DrumBeat: March 1, 2008

Annual Threat Assessment - Director of National Intelligence (PDF)


Access to stable and affordably priced energy supplies has long been a critical element of national security. Sustained increases in global demand and the interactive effects of energy with other issues have both magnified and broadened the significance of developments in the global energy system. Oil prices in late 2007 were near record levels and global spare production capacity is below the market's preferred cushion of 3 to 4 million barrels per day (b/d).

...The double impact of high energy and food prices is increasing the risk of social and political instability in vulnerable countries. Corn protests in Mexico, bread riots in Morocco, and recent unrest in Burma are directly linked to higher food and energy prices. Higher food prices, as well as rising transportation and logistical costs, also have outstripped global aid budgets and adversely impacted the ability of donor countries and organizations to provide food aid. For example, the World Food Program's food costs have increased by more than 50 percent over the past five years and are projected to grow another 35 percent by the end of the decade.

White House wants more oil; investment not seen

WASHINGTON (Reuters) - The White House called for more U.S. and global oil output to fight rising energy costs, but a top intelligence official said on Wednesday that prices at $100 per barrel had yet to spur production.

"We would like to not only have exporting countries increase their output but we would also like here in the United States to be able to increase domestic (oil) production in environmentally friendly ways," White House spokeswoman Dana Perino told reporters.

She insisted, however, there was no "silver bullet" or short-term solution to high energy costs.

Dueling Markets: Can Food Fight Oil?

It's no secret that high oil prices have moved big money, some $3 trillion, from energy-consuming states in the West to suppliers like Saudi Arabia and Russia. Pooling up in huge state-controlled investment funds, this vast transfer wealth is tipping the global financial power, raising fears in the West of petrol-power domination.

Or maybe not. A recent Goldman Sachs commodities report notes that growing populations and wealth in the developing world, and to a lesser extent rising biofuel production, is moving some money back to farm powers like the United States. "Food exports won't offset our oil bill, but they will help," says Robert D. Hormats, vice chairman of Goldman Sachs International. Agricultural exports are a key reason the U.S. trade deficit decreased about 6 percent last year.

Soaring fuel costs spark a tidal wave of diesel thefts

SOARING fuel costs have led to a spate of thefts of diesel from farms and goods yards across Scotland.

Police believe relentless rises in pump prices have turned diesel into such a valuable commodity that it is being stolen and resold – joining copper and lead as a target for criminals seeking a quick profit.

Insurers say the crime wave has become an "epidemic" with claims from farmers doubling in the last three years.

Venezuela urges OPEC to study Exxon row

ALGIERS (Reuters) - Venezuela wants next week's OPEC meeting to discuss its escalating legal battle with Exxon Mobil, a Venezuelan official was reported by Algeria's official APS news agency as saying on Saturday.

James Petras: ExxonMobil in the midst of a lost war

Caracas 29 ABN- “ExxonMobil is in the midst of a lost war. There is no opportunity for them to gain a trial, nor they have the solidarity of other oil companies; the other oil companies understand that the current Venezuela is profitable, very profitable because the common profitability has been exceeded,” he expressed.

Wind power snafu nearly led to rolling Texas blackouts

Texas' near miss with rolling blackouts Tuesday night may appear at first blush to be a sign of the failings of wind power — more than 80 percent of the state's wind turbine energy went offline when a North Texas cold front stilled the air.

But the state's grid operators say a problem they could normally handle was complicated when a number of traditional power plant operators failed to provide the amount of electricity to the grid as promised.

The details behind the close call may seem esoteric, but it's an important distinction to make in a state where wind power is the fastest-growing source of new projects and the margin between power supply and demand grows tighter.

Human error caused outage

A Florida Power & Light engineer not following proper procedure was the sole cause of Tuesday's massive power outage that left millions without electricity throughout the state for a few hours, FPL officials said Friday.

U.S. Won't Finance Montana Coal Plant

The Agriculture Department's Rural Utilities Service will not provide financing for a controversial coal plant proposed by a Montana electricity cooperative, an agency spokesman said yesterday.

'Clean' Coal? Don't Try to Shovel That

Clean coal: Never was there an oxymoron more insidious, or more dangerous to our public health. Invoked as often by the Democratic presidential candidates as by the Republicans and by liberals and conservatives alike, this slogan has blindsided any meaningful progress toward a sustainable energy policy.

Nepal king must pay $880,000 electricity bill

kathmandu • It has been a humiliating couple of years for Nepal's King Gyanendra. First, the erstwhile living deity was stripped of absolute power. Then his subjects took his face off the national currency, renationalised his palaces and decided to abolish the monarchy.

Now he has been ordered to pay an electricity bill of $880,000 (£442,000) for the vast Narayanhiti Royal Palace in Kathmandu, the Nepalese capital, and several other royal residences around the country.

Lawmaker introduces gas prices resolution

Citing fuel prices that have doubled since 2000, state Sen. James J. Rhoades, R-Mahanoy City, introduced on Tuesday a resolution asking President Bush and the U.S. Congress “to control exceedingly high gas and energy prices.”

...Noting the five largest United States refineries earned $228 billion in profits between 2001 and 2005, the resolution suggests “one lasting solution to this problem is to control the price increases energy suppliers pass on to consumers.”

Rising gasoline prices are a national emergency

The biggest news in the country right now, as far as I'm concerned, is what you and I are being forced to pay at the pump. And I am not just talking about local gas prices - gas is high everywhere. It is well over $3 a gallon no matter where you go, and it got there overnight - heck, in a matter of minutes. There is no sign of it going back down.

Alaska lawmakers consider oil surplus to offset heating bills

JUNEAU, Alaska (AP) - Oil rich Alaska is suffering from an energy crisis because of the high cost of fuel.

The problem is especially acute in rural villages where fuel bills are often two or three times the national average.

Some lawmakers believe the state should use part of its oil wealth that's feeding a multibillion dollar budget surplus to help residents offset their fuel costs.

Pizza and beer now cost an arm and a leg

If you’re looking for a sure sign the U.S. economy is headed in the wrong direction, all you need to do is look at the skyrocketing price of “recession-proof” foods: pizza, hot dogs, bagels and beer.

For many Americans, the credit crunch and the mortgage mess have left their pocketbooks – and their cupboards – bare. These same consumers, many living paycheck to paycheck, have relied on these cheaper foods to keep their expenditures down. Not anymore.

Community concern needs to be reborn

This is the first time since our agency started providing heating assistance benefits that clients are having trouble receiving fuel oil deliveries because their allocations do not cover the cost of the minimum delivery quota (150 gallons).

Whether one believes that we are entering into a peak oil crisis or not, the stark reality remains that energy costs will continue to rise unabated.

Smart growth, conservation are the only ways to survive

These small, older towns are not just charming reminders of the past, they are also a bridge to the future. Basic to the concept of smart growth is another concept, "peak oil." Sometime around the 1970s, scientists in the petroleum field realized oil discoveries were declining, and that trend has continued since. It is now recognized by all but the most "head in the sand" diehards that the era of fossil fuels - which allowed for 100 years of technological and scientific expansion and provided for the lifestyle enjoyed today in the industrialized nations - is coming to an end.

Under the pump

IT WAS not just motorists who were in for a shock as the the price of oil passed $US103 a barrel for the first time in history on Friday. The soaring price of "black gold" is likely to affect everything from airline travel and taxis to investing, and even what you can afford to put on your dinner table.

Oil money is coming – and there is little the west can do about it

Larry Summers was in full flow. Addressing a packed meeting on sovereign wealth funds at the Davos gathering of the World Economic Forum in January, the former US treasury secretary told the investment arms of foreign governments they should sign up to a code of conduct and be more transparent.

In a telling sign of the shift in the balance of global economic power, the sovereign wealth funds told Summers to get lost. The Saudis accused him of double standards: hedge funds were not being regulated despite causing mayhem in the financial markets, so why pick on SWFs? The Russians — revelling in Washington's discomfort — said American attempts to restrict investment by wealth funds was "not helpful".

Ukraine's PM says Russia will not cut gas supply

KIEV, March 1 (Reuters) - There will be no cutoff of Russian gas to Ukrainian consumers despite threats to reduce volumes over payment arrears and contractual issues, Ukrainian Prime Minister Yulia Tymoshenko said on Saturday.

..."I am certain that there wll be no cutoff of gas. Ukrainians will be able to use gas without fuss. No one is going to cut off anything," Tymoshenko told a news conference.

Zimbabwe: Fuel shortage looms

A MASSIVE fuel shortage is looming in the country amid revelations that government has started stocking diesel and petrol for the election campaign.

Sources said the National Oil Company of Zimbabwe (Noczim), the sole importer of fuel in the country, has been directed to hold on to the fuel that they have imported on behalf of private fuel companies.

South Africa: Farmers Can Plan - But Not Indefinitely

Millions of dollars worth of agricultural produce have been lost due to the electricity crisis in South Africa, which has seen rolling power cuts - referred to locally as "load shedding" - across the country over the past few months.

China’s Industrial South Faces Its Worst Power Crunch in Decades

The Pearl River Delta, a center of “made in China,” is in the midst of a severe power shortage. In some areas factories can only run four days a week. The Guangdong Provincial government has declared that the province is undergoing the most serious power supply crunch since 1978, when China started the reform and opening-up policy.

Bangladesh's gas crisis may persist for a decade

DHAKA, March 1 (Xinhua) -- Bangladesh's gas crisis may persist for next one decade as there is no immediate option for addressing the problem -- neither through augmenting domestic production nor through import of the fuel, private news agency UNB reported Saturday.

2050 Peak Coal May Make the US into the Next Middle East

Despite possible uncertainties in their methods, the Energy Watch Group has published numbers that raise alarming questions about our energy future. While the United States is busy pouring resources into the Middle East to keep the oil flowing, what is being done to safeguard our domestic coal supplies?

Calif. to consider return to customer power choice

NEW YORK, Feb 29 (Reuters) - The California Public Utilities Commission (CPUC) said Thursday it will consider steps to let customers choose their electric suppliers, but must first remove the California Department of Water Resources (CDWR) from the power supply business.

China steps forward as Venezuela's key oil buyer

BEIJING (Reuters) - China could be the near monopoly buyer of Venezuelan fuel oil after Beijing stepped up financial aid to cash-strapped Caracas, but it will be years before higher volumes of crude from the OPEC member begins flowing East.

No impact from Energy Saving Day

The UK's first Energy Saving Day has ended with no noticeable reduction in the country's electricity usage.

E-Day asked people to switch off electrical devices they did not need over a period of 24 hours, with the National Grid monitoring consumption.

It found that electricity usage was almost exactly what would have been expected without E-Day.

Colder weather than forecast in some regions may have led to higher use of heating, masking any small savings.

Cuba to Produce Ethanol without Sacrificing Food

Havana, Mar 1 (Prensa Latina) Cuban scientists from nine institutions met this week to analyze the possibilities to produce ethanol from sugarcane byproducts and other alternative sources without sacrificing food.

Ecuador Oil Min: Force Majeure On Oil Exports

QUITO -(Dow Jones)- Ecuador's oil and mining minister, Galo Chiriboga, said Friday the government has declared a force majeure on its oil exports.

"I have reviewed carefully the situation and approved the force majeure as a preventive measure," Chiriboga told Dow Jones Newswires.

Seismic data points to huge Raukumara oil strike

New Zealand could soon be known as a "land of milk and oil" as Crown Minerals plans to unveil details of a new sedimentary basin potentially more productive than the booming Taranaki oilfields.

Valero will need 2,000 workers at peak of $2.4 billion expansion

A $2.4 billion expansion to Valero Energy Corp.'s Port Arthur refinery will require 2,000 workers when construction reaches its peak, the plant manager said Friday.

The expansion also will create more than 30 permanent jobs on completion, Valero general manager Greg Gentry said.

A revolution in the skies... a disaster for the planet

Cheap flights. More flights. Multiplying routes. At the end of a week that has seen protests against airport expansion, predictions of further airport chaos, and record oil prices, British travellers are showing no sign of shaking off their addiction to CO2-heavy cheap flights.

A record number of new air links will open from the UK to Europe this summer. The Independent has identified 100 entirely new short-haul international routes to be launched from Britain when the summer schedules begin at the end of this month.

Football-sized boulders provide clue to Antarctic melt

Boulders as big as footballs show that a thinning of west Antarctic glaciers has become much faster in recent decades and may hold clues to future sea-level rise, according to scientists at British and German research institutes.

Matthew Simmons calls on regional oil producers to curb output

Matthew Simmons, the controversial energy investment banker, has called on Middle East oil producers to reduce their oil production to extend the life of their reservoirs.

Simmons, chairman of Simmons & Company International and a leading proponent of the theory of peak oil, which states that production has reached its peak and will decline, says Middle East states risk their reservoirs collapsing if they try to increase production.

Gulf states should reveal oil reserves

There are few more controversial figures in the oil industry than Matthew Simmons. Since the Houston-based banker argued the case for the peak or declining oil scenario in his 2005 book 'Twilight in the Desert' he has been at the centre of a storm that has had a real impact on the rising oil price.

If Simmons' thesis is correct, then the oil-producing states of the Middle East are living on borrowed time. Even with the introduction of enhanced oil recovery (EOR) techniques, their fields are on the inexorable road to decline. The only question is how long the decline will take.

Nigeria oil hub targeted in night attack

ABUJA (Reuters) - Armed men torched a police building and several vehicles at the main jetty on Bonny Island, an oil and gas export hub in Nigeria's southern Niger Delta, a security expert working for an oil major said on Saturday.

Police spokesmen could not immediately be reached to comment on the report from the industry source, who said the raid took place in the middle of the night.

Oil firms line up for contracts in Iraq

BAGHDAD–More than 100 companies including foreign majors are vying for deals to tap Iraq's vast oilfields, but a vital oil law is stalled by tension involving the Kurdish region, Baghdad's oil minister said yesterday.

Hussain al-Shahristani said 115 companies had registered to compete for oil extraction and service contracts to help develop Iraq's oil reserves, the world's third-largest.

Canada's privileged position

Being Prime Minister of Canada is a cakewalk.

That is because there is nothing so propitious politically as $100 a barrel oil -- and an acrimonious and engaging presidential race in the United States -- to skate onside the fractured population of Upper North America.

Cars Becoming Less Popular, But Not in China

FREMONT, Calif. — With oil prices reaching $102.08 per barrel, a record high, driving a car is becoming less affordable than ever for people the world over. In China however, people are as enthusiastic as they ever were about buying and owning cars, according to Wenxuecity.com, a Chinese language website based in California.

Area drivers feel pinch of costly gas

Kris Guist of Rainier called her family's one-ton truck a "yard ornament."

Chuck Halk of Longview has a prosthetic leg and depends on his Ford pickup to get around. He called rising gas prices "ridiculous" and "sad" and worried that if they keep going up, "I'll have to take the CUBS, and those ain't no fun."

Honda's natural gas car named as Greenest Vehicle of 2008

WASHINGTON: Honda's Civic GX natural gas car has been named by the American Council for an Energy-Efficient Economy as the greenest vehicle of 2008 for the fifth consecutive year.

New fuel eases oil issues

Hydrogen refueling stations are in the chicken and egg stage.

"You can't have a hydrogen car without some place to refuel it," said Frank Ohlemacher, the facilities manager at Ohio State's Center for Automotive Research. CAR houses the only hydrogen refueling station in Ohio, where it is used in research on alternative transportation technologies.

EPA justifies blocking Calif. waiver

WASHINGTON - The Environmental Protection Agency on Friday justified blocking California from cracking down on auto emissions by saying global warming isn't unique to the state.

The long-awaited analysis drew angry ridicule from environmentalists and officials in California and some of the dozen-plus other states that also wanted to implement the greenhouse gas emissions reductions sought by California.

Some folks have been concerned about the winter wheat crop in Kansas and Okl if you study this chart.


You will find that for the past 90 days they have received 150 to 200% of normal rainfall. The problem is in Minn and the Dakota's

actually it is a problem. There is to much rain and flooding. Whatever happened to normal?


Here's the latest I've found:

Source USDA h/t http://axcessnews.com/user.php/articles/show/id/13999

The USDA reports that hard red winter wheat crop conditions are not good.

Crop conditions in Texas, Oklahoma, and Kansas are not as good as last year at this time. In Texas, 61 percent of the crop is rated poor to very poor, and only 10 percent rated good to excellent; last year at this time, 23 percent of the crop was rated poor to very poor, and 42 percent rated good to excellent. In Oklahoma, 29 percent of the crop is rated poor to very poor, and 32 percent rated good to excellent; last year at this time, 19 percent of the crop was rated poor to very poor, and 53 percent rated good to excellent. In Kansas, 25 percent of the crop is rated poor to very poor, and 42 percent rated good to excellent good; last year at this time, only 7 percent of the crop was rated poor to very poor, and 62 percent rated good to excellent.

Conditions in Nebraska are about the same as a year ago. This year, 7 percent of the crop is rated poor to very poor, and 58 percent rated good to excellent. Last year at this time, 6 percent of the crop was rated poor to very poor, and 54 percent rated good to excellent.


Central Oklahoma farmers may turn up some early planted, drought-plagued wheat this spring and replant milo or corn, taking advantage of good pricing opportunities. Late soybeans also may make it into the mix.

A combination of volunteer wheat, germinated from acreage abandoned last summer, and poor planting conditions early last fall left many farmers unhappy with prospects for the winter crop, says Enid, Okla. farmers James and Richard Wuerflein, and Sherwin Ratzlaff.

“Wheat planted in early September looked poor in late fall,” said James Wuerflein. “Volunteer wheat and cheat grass also caused problems.”

”A lot of wheat was left in the field last summer and never cut,” Ratzlaff said. At planting time a lot of that old wheat germinated and caused problems for farmers trying to get in a new crop.

“We sprayed some fields five times with Roundup,” said Richard Wuerflein.

“We had 40 to 60 bushel per acre wheat just laying on the ground,” Ratzlaff said.

”A lot of wheat was left in the field last summer and never cut,” Ratzlaff said. At planting time a lot of that old wheat germinated and caused problems for farmers trying to get in a new crop.

“We sprayed some fields five times with Roundup,” said Richard Wuerflein.

Good thing they didn't plant Roundup Ready wheat the year before!

I never meant to imply that I wasn’t concerned. Anyway thanks for the Info.

Do you know of a website that provides weekly crop reports?
I use Ag-insight PDF, however they only report on a single crop or livestock each week.
I receive the PDF file each week from a friend as it is subscription.

No. You have to pay. And big.

To get regular crop reports, you basically have to
"understand" the crops condition already and float
across various nations/websites to correlate the data.

Delta Farm Press, Cleveland MS, is a good source,
believe it or not.

“We sprayed some fields five times with Roundup,” said Richard Wuerflein.

Ah yes, but did they achieve complete field saturation, and did they do a proper downstream belly-up count to assure that was the case? So many questions so few answers!

Fears of ‘biological contamination’ over Monsanto’s sugar beet


The lawsuit is similar to one biotech crop opponents filed over the USDA’s deregulation of Monsanto’s genetically altered alfalfa, which led a federal judge last year to issue a nationwide ban against the planting of the Roundup Ready alfalfa.

RoundUp--An Endocrine Disruptor?

In a new study by by Walsh, McCormick, Martin, and Stocco1 of the Department of Cell Biology and Biochemistry, Texas Tech University RoundUp has just been conclusively identified as an Endocrine Disruptor.


Oman entered its 8th year of oil production declines in 2007.

http://www.gulfnews.com/business/Oil_and_Gas/10188960.html (Gulf News)

The UAE was into EOR by injecting natural gas into mature fields. During the early 1980's the UAE boosted its stated reserves from 30 billion barrels without any major oil field discovery(s). The stated reserves have been about 98 billion barrels for years with neither decline nor addition of reserves. The boosting of reserves was political in nature in order to increase OPEC assigned production quotas for the UAE. These oil production quotas were based on stated reserves, no scientific verification was required. The UAE was estimated to be producing about 2.7 + million barrels per day. They have plans to continue EOR and mature field rehab in order to boost production to 3.5 million barrels a day or greater about 2011. At one time they desired to boost production to 4 million barrels a day. Due to the onset of continued depletion this may not be possible. After reaching peak production of 3.5 - 4.0 million barrels a day; production is expected to decline without a prolonged peak plateau.

I need to toss out a quick question to THO experts. This past week, my Environmental Politics course focused on energy scarcity and peak oil. One of the students asked about the effects of petroleum extraction on the area around the oil fields. I told them that I had never encountered a discussion about oil field subsidence being the same problem that it is with over mining water from aquifers, but I would try to find out. Is this ever an issue? If so how is it mitigated?

Yes, subsidence happens, occasionally. Also known as reservoir compaction. Most famous example is probably the Ekofisk field offshore Norway. The solution there was to cut the platform legs, jack the top part up, and weld in spoolpieces (extensions) to keep the topsides at a safe height above the waterline...


Another well-known example is the change in the eastern coastline of Lake Maracaibo in Venezuela over several decades of oil production...


Go to Lagunillas, Zulia, Venezuela in Google Earth. Here's a picture from Panoramio of a guy walking on the berm that was built to protect the city. Note derricks visible on the sea horizon...


And here's a paper abstract that mentions a few examples...


You're welcome!

The Plucky Underdog

Oil production-related subsidence has also occurred at Long Beach, CA, and to a lesser extent in Galveston, TX.



Thanks for the info. I'll incorporate it into my presentation.

What about last year's mudslides? I think they were related to drilling into a gas deposit. Indonesia?

You've probably already though of this, but Saddam's destruction of the Kuwaiti oil wells must surely rank among the worst man-made environmental disasters of all time. Such disasters have happend on a much smaller scale as well.

Here's video of Congressman Bartlett's 38th testimony in the House of Representatives on Peak Oil from 2/28/08... http://video.energypolicytv.com/displaypage.php?vkey=5b72b2e7d3527cfc84f....

Re: Matt Simmon's calls on Middle Eastern oil producers to reduce output to save oil fields from collapse up top:

So "Twilight In The Desert" isn't happening fast enough to suit him?
Talk about Peak Oil activism. This takes the cake. The implications are profound. Is he ready to defend himself? He better be. The President was just in Saudi Arabia holding hands and begging for more production. Oil is trading above $100.00. Better find a good hiding place Matt!

(I couldn't read the article due to subscription reasons but IMO):
Matt probably believes that the damage due to oil supply contraction is better managed if the contraction is spread out over time. This implies that a barrel of oil produced next year (or next decade) will be more important to the world economy than one produced today. The mechanism should be pretty obvious, a barrel not pumped today increases the strength of the scarcity signal in the short term -hopefully
leading to economic decisions that take oil scarcity into account. The barrel not produced today, but available in say ten years time, when the world economy is trying to adjust post pek oil will go further then -as economies will be placing a premium on efficient usage of the resource.

I don't think Mr Simmons gives a rats ass about helping the Arabs to keep their oil flowing!
Why would he try and help them if they are flatly ignoring him and rubbishing whet he says. He is trying to expose them.

He may well be the coming prophet that drags us into a new fossil fuel free age but right now he is just trying to get people to realise that there is a actually a problem!

I disagree. I've read Twilight in the Desert, and repeatedly in the book he talks about if you push production past what the reservoir can handle, you may increase production in the short-term, but you will reduce the total amount of oil that is ultimately extracted. My guess is that is his concern is the total amount of oil ultimately extracted rather than short-term profit.

Maybe one of the oil-people will correct me if I'm wrong, but I tend to think about this as the milkshake phenomenon. When you get to the end of the milkshake, if you suck too hard on the straw, you bypass some of the shake and start pulling in air. If you suck more slowly, you can ensure a continuous flow of creamy goodness. In an oil field, especially the Saudi ones where they bypassed primary recovery and went straight to pushing with water on the periphery, it's not air you get if you suck to hard, but water, and pockets of oil are bypassed.

Matt is playing poker here and the Saudis know it! They will ignore him completely because if the Saudis flinch either way they will give the game away.

He is calling their bluff and the Saudis are hoping the rest of the world doesn't figure out that it is actually a double bluff! Does that make sense?


Practical, it may take the cake as you say but it makes perfect sense. Why pump all the oil you can now when it will demand a much higher price later? Why pump it all out now when later you may not have enough for your own use?

The best thing that ever happened to the US is congress not allowing drilling in ANWR and states like Florida and California not allowing drilling off their coast. This means that this oil will be saved for the time when we most desperately need it. When globalism collapses and oil exports from most nations drops to a trickle, we will have ANWR and offshore oil to fall back on.

It makes absolutely no sense for nations to go through their oil reserves like a drunken sailor going through his rich uncle's inheritance. Holding back on oil production would be the very smartest thing any nation could possibly do. Oil not extracted today will mean more oil to extract when it becomes far more precious than it is today.

Ron Patterson

In Britain North Sea oil was pumped out as fast as possible even when prices were low. The result is it is now fastly depleting and will soon go to zero. I have long doubted the sanity of the policy but nobody questioned it.

As is normal in most basins, the large fields in the UK sector were discovered and developed first (Forties, Brent, Beryl, Ninian, Cormorant, Magnus, Dunlin, Piper/Claymore, Thistle, the Braes and a few others). The platforms were installed and the wells drilled (and the capital spent) before the oil market really collapsed in '86. What would you have had the operating companies do? Remembering that it was during the 70s that they were being thrown out of their traditional producing areas in the Middle East...

When the old invisible hand says you have to make payments on the debts from drilling the hole, you just keep producing. Lacking a NOC or any sort of long term planning mechanism, the Brits just made money for the few. Worse, when the price gets low you have to pump harder just to make the payments, adding to the temporary supply glut. As the Economist magazine noted at the time, we were 'awash in oil'. Sic transit gloria. But never, ever, expect an apology.

I think you'll find it's the banks, not the invisible hand, that insist on debt repayment. Where did you get your mortgage?

Sorry, missed this. What does "pump harder" mean in the context of an offshore production facility that is designed and built for a certain throughput?

Exactly. The designers of the throughput knew full well the party would be over about now, but acted as if it were going to be energy forever. These fields were set up for fast extraction, and when you consider the corrosion factor at sea, I can understand why. Field pressurization is pumping harder. Offshore installations don't have the same luxury of shutting in that onshore does. Regardless, they went from boom to bust in record time. The resource could and should have been handled with a longer production program.

As to the banks versus the invisible hand, unless the public controls the financing with a regard to payback in terms of energy profit over time rather than monetary profit, any form of private finance that cannot see beyond its own lifetime cannot be expected to utilize resources for a multigenerational benefit.

On the other hand - yes, that's what it looks like all spelled out! - it really doesn't matter whether we burn it up in thirty years or thirty centuries; within a cosmically instantaneous moment it will be over and we will make other plans and systems for survival. Or not.

Hi Pet,

The designers of the throughput knew full well the party would be over about now

That sounds dangerously tin-foil-helmetish, if I may say so. Anyway, back in the 70s, wasn't peak going to be in 1990 or something like that? I've seen economic projections from about that epoch that had base-case oil price assumptions of $200/bbl by about 1995.

Field pressurization is pumping harder.

Given that you can't suck liquid (or gas), I guess that's something we can agree on.

Can we knock on the head once and for all the idea that water or gas injection is some kind of extreme desperate measure? It keeps reservoir pressure above hydrosatic, (where the wells stop flowing - in a handwaving sense) and increases recovery factor. Petrosaurus - does your name imply that you are somehow linked with the industry? Have you ever seen an inflow-outflow diagram?



It does matter if it lasts another 30 years. That would keep things going while alternatives are developed. Now that is impossible.

I think Matt is exactly right. It is easier to deal with higher prices than shortages. The faster we deplete fields the more erratic supplies will become.

Mexico would do themselves and the US a favor by cutting production in half and doubling their price over a declared period of 6 months. We can adapt to anything. It is the shock that kill us. If Mexico can extend deliveries from their field 5 years, that will help the transition to sustainable infrastructure.

what ? we need to encourage me oil production to keep the ethanol industry supplied with energy ?

Keep an eye on This Process, folks. It solves a lot of problems. The BioChar CoProduct can cut fertilizer costs by up to 75%.


This all sounds good, but have they released any true accounting of EROI - energy out / energy in?

Some of the biofuel processes - if growing, harvesting, transporting, processing, and distribution are taken into account - have an EROI of 1.0 or less.

First Commercial Plant in U.S. to Produce Liquid Biofuel from Wood Residues to be Built by Dynamotive in Missouri

Surely you guys jest and to hell with the eroi of it too!

What do you think will happen after the few unspoken for sawmill scraps are fully utilized? Then they will be off to the woods for the same wood pulp that is used to make newsprint and the price of that will go through the roof, no books no newspapers! "But!" you say, "what do we need 'buks' for we got tech and the internet!" Yes but those pulpmills also do toilet paper and how the heck do you think you will look standing about with your fingers where,eh?

Serious, take a look just at B.C. from Google Earth, we are living beyond the economical means of the earth now. Get out and push that SUV. To hell with Bio diesel, get manly, build up strong muscles. Never have sand kicked in your faces again ... now isn't that a better way to go? Tell me!:)

Serious, take a look just at B.C. from Google Earth, we are living beyond the economical means of the earth now. Get out and push that SUV. To hell with Bio diesel, get manly, build up strong muscles. Never have sand kicked in your faces again ... now isn't that a better way to go? Tell me!:)

The technocopians are walking around the streets like zombies now, desperately looking for any and every excuse to keep their morbid life style. They aren't the slightest bit interested in growing food. They admit to themselves that there are no techno-fixes to growing food. In a post peak-oil situation we will have to quickly revive a lot of the good old traditional ways of agriculture and gardening in order to harvest any meaningful calories from the abused and depleted soils we have left and manage all this without an abundant source of energy (see: How Cuba Survived Peak-oil).

However we have one source of energy we aren't using at the moment, six and a half billion of us (and I don't mean the Matrix way) - but right now this one is sitting on its butt staring at the computer! It would be interesting to try out how many people it takes to pull a plow. I for one admit I'd need the exercise :P

73 de oh3gpj

Snow, Rain and now freezing slush, here in Portland, Maine, and my brother just went home from a dinner at our Mom's house on his bike, a pleasant 29f outside. (And happy as a clam, too, since his new job has him reverse-commuting out of town a few miles, so he hasn't been on the bike much this winter, as he had for the last 20) He has knobby tires that work well, but says he has to keep his reflexes sharp when it's icy.

Pedal-powered trikes would be a lot more stable on slippery roads. Of course there's always skis, too. I ski'd down Sixth Ave to a job once, when Manhattan was buried. That was fun!


One of the problems here is that society "expects" people to be at their jobs every day, despite weather.

Before the advent of cheap energy, that wasn't the case. If weather was bad, people stayed in, until it got better.

And so too shall that cycle return. Once we realize that the comfy car is no longer a possibility, it will either be going out in the cold on the bike/foot/etc, or it will be staying in (here's hoping there's some heat source, that we havent run out of Nat Gas!)

Once we realize that the comfy car is no longer a possibility

how many decades away is that?



It would be interesting to try out how many people it takes to pull a plow

Ransu you gave me an idea there, the local high school football team is forever pushing great heavy things about the field and seeming to love the whole business. Maybe I could sneak up behind them and attach a plough. The only thing is that after they plough the field how do I get them to plant the potatoes? Likely they wouldn't think that a manly job:)

Funny how there is not a lot of talk on the oil drum about getting exercise yet a lot of talk about going off and working a farm, bit of a disconnect there too wouldn't you say?

I would be doing handsprings about peak oil and the idea of all of us starting to do things for ourselves again. Doing things like building gardens making music and art, doing clean honest science, rather than being run by technology. But there are over 6.5 billion of us on this sinking ship, and we sit talking of throwing tech doilies into the breach We should be preparing lifeboats. Hmmm must be getting late, I think I hear Melodrama starting up the walk.

What if any, is the relationship of BioChar and Terra Preta (in the Amazon)? Does anyone know about this? Is Charles Mann on solid ground when he asserts that Terra Preta is of human origin? Wikipedia says yes, but then, who are they?

Our depleted soils can be renewed -- after the oil and chemicals of the current system are no longer available.

Yes, the scientific consensus is that terra preta is of human origin. Here's an article from Discover magazine:

Black Gold of the Amazon

However, it's not clear that it's as useful in temperate climates. Maintaining soil fertility is a special problem in the tropics, where organics tend to rot quickly. They are doing studies now, and the results aren't quite what they were hoping.

Some researchers suspect that it's the bacteria that grow on the bits of charcoal, not just the charcoal, that make the difference.

They are doing studies now, and the results aren't quite what they were hoping.

Leanan, can you give a little more information on this?

Maybe they couldn't figure out a way to scale up the whole process to Industrial Agriculture. My limited experience gardening with home-made charcoal was very favorable, but I live in the SE US. This year I'll know more, as I found that a clay oven makes an excellent charcoal factory once it heats up.

I live in the tropics ( Miami Florida ) and so can maybe offer a little info on this.

In the tropics the soil never freezes, so the micro organisms that degrade lignins and other components of humus will rapidly metabolize humus so that it never accumulates in the soil. This is why 'slash and burn' agriculture in the Tropics must clear a new plot every three years or so. What little organic material that has accumulated from leaf litter gets oxidized away and the rain leaches all the water-soluable components from the soil, leaving sun-baked clay laterite.

In the temperate zone, humus acts as a reservoir of minerals and water, and improves the aeration and texture of the soil. In the tropics humus is not an option, so humans figured out to use finely divided charcoal to perform similar aerating and reservoir functions in laterite soils.

One of the sad consequences of the 'oil age' of agriculture is that US agriculture has put almost no walue on soil carbon content. Once the precious carbonaceous topsoil ran or blew off, they were able to maintain production by brute force: agents were used to clump clay into a hydroponic growing medium, followed by synthetic ferilizers dissolved in irrigation water. Once the petrochemical inputs stop, much of the US 'soil' will experience a precipitous decline in productivity. Let's call it 'Peak Food'.

God help us.

Errol in Miami

Well said, Errol.

None of Florida is in the tropics, if such a state is defined by being south of the Tropic of Cancer, and north of the Tropic of Capricorn. I appreciate that soil characteristics in parts of Florida may closely resemble those in genuinely tropical regions.

I see Pimentel has done an analysis of sugar cane to ethanol. Quote from the abstract (article is pay only)

In this study, more than 12 energy inputs in average U.S. and Brazilian sugarcane production are evaluated. Then in the fermentation/distillation operation, nine more fossil fuel inputs are identified and included. Some energy and economic credits are given for the bagasse to reduce the energy inputs required for steam and electricity. Based on all the fossil energy inputs in U.S. sugarcane conversion process, a total of 1.12 kcal of ethanol is produced per 1 kcal of fossil energy expended. In Brazil a total of 1.38 kcal of ethanol is produced per 1 kcal of fossil energy expended.


These numbers are very useful. They spell out how utterly hopeless it is to try to grow transportation fuel. Using the 1.12 ratio for the US and supposing that ethanol had to be used instead of fossil fuels the implication is that any of the current production estimates have to be divided by 8.3. Even if all of the arable land was converted to corn the net energy extracted would be 14% x 12% = 1.68% of what is needed (assuming the nominal production would cover 14% of current needs).

The ethanol hysteria is going to crash and burn due to its absurdly bad economics.

Speaking on this, having just come from an open house for a small ethanol facility, here is what I've found.

They're actively pushing 'fractionation' - the corn oil is being extracted for biodiesel before the ethanol production starts - a significant EROI boost. 40% of the energy used comes in dry distillers grain. The wet grain has a three week shelf life, the dry is good for a couple of seasons. The wet output can be fed to a biological process to produce methane needed for heating in the ethanol production plant, which results in a dramatic increase in EROI. The wet output can also be fed to cattle in a colocated feed lot, producing meat (or maybe milk) and the animal waste flow gives a similar yield on methane, reducing EROI without blunting the animal feed value of the distiller's grain. I am not certain, but I think this all adds up to an EROI equaling the 5:1 the Brazilians are getting.

Ethanol plant operators are actively seeking ways to use renewable energy. The wind driven ammonia thing I've mentioned here or there (and inspired by TOD user NH3, thanks!) has taken many, many steps towards funding and it seems likely it'll get built, certainly to the point of removing the natural gas input for corn growth, and there is some solid interest in ammonia as a farm fuel. $25B will free the Iowa corn crop from any fossil fuel inputs and there is a lot of money sloshing around out here for renewable energy projects.

So ... fossil fuel free corn, ethanol and biodiesel as road fuels(think: police, fire, rescue services, and school buses still need fuel), and once this is funded and rolling we're going to turn our attention to rail policy and drive the use of rail right of way as electricity transmission corridors, the transport method for the delivery of wind farm installation equipment, rail electrification to eliminate diesel usage in that sector, and so forth, taking Alan Drake's national rail electrification plan and putting it to work in a manner sensitive to the needs and temperament of those here in the upper Midwest. Hopefully this will be a "seed crystal" for a national rail electrification push ...

Can't say anything about the rest o' y'all, but I have no intention of my children freezing and starving as the global tumble into Olduvai begins. I'd strongly suggest that the rest of you get up and get moving on things for your respective areas ... and if you can't envision anything specific yet go check out http://strandedwind.org and click on the Google ads for me while you're pondering :-)

you're welcome!

don't you think the new finding on the 5:1 ethanol EROI deserves a dedicated post in this forum?

The wind driven ammonia thing I've mentioned here or there (and inspired by TOD user NH3, thanks!)

Missed that, would you mind giving a reference to that 'wind driven ammonia thing', sounds very intriguing, thanks.

main link:

relevant presentations in particular:
#4: Ammonia from Wind, An Update
#6: “Solid-State” Ammonia Synthesis from Renewable Energy
#21:An Ammonia Based Global Crises Solver

also, SCT's dedicated wind to ammonia site given above.

Not just wind driven ammonia, but if you nose around on this one you'll find some interesting stuff:


I am excited to see them so diligently working on ethanol EROI - we will still need road fuels in the future and it would be nice if a corn oil/corn ethanol blend totally replaced the existing gasoline based E85. I am not so interested in doing such a post as I would be in gather information for Robert Rapier, who has an existing body of work in the area. I am taking some preliminary steps in this area and have not yet had any contact with him ... if there is substance to it I guess someone will end up doing a front page post, but we're still in discovery mode at this point in time.

I have been fascinated by the replies on the Olduvai thread for several reasons:

The first is the lack of any consensus as to what to do. Here we are, the supposed energy enlightened, and the best we can come up with are a few scenarios none of which are likely to occur.

Second, enconomics don't even appear to be on the radar screen. Even if we had a consensus as to what to do, no one seems to have the slightest idea of how to pay for it or even who is going to do it.

Lastly, only a minor recognition that business as usual is not viable even in the moderate term regardless of whether society becomes more "sustainable." Any form of BAU implies that society has not come to grips with the reality that a new philosophy of life is a necessary precurser to action.


That is the elephant in the room. We have a superstition based economic model (capitalism), and it is excepted that this will continue on a subconscious level by even educated people practicing equanimity in their analysis.
This thinking needs to change, or survival is not possible.
Just my opinion.

Luis is trying to put a number on the problem. If people can get a handle on what needs to get done by when, they are more likely to do it. People can't act until they understand the problem, and the steps to take are broken down into manageable, bite-sized pieces.

My own sense is people will scramble to maintain their lifestyles (or to survive). And other people will scramble to make money out of crisis. So we see Bill Gross (of Pimco) and other heavy hitters putting seed capital into Infinia Corp, which is setting up to make solar dishes. We see Matt Simmons investing heavily in research on algae-based biofuels. I don't see that scaling, but I wouldn't be surprised to see him make money providing fuel to rich people. We see Richard Rainwater getting himself securely set up off the grid. We see Kuntsler making himself as secure as possible in small-town New York.

So, richer, forward-thinking people will probably do fairly well, and less-rich, less forward-thinking people will probably scramble to add some solar, get a hybrid or electric car, car pool, etc. as energy continues to get more expensive. And this class of people will continue to fall farther and farther behind, just as they have for the past 25 years.

Then there will be all the people (the overwhelming majority) who can't afford to do any of that, as the economy gets worse and worse. Right now it looks as if their lives will follow a kind of Dmitri Orlov track--getting used to power outages, learning to sponge off with a bucket of cold water, learning to live with a large number of family members in a small space, dumpster dive, and so on.

I don't currently see any prospect of financing the infrastructure necessary for a better future for the vast majority unless we have a major change in leadership. Bush is like a deer frozen in the headlights. He's as incapable as he was with Katrina. But Roosevelt electrified rural America, and Obama could inaugurate an energy New Deal.

There are all kinds of studies that show that thinking follows behavior, not the other way around. In other words, you get people carpooling and walking because they're unable to afford driving, and then they start thinking in new ways about energy. It almost never works the other way around for most people.

The thing to do is just go ahead and take steps yourself. The big solutions are going to take forever, and in order for them to succeed there are going to have to be pioneers in place in local communities anyway. If you put in a solar dish or solar hot water, your neighbors will be curious about it. You'll be able to tell them what the experience was like, and how such-and-such batteries suck, and if you were going to do it all over again, you'd do this instead of that. There's real value in that for your community. When your neighbors get ready to install, they'll be able to borrow that special wrench from you. Then word will continue to spread, as they all tell their brothers-in-law about it.

The informal sharing of knowledge will lead to other informal sharing systems. Your neighbors will be grateful for your help, and send over some tomatoes from their gardens. Or whatever.

I think the thing to do is just get started in your own life, and be honest with your neighbors and friends without forcing the issue.

Obama could inaugurate an energy New Deal

That might just be the key. FDR was the financial world's choice to "save" capitalism. He was quite successful. Capitalism appears to be in need of another save -- and Obama could be the ticket. See the not-very-supportive commentary by Matt Gonzales in CounterPunch. I actually think, all things considered, it could be a lot worse. It might even be better than "hope" -- it could be the start of a "plan."

Capitalism is doing fine-it is the USA that needs the save.

FDr saving Capitalism is one of the sillier left wing myths. The financial community crtainly didn't choose him. In fact businessmen threw celebration parties when he died. If he'd saved them they would have been more grateful.

About as silly as the right wing myth that Capitalism built the economic powerhouse that the USA was at one time. What do you think the USA GDP would be right now if Germany had been controlling that incredible piece of prime RE and running the place for the last 30 years-the country would be an absolute manufacturing and economic powerhouse and would be well positioned re alternative energy. OTOH, Germany isn`t running the place so it continues its path towards its future Cayman Islands/Argentina/Mexico hybrid status.

"The Business Plot, the Plot Against FDR, or the White House Putsch, was a political conspiracy involving several wealthy businessmen to overthrow the presidency of Franklin D. Roosevelt in 1933."


Hardly, in fact Germany has been in the doldrums since the 1970's. In fact they suffored national angst and have introduced reforms to try to get the show on the road again. Their income per head has been passed by the UK. In 1992 it was way ahead. The US became the World's leading economy in the 1880's with not a five year plan in sight.

I was under the impression that some of Germany's doldrums were a result of unification with the East, which had much out-dated plant. Do you think that unification has been and continues to be a drag on the overall German economy?

My guess would be that Germany's income and perhaps wealth as well might be more evenly distributed than in the U.K. I'm writing from recollecion, my I think that the U.K. GINI score is just a little better than the U.S., which was approaching Latin American numbers the last time that I checked.

Businessmen are ungrateful bastards who always want more. They made a fortune under JFK, yet Dallas fatcats like H L Hunt wanted a bullet in his head. They made a fortune under Clinton, but they bankrolled the right-wing smear machine and the Christian fanatics and the Abramoff crime machine and the Duke Cunningham Pentagon fraud and the Bush-Cheney war machine, because they wanted total wealth, total global control, and total ownership of your tax dollar. No matter how much wealth you give them, they put some of it into right-wing thinktanks creating propaganda saying the system is unfair to the rich.

As for FDR, the rich then genuinely feared a worker's revolution. A member of the Dupont clan conspired with many others, including the current President's grandfather, to install martial law, before they were exposed by General Smedley Butler. But as soon as the threat of revolution seemed disarmed they griped about not getting a better deal. The American public was so radicalized that an outright Socialist, Sinclair Lewis, got the Democratic nomination for governor of California in 1934, but FDR collaborated with the Republican fatcats to bring him down. Yet again, no gratitude. Another radical, Huey Long, was governor of Louisiana and was assassinated. Republican Iowa farmers organized mobs to scare off land repossessors, war veterans had occupied Washington DC with a tent city, the KKK and the Communists marched openly. It was the closest we'd come to civil war since 1865.

But you don't know about these things because big business controls the media and prints the school textbooks. They want to go back to the insanity of the Roaring '20s, complete with private armies gunning down labor organizers, and in order to do that they must destroy the idea that ordinary Americans were screwed under laissez faire and were beginning to fight back. Gratitude is irrelevant.

I forgot to mention that during the Depression the governors of Texas and Oklahoma fought armed battles using their National Guard units to control an oil field on the Red River, and that American citizens of Mexican descent were rounded up in Texas with non-citizens and deported to Mexico to make more jobs available for whites. More relevant for the future we're worried about at The Oil Drum.

I've always been astounded that America has forgot so much of its history.
For instance, hardly anyone knows about the pandemic of 1918 and how it impacted WWI (and visa versa).


There's been a lot of interest in the "Spanish flu" ever since bird flu became an issue.

Thanks to FDR the good people of the US electorate passed the 22nd amendment to the Constitution: presidental term limits. Four terms of any president was too much.

A meaningless electoral feature in a country dominated by party politics. Looks like McHate, oops, McCain has a real chance of winning this year. Obama's just too ethnic for the red state rednecks.

Hey Moe,

Yes the forward thinking very rich will not do too bad ... all ten of them but I wouldn't gamble on even them right now, the flux is in:)

As far as your statement:Luis is trying to put a number on the problem, try going through the article with a word search for ...Global warming , climate change, G.W. see the number of times they are mentioned. The thinking is linear and the problem is not. The very idea of trying to put a number on the problem is a scientific approach and the antithesis of an holistic way of looking at the problem. Energy is only part of the 'problem' an important part but like feet in walking only part of the procedure. Less of the digital and more of the analogue guys!

BTW I should have added that I quite agree with this of yours:

The informal sharing of knowledge will lead to other informal sharing systems.

and this:

I think the thing to do is just get started in your own life, and be honest with your neighbors and friends without forcing the issue.

Would you kindly try to be be more black or white in the future and save me a trip!

Moe, I'm just taking a moment to express my appreciation for your posts on TOD.
Keep 'em coming!

Luis is trying to put a number on the problem. If people can get a handle on what needs to get done by when, they are more likely to do it. People can't act until they understand the problem, and the steps to take are broken down into manageable, bite-sized pieces.

The consensus on PO is about 2012 or so. Hirsch Report, and others, says we are then about 17 years past due.

The latest data on Climate Change is we need to reduce CO2 from even current levels down to 350, meaning we are already over the line.

Excuse me if I have trouble understanding why people see ambiguity with regard to when we need to take action. The answer is: years ago.

What do we do? We start conserving our butts off and make it easy for people to do that. I have estimated a max of $30,000 per US household to make a significant shift to renewables. This is @ 3,000,000,000. That is a very small part of the US budget. Hell, there are probably dozens (hundreds?) of individuals who could literally cut a check for that much, or nearly so.

You set up a simple system of community-based solution proposals then fund them as viable plans come across the desk.

I will expand on this idea in a post ASAP.


Except on matters of mere detail, there are perhaps no practical questions, even among those which approach nearest to the character of purely economical questions, which admit of being decided on economical premises alone. J S Mill, "Principles", 1848

This is not an "economic" question, as least not as we commonly think of economics today. "There you go again", someone said to me at a transportation charette last week in Portland Maine, "bringing politics in.". I'd just written over the location of a gas station "RAISE GAS TAX/FUND FREE IN-CITY TRANSIT". And over the West End I'd written "WHERE IS THE WALK TO STORE SELLING UNDERWEAR AND TURNIPS?"

The politics has to go back into economics - explicitly - not buried as it is now (and yes, it is ever-so-there now). For example, the piranhas in Maine want to exempt airplanes and related services from sales tax to "boost economy". The benefits will exceed the costs they say. This at the same time the state revenue projections are falling maybe $100M or so every other week and all the cuts are coming out of social services, health care, infrastructure, education, maintenance, etc.... Talk about a social clusterf**k.

Airplanes, give me a break. I'd like to see the fiscal note (financial implications) on that bill. Voodoo economics about the dollar worth of a minute of a rich bastard's happiness vs the rest of us slobs.

You also brought up the question of how we build the new infrastructure. It strikes me as quite likely we do not have the necessary resources for most of the "solutions" people put on the table. It strikes me that our conventional economy is faltering now for precisely that reason, so we cannot build our way out of the problem. We have to unbuild our way out of it.

That puts us into triage right away. Frankly, I'd rather be there now, before martial law. But I suspect the window of time is small.

I'm impressed with Simmons taking the angle he is - calling on suppliers to shut down supplies. That's probably as powerful an argument as he can make.

cfm in Gray, ME

Todd - I Agree.

Just want to say I really like what aangel has been saying and doing.

Thanks Andre

The deep fundamental Love/Lust/Need for $money will gar-on-tee that it will be BAU until way past the point of no return.

But I hold out great hope for what comes after the squeese.

I did make some comments on the 'New Olduvai' scenario that concerned leadership and economic issues as well as how human nature will be a factor when trying to transition to life after PO.
I have read many comments from posters on TOD regarding 'bottom up' leadership vs 'top down' leadership. Bottom up can be a good local solution but does not address the problem of funding and direction for America which must come from the top because that is where the money is and that is where most Americans are used to looking for leadership. Right now we are at a critical juncture in our history and we have no leadership at the top willing to lead because they are politicians, not leaders. They are interested, first, in being re-elected and are loathe to address any issue that might cost them votes. Americans have been lulled to a state of numbness by easy living (compared to many other countries) and $3 gas didn't seem to awaken them but I am seeing signs that $4 gas might act as a bucket of cold water in the face. Of course, even if awakened Americans must go through several stages before the truth dawns on them and even then a large percentage of the population will be pointing fingers elsewhere.
Given what we know about American History, the current administration, and those wishing to be president, what will be the likely steps for leadership at the top to take after PO makes economic recovery (the life known before the housing crash and economic melt down that has just begun) unlikely without cheap oil?
Obviously we need a leader that can unite the country and lead all Americans. We do not need another fear mongerer. We dont need a fascist or a tyrant. We do not need another person that believes that 'war will solve this problem'. We need a person that doesnt give a hoot about the next term, but the current term. We dont need a populist but neither do we need one who bows to the corporations...and, if we ever are fortunate enough to find such a leader we need to protect he/she from assination. Perhaps no such person exists or that such a person is un-electable. I contend that it will be easier to find a great leader than it will be to change human nature and educate all Americans to the point that they will view the problems facing us with cool calculation, not hot headed rhetoric.

While it is likely that a lot of sheeple will follow a charismatic, fearless leader, my gut feeling is that the US is headed toward Balkanization and a return to a real republic or small nation-states.


Todd, I agree with you. The people would follow a great leader, had they the chance.
Lord Acton once said that (paraphrase) once a bureacracy reaches a certain point the only way to remove it is by a toppling by its own weight...or, something along those lines. I certainly dont see a great leader on our horizon.
I have always thought that the Civil War and dismanteling of states rights was a huge mistake and so did the great European thinkers of the time. European leaders were saying that the only future for America after the Civil war was a tyranny. They were right.
I am looking forward to living in a country that doesnt value military might above all else. Economic strength is much more usefull.

We know what we are doing but the idea of increasing efficient use of energy in transportation via automated guideways is generally censored here.

It to bad. The Congressional Office of Techical Assessment Study PB-244854 is an good blueprint of how to change transportation energy efficiency from about 4% to 70%.

Morgantown's PRT is a great beta version that has delivered 110 million injury-free, oil-free passenger miles.

Luis's excellent article just puts some analytical heft behind the simple formula we all know (or SHOULD know) is THE ANSWER: renewables + conservation. Even these will probably (IMHO) not be enough to avoid an economic decline to some extent (and probably a quite drastic one here in the USA), but these are our best and only hope for at least salvaging civilization, more or less.

Rising energy prices will get us part of the way there. The problem is that they have risen too slowly up to now, and threaten to rise too fast later. This means, for those that are counting on "the market" to work its magic on its own, that it won't. The market is not getting the right price signals NOW to make the mega-investments that need to be made NOW (and that still can be made NOW) in renewables and conservation in order to moderate the more rapid price increases we know will come before long if renewables and conservation are not already well on their way. This, IMHO, can properly be viewed as a market failure.

Because there is no global government with the power to implement an effective response at the global level, it is going to be every nation for itself. It is thus incumbant upon every national government to institute policies to promote renewables and conservation to a much greater extent than what would be happening if left solely to market forces. Those national governments that are refusing to do so (i.e., most of them, and particularly the US government) are betraying their long-term national interests.

Leananan posted this yesterday Iraq has ‘more crude oil’ than Saudi Arabia, and I went back this morning to see if there were any comments -- I didn't find any. Chalabi just won't go away, and references to huge Iraqi petroleum deposits keep appearing without any reference to verifiable data. Is this all just more of the same smoke and mirrors, or is there some reality behind it? Is the Iraq "prize" "worth" eliminating 60 million people, at least, to the most cynical among us?

My mistake about the Chalabi reference -- that's not Ahmed Chalabi of early Iraq war fame. The question remains -- how much petroleum does Iraq really have?

That is a good question. I had been taking these estimates that Iraq has a lot of undeveloped oil at face value. If the source of these claims is Chalabi, their credibility should be questioned.

Re: "Iraq has ‘more crude oil’ than Saudi Arabia."

If KSA is as depleted as some seem to think, then Chalabi might have a point.

this is why the old regime had to be removed from power

the us/uk and other nations were not going to accept an iraq controlled by saddam or his sons to be the world's number one producer and by extension controller of the petrodollar economy

The west is trying really hard to restart the cold war against Russia. Clearly the deciders didn't think too hard. The Iraqi resistance is not getting big power support like the mujaheddin in Afghanistan did, so the occupiers can pretend that they will be in Iraq for 10,000 years (according to McCain). If the current occupation is precarious then they have not seen anything yet.

It is a shame that the United States government taxed the United States oil industry in order to subsidize the Iraqi oil industry (Halliburton contracts) while the dollar sinks to lower lows and the prices of our imports soar. McCain's plans for a hundred year war seem similar to what happened here during British colonization when the colonies had taxes imposed on them to support the British army. Spending billions to build infrastructure in a Shiite dominated Islamicist republic while the U.S. goes deeper in debt is not solving our short term or long term energy needs.

According to HubbleTelescope:

There are rumors of a conspiracy (hint: KSA is not producing the oil it is "producing" allegedly from its own lands)

Sadly, No!


Quoting myself:

Outside [the existing producing areas], the conditions for the formation of supergiant oilfields don't obtain. There will surely be some localized small stuff, but that's true in almost any sedimentary basin. But don't dream about another Ghawar, or even another Abqaiq, because t'ain't gon'appen, mon. Expect to see plenty of hype aimed at gullible investors, though

Honda's natural gas car named as Greenest Vehicle of 2008

We could convert cars to dual fuel gasoline and natural gas. I know people will say that we are running out of natural gas as well, but we can create methane from biomass. Natural gas cars are very clean and dual fuel would allow longer trips.

So you like the idea of keeping the cars out on the road, and depleting our home-heating and cooking, electricity-producing, fertilizer-feedstock faster than we currently are?

interesting choice

I'd rather ride my bike or walk or take public transport and keep the lights on, the heat on and my stove on for a few more years...

but that's just me...we can just go ahead and burn it all up as fast as we can to keep those lovely cars on the road...

I will not argue the point. Homes can save enough natural gas with solar thermal heating and cooling to power a car. Methane can be made from biomass for a CO2 neutral fuel. There are lots of ways that we can have a good sustainable life, but some see it as either/or.

There are lots of ways that we can have a good sustainable life, but some see it as either/or.

of course they don't see it because they have already doomed us to doom and there is no way out. they won't discuss anything else. they just throw mud and say things like "where are we going to get the energy or _________ to do that?

Using natural gas for home heating and basload electricity production is a waste of a valuble resource. Natural gas is more valuble as car fuel, emergency grid power and chemical feedstock.

Dec NG data has been released by EIA


2007 consumption increased by 1.077 trillion Cu Ft
2007 Dry production increased by 602 Billion Cu Ft.
2007 Imports increased by 395 billion Cu Ft.

That tells me that Gas in Storage should be down at the end of 2007 over 2006
At the end of Dec gas in storage was down by 153 billion Cu Ft Y on Y per EIA

Edit: electrical consumption was up by 615 billion cu ft

Hello TODers,

I got a kick out of Leanan's toplink on the Nepalese King's electric bill. You would have thought this 'god' would have had the 'all-omniscient powers and time' to at least study Dieoff.com, then apply it to his situation.

For example, instead of burning all that electrojuice and other stupid excess consumption, he could have perhaps lifestyle shifted to a Richard Rainwater type of personal lifeboating, and led the public information drive for Peak Outreach and paradigm shift by living a Mohatmas Ghandi style of austerity.

If so, he could have garnered sufficient public adoration to be protected and revered as a true 'god-like leader', but too late now: he is probably now on the fast track to become the national pinata when Nepal implodes.

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


I think much of the top of the world's problems do not stem from the things you allude to. Nepal, Bhutan, Sikkim, Tibet's problems I believe have to do more with China and the west, and everyone else changing how they were.

Their daily life WAS perfectly suited to the location. Their practices etc.

NOT from their particular beliefs in God. Their "God-Like" leader as you say was a cultural thing completely insync with everthing else there.

It 50-80 years ago they DIDN'T have a energy problem. Everyone should have just left them alone.

If you want to get a look and feel of what it was like in 1900 read "Magic And Mystery in Tibet" by Madame Alexandra David-Neel, the first western woman to travel there. And brought back pictures.

Hello TODers,

I was pondering my postings in yesterday's Drumbeat, then wondering if future historians will call this year 2000-ATE or 2000-STARVE? Food for your thoughts. Or is that even now too expensive a tradeoff?

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

Video of Jim Jubak talking about how Saudi Arabia is going to stop growing wheat.
Then lists the countries who will stop exporting wheat because of domestic needs.



Yep. Ethanol subsidies and $4 a gallon gas, but I'll bet SA can get all the wheat from the USA that they want. $6 a loaf here we come.
Baking Leanan's 'no knead' as we speak :-)

IMO, the level of contempt for the American public that the Mccain and Clinton camps exhibit is absolutely mind boggling. In the link, Hillary explains that the election is all about national security, as "we are at war". There is a war all right, and it is a war against the American public, and obviously McCain and Clinton feel the public is too frigging stupid to comprehend it http://www.swamppolitics.com/news/politics/blog/2008/03/clinton_belittle...

Possibly OT, military resource consumption impacting civilian rail

SEPTA has granted Rotem USA Corp. an extension until April 2009 to deliver the first three Silverliner V railcars because of steel shortages and the bankruptcy of a communications equipment supplier, said Patrick Nowakowski, chief operations officer.
Rotem was unable to procure enough of the type of steel specified in the SEPTA contract because the U.S. government has cornered the market; it is using the steel for armoring vehicles bound for Iraq, Nowakowski said.

Not sure if this claim was just to hide mismanagement or not, and also unsure what type of steel is required but ...

I expect to see increased competition between the US military and the US civilian sector for fuel and other resources.

avert your eyes doomers.

Daimler plans new battery for hybrid

DETROIT (AP) — Daimler AG is planning to roll out a hybrid version of its Mercedes-Benz flagship S-Class luxury sedan that uses a kind of battery already widely used in consumer electronics.
Daimler said that it has adapted lithium-ion technology to meet demanding automotive requirements. Daimler said Friday the new battery will be used in the S 400 BlueHYBRID beginning next year.

"What we have here is a groundbreaking key technology that is going to be a decisive factor for the future success of the automotive industry," Daimler Board of Management member Thomas Weber said in a statement.


Coca-Cola and UPS continue green truck push
Wednesday February 27, 10:09 am ET

Coca-Cola Enterprises Inc. and United Parcel Service Inc. are rolling out more environmentally friendly trucks.
Atlanta-based Coca-Cola Enterprises (NYSE: CCE - News), the biggest marketer of Coke products, is set to buy 120 new hybrid-electric trucks from Eaton Corp. (NYSE: ETN - News). Coca-Cola Enterprises said its testing found Eaton's hybrid-electric drivetrain equipped trucks decreased emissions by roughly 32 percent and fuel consumption by up to 37 percent, compared with conventionally powered trucks in Coca-Cola's current fleet. Coca-Cola also reported lower maintenance costs on the hybrid-powered trucks.


Coca-Cola sets aluminum recycling goal

The Coca-Cola Co. is aiming to eventually recycle or reuse 100 percent of the aluminum beverage cans it sells in America.

Atlanta-based Coca-Cola (NYSE: KO) said the 100-percent goal is a long-term target.

One out of every two aluminum cans is recycled today, Coca-Cola said. Recycling aluminum is efficient and requires 95 percent less energy than creating aluminum from raw materials. It also reduces carbon emissions by 95 percent. Coca-Cola said it uses an average 60 percent recycled aluminum in its beverage cans.


Coke tracks its environmental progress

Coca-Cola Enterprises posts $711M profit

Eco-friendly hybrid buses for Dubai

Chevy gets it right with '08 Tahoe Hybrid

Just remember technology won't save us.

GM's Hybrid SUVs Have 'Street Smarts'
Freescale Semiconductor's technology provides brains behind powertrain system.

Compiled By Adrienne Selko
Feb. 26, 2008 -- General Motors' Chevy Tahoe Hybrid and GMC Yukon Hybrid are seeing a 50% increase in fuel efficiency over their conventional counterparts thanks to chips produced by Freescale Semiconductor, according to the companies. Freescale is providing advanced microcontroller (MCU) technology for the complete hybrid drive train.




Production starts 2009 in Euro.

Sorry no Yanks! (Doesn't meet US safety regulations due to no armour/not enough pizza burger holders on dashboard and 20St driver weight limit:-)Joke guys; i know that 66% of you are not obese.


so a (at least) $80,000 luxury car getting an estimated 30mpg is going to save us?

and how is coke going to manage to get everyone to recycle ALL their cans when they don't now? I have friends here in LA who won't even bother to separate their recyclables into the different garbage bins the City of Los Angeles provides...

but it's cool that a luxury car affordable to a tiny fraction of those in the world and coke announcing that they are aiming for people (whom they have 0 control over) to recycle all the coke cans is going to save civilization - very reassuring and surprisingly easy solutions to all the big problems!

yay! the market provides again! let's celebrate with Dom, Cuban cigars and a public reading of Ayn Rand's greatest works!

Naimi, must be reading the Oil Drum

Oil prices to stay above 60-70 dollars: Saudi Arabia


He also said that the country, which already has the biggest proven oil reserves in the world and exports 10 million bpd, planned to add another 200 billion barrels of oil to its proven reserves figure.

He said this was "to reassure the world that we are not going to run out of oil in the next five to ten years as peak oil theorists say."

Exploration efforts to find new oilfields that could be exploited in the future will also continue.

"Saudi Arabia is not fully explored," he said.

Do any of the reporters ever ask Naimi where the extra 200 Gb of reserves will come from? Saudi Arabia currently says it has 260 Gb of reserves and they plan to add another 200 Gb - from where? We don't even know how their 260 Gb figure is derived!

At the same time

Khursaniyah completion might be delayed July 2008

and Saudi Arabia plans to become a solar power centre

200 Gb, based on the HL model, is the approximate URR for the entire Lower 48--or it is about 16 Prudhoe Bay Fields (the largest oil field in North America).

Time for me to trot out the Texas State Geologist again, who said in 2005 that while Texas may not be able to equal its peak production it can--with the use of, drumroll please, better technology--significantly increase its production. Texas production has fallen almost continuously since peaking in 1972. While we have found, and are finding new fields, we can't offset the decline from the old, large fields.

ace, I am very confident that KSA will increase their 'proven reserves' by 200 billion barrels using EXACTLY the same technology they used to increase them from 110 billion barrels in 1978 to 260 billion barrels in 1988.

I will soon be holding a press conference, announcing that I will be using this same pioneering technology to increase my personal proven oil reserves by 200 billion barrels as well !

Party on!

Yes, you have to ask yourself why they didn't "discover" this oil back in the 70's during the quota wars. If it's really there. IF anything, OPEC members are going to start revising their reserves down in the future to justify reduced production!

Is a Lean Economy Turning Mean?

It was never enough to pay all the bills, she said, so she made choices, paying this one, not paying that one, all the while focused on one mission: getting her two daughters through school. She lived in apartments in better neighborhoods, paying more rent than she could afford to ensure that her girls attended better schools.

“I truly bought into the idea that education is the way out of poverty,” Ms. Thomas says. One daughter received a master’s degree in education and is a teacher in Hawaii, she says, and the other is still in college.

But the bills for Ms. Thomas are still coming due. She lost her car in November 2005 after she fell behind on the payments. Unable to drive to work, she lost her job. Since then, she has been unable to find a job.

Several times, she has landed interviews that seemed likely to bring offers, but the jobs required a credit check — a test she cannot pass.

"jobs required a credit check — a test she cannot pass."

looking myself & seen the same recently re credit check. i had never seen before ; is this new?

It's not totally new, but there's been an increasing use of credit checks for job applicants. Sounds like there's been a surge recently.

Not just credit checks, but more complete background checks. In Maine, with population just under 1.3M, there were nearly 400k background checks run last year. Police want more money so they can run more checks.

cfm in Police State, ME

Jobs that requires a security check need a good credit history. It proves that you're honest and can manage your money in such a way that does not leave an opening to subversive influences.

Would you trust an employee with company secrets, or large amounts or cash, if they kept defaulting on their debt, or had a dozen maxed out credit cards?

It's amazing how the oil market has become intertwined with wheat, corn, aluminum and the market for things that have little directly to do with making fuel and plastic. The common thread is, of course, they are all commodities - real stuff as opposed to paper assets. The market on real stuff vs paper stuff has always been a market unto its own depending on the health of the paper stuff. This has always been a prime driver in the commodities markets down through history and must be the primary consideration in guaging over or under valuation. After the run oil and other commodities have made, you'd think maybe they are grossly overvalued. But if you look at the historical context you see this:

This is just taking the price of the CRB commodities index and divding it by the value of the S&P 500 index. It shows how much more important paper stuff was 15 years ago. If you think back to the 90s, the financial world's preoccupation was stocks, new technology intellectual property rights, complex debt leveraging - paper stuff while they ran around in gas guzzling SUVs giving no thought to the basic stuff like oil and food.

Now the financial world is preoccupoed with what to do about oil and food and how to clean up the CDOs, CDSs, and other paper messes we have made. This is all a normal cycle of history that can be seen in a 200 year history of what is shown above (which includes oil) but focused on only the ultimate anti-paper which serves little useful purpose other than being an anti-paper:

Both of these charts strongly suggest that we are in the fairly early stage of doing a swift reversion between the paper thing and the real stuff thing such as has happened many times before. The first chart shows where we are with things like oil and crops relative to the condition of the stock market. The three trips the CRB make to the resistance level over the last 7 years were

1. At the end of a stock bear market
2. In the middle of a stock bull market with stocks at least as
atractive as commodities
3. Now at the beginning of a likely stock bear market with investors fleeing anything that smacks of paper wealth

During this process, oil has gone from being plentifull and $18/bbl to being the ultimate shortage and $100/bbl. And now it has a powerful paper-to-stuff switch pushing upward on its price.

If the price of everything is going up that just tells you the value of money is going down. This is inflation caused by the huge increase in M3 worldwide. The price of everything simply could not rise if the money supply wasn't increasing. Commodity prices are moving up in step and not because of shortages. The 3rd hour of this week's Financial Sense News Hour covers this well.


Unfortunately the Fed can't control this world-wide inflation because they can't control the world-wide money supply. If they tried to bring inflation down in this environment they would just drive down real wages in the US via a recession and consumption outside the US would simply replace US consumption. There is no way out.

M3 money supply is indeed increasing far faster than the official inflation rate. The Fed has stopped reporting this ugly number, but everyone knows that the core inflation rate is bogus because energy and food inflation is not a "volatity" issue. The average energy and food price is a major inflation contributor. Commodity prices are responding with or without a shortage in a practical usage. Some commodities such as gold have insignificant practical usage and are simply responding to devalued money while many commodities have acute shortages driving their price climb as well.

from NY Times:


IF you’ve stood in line at a farmers’ market recently, you know that the local food movement is thriving, to the point that small farmers are having a tough time keeping up with the demand.

I've seen posts on TOD in the past that suggest that maybe some people don't know this. Or, perhaps they work for the federal gov't?

But consumers who would like to be able to buy local fruits and vegetables not just at farmers’ markets, but also in the produce aisle of their supermarket, will be dismayed to learn that the federal government works deliberately and forcefully to prevent the local food movement from expanding.

Hello TODers,

Maaden to dominate fertiliser market

..."We expect to take a 15-20 per cent share from day one," says Steve Wilson, a spokesman for Maaden Phosphate Company. "The sulphuric acid, ammonia and phosphoric acid plants will be the largest [of their kind]."

The project could be able to undercut its competitors. "It is the only fully integrated phosphates project in the world and we have access to cheap natural gas and great economies of scale," says a senior project source.

Costs in Russia, a key rival, are set to escalate dramatically, with Gazprom set to raise sulphur prices more than sevenfold in 2008. Maaden, in contrast, will have access to cheap local sulphur.

"Maaden's sulphur will be cheaper than most," says Barrie Bain, director of Fertecon, a UK-based fertiliser consultancy. "But the phosphate rock will be expensive compared with Morocco and US producers who have their own rock. It depends on how Maaden accounts for the capital cost."
No mention of K from potash rocks, but an intriging N & P project.

The interesting news tidbit to me was Gazprom's 7-fold raising of sulphur prices! I tried to google for more info from other sources, but no luck. The global sulphur pricing disparities are amazing if this Gazprom news is true.

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

A little more info on the ripple effect of spiking sulphur prices:

Base metal markets look to ‘decoupling’

Available stocks of copper have shrunk to about three days’ worth of global consumption, leaving prices highly vulnerable to further supply problems.

Credit Suisse believes copper could spike to $12,000 a tonne, partly on rising prices of sulphuric acid, used to process ore in a quarter of global copper production.

“Upward shifts in production costs and metals demand will underpin strong long-term metals prices,” says Gayle Berry of Barclays Capital.
Yikes, just imagine the number of copper thefts if this prediction comes true. Picture a jewelry store merging with a plumbing supply company: diamonds, gold, and copper fittings all locked up in the same glass display cases.

Go to gas buddy:


and do a 5 or 6 year chart and include oil price. The oil price tracks gasoline prices very closely, until May 07 where there is now a sudden divergenge. It appears that gas is being kept flat at around the $3 mark by subsidy. I know Robert has given an explanation as to why the divergence happened last year, but I just don't buy it now as this divergence seems to be ongoing now. Extrapolating the last 5 years out to now should support a gasoline price of around $4.20

What changed in May 07'?

What seems even more bizarre is the fact that in the last year refinery utilization has been lower than usual which would support an even higher price, not to mention the fact that inventory draw has not been that bad either.

Demand destruction? But according to national sattistics gasoline consumption is still up!! WTF??

I want to know!


I own Valero stock, and since the summer the price of crude goes up, the stock comes under selling pressure. I would also like to know why the refiners are holding the price down of gas. Is it really supply & demand?

One problem with Valero stock is that it has been very popular and is in every mutual fund and thus has a strong tendency to track what the overall market is doing - and that has not been good since mid '07.

The divergence happened when I started gambling on gasoline futures, trends always seem to reverse when I put money down ;)

Seriously though, does seem quite odd.