DrumBeat: February 21, 2008

The Next Price to Watch for After $100 Oil

If you want a longer benchmark to keep an eye on, look at "The Coming Triple-Digit Oil Prices" (.pdf) by petroleum economist Philip Verleger, published last fall in the International Economy magazine. Writing during the summer, when oil was in the $70s, Verleger noted six factors that would lead to higher oil prices: demand created by economic growth, underinvestment, nationalism in oil-exporting countries, investment uncertainty, disruptions from global conflicts, and issues of scale—"efforts to substitute away from hydrocarbons or to conserve will be hampered by the problem's enormity."

"Indeed, looking forward," Verleger wrote, "it appears that triple-digit oil prices may become a regular feature of the global economy within three or four years, and soon the first digit may become something other than one."

The gazpromization of European energy security

The term “energy security” in Europe has been hijacked to empower suppliers and weaken importers, implying a drastic reduction in competition, rising political vulnerability and the erosion of the rule of law.

Saudi financial plans rely on high oil prices

Saudi Arabia is pushing ahead with a costly decision to pay more to public servants and cut government fees – but is keeping its fingers crossed as such measures could have damaging effects if oil prices fall steeply.

Venezuela's PDVSA prepares legal defense

State-run oil company Petroleos de Venezuela SA is preparing to challenge a court injunction obtained by Exxon Mobil Corp. that froze $12 billion in PDVSA assets next week in London, a top Venezuelan oil official said.

Deputy Oil Minister Bernard Mommer said Wednesday that a hearing in which PDVSA plans to contest Exxon's claims will be held between Feb. 27 and Feb. 29.

Whodunnit? - A strange theft of oil and gas secrets

Neither Halliburton nor Petrobras has said much about it. This may reflect their embarrassment. It seems odd that commercially-sensitive information should be transported in the same way as soya beans; odder that the thieves apparently knew exactly where to find what they wanted. President Luiz Inácio Lula da Silva has said that the incident bears the signs of industrial espionage.

Nigeria accuses oil delta rebel leader of crimes

ABUJA (Reuters) - Nigerian police accused a detained rebel leader from the oil-producing Niger Delta of killings, arms dealing, oil smuggling and other crimes on Thursday, raising the prospect of a trial that could destabilise the area.

Eni's Agip Says Oil Worker Kidnapped in Nigeria

Gunmen kidnapped a Nigerian manager with Agip, a subsidiary of Italy's Eni, and wounded his driver on Wednesday in restive oil-rich southern Nigeria, a company spokesman said.

The man was snatched from his car close to the Nigerian Port Authority offices in Port Harcourt, the region's oil capital, Agip spokesman Harsen Orife told AFP.

China: Coal mines lift their production

China, the world's second-biggest energy consumer, has ordered state-owned coal mines to expand production as factories reopen after the Lunar New Year holidays and increase demand for electricity.

"As the industrial and agricultural sectors resumed production after the holidays, China is facing further potential thermal coal shortages," the Beijing-based National Development and Reform Commission said yesterday. China shut seven percent of its coal-fired power plants last month as the heaviest snowfalls in half a century hampered transportation.

China Seeks Spot LNG Imports to Ease Fuel Shortage in Guangdong

(Bloomberg) -- China, the world's second-largest energy user, is resuming imports of individual liquefied natural gas cargoes after record snowfall disrupted fuel supplies to power plants, a Chinese official said.

Kathmandu: The City of Scarcity

One sight has become very commonplace in the nation’s capital these days, and it is the long line of motorbikes, taxis and buses stretching, at times, up to two kilometers from petrol stations in the main thoroughfares of the city. This is the worst fuel crisis the city residents ever saw since 1990 when the country went out of petroleum products after India imposed an economic embargo against it which only worked as a catalyst for the democratic movement to follow.

UAE: Gas shortage hurts profits of cement companies

A shortage of energy – particularly gas – combined with high oil prices and inflation in local and global economies – has contributed to a fall in profits of most UAE cement companies.

Restructured Debt to Mexico Could Precede Cuban Economic Change

Before Fidel Castro stepped down as Cuba's leader, Mexico signed a deal to restructure a $400 million outstanding debt owed by Cuba. This follows a six-year drought in trade and credit communications between the two countries.

The agreement could be the first step in repairing trade relations between the two countries, which reached nearly $500 million in the 1990s but fell to less than $200 million in 2007.

Mexico's PRI Limits Opening of Oil to Border Fields

(Bloomberg) -- Mexico's opposition Institutional Revolutionary Party is pushing to limit foreign or private investment in the state oil monopoly to offshore fields near the U.S. border, a senator said.

Monbiot: Juggle a few of these numbers, and it makes economic sense to kill people

Britain's official approach to climate change puts a price on human lives. And the richer you are, the more yours is worth.

Worldwide shortage of rice shoots prices soaring

The causes of the shortages and high prices are diverse, and vary from country to country. They include natural disasters or adverse weather; high fuel prices, which add to transport costs; hoarding and smuggling of rice and wheat to take advantage of higher prices across national borders; and, in Pakistan, a shortage of electricity that is reportedly hampering mills from functioning at full capacity.

Wheat prices could defy a recession

Declining water tables and unpredictable weather in major production areas have hit crops, and much arable land has been diverted to producing biofuels. Meanwhile, consumers in emerging markets like China are eating more meat as they become wealthier, driving demand for animal feed.

These factors are not likely to go away soon, even as general economic conditions worsen.

Bread will cost more dough

The world is suffering from a scarcity of wheat with stocks at a 30-year low and in the U.S, they're at a 60-year low, said Canadian Wheat Board spokeswoman Maureen Fitzhenry.

The price of wheat has doubled. Durum wheat, used in pasta, has tripled in price.

The commonly held belief that farmers switching to corn from wheat for bio-fuel production is not a factor in the shortage, Fitzhenry said.

Liquid Gold

Ethanol is supposed to be good for the environment. But producing green fuel can cost a lot of water.

The Futility of Ethanol

Never mind the subsidies, we simply cannot grow enough fuel to have a signficant impact on our petroleum consumption.

Uranium One Cuts Production Forecast 32%; CEO Resigns

"We're removing 1.5 million pounds that the market anticipated having" this year, Executive Vice President of Business Development Jean Nortier, appointed interim CEO, said from his mobile phone today.

UK: Shock tactics

Plans to install smart meters in homes to let consumers see how much power they are using should help reduce emissions, but the government and energy companies can't agree on strategy.

Energy cost rising

Ohio State's energy budget grew from $22.5 million in fiscal year 1998 to $58.5 million in fiscal year 2007, a $36 million increase. The cost stems from rising energy prices and from OSU's 66 percent increase in energy usage since the mid-1980s.

Groceries Grow Elusive For Many in New York City

Many cities, including Washington, have long struggled with the lack of inner-city supermarkets, but Rivera's plight is different: There had been an Associated Supermarket across Myrtle Avenue from her housing project, but it was recently demolished to make way for a condominium development.

Greenland's rising air temperatures drive ice loss at surface and beyond

A new NASA study confirms that the surface temperature of Greenland's massive ice sheet has been rising, stoked by warming air temperatures, and fueling loss of the island's ice at the surface and throughout the mass beneath.

Greenland's enormous ice sheet is home to enough ice to raise sea level by about 23 feet if the entire ice sheet were to melt into surrounding waters. Though the loss of the whole ice sheet is unlikely, loss from Greenland's ice mass has already contributed in part to 20th century sea level rise of about two millimeters per year, and future melt has the potential to impact people and economies across the globe. So NASA scientists used state-of-the-art NASA satellite technologies to explore the behavior of the ice sheet, revealing a relationship between changes at the surface and below. The new NASA study appears in the January issue of the quarterly Journal of Glaciology.

Rich, poor and climate change

Around half of the world's population -- slightly fewer than 3 billion people -- survives on less than $2 a day. None of them are likely to go shopping for an automobile any time soon in a bid to reduce on their greenhouse gas emissions; and investing in photo voltaic solar panels to put on their rooftops probably won't be a priority, either.

Maryland's climate plan would be nation's boldest

ANNAPOLIS, Md. — A proposal to address climate change by adopting the nation's most ambitious plan to reduce greenhouse gases went before Maryland lawmakers Tuesday.

The governor lent his backing to the bill, but industry and union officials warned that the plan could hurt the state while doing little to stop climate change.

Crunch time for South America's gas supplies

Until last May more than 10 per cent of the world's methanol was produced at a plant on the Magellan Straits in the far south of Chile. But for eight months now, three-quarters of the plant has been standing idle.

Canada's Methanex relies on Argentina for 60 per cent of the natural gas it needs for its Cabo Negro methanol plant but Argentine supplies dried up last June.

Oil constraints to cause “huge recession” (podcast)

The world will have to suffer a deep economic downturn before serious attempts are made to kick the oil habit, according to the chairman of PFC Energy, the Washington based oil consultancy.

Saudi Aramco chief calls for energy vision clarity

Jum‘ah said he is “deeply concerned that if the prevailing confusion involving energy issues continues and key players scatter in different directions in trying to address those issues based on varying agendas, there is considerable risk that the necessary expansion of energy supplies would be significantly compromised.”

Technology to aid in tackling skills shortage

LONDON, Feb. 20 -- Technology will aid in improving the productivity of skilled labor as the petroleum industry struggles to attract and retain new recruits, International Petroleum Week delegates were told in London.

Antoine Rosand, a senior executive with Schlumberger Business Consulting, said remote, real-time drilling centers with features such as model-based surveillance and integrated well planning would enable companies to boost production and handle risk better.

Rowan Gets 3-Year, $201M Rig Contract

HOUSTON - Rowan Companies Inc. said Thursday it received a three-year, $201 million contract to operate one of its offshore drilling rigs off the coast of Saudi Arabia.

The jackup rig recently completed a project in the Gulf of Mexico, where demand for that type of drilling platform has been slow. Rowan has been expanding operations in the Middle East since returning to the region two years ago and now operates nine jackups there.

Pemex Says January's Daily Oil Output Little Changed

(Bloomberg) -- Petroleos Mexicanos, the state- owned Mexican oil monopoly, said daily crude oil production in January was little changed from December.

Output rose to an average 2.957 million barrels a day from 2.954 million barrels in December, Mexico City-based Pemex, as the company is known, said today in an e-mailed statement. Production fell 5.9 percent from January 2007 as output at its main field extended a three-year decline.

Mexican Energy Reforms on Horizon

Mexico’s political leadership is building on the momentum created by last year’s passage of several reforms to the state-controlled energy sector. Mexico’s congress is now considering proposals that could break the monopoly of state oil company Pemex over refining and transportation operations. Perhaps more important are proposals that would allow Pemex to partner with other companies in promising new regions, especially offshore. Pemex’s falling reserves and production, as well as its financial problems, have created a sense of urgency for reform, so some form of change is likely.

Tehran Looks To Dushanbe To Promote Iran's Role In Central Asia

Tehran’s policy toward Tajikistan remains cautious and not primarily exploitative. Despite the dire Tajik energy crisis, Iran has not manipulated the situation for overtly political purposes.

Netherlands to Donate 676,000 Dollars in Aid to Tajikistan

These funds will be used to provide over a million Tajik people, suffering from the energy crisis, with drinking water, as well as with public health and hygiene goods.

Proposed power line gets its own Web site

A regional power line project that would stretch from northern Virginia into southern New Jersey now has its own Web site.

At the newly launched www.powerpathway.com, visitors can find an overview, a timeline and maps of the Mid-Atlantic Power Pathway project - a 230-mile, 500-kilovolt transmission line that Pepco Holdings Inc. could begin building next year.

Mining Weekly Real Economy Report

Embattled State power utility Eskom is getting set to pull the trigger on a large-scale concentrating solar power plant in the sun-rich Northern Cape. This could see the deployment of a field of mirrors 1,5-km in diameter, which will concentrate the suns energy on a central receiver, or tower, which will in turn heat a salt solution that will power a steam generator. But what if the sun fails to shine?

Extending the Life of Data Centers with an Energy-Efficient SAN

According to analyst estimates, up to 50 percent of data centers will have insufficient power and cooling capacity this year. This leaves many companies scrambling for more efficient solutions that reduce both the total cost of ownership and the environmental impact of running their data centers, and are scalable enough to grow along with the company and its data needs. To meet rapidly changing business needs, IT departments need to consider more than just adding equipment or expanding functionality and look for long-term solutions.

Law Professor Says Government Obligated to Curb Climate Change

The government’s failure to protect the atmosphere from climate change is a violation of its “fiduciary duties” as guardian of the nation’s natural resources, distinguished University of Oregon Law Professor Mary Wood said in a Wilderness Issues Lecture Series address to the University of Montana campus Tuesday night.

Citing common law and a variety of other statutory frameworks like the Clean Air Act, Wood argued the atmosphere, like all natural resources, belongs to the people as a natural trust administered by the government. The government then has a legal responsibility as trustee to maintain these resources for the benefit of present and future generations.

Clean coal's false promises

While Illinois politicians cry foul over the Department of Energy's "deceptive" cancellation of the nearly $2 billion FutureGen project, and scurry to circumvent the department's decision to withdraw federal funding from the project's ballooning budget, they have effectively limited the debate over whether FutureGen is really in our economic best interest. The resounding message is the "clean coal" pipe dream. Even in the minds of government officials whose life's work is to handle our national energy policy, is not economically viable.

Even in the wake of all this, our administration is considering going down the same economically risky road.

Global Warming An Immediate Threat, Says Founders’ Day Speaker (with podcast)

BLOOMINGTON, Ill. – The moment is coming. The Earth is reaching a point of danger from which it cannot be rescued.

This was the message of James E. Hansen, an expert on climate change and the Director of the National Aeronautics and Space Administration (NASA) Goddard Institute for Space Studies, at the address for Illinois Wesleyan University’s annual Founders’ Day Convocation Tuesday in Westbrook Auditorium.

India - Bio-Diesel: The fuel for future

These days, bio-diesel is mostly derived from oils or fats of plants like jatropa, sunflower, canola, rapeseed, soybean, etc. We have chosen jatropa carcus as an important source along with many succulent plants because it is a drought-resistant perennial plant, which grows well even on infertile land. The seeds contain oil to the extent of around 37 per cent. It burns smoke-free. It was tested in the beginning of the bio-diesel era as fuel on simple diesel engines and found to be satisfactory.

Cheap, renewable energy years away: Shell

“Renewables are still too expensive. They will come, I'm not self-serving, I'm not defensive but it will take a very long time” either to achieve the technological breakthroughs required or to build many more nuclear power stations, Mr. van der Veer said.

“You see that we have a lot of tensions. The world demands more energy,” he added. “Renewables may come to a solution but it will take decades before it is big.”

The Impossible Dream of Energy Independence

In his forthcoming book Gusher of Lies: The Dangerous Delusions of “Energy Independence” (PublicAffairs) Robert Bryce, managing editor of Energy Tribune and author of Pipe Dreams: Greed, Ego and the Death of Enron, grapples with what he detects as a growing belief, both among policy elites and the public, in “energy independence.”

That’s the notion that America should disengage from world energy markets and seek self-sufficiency in energy production. To Bryce, this is not only impossible, but dangerous to even attempt. As he writes in the book’s introduction, the quest for energy independence “means protectionism and isolationism, both of which are in opposition to America’s long-term interests.”

Oil Barons Raise Price.... Again

With new oil fields being discovered at an exponential rate it is hard to see a peak in the near future. Russian scientists have discovered enormous fields in the arctic which it plans to start drilling in the near future.

Even new discoveries in America's own backyard have put a damper on the peak-oil theory. The field is in the Gulf of Mexico and expected to have at least 10Bn barrels of oil which would make it larger than their current largest oil field in Cantarell.

UK: Seaton gets 'transition' status for sustainability

SEATON has been officially recognised as a 'transition town' thanks to the work of an environmenatl group.

Sustainable Seaton meet once a month to discuss ways in which the seaside community can tackle the issues of climate change and 'peak oil', the moment the world's demand for oil outstrips its supply.

Pentagon faces a battle on climate change

In the run-up to the United Nations climate change conference in Bali, businesspeople implored political leaders to take bold steps to combat global warming. They insisted that their ability to undertake effective long-term planning was undermined by uncertainty about the future cost of carbon emissions. Yet their calls for action were ignored.

Perhaps the outcome would have been different if the world's single largest organisation - the Pentagon - had joined the chorus. After all, it also needs to know what kind of environment to prepare for to allocate its vast resources efficiently. Planning for future contingencies is a long-term process, as force structure and weapons systems have to be co-ordinated at least a decade in advance.

Expert: Energy crisis here, climate change on the horizon

While several key government agencies and industry sources have rejected the notion that a global energy crisis is imminent, others in the field believe the crisis is already upon us.

“I think the crisis is really happening now. It’s less visible to us in North America because we’re not seeing the same fallout that is happening in other countries,” said Richard Lawrence, director and co-founder of the Association for the Study of Peak Oil & Gas-USA (ASPO-USA), a nonprofit and non-partisan research and public education initiative.

Architect's wish list could apply here

In their song If I Had a Million Dollars, the Barenaked Ladies muse about what they'd do if they were to strike it rich. In a similarly playful spirit, the current issue of Architecture magazine asks various urban-affairs experts to fantasize what they would do if they had $1.6 trillion.

That staggering sum is what it would cost the United States to upgrade its crumbling infrastructure, according to an estimate by a think-tank, the Urban Land Institute.

Backyard garden is a practice run for future sustainability goals

I'm treating it like my practice run--I want to learn the ways of the soil now, while it is not yet necessary for my survival to do so, and be able to move out into the country or an eco-village when I graduate and hit the ground running. On my next visit down to Fredericksburg, I will be tilling and digging up the land and adding fertilizer. We plan to grow sweet corn, squash, zucchini, beets and the occasional herb, but that's just for starters.

Ireland: Domestic attempts to meet our increasing demand

Marathon Oil moved yesterday to assure its commitment to the Irish market, as it completes a review of its international business, including its assets here.

...Meanwhile, there have been attempts on the homefront to increase the security of gas supplies in Ireland, apart from the various efforts to focus on alternative fuel sources, according to the Commission for Energy Regulation.

Australia: Acting on climate change - now

We may be all to blame. And we may be all in this together. But on very different terms.

Poorer Australians feel the effects of climate change disproportionately. To give obvious examples: rising costs in food (due to the drought), utilities and petrol take up a greater percentage of a smaller budget. Anglicare services across the country are reporting more families accessing emergency relief as these prices rise.

We have seen increased wild weather events. Those on low incomes are less able to protect themselves. Only some 45 per cent of clients of community services are able to afford home contents insurance - compared with 78 per cent of the general community.

Let buildings heat and cool themselves

We know that coal is the enemy of the human race, what with carbon emissions, deadly air pollution, and unsafe and destructive mining practices. The supply of coal is becoming more problematic as well: recently, a Wall Street Journal article described a "coal-price surge," and Richard Heinberg has warned that coal may peak much sooner than most people expect. So what's to like? Not much.

But since coal-fired plants provide almost half of our electricity, we can't get rid of coal unless we find either a way to replace it or a way to reduce the use of electricity. Recently, Gar Lipow has discussed how friggin' cheap it would be to replace coal, and Bill Becker has pointed to several studies that show how renewables could replace coal.

U.S. Presidential candidates' staffs briefed on peak oil and the plastic plague

Just to cover my bases, in case politics and laying groundwork can do wonders, I have just spent a week in Washington, D.C. talking with staffers of Senators Obama, McCain and Clinton. Their understanding of peak oil is rising at a critical time, perhaps in time for the election, but certainly afterwards for Presidential or Senatorial initiatives.

IEA Wants OPEC To Keep Oil Output Unchanged

(RTTNews) - Julius Walker, an oil market analyst with the International Energy Agency, or IEA, requested OPEC to decide at its next meeting on March 5 to keep oil production levels unchanged, to rebuild low crude oil stock levels.

Oil Breaking $100 a Barrel - But Why?

Crude oil reached a record high on Tuesday, and there's an embarrassing oversupply of theories to explain why.

BP goes back to petroleum

The biggest change at the oil major is associated with none of these initiatives: it is the decision to accept that high crude prices of between $60 and $90 per barrel are here to stay, which will affect the whole strategy of BP. This "seismic shift," as one veteran analyst described it, promises to hasten in an era of higher dividends, more capital expenditure and investments in high-cost areas such as the oil sands of Canada that were previously considered too costly - and environmentally unfriendly.

Libya ratifies gas exploration deal with Gazprom

TRIPOLI (Reuters) - Libya's state-owned National Oil Corporation ratified a gas-focused exploration accord with Russian gas export monopoly Gazprom on Thursday, detailing the firm's commitments, NOC said.

Vermont: Peak Oil Task Force tells town to prepare for post-petroleum world

BRATTLEBORO -- The world is running out of petroleum and Brattleboro better prepare itself for that eventuality. That was the message from the Peak Oil Task Force at Tuesday night's Selectboard meeting.

The group, part of Post Oil Solutions, was asked to give a presentation on its research into a world of declining petroleum supplies.

The Peak Oil Crisis: Connecting the dots

Earlier this week oil closed above $100 a barrel for the first time. To make matters worse, wholesale gasoline and heating oil jumped 11 cents a gallon in a single day to their all-time highs. A lot of bad news triggered the increase of nearly $14 a barrel in the last two weeks. A 70,000 b/d refinery in Texas blew up and may take months to repair; floods, snowstorms, and power outages have the world’s coal markets breaking records; and to top it off OPEC is threatening to cut oil production, either officially or unofficially, because OECD stockpiles crept up a bit in January. When you can get $100 for every barrel exported you might as well save some for the grandchildren, because you sure don’t need the money.

Then there is the economic news. Last week, a Harvard economist opined to an energy conference in Texas that when we are through tallying up the credit crunch losses from real estate loans, car loans, credit card loans, and business loans all going bad at the same time, the total will be over $1 trillion. Now this is just an abstract figure until you learn that the total capitalization of all the banks in America is about $1 trillion.

Australia: Planning for peak oil - what it will mean

South Australia has no transport plan - if there was an understanding of peak oil we would have. At the national level the transport-related promises of both parties in the 2007 federal election were almost entirely about roads. Yet, in May 2005, the then Premier of Queensland, Peter Beattie, listened to the concerns of the member for Hervey Bay, Andrew McNamara, and set up the Queensland Oil Vulnerability Task Force.

Brunei: Days Of Cheap And Easy Oil Are Over

"It is not easy to bring out oil from the ground. The days of cheap and easy oil are not here anymore," said Pehin Dato Hj Yahya.

"Many reservoirs are no longer using the primary drive to move the oil to the surface. Many arc now using secondary or tertiary recovery methods to extract the extra molecule of hydrocarbon (oil and gas) from the formation.

China: Adapt to dearer oil

Triple-digit oil prices will surely complicate the Chinese government's efforts to fight domestic inflation. Yet, policymakers should face it with a greater sense of urgency to reform the country's energy pricing system.

Demand fuels oil industry confidence

At last week's annual gathering of global oil industry executives and academics at the Cambridge Energy Research Associates conference in Houston, Texas, climate change and energy security were high on the agenda. A US recession was not.

The surge in commodity prices to record levels in recent years has left the leading oil companies flush with cash, which they intend to continue spending.

Risk Of Permafrost Thaw A "Wild Card" In Warming - UN

MONACO - A thaw of Arctic permafrost is a "wild card" that could stoke global warming by releasing vast frozen stores of greenhouse gases, the UN Environment Programme (UNEP) said on Wednesday.

More research was urgently needed into the possibility of a runaway release of methane, a powerful heat-trapping gas trapped in frozen soils in Siberia, Canada, Alaska and Nordic nations, it said in a 2008 yearbook issued at 154-nation talks in Monaco.

Past greenhouse warming events provide clues to what the future may hold

BOSTON, MA--If carbon dioxide emissions from the burning of fossil fuels continue on a "business-as-usual" trajectory, humans will have added about 5 trillion metric tons of carbon to the atmosphere by the year 2400. A similarly massive release of carbon accompanied an extreme period of global warming 55 million years ago known as the Paleocene-Eocene Thermal Maximum (PETM).

Scientists studying the PETM are piecing together an increasingly detailed picture of its causes and consequences. Their findings describe what may be the best analog in the geologic record for the global changes likely to result from continued carbon dioxide emissions from human activities, according to James Zachos, professor of Earth and planetary sciences at the University of California, Santa Cruz.

Biofuel doubts hit Dutch renewable energy output

AMSTERDAM, Feb 20 (Reuters) - The proportion of Dutch electricity produced from renewable sources fell to 6 percent in 2007 from 6.5 percent in 2006 as less biofuels were used, the statistics office said on Wednesday.

Statistics Netherlands (CBS) said in a statement that power plants almost halved the use of biofuels in 2007 compared to 2006 after government subsidies were cut mid-2006, in part due to concerns about the environmental effects of some biofuels.

Pumped up: Why the price of oil and other raw materials continues to rise despite the economic gloom

Citigroup believes that the recent rise in the oil price “is driven principally by a sharp uptick in fund flows.” Lombard Street Research sees an “iron bubble”. Others worry that America’s fiscal stimulus may cause trouble by inflating demand for commodities. In Citigroup’s cheery phrase, “the collapse of one bubble often sows the seeds of the next.”

Oil muscles past faltering U.S. economy

NEW YORK (CNNMoney.com) -- There was a time when oil prices needed the backing of a strong U.S. economy to reach record levels, but oil prices hit all-time highs again Wednesday even as a recession looms.

Clearly, a strong economy is still necessary to keep oil prices high, but it seems the United States is no longer oil's main driver.

Oil at $100 to sharpen pain for US consumers

Oil's rise above $100 a barrel will probably sharpen the trends the US has witnessed during the commodity's climb, ranging from high petrol and home heating prices to difficult operating conditions for industry, according to analysts.

"$100 crude is really an exclamation point behind the trends we have seen the last year or two," said James Burkhard, managing director of the oil and gas group at Cambridge Energy Research Associates.

Pickens sees oil, natural gas prices falling

NEW YORK (Reuters) - Oil investor T. Boone Pickens said on Thursday he has a short position on oil and natural gas due to his expectation that prices will fall in the near-term.

Pickens, speaking on CNBC television, said he expects the price of oil to fall $10 a barrel to $15 a barrel in the second quarter from the $100 level it hit on the U.S. market this week. But he said he expects the price of oil to be back above $100 a barrel in the second half of year.

He also called natural gas prices unusually high and said he expects them to "back off also."

Venezuela settles with oil firms

The Venezuelan government has paid $1.8bn (£900m) in compensation to French, Norwegian and Italian oil firms after it nationalised key oil fields.

The move isolates US oil firm Exxon Mobil in its dispute with the country.

Kuwait raises salaries to meet soaring inflation

KUWAIT CITY - Oil-rich Kuwait on Thursday ordered a 120-dinar (440-dollar) monthly salary rise for nationals in the public and private sectors after inflation hit a 15-year high, the finance minister said.

It also decided to raise the pay of foreigners employed by the government by 50 dinars (183 dollars), Mustafa al-Shamali said, quoted by the official KUNA news agency.

Indonesia to make adjustments on state budget due to soaring oil prices

The president said the subsidies could reach 250 trillion rupiah (27.14 billion U.S. dollars), some 28 percent of the total value of the state budget. "Without adjustment, our subsidies would be very high, it is very unhealthy."

News blackout on Nigeria oil rebel raises tensions

ABUJA, Feb 21 (Reuters) - Militants in Nigeria's oil producing Niger Delta have been angered by the government's failure to give more news of detained rebel leader Henry Okah and the issue could cause more violence and derail peace talks.

Russian expert says oil dealings in Iranian Oil Exchange Market soon

Head of Iran Contemporary Studies Center in Russia Rajab Safarov says in the coming months, Iran wants to privatize its oil companies, whose number is no more than 40, and start oil deals in Iran's Oil Exchange Market.

Safarov told Moscow-based daily Vermianovesti that Iran's Oil Exchange is a crucial body that is expected to leave a drastic impact on the world oil market.

Shell says Iraq oil law proceeding slowly

BRUSSELS (Reuters) - Royal Dutch Shell hopes Iraq will pass an oil law this year and sees this and improved security as prerequisites for being able to work there, CEO Jeroen van der Veer said on Thursday.

"You need basically two green lights before you can work...first of all you have to know the rules of the game," van der Veer told a security conference in Brussels.

He told an Iraqi questioner he hoped the oil law would be passed this year "but it doesn't go very fast."

Kazakhstan oil blocks offered to investors

ALMATY (Reuters) - Kazakhstan announced on Thursday it would abandon subsoil contracts favoured by oil companies due to their liberal tax regime but keep existing production sharing agreements intact.

Carbon tax heat from B.C. to blow Alberta's way

Dunno 'bout you, but since the 60-cent-a-litre average price of gas in July 2006, traffic seems just as jammed, buses just as empty, full or SUV-sized cars just as popular and the average number of occupants in most commuting vehicles remains at, um, one.

But out there in British Columbia they've decided that a carbon tax, hitting motorists for 2.4 CENTS per litre more this summer, represents a sufficient incentive to revolutionize consumer habits and help save the planet from overheating in its own greenhouse gas blanket.

Brazil hosts climate change forum

BRASILIA, Brazil - Encouraged that all major U.S. presidential candidates vow to protect the environment, lawmakers from industrialized nations and big emerging economies met Wednesday to craft solutions to global warming and rising deforestation.

Scores of legislators and officials from China to Cameroon were considering approval of a document demanding "ambitious absolute emission reductions for developed countries" to fight climate change.

China, India speed climate change: Australian report

SYDNEY (AFP) - The economic rise of China and India means climate change is occurring faster than previously thought, making efforts to fix the problem more urgent, an official Australian report found Thursday.

The government-commissioned report called for stronger international commitment to addressing climate change, saying current efforts "still fall far short of getting deep cuts in global emissions underway."

Lunar eclipse, February 20, 2008

Ok, another little comment on my upcoming solar purchase...looks like the best system I've been quoted is 2.3 KW of 230w Sunpower panels with a 1800w inverter. I'm assuming the difference in those numbers is acceptable. The Sunpower panels have a good warranty and according to the CEC http://www.consumerenergycenter.org/cgi-bin/eligible_pvmodules.cgi the PTC rating is almost 93%, which seems quite good. It sounds expensive, but possible to add battery backup in the future.

Any final comments before I jump into this 20k investment? Other sources of reviews or whatnot of PV panels?
Thanks as always.

And to the person who kindly suggested I call the state (FL) solar energy center for any extra info, I am doing that now.

Before you buy the solar system, have you thought about what $20,000 can do elsewhere in your budget? What would happen if you bought a Prius, and sold your existing compact to someone who promsied to junk their SUV? What would happen if you put in a ground source heat pump? What would happen if you sold your home, and moved right next to your work? I have thought about putting in a solar system, but the price just tells me that it is really for show right now: I get better bang for buck, whether in dollar returns or decreased carbon emissions, everywhere else. My next $20k investment, after my $20k in the Prius, is the GSHP. I suggest that you look at your carbon footprint, not just in natural gas or coal used to generate electricty, but also in transportation, eating, etc. Solar is in the works for us, just not for a while.

And, if you live close enough to work, consider buying an electric scooter for less than $3k. Replacing an SUV with a scooter will far outweigh the solar panels, in your pocketbook and for the environment.

From a social perspective. investing in Canadian Hydro Developers does more good. A bit over 7 kWh# of renewable energy (much of it hydro with 100+ year life spans) per share and growing as all profits and cash flow plowed back into development of more renewable energy (no dividends).

A changing emphasis to wind (but a couple of small hydro projects in development) and a biomass facility.

# Hydro production has 30% annual variability, wind 15%.


Good points, but I drive an 8 year old Honda roughly 5k miles a year, if that. I do need to bike to work more, but can and do at times.

Heat pump might be an idea worth pursuing...although heat isn't needed much here obviously it produces AC also. I'll be busy researching every option this weekend I suppose...

And yes to...Dave? below, looks like the payback for solar water panels is even better so I'm seriously thinking about doing that at the same time. My local utility pays extra for that (I think they convert BTU's to KWH and tack on 2-3 cents extra) but for PV power they give me a 5 cent credit for every KWH I would produce-that's over and above what their retail rate is.

But then again getting rid of the heater entirely and going with instant gas hot water would be nice also. My girlfriend would appriciate the extra closet space...

While you might be doing a grid-tie solution, I'm planning on going off-grid with my PV system. For me, it's not a matter of cost, it's a matter of having electricity no matter what happens to the grid, plus it forces conservation on my part. It also means I won't have an electric power guy on my land to read my meter, worry about having a licensed electrician do everything, etc, etc. I'm just crazy like that, though. ;)

Exactly, I can't imagine not having some storage on site. The grid will go down. Even 4 or 6 100amp hour agms would be a blessing in that case. We started with the battery bank first, with inverter, and charge the batteries from the grid. Easy enough to add an alternative charging source at any time.

"I'm planning on going off-grid with my PV system."

Why not install a grid tied with battery back up system? This would allow you to bank excess summer generation for winter use. The batteries can be sized to give you hours or days of backup power.

Not grid tieing will make your system less efficient as any surplus generation will be wasted rather than sold to the grid.


I am really curious why the systems are sized so large. Two people, maybe even include some kids, don't need a lot of power at any given time -- if you use low-wattage lights and turn them off when not needed, avoid power sucks like plasma-screen tv's, dry clothes on a clothesline, and so on.

If natural gas is available, it is surely more efficient in every way to use it as a primary heat source for hot water on cloudy days, heat for the clothes dryer when the sun isn't shining, space heating when solar is insufficient, etc. Turning gas to heat to make electricity to make heat makes little sense.

On the other hand, sizing individual solar installations to be big enough to run motors and compressors and other major power drains doesn't seem to make sense to me, either -- especially when you are already tied to a grid.

Why not assemble a system that takes advantage of all sources, using the best of each.

Use the home-solar for water heat, lighting, light electrical; gas for backup heat and cooking; grid for heavy electrical.

What can you get for $10K in solar installation?

Natural gas is not available where I live. My electric service is already unreliable. I have regular short outages and a longer outage every time there is severe weather (which is more often these days). So far the longest outage was 44 hours.

I have a 360' deep well. When I lose electricity I lose water. The well is deep enough that the pump uses a lot of electricity (it uses 220V). Frozen food doesn't do well after 44 hours of outage, though I do intend to invest in a 0.5KWH DC freezer one I have PV panels up. I have a gasoline-powered generator for the longer outages now, but that's problemmatic in the long run.

The only option I see is about 4kw of panels and enough batteries to last maybe 3 days. However, before I do the PV, I'm doing solar hot water and a geothermal heat pump to replace my oil burner.

It's all going to be very expensive. However, the grid is only going to get worse. The outages will be more frequent, and it will take longer and longer for the repair crews to get out where I live. And I can't live without water (though I am investigating a DC pump...I'm just not sure there are any that can handle 360' with enough pressure to backwash my iron-removal system).

Everyone's situation is different. Most city people can rely on grid most of the time. Country and off-grid a different story, and different mix of resources.

Most people don't need much electrical power, and if you have battery backup, an unreliable grid is not so much of a problem. Lifting water 250feet takes some serious energy-- living where that is necessary obviously involves a whole different order of tradeoffs.

Seems like the poles of the spectrum are technological beauty or beauty of simplicity -- and a real-world solution involves certain compromises and certain aesthetic choices along that spectrum. Obviously, the choices will be different for everyone.

I'm still curious what kind of system you can get for $10K.

A reference I have used many times to look into grid tied systems. Not affiliated or even purchased anything from them.


In Switzerland, imho, an it is very ho, what individuals can do to reduce ‘overall’ energy consumption, are, in the two unordered top positions:

1) insulate home to top standards. For the mass of apartment dwellers this means lobbying, arm twisting and paying more (transformations, etc.) facing Building Societies, large property owners, banks, etc. Not easy. Geothermal heating is a second point here.

2) reduce or eliminate meat consumption.

Now my at the mo. two top picks could be contested, and of course they are set in a business as usual scenario, etc. My point is not to prove I’m right, which would be impossible in any case, the numbers aren’t there, but to show that the first does bring financial advantages to the dweller (less spent on heating etc., even if very long term investment) while the second doesn't afford any advantages at all except socially, being pure about not eating beef filet, having success with veggie women/men, etc.

The links between drafts and icy beds and burning FF are quite direct, for the other - no. Typically, Switz. is enforcing very strict building standards and controls, rightly so, but the agri. circuit is not touched.

Difference is: upgrading or transformin housing is good biz - many will earn money. Down grading imports or meat agri. will harm importers, farmers, bison and ostrich farmers (considered green), meat producers, salt of the earth, etc. etc. so it can't be done.

Hi Noizette,

Your advice is solid and although I haven't spent a lot of time examining the linkage between energy and meat (I'm not much of a meat eater myself), I do think we can do far more to make our homes and commercial spaces more energy efficient. It's painful for me to enter a shopping mall for several reasons, but I'm especially appalled by the amount of energy consumed by their lighting and a/c systems. Light levels in most stores is excessive, to say the least, and much of it is provided by woefully inefficient halogen sources. The ubiquitous 75-watt halogen PAR38 operates at roughly 15 lumens per watt. If store owners kept their existing fixtures and simply swapped-out these bulbs (micro space heaters) for the latest generation of halogen IR lamps that produce upwards of 25 lumens per watt, they could obtain the same amount of light for about 40 per cent less energy. Better yet, replace those fixtures with new ceramic metal halide lighting (e.g., Philips MasterColour Elite) and you would get similar or arguably better light and slash power and a/c loads by as much as 85 per cent. This is just one example of what we can do right now and at very nominal cost; the potential energy savings are enormous and when you look at the numbers, the financial benefits are resoundingly positive.

Another case in point. Several years ago, I replaced a 455-watt metal halide fixture in a retail store that ran 24-hours a day as a security light with a two-tube, low ballast factor, T8 fluorescent that operates at 55-watts (as a night light, the replacement was more than adequate). The change-out of this one fixture saves enough electricity to power my home's heat pump for the entire year!

With respect to geothermal heating, I'll simply add that we shouldn't overlook their air-source brothern. DaveMart and I have discussed this at great length in other threads so I won't go into the details here; suffice to say they're often much less expensive and can be installed with fewer complications and restrictions and in many cases will do just as good a job.


"Air source" heat pumps are very common in Asia, where in the most populated areas, the temperature rarely drops below freezing but might be in the 32-55 degree range. This could be appropriate for California, Georgia, etc.

They work as both air conditioners and heat pumps. Try the Duskin brand for example. Matsushita also makes them.

Paul, you know me, I nearly mentioned air heat pumps, but with the high humidity and need for air conditioning in Florida, didn't think there were any suitable models and you would need to go for the much more expensive ground-source pump.

Do you know of any air-pumps that would do the trick there?

A very common choice for a central unit would be an air source, air supply heat pump. I like the Carrier units with a scroll compressor and variable speed motor on the evaporator. Good down to high 30s F.

And a gas furnace with variable speed motor (such as Carrier MVP unit) if colder operation is needed.

For window unit, the highest SEER a/c is also a Freidrich heat pump.

These are as common as dirt on this side of the pond :-)


Thanks Alan. What sort of ratio do you get with them for energy in and out? After our friend in a post above gave a hint to look at the Duskin and Matsushita units I found this link:
Electric Companies Offer Jointly Developed Air Conditioning Unit

This gives an incredibly high performance ratio of 4.1/3.7 - do you get that sort of performance from the units you mention?

Heating is a byproduct and efficiency there is of minor importance. The real key is summer air conditioning and especially humidity removal.

I will have to look at the ARI stats for current models.

Best Hopes from a sunny 25 C New Orleans,


That ratio WAS for cooling. Alan!
From the link I gave:

This product offers the world's highest coefficient of performance, a remarkable 4.1/3.7 (cooling capacity: 160/180kW at 50/60Hz), in the field of air-cooled chiller units used for air-conditioning in buildings and factories.

Pretty good, huh?

Dunno about heating - they don't specify there.

Well, Dave, I'm not a HVAC engineer, but I'll go out on a limb and potentially embarrass myself by saying that just about any central a/c, chiller or heat pump manufactured today would perform equally well in this type of climate. [For those who want to explore this matter in greater detail, residential CACs and heat pumps sold in the United States are tested in accordance to the ARI 210-240-2006 performance standard and a copy of this standard can be download at http://www.ari.org/ARI/util/showdoc.aspx?doc=9]

I believe the Fujitsu 9RLQ ductless heat pump is rated at 21 SEER (seasonal energy efficiency ratio), which makes it 1.5 times more energy efficient that what is now required by law. SEER is similar to EER, a measurement of continuous operation at a steady 35C/95F, except that it better reflects relative performance over a wider range of operating temperaturs -- as one would expect to encounter over the course of the cooling season -- and takes into consideration various cycling losses. To convert a SEER rating to COP, the metric applicable to ground source systems, you divide this number by 3.793. Thus, a 13 SEER base model would have a COP of 3.43, a mid-efficiency 16 SEER unit would check in at 4.22 and an ultra high efficiency 21 SEER model would give us a COP of 5.54.

I really can't say to what extent relative humidity impacts cooling performance. I'm sure there are other members of this group better qualified to answer these types of questions and I would certainly encourage them to speak-out if they so wish. From my layman's perspective, the delta between an outdoor air temperature of 35C and an indoor temperature of 20C in cooling mode is really no different from an indoor temperature of 20C and an outdoor temperature of 5C when operating in heating mode; it's basically the same amount of "lift", just that the refrigerant is flowing in the opposite direction. Relative humidity over the condensor and evaporator would no doubt impact performance a few percentage points either way due to the effects of latent and sensible heat but, again, I wouldn't expect this to be a dominant factor in terms of overall efficiency.

I hope I answered your question (and did so correctly).


Thanks Paul - you sound pretty safe on that limb to me!
I think what is confusing me is that most of our systems in the UK are use water for hot water, not air, and are not usually used for cooling - if you do set them up to do this then you don't get any grant aid which may be available.

It seems that if you want to de-humidify too you might have to take care which air-con system you choose:

It seems that if you want to de-humidify too you might have to take care which air-con system you choose

Hi Dave,

Actually, conventional air conditioning systems do dehumidify and that's a big part of their job. I believe some of the newer systems in large commercial/office environments run chilled water through high mass floors and ceilings, thereby providing radiant cooling much like they would heating. I believe these systems work in tandem with an independent air handling system that provides fresh air and humidity control. The rationale behind these systems, as I understand it, is to minimize the size of the air handling system and to lower operating costs (much less energy is required to move those BTUs around via water than by air).

Those Daikin ductless system are interesting but I wonder how they prevent the water supply line that connects the outside compressor to the indoor air handler from freezing in cold weather. Also, I would expect that line to get a tad skunky over time and I'm not sure I'd want to be introducing potentially contaminated water droplets into the living space.


Divide by 3.793

I believe that it is 3.412 or 3.413 (depending on which way one rounds).


Hi Alan,

The number(s) you quote are correct when converting EER to COP, but in the case of SEER, I'm told the number is 3.793 -- because the testing conditions are different, SEER ratings are roughly 1.1 times higher than their equivalent EER values and this why the conversion factor is likewise higher.


In my case sizing is determined by the need to charge an electric vehicle. It uses a 100Ah 72 volt battery pack. I can't seem to figure out the minimum solar pack needed to charge it (200Ah 72 volt? or what?). I would probably use an inverter and charge thru the on-board charger rather than directly.

Well, you can have the array be 72 volt, or whatever voltage you want it to be, especially if you have an inverter that you're using. However, you want the wattage to be high enough to compensate for the consumption of the charger. There will be efficiency losses for converting from DC PV to AC with the Inverter, then AC to DC with the charger. It's much more convenient than a direct charge, however.

For a decent range on an EV, you're looking at around 12kwh in storage. At a consumption of 250wh/mile, you will get a range of 48 miles, if you drain the pack dead. (Not a good idea to do.) Ideally, you would only drain it to 50% capacity at maximum, which gives you a 24 mile range. If you want to charge that 6kwh that is consumed each day, you will need around 1.5kw of solar panels. (1.5kw X 4.5 hrs peak average = 6.75kwh/day.) Of course, your average peak solar depends on the season, where on this planet you live, etc.

Anyhow, I don't have any direct experience with EV's, I've just done research on them for a couple of years now, and my experience with PV is limited to a very small 45w setup that I use for when I go camping and little things like recharging my laptop. I have learned, however, that having a good charger will help extend battery life, as a cheap charger is virtually guaranteed to kill your battery.

"But then again getting rid of the heater entirely and going with instant gas hot water would be nice also."

A well insulated tank style electric water heater will produce your BTUs for less money than a demand gas unit.


That depends upon the rates (and pattern of use, some people use hot water once or twice a day). In most places, not true,


shastatodd: A well insulated tank style electric water heater will produce your BTUs for less money than a demand gas unit.

This is false. I'm wondering how you came to this point of view.

Just check the EPA stickers and compare. Electric tanked is about twice as expensive as tankless gas in most places with any usage patterns. Any tankless is more efficient than any tanked heater you can buy at Lowe's or Home Despot.

We are changing from electric tanked to solar thermal backed by on-demand gas. If we had just changed to gas we'd cut our water heating in half and pay off the new tankless unit in a few years.

Also note that electric tanks heat more slowly than gas tanks or electric or gas tankless units. Also note that GHGs from coal-fired electric water heating are significantly higher than GHGs from propane-fired direct heating. Most gas tankless units approach high-80% efficiencies.

For homes that use 41 gallons or less of hot water daily, demand water heaters can be 24%–34% more energy efficient than conventional storage tank water heaters. They can be 8%–14% more energy efficient for homes that use a lot of hot water—around 86 gallons per day. You can achieve even greater energy savings of 27%–50% if you install a demand water heater at each hot water outlet.


Hi NR,

I don't believe the savings over newer electric water heaters are quite as impressive as they are for gas. The EF of a new, well insulated electric water heat can be as high as 0.95, so standby losses for some of the better models should not exceed 5 per cent (the current minimum standard for a 50 U.S. gallon model is 0.90).

This EF value is calculated in accordance to the US DOE's "Uniform Test Method for Measuring the Energy Consumption of Water Heaters" testing procedure and is based on a designated pattern of usage over a 24-hour period (i.e., a total of 64.3 gallons of hot water/day, an inlet temperature of 58F, a nominal outlet temperature of 135F, and an ambient air temperature of 67.5). This is said to be representative of the hot water consumption of a "typical" U.S. household, although I suspect it may be somewhat high given the growing popularity of more efficient clothes washers and dishwashers, as well as reduced-flow shower heads and other water saving devices and, hopefully, behaviour changes in response to higher energy prices.

Be that as it may, according to these tests, a 50 gallon electric hot water tank that meets the minimum federal standard consumes 4,879 kWh/year. A similar size tank with an EF of 0.93 would use 4,721 kWh/year and, at the top end, one with an EF of 0.95 would be rated at 4,622 kWh/year. That puts the standby losses for each of these tanks at 488, 330 and 231 kWh/year respectively. At $0.10 per kWh, 231 kWhs would cost the consumer less than $2.00 per month, or even less if the homeowner is located in a heating dominate climate and the tank is located in a conditioned space where this waste heat would help offset a portion of the home's heating demand. Older tanks can also be wrapped with external insulating blankets to help minimize these losses.

And for anyone living in Ontario, an electric demand unit would be ill advised. The reason? Within the next two to three years, all residential consumers will have been shifted to time of use rates, so their operation during peak times (i.e., anytime after 7:00 am) will be about three times more costly than during off-peak; much better in this case to stick with a conventional water heater that is controlled by a timer so that it recharges during off-peak hours. Over time and as advanced metering costs continue to decline, I wouldn't be surprised if more jurisdictions adopt mandatory TOU in an effort to help utilities better manage their loads, reduce emissions and operating costs, and avoid/delay new capital construction.


Hi Paul,

Thanks for your response. I found your estimates and links helpful.

Regulations have improved all flavors of water heaters over the last 20 or so years in the US and Canada, so that the differences between tanked and tankless are smaller. Nevertheless:

Electric tank heaters:
* have largest greenhouse gas emissions (when coal fired)
* are the most expensive to run
* have the lowest recovery rates among water heaters
* last the shortest amount of time (~12 years)
* have the largest mass footprint and require more energy to move around
and recycle

Gas tankless heaters:
* have the lowest GHG emissions (except for nuclear-electric)
* last longer than tanked
* are cheaper to run (and can be run without a generator in
deep-standby applications)
* have infinitely fast recovery time, i.e., infinite run time
* have tiny mass footprints and can be replaced by parts, including
the heat exchanger

Additionally, tankless heaters can follow solar thermal, which is what I'm installing right now and which will provide > 60% of our water needs from the sun.

There is not a single electric tanked water heater in the US which costs less to run than any gas tankless water heater, as far as I can determine. There may be exceptions where electricity is very cheap or gas or propane are very expensive but neither of those applies to us or anywhere close.

Some more links:
Consumers' Directory of Certified Efficiency Ratings for Water Heating Equipment: http://www.gamapower.org/water.php

And it's late and I think nobody will see this :-0

Best regards,

what about the initial cost ? i looked at this in '04 (tankless ngas vs tankful ngas) and concluded that the tankless wouldn't payout in the expected life of the tankful. (just used the mandated yellow tag energy cost estimates, which does not account for peak ngas).

Hi NR,

Great points and thank you for the links too. I'll confess I've never felt comfortable recommending the use of electric water heaters; there's something inherently wrong applying a premium fuel to such a low grade service. Natural gas, where available, would normally be my first choice, although I'm starting to think the long-term outlook for natural gas is negative and that we could be looking at rapidly escalating prices and supply issues in the not too distant future.

For those, like myself, who don't have access to natural gas our choices boil down to electric or, alternatively, propane, oil and possibly solar, either alone or in combination with one of these other three. At $1.05/litre and with an EF of 0.65, the operating costs of a standard propane water heater would be $0.228 per kWh(e) or more than twice that electric ($0.1067). A tankless unit with an EF of 0.82 would be a little more economical at $0.181 per kWh but still 1.7x more costly than electric. Solar was out due to poor orientation (east-west), a complicated roof design and severe shading. I ended up sticking with oil but, in hindsight, I wish I had opted for electric.

At this point, I'm inclined to recommend a heat pump water heater (HPWH). The EF in this case is in the order of 2.0 to 2.4, which makes it twice as efficient as a conventional water heater. As mentioned in another thread, I run my dehumidifier virtually non-stop between May and October and a Nyle HPWH which I can purchase for a little over $800.00 could perform this service and, at the same time, provide me with all the hot water I require at no additional cost. In climates where cooling demands are high, a HPWH might make even more sense.

With respect to electric demand units, there are a couple of things that bother me, but one in particular is their huge power draw. Those 80, 90 and even 120-amps can put a huge stain on a home's electrical service and, in turn, the local distribution system. You can just imagine what would happen if everyone started to replace their electric hot water tanks with one of these. From a utility point of view, a conventional water heater at 3.0 or even 4.5 kW is a whole lot kinder than a 25.0 kW demand unit, especially when placed under load control. And a HPWH at less than 1.0 kW is largely invisible.


What you do is use a timer. Ours is on from 12 noon to 7 in the evening, and we generally have a full tank of hot water in the morning. So you use that window to do dishes, laundry is strictly cold water anyway. Take your bath in the evening, it's hubris to think when you decide you need hot water it should just be there for you.

"it's hubris to think when you decide you need hot water it should just be there for you."

I'm a retired engineer, and if I felt like that I'd either take cold showers or shoot myself.

We get hot water for free from the sun most of the year, stick it in a tank (surface area goes up by x^2 while volume goes by x^3 so larger tanks are better) and supplement with a little propane once in a while, and I'll enjoy my showers whenever I want. It's easy.

Thanks, Nervous!

Some top-notch stuff there, and it has changed my thinking, although I sometimes have trouble translating American terms into our English market, and costs and the structure are often different here anyway.

Most people hare use a combination gas boiler, with a tank.

All our meters have provision for charging at different rates at different times of the day, so if you are in a flat many of which do not allow the use of gas then overnight electric tanks are common - that is what I have.

However, I still kept the old on-demand electric water heater, which installs over the sink, and which I used to use in an old rented flat many years ago, and have always had a hankering for them - no heating water which I am not going to use, or using a bit then having gallons get cold in the piping, and contrariwise no running out on the rare occasions when I use a lot.

You are the best of all advisers, one who suggests that it is a good idea to do what I fancied doing anyway! You could make a lot of money doing that!

Seriously, that is a lot more attractive than forking out thousands on a air-heat pump driven system- a couple of those and I can switch off my tank most of the time, and only turn it on when I want to wash clothes- I m in the habit of doing that frequently, but with a bit of planning could easily manage with once week.

Is your home South facing? If so, continue...

Do you have a relatively flat front to your home? If so, continue...

Do you have a basement, or, can you dig out at least a partial one, or, can you modify your home to have an earthen berm around N, E and W? If so, continue...

If all this is yes, it might be worth checking how much you could do a finished or unfinished basement and add a passive solar front to your home. Also, add vents to allow air to circulate through the areas. You can see the Earthships and Enertia homes for ideas. NOTE: Neither is unique in using these basic concepts. Envelopes and passive solar are both widespread and old technology. (Both do have elements that would be proprietary, I imagine.)


A third, and perhaps simpler, cheaper and easier option would be to add a hay bale shell around your existing home, with the passive solar front. http://www.strawbale.com/using-straw-bales-to-insulate-a-house#more-321

A successful conversion on any of these fronts would eliminate all or most of your need for heating and cooling.


A couple of comments. A solar thermal panel often provides a better pay-back than PV, and in fact you can buy some panels which can be combined either on installation or at a later date with PV, and in fact increase the efficiency as the right design can help to keep the PV cool.

I am not familiar enough with Florida to know how much of the time it is cloudy, but if that is the case then the vacuum evacuated type with good insulation appears to fare best:

Of the silicon solar cells, although they are less efficient by area, as you actually buy them by rated output if you are not space constrained amorphous silicon does better in cloudy weather than crystalline:

Thin-film panels are also supposed to do better under cloud than crystalline, but I have not found a good source to confirm that, and if so by how much.


Can I suggest you consider this system...for an extra $5k you can get almost double the system. The trick is that you have to install it yourself or hire that out. Do you live in FL? If so, you can then cash in on the full $20k available for a 5kW system.

Just a thought. http://www.dmsolar.com/5000w-solar-gridtie-sy.html

I am getting ready to drop down on this system. I have a Master Electrician who has agreed to help me hook it up and to sign the Rebate paperwork. Gonna be tight, as the rebate deadline is running out. Word on the street is that the incentive program will get renewed next year. Hopefully, the two rebate systems won't talk to each other, and I'll be able to do another 5kW system next year for another 5 grand.

Hmmm, very tempting. Located down in Ft. Lauderdale too? Yes I am in FL and from what I understand the rebates are supposed to be renewed...that was one of the few things to survive the budget axe. I hope.

This is where I considered my system from


Current solar prices .... http://www.ecobusinesslinks.com/solar_panels.htm

Wind is usually a better bang for the buck

Solar hot water panels and a Solar Oven ??

Conservation .... Insulation etc. is better to spend $ on to lower your electricty needs

There's an eBay seller in South Florida who sells Evergreen systems. As I recall, last week he offered some complete systems, with a 2 kW version for about $15,000 FOB. His panels seem to be rather low priced, perhaps because they have "slight blemishes"...


E. Swanson

BTW-be careful, I think rebates are only available on these panels. http://www.fsec.ucf.edu/en/industry/testing/PVmodules/pv_flashtest_list.htm


I just checked the state web site, and it looks like the rebate money is gone for the year.

*Due to the large volume of rebate applications received and funding awarded, the budget for the fiscal year 2007-2008 has been exhausted. If your application is approved it will be placed on a waiting list. If the program is appropriated with funding for the next fiscal year by the Legislature, your application will be granted funding based on the order it was received.

Neon9 - My only comment is that an 1800watt inverter sounds awfully whimpy and offers litte if you subsequently deceide to expand your system.

I have a 3.6kW system (wired for 48 volts DC) and dual 5,500 watt continuous output/10kW surge inverters for 220 volt operation. I am not grid tied but rather have a battery bank of 32 L-16 6 volt batteries wired for 48 volts DC (4 sets of 8 batteries each).

I use a lot of work-arounds so I can run my HWH and 2 hp well pump. These have high draws for short periods since they are set up to cycle and not overload the system. A little inverter(s) would preclude this.

I'd really check out your planned uses to a greater degree.


Do you think that if they ever make large high capacity ultra capacitors it would be useful in load situations like your talking about.

Also it sounds to me like people with deep pumps should look into a storage tank and potentially additional wind power to handle the load.

Just wondering.


I should start by saying I'm also on the grid so I don't have to depend upon my PV system. There is water for household use and then there is water for irrigation. My system will handle filling the pressure tank for household use during the day (although I use another pump to maintain household pressure - see below).

However, irrigation is another matter. I have 4,700 gallons of storage tanks. I can use the PV system to fill them - the way the system works is one of the discharges from the household pressure tank goes to a solenoid valve that feeds the tanks. There is a takeoff from the pump on/off relay that feeds another relay that opens and closes the solenoid valve. The flow rate is set such that the PV system starts to divert just before the cut in pressure for the well pump. The solenoid to the tanks closes when the pump turns on.

All well and good except I need real pressure for irrigation not simply gravity flow. I could set up another small pump at the tanks for this purpose but it wouldn't give me the flow rates I need to irrigate the orchard. Plus, I already have a small 1/3 hp pump that I use for day time water in the house to avoid having the well pump come on. In other words, I have enough complexity in my life.

As far as wind goes, I assume you mean a wind generator not a fan/windmill water pump. I had a 1.5kW wind generator for several years and it didn't do what I wanted so I sold it. In the case of a fan, I'd have to have it on at least a 100' high tower because the well is surround by tall trees and there are far too many times when there isn't sufficient wind (That's why I sold the wid generator.).



Sounds like if your plans are to use solar/wind etc its better to pick the place first then try and retrofit. Sort of like with the Amish they are very careful about where they farm. Not that your not doing what you need to do but complexity is a problem.

Myself I plan to try and do run of river hydroelectric on a reasonable sized stream. I'm waiting for waterfront properties to tank with the general market.
And its hard to get a lot of land along a river. And your really looking at trying to get right on the fall zone with good land on the plains.

So its a very particular set of conditions needs to pull this off.


I applaud your plans to go solar. It is interesting to read the responses to your post about payback, alternatives, etc. Most of those are not from people who live in a solar powered environment, and it shows.

I am an RVer, and my rig is equipped with 240W of solar, about 1/10th of what you are planning. I also have four type-27 batteries and a 1000W inverter, but no generator. Granted, I spend most of my time in the southwest, so usually have an abundance of sunlight. We just spent a week out in the AZ desert totally off the grid. What brought us back to town was the need to fill the water tank and dump our waste liquids.

Our "secret" to living on solar is to be very choosey about how we use the electricity. Our "AC" set of appliances include a 23" LCD TV, a DirecTV receiver, satellite Internet modem and router, and two laptop computers. Missing from the power load are the microwave (not used off grid) and refrigerator (runs on propane).

An essential part of our secret is to run with 12vdc LED lighting throughout our rig. I was amazed a couple of years ago when I found that over half of the rig's electricity usage went to the lighting system composed of incandescent and fluorescent bulbs. Cutting that consumption by factor of 5 times allowed me to stick with my 240W of solar.

So my suggestion is that you might review just what you are using the electricity for, and consider putting part of the money into more efficient appliances and lighting, especially LEDs. You might also consider installing a 12vdc power system in your home so you don't waste energy converting from the natural DC of solar to AC.

As far as payback is concerned, from a financial point of view it is easy to prove I will never "save" enough money to pay even for my small system, but when everyone else's power starts to fail, I will still be out there reading my books, talking on the Internet (if it is still operating), and watching TV (at least during the time when the stations have power to stay on the air). To paraphrase one commercial, the payback from that fact is priceless.

Sam Penny
the Prudent RVer

I'm tagging along behind Prudent's post, which I found to be the most salient in terms of issues to consider.

A couple things to consider,

1) While Solar Heating can pay back faster, it is also easier to create from non-specialized materials, copper, glass, etc.. while PV is very specialized material, dependent on a supply chain and a growing demand, either of which could quickly interfere in its availability or affordability. I keep saying 'Get some if you have the chance'

2) It's worth remembering that it's completely expandable, both with panels and storage, if you end up adding batteries.. and if you want to price out a $10k or $15k array/combo instead, to just try to pick panels that you can expect will still be produced, for the day when you want to add to that investment. (It's possible to mix different panels, but is recommended for efficiency and mounting systems to keep to the same models..)

3) But as Todd said about the Inverter.. it's worth getting a meaty one, and a really well-respected one (Outback Chargers/Inverters seem to get great reviews.. ), since that would be expensive to upgrade, compared to adding a couple panels to the existing array every year.. if you have one that's 'not quite there' for your needs..

PV users in Homepower Magazine have repeatedly said they wished they had planned for their actual needs earlier in the process. But then look to PrudentRVer to see how you can also work to redefine your needs, too. I like the LED lighting review.. I like playing with ways of using smaller light sources so that a room 'feels' lit, but draws much less power than it had before. There is a lot of Psychology that goes into how much light feels like enough to someone. Those single 'white LED' button-cell flashlights can often feel 'Too bright', for example, due to the way our eyes respond to the Cooler color balance.

Bob Fiske

One more thought.. you asked about the difference between the 1.8kw Inverter and the 2.3kw array. With a storage system, your calculation would be that the PV defines how fast they can fill the Batteries, the Batteries define how many backup days of power you design into your system, and the Inverter size defines your max load at any given moment. If you did want a bigger Inverter, clearly the array would not be able to feed more than 2.3kw (minus efficiency and amt.of Sunlight corrections) .. but if you foresee either adding batteries or adding panels, adding a bigger Inverter later will be another cost that you could preclude by spending a bit more now for a couple more KW's of output. (Even with just the 2.3kw of PV, Batts would be able to feed a bigger inverter for some period of time.. just takes that smaller array longer to refill them later)

Thanks to all, I believe I remember reading Todd's description of how he juggled loads as necessary, reminded me of some experiences with small generators after hurricane Charley...which was between 3-7 days without power depending on where you lived.

Extra watts, maybe later-but a few extra bucks on a better inverter (more eff. and larger capacity) sounds like money well spent.

Being a sustainability nut, I am firm that adding excessively large solar PV systems to homes to compensate for waste and inefficiency is more of the brain dead thinking that got us into the mess we currently face... so before I will install a system for a customer I do an energy audit to reduce waste/increase efficiency and encourage conservation.

This should be the first thing you do. Every dollar you invest in this will pay back 3 to 5 dollars in savings from a smaller PV system.

Job two is solar hot water. SDHW systems gather around 90% of the available solar thermal resources where solar PV runs around 10%. So, your second job should be to invest your money in the second largest payback (after conservation and waste reduction) SDHW.

Lastly you should consider solar PV. The average 'mericun consumption is around 35 kWh a day. After conservation and efficiency upgrades, we lowered our consumption to 15 kWh a day, which includes winter heating (heat pump) here in our mountainous location. This allowed us to get to 105% of zero energy with "only" 4.5 kW of solar PV. We have a small surplus for the plug in hybrid... when they make them.

Todd Cory
Mount Shasta Energy Services

Price seems in the right ballpark. I am presuming this doesn't reflect rebates or credits. I have 3k worth of panels and an inverter rated for 2.5. Works fine. Max output is aroung 2.4 AC in summer. I am glad I did it. Maounted the panels myself for a little discount. My cost after rebates was just under 10k. Even so, payback is a long time, especially for me, as we are energy concious and rarely or never exceeded CA baseline power rates. If we had a pool, pump, big house, etc we might be offsetting electrical costs at almost 3 times the rate we are now and would clearly pay off well. Even so, we have generated about 14k kwh, and I expect that as long as we live in the home our electricity is paid for (we net out zero at the end of the year). But really, it is more of a statement than an investment for most of us. If I was buiding a home for retirement that I planned to stay in for the rest of my life, I would do it as an inflation hedge. I fully expect electrical rates to be headed significantly upward in the upcoming years.

Hi, neon9.

Check out these new products:

Combined solar thermal and solar PV in one system. One of the founders used to run Sharp's solar division. Very clever.

Also for air-source heat pumps, the most capable ones currently being produced seem to come from Hallowell:

You don't have much of a requirement for space heating but they are currently in beta testing of their hot water heat pumps and a mini-split heat pump.

In a conversation with one of their reps, they apparently use off-the-shelf compressors but in a novel way to get the performance numbers they get. Apparently 5k+ units have been sold to date.

For my home I'm looking into replacing my trusty Sanyo mini-split heat pump with one of theirs once the product comes to market. The heat from my heat pump plummets once it gets colder than 50 degrees or so, which happens often in Northern California during the winter. The Hallowell's are considered "cold climate" air source heat pumps -- much more effective than traditional designs at low temperatures.

Also, I second the poster who said consider installing it yourself except for the grid-tie. It's not necessary to have a degree in electrical engineering like what once was almost required.


The PVT Solar system is nearly useless as a thermal collector. The thermal energy is the result of cooling the rear of standard solar PV panels mounted over a roof. While there might be some hot air produced on warmer days in summer, that energy is of no use for space heating, as the weather is already warm. As the seasons shift and the air temperature drops, so will the amount of useful thermal energy. Since these systems won't have the cover plates which are required a good thermal collector, the heat loss from the exposed front of the PV panels will result in no available thermal energy from the back of the panels as the air temperature drops. This approach won't heat a house in winter. It certainly won't heat hot water, except in summer. This system might be a good source for heating water in a swimming pool, but there are already some low cost thermal systems being marketed which do that without the PV. FAFCO is one company which produces swimming pool heating systems and they've been doing it since the 1970's.


E. Swanson

I purchased twenty 120 watt BP Solarex Panels and a Xantrex Suntie inverter six years ago for about $13,000 sugared with a $6000 rebate from CA. It was the worst investment I've ever made. On a good year I generate $360 worth of electricity even in a state with a very high electricity rate - thanks to Enron. I'm dismantling it and selling it on eBay. You are paying three times as much for an equivalent setup. You're paying far too much for too little return. When power fails you are stuck. So what's the point?

I live in inland SoCal where the sun shines a lot. It's comparable to Arizona.

If you do the math you discover that it takes twenty years for me to recover the $7000 at no interest. Your proposed system will take sixty years! This is not a good investment.

Your system would be sufficient enough for me to power everything I need.. The payback period for me is pretty quick, as I wouldn't have to pay for having electrical lines out to my new home out in the rural area that I will be building.

Actually...I would pay 19k upfront...with 4 per watt back from the state. So -9000 first. Then I think the fed. tax credit is 2k. 19k-11k = 8k. So I pay virtually the same amount as you did. Then as I explained, I get 150% of the retail value of ANY electricity I produce. Even if I'm the one using it.

Is it a dream investment? No. Probably a 'hedge' if anything. Who knows, maybe next year a Mr. Fusion tabletop reactor will be released finally and solar use will be restricted to plants and female sand volleyball players.

I consider 'mad max' as likely a scenario as that, if not more so.

Actually...I would pay 19k upfront...with 4 per watt back from the state. So -9000 first. Then I think the fed. tax credit is 2k. 19k-11k = 8k. So I pay virtually the same amount as you did.

Depending on your shading and orientation, you should generate around 2,841 kWh per year which is 2.84 Renewable Energy Credits per year.

If you sell your RECs at $125 a piece ($5,327 for a 15 year contract),
the net cost of your system is $2,673
You will generate 85,226 kWh over 30 years
The cost of your system in kWh over 30 years is $0.03

If you sell your RECs at $150 a piece ($6,392 for a 15 year contract),
the net cost of your system is $1,608
You will generate 85,226 kWh over 30 years
The cost of your system in kWh over 30 years is $0.02

If you sell your RECs at $175 a piece ($7,457 for a 15 year contract),
the net cost of your system is $543
You will generate 85,226 kWh over 30 years
The cost of your system in kWh over 30 years is $0.01

If you sell your RECs at $200 a piece ($8,523 for a 15 year contract),
the net cost of your system is (-$523)
You will generate 85,226 kWh over 30 years
The cost of your system in kWh over 30 years is (-$0.01)

If you sell your RECs at $263 a piece (the maximum currently allowed)($11,207 for a 15 year contract),
the net cost of your system is (-$3,207)
You will generate 85,226 kWh over 30 years
The cost of your system in kWh over 30 years is (-$0.04)

Payback time isn't relevant if your goal is to use cleaner, more sustainable energy. EROEI is the only thing that's important. Are you saying you thought of this as an investment yet never bothered to do the calculations to determine how much money you'd save?

I purchased twenty 120 watt BP Solarex Panels and a Xantrex Suntie inverter six years ago for about $13,000 sugared with a $6000 rebate from CA. It was the worst investment I've ever made. On a good year I generate $360 worth of electricity even in a state with a very high electricity rate - thanks to Enron. I'm dismantling it and selling it on eBay. You are paying three times as much for an equivalent setup. You're paying far too much for too little return.

A 2.4 kW solar electric system on a roof with 4.7 sun hours per day and an estimated conversion efficiency of 0.72 will generate 2,964 kWh per year. You are generating 2.96 RECs per year. Assuming you didn't receive the federal tax credit, and only received a $6k rebate from the State, then...

If you sell your RECs at $125 a piece ($5,558 for a 15 year contract),
the net cost of your system is $1,442
You will generate 88,932 kWh over 30 years
The cost of your system in kWh over 30 years is $0.02

If you sell your RECs at $150 a piece ($6,670 for a 15 year contract),
the net cost of your system is $330
You will generate 88,932 kWh over 30 years
The cost of your system in kWh over 30 years is $0.00

If you sell your RECs at $175 a piece ($7,782 for a 15 year contract),
the net cost of your system is (-$782)
You will generate 88,932 kWh over 30 years
The cost of your system in kWh over 30 years is (-$0.01)

If you sell your RECs at $200 a piece ($8,893 for a 15 year contract),
the net cost of your system is (-$1,893)
You will generate 88,932 kWh over 30 years
The cost of your system in kWh over 30 years is (-$0.02)

If you sell your RECs at $263 a piece (the maximum currently allowed)($11,694 for a 15 year contract),
the net cost of your system is (-$4,694)
You will generate 88,932 kWh over 30 years
The cost of your system in kWh over 30 years is (-$0.05)


I would definitely do solar water first, its cheap and direct. Here in NZ we have one innovative company http://www.thermocell.co.nz/ which uses heat sheets (flat heat pipe). In a temperate climate evacuated tubes are an unnecessary complication, they can fail and only allow 50% coverage, their main advantage is efficiency in low ambient temps ie northern europe etc

One other thing if doing a PV system, consider wiring some of your high power some of your items DC, This would remove the requirement for an inverter, you would have to change the motor on a pump for example but you could save some percentage points.

Neven B.E. E&E


Tips for a Successful PV Experience

Give the most weight to the counsel of those who live with PV systems, such as todd and prudent.

The most important considerations are not payback or total cost-effectiveness. Power in grid-down situations is much more important IMO. The romanticism of a 19th century lifestyle wears thin very quickly in hurricane and SHTF situations. Hence, if you go with a grid-tie system, do have an integrated battery backup to run essential circuits for lights, refrigerator, communications and water supply.

For a $20K budget, consider a smaller PV array and an appropriate inverter/charger designed for grid-tie and battery operation with an internal transfer switch. The inverter you are now contemplating for a grid-tie system is probably designed for grid-tie operation only.

The design of these systems is client-site-specific. Rather than looking for a low-ball system from an online vendor, I suggest that you find a local expert to design the system to meet your particular requirements. Battery systems are more complex. An experienced designer/installer can advise you on the cost/benefit trade-offs. Most licensed electricians can install a simple grid-tie system but I have found that many electricians are clueless with regard to some of the control subtleties of battery/inverter systems unless they have experience in this area.

Use energy efficient refrigeration, lighting and appliances and be relentless in eliminating “phantom loads” on the dedicated battery/inverter circuits. Please note that PV is not cost effective for electric water heating, space heating, air conditioning, cooking (except for small microwaves and hotplates) or FOR RUNNING THE LARGE COMPRESSOR ON HEAT PUMPS. Better to employ other strategies to address these issues. Look in the TOD archives for Allen’s posts about keeping cool in the Big Easy. Domestic hot water is easily addressed with a traditional flat-plate collector natural thermo-siphon system without a heat exchanger if you live where it never freezes. These systems have worked for a hundred years in south Florida and Southern California. No need for the more expensive vacuum tube collectors which are more efficient in the northern US and more cloudy areas.

Solar Panels

Don’t go for the cheapest. Avoid Chindia. I have a bias for single crystal solar panels over all others. The higher voltage makes a difference in battery charging, particularly in summer temperature regimes where power degradation is significant.

I am very conservative in regard to equipment and recommend only the tried and true after a lifetime in the field dating from a semi-conductor career in the 1960s and work on the Apollo Program. I know what works and what doesn’t. I seldom invest in revolutionary alternative energy developments and never buy early production. Bogus claims are legion. Beware of product differential marketing ploys. There is always a promotional factor at work in new start-ups and bugs in new production.

With that caveat, I think that an investment in good solar panels of time-proven technology is better than gold after the basic worst-case-scenario needs for optimal location, water, food, medical care and security are met. The available supply of good panels is short and can disappear overnight like a run on the bank when the public wakes up. Solar panels will be priceless going forward.

I am off-grid and with a PV array in my back yard that was installed in 1987. It produces as much power now as then, showing no degradation with time. The original ARCO SOLAR 50 Watt single crystal panels were produced at the same southern California plant that was successively sold to SIEMENS then SHELL and now SOLAR WORLD. Curiously, the panels actually produce more power now than in 1987. Anomalous edge-of-cloud and other undefined atmospheric/electro-magnetic effects produce up to 180% of rated power at unpredictable times, even at night. No data yet, just anecdotal experience with an analog meter. But that is another story.

Hope this is some help.

Best wishes for some version of westexas’ ELP Plan for all while there is yet time.


B.C. takes lead on climate file

Everybody talks about global warming, but the government of British Columbia is the first jurisdiction in Canada to take a significant step toward doing something about it. In Tuesday's provincial budget, Premier Gordon Campbell's Liberal government introduced the first full-fledged carbon tax in North America, thereby putting a real price on the greenhouse gas emissions that come from burning fossil fuels.

Highlighting the degree of disarray in this country over global warming, B.C.'s new carbon tax comes only weeks after Premier Ed Stelmach of neighbouring Alberta (source of almost one-third of Canada's greenhouse gas emissions) walked out of a premiers' meeting convened to discuss climate change.

Compare to this:

Price gouging election issue: NDP

OTTAWA–Consumer gouging is going to be an election issue, the NDP finance critic predicts.

Thomas Mulcair told reporters yesterday price gouging by oil companies, cellphone companies and banks will all be a factor in the next federal election.

"In all of those cases what you have is the failure to use the tools that exist for the government (to protect consumers)," he said, adding the minority Conservative government mistakenly believes market forces must be left alone.

How can the socialist minded NDP that wants to save the planet by higher energy taxes complain that high energy prices are gouging the public?

jrwakefield on that, BC Takes Lead, article try this further on:

the government has committed to return all the revenue collected through the carbon tax to taxpayers in the form of personal and corporate income tax cuts.

I would say Hmmmm!!! Going green or buying votes?

About your statement:

How can the socialist minded NDP that wants to save the planet by higher energy taxes complain that high energy prices are gouging the public?

Taxes are returned in services to the public. Higher prices means the public gets serviced in the ear or other orifice ... Hmmm!!!! Of course that might not be all that bad an idea.

Yea, I saw that about the taxes. Which is interesting as in the news last night they said the $1.2 billion from that tax would be used for "green" projects and they would give a $100 rebate to the public. Why? And if it's just for income taxes then why again? Politics.

The point about the second one is we have the NDP on one hand claiming drivers are getting gouged by high fuel prices, but on the other hand they claim we need higher fuel taxes to pay for greenness. So higher prices if they are from taxes is not gouging then. Boy that's debatable!

Yes I guess it is debatable on the point, gouging. If I do get a return on my taxes, in the form of a cleaner faced, brighter eyed and chirpier world, am I being gouged?

If one looks at a 'complete' economy as a stool with three legs: production , consumption and return, then we have a stabler economy when taxing for green purposes. So, even if gouged, we do not fall on our asses when resting those weary things.

The are about to change their name to N.O.P.E.
The New Opportunistic Political Entity
It is policy like this from the NDP that keeps the Green Party strong.
They had all better hope the next election is in a few months or they may be debating how to save the economy.

Depends whose ox is gored -- or fed.

Price gouging by "corporations" puts my money in someone else's pocket.

Taxes, that are often miserably wasted and mis-appropriated, puts my money in someone else's pocket.

I despair of trying to keep track of all this, so my strategy is to get by with as little money as possible to avoid large payouts to any crook-- political affiliation is irrelevant.

I find it surprisingly effective, and it decreases my carbon footprint to boot. But the strategy won't work for everyone, and I don't try to preach my view.

Then you will like this:

Surprise: Green (Carbon) Taxes Get Passed on to Consumers

What it demonstrates is that when governments "go green" they are essentially launching a tax attack on the middle class, while letting big industrial greenhouse gas emitters off the hook.

That's already happened in the European Union's three-year-old carbon emissions trading market, where big energy companies are doing fine, while electricity rates for many consumers have skyrocketed.


That's almost as disingenuous as the coal-fired electrical utility in Europe which, when asked why it was passing along the entire cost of buying carbon permits under Europe's cap and trade emissions trading scheme to its customers, when the utility had received the initial permits for free, responded the whole purpose of cap and trade was to raise electricity rates.

That's what I mean. It's seems so easy to twist a good idea.

Where would a large gas tax on U.S. gasoline go? Not to building "green" energy sources, I would wager. It would simply be recycled to the most powerful pigs at the trough -- which at the moment are the "defense" contractors. (Few hundred years ago it was the Church -- but at least they built beautiful cathedrals and not missile silos).

For reasons I can not understand, the concept of "small is beautiful" is anathema to many people. EF Schumacher is still a heretic in much of the "developed" world, and yet most of the problems we face could be ameliorated, if not entirely resolved by everyone simply reducing the scale of their consumption.

NeverLNG -

This is why I have some serious reservations about raising gasoline taxes to a truly painful level. Sure, at some point high enough it will help decrease gasoline consumption, but at the same time it will bleed the taxpayer even more than he is being bled now.

And the question of where the money will go is also of great importance. Knowing how things currently work in the US government, this revenue will one way or the other find its way into the general treasury and will thus continue to feed an already over-bloated government and military machine. Sure, there will be many schemes to have some of it rebated back to the consumer in the form of various tax credits, etc. but we all know how that sort of thing tends to work .... once the government has the money, most of it tends to stay there.

This is why I'm inclined to think that if things get real bad, we might be better off with some sort of flexible gasoline rationing system. While I am quite loathe to give the government any more power than it already has, my own bottom line is that if I am forced to drive less, I'd rather do it with more money in my pocket rather than with less. I'd rather willingly participate in an equitable rationing system than being further beggared by a punitive tax.

As I've mentioned before, I'm not in favor of increasing fuel taxes, as I think rationing is the best approach, once Peak Oil becomes the reality. I think we know by now that the price elasticity of oil, particularly gasoline, is rather steep, which means that matching increasing demand with declining supply will result in a very large price increase. If that price increase is the result of taxes, some of that increase can be returned to the public, however, if prices are allowed to rise enough to force demand down to the ever smaller supply, the producing nations will receive the benefit and the economies of the importing nations will nose dive because of the resulting inflation. I think we are already seeing "stagflation" as a result of recent increases in the price of oil.

The only situation in which I would think to raise oil taxes would be to pay for the bloated military we now have in the U.S. and it's adventures overseas. Such a tax increase would allow a reduction in other taxes, such as the income tax. If a steep gasoline tax were instituted as a "oil import security tax", the many people who don't seem to comprehend our situation might become aware of both the large amount we are spending on our military and the purposes for which the military is used. There might be loud clamor to reduce the military budget, which would also reduce the level of the tax over time.

E. Swanson

Black_Dog -

The idea of an 'Oil Import Security Tax' has merit, as it would quite dramatically reveal one of the reasons why the US 'defense' budget is now larger than the rest of the world's combined.

Alternatively, how about having the DOD bill Exxon Mobil, et al, for a portion of the defense budget plus a large chunk of the cost of occupying Iraq and calling it something like an 'Oil Supply Security Surcharge'? This would allow the oil companies to be the first to feel the pain. Of course, the oil companies would then have to pass this cost on to the consumer, but would then be in the uncomfortable position of having to explain why their price of gasoline is so outrageously high.

I'd still prefer a way of getting people to use less gas without a huge transfer of wealth from citizens to their government or to the oil industry.

Isn't the aircraft carriers and missile silos just the same church as the middle ages? Same power of authority. Same oath to maintain? Same ill founded faith?

No argument there. I was just thinking of the aesthetics of a Gothic cathedral compared to an aircraft carrier or a missile silo in North Dakota

For reasons I can not understand, the concept of "small is beautiful" is anathema to many people.

Look into the history of the Federal Reserve, realize that, without necessary reason, the "creation" of money in the US and other developed nations is contingent on the creation of debt. Is the Fed, a government agency? And if not, to whom does the payment of interest on national debt, extracted through taxation on income, end up going to?

Here is a disturbing, if enlightening, documentary on the topic


While you criticize, "the Church" for building places of worship, "the Church" has opposed for millenia the charging of interest on loans, as it is also still opposed in Islam today. For over 700 years England paid taxes with Talley sticks, carved pieces of wood. It was precisely the weakening of English laws on usury which coincided with both the rise of the Bank of England and England's Imperialistic history, (Opium trade in China, wars with mainland Europe, African slavery trade, persecution of Ireland, domination of India), all for pursuit of "profit". This is not to criticize the English people, as the same yoke is now being placed with some apparent success on America. Americans by an overwhelming majority don't desire further war, yet this is the one commonality in all of our future presidential "candidates."

Let me put it a very simple question to you. You acknowledge fractional reserve banking as accepted practice? In such an environment for a bank to prosper is it not contingent that for every thrifty soul who salts away his money there must be an order of magnitude greater that "enslave" themselves through debt to the same bank. Sorry to be melodramatic, but think about it, if a bank (for its profit) loans out ten times its reserves, for every one person saving money must not ten go into an equal amount of debt.

This explains the relentless pressure for a consumer oriented society, even when such consumption is, to be Kunstleresque, suicidal, for most.

Wow! Money is the root of all evil! - Now there is a new thought! ;-)

I like your argument, but it is surely not sustainable, as it leaves out too much.

If you want to amuse yourself, check out Islamic lending practises and the contortions it gets into to try to avoid the use of the term 'interest'.

There are a remarkable number of entirely co-incidental 'gifts' which occur to the person who lent the money! - and many of the cover ups are far more complex and entertaining.

More seriously though, it has been a major cause of poverty in the Islamic world, as if your harvest fails you are forced into the hands of illicit money lenders, who charge rates more or less disguised that are through the roof compared to any properly regulated banking system, although whether the American and English banking systems are properly regulated is open to severe question.

Your association of slavery with the capitalist banking system also does no0t bear examination.
Slavery was prevalent in the Islamic society long after it's abolition in other societies - indeed it still occurs in parts of Africa.

Tanking about slavery, the medieval system of serfdom in Europe was not far off of that state, although they had some very low level of rights, but even those were often abused.

Medieval society was also much more prone to conflict that anything since, arguably partly because instruments did not exist to invest and accumulate wealth, and so conquest was de rigeur to get ahead.

The most serious critique of your line of thinking though lies in the way medieval society actually raised their money since Christians could not charge interest - they of course went to the Jews, and if the debts to them became inconveniently heavy, simply killed them.

I suppose it is an alternative, but perhaps not one that many today would approve!

It was an entertaining thought though, and seriously, do take a look at the sophistries the Islamic countries get up to to avoid the word 'interest' - it is a fine example of human ingenuity!

This is a good historical read also for some background.

By the guy G.Edward Griffin who wrote "The Creature from Jekyll Island.

Exposing the Federal Reserve

The B.C. liberals are being about as apolitical as is possible for an elected government to be on this issue. They are developing these policies as part of the WRCAI (Arizona, California, New Mexico, Oregon, Washington, Utah, B.C., Manitoba) and have pretty much written off both American and Canadian federal politics for now. They are relying on the recommendations of their Climate Action Team which is a very broad group drawn from business, NGOs, and a few Nobel laureates. The Premier does not seem to be injecting a lot of his own bias.

To the extent that there is politics involved, I think that the tax is largely symbolic at this point. B.C. knows they can only go so far on their own, without distorting business too much (truckers will just fill up their tanks in Blaine WA., and enjoy their tax benefits in Vancouver) but the olympic media opportunity is coming up, and now they have their message.

From The Economist article above

Meanwhile, most analysts expect demand for raw materials to remain firm despite the gloomy economic news. Although Goldman Sachs, for one, expects oil consumption to fall in America, it also predicts that continued growth in booming spots such as China and India will underpin global demand. The International Energy Agency, a watchdog group for consuming countries, still expects the world’s consumption of oil to rise 1.9% this year.

Worse, rising prices and tightening credit give the firms that process raw materials an incentive to run down their stocks, argues Jeffrey Currie of Goldman Sachs, making prices all the more vulnerable to supply shocks. America’s Department of Agriculture believes global demand for wheat will continue to exceed supply this year. That will push America’s wheat stocks to their lowest level since 1948 (see chart).

That's a scary looking graph to me.

They could make the graph even scarier if they wanted to: just increase the scale again on the futures contract price side of the graph.

But point taken. It would be interesting to see a comparison of how much of the wheat is still being exported over the same time period. Will we see peak wheat exports?

According to http://www.eia.doe.gov/emeu/ipsr/t21.xls 2007 first 3 quarters demand higher than supply, consuming reserves

Q2007: First Second Third
Supply: 84.17 84.40: 84.43
85.68 84.83 85.43

Yet another example of Gail Tverberg's prescience: the funding sources for states and municipalities implodes as banks remove their own capital from the game.


That's for the auction-rate bond market. I'm wondering if things are going to be so bad for well-run AAA rated (on the strength of their own financial position) municipalities issuing plain vanilla general obligation bonds or the like. The widows and orphans still have to have something to park their money in.

Credit crisis hits Main Street

"Without affordable funding, projects don't get built, streets don't get repaved," Leighton said. "It affects the people driving on those roads and the people paving those roads."

The credit crisis that began in the subprime mortgage market last year has now spread to municipal bonds. Governments and public authorities face steep increases in borrowing costs because investors are losing confidence in the credit markets and the companies that insure the debt.

Today in normally well-to-do suburbs in the Midwest, they were filling in the potholes. They were apparently saving money by not tamping down the asphalt, instead letting the cars drive over the mounds to tamp them down, and also spraying loose asphalt everywhere.

That is standard operating procedure in winter. They shut the asphalt plants down in winter. Different times depending on how far north you are, but typically, the plants shut down in about November, and re-open in April.

To fill potholes in winter, they use "monkey mix" - the loose asphalt you describe. It's strictly a short-term fix, and not a sign of fiscal distress.

Not filling the potholes at all - that might be a sign of fiscal problems.

The link above that states that the current high price of oil “is driven principally by a sharp uptick in fund flows” is just silly. Boone Pickens runs one of the largest energy funds around and he is currently invested in oil on on the short side! Funds are just as likely to be short as long. But when prices go down does anyone attribute this to "a sharp uptick in fund flows on the short side"? Of course not, people only blame "the funds" when prices are high.

People, especially people like Mike Lynch, always assume the funds are long. No, funds are every bit as likely to be short as they are long. Pickens, one of the most bullish oil investors around, is short. And I would wager there are a lot of other funds that are also short.

Ron Patterson

An interesting question is when he took his short position. If it was more than a couple of weeks ago, he could be looking at some sizable losses, and in effect trying to talk the price of oil down. BTW, he said that his hedge fund was down for January.

WT, exactly my thoughts after watching the Pickens interview this morning. Pickens also mentioned that he took a loss in Jan '07, but his fund was positive in the other 11 months of '07 and he mentioned it was up 32% in 07 but the fund gets 20% of the gain so the fund investors had a gross return of 12%...about the real rate of inflation. Nothing to crow about.

I thought the most important thing that Pickens said was 'we are sending $1/2 trillon a year out of the US to purchase crude and that has to stop...there must be demand destruction somewhere.' (paraphrase) Pickens also indicated that 'about 85 million bbls per day production is all the world is going to see.' (another paraphrase)

Hedge funds take 20% of the gain (32%). So, investors get 25.6% net.

Odd that BP is going from a oil bull to bear - he's being deceptive now IMO.

River - The BP fund takes 20% of the gain. 20% of 32% (the gain) is 6.4%.

I agree that BP is trying to tout his position. All hedge managers tend to do the same thing. The one thing that I am thinking: It has been extremely cold in Canada, and drilling in Canada (for natural gas) is way down. So Canada is going to have more storage to fill after this winter. The oil sands require more Canadian gas with each passing year. So there will be less gas available. Therefore, exports to the US from Canada should be going down. If they go down 2-3 BCF/day, can the US refil storage this year? I think that it is going to be a tighter market in NG this year, despite BP saying that NG is way overpriced. PS: I am a beleiver in the fact that reduced sunspots let more cosmic rays hit the earth, which produces more lower level, bright topped clouds that reflect back more sunlight - thereby cooling the earth. One sunspot in over a year so far. Well it has turned cooler - Artic Ice is 2 million square KM larger than anytime in the last three years, and the winter this year is more extreme in the Nothern Hemisphere, just as the Southern Hemisphere winter was. Does a "greenhouse" just stop working?? I mean the CO2 count is still going up.

That Galactic Cosmic Rays cause cloud cover is an interesting hypothesis. However, there isn't any correlation between GCRs and cloud cover. Nor is there a very good correlation between sunspot minima and either global cloud cover or temperature. So until there is some evidence to support it, it has to remain an interesting hypothesis. See here for more. The greenhouse effect of CO2 and other GHGs, however, is way beyond the hypothesis stage and is on a par with the theory of gravity or the laws of thermodynamics.

Well it has turned cooler

Has it? Last year was the warmest year on record in the northern hemisphere, but unusually cold weather in the southern hemisphere dragged it down to around #6. This year the weather is colder in the northern hemisphere. What is happening in the southern hemisphere? Any hypothetical extraterrestrial effects, including insolation and GCRs, has to have a global effect or the theory has serious problems.

The Weather isn't colder everywhere in the northern hemisphere


Winter 2007/8 forecast

Updated 23 January 2008

The mean UK winter temperature to 20 January is 0.6 °C above the 1971-2000 average, with rainfall standing at 122% of the average, for this period.

Forecast for the remainder of Winter (February 2008)


Mean temperatures are more likely to be above normal than either near or below normal.


Here in my part of Ontario there is a general warming trend. I keep stats for the school board I work for and it is generally getting warmer(the past 5 years have been warmer in the Hamilton area) This winter has been interesting as there has been an increase in cooling and warming cycles. Typically you will get an accumulation of snow and one thaw (usually in January). There have been three so far this year. We have had three larger than normal accumulations of snow then a thaw with rain. The basement has flooded twice this year already. Also the heating degree day stats seem to indicate a warming trend during the shoulder months of the heating season. We seem to be entering a period of extremes in my little corner of the world.

WTI average price per quarter:

Q1 35506458

Every year for the last 4 years, price Q2>Q1. Pickens thinks this year it is going to be different. I wonder what he believes is going to happen that will buck this trend.

Western Australia Prepares

I noted the article about South Australia and their lack of preparation. WA just finished completing a doubling of their electrified (some diesel) commuter rail system and all new buses use CNG (WA has massive reserves and exports LNG).

Certainly not enough, but better than most.


Vice Chairman of Merril Lynch was just on CNBC after returning from the Middle East and commenting on the amazing efforts of the M.E. to add alternative energy. His comment there are more believers of Peak Oil in the M.E. than in the U.S.

Not all that surprising. I think it's clear the Middle East understands peak oil very well. They are painfully aware that it's a limited resource.

I imagine they are also quite aware of the consequences of having, or seeming to have, a lot of petroleum resources. Various European and North American nations would not have spent the last century contending over sand -- if that is truly all there was there.

Perhaps they are trying to make themselves less of a target?
If I were King of the Middle East, you can be sure I would hide my light under a bushel.

But I'm not, so it's just gas.

That, and there's a good deal of resentment among the people, who feel their birthright is being given away too quickly and too cheaply. That is something Al-Qaeda has played upon.

Summary of Weekly Petroleum Data for the Week Ending February 15, 2008

U.S. crude oil refinery inputs averaged nearly 14.5 million barrels per day during the week ending February 15, down 97,000 barrels per day from the previous week's average. Refineries operated at 83.5 percent of their operable capacity last week. Gasoline production moved lower compared to the previous week, averaging 8.8 million barrels per day. Distillate fuel production fell last week, averaging 4.0 million barrels per day.

U.S. crude oil imports averaged 10.1 million barrels per day last week, up 365,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 10.1 million barrels per day, 481,000 barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 827,000 barrels per day. Distillate fuel imports averaged 381,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 4.2 million barrels compared to the previous week. At 305.3 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year. Total motor gasoline inventories increased by 1.1 million barrels last week, and are above the upper limit of the average range. Both finished gasoline inventories and gasoline blending components inventories increased last week. Distillate fuel inventories decreased by 4.5 million barrels, and are in the lower half of the average range for this time of year. Propane/propylene inventories decreased by 2.8 million barrels last week. Total commercial petroleum inventories decreased by 3.7 million barrels last week, and are in the upper half of the average range for this time of year.

And here's what they were expecting:

"The general expectation is that you'll see another increase in U.S. crude oil inventories," Moore said. "If there was an increase that would just take a bit of the edge off oil prices."

Crude oil inventories were expected to rise 2.9 million barrels, according to a Dow Jones Newswires survey of analysts' estimates.

Gasoline inventories were seen growing 1 million barrels while stocks of distillates, which include heating oil and diesel fuel, were expected to fall 1.5 million barrels.

CNN Breaking News: Oil prices off their lows on government report that heating oil supplies are weaker than expected.

With the past six weeks giving continuous increases...

It puzzles me a lot why the runup to over $100 again. News like this only assures me there is plenty of oil to go around, and lends a lot of credence to the Saudi claims that the market is well supplied.

If anything, all these inventory increases in the millions of barrels would justify OPEC production CUTS as they protect themselves from the price crash of a glutted market.

I'd do that if I was them, seeing the numbers and "above the upper limit of the average range" inventory levels.

I thought "auction fever" was only rampant amongst naive auction attendees - not seasoned professionals. This is the kind of stuff I expect newbie investors to do. Unless they got onto some really bad news. When I saw the runup, I figured the bad news was going to be the inventory levels or maybe SA releasing some sobering data on Ghawar - but nothing of the like has showed up. Nothing.

Something fishy is going on.

Total commercial petroleum inventories decreased by 3.7 million barrels last week, and are in the upper half of the average range for this time of year.

IMHO we are seeing a shifting PO awareness coupled with the prospect of a broken US economic system and a continually falling dollar.

As late as September of last year Saudi oil ministers were saying that $80 oil was too high and 'unsustainable'. Recently the rhetoric has transitioned over to a willingness to defend $80 as an absolute bottom. Traders now 'know' they will likely never see oil below that level no matter how slow the economy of the US. Worldwide supply/demand tables seem to bear this out. It may be that the loss of production headroom has been successfully communicated to the people who are commiting huge investments in futures contracts.

A case can be made that those holding Euro's are paying $50 for oil today. (pre dollar slide) In terms of gold ounces and many other metrics oil's 'increase' is much less significant. Some have suggested that oil is the 'new' world currency forcing the others to basically float against it's inherent value. This being the method which finally heralds the demise of the petrodollar.

In these ways $100 oil may be seen as reasonable. Fill er up at 100 it'll be 110 tomorrow.

Here's a question for one of you oil patch "wonks" (meant affectionately, not derogatorily)

The refinery input was 14.5 mbpd. The product supplied (or consumption) has run at around 20.6 mbpd. Where does this difference come from? I would guess that some is refinery gain, some is imported gasoline, but where else does that 20 mbpd go, other than the refineries?

Thanks in advance.

In my view this report is (slightly) bullish. The number to watch has always been "Total stocks", which are down by 3.7 million barrels. The changes of oil/gasoline/destilate stocks would result in relative price changes (affecting the "crack spread"), but drawing down total stocks means oil demand will be up at later point in order to replenish them.

It's going to be a very long and volatile squeeze.

Just heard on CNBC

Tom Petrie, Vice Chairman of Merrell Lynch, just said:

There is more belief in conventional Peak Oil in the Middle East than in Washington!

He was speaking of his trip to Saudi Arabia and several other Middle East oil producing countries.
Here is the link to the CNBC video. He talks about the massive investment of alternative forms of energy in the Middle East, presumably because they know their party will soon be over.


Ron Patterson

German Biodiesel Plants Find US, Canada Buyers

HAMBURG - Three German biodiesel production plants were recently sold to the United States and Canada and more are up for sale after biodiesel sales collapsed, a German renewable fuels industry leader said on Wednesday.

Well the talking heads would make you think that we had a huge build in Oil and gasoline stocks this week. A closer look reveals something else. Total Petroleum stocks actually declined from 981.6 to 977.9. Our old friend "Blending Components" rose 900,000 barrels to 114.5 million while conventional gasoline rose only 300,000 barrels to 114.8 million. Looks more bullish to me than bearish.

Oil prices back down below 98. Looks to be a ceiling of $100, then the sells start. Problem is with ceilings is once the break through happens it's all up from there.

Did anyone else see Boone Pickens on CNBC this morning? He mainly seemed to speak about the need for wind and solar. He did mention a couple of times about supply at no more than 85 million barrels a day. What I thought was new for him was his talking about problem of high oil prices is the amount of money leaving the US instead of high oil prices being a signal of supply constraints. It just seemed like a shift in language to me. My perception was that he was alarmed about oil supplies going forward, was pushing renewables, thinks oil will hit $150, BUT tried wording it all in a way that didn't make him sound like a doomer.

A link ...

Pickens Expects Oil, Natural Gas Prices to Fall


I thought the fall in price was a short term outlook. He was saying that oil would fall $10-15 in the second quarter but unless there was a recession, oil would hit $150 in the next two years. He did think natural gas was high and was shorting it, but again he was saying about how the price would fall once the cold spell breaks, again a short outlook.

Yeah, I saw him too early this AM.
He was talking to the Moolah heads on Squawk Box.

I don't think they get it when it comes to discussions of "physical" production limits. So he was trying to talk to them in the Moolah Moolah language that they understand. He was trying to tell them that the path we're on is unsustainable. That we can't keep shipping trillion dollar chunks of change overseas year after year and still remain as a viable economy.

The Moolah heads didn't seem to get it though. They kept asking why it doesn't make economic common sense to always opt out for what seems the lower cost option at the moment. In other words, if buying oil from overseas is "cheaper" at the moment than switching over to long term solar/wind, then why shouldn't we keep buying into the cheaper current option (keep buying foreign oil)?

I think Boonie got tired of trying to explain and decided to switch over to talking about football and seasons. Not sure where that was going.

Wondering if someone could help me out w/ a data request..

I'm looking for field-by-field production data of an oil province going back to whenever production started in that particular province. Ideally, data set should be comprehensive enough so that if I add up all the fields, I actually get the total production of that province. It would also be very helpful if the the province is lower 48, alaska, or North Sea. If North Sea (gosh am I picky here) I'd also like to know which fields are UK and which are Norway.

(I thought this would be easy to find, but my googling skills weren't up for it.)

With much thanks in advance.


Try here! Great stuff on the UK North Sea.

Thanks! That's just what I was looking for. What a great resource this site is.

(Although if anyone is aware of any similar data sets, I'd love to hear about those, too :) Thanks again)

Just a short note on US Crude Oil Production.

I track and chart the weekly US production data posted each week by the EIA. I thought it interesting to note that the ten week moving average of US oil production has dropped more than 250 thousand barrels per day since hitting a post Katrina in February of 2007, one year ago.

The ten week average high ending Feb 2 of 2007 at 5,324,000 barrels per day and the ten week moving average this past week was 5,050,000, a drop of 274,000 thousand barrels per day in one year.

My point is, I do not believe the EIA's Short Term Energy Outlook which predicts that US production will increase by just over half a million barrels per day by 2009. They are basing this prediction on new projects such as Atlantis and Thunder Horse. But Atlantis came on line last year and will ramp up to full production later this year. But US production is still going down due to depletion.

The EIA predicts that we will climb the down escalator faster than the escalator goes down. At present that is not happening, depletion is dropping production faster than new fields are increasing it.

Ron Patterson

I suspect that the post-Katrina US and post-Soviet Russian case histories are similar, i.e., a lot of the rebound in production was from oil not produced--because of hurricane damage in the US and because of political disruptions in Russia. After cumulative production gets to where it should have been, production resumes its downward trend.

In the conference call with the API, their chief economist confirmed, in response to my question, that the 2007 increase in US Oil Production was a rebound from problems in 2006 (Katrina & BP AK).


Hello Darwinian & WT & Alan Drake,

You three are not the only people saying something is not passing the sniff test.

Dave Cohen's latest scribe on EB does any excellent detail job of non-OPEC producers trying to race up the down escalator, and how maybe the EIA projections are too optimistic when the facts are given close scrutiny:

These are the good years

...Can the oft-delayed Thunder Horse save the day and contribute substantially to the supposed 350,000 barrels per day net addition from the Gulf in 2009? Your guess is as good as the EIA's, or ours. And be sure to make a ritual sacrifice to the Hurricane Gods. History tells us that a goat is the animal of choice.
I got a kick out of the above posted teaser. :)

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

a goat is the animal of choice

VERY good information !

We were debating if a FEMA official or an engineer from the US Army Corps of Engineers would be best.

Best Hopes for another 3 calm years.


Hello Alan,

LOL! We should make the maximum effort to hopefully appease the Gods by sacrificing lots of goats [I think CERA, Wall Street, and the D.C. have a few herds]--makes more damn sense than hurling beautiful virgins into a volcano. :)

A diligent search (by volunteers) has shown an absolute dearth of virgins in New Orleans !

We ARE known as The Big Easy :-)

So goats, FEMA or Corps it must be,


I like goats. Might I suggest El Presidente de Los Estados Unidos, o Senor Peligro? (Sorry, don't know how to make a tilde on a Windows machine.)

Dunno 'bout you, but since the 60-cent-a-litre average price of gas in July 2006, traffic seems just as jammed, buses just as empty, full or SUV-sized cars just as popular and the average number of occupants in most commuting vehicles remains at, um, one.

But out there in British Columbia they've decided that a carbon tax, hitting motorists for 2.4 CENTS per litre more this summer, represents a sufficient incentive to revolutionize consumer habits and help save the planet from overheating in its own greenhouse gas blanket.

Bingo!! While carbon taxes might actually change behavior if put high enough, most of the proposals we see seem more like feel good exercises which, at best, raise some revenue. The revenues can be used to cut carbon but the taxes have effectively no impact on consumer behavior. In any event, no one will propose high enough carbon taxes, assuming that anyone actually knows what level is required. The inelasticity of demand is just too damn high.

Rationing with cap and trade is the better alternative, not just at the producer but at the consumer level.

I disagree.

First, there is psychology. A message that using gasoline and oil is bad, a new thought for too many. This plays into all sorts of decisions (car & house to buy, vacation close by or far away, etc.).

Please do NOT discount the symbolism !

And secondly, the buggers have found a new way to tax me !! We all know that the first low tax will be followed by a higher tax, and higher still. Maybe I ought to buy that Yaris or Fit after all. And that new tract home 45 minutes from work looks less attractive.

Politics is the Art of the Possible.

Best Hopes for Doing SOMETHING !


Why the current U.S. gasoline tax is a fixed $0.XX rate per gallon instead of a percentage is beyond me. As inflation continues, the tax base decreases. The US gasoline tax should be converted to a percentage.

While politics is the art of the possible, what is currently possible is far from sufficient. It is clear that higher prices have done little to cut demand, unless we believe that the current high prices have little to do with demand. Prices keep going up and demand keeps soaring. Perhaps a major depression will make a difference but that is probably not a very good policy prescription.

At the federal level, there is probably a better chance of a cap and trade, at least at the producer level than higher taxes, simply because higher taxes are anathema to both parties and are perceived as a way to guarantee one's political oblivion. There is always hope, however, that Obama could change the paradigm. His followers certainly seem to think so.

Our whole system is set up for growth, so don't expect taxes that limit it - our politicians know no other way. Even if we go into a recession (the ultimate cause of which is a lack of energy, as seems the case now) they will try and grow us out of it rather than deal rationally with it.

We will eventually emit less CO2 ... nature will force it even if we don't - there is only so much affordable fossil fuel in the world, when it's gone it's gone.

If you live in a 'net importer' country it is probably wrong to assume that, in the medium term, your country will be able to afford the import bill for the rapidly dwindling 'net export' fossil fuels even without any taxes or trading schemes.

Hi Alan,

Thanks for your work and this post.

I've often thought that besides the "bad" message, which works to a surprising degree, actually - if there was some way that people could see a tangible benefit from taking the desired - (from our POV) - action.

For eg., a "People's SPR" - in other words, if there was a way that people could tie together their gasoline usage say, conserve it, and see the tangible benefit ---something like this. "As a group we've saved..."

Then, use that toward something sustainable.

Does this make sense?

In other words - I keep thinking in terms of the principle, so to speak, and have yet to come up w. examples, exactly. Except to say, it would be almost like the "commons" in reverse - creating a commons. Creating something that each person contributed to...and then could benefit from later...

I don't know how this would fit into the "co-op" arrangement.

I still have to wonder if a better incentive to get Americans to consider carpooling and other ways of stretching our VMT and dollars spent isn't just for the Public Voices to simply Ask Us to..

I do remember the reasons why we think the Leadership doesn't do this.. but the question remains.. would a plea to this as an act of Patriotism and 'being smart with our money' not have some success?

The last time an appeal to 'sacrifice for the good of all' was made by a US president, he was replaced by an actor.


When I suggest to coworkers that they turn down the heat and put on a sweater, they look at me like I'm crazy. When they can't seem to wrap that around their head, I suggest turning down the heat in the house, and simply piling more blankets on the bed along with a small space-heater in the bedroom. They don't see that as "doing without" so they buy it more easily, especially after you mention the space-heater. With homes as big as they are these days, there's no sense in heating the whole blooming house all night long when the only place you are is in the bedroom.

There are lots of things individuals can do to save. I've replaced all of the windows in my house with tighter ones, at only about $150.00 per window. I’ve added thick, insulated window shades. Simple stuff like that. Unfortunately, the image of entertainers like Elvis and Jimmy Stewart inspirationally going off to war are now replaced by singers telling us to 'use less toilet paper.'

People will start to do stuff like that when they have to.


I have to say that the Reagan angle is a lame excuse. After all these years, and all the Snarking of the Reagan Cheerers, it's still obvious which prez had a pair, and which one was just better at acting as if he did. Carter was klutzy in a few ways, sure, but has been Heroic where it counts more than a few times..

As far as 'They will do it when they have to..' well the point is that we 'Have To' right now, but the call is not out there making it clear. Yes, I know you meant 'Have To' in terms of 'Forced to', but I'm not going to accept 'realpolitik' and shrug my shoulders and go 'oh well'

There will be openings here and there for the ideas to get through, but sadly and exhaustingly, it has to be as persistent as the whinnying 'why bother' machine that Fox and their pals are looping every hour, paid for by blah-trex and goo-goo berries.

Sounds like you've done a bunch of steps. Glad to hear it!


ps; a Supporting voice for Carter's role as a US Statesman

"I picked up Jimmy Carter's new book, Palestine: Peace Not Apartheid at San Francisco airport, and zipped through it in a day. It's a good, strong read by the only American president approaching sainthood. Carter lists the outrageous treatment meted out to the Palestinians, the Israeli occupation, the dispossession of Palestinian land by Israel, the brutality visited upon this denuded, subject population, and what he calls "a system of apartheid, with two peoples occupying the same land but completely separated from each other, with Israelis totally dominant and suppressing violence by depriving Palestinians of their basic human rights". "


(From another Robert Fisk(e))


Bob, do I take it that you think I dislike Carter? (Sorry if I misunderstood.) I voted for him and continued to respect him during and after his presidency. He did graduate from Annapolis and was a submariner (made in Connecticut, I might add.)

I am too cynical to believe that any large scale solution will work, simply due to the fact that we no longer have enough surplus energy to support an empire. Back when we still had a surplus, we could hear about ‘Morning in America’ till the oil tankers came home and still be as spendthrift as ever. Now this is no longer an option.

Carter’s Cardigan, along with low interest loans to insulate homes and ethanol augmented gasoline, didn’t catch on, not because these were bad ideas, but it was not critical that we do so. There were less costly (in terms of self sacrifice) alternatives. So when I say that people will change when they have to, I literally mean when there are no alternatives. What was that Churchill said about Americans doing the right thing after they have exhausted all other possibilities?

Take care, Jon.

"Coworkers"? Would these be the same coworkers that keep portable space heaters under their desks, to heat the air that the a/c has cooled, because their heaters have heated it, because the a/c has cooled it, because their heaters have heated it, because the a/c has cooled it, (etc., etc., etc.)?

Lol. Fortunatley space-heaters are banned in the building. But it's pretty typical in an office environment for someone to have a space-heater because their feet are cold instead of wearing pants instead of a skirt... I know that sounds like a stereotype, but I've never seen a guy use a space-heater during the summer at the office.

This is opposed to me, where I love to have a fan on me, especially on my feet, as it seems the best way to keep me cool.

Of course, these same people scoff at the idea of turning up the temperature in the summer and having a fan blow on them.. I use the A/C to keep it below 80 and keep the humidity down, and fans to actually keep me cool.

Hi Durandal,

re: "because their feet are cold instead of wearing pants instead of a skirt..."

I wonder if it might become part of a chic new corporate culture for persons-who-wear-skirts to be given (or bring their own?) knee-high woolly socks. How long before the investment pays off?

And a second rate actor at that!

Coal on Fire

Coal futures have soared 83% in the past six months.


From the Drumbeat story:

Crunch time for South America's gas supplies

Many of the possible alternative energy sources to FF produce electricity, however this requires the use of lots more copper ... but production of the copper requires use of fossil fuels if the weather changes and hydro-electric, for example, isn't enough!

Scant supplies in both countries mean electricity generators have switched from gas to diesel, which is about three times more expensive. "Argentine gas is history

A kind of 'Liebig minimum' cascade ... with an ELM at every stage!

"very real risk of production problems" for Chilean copper this year as gas shortages are compounded by low rainfall, which will affect hydro-electric production, raising the prospect of power cuts.

The "Catch 22" that we are starting to see all around the world, for vitally important fertiliser as well as strategic minerals!

Maybe adequate quantities of the alternates aren't possible?

Maybe adequate quantities of the alternates aren't possible?

Good old fashioned conservation is always an alternative.

South Africa: Householders Use Less Power

ESKOM has seen a 220MW reduction in electricity consumption by households since load-shedding hit at the beginning of the year, according to Eskom consultant Barry Lipchin.

Load shedding means power cuts. It's not obvious to me that the article isn't saying that they've cut peak consumer demand by 220MW because the end users physically don't have it. Maybe someone with knowledge of ESKOM can comment?


Load shedding is:

* A last resort measure. Only when all other options at its disposal have been exhausted, such as running its power stations at maximum capacity and interrupting supply to industrial customers with special contracts, will Eskom cut supply to other customers.

HA! sounds like they've cut because it wasn't AVAILABLE to the households

is it still called conservation when it is forced?

Hmmmmm....what's that term - ah yes, Demand Destruction

See, the markets are working perfectly.

the market in South Africa is heavily distorted by the government. this is not a market problem.

Good thing no other governments distort the market.

"HA! sounds like they've cut because it wasn't AVAILABLE to the households"

no it doesn't. who doesn't believe that consumers are using less because of the blackouts? it's safe to assume this is conservation and not the result of having load shedding.

Good old fashioned conservation is always an alternative.

Wrong - conservation is just a short term way of using less, the non-renwable resource just runs out more slowly - using less is a recession, not considered an alternative by most governments in the world, IMO it is not an option any country will aim for, but they may be forced to consume less because of supply constraints ... which isn't conservation!

the market in South Africa is heavily distorted by the government

Yes - the normal way of the world - most markets are not free - it's what the world has to increasingly deal with, get used to cartels for anything in constrained supply! ... oil, gas, coal, wheat, corn, meat, debt, uranium, phosphorus, indium, fresh water, sensible leadership, etc. etc. etc. come to mind!

john15 your understanding of economic theories does not apply precisely to the real world - watch how it works, see how many economists are correct with their predictions of the future, and think ... carefully!

conservation is not short-term.

john15 your understanding of economic theories does not apply precisely to the real world - watch how it works, see how many economists are correct with their predictions of the future, and think ... carefully!

I won't even dignify that with a response.

Upthread there is discussion of small scale solar....here's some new big stuff in the pipeline (announced today). Apparently would be the biggest in the world if currently operational:

Abengoa Solar to Build the World’s Largest Solar Plant

Arizona Public Service Co. announced as partner

280-Megawatt plant will sell around $4 billion in clean electricity over 30 years.

The Solana Generating Station will use solar trough technology coupled with molten salt thermal energy storage. The plant's rows of mirrors, thermal storage, generating equipment and service areas will cover nearly three square miles.


The plant, scheduled to go into operation by 2011, is located 70 miles southwest of Phoenix, near Gila Bend, Arizona. It will sell the electricity produced to APS over the next 30 years for a total revenue of around $4 billion, bringing over $1 billion in economic benefits to the state of Arizona.


The Solana Generating Station will have a total capacity of 280 megawatts, enough to power 70,000 homes while avoiding over 400,000 tons of greenhouse gases that would otherwise contribute to global warming and climate change.

If you have a Wall Street Journal subscription the story is here.

Funny thing is, about a year ago, the wife and I spent a few days driving around the Navajo Nation in northern Arizona.

My thought then was, How are these folks going to support themselves on this near-lunar landscape post-peak? But it seems they have some possibilities.


Wikipedia says the reserve contains 26,000 square miles. Say, they decide to use 3000 of them for solar power. That's 1000 plants like the one above with a total peak output of 280 gigawatts. That's a lot of power. Roughly 10 times the peak output of my home province (Ontario).

Not that the economics look good in a general sense, but that reservation also produces a lot of coal, at least some of which fires the coal fired power plant at Page Arizona. In addition, I believe some of the Paradox Basin oil and gas production is owned by the Navaho Nation. In terms of fossil fuel energy, there are much worse places to be.

Thanks for the link to a great story. For those without subscription, here is the site of the makers
Abengoa Solar :: Solar Power for a Sustainable World

We should have a really good handle before long on the costs of solar energy on a utility scale, with a number of different technologies coming through.

The use of molten salt technology for storage is particularly exciting, as it is one of the front-runners.

Personally the Ausra system sounds cheaper to me, as it trades in some efficiency for flat mirrors instead of curved, and should be cheaper.
Not too sure about their projected means of storage though - steam.


If you happen to visit the energy blog:
The Energy Blog

look out for posts by steve on solar matters - he is an industry insider, who is always happy to help and always specifies his degree of confidence - even an insider obviously has not got access to all the information.

How is electricity stored and used at night? It can't be via batteries. And on a smaller scale, how do those off the grid use their solar power at night?

The story says Thermal Salt, so stored as heat. The heat then used to make steam I would imagine and turn turbines. That is the most efficient way to store solar energy, not converted to anything at all. The solar collectors are collecting heat in this instance.

The Solana Generating Station will use solar trough technology coupled with molten salt thermal energy storage. The plant's rows of mirrors, thermal storage, generating equipment and service areas will cover nearly three square miles.

"molten salt thermal energy storage" Essentially, they heat up a bunch of salt, and they keep it insulated and use that heat during the evening, allowing for a near-constant output. Also remember that night-time energy usage is a good bit lower than daytime energy usage. :)

Theres some retro craze and being asleep at those times!

What? You never heard of dancing by the light of the moon?

One thing I like about solar thermal energy: the producers often deal with intermittency issue themselves via heat storage or an alternate heat source.

Unlike solarvoltaic producers and their promoter who are often seen lobbying the government to require utilities to accept their electricity when its available and deal with the intermittency issue for them.

..That the 'intermittency' of Solar PV will cycle on almost every day to time right along with the Peak Electric Demand seems to me would be more blessing than curse..

Why shouldn't that be lobbied for as a regular, recurring source?

The utilities will have a much heavier set of Intermittencies to be dealing with. One regular input that you don't have to dig up will become a welcome gift, as it has been for all of our history.

Yeah,with it's mirroring of peak load for solar the South-West of the States is kind of like a reverse of 'New York, New York' - if it can't make it there, it can't make it anywhere.

The costs for this set-up do sound worryingly high though, and personally I am more hopeful of Ausra being more competitive.

$4 billion in clean electricity over 30 years
capacity of 280 megawatts, enough to power 70,000 homes

This of course assumes electricity costs remain the same for the next 30 years and that Arizonans still need/can afford 4 kW per home. Any chance?

As long as we are extrapolating current reality into the future, Arizona has a growth rate of 3.5% and a headcount of over 6M. Thus, every year requires one of these to be built just to accommodate growth. Best to get started yesterday.

It gets tricky when you are calculating the power from a renewable source as they don't work all the time, most notably in solar at night!;-)
So you get a rated capacity which is the 280MW and you take out for night-times and for when the sun is not high up in the morning and evening and you end up with the power that you get.

The journalist did an unusually good job in this case, they usually know nothing about it and would just say this would power 280,000 homes, allowing 1kw for each home.

So with the losses he is in the right kind of ball-park, but even this may be a bit high, as even at the latitude of Arizona winter solar incidence is only around 25% of that in mid-summer, with shorter days and the sun being lower over the horizon.

The storage won't affect this, of course, as it still has to be generated, but it should help make solar more practical.

What is not clear from the article is whether they are going to put in enough storage to try to do the whole job and generate power 24 hours a day, or whether they are going to go for the much cheaper option of extending the power for an hour or two at night, and not bothering later when grid loads are lower anyway - I suspect the latter, and as the biggest load in Arizona is going to be on a hot day for air-conditioning they have a real shot at making it work cost effectively.

Hope this clears it up for you!

The only correct measure for such plants would be GWhs/year. By visiting the company web site, the claim is that their 50MW trough plant under construction in Spain is going to produce 114.6 GWh per year. Extrapolating this to 280MW gives 642 GWh/year. x 30 years = 19253 GWh. If the plant is indeed to produce 4bln. worth of electricity, this translates to $208/MWh or 20.8c/kWh

Something doesn't bode well, as when I'm looking at bloomberg the wholesale price of electricity for peak power in West Coast is in the order of 65-75$/MWh. I don't believe AZ is so much better place than Southern Spain, so what gives? My bet is that they used retail prices when calculating the value of the electricity, giving artificially higher value of the future revenue stream.

In some respects Arizona is a worse place than Spain for solar thermal. Over at Energy Blog, steve is in the solar thermal industry, and informed me that they have to maintain much more in Arizona from the data he has seen (he is based in California) as the high winds and dusty environment scour the mirrors.

Talking about maintenance, you have just put in build costs - you also have to budget for the 85(highly skilled) people they intend to keep permanently on site - I'd work out the new cost per kWh, but I am sure I would loose a decimal place!

My guess is that their revenue stream may be right though, and the utility has to take power at a high price due to meet targets for renewables, IOW it is mandated, not economic.

Having the construction completed at all in the next three years assumes:
1. no infrastructure destruction due to war
2. no social unrest due to food/water/resource shortages
3. no disruption due to disease epidemic
4. no delays from cost-overruns

Having the construction completed at all in the next three years assumes:

I forget that good news always has to be rained on here.

The technical term for this is "reality".

"The technical term for this is "reality"."

that's what some here call it.

Well, let's bring out some sunshine, then.

Suppose that each one of these events is independent, and the chance of each happening is 2%, 1 in 50. The chance that at least one will happen is only 7.8%. The chance that none of them will happen is about 92.2%. That's not too bad, now is it?

Of course it doesn't look as good when we assume that the events aren't independent, or use a more realistic percentage like 5% or 10%.

But it's not raining anymore. Just partly cloudy. And I'm sure those storm clouds on the horizon will wait until we're ready. :P

You want to assume a 5-10% change that a small solar plant in Arizona is destroyed in a war, then the same again for social unrest and an epidemic?

That's pretty pessimistic. If insurance and funders thought the chances were anywhere near that, this thing would never get off the ground. I expect that the people taking the risk on this see those problems as extraordinarily unlikely - near 0%. I would guess.

I'm feeling lazy - give me the good news on how many of these we'd have to build and what that would cost, in order to build your dream of PHEV's in every garage and BAU, all while energy supplies get more expensive driving costs up?

"in order to build your dream of PHEV's in every garage and BAU"

who said BAU? who said a PHEV in every garage? I didn't. that's the big straw man of all straw men here. not everyone has to adopt these. enough people have to to make a difference but that easn't necessarily everyone and all at the same time.

Maybe Phoenix will do well after all. I wonder if Kunstler will mention this at all? did he mention the new light rail in Phoenix either?

Given the scope of the first Phoenix Light Rail line (20 miles) and the six proposed extensions (37 miles) it is a drop in the bucket for 4+ million people !

By contrast, Mulhouse France (pop 112,000) is scheduled to have 3 tram lines of 12.7 miles by 2011 and plans for more after that.

The town of Mulhouse will offer trams every 6 to 8 minutes at rush hour, Phoenix every 10 minutes.

France, population ~62 million, will build 1,500 km (a bit over 900 miles) of new tram lines in the next decade, on top on an already extensive network.


Alan- can't we just celebrate a victory. light rail is what we alway here about at TOD. can't something be a good development once?

Output rose to an average 2.957 million barrels a day from 2.954 million barrels in December, Mexico City-based Pemex, as the company is known, said today in an e-mailed statement.

Huh, does that mean Mexico's previous declines were voluntary?

No, I think it means they had some really bad weather that shut in production.

Mine was not a serious question but rather snarky commentary on recent discussions of saudi production fluctuations.

If you check the PEMEX site production statistics for January 2008 you might find that Mexico's total liquids production declined about 10,000 barrels month to month.

Mysterious to me is that with oil hovering around $100. a barrel; the cost of resurrecting dry or abandoned local oil sources (within the US); the cost of extracting every drop is rarely mentioned as being more cost-effective at this time. Hopefully, if ever done, this will help to somewhat eleviate the financial problem- albeit temporary perhaps- and you never know: someone may hit a gusher!

This is happening here in my neck of the woods (Southeast Ohio) where oil production peaked 110 years ago. The number of wells drilled has nearly doubled from 2004 to 2007. Scores of wells that had been mothballed in the late 1980's are being pumped again. Natural gas producers that used to have difficulty "disposing of" small amounts of oil byproduct are now happy to install tanks and have a truck come by to pick up the oil once every month or two.

The problem is that most of these new wells typically produce 2 to 10 barrels per day. I've heard of one that produces 80 barrels a day. The old stripper wells that had not been used in 20 years are producing 1/2 to 1 barrel a day just like when they were last pumped in the 1980's (sorry no abiotic filling of these wells aparently). These are very nice turns of events for a local person who operates an old, pre-existing well. He turns the pump back on and for $5 to $10 a day of operating costs, he gets a check once a month for $3000 when the oil truck comes by. But in the big picture, it's only a drop in the bucket.

I've been trying to find data to see if Ohio has been able to reverse it's 110 year decline but can't seem to find it.

Myabe we will find out that we can use in use or abandoned oil wells for geothermal energy.



Just saw Denis Gartman on Bloomberg say that he thinks all the US auto manufacturers are in big trouble right now because they can't source enough platinum for catalytic converters. The recent power supply problems in South Africa have shut down platinum mines and turned the existing tight situation into a clear physical shortage he says.

No catalytic converter = no finished car.

All the more reason why platinum based fuel cell cars are bunk. I'll be sure to turn in my catalytic converters for some cash, and replace them with straight pipe. :)

Hello Durandal,

I saw the smiley emoticon, but still wanted to comment.

It might be the opposite effect: a govt emissions legislated Liebig Minimum to get older vehicles quickly off the road by the multi-millions. When your cat-converter rusts away [or is stolen!]--if you cannot ante up huge sums for a new replacement--sorry, tough-luck, too bad, no choice but to park your vehicle as your vehicle registration tags and auto-insurance coverages are yanked.

IMO, the govt should prepare us all for this by ramping up transport substitutes: Alan Drake's RR & TOD ideas, bicycles, electric scooters, buses, carpooling, etc, and 50cc ICE kicker motors with a $1000 cat-converter, that can be easily taken inside to prevent theft.

Somehow, I can't imagine a traffic logjammed urban cluster***k going back to NO Pollution controls until most of the present multi-millions of ICE-vehicles are long gone--otherwise the smog choked pedestrians and bicyclists will be justified in disabling most personal, old, ICE-vehicles; imposing their own social Liebig Minimum.

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


dumb question here - but is there really that much accessible platinum in a catalytic converter then? if so how come there isn't ore theft of these things?

There are tiny amounts in each converter, and extracting it would be no job for an amateur.

Stick to stealing the whole car, or some copper! :-)

"The component is the catalytic converter, which has been a mandatory part of exhaust systems since 1975. Police across the country say they have seen a dramatic rise in thefts of the components in recent months."


Well I'll be blowed!
I'll have to change my post-peak business model! ;-)

I'll be sure to turn in my catalytic converters for some cash,
...replace them with straight pipe. :)

Someone else in the middle of the night may beat you to it.

I think we will find many laws will not be enforced when small gov's run short of budget money.

Car inspections will be a casulty of it for example. No one will try to get it inspected, if it will cost them $500 to come up to spec so to speak.

That expensed will be put off till..... they get stopped...

The towns won't be out trying to enforce minor things like that, The may have their hands busy with... other things.

Interestingly enough, there is no smog-check or inspection where I live. However, an inspection can be performed by a police officer when you're pulled over by something else, and can make for a quick revenue generator... I plan on seeing more tickets written for non-compliance on vehicles.

You can have all of our cat convertors from the UK.

Thatcher the witch decreed that we had to have them, even though we have no smog climate [presumably due to some sleazy lobby backhander]. We have been wasting fossil fuel and costs needlessly for 15 years now..

Huh? No smog climate? What was it killed thousands in London in 1956 then?

I have a bad chest and the fumes are bad enough anyway in the city.

I prefer to keep breathing, thanks.

14 days in 1956 was not caused by nitrous oxide from car exhausts was it? It was fog and localised coal smoke.

You did know that really??

Converters arrived in 1993. We breathed fine before and after 1993.

Yes thanks. I was around in 1956, and am well aware of the history of that event.

You are still under-emphasising air-pollution issues, we don't want them to be any worse.

It wasn't Thatcher it was the EU. Car exaust was never a problem in Britain. The sun was never hot enough to oxidise the fumes as in hotter places. Plus the climates wet and windy. The EU never misses a chance for a piece of beaurocratic lunacy.

You missed out a few 'usuallies' in your statement.

As in: 'The sun is not usually hot enough to oxidise the fumes'
And: 'The climate is usually wet and windy'

The sun coming off the tarmac in a heatwave, which we are told are more likely in future, does a pretty good job of heating things up.

Plus the fact that in Britain in places like London we live at far higher densities often in close proximity to the traffic, and that many of our cars are diesel, which have particulate issues, although I don't know if the catalyst is the bit that deals with that.

If you haven't been here, trust me, the fumes are bad enough, although no match for Bangkok.

Bangkok is getting better, by the way. And enjoying a remarkably cool February. I hadn't even thought about fumes until you mentioned it. No match for Mumbai or Beijing.

Interesting because I though to oxidise exhausts in to smog the sun had to considerably more powerful than it gets at out latitude. I live in the North where we never had issues with fumes. I have been to London a couple of times recently and don't remember fumes bieng a problem. Perhaps bieng a tourist my mind was elsewhere.

If you want to borrow my lungs for a couple of weeks you might feel differently.....

I understand the EU part. Our leaders at the time did choose to follow this unsuitable law.

can they use Palladium instead?

It won't help much if they try, John:

World demand for palladium increased from 100 tons in 1990 to nearly 300 tons in 2000. The global production from mines was 222 metric tons in 2006 according to USGS data.[6] Most palladium is used for catalytic converters in the automobile industry.[7]


From the frying pan into the fire! In any case, you can't re-engineer overnight - substitutability happens over the medium and long term, if it happens at all, and this one wouldn't be easy, platinum is darn expensive, and they would not use it if they could figure out any way not to.

A lot of charts look like this just now...

From the frying pan into the fire!

you only gave production figures, what about above ground stocks/increased recycling brought on by increase palladium prices? we haven't even talked about companies finding out ways to use less palladium.

With production figures and the prices you have been linked to you seriously think that there are great heaps of palladium or platinum laying around waiting to be used?

And I have already discussed substitutability - both are so dear that if they knew a way to reduce it they already would have done.

That does not mean that over a period of years no solution could perhaps be found, but it does mean that there is unlikely to be a quick fix.

I enjoy some of your posts John, and think that your attempts to look on the bright side are often a useful or at least pleasant counter-voice to the tone of much that posted here, but please try to think things through a little better than this before you post.

With production figures and the prices you have been linked to you seriously think that there are great heaps of palladium or platinum laying around waiting to be used?

YES!!! we have only begun to see a rise in thefts of copper and some people cashing in gold. most people probably can't spell platinum or palladium yet much less quote a price. I expect when we are at the height of the metals craze(when everyone CAN quote the price and spell the words) we'll see lines at the coin store and metal recycling centers. we aren't there yet.

40% of the worlds palladium come from S Africa. You are going to have the same supply problems as platimum. And I really don't think people hocking their jewlery will make much of a difference.

You know, 2 minutes of googling and you can find this stuff out for yourself. Unless you like looking like an idiot that is.

hey idiot, I spent 2 minutes googling where most platinum production is and 80% of it is in South Africa. that means you most likely have a better chance of getting some palladium than platinum if that's what you want to use. plus palladium is a lot cheaper.

hocking jewelry won't matter now, but I didn't saw it would. palladium is has just started replacing platinum in jewelry because of the price difference.

Why can't platinum be recycled. After all unlike fuels it doesn't disappear once it's used. When cars are junked the platinum can be retrieved and used in new cars.

It is - what on earth made you think it is not?

If it was the demand for new platinum should be small.

Not really. For a start platinum is not just used in cars - see wiki.
But it is it's biggest use.

The car fleet is still expanding all over the world, and a lot of old cars without cats are still coming out of the fleet.

And then, production is only of the order of 300 tons per year!

I know that each car only uses a small amount, but still, that 300tons would only fill an area the size of a shed!

That is for millions and millions of cars!

When they first proposed used platinum and palladium for cats I never thought it would work, never imagined they would be able to stretch the supply enough, but they have done wonders.

Thanks for this one leanan;

Monbiot: Juggle a few of these numbers, and it makes economic sense to kill people

"Britain's official approach to climate change puts a price on human lives. And the richer you are, the more yours is worth."

I wonder if anyone will take it into their own hands to reduce carbon emissions this way.

It may make people start to think twice before aspiring to be "Filthy Rich".

"economic sense" is sometimes an oxymoron, along the lines of "military intelligence".

Dissecting People's 'Predictably Irrational' Behavior

Predictably Irrational explains how the reasoning behind those decisions is often flawed, because of the invisible forces at work in people's brains: emotions, expectations and social norms.

"Our willingness to pay, it turns out, is not just a function of the utility of the pleasure that we expect to get from [the item], it's also influenced by all kinds of irrelevant factors that change our psychology but not our economic reasoning," Ariely says.

nuke the third world and create a nuclear winter to buy time in climate change, and reduce population demand drivers... sounds like something that people somewhere will be suggesting at some point in the future

Proposed $3 billion ethanol pipeline would link North Iowa production to Eastern markets:


Supply fears as oil surges

A fairly hair raising report on ABC (Australia) tv last night (oz time). This was broadcast in their daily news magazine show, a flagship news program for the network.

The ABC has been across peak oil for a while now with numerous news stories and their documentary "Crude: the incredible journey of oil" which included a discussion of peak oil.

Still it's quite something to see a Minister in the government saying that unless Australia finds a large new oil precinct soon (2015 was the date he gave) Australia faces dire consequences (he sounded almost doomerish).

Sadly despite the efforts of the ABC most people in OZ seem oblivious. If they are worried about anything it is climate change.

Anyway on the bright side if we have no oil in Oz by 2015 we'll have no trouble meeting our green house gas emission cuts (the big news in Oz today is the Garnaut report on climate change that Leanan linked to above).


bados said:

Anyway on the bright side if we have no oil in Oz by 2015 we'll have no trouble meeting our green house gas emission cuts (the big news in Oz today is the Garnaut report on climate change that Leanan linked to above).

Not when they start turning some of their coal into oil it won't! - and that is what they will do.

How long does it take to build a CTL plant anyone?

I suppose I'm extremely skeptical of any large scale coal / gas to oil schemes actually getting up. By the time people really wake up to scarcity and what it means, it will probably be too late, and until then the the greenies, god bless 'em, will fight tooth and nail against any ramp up of the industry. I can't say I disagree. Solar/wind/tidal/geothermal is the way forward for Australia. We have scads of all of them. Once a real price is applied to carbon maybe we'll take exploiting them seriously.

But anyway CTL. I did some back of the envelope calculations a year or two ago based on EIA prices for CTL (sorry no link - these figurings are a couple of years old so probably out of date anyway). They placed a cost of about $60,000 USD per barrel for a CTL plant eg to build a 100,000 barrel a day plant would require a capital investment of $6 billion dollars. So for Australia to move from oil to CTL would cost (at least) $60 billion USD. It just isn't going to happen. CTL will only ever be on the margins.

Then of course there's Paul Krugman's take. And he actually studied this stuff and not just on the back of an envelope, either. He's talking about CTL and shale-to-oil here:

Eventually people began talking about “Weitzmann’s Law,” which was that the cost of alternatives to conventional crude is 40% above the current price — whatever the current price is. Seriously, don’t believe the hype: history says that these things always fall short of expectations.


Hmm...sounds like in Australia they will be going the LNG route for transport needs, but I understand that the resource, whilst substantial is not vast, and they are currently exporting it in large quantities.

Has anyone got more precise information?

I did some back of the envelope calculations a year or two ago based on EIA prices for CTL (sorry no link - these figurings are a couple of years old so probably out of date anyway).

The information is still available. I linked to it in my corn ethanol economics post:


It also has info on GTL and BTL, as well as ethanol plants and oil refineries.

Kim Stanley Robinson author of the Mars trilogy is speaking this evening at OSU.

Who Owns the Sky?
The Tragedy or Triumph of the Commons


Here's one of Yahoo!'s top stories: Closet Gas Hogs. And the worst gas hog? "Anything on E85."

What you need to know is that E85 reduces the fuel economy of any vehicle burning it by about 25 percent. For example, the grand-prize glugger of the full-size-truck segment, the Dodge Ram 1500, gets 12 mpg in the city and 16 on the highway. Fill ’er up with E85, and the fuel “economy” falls to 9/12. That’s right, a single-digit mpg number, something the average person only experiences in Uncle Dwayne’s RV or when renting a U-Haul truck.

Pres. George Bush recently announced a proposed mandate for 35 billion gallons of ethanol production by 2017, so you’ll probably see more vehicles so equipped, regardless.

We're chugging oil like there's no tomorrow! That's okay, we can just burn our food as well.

Oil at $100 May Look `Cheap' Within Five Years

``We may hit peak oil in the course of the next three, four or five years, in which case $100 oil will look somewhat quaint,'' Alfa Bank's Moscow-based Head of Research Ronald Smith said in an interview with Bloomberg television.


Additional acres of corn planted in 2007 meant declines in the numbers of acres planted with:

Spring Wheat
Oil Seeds
Other Field Crops


You were not able to pull corn out of thin air. World food prices went up as a result of corn for ethanol displacing both livestock feed and crops for human consumption. Rumors to the contrary abounded.


As corn prices rose after corn was converted to ethanol more wheat was used to feed livestock. Recent forecasts indicate that bushels of wheat available for human consumption might rise slightly, while additional plantings of wheat for livestock may grow much faster. Worldwide wheat inventories are very low. Of course if wheat or soybeans are more desireable to farmers as a cash crops there will be a spike in corn prices and trouble for ethanol farmers.


The large drop in the number of acres of soybeans planted may coincide with the increased consumption of corn for ethanol production. Soybeans were used for vegetable oil and the leftover meal was used as livestock feed, including some poultry feedstock.

I was just reading quietly in my living room and got throwing out. American Idol is on and the family is glued to the tube. I am 40 pages into JHK new book “World Made by Hand”. This is a must read by the TOD crowd. Many of the topics that are covered weekly here of the TOD are already playing out in the book. It is really surreal for me being an upstate NY guy as I have driven through some of the towns and routes mention in the novel.

On National Geographic channel in the UK Thursday 21st:

Megastructures: Deep Earth Drillers.

Keep an eye out for it.

It deals with the prospects for geothermal around the world.

You need hot rocks, water, and fissures in the rocks to allow the water to percolate.

Areas like Iceland and the geysers in California have resources close to the surface, but to use geothermal more generally we need to go deeper, and put the water down a couple of holes and draw the steam up through another.

They are trying to develop this at Soultz in France, but there is a blockage, source undetermined, between one of the water in bores and the steam out bore, so it might only produce 50% of the projected power, which might discourage further investment in geothermal technology.

With present drilling technology you basically grind the rock away, and drilling really deep is both slow and expensive.

There is a new technology called hydrothermal under development for the last 30 years, now coming near to possibly being ready to deploy.

You blast the rock with very high temperature water, and nothing comes into contact with the rock so it causes little wear, so if it can be made to work would allow drilling much faster and to depths of perhaps 15 kilometers.

This would change the areas you could use geothermal in from being in many places, which it would be if the level of technology in Soultz works out, to being virtually in all regions of the world.

I hope this gives you the gist of it, if you are unable to see the actual program.

This appears one of the most hopeful resources we have for base load electricity, and does not suffer the intermittencies of solar and wind.

I suspect deep drilling for anything - oil, heat or whatever - has to be done at a PROFIT.

If it costs, say, $200 million to dig the hole you need to get $200 million+ of something out of it in some kind of meaningful timescale - as usual it's about flow rates, not the reserves of the resource (in the case of geothermal the potential reserves are undeniably huge but currently the actual reserves are minute!)

Beware of researchers touting for funds to keep them in a job - in my experience they will always sound optimistic even when there isn't a hope in hell!

Be skeptical - it is the scientific way - and IMO it's the only way we can possibly come to a good outcome. We need governments to admit to problems in a timely manner then maybe enough resource will be allocated to find viable alternatives. At the moment this isn't happening.

Absolutely - I don't really have the same difficulty many here do anyway, who would seek to generate all electricity from renewables, as base-load form the wind and sun are not easy.

Since I am happy with nuclear energy I don't have that problem, and it can be done almost everywhere as opposed to the more regional nature of geothermal barring breakthroughs.

Just the same though I am by no means adverse to diversifying supply, as long as, as you say, costs are somewhere in the bounds of rationality.

Unfortunately drilling costs are going through the roof, but at least geothermal does not suffer other than in the most local sense to a particular well from the resource depletion issues of oil and gas, so it they can get a handle on some problems of the rock sufficiently fractioning such as they have had at Soultz at some price point for oil it must get worth while.

One interesting point from the program is that it is apparently very cheap where in use - I had rather lazily assumed it might be some Scandinavian, heavily subsidised thing, although of course the present wells are at much lower depths than they would have to be if the technology were more widely used.

There are interesting developments in low-temperature geothermal, where basically lower temperature equals shallower, for instance in Alaska:
Geothermal Power in Alaska Offers New Renewable Energy Model - Chena Hot Springs Resort - Popular Mechanics

An MIT study gives some idea of the scale of the resource in America using technology at the level of Soultz, ie without major breakthroughs:
Hot Rocks: Tapping an Underutilized Renewable Resource: Scientific American

Based on costs alone (that is, how much of the geothermal resource could be tapped at prices as low as 6� per kilowatt-hour, the typical price of electricity from coal), more than 100 gigawatts of geothermal power could be developed for just $1 billion spread out over the next 40 years—the price tag of just one advanced coal-fired power plant and one third the cost of a new nuclear generator. "This is a very large resource that perhaps has been undervalued in terms of the impact it might have on supplying energy to the U.S.," says lead author Jefferson Tester, a chemical engineer at M.I.T. "Geothermal is the one sort of forgotten orphan here that could be much more compatible with our existing grid system than other renewables."

Our level of investment in this technology's R & D is far too low IMHO considering it's potential.

However, Australia is also likely now to move ahead with it's plans to develop it's resources, some of the best in the world:

When that documentary comes your way I think you will find that, for a change in such documentaries, it is by no means mindlessly optimistic, but fairly lays out the difficulties and hurdles ahead.

Alan, in case you happen to read this, a thought has occurred.

As you might have guessed, I am a bit twitchy about your suggestion to lay a power cable between Iceland and the UK to use their geothermal resources - I get a sharp stabbing pain in the wallet whenever I think of it!

It occurs to me that you may not be aware though that the UK has excellent geothermal resources itself, given the use of technology such as is being deployed in Soultz, and they even carried out some exploratory bores in the 70's, but the rock did not fraction as they had hoped at that location, oil and gas prices dropped and they gave up - costs were estimated as high, too:

According to an assessment by the department's Energy Technology Support Unit the cost of electricity from this source could be anything between 12 and 60 pence per kilowatt-hour. This would make it between 4 and 15 times as expensive as power from either coal-fired power stations or the new breed of combined-cycle gas turbine plants.


Here is a brief summary of more recent work in this country, which centre on getting lower temperature steam from brine laden rocks for heating, not generating electricity, still a potential useful source of energy:

A recent re-evaluation of the chemistry of mine waters encountered in the late 1980s in fluorspar workings in the North Pennines suggested that regional-scale fractures might in fact be transmitting brines from deep within the granite: something they could only do if they were permeable.


I hope this is of interest to you.

I am a bit twitchy about your suggestion to lay a power cable between Iceland and the UK to use their geothermal resources - I get a sharp stabbing pain in the wallet whenever I think of it !

You will be EXTREMELY pleased to discover that you have to pay NOTHING for electricity during blackouts.

Iceland is about 2/3rds hydro & 1/3rd geothermal electrical generation today (plus about 800MWt geothermal heat for space heating & hot water).

They have tremendous wind and summer hydroelectric potential, as well as wind. They can supply the daily summer peak demand, preserving NG, in Scotland during the summer. Their hydroelectric power can buffer wind during the year, again meeting peak demands.

An extra 2 GW of power during peak demand would save quite a bit of natural gas. And peak power always sells at a premium :-)

Best Hopes for keeping the power on in Scotland,


I rather hoped you might focus on and find interesting the information I assembled for you on geothermal in the UK, but never mind.

Later, when I have time.

Live, superheated steam is a viable & proven technology. Hot rock is still in the development stage. I will have to read the links to see which type you are talking about.



I finally got a chance to read it :-)

I think the focus should be on space heating (and hot water for domestic or industrial uses), That is a MUCH less steep hill to climb.

Reykjavik gets it's hot water (800 MWt) from 3 sources (a few years ago) and only one generates significant electricity, yet all three are used. The storage tanks above the airport store water at about 90 C.

Hot water radiators may not be sexy, but they work !


Shown again in the UK next Wednesday at 5pm


5.00pm Megastructures: Deep Earth Drillers

Geothermal energy is one of the planet's cleanest forms of energy. Follow teams in Iceland and California as they dig deep into the Earth's crust to harness its power.
Also showing on
This programme has already aired this month.

Doesn't seem to be listed in the US schedules yet.