes

The IEA says the U.S. needs higher prices for transport fuel in order to encourage increased efficiency and lower emissions of CO2. Don't they know that the U.S. depends on low cost fuel? And, how will our democracy be able to accomplish this highly desirable goal? Recall How much trouble Bill Clinton went thru to get a 4.3 cent increase in the gasoline tax. That is a far cry from the tax level needed of about $2 per gallon today, a tax increase which would be impossible to impose on voting citizens in the U.S. So, the Saudi's will have to do it for us...

E. Swanson

The market will impose a high enough price to force people to conserve whether they like it or not. At least this way they can't bitch it is all a government conspiracy to deprive them of their "freedom".

You're right, ppl will complain that it's a conspiracy of "Big Oil" or "them Arabs" instead.

'If It's Raining In Brazil, Buy Starbucks'...Some interesting comments from a professor of economics at U Cal and a book with the amusing title above. Occasionally I watch Squeek Blab, especially if they have some one on the show that calls em like he/she sees em. Why does Squeek Blab devote so much time to stock markets and so little time to commodities and the bond markets?
I think the good professor should write another book entitled 'Stock Traders Are From Venus, Bond Traders Are From Mars'...Anywho, the good proff has an interesting take on why the Fed is having so little effect on the US economy with their continuing prime rate cuts and other mechinations along with the following quote which most of us have heard before (or, something similar):

'I might note here that there is no world oil price shock in progress. It is a US oil price shock. As the dollar has fallen against the euro, Europeans are actually paying about the equivalent of $50 a barrel oil.'

And the proff continues: 'The Fed's conundrum is this: every time it cuts short-term rates, it hopes that the bond market will react collectively by pushing down long-term yields. When the Fed is effective in influencing the long end of the yield curve, it has its only chance of stimulating consumption and investment. The problem now is that the bond market is not cooperating.' Why isnt the bond market cooperating? Well, thats the interesting bit. Its a good read but we are exhorted to post in moderation...moderation is dependent on, among other things...The phase of the moon, lack of extracarricular activities, threat of a visit by inlaws...Or, all manner of other unknowable unknowns to mere mortals... :)


Holy mackerel!! Phil Flynn, the most quoted oil trader this side of Cantarel is now starting to at least wonder about the possibility of peak oil. This is from his daily commentary that ran yesterday:

Then low and behold in just a few short trading sessions oil rallied close to 9 dollars a barrel. That kind of a move used to take years and now it is happening in days. I mean come on!

The larger issue of course is the big picture peak oil stuff. Does a recession really matter if we are running out of oil? With all the bullish fundamentals that have driven oil for the last 5 years we only added roughly 10 dollars to the highs for oil a year. That was in the backdrop of a growing and expanding economy. Now we add 30 into a slowing economy! The only thing that can explain that is either we are seeing the peak oil production and the sudden realization by the masses that we are running out of oil or more likely bulls on steroids! Or maybe just maybe this is a last desperate to take out $100 a barrel before we crash into the sixties!

This guy is all over CNBC, Fox Business, and is by far the most quoted oil trader in newspaper stories. In the past he has dismissed peak oil worriers as a joke. If he starts to talk about peak oil with the megaphone he has, how long until peak oil is on the front cover of Time magazine?

How many POers think oil prices will decline this year? We have recession and a boost from megaprojects in 2008. I'm really not sure what will happen, but I wouldn't be surprised if oil dropped to say $70-$80 sometime during the year.

Jim Puplava discusses resources limits in Hour #3 this morning. He is not anticipating lower energy prices: www.financialsense.com

My take on the issue, as ever, is net export capacity. For example, if the US were the sole source of crude oil for the world, crude oil production would have increased from 1945 to 1970, but net oil exports would have ceased in the Forties.

From Leanan:

Vietnam to slash coal exports by a third in 2008

HANOI (Reuters) - Vietnam, a key coal supplier to Japan and China, will slash coal exports this year by more than 32 percent to about 22 million tonnes to save more for new power plants at home, a government official said on Friday."

From Arkansas:

McGowan Farms will grow zero rice this year.


Fertilizer too costly.

ELM comes to coal. We could really use an in-depth analysis of coal export markets here at TOD.

That last note is interesting. CBOT has rice above $16 and all guesses are it's only going higher. How much have your costs gone up? How constrained are you from betting on good prices for your crop? How many other producers are in positions similar to yours? Your production is a known zero if you don't plant, any guess at all what sort of declines we may be seeing globally/

Let me try again. How high a price would you need locked in to justify an outlay now for fertilizer? Are there other producers who can pick up slack who will have lower costs?

As long as I can remember farmers go on and on over costs and prices and then they go ahead and plant and hope for the best. If you really just can't plant it sounds like a very big story to me.

Hey, OH,

Yes. We've had rice since 1976.

Rice lost out to cotton, soy. The return on these 2 just
out weighs the former. We sell in advance.

Fertilizer was just the tipping point.

BTW- We need $20 the bushel on wheat to make up for destroyed crop rotation.

From Delta Farm Press:

During its annual meeting in Memphis, Tenn., Council Chairman John Pucheu cited a 14-point package that made improvements in the cotton-marketing loan as one of the best features of the new farm bill. That — and one providing assistance to the U.S. textile industry — appear to have been left out of the proposal.

The American Soybean Association said the Peterson-Goodlatte plan “reversed the limited progress ASA achieved in the House bill to provide more equitable income support to soybeans and eliminates funding to make U.S. biodiesel producers competitive with imported biodiesel.”

The National Corn Growers Association, which has been working since the last farm bill to try to pass an improved counter-cyclical program, was watching the revenue counter-cyclical program it supported in the House bill fade off into the sunset.

“This framework does not contain a revenue program growers will view as an option,” said NCGA President Ron Litterer. “It simply fails to address the changes in our industry, the realities of today’s marketplace, and the increasing levels of risk farmers are facing well into the future.”

Thanks. That makes sense. I'm still scared tho.

Hello Oldhippie,

Yep, Industrial NPK [I-NPK] is now having an ELM effect on availability and prices. I was hoping Organic NPK [O-NPK] would be ramping up by now bigtime to help tamper I-NPK pricing increases, but it appears the relative 20:1 O-NPK/I-NPK weight ratio is a big hindrance to moving the compost and manures very far:


To begin with, you can assume that a ton of manure is roughly equivalent to 100 pounds of packaged fertilizer. For example, 1 ton of fresh horse or steer leavings (with bedding) which contains about 10 pounds of nitrogen, 5 pounds of phosphorus, and 10 pounds of potassium-is more or less equal to 100 pounds of commercially made 10-5-10 soil supplement. On the other hand, 2,000 pounds of dairy cow or pig excrement is slightly less nutritious ... while the same amount of poultry droppings (equaling about 100 pounds of 25-15-10 fertilizer) is a great deal more valuable. And keeping in mind that rotted waste is twice as potent as raw, 1 ton of fermented equine or bovine manure is comparable to 100 pounds of 20-10-20.

As to the rate at which chemicals are released into the ground, the general rule is that most manures let go about half their "vitamins" during the first year ... around 25% the next ... close to 12.5% the third ... and so on. Two exceptions, both of which release the bulk of their nutrients within the initial 12 months, are cow dung (75%) and hen droppings (about 90%).
This link has a lot more useful info besides the teaser excerpt above.

Maybe the best way to immediately cost-effectively improve manure movement from the city back out to the rural area is to fill the trunk of any rural-heading vehicle full of compost/manure, then require them to dump the load at designated rural spots convenient for the farmers to field-apply. Instead of car-pooling--how about poop-pooling?

EDIT: Wouldn't it be fun to fill the storage area of a Bentley, Jaguar, Mercedes, or Hummer full of pig manure? :)

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

Do you or others have any numbers on the amount that a farm's livestock leavings helps as fertilizer- to offset the costs of feeding that livestock, or the acreage required to feed livestock? Not to suggest that these outputs would be a wash against the feed inputs, but I don't know if I've ever heard any arguments for the savings generated when a farm has livestock supplying a portion of the fertilizer requirement.

From Michael Pollan "The Omnivore's Dilemma"
'Industrial agriculture took a solution (the classic farm), and turned it into several, separate problems..' (paraphrased from memory)

Bob Fiske

Hello Jokuhl,

Thxs for responding. Sorry, I don't have any numbers, but I sure wish some economists would look at the entire nutrient-loop costs and benefits of O-NPK compost and manure vs I-NPK.

Recall my earlier post: when 1914 I-K hit $10,500/ton inflation adjusted, yet most farmers probably predominately used O-NPK; I-NPK was mostly used to supplement O-NPK to prevent a Liebig Minimum. It is easy to see how our modern farming methods, being highly reliant upon long distance and energy intensive I-NPK, could be hammered by rising farming input prices. Restoring the O-NPK loop from city back to the farm may be real important soon.

Arizona has lots of wealthy people who own second vacation homes in the highlands or vacationers who travel from the desert to the mountains to get a respite from the summer heat. Lots of them have blinged-out crewcab pickups that never haul anything but luggage and golf clubs. What if they hauled manure from the outlying pigfarm to the private golf course by their vacation home, and then hauled more manure for their private city golf courses on the return trip?

In exchange for this two-way hauling, maybe they could be rewarded with free golf rounds, free pork, or reduced country club membership to offset the costs of I-NPK for the golf courses, and the aquifer depletion and groundwater pollution from the pig manure holding tanks.

Just musing on ways to make every vehicle move O-NPK while we still can, but I still think SpiderWebRiding + Alan's Ideas are our best hope for machete' moshpit reduction.

JB Hunt got started by hauling rice hulls from Stuttgart to NW AR.

Truckers are now hauling poultry waste down to farms in E AR.

They present a good case, but they didn't address that the new capacity coming online this year is about 100% more than came online in 2007 (via megaprojects wiki).

(1) Estimated new capacity coming on line.

(2) How much production was lost to depletion?

(3) Based on a pretty good grasp of 2007 data, I estimate that the top five net oil exporters are going to show another drop of about one mbpd in net oil exports in 2007, roughly the same as 2006, on track to approach zero net exports in the 2030 time frame.

(1,2) Yeah, but it's still 100% more expected than in 2007. See my comment to Leanan.

(3) I certainly think net exports will be interesting to watch over then next decade, but it's more than just the top five. Rembrandt's last oil monthly has liquid exports sort of flat.

And the problem for the smaller exporters in the bottom half is that they peak and decline faster than the larger exporters in much the same way that smaller fields peak and decline faster than the super giant fields. For example, even the Wall Street Journal is talking about Mexico, a top 10 net exporter, hitting zero net exports in the 2015 time frame.

hitting zero net exports in the 2015 time frame.

Is it funny that doesn't sound as bad as Hitting zero net imports in 6-8 years timeframe.

2012, 2018, 2025 sound so far away still for us. It's like our internal clock is still back a few years.

But 4 years away, 10 years away, sounds alot closer for some reason.

During those same 4 years, 10 etc years Ghawar will start dropping/diving, the Greater Depression will have hit.

There might even be a war or something else. Amazing times.

Unless trends change, China`s economy will be larger than the USA at that time. The latest stat show China`s exports up 26.7% YOY. There has never been an economy of this size growing at this rate (the growth eclipses the growth of the USA in its heyday).

Yes regards China and the US heyday. What you describe is exactly the impression one gets firsthand. There has never been or ever will be again anything on the earth to equal the sheer scale of the thing. Unimaginable enormity. Literally sucking up the planet's resources at present.


There's a lot of cognitive dissonance concerning coal at the moment. I regularly see side-by-side articles in DrumBeat declaring the end of coal and the resurgence of coal. Unfortunately for climate change, I think the world is going to gorge on coal the way a starving man gorges on a hot meal.

Instead of a dissonance, it reminds me of the windup to a missed punch.

The image in my mind is of the Death-Star, just starting it's Destructo-beam to abolish the Rebel Base, at the very moment that it is going to blow up from Luke's Direct hit.

"Jimmy: I've achieved nothing!

"Joey: You're missin' the point. The success of the band was irrelevant - you raised their expectations of life, you lifted their horizons. Sure we could have been famous and made albums and stuff, but that would have been predictable. This way it's poetry.

Roddy Doyle - The Commitments

IMO, the Megaprojects wiki is more a way to keep track of industry predictions than a projection of actual production.

In 2005 and 2006, everyone was saying that 2006 was going to be rough, but in 2007, all kinds of new production was coming online. Didn't quite work out that way. Now it's 2008 when all the new production is coming online.

My projection: next year at this time, people will be saying that 2009 is when that wave of new production is going to come online.

IMO, the Megaprojects wiki is more a way to keep track of industry predictions than a projection of actual production.

In 2005 and 2006, everyone was saying that 2006 was going to be rough, but in 2007, all kinds of new production was coming online. Didn't quite work out that way. Now it's 2008 when all the new production is coming online.

Well, I completely buy that the megaprojects is sort of a best case, that there will be project slippage, that obviously there will be depletion, and so on.

However, I'd imagine these factors will be similar in 2008 as they were in 2007. So maybe these factors mean something like 50% of expected capacity actually comes online. That would still mean the actual new capacity coming online in 2008 will be greater than 2007.

So maybe these factors mean something like 50% of expected capacity actually comes online.

We'll see. The "bottom up" projections have proven to be way optimistic.

That would still mean the actual new capacity coming online in 2008 will be greater than 2007.

That doesn't matter. What does matter is if it's enough to make up for declining production in the existing fields. Prudhoe proved to be just a bump on the backside of the US Hubbert's peak. And I don't see any Prudhoes on the horizon now.

I'm not ruling out one last hurrah...but we've been waiting for this wave of new production since 2005. It's looking more and more like "Jam tomorrow, but never jam today."

I agree.

I have frequently asked how a Mega Projects analysis would have handled the East Texas Field in 1972. It was then showing, in its fifth decade of production, a multi-year long increase in production, but then it started a terminal decline in 1973, never to recover.

My point is that the decline from these big fields that are watering out--Cantarell, North Ghawar, Burgan, Daqing, etc.--is going to overwhelm the smaller fields coming on line.

And as I have pointed out several times, the annual Lower 48 decline rate at the end of 1972 was -0.8%/year, after having peaked in 1970. At the end of 2007, the annual world decline rate relative to 2005, will be quite similar, probably about -0.5%/year.

That doesn't matter. What does matter is if it's enough to make up for declining production in the existing fields.

This is my point. IF (yeah, big if) there is more capacity coming online than did in 2007 and if declines in existing production in 2008 are similar to 2007 then considering that production was flat in 2007, you'd expect production to rise in 2008.

Best to see it as a sort of upper limit or best-case ceiling. We're not going to see more capacity come on line that what has been planned, but there are any number of things that cause those things to run into problems and delays or even be canceled.

Furthermore, if we run into various problems making things happen at this level, what basis should anyone have to think that there can or will be a massive ramping up of megaprojects in the future? Without such a ramping up, lines drawn into the future with an upward slope look pretty incredible.

Prices at the pump in the US will not decline until real inflation is reigned in...I dont see that happening this year or next. Inflation is simply a disguised tax so it is probably a good thing if it causes a decrease in consumption that doesnt decrease the GDP...Of course, we wont know if cause/effect occurs, because the Gov isnt going to make the stats available. Aint it great? :)

Volatility will be the main attribute of oil prices this year, I think. So many things affect the price of oil, that it is impossible to figure out how they will interact -- relative value of the dollar, recession or even depression, weather (we've been lucky the past two years), politics (Bush really wants to hit Iran), and just plain luck. I do think the general trend will continue upwards, and I think there could be some very high spikes during the year depending on how things break. But I also wouldn't be too surprised to see oil down in the 70s at some point.

I think politics/leader psychology will have a much, much larger effect in the near future and here's why. When/if the peak oil possibility hits critical mass of awareness on the global stage, there will be Chavez times 20 going on around the world. Exporting countries will start protecting their resources more and more and wanting more stakes in what happens to those resources (i.e., current Russia). So, even if the "data" show us with ample supply and production, it does not mean diddly squat if the politicians decide to sit on their resources or hand them out only to "friendly" nations. This goes against the "oil fungibility" concept...we can just buy from another exporter. All oil exports are the same, right? Same price, same quality, same terms...hogwash!!

It is Peak Oil Lite as Robert likes to call it, but it could go on ad infinitum until the real deal hits the world.

"Exporting countries will start protecting their resources more and more and wanting more stakes in what happens to those resources (i.e., current Russia)"

In the end, this means that the peak will come sooner and the decline will be more shallow.

This isn't necessarily such a bad thing.

Bush hits Iran,and we get to spend the rest of our lives living in a scifi movie,I.E."The Postman".It would get so bad,so quick,I would barely have time to get my costume right...

And they would be hunting politicians with dogs

Hope is a strong humane trait.

Yes, 'Bush really wants to hit Iran'...and so does Israel. But, I dont see it in the cards now. The timing of this administration is incredibly bad...but, they are enept so what to expect?

If anyone hits Iran and does not take out all the missles targeting the Straits of Hormuz, Iran will sink a few tankers in the straits and no other tankers will attempt to transit the Persian Gulf. The tanker owners will not be able to purchase insurance and the crews are not suicidal. World economy stops. Then the SCO will designate their own 'Axis of Evil'. US and Israel will be at the top of the list. Iran will encourage the Shia in Iraq to disrupt all oil/electricity in Iraq plus step up attacks on US forces there.

The US would eventually be forced to the bargaining table with Iran to restore safe passage for tankers transiting the Gulf. This is a disaster scenario for the US and world economies and would put an end to US influence in the ME and probably an end to the US Dollar as a reserve currency. Of course, it could escalate to nuclear war. I dont believe anyone is ready for that possibility.

Gas at the pump is going to continue to rise as the Fed lowers interest rates and the dollar falls against other currencies. There might be some fluctuation in price but I dont see oil going below $75 bbl unless economies collapse and world depression ensues.

Just my take on the situation ... most everybody has one.

We had a "tanker war" back during the Iran/Iraq conflict and traffic didn't stop - 546 vessels damaged, 430 civilians killed. This was Iraq making trouble at first, and then both sides going at tankers. It came to a screeching halt when Russians chartered tankers and others flew the U.S. flag.

Today things are a little different. Iran can hit much harder now than they could just a year after their revolution, having had decades to arm, train, and plan. The United States will react much more swiftly but I am not sure we have a battle plan that can be successful given how thin our troops are stretched and how much Iranian coast line would need to be covered. An aerial interdiction program like we had for SCUDs during the first Gulf War seems likely, but anti-ship missiles are much smaller and more easily hid than the SCUD setups.

Double post

IIRC WTI hit an all time high daily close on 7 Aug of 06, then we waited untill 31 July of 07 to break thru that high.

That is less than 7 months ago and now we are talking about oil might be back in the Seventies this year.

It seems the humane mind can adjust quite rapidly to be surprised by $70 oil!

As I continue to say, the price of oil will go up and down - but there will be more ups than downs, and the ups will be up more than the downs will be down.

I never know what to make of Phil Flynn. He is at least peak oil aware, which many of the talking heads aren't (or at least won't admit to). I get the feeling he's a peak oil agnostic. Even in this article, he ends by saying it's "more likely bulls on steroids" than peak oil. But at least he mentions it.

The CEO of Shell Oil said the other day that the futures markets probably impact the price of oil plus or minus 5%. So, whether it's bulls on steroids or bears on steroids, they need some better steroids to have much of an impact apart from the underlying supply and demand relationships. Now, of course, the CEO of Shell Oil could just be talking out of his ass, but I would think that he would have a pretty good understanding of how the markets work. If anything, he might want to overplay the impact of the futures markets rather than underplay them to shift the blame from the oil companies to so called speculators.

Flynn has trading clients.He went short near $100 in Jan/08.He has been stopped out several times in the past 2 mos.He has had a credible record for those who like to play the 1-3 mos trends over the past 4 yrs.I'd say He is sweating his latest call.His daily page was more confident sounding when oil was below $90(barely a week ago now)!

Its starting to look like "game over" for a lot of the paradigms that we live our lives by.Haven't you notice little things like wheat prices,CERA saying"Unnh fellas,we might have a problem",the entire world financial system on the ropes,a black man, or a woman will be the next president,ect,ect.

We are at the tippy top of a roller coaster of change.And not all of it,or even most of it will be good.As the Chinese curse goes"May you live in interesting times..."

I like to think of it like this:

Our range of error in predicting the future based upon the past has dramtically increased. In other words, things just don't work like the used to.

AKA "Paradigm Shift"

And we all know what happens after that! The last Time magazine cover I remember was a man hugging his house.

I remember that cover! They should run one now with a man kicking his house.

. . . or running for his (financial) life from his house.

This guy still thinks, that the US is on the centrestage of the world economy. He still thinks, if the US goes into recession, the world goes and so do commodity prices. It used to be like that. It was so easy to make money with that paradigm. Now it's different, much different.

Ok, the US is in recession. Who actually cares outside the US? Nobody.

China is booming
India is booming
Vietnam is booming
The Philippines are booming
Malaysia is booming
Eastern Europe is booming
Russia is booming
Australia is booming
Brazil is booming
Middle East is booming
Western europe is doing exceptionally well
South africa is booming

The US in recession? So what! What we have seen within the last few weeks reg. commodities especially Oil was the "proof of the pudding". Expect commodity prices to skyrocket in 2008 and onward. Winds are changing!

I think you missed the arrival of Mr. Bearmarket.

The USA isn't the entire world, that's true. However, the 800-pound gorilla that is weighing down the US economy (the subprime loan Ponzi scheme) will effect so many other nations' banks that bought the AAA-rated "toxic waste" (ie CDOs and other derivatives). It's my understanding that many European and Asian banks are holding the bag. Aside from the derivatives fiasco, nations that foolishly bought (and continue to buy) US treasuries will be impacted when the US dollar finds its true value (10 cents?).

I can't predict just how far and wide the world depression will spread, but it won't be pretty. But I do agree, Euro, that there are other nations which will weather the storm much better than the collapsing empire of King George, Jr. For Junior's sake, he'd better hope that Paraguay (his future home) will be one of the nations that comes out on top.

Uncoupled, Right. Good Joke. Ha Ha...

Well Contained... Good One.

Ok, Brazil is an isolated country, with almost no external commerce and a huge gap between capital and real markets. From all the countries you listed, maybe Malaysia and a few eastern european ones have those same characteristics. All the others are linked to the US fate.

Now, the isolated countries may be in a better situation, or may not. I can talk about Btazil, and expect it to follow the US just a few years later.

Think of the world as an elevator. If the USA farts, we are all going to get a whiff, the taller you are the the more it will stink.

I think your claims of "booming" are relative. Most, especially South Africa are on the cusp.

BushCo and economic data:

"The Bush administration’s latest move is to simply hide the data. Forbes has awarded EconomicIndicators.gov one of its “Best of the Web” awards. As Forbes explains, the government site provides an invaluable service to the public for accessing U.S. economic data:
This site is maintained by the Economics and Statistics Administration and combines data collected by the Bureau of Economic Analysis, like GDP and net imports and exports, and the Census Bureau, like retail sales and durable goods shipments. The site simply links to the relevant department’s Web site. This might not seem like a big deal, but doing it yourself–say, trying to find retail sales data on the Census Bureau’s site–is such an exercise in futility that it will convince you why this portal is necessary.

Yet the Bush administration has decided to shut down this site because of “budgetary constraints,” effective March 1:"
(Posted from Naked Capitalism)

This on the same order as the GAO chief calling it quits.TPTB do NOT want the raw ,un-massaged data anywhere near anyone who might read some irritating truth in it.
These actions ,more than most others is what gives me concern.That the data is so bad that its being hidden...thats enough to spook me pretty good.

When the Fed Reserve stopped publishing M3 Stats 'because it could save money and no one really needed the M3 data' I knew we would see more Government Stat data disappearing. It all fits a pattern. GAO chief resigns, Pentagon books so shabby that they have not been audited for years, now Gov Stats to disappear. Gotta love the transparency of this administration and I dont see why it would change because of an election...regardless of who wins.

In the second part of Hour Three, Puplava has a discussion with the guy that runs Shadow Government statistics--more discussion of immediate inflation versus deflation, and some discussion of the ongoing reduction in government statistics. www.shadowstats.com

I've decided that my take on the issue is that the American consumer is like a blind drunk guy staggering across a highway filled with speeding 18 wheelers. If he is not crushed by deflationary 18 wheelers, he will be crushed by inflationary 18 wheelers--of course while being bombed by higher food and energy price dive bombers.

Having been a post office clerk for 10 years my favorite indicator is the price of stamps. When I started in 1980 it was 15 cents and today with the increase to 42 cents coming in May it has nearly tripled. That the new forever stamp is a big seller confirms that inflation is on many minds. I do not trust government reports on inflation, unemployment, and deficits to name a few. I have learned to trust what I see in every day life. It is the truth.

I wonder about those "forever stamps." They probably are "forever," but in the future you'll need 10 of them to mail a letter.

Considering 'receding horizons' - and I do, I do - those 'forever' stamps may be a decent investment. I plan to order a nice thick stack of 'em. Problem is, they're only as good as the postal service which is not immortal. It'll be propped up for awhile, though, and those 41-cent stamps will probably pace inflation pretty well, while being quite liquid. For those who plan to hold a bunch of cash, might want to hold some of those as well. I'll bet future stamp prices rise faster than the bogus CPI.

They'll probably be just about as "forever" as the promises to give us social security checks.

And I can remember posting a $.01 stamp to a chess postcard.
"Those days are gone."

I am old enough to actually just remember pasting a three cent stamp on a letter. That tells you a little bit about my age, and a lot about the history of inflation in the US.

In 1970 (when I was in boot camp in Uncle Sam's Army) first class stamps were 6 cents. I remember buying a roll of 100 for exactly six bucks to write (remember that, actually writing?!?) to my fiance. They had more than doubled in the ten years before you started at the P.O.

And for WNCObserver: Inflation, indeed. How about this: In my junior year of H.S., on a Friday afternoon I could put 6 gallons of regular gas in my car, take my girl to the movies, and afterward hit MacDonald's for 4 burgers, 2 orders of fries & 2 milkshakes, and I'd still have change left from the five dollars I started out with.

Edit: Oh, yeah... That "regular gas" would have been in the 92 - 94 octane range!

Right on WT...and lots of them blind drunks are staggering around the Daytona International Speedway this week/weekend. $3 Million motor homes parked in a muddy infield paying $3000 so they will have a 'lake view' and a partial view of the race track. That 'lake' is the mudhole that was left when dredged to build the high banking for the speedway...but instead of dive bombers aiming at their high dollar motor homes, its thousands of sea gulls attracted to all the left overs from cook outs. Unbelieveable waste on parade.

One of the comments a cia spook made once concerned how societies change.Used to be,every 50-60 years we would all have a good major world-wide war/depression to shake up the social stratification and resource allotment.This was actually good in some ways as it allows new forms,and evolution of the societies involved{cold-blooded as that sounds}Problem we have now is with the advent of nukes,war is not such a good thing anymore as it could get"out of hand"And actually damage the ruling class,and the true order of things.

Its starting to appear as if the international corp. have declared war on the fedgov,had one of their own declared pres,then set about to dismantle enough of it to ensure it never has the ability to "harm" business.

The problem that this brings is that w/o a strong fedgov to enforce contract,and regulation,we get messes like the current pile of poop in the mortgage market.

{Darn.never saw that one coming}now what?

Used to be,every 50-60 years we would all have a good major world-wide war/depression to shake up the social stratification and resource allotment.This was actually good in some ways as it allows new forms,and evolution of the societies involved{cold-blooded as that sounds}Problem we have now is with the advent of nukes,war is not such a good thing

It's like suppressing forest fires... you just guarantee that when you finally have one, it'll be nearly unrecoverable.

And I reckon it'll be a pip.

It's also like our system of totalitarian agriculture, which seeks to eliminate individual hunger, making wide-scale famine more likely, when everyone goes hungry.

It's also like our system of electricity generation that seeks to eliminate small blackouts, which makes large blackouts more likely.

How does a government keep its population from panicking? Largely through information control. This administration is quite crafty in this regard. Perhaps it is for our own good? Could we handle the truth?

Give me the truth.Unvarnished.With cold water.Its the best food one can have.

Unfortunately, we are fresh out of the current stock of crunchy, cold truth. How about a nice circa 1980's, slightly-used truth or a can of synthetic truthiness?

It takes an industrial-strength stomach to handle distilled truth. Most people simply can't take it. I have a cast-iron stomach, I expect many people here do.

But the vast majority of people are not like us.

Could we handle the truth?,

From www.dieoff.com

"If a path to the better there be, it begins with a full look at the worst."
-- Thomas Hardy

This will just make independent, non-MSM resources like TOD all the more important. We can all count upon motivated individuals to make sure that the information is exposed one way or another, and then distributed around the Internet.

Sharks could migrate to the Antarctic, first time in millions of years. Hey, I thought it was all natural variability. How can the Antarctic waters be getting this warm due to variability when we are sitting in a period of ice ages? Maybe 27 bllion tons of human produced CO2 a year into the atmosphere has something to do with it.

And sharks are just the guaranteed headline for the press release; the total loss of a stable ecosystem there is horrific to anyone who has studied it... and it's being played out pretty much everywhere.

When I read the story about the predator crabs ready to march on the marine communities, it reminds me in a strange way of my reaction to the story uptop with Lester Brown hailing the beginning of the end of the coal industry.

I don't know what Lester's smokin', but I could use a pouch of it. Humans and coal are like predatory crabs and soft-bodied prey. If they can get to it, game over.

And sharks are just the guaranteed headline for the press release; the total loss of a stable ecosystem there is horrific to anyone who has studied it... and it's being played out pretty much everywhere.

Nonsense! Nothing will displace Britney in the headlines I tell you, nothing! At least, not unless Angelina Jolie gets knocked-up by Tom Cruise, attempts suicide, and goes into drug rehab.

You need to understand America's priorities.

True, true. My comment was actually meant as a compliment to whoever spun the press release. "Crabs Poised to eat sessile Antarctic Fauna" wouldn't have made the news, while the word "sharks" causes the human brain to pause and go "whuh??". You have to work with the memes that are already in people's heads, and since Americans are, on average and to a reasonable first approximation, all morons, you need to use a keyword like Fire, Tits, Shark, Angelina, Terrorism, NasCar, etc. After many decades writing environmental press releases (and I was good at it, you HAVE seen me on TV if you've got one and watched it in the 80's or 90's), I enjoyed a short stint creating cover stories for Weekly World News under a psuedonym just for the sheer joy of being able to write dumbass stories which could not be ignored by those checking out at Wal-mart. I have utterly no doubt that those latter stuck in peoples' minds a lot better than the factual ones....


Thank you so much for that Trickes of the Trade so to speak using of keywords, Memes, groupings, snagging stream of consciousness subliminally. Ones eyes are automatically drawn to Proper Nouns, phrases, etc that have emotional/checked subconsious flags to them. Understanding this, information can be shaped for the disired impact.

Marketing/PR/psyops/propaganda they all just kinda overlap each other.

A great book recently on the best sellers list is

Blink: The Power of Thinking Without Thinking
by Malcolm Gladwell


After reading alot on how the brain processes things without us even being aware of it is very sobering.

Take a look at these techniques.

25 Rules of Disinformation:

Exxon replaced more than 100% of their reserves in 2007 in spite of Venezuelan nationalization of their oil sands operations there.


In another report OPEC considered it might have to cut production if petroleum stocks rise too much.

See Rigzone: http://www.rigzone.com/

This is congruent with OPEC's previously established methods of operation.

The full article referenced above.

"The ExxonMobil's total oil and gas resource base stands at 72 billion oil-equivalent barrels at year-end 2007.

During 2007, ExxonMobil added 2.0 billion oil-equivalent barrels of total resources, which more than replaced production. Significant resource additions were made from successful drilling programs in the United States, West Africa and the Asia Pacific region.

Overall, the resource base was reduced by 1.8 billion oil-equivalent barrels in 2007, primarily driven by the effects of the Venezuelan expropriation of 1.6 billion oil-equivalent barrels.

The Corporation's resource base of 72 billion oil-equivalent barrels includes proved and probable reserves, plus other discovered resources that are expected to be ultimately recovered."

I may be missing something, but I don't think the use of the term "in spite of" is appropriate. It would be more appropriate to say that even though Exxon replaced their production with new resources, their overall resource base was still reduced because of the Venezuelan expropriation. It is still a bit confusing to me since there seem to be .2 billion barrels unaccounted for.

Also, the whole thing needs to be viewed in the context of what the meaning of peak oil is, as they are talking about oil-equivalent barrels. After one subtracts all the energy required to get oil shale or oil sands, how many oil equivalent barrels are left? Is the oil equivalency determined by net or gross barrels?

The way oil production is graphed and accounted for may be understating the nature of our predicament. The peak may be lower and the downward slope may be greater than is represented by the graphs that we typically see.

One of the constraints that has to be in the back of the mind of any who read this report is the political aspect of it.Think of shareholders attitude if a distinct downward trend was noted...

Considering the stories listed below, I have to wonder about the future of Rail projects and Coal to liquid. I've been worrying about how the credit chaos would ultimately affect big ticket projects.

Well, here we go: Municipal Market Is Beset By Wave of Auction-Bond Failures

The Port Authority was forced to pay a rate of 20 per cent after the sale of $100m bonds failed at an auction on Tuesday.

Along a different track:

Looks like energy stocks have the best chance of success in the current market.

Here are a some graphs showing that as the fed lowers its rates, the real world rates keep going up:
Pushing on a string.
Failure of Borrowing Costs to Fall
30 year mortgage rates

How SubPrime Really Works: An amusing little power point presentation.

That information about the muni bonds is telling....if no one buys bonds...it all freezes up.And we really are screwed.

All the money people are dancing as fast as they can to stop a bust. I half way expect another surprise interest rate cut Tuesday before the market opens. All depend on what happens to Europe and Asia on Monday.

From what I read, the vast majority of municipalities have good enough credit ratings that they don't need no stinkin bond insurance. Presumably only a small number of municipalities are affected.

This was covered in depth on AutomaticEarth - Buffet is starting a bond insurance effort that will only take municipals, which strips the stable, good paying stuff from the monoline insurers, pretty much guaranteeing they fail ... and then a lot of companies are very desperate for funding and there is Buffet, ready to value shop.

It needs to happen - Eliot Spitzer put the monolines on notice - get thee stable by 2/19 or you're done. A formality - they're done.

Let us be sure to note that these are fancy new-fangled "engineered" bonds. Essentially, variable-rate bonds where the rate is adjusted every month or so by an auction. The investment banks that set this all up assured the bond issuers like the Port Authority that they would always be able to resell all the bonds at the auction, that there was no real chance that the 20% rate that kicked in if all the bonds failed to sell would ever be used. Traditional muni and agency bonds with fixed interest rates based on the credit-worthiness of the issuer are doing fine. In fact, most of the stories written about this situation note that if the auctions continue to fail, the Port Authority will have little trouble selling enough traditional bonds to redeem the now outlandishly-expensive engineered bonds.

The lesson here? If Citibank approaches you with an "innovative new financial instrument" that will save you money compared to the stodgy old way you've always done business, keep your hand firmly on your wallet and just say no.

I think How SubPrime Really Works is really funny, starting with 'Blow me.' I laughed till the end. This is something my brothers might appreciate... if they knew something was amiss in the world of finance.

Yes, very funny. "Bad assumption, my frigid Norwegian ass!"

The "South Park" type humor and graphics help to point out how completely insane the whole scam was.

(On the other hand I finally understand what "traunches" are.)

The continuing saga, starting on slide 46, will be a bunch of high-powered vultures lawyers getting together a class-action lawsuit

Has anyone commented on this yet, as Kosovo is about to declare independence:

Vladimir Putin's nuclear threat to the West

Europe was scolded for its "silly", "immoral" and "illegal" backing of Kosovo's imminent unilateral declaration of independence from Serbia.

Although he did not elaborate, Mr Putin gave warning of retaliation once Kosovo broke away - a threat likely to chill Western leaders. "We have a ready-made plan and we know what we are going to do," he said.

Russia has made many overtures to Europe for mutually beneficial relations, only to be constantly ignored (mainly at the behest of the US). It therefore won't come as any surprise if Russia finally decides to adopt a more vigorous approach towards Europe, probably using energy to get everyone's attention. Only conjecture, but worth watching never-the-less as major crises often approach unseen.

The Kosovo precedent is a particularly obnoxious ploy by the western club. Spain is already making official protests that Putin dared compare the Basques to the Kosovars. Bloody hypocrites.

The only nuclear "threats" that Putin made was to target NATO military assets such as the ABM "shield" and new bases in potential member states like Ukraine (where only 20% say they support joining NATO, BTW). The Goebbels western media then puts words into Putin's mouth that he is threatening to target Warsaw and Kiev.

The only threats? He said he will start slinging nukes at countries with NATO military assets. Thats enough to get worried.

Putin said he was going to target NATO assets moved into new areas right up against Russia's borders. I don't recall Putin saying he was going to sling nukes anywhere, unless he was attacked first.

Make no mistake, the escalation and threats in this situation were started by the US. NATO is an explicitly anti-Russian alliance, and the ABM system Bush is trying to put into Eastern Europe is a direct threat to Russia. NATO should have been disbanded years ago, and there is zero reason for ABMs in Europe.

The US needs to learn that you can't bully everyone in the world. There are a few countries that are just too powerful. When they are threatened, they will threaten back.

Also, the West needs to appreciate the depth (and irrationality) of the Russian attachment to the Serbs. That attachment started WWI. NATO probably only got away with interventions in the former Yugoslavia because Yeltsin was running Russia, and Yeltsin may have been Russia's worst ruler since Nicholas II.

I find the tensions with Russia to be incredibly frustrating. The collapse of the USSR was tremendous opportunity for the world. But the West only saw it as an opportunity to feast on the Soviet carcass, while expanding its military hegemony into former Soviet territories. Meanwhile, Putin is demonized much the same way as Chavez by the Minitru outlets in the Western press. From a Russian perspective, if his epitaph were written today, he would go down as Vladimir the Great.

Remember, Oceania has always been at war with Eastasia.

I find the tensions with Russia to be incredibly frustrating. The collapse of the USSR was tremendous opportunity for the world. But the West only saw it as an opportunity to feast on the Soviet carcass, while expanding its military hegemony into former Soviet territories.

In what way did the West "feast" on the Soviet carcass? To me it seemed that the carcass rotted all on its own from the inside.

Did you mean former ""Soviet territories"" like Poland and Hungary?

They joined NATO and the EU all on their own and voluntarily because of their experience with the USSR 1945-1990.

In what way does the West have "military hegemony"? Negotiating a few minor agreements is very very far from hegemony. And don't the former Soviet territories have the opportunity and right to do what they want?

I'm certainly no Bush lover, but right now Putin is enjoying the same sort of support of many know-nothing jingoistic aggressive dorks the way that GWB did in 2002.

And let's be blunt. Vladimir Putin is constructing new offensive nuclear missile systems (the USA has not done so since 1990) and threatening neighbors with them, and somehow he gets applauded. And suppose Bush did this to Venezuela?

"the ABM system Bush is trying to put into Eastern Europe is a direct threat to Russia."

How? It may be a big waste of money but it is no threat to Russia.

What could it possibly do to Russia? It is very likely that the newer missiles produced by Russia are immune to interception and in any case, even assuming otherwise, Russia has an order of magnitude (or two) more missiles than there exist interceptors.

Since there is a 1-1 correspondence between expended interceptor and missile, the only threat is that it very slightly alters (but probably not) any plan by Russia to genocide anybody in Europe.

Is that a real "threat"?

I don't think Putin issues idle threats so this bit certainly indicates he's going to take some kind of action over Kosovo:

"We have a ready-made plan and we know what we are going to do,"

I certainly don't believe it will be anything military and certainly not nuclear. Europe's vulnerability is energy and in particular gas from Russia. So assuming he's going to do something, then what form will the retaliation come in?

Pure conjecture, but if Russia reduced supplies to Europe at the same time Venezuela did the same to the US or some such (perhaps even Iran). Would people sit up and take notice of their grievances rather than ignore them and rub their noses in it? Another one of the many crises heading our way may be just about to make itself known to the public.

I doubt China would be too upset after having their noses rubbed in it over Darfur either.

Putin is going to try a few swings with the energy stick in the latest act of the ongoing Serbia v. Everybody Else farce in the Balkans. I don't know what he hopes to accomplish, as the formerly Serbian Kosovo was 90% Albanian last I heard and I think they've been pretty focused on 'cleaning up the neighborhood'.

Interesting times we're living in, and no mistake about that.

Complicated little story, Kosovo.


Quite what the EC thinks it is doing, biting into Serbia is beyond my ken.

I am pretty sure Putin wont let the South Slavs be hung out to dry though.

This puppy may run.

The EC and NATO is applying the might makes right principle of law in the case of Kosovo. If it only didn't spew so much nonsense about how the case of the Basques, Abkhazians, Ossetians and any similar people with a plausible legal justification for secession has supposedly no comparison with that of the Kosovars.

If Serbia has no territorial integrity then neither does Kosovo. But you can rest assured that NATO hypocrite-liars will be denying through force any attempt by Kosovo Serbs to secede from the new statelet.

Reminds me of the cagey wisdom of Otto von Bismark

“If there is ever another war in Europe, it will come out of some damned silly thing in the Balkans”

Another fitting quip by the wily German chancellor of the First Reich (may contain a grain of truth for discussions above and below) :

“There is a Providence that protects idiots, drunkards, children and the United States of America.”

That is ugly, like the wrong end of a bulldog ugly, and the head of the Bank of England is in one of the links, validating the concerns.

I'm going to crawl under the covers and hide now ...


The article that you linked says that "from March 2008 onward, the US government will cease to publish its economic indicators due to budget restrictions (3)" on http://www.economicindicators.gov/ with the note "Due to budgetary constraints, the Economic Indicators service (http://www.economicindicators.gov) will be discontinued effective March 1, 2008". First, money supply M3 data was discontinued. It is reconstructed here at nowandfutures.com

M3 growth is highest in three decades which can only increase the risks of hyperinflation.

I can't believe that http://www.economicindicators.gov/ will be discontinued! A web site doesn't cost much to operate.

The US Govt is handing out rebates worth about $160billion but they don't want to provide an easy source of data on a web site! The next step will be price controls and food/gas rationing.

It seems quite clear that secretive central government planning continues to increase in the US - how sad.

Why not just watch the Census Bureau and the BEA site yourself?

You're right - but it's not as user friendly.

I still think that as the US economy continues slowing, the government doesn't want any more panic in the markets. So, it restricts the easy access of date to the public. The excuse of "budgetary constraints" to close down http://www.economicindicators.gov/ is a poor excuse.

The government's manipulation of data releases is already absurd, now it wants to make data harder to access.

Take inflation, the US government says about 4%/yr, but they exclude everything that goes up. The inflation that people experience is probably over 10%/year.

Flies in the face of one of Bismarck's shrewd insights:

“When you want to fool the world, tell the truth.”

From: http://thinkexist.com/quotation/if_there_is_ever_another_war_in_europe-i...

First Peak Oil Book Available in Arabic

At the Cork (Ireland) ASPO conference, we met a wonderful man on a mission: write the first Peak Oil book for Arabic-speaking audiences. Hatem Elrefaei (Egypt) has now completed the book and it is available for purchase. This is a valuable contribution to the literature, making the Peak Oil message available to a huge new audience. We wish good things, and lots of book sales, for Hatem. If you want to contact the author, please get in touch with me.

- Dick Lawrence

Here is an outline of the book's contents:

TITLE: Oil, peak production and consequence of decline

Number of chapters: 7
Number of pages: 200
Number of figures: 18
Number of tables: 23
Number of references: 68
Appendix: 1 Appendix containing 7 tables

Table of Contents:

Chapter 1: Energy and evolution of human civilization
It discusses how access to energy was/is a vital resource for mankind development across history. It starts from the hunting age, to grazing, to farming, to the industrial age. From using wind, to wood, to coal, then oil.

Chapter 2: Oil: Three important numbers.
It gets to the root of peak oil in a simple way. The chapter brings forward three important numbers to be used in the following chapter; they are:
1) The annual world oil consumption as of 2006.
2) The total amount of oil consumed since mankind discovered oil.
3) An estimate for the existing proven reserve.

Chapter 3: Peak oil: Not a theory but a fact.
It starts with describing Hubbert curve and his prediction of USA oil peak production. Then it uses the three numbers to show that in a few years the amount of oil consumed will equal that remaining underground, meaning we are half way through the total amount. It highlights 11 studies of expectation of peak oil year. It also replies to the denial of economists' view of peak oil and to the claim that oil sand and shale oil can solve the problem. Then it lists 7 evidences of international recognition of the fact of oil peak:
1) Robert Hirsch report.
2) USA Congress hearing report (that was attended by Dr. Kjell in December 2005)
3) USA National Petroleum Council report.
4) Fredrik Robelius PhD thesis from Uppsala U.
5) ASPO and my experience in Cork’s conference.
6) Sweden declared to be oil independent by 2020.
7) International Energy Association (IEA)

Chapter 4: Consequences and proofs
It discusses consequences of peak oil on economics, transportation, agriculture, tourism, globalization, social life. It also shows that impacts already beginning in many parts of the world.

Chapter 5: Is there a substitute?
This chapter is devoted to discussion of all other energy resources: natural gas, coal, nuclear, hydro, geothermal, biomass, solar, wind, tidal. The chapter ends by talking about batteries and hydrogen cells as means of energy storage. The main focus in the chapter is to discuss if these resources can really mitigate transportation and food-supply problems.

Chapter 6: What to do?
It discusses ways to adapt to the new life environment that we all have to live in. It starts with personal adaptation up to the national level with the implementation of Oil Depletion Protocol and TEQ’s. (I translated the Oil Depletion Protocol, and hope it is a good one)

Chapter 7: The future: International and national.
This chapter looks at two pictures: the first views the global stage where it discusses the strength and weaknesses of each of 6 important countries: USA, European Union (now almost one society), Japan, Russia, China, and India. The second is on the national level, where it discusses the strength and weaknesses of Egyptian society and proposes some ideas to overcome expected hardships.

Hello DickLawrence,

Cool! IMO, I think anythig to help spread Peak Outreach is good!

Maybe if a bunch of ME people read this book: it will be easier to get OPEC [and all the other IOCs & NOCs] to agree to an open audit per Matt Simmons' request.

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

Auto racing is part of a world that is living in the past. Formula 1 is going to require a system of energy recovery from breaking. This would most likely be a flywheel system. This still falls far short of looking forward to the post carbon car. During the next few years fans will increasingly drive to NaSCAR racing events in hybred cars and EV's. Will they watch a sport that is increasingly wedded to an obsolete technology?

During the next few years fans will increasingly drive to NaSCAR racing events in hybrid cars and EV's

I really do not think so.

I would love to see a survey of the parking lots @ NASCAR races, but I would be willing to guess that the ratio of Priuses, and Civic Hybrids is *WAY* below the national average. Perhaps a few Ford Escapes (their mid-size hybrid pick-up truck).


EV racing might look good - the acceleration is already incredible

Check out Toyota's hybrid:


Unfortunately it would be the Daytona 35, with a top speed of 80 or so MPG (~130 kph).


I'm thinking more of rallying, where the brutal acceleration should do well, and top speed is not so important in some races.

Any race where distances between re-fuels is important might work well for the hybrids, too.

Nascar fans like to watch brightly colored cars go in circles at high speeds for several hours. Nothing could be more boring IMHO (paint drying would be a tie).

No easy substitute.