DrumBeat: March 15, 2008

US fuel dealers seek emergency heating oil release

NEW YORK, March 14 (Reuters) - U.S. heating oil distributors are planning to ask the government to release emergency heating oil supplies as part of a package to ease a cash crunch this winter, a source said Friday.

The squeeze for dealers has been caused by delayed payments from low-income customers and sky-high prices for their own fuel inventory and mirrors problems faced by the sector in 2004 when a run-up in prices pushed a top U.S. heating oil distributor to the brink of bankruptcy.

"It's brutal," said Shane Sweet, chief executive of New England Fuel Institute (NEFI), which represents some 1,000 distributors and retailers in northern states. He said customers occasionally ring their fuel dealers in tears over their heating bills.

Oil price leap catches out the experts

With the world’s oil supplies in decline, everyone agrees that prices should be high. A new breed of speculators in hedge funds and investment banks, though, is being blamed in some quarters for pushing prices too high.

“If you talk strictly about the fundamentals of supply and demand, the oil price should be about $80 a barrel,” said Ruchir Kadakia from Cambridge Energy Research Associates (CERA).

Truck firms fuming about high gas prices

With 12 years experience running a trucking company, Chad Bowen thought he’d seen it all.

But in the past year, the owner of Bowen Enterprises Inc. in Sparks said he’s witnessed something he’s never seen before.

“For the first time, we’ve actually paid more for fuel than we have for our drivers,” said Bowen, whose company boasts a fleet of 40 flatbed trucks and 25 refrigerated trailers. “In the past, we’ve always budgeted more for our drivers than we have for fuel. But now the cost of fuel far exceeds the cost of a good employee. It’s just insane.”

Why Silver is better than Oil as an Investment

1. There is a 40-year supply of oil in the ground. There is a 14-year supply of silver in the ground. Therefore, silver is the better investment.

If "peak oil" is true, then every peak oil nutcase out there ought to be several times more worried about "peak silver", since silver reserves will run out sooner.

Politics of black gold

International prices of crude oil have touched stratospheric heights. This is pretty bad news for India. The government will say it has no control over world prices, which is correct. Political compulsions will check increases in consumer prices of petrol and diesel, which is to be expected in a pre-election year. The finance ministry will protect its revenues and even increase tax collections while claiming that the money is required for education, heathcare and rural development, which is partly correct.

Iraq oil refinery expands, boosting production capacity by about 10,000 barrels per day

BAGHDAD (AP) - A Najaf oil refinery expanded its production capacity Saturday by about 10,000 barrels per day, or roughly half of what it had producing.

The refinery, about 100 miles south of Baghdad, was built in October 2006 to help meet central Iraq's increasing demand for petroleum products, including kerosene. It had been producing about 20,000 barrels per day.

Ukraine Not Happy About Russian Gas Quotas

Ukraine President Viktor Yushchenko said his country's agreement with Gazprom gives the Russian gas monopoly too high a quota for direct sales.

White County asks gas companies to pay for road repairs

SEARCY, Ark. (AP) White County, home to much of the exploration in Arkansas' Fayetteville Shale play, plans to bill two of the largest gas companies drilling there for repairs to roads buckling under their heavy equipment.

Japan: Govt waste-timber biofuel plan stumped

Although cutting global carbon dioxide emissions is dominating the Group of 20 climate talks currently being held in Chiba, the government's effort to promote biofuel derived from construction waste has stalled due to a lack of cooperation from the nation's oil industry.

Is Suburbia Turning Into Slumburbia?

Every coin has its flip side. Last week, I explored how San Francisco and other centers of innovation around the globe are resisting the downward vortex of the housing market. These fabled super cities, Richard Florida contends in his new book, "Who's Your City," are attracting an increasingly disproportionate number of educated, creative knowledge workers who fuel the economy. In turn, these folks are keeping housing prices relatively high despite recurring appearances of the R-word on our front pages.

The dark side of this surreality is that the places far from these hallowed urban cores are experiencing unprecedented decline and, according to some experts, threaten to become tomorrow's slums.

We're not talking about mean inner city streets getting meaner, we're talking about the pristine, newly built developments of four-bedroom, three-bath dream homes produced in the last housing boom becoming ghettos for the poor and the disenfranchised.

Environmentalism 2.0

If your image of an environmentalist is an organic fiber-wearing vegan who likes to tout the health benefits of hemp tea, Fred Krupp is here to dissuade you. The environmentalists of today — and more importantly, tomorrow — are more likely to be working at a Silicon Valley solar power start-up than saving the whales. Climate change poses a fundamentally different problem, on a far vaster scale, then the local air pollution or wildlife conservation issues that environmentalists have faced before, and it demands a different kind of solution. At the core of that problem is energy, which touches every aspect of modern life, and while the old green virtues of conservation, of simple living, must play a part in our response, the key will be technology.

Hydrogen Fuel Station Opens in White Plains (NY)

WITH a history of using alternative-fuel vehicles long before it became chic, White Plains now is the Northeast hub — and one of three cities nationwide — for a model program designed to put hydrogen-powered cars in consumers’ hands.

Lawsuit Seeks to Block Uranium Mining at Grand Canyon

One of the great natural wonders of the world - the Grand Canyon of the Colorado River - is threatened by uranium exploration.Three conservation groups filed a lawsuit Wednesday challenging the approval of up to 39 new uranium drilling sites within a few miles of Grand Canyon National Park.

A Declaration of Energy Independence: One Year Later

Despite the multitude of approaches that have been suggested to deal with the developing energy crisis, the universal consensus that the world’s oil supply will shortly be depleted leaves a number of countries engaged in an active search for new alternative energy. Thus, the pressure is on industrialized countries not only to create an ecologically-friendly energy market, but to do so without disturbing the energy supply of their citizens.

Nigerian deals 'wasted billions'

Some $2.2bn-worth of Nigerian energy contracts were awarded without a bidding process by the former president and his energy minister, officials say.

One was to a company with less than $200 of base capital at the time, a witness told a parliamentary committee.

A funny thing happened on the way to the pump

COLONIE -- Some things bring out the best in people. High gas prices can bring out the worst.

Or so it seemed at the Mobil station on Wolf Road Friday, where cashier Dave Brown recounted some memorable encounters with customers.

A number have been putting just a gallon of gas into their cars, he said, apparently believing there might be gas several cents cheaper up the road.

One customer wanted $1 worth of gas.

"I said you're not going to get anywhere with that," Brown said.

EU's biofuels target could be amended amid concerns

BRUSSELS (AFP) - The European Union's ambitious target on using biofuels in cars could be amended in the face of concerns over rising food prices, the EU's Slovenian presidency said Thursday.

Virgin's biofuel is a PR stunt says BA boss

Richard Branson's promotion of biofuels is a PR stunt and green taxes on aviation are pure opportunism according to the chief executive of British Airways.

To avoid another energy crisis, Cuba looks offshore for resources

Cuba's onshore oil is heavy, sulphurous crude that makes poor fuel. But farther offshore, just 50 miles from the Florida Keys, is a potential treasure trove of premium grade oil.

The U.S. Geological Survey estimates Cuba's offshore reserves hold from 5-billion to 9-billion barrels of oil, and close to 1-trillion cubic feet of natural gas.

"This is the big bonanza," said Jorge Pinon, a Cuban-American energy expert and former president of Amoco's oil operations in Latin America. "This could transform Cuba's energy security, turning it into a petroleum exporter even."

Post Carbon Montreal examines how to cut reliance on fossil fuels

With the oil price tag topping the $100 mark, more and more people are starting to think about using fossil fuels more efficiently.

In January, CIBC World Markets warned Canadians to brace for $1.50-per-litre gas prices in the near future. That prospect and the threat of peak oil is getting Montrealers to think about how they can face the consequences of an energy crunch.

Black Gold

After Daniel Yergin’s book, The Prize, published 16 years ago, Blood of the Earth is the best basic text on energy, and compulsory reading for all of us interested in India’s long-term security interests.

Governator Pushes Green at ECO:nomics on Friday

Today, oil prices reached $110 a barrel, which made the “Oil: The End of an Era?” talk one of the more anticipated. Featuring Christophe de Margerie of Total and Daniel Yergin of Cambridge Energy Research Associates, the talk centered on the political boundaries to oil extraction and downplayed any sort of “below-the-ground” limitations that peak oil believers espouse.

Gas Price Driven Inflation Tackled at International Conference

Today’s gas prices may seem high but could skyrocket as global oil supplies dwindle.

The coming crisis in the oil supply is one of three key topics to be covered at a conference bringing together national experts on “peak oil”, climate change and an environmentally friendly and sustainable economy.

Energy price spikes call for crisis response

Governor M. Jodi Rell today announced she has written the leadership of Congress, asking them to consider the spike in energy prices as a crisis worthy of the same treatment legislators gave to the recent economic stimulus package.

“The people of Connecticut and other states are suffering,” Governor Rell said. “The U.S. dollar is trading at all-time lows against major currencies. Crude oil is trading at record highs, closing last night at over $110 a barrel after reaching the $111-a-barrel mark during the day

Which path do we want?

James Howard Kunstler thinks that American society is due for a massive reordering. Reading his latest fictional work - "World Made by Hand" - you'd be forgiven if you thought that maybe James Howard Kunstler wasn't looking forward to it.

U.S. Population Grows Due to Immigration as Infrastructure Weakens

A story in USA Today reports that “The U.S. population will soar to 438 million by 2050.” Most of the population growth will be driven by immigration and live births to immigrants. How depressing. And it ought to make you mad, so that you want to “do something” about it… like build a wall or something.

Really, why is it that the so-called “immigration debate” in the United States is often tied up with terms of race and seldom tied into the discussion of depleting resources and declining infrastructure? If the immigration debate was framed in the latter terms of resource depletion and infrastructure, people would focus on the point that the nation is “full.” The irrefutable fact is that the U.S. resource base is fast-depleting and the infrastructure system is overloaded. There is no more room at this inn. It’s time to hang out the equivalent of the “No Vacancy” sign for very some practical reasons.

Pakistan: Petroleum dealers demand 5pc margin

LAHORE: President of Petroleum Dealers Association (PDA), Abdul Sami Khan has demanded the government to raise petroleum dealers’ margin on petrol as their sale of petrol has declined due to rise in CNG use.

China – World's Largest Miner – Is Short of Coal

While China, an importer of enormous amounts of iron ore, is doing its utmost to avoid a crippling price rise for that particular commodity, it is also the world’s largest coal miner and many here would be quite happy to see its price shoot for the moon. But price hike or no price hike, China’s coal future is facing difficulties.

Who will win this clash of dolphins versus our oil on troubled waters?

IT IS a classic conservation-versus-development dispute. Desire to find more oil and gas reserves off Scotland's coast is clashing with concern for a colony of renowned bottlenose dolphins which is also a valuable asset – in tourism terms.

Adm. Fallon and the Unfinished Business in Iraq and Iran

The real reason for Fallon’s resignation may be much more straightforward: disputes over the conduct of ground operations which have resulted in conflicts with General David Petraeus. Barnett’s Esquire article hinted at difficult relations with Petraeus, claiming that Gates appointed Fallon to put the brakes on the general. Barnett wrote, “in fact, any time he talks with Petraeus, there are only two men in the room — the admiral and the general — and their exchanges remain private.”

According to the Wall Street Journal, the key dispute was over troop strength. Fallon wanted to draw down Petraeus’ troop levels in Iraq far faster than his ground commander would agree to. “Senior Pentagon officials — including, we hear, Defense Secretary Robert Gates, Joint Chiefs Chairman Mike Mullen, Army Chief of Staff George Casey, and Admiral Fallon — have been urging deeper troop cuts in Iraq beyond the five ‘surge’ combat brigades already scheduled for redeployment this summer.” But with support for the war in Iraq at a two-year high on the back of a perception that Petraeus’ strategy is working, Fallon’s hand was weakened.

Peak Oil? Industry Numbers Disagree

The supply of oil, one of the most crucial elements for all energy choices—renewable or otherwise—is a subject of dispute even among the denizens of the industry.

The “peak-oil” debate returned on the final day of The Wall Street Journal’s “ECO:nomics” conference, politely pitting a reluctant oil-industry worrier, Christophe de Margerie, head of France’s Total SA, against Daniel Yergin, head of bullish Cambridge Energy Research Associates. The question they hashed out: What does a $110-a-barrel price say about the supply of oil?

A Crude Case For War?

Instead of making Iraq an open economy fueled by a thriving oil sector, the war has failed to boost the flow of oil from Iraq's giant well-mapped reservoirs, which oil experts say could rival Saudi Arabia's and produce 6 million barrels a day, if not more. Thanks to insurgents' sabotage of pipelines and pumping stations, and foreign companies' fears about safety and contract risks in Iraq, the country is still struggling in vain to raise oil output to its prewar levels of about 2.5 million barrels a day.

As it turns out, that has kept oil off the international market at just the moment when the world desperately needs a cushion of supplies to keep prices down. Demand from China is booming, and political strife has limited oil production in Nigeria and Venezuela.

Running on empty?

Depending on whom you listen to, global oil production has peaked, will peak soon, or may not peak for a very long time.

Although the peak-oil thesis has existed since the 1950s, it has gained considerably more attention in recent months with the rising price of oil.

Why your food is costing more money

World financial markets may seem remote from you; far away from from that turkey sandwich in your hands.

But chew this over before you swallow: seventy percent of the cost of raising that turkey in your sandwich was the food it ate. And turkeys eat corn and soybean meal.

New pipelines will even out gas prices

SALT LAKE CITY - In the Rocky Mountains, the energy crisis has mostly been a crisis for natural gas producers and a boon for consumers.

Last fall, gas suppliers competing to stuff excess production into constrained pipeline systems drove spot prices to a laughably low 5 cents for 1,000 cubic feet of gas. That's the equivalent of a nickel to heat a typical house for two winter days.

"A lot of producers didn't think it was funny," said Porter Bennett, president and chief executive for energy analysts Bentek Energy LLC. "They were actually paying somebody to take it." Storing gas or turning off wells isn't always practical.

Yet for consumers across much of the West, where natural gas historically has been cheap and plentiful, the party is almost over, and it may have ended with that final discount splurge. The first of a handful of major new pipelines originating in the Rocky Mountains is starting to siphon away the bounty, promising lower prices for other regions.

"If you don't care about the rest of the country, it's not such a good thing," Bennett said in Golden, Colo. "We kind of get screwed in the deal."

Russia's Gazprom settles Ukraine gas row, but profits could dip

The energy giant agreed Tuesday to pay 'European prices' for Central Asian gas, where it has long enjoyed below-market rates.

The Philippines: Arroyo urged again to suspend VAT on oil as pump prices soar

Activist group Bagong Alyansang Makabayan (BAYAN) reiterated Saturday the call to the Arroyo administration to suspend the imposition of Value-Added Tax (VAT) on petroleum products in light of the latest series of price hikes by oil companies.

Judge Appoints Receiver For Abruptly Shuttered Waterbury Oil Company

Hartford, CT — A judge has appointed a temporary receiver to take control of a Waterbury oil company that shut down abruptly, leaving some 3,000 customers in the lurch. F&S Oil shut down last week and owes millions of dollars to customers who prepaid for home heating oil.

It's the '70s, but not all over again

Now, with oil hitting a new record above US$110, food costs soaring, and the United States hurtling toward recession, fears are growing North America could face a repeat of that nasty 1970s' affliction: stagflation, an ugly mixture of both slow growth and high inflation.

However, it will not be North American wages that drive inflation higher. The new twist this time is that inflation could start to drift higher on the back of rising costs and currencies in emerging markets, which have long been a source of downward price pressure.

Diesel price fuels concerns

Drivers using diesel are feeling the pinch of the high costs of the fuel - which at one time was cheaper than gasoline - after it hit a record high of more than $4 a gallon in some areas.

"It's just mind-blowing that it costs so much," said Pierce, 34, of Durand, who works for Wixom-based Tomra Michigan, a bottle-return machine installing company.

Australia: Easter warning for oil giants

THE nation's consumer watchdog has warned petrol retailers not to raise prices unnecessarily ahead of the Easter long weekend.

Hawai`i: Lawmaker Wants Big Oil To Open Books

As the price of regular unleaded gas in Wailuku, Maui approaches four dollars a gallon and goes above that in other parts of the state a lawmaker is pushing a bill that would require oil companies and gas suppliers to open their books for public inspection.

Sen. Ron Menor, the democratic chairman of the Energy and Environment Committee, believes more transparency would put pressure on energy companies to lower fuel prices.

Tax code unfair to taxpayers, but not oil firms

Every American is affected by extremely high oil prices, yet major petrol corporations such as Exxon Mobil continue to receive special treatment on federal taxes. Our President, who has considerable financial holdings in the petrol cartel, refuses to support fair and justifiable changes in the federal tax code.

This is extremely unfair to average taxpayers who soon will be filing their 1040 tax returns. Why not write the White House? This is not only unjust, but is in fact madness -- given America's financial status.

Pain at pump goes both ways

Soaring fuel prices make for unhappy customers and dwindling business for gas-station owners.

At Khawar Shahzad's Sunoco station on Parsons Avenue, the sign outside read $3.39 a gallon yesterday afternoon -- a bargain compared with $3.59 earlier this week.

"Everybody looks so sad, like they've lost all their hopes," Shahzad said. "We do feel it, too, because we are not getting the business we used to get."

Indonesia raises fuel prices for industrial uses

JAKARTA, March 15 (Xinhua) -- Indonesia's state-run oil and gas firm Pertamina announced Saturday it has increased fuel prices by between 1.1 percent and 4.6 percent for corporate customers effective from the same day.

We mistakenly worship oil, when the Sun is our true god

In the excellent documentary A Crude Awakening, one of the speakers, Matthew Savinar - who manages the web site lifeaftertheoilcrash.net - states that although we (as the world) claim devotion to other gods, that who we truly worship is Oil. "Oil is our god", he says.

I couldn't agree with him more. What Matthew Savinar is saying is that we now live in societies whose very existence depends primarily on using oil.

Fighting the Wrong Foe With the Wrong Weapons

Mr. Scheuer’s appraisal of the situation in which the United States now finds itself is grim. Because of the “profound and willful ignorance” of the “bipartisan governing elite” (those “individuals who have influenced, contributed ideas to, drafted and conducted U.S. foreign policy for the past 35 years”), he argues, “America has traveled a path that has seen the lethal nuisance originally presented by Sunni militants transformed into an existential threat that is poised to strike at the core of our social and civil institutions in a way that could change our collective lifestyle for many decades, perhaps forever.” If there is “a place worse than hell in 2008,” he adds, “Americans are now in it.”

Blair urges binding gas cuts by all countries

MAKUHARI, Japan (AFP) - Tony Blair on Saturday urged the world's heaviest polluters including the United States and China to agree to binding emissions cuts, saying failure to act on global warming would be "unforgivably irresponsible."

Japan climate plan questioned by poorer nations: NGOs

MAKUHARI, Japan (AFP) - Japan proposed Saturday at a meeting on global warming to set energy efficiency targets for each industry, but activists said the idea was met with suspicion by poorer countries.

Japan is a front-runner in energy-efficiency technology but is struggling to meet its own obligations to slash greenhouse gases under the Kyoto Protocol as its economy steadily recovers from recession in the 1990s.

EU agrees climate plan deadline

EU leaders have agreed to finish talks by the end of the year on an ambitious plan to fight climate change.

After a two-day summit in Brussels, leaders for the 27 nations said they hoped new legislation would be enacted in early 2009.

EU warns US, China on climate change

BRUSSELS - European Union leaders threatened the United States and China with trade sanctions Friday if the world's two biggest polluters don't commit to ambitious cuts in greenhouse gases by next year.

The warning came as the economic downturn focused European leaders on the impact on industry of their groundbreaking agreement last year to cut carbon emissions by 20 percent from 1990 levels by 2020.

Transition Towns - a Movement in the UK to Deal With Post Peak

Bristol is my hometown!

Returning to England, Hopkins launched helped to create a similar “energy descent” plan in Totnes, Devon, and the Transition Town movement was born.

It’s grown incredibly fast. Individuals and groups from hundreds of places across the UK - and around the world - have registered to become Transition Towns, with more coming on board all the time.

The first, Totnes, Lewes, Glastonbury and Stroud, were full of middle-class hippy types (or as Hopkins puts it, “places that traditionally have been laboratories for alternative ideas”). But in Bristol it’s the poorer districts that have been most dynamic. In Wales, the impetus has come from the agricultural community.

“If we don’t do anything,” says Hopkins, “there are all kinds of grim scenarios. But I like to think of those as like Dickens’ Ghost of Christmas Future – just one possible scenario.”


And here is a direct link to the 'Transition Towns' website:

Walter Bagehot, the patron saint of central bankers, suggested the following basic principles for central banks to help the banks under their supervision to avoid liquidity runs.


A. Only lend against good collateral to avoid losses for taxpayers at a later date.
B. Lend at extremely high interest rates to avoid the facility being used willy-nilly by greedy bankers.
C. Make public the availability of such facilities, so as to prevent doubts and suspicions in the minds of depositors and other creditors.

This week's announcement by the Fed violates EVERY one of those principles.


It Is Tough to Value Bear, But It Had Better Sell Fast"

I said it earlier. Stop redemptions/withdrawals to $100 millionaires,
we'll skip the Middleman and just take your bank.

What Lehman Bros will be doing ASAP:

"wire or bring a check to the cashier by 2 pm or you will be sold out"

RE: It's the '70s, but not all over again... (page 2) The Fed is aware that it's loose money policy over most of the past ten years would eventually lead to inflation. Eventually is the key word for the economy is huge and has great momentum, making quick course corrections difficult or impossible. Bernanke was so convinced that his study of prior recessions/depressions gave him insight to implement new tools, and that the new tools would work, leads me to believe it is the reason that he was chosen for his current position of Chairman of the Fed. A series of Phsycal and monetary policies have hidden or delayed inflation...Off shoring of American jobs debased the workers ability to bargin for wages, attacking unions did the same, importation of cheap goods from overseas held down prices, blowing bubbles in various sectors like housing gave the appearance of a strong economy, the dot com bubble did the same, hiding the real economic statistics made all seem well...All were bullets that forestalled the inevetible or terporarily hid the inevitable from the average American. Those policy 'bullets' are pretty much used up and now we face reality...but the Fed has yet to give up on reflation, which is going to make reality worse when it arrives full force.

...snip..."In choosing to aggressively reflate, the U.S. is pursuing a high-risk strategy that threatens to increase inflation and macroeconomic volatility in the years ahead," Mr. Bond said. "Any central bank that so clearly targets growth over inflation is destined to lose control over inflation expectations."

Interest rate cuts have also gutted the U.S. dollar and only exacerbated the inflation problem, other analysts say.

"The upsurge of food and energy prices in response to the Fed's deliberate trashing of the dollar has significantly worsened consumer confidence and real incomes," said Charles Dumas at Lombard Street Research in a research note on Friday.'...snip...

If there is “a place worse than hell in 2008,” he adds, “Americans are now in it.”

From the review of Michael Scheuer's book in Fighting the Wrong Foe With the Wrong Weapons

Summarizes much of what is said here daily.

However, while we are dancing around the brim of the abyss, we're not there yet -- people are still eating, motoring, planning vacations, and doing what they've always done.

Will 2008 be the year of arrival?

Will 2008 be the year of arrival?

My guess is no. Anything's possible, but I've always thought "catabolic collapse" was our most likely fate, and recent events have only bolstered that view.

The decline will be slow. So slow that many won't even notice.

Leanan, I too think the evidence points to a "catabolic collapse" with disintegration occuring over an extended period with most people missing the reasons behind it and misdiagnosing the symptoms for the disease.

Hell, however, is a generic "mystical" state when an individual or society is accutely aware of the disintegration itself. The examples of past breakdowns of civilization do point to complexity returning to a sustainable level and yes, the process takes decades and centuries to complete. All that said, most people become aware that something is terrible amiss long before the breaking point.

Knowing the power of deniability (denial is indeed more than dat river in Egypt!!), 2008 may be the year when reality begins to seep in, especially if shortages and losses (in finance, in commodities, in food) begin to alter our lifestyles in a big way.

We're dancing on rim of the abyss now and, if observations about peak are right, have already descended onto the slippery slope of the maelstrom. At what point do people start to notice the pain?

From what I'm reading and seeing, the pain is apparent and for many, chronic.

The pain is apparent to some, but it's assumed to be temporary. And I think that will be the case for a very long time.

IMO, the collapse actually began in the early '70s - peak oil USA. Since then, there have been bad times (gas shortages) and good times (the dot-com boom). The pain has been very apparent to some (the blue collar workers who lost their jobs to offshoring). Some have pointed out that real wages have stagnated, and that Americans are working much longer hours than their parents did to maintain a similar lifestyle. But most people haven't noticed, or if they have, assume it's a temporary problem. We just need to elect the right politicians, pass the right laws, give people the right educations, etc., and everything will be okay.

I don't see that changing. Even in countries that are suffering far more from energy costs/shortages than we are...they don't seem to be "aware of the disintegration." At least, not as an insoluble or long-term problem. The problem is corrupt politicians or greedy oil companies or incompetent officials. Fix those problems, and they'll be on their way to the American dream.

And of course, politicians have every reason to encourage us to keep believing.

We've got a rate change coming this year. In energy prices, food availability, water availability, etc. People don't notice constant velocity, but acceleration tends to get their notice. Nothing may still happen, but then again maybe the pitchforks will come out.

If we do get accelerating rates of decline in our current lifestyle, will people look to the core causes or just the symptoms? The usual western world view is to address the symptom. The best long-term solution is usually to address the cause. I think Leanan may be right - people will continue to think that we just need some policy change and elect the right people (or some equally cosmetic change) and all will get better...

I suspect a few will look to core causes, but most of the people will be "lead" to look at symptoms and find a quick and easy way of "blaming others." As the example of the current banking crises has revealed, very few people are in to being accountable for their actions these days. John

I do think though that you will reach critical points for certain elements of the economy and then change/collapse will be rapid with unseen knock on effects.

As a case take the airline industry. There is no way the airlines can survive $100.00+ oil for very long. The last acts will consolidation and downsizing that may buy a the last limited period of time. With few exceptions there is little understading amongst the airlines of the situation we are in in respect of peak oil. The belief is current high prices will go away eventually.

With the US airlines now forcast to lose between $4 and $9 billion this year there will come a point where the majority of the system will fail and probably quite abrubtly. A lot airlines were bailed out after 9/11 with financial wizardry that will not be available this time round.

Just wait for the fuel hedges to expire and you may start to see some rapid closures if we have maintained this oil price later in the year. Then obviously knock on effects to other parts of the economy. I'm sure this will play out in other industries so we may see nothing much happening and then rapidly changing circumstances. Fits and starts down the slope.


I expect "the airlines" to survive indefinitely even if they shrink considerably. Even in very poor countries, certain things are untouchable. In the present-day USA, two sacred cows are "home" "ownership" and the tourist "industry". Congresscritters will step in as needed and loot everything else to bail them out, as they have done many times at huge expense in the past, and as they are doing again right this very minute. When it comes to feeding sacred cows, there is always more "financial wizardry" to be had, even if it opens a road to everyday banknotes running far into the quintillions.

Congresscritters are, after all, incapable of ignoring yelps from Very Important And Connected People. And heaven forbid that Very Important Business Persons, their deals already made without human intervention by computers and spreadsheets, had to seal said deals over the phone rather than by physical visits to ultra-upscale hotels and restaurants on the far side of the world. The whines would be deafening and unbearable. And imagine the inhumane deprivation suffered by Very Important Academics made to read papers on their own, rather than vacation someplace nice like Bermuda on the pretext of pretending to listen in person to the absolutely incomprehensible mumbling of the authors. Our universities would collapse to dust instantly.

That's to say nothing of all the carrying on, some of which I'm already hearing, from the vast army of otherwise unemployable zero-marketable-skills persons who comprise the overwhelming bulk of the tourist "industry". The Chicago radio stations have been running unbranded ads, apparently from the hotel industry association, every now and then. These ads seem to be intended to scare people that if they aren't "being there", at $300 a night or whatever, they're toast. [And United Airlines continues to make the same point (PDF) more subtly in their print ad campaign.]

Even when there were long lines in the 1970s at the gas stations, flying somewhere for no particularly vital purpose was not a huge problem. Fares may go up, airlines may consolidate and lay off workers - but have no fear: ordinary people will forced to break their necks riding bikes to work on winter ice if that's what it takes to keep airlines going.

You could be right on the fuel priority for the airlines. They might get subsidies too like they did after 911. Even profitable Southwest Air received a hundred million or so in federal handouts back in 2001. At the very least I would see the US government giving security services for free to airlines, along with reducing or eliminating things like landing fees, fuel taxes, and ticket taxes. Maybe a $50 per airline passenger subsidy is in order, so that the flyers don't have to "feel the pain" like the rest of us.

One caveat about the airlines bailout is that as the economy heads south and people/businesses have no cash to spend (and far fewer employees), airlines may have no passengers to subsidize.

I don't really see the airlines as being immune. Their volume business comes from the masses, and discretionary spending is going to take a real hit.

This time around it seems that finances, at least in the US and UK, will be so dire that the ability to subsidise will be limited.

I think that they will loose a huge amount of volume, and that will creep up and hit the business market too.

Leanan: If you compare global supply (C+C) between 1974 and 2008 it is up about 33%. So an increase in global supply to 2042 C+C of 98 would be expected to continue the long term decline in the fortunes of the average American. The conclusion is that, for the average American, the slide is quickly going to become a freefall.

I agree with Leanan that the US has been in a slow decline since our oil production began to decline (benefits decreasing from employers, more folks working 2 or 3 jobs) but I agree with BrianT that now it is turning into a freefall. By 2012, I think we will be living in a much different world.

I would agree if the reduction is evenly distributed.

But I don't think it will be. I think we'll continue to outbid most of the rest of the world for the remaining oil. Even with our funny money.

I suspect a lot of Third World nations are near the breaking point. They can't afford to keep subsidizing energy costs. They're going to be forced to reduce consumption. We're still a far way from that point.

Also, we are so profligate in our energy use that we could cut back quite a bit without serious pain. People who have two or three or four cars will drive the little Toyota instead of the big Explorer more often. My office has not (yet) returned to the energy conservation measures they took a few years ago during the last recession.

RE: noticing the pain.

Unfortunately, we also have an unfortunate series of strategies for pain-management..

We don't always care as much about stemming the actual cause, as long as we can alleviate the symptoms.

As the 4 or 5 prescriptions for various pain-killers that my wife was just given after some gum surgery yesterday will attest, we are often just too terrified of experiencing pain at all. Besides the actual drugs, we have a broad spectrum of addictions that we use to drown out our anguish and fear, instead of letting these emotions help instruct us and inspire us to engender real healing.

Leslie just picked the Alleve.

".. It damn well hurts!

Certainly, it hurts.

What's the trick, then?

The trick, William Potter,
is not minding that it hurts. "

-Lawrence of Arabia screenplay, Robert Bolt

People may care about the actual cause, but often they don't have the tools to either discover the cause or address the cause.

And discussing only in the linear terms of "cause" and "effect" will miss a whole host of contributing systemic interactions.

Fair enough.

Trying to write and work this morning despite neck and shoulder pain, which the chiropractor tried to address by putting a rib back in place, because (all too likely) I do too much writing and not enough bricklaying or rockclimbing, so my intercaustals don't have the tone necessary to hold a few bones in their proper places..

"This calls for immediate discussion.." MontyPython's Life of Brian


I really ought to read further down thread before posting...

The decline will be slow. So slow that many won't even notice.

That is certainly the present case. I work in the medical feild and interact with the public most of the day. It is extremely rare for someone, regardless of background, to look beyond their nose.

All the usual explanations for the run on energy costs are verbalized. And when I suggest that geology is forming the "bedrock" of price instability, I just get blank stares. Even smart people seem clueless about the limits of exponential growth.

But there's the jihadist catalyst simmering out there, with its eyes on Saudi Arabia and the global havoc that a sucessful attack on the Saudi oil infrastructure could have. They have shown patience and tenacity and, having failed in the past, will be planning more carefully in the future.

What I would give for a good energy policy!

Excuse me, time for some fiddle practice.

I agree with Matt Simmons that 2008 will be the year that the media begin to take notice. I have been peppering THE WALL STREET JOURNAL with information, and they have at least responded by focusing a number of articles, commentaries, and blogs on the Peak Oil "theory." As soon as oil production declines just a little, oil prices will skyrocket, probably in 2008. The economic collapse will come slowly at first, but when the power grid fails we will experience a rapid collapse. Virtually everything depends on electric power: transportation, elevators, airports, truck stops, home heating systems, communications, etc. According to Railton Frith and Paul H. Gilbert, power failures currently have the potential of paralyzing the nation for weeks or months. What happens across the northern U.S. when there are power failures in winter for "weeks or months?" Of course, FEMA is probably working on some contingency plan, so we don't have to worry much.



Why would the power grid in the US fail due to high oil costs?

My understanding is that very little of it runs on oil.

I don't personally think this is inevitable, or even necessarily likely, but I think it is feasible to imagine that as shift energy from natural gas and oil to the electric grid, we might see failures proliferate. For example, heating oil in the Northeast is likely to hit a crisis point fairly soon, and I suspect conversion to electric heat will follow it. That's a very large load in a nation not spending money updating its infrastructure.

My own feeling is that grid failure is less likely that large chunks of the population being priced out of electricity altogether - until lower income families are forced to operate without electricity.


As you say, many are in grave danger from shortage of power

Almost five million people in the UK are in fuel poverty, meaning they spend more than 10 per cent of their income on energy bills, and 55,000 die each winter because of cold-related illnesses,


That is BEFORE things get tough!

Apart from underlining the criminal incompetence of successive administrations, in an energy short world, that is going to climb to what level of deaths per year? 100,000? 150,000?

And this is for the UK alone.

It also perhaps puts into perspective claims that we ‘should’ be prepared to pay a heck of a lot more for relatively carbon free energy.
The ‘pay more’ for many could be with their own lives.

Any assessment of risks for different energy strategies should be set in the context of the massive mortality figures consequent on energy shortage or very expensive energy, and the possibly even greater mortality from global warming.

It also perhaps puts into perspective claims that we ‘should’ be prepared to pay a heck of a lot more for relatively carbon free energy.
The ‘pay more’ for many could be with their own lives.

The irony of Britain actually exporting oil. It makes me want to cry. How could the British government have been SO stupid ? Presumably they must have had some idea about the 1999 peak in production ??

How could the British government have been SO stupid ?

These are the guys who sold most of our gold in 1999-2000, so stupidity comes naturally.

These are the guys who are allowing the the energy utilities to put up prices vastly more for low users, so that you pay a lot more if you conserve.

They are also the ones who invaded Iraq for oil.

I don't think they expected peak oil in the North Sea to occur as soon as it did. (That's the scary thing: the "experts" tend to be overly optimistic about how fast, how much, and how long an oil field can produce.) I think Simmons was the only one who thought the North Sea peak would occur when it did. An article I posted recently said the peak occurred ten years earlier than predicted. I'm not sure if everyone thought that, but the predictions I've come across expected North Sea production to still be increasing now.

However, I am surprised at how many people die of hypothermia in the UK. It's not as cold as it is in the US, and they're supposed to be a "welfare state" (at least in comparison to the US). But you rarely hear about people dying of hypothermia here.

Very, few of the deaths are from hypothermia. They are "cold-related illnesses"


The situation today

Since the turn of the century nearly 160,000 older people in the UK have died from cold-related illnesses such as bronchitis and strokes.

No wonder, if you look at the quality of the buildings. Here in Switzerland you can not even imagine how really bad the quality of the buildings in the UK is. And the price, people are willing to pay for whatever house / flat is just insane.

The UK in general offers bad quality / service for an outstanding price. I think, the UK is much worse off than the US. In the US you don't get quality - never did - but at least the prices are comparable cheap.

House prices are just about to crash, as is the pound - that will likely be mitigated slightly as they are unlikely to get away with such a lax attitude to inflation as the US.

Until, I believe around 2005, we had some of the worst housing insulation standards of countries with comparable climates in Europe.
Apparently around 65% of houses built still did not meet them - the local authority officers charged with enforcing them did not consider them important.

5 million homes out of around 24 million in the UK are in the lowest category for insulation, band G.

A further 9 million are in band F.

Nuclear reactors and many of the coal plants are due to come off line in the next few years, and we have built a lot of LNG terminals which are paid for regardless of whether any ships ever use them, and the EU alone plans to import most of the projected LNG increase in world supply for the next several years - it ain't gonna happen.

Nuclear reactors could not be built to come on line with the glacial pace of approval here before around 2017.

They plan 33GW installed capacity of off-shore wind power, 10-11GW of average hourly energy output at vast cost - around twice the price of onshore, or double nuclear costs.

Even the British Wind Energy Association says that this is unrealistic.

Their other plan is to build more coal plants, whilst apparently we are still to lead the way in climate change mitigation.

Conservation has barely started, with erratic grants.

They have, however, completed terminal 5 at Heathrow, so we will have plenty of space for all the planes that will not be flying due to fuel costs.

And they introduced tabacco prohibtion.
BTW: the most common first name in the UK for young children is Mohammed. Immigration seems to be one of most important points of this socialist /labour gouvernment.

Are they really cold-related? I thought the idea that temperature caused respiratory disease was an old wives' tale.

If they're basing it just on higher death rates in winter, they may be barking up the wrong tree. Winter is flu season, and the elderly are the most vulnerable population. However, there's no proof that keeping your home warmer prevents the flu.

I can't vouch for the illness figures, Leanan, but I can confirm that very many people have to stay in bed and so on as it is too cold out of bed, and they have great difficulty affording the heat.

However, looking into it the 50,000 figure appears poorly substantiated, it is not however made up by the Times, but appear to be based on the work of Professor Keating:


Many of the deaths though are due to poor practises such as poor shelter at bus stops.

This seems a fairly definitive study:

Heat is also a large cause of mortality in the UK, as there is little air conditioning in homes.

The BBC wording quoted is: "Up to 50,000 more people die in the UK during the winter months than in the summer, according to new research."

During the last particularly bad flu season about 50,000 extra people did die over the winter. The Times financial reporter may have misread or incorrectly recalled that extreme figure as the average.

Of course in the worst imaginable case you could say that "up to 60 million people die in the UK during the winter months"...

"That's the scary thing: the "experts" tend to be overly optimistic about how fast, how much, and how long an oil field can produce."

I have to wonder if being optimistic is an unspoken, even subconscious requirement for gaining the title of 'Expert'? At least in these circumstances..

"Today a Knox engineer will tell you that he might need a little time, but he’ll get the oil. He knows that a little time is all we have left. " - Local Hero d. Bill Forsyth

It's another fine example of Britain's Third World policy, to join it as fast as possible.

Here is the rest of the bit I quoted:

55,000 die each winter because of cold-related illnesses, a far greater number than in countries such as Finland and Russia that have much harsher climates.

Have you seen the way the British government looses data files? It puts uncoded data into the post on CD's.

They make US politicians seem competent models of rectitude.

the "experts" tend to be overly optimistic about how fast, how much, and how long an oil field can produce.

It is not politically correct to be pessimistic. So called 'doomers' catch all kinds of flack for expressing pessimism about what the future will bring. Look at the flack caught by the LTG studies. Try bringing up peak oil or population crash issues at a cocktail party. You will likely get dismissed as a party pooper and people will quickly seek out another conversation.

So-called pessimists and doomers don't have the "can do" attitude that society likes to see. (slight sarcasm)

It didn't say that they were dying from hypothermia. The cold somehow weakens some people's immune systems and they die from infection. That we don't hear about people dying because of the cold is because the US news media turns a blind eye toward what happens to poor people. The right wingers believe people are poor because of the choices they make and deserve to die from bad choices. To say otherwise sends the wrong message.

We in the industry reckoned peak in the UKCS around 1995, but steerable assemblies and horizontal drilling techniques developed and enabled access to margins.

What puzzles me is why everbody is puzzled that ' production falls even though we are spending on exploration...' This is especially true of the RBS annual comment on the Industry.

The 2003 DTI graph shows a trickle of oil by 2020.

What puzzles me further are th £300 k McMansions sprouting up all over the place. They will never get paid off. All built on prime farmland that once grew tatties and neeps, all 20 miles from job source, all with SUVs parked outside.

Madness, complete madness.

My plan is ELP This year. If all here take nothing away from this site other than Westexas's 'ELP' Then it may save your life, certainly your sanity. I thought ELP could wait a couple more years. After this week, I think ELP could be vital this summer at the latest.

As for cold deaths in the UK: Expect them to get worse. It becomes a choice of food or heat for many poorer pensioners. As things now stand with food inflation being up to 15% per annum and fuel cost inflation at the same rate, then I think will only get progressively worse. National pensions are low and rarely keep up with true inflation. They keep up with the scandalous measure of inflation peddaled by the government (2.1%)

If we ever have a 1 in 10 winter, It will become a pensioner cull.

ELP - While you can

I Googled ELP-
European Left Party
Emerson, Lake & Palmer
Emerging Leaders Party
English Language Programs
El Paso International Airport
The list goes on-Please inform Google you have an addition.

Economize; Localize & Produce

55,000 die each winter because of cold-related illnesses,

That figure is bogus. http://www.statistics.gov.uk/cci/nugget.asp?id=574 Try 20,000. With GW this can be expected to reduce.

You have to be careful when you take figures from a right-paper criticizing a left-wing govt.

Also, studies have shown that home heating is not so relevant, the common factor for the elderly is waiting at cold bus stops, since most don't drive.

Thank you for some balance. The UK MSM always accepts whatever statistics they are spoon fed by agenda groups [help the aged, alcohol concern etc]

That said I agree that UK houses are largely uninhabitable without affordable heat - which is I suppose the issue.

The Help the Aged link I posted puts the figure at 20-30 thousand per year. I think the Times article just made the much higher number up.

And I think that you ought to be careful about accepting government figures for a situation for which it is responsible which is obviously pretty disastrous!

I don't know where you live Bob, but regardless of what the government says I can assure you that there are plenty of people in the UK who have to be very, very careful when they turn on the heat - and that is before the latest increases.

However, it is true that for simple new items like this I give the source normally, so that others can see how happy they are with it, and as long as it is fairly reputable do not cross check.

Differences such as you outline are often down to different methodologies and definitions - I have often found the Times to be mistaken, but hey rarely make things up without sources.

Since I also know (from Government statistics) how many home here have little or no insulation, it does not seem too surprising that many suffer from the cold, and that that looks like getting a great deal worse.

And I think that you ought to be careful about accepting government figures for a situation for which it is responsible which is obviously pretty disastrous!

LOL, a disaster? Based on some made up figures in the Times!

You are making a mountain out of a molehill.

Not really, Bob - check out my latest post to Leanan - as I said there, I usually reference quotes and go for fairly respectable sources, but do not extensively cross-check them, as people if they are unhappy can do that as I name the source.

Check out the reply to Leanan for the exact, details, but I have now checked and the Times post was based like a BBC article on one particular study - I think their sub-editors are fairly good and throw out entirely unreferenced stories - but many other studies seem to come out with figures similar to the ones you provided, and part of the problem does indeed seem to be unsheltered bus stops etc.

Nevertheless I am very comfortable in stating that insulation standards are some of the worst in the cooler climates in Europe, and that even the huge price rises that are coming now - greater for low users, up to 71% - will cause great suffering this winter, if it is cold, and that tight supplies, high prices and energy insecurity look like causing an enormous amount of suffering.

If you feel that heating and insulation for the poor and old in the UK is anything short of a scandal, I doubt that you would either get many in the UK to agree with you, or that you are very familiar with the country.

Edit: I have spotted the post where I gave the basis that the Times article seems to be based on:

They have usually been fairly good in checking that they have respectable sources, at any rate for the last hundred and fifty years or so - they were less careful in the early days!

I think that's quite possible. Which would mean the grid collapses...or at least contracts...in roughly the reverse of how it was built.

You see this when the power goes out after an ice storm or other natural disaster. Utility crews fly in from all over the country, and work massive overtime getting the lights back on. Rich neighborhoods with higher population densities get their power back first. If you live in a trailer park in the boonies, it may be weeks before your lights go on.

If we reach the point where people can't afford to pay their utility bills, what would be the incentive for the utility company to send crews out to repair the lines when they go down?

Infrastructure is expensive. Even just maintaining existing infrastructure. The cost of raw materials is skyrocketing. Concrete, copper, aluminum, steel, asphalt, resin, fuel, etc. Maybe those big utility trucks can run off hydrogen or electricity instead of oil. But that would be more expensive...at a time when people couldn't afford to pay more.

Then there's the problem of increasing vandalism. The cost of metals has increased so much that people are stealing light poles, stadium bleachers, signaling cable, train tracks, etc. In some places, they are switching to fiber optics because copper is stolen so often. I think it's quite possible that maintaining infrastructure will be an uphill, and ultimately losing, battle.

Hi DaveMart, Leanan, and Sharon, here is the collapse:

Peak Oil means that the U.S. lacks the energy necessary to provide for transportation, food production, industry, manufacturing, residential heating, and the production of energy. Oil shortages and natural gas shortages will generate multiple crises for the nation: (1) Shortages in gasoline, diesel, and jet fuel will limit travel to work for oil rig/platform workers and technicians, coal miners, highway maintenance personnel, and maintenance workers for electric power generation stations and power lines. (2) Without truck and air transport, spare parts for virtually everything in the economy won’t be delivered, including parts needed for highway maintenance and energy production equipment. Matt Simmons notes that 50,000 unique parts are necessary to create a working oil field. Many more parts are necessary for ultra deep water drilling operations, including a variety of high tech ships, remotely operated underwater vehicles, seismic survey equipment, helicopters, and technologically complex platforms (see The New York Times and click on Multimedia Graphic). Thousands of corporations around the globe manufacture these parts, and many of these corporations will fail in the Peak Oil crisis. (3) States governments will lack funds for maintaining the Interstate Highway System, including snow plowing, bridge repair, surface repair, cleaning of culverts (necessary to avoid road washouts), and clearing of rock slides. A failure in one section of the Interstate highway will cut off transportation for that highway and everything it carries: food, emergency supplies, medicine, medical equipment, and spare parts necessary for energy production. (4) The power grid for all of North American will fail due to a lack of spare parts and maintenance for power lines and electric power generators, as well as from shortages in the supply of coal, natural gas, or oil used in generating electric power. Power failures could also result from the residential use of electric stoves and space heaters when there are shortages of oil and natural gas for home heating. This would overload the power grid, causing its failure. The nation depends on electric power for: industry; manufacturing; auto, truck, rail, and air transportation (electric motors pump diesel fuel, gasoline, and jet fuel); oil and natural gas heating systems; lighting; elevators; computers; broadcasting stations; radios; TVs; automated building systems; electric doors; telephone and cell phone services; water purification; water distribution; waste water treatment systems; government offices; hospitals; airports; and police and fire services, etc. Phillip Schewe, author of “The Grid: A Journey Through the Heart of Our Electrified World,” writes that the nation’s power infrastructure is “the most complex machine ever made.” In “Lights Out: The Electricity Crisis, the Global Economy, and What It Means To You,” author Jason Makansi emphasizes that “very few people on this planet truly appreciate how difficult it is to control the flow of electricity.” A 2007 report of the North American Electric Reliability Corporation (NERC) concluded that peak power demand in the U.S. would increase 18% over the next decade and that planned new power supply sources would not meet that demand. NERC also noted concerns with natural gas disruptions and supplies, insufficient capacity for peak power demand during hot summers (due to air conditioning), incapacity in the transmission infrastructure, and a 40% loss of engineers and supervisors in 2009 due to retirements. According to Railton Frith and Paul H. Gilbert, power failures currently have the potential of paralyzing the nation for weeks or months. In an era of multiple crises and resource constraints, power failures will last longer and then become permanent. When power failures occur in winter, millions of people in the U.S. and Canada will die of exposure. There are not enough shelters for entire populations, and shelters will lack heat, adequate food and water, and sanitation. (4) Water purification and water distribution systems will fail, leaving millions of metropolitan residents without water. (5) Waste water treatment systems will fail, resulting in untreated sewage that will contaminate the drinking water for millions of residents who consume river water downstream. (6) Transportation and communications failures will cripple federal, state and local governments -- leaving and residents without emergency services, emergency shelters, police and fire protection, water supplies, and sanitation etc. (7) Mechanized farming will cease, and harvested crops won’t be transported more than a few miles. (8) Food won’t be transported from the Midwest, California, Florida, and Mexico to the U.S. population. (9) Fertilizer, pesticides, and herbicides won’t be produced. (10) Due to limited farm acreage, most cities and towns will be unable to support their populations with sufficient food from local farming (see Paul Chefurka and Paul Chefurka). (10) Homes across the U.S. will lack heating. Even if homes are retrofitted with wood stoves, local biomass will be insufficient to provide for home heating, and it will not be possible to cut, split, and move wood in sufficient quantities.

In the coming years, the U.S. faces multiple energy crises. Each crisis will generate delays in handling other crises, thus making it more and more difficult to address multiplying problems. The worse things get, the worse they will get. A grid lock of crises will paralyze the nation.

But, don't worry, FEMA will come to the rescue.

Do you really expect someone to decipher this word salad? Did your english teacher ever acquaint you with the concept of a paragraph?

"Don't worry, FEMA will come to the rescue."

That's all I read, and that's all we really need to know, right?

The government will save us. :)

Well yes, look the great risk management work of Congress and FEMA in New Orleans. You can expect the same foresight and risk management results with Peak Oil, only this time the U.S. deaths will be in the hundreds of millions, not 1000. Stay tuned, the picture show is just about to begin, and we will all have a front row seat. Congress will begin by pumping billions and billions into renewables, which will accelerate fossil fuel depletion. The ignorant masses will cheer Congress on.

It will be hard for FEMA to do the Katrina level of screwups if the whole of the US is in trouble at the same time. They can only blockade so many roads and keep assisstance from reaching people.

Yes, it is well-written, it is a lot to absorb in a short space of time, and slow reads and several reads helps. Many of the concepts are spatial and temporal. Such concepts require repetitions and time in between readings. I've reread articles by Chris Shaw several times for example. One sentence took me weeks to figure out: "energy is the one true currency, always was, always will be." Shaw is right, what a mind. http://www.onlineopinion.com.au/view.asp?article=3837
and he has 4 other articles there. My stuff is not so brilliant, just a lot of stuff at once.

Do use normal paragraphing and leave some space between some of the lines to make things more digestible if you actually want anyone to read it.

The poor formatting simply makes one suspect that the thoughts behind it are probably equally turgid, and certainly not worth the effort of deciphering.

Yes, you have reread articles by Chris Shaw several times...But, have you reread your own posts?

Yes many times, and every 3 months I take all comments into account and all the stuff or TOD and EB and revise my report, from which the post was taken.

Yeah, about that - sold many reports yet?

I see you take every opportunity to advertise.

The report is free.

Bear in mind that newspapers, being physical objects that need to be read on the subway, etc, impose strict space limits on the writers. These don't exist in web materials so it's worth adding at least visual structuring (make your list an actual list rather than inline text).

I'm also reminded of the stories about the physicist Bohr, who was respected as a great man but often spoke in very convoluted ways. Physicists visting him would spend hours trying to figure out what he could have meant in order that what he said was comprehensible -- because he was a great man -- before coming to the conclusion that he was muddled about the issues. Being difficult to understand does not always mean it's worthwhile struggling to decipher the meaning.

"Each crisis will generate delays in handling other crises, thus making it more and more difficult to address multiplying problems. The worse things get, the worse they will get. A grid lock of crises will paralyze the nation."

But Cliff (And yes, another vote for exercising your Carriage Return key, as Backwardist as that term might sound today. It's a nice way of making a rant seem like part of a real conversation..), people are not static in this equation. There will be new threshholds met, as various crises wake people up. I know it sounds like crazy-talk in our placid and anaesthetized land, but people WILL wake up when the power doesn't come on a couple of times, or the Oil trucks start getting more erratic. At the moment, the American Working and Middle classes are doing just about all they can to keep a household together with two or more incomes, and they douse the flames of their frying minds with a cocktail of distractions and balms.. but they aren't 'Actually' Potatoes, you know, and responses will have a dynamic that's not quite as hopeless as you so persistently paint it up.

There will be gridlocks, and there will be paralysis, dislocations, blackouts, supply disasters.. but people REALLY like to eat and feed their kids, and they WILL work really hard to pull things back together when they fall apart..

It's fine and truly necessary to ask "What's wrong with this picture?" .. but it is equally important AND productive to look closely and discern "What's RIGHT with this picture?" as well.

Bob Fiske

"You have to Ac-centuate the Positive, Elim-inate the Negative.." J Mercer

Right, people will scramble. But I think CJ Wirth is correct that massive far-flung systems will fail. Which supports the idea of a return to localized production, agriculture and social systems, as opposed to worldwide wind power systems or Stuart Staniford's ideas about the continuation of the industrialized agriculture system.

Have you all seen "Fear of Fallowing: The Spector of a No-Growth World" by Steven Stoll in the March 2008 Harper's? Stoll reviews three books on the subject, especially Deep Economy: The Wealth of Communities and the Durable Future, by Bill McKibben. The book basically covers such ideas as: the endless growth track fails to produce extra happiness once basic needs are met; the liquidation of natural capital (natural resources and ecosystems) for "economic growth" cannot last; growth at the expense of the environment is uneconomic because it's greater in its negative costs than its positive returns, etc.

McKibben says, "Growth is no longer making people wealthier, but instead generating inequality and insecurity."

The book also makes the point that separating production from consumption on a global scale ultimately fails because it reduces people's accountability for the consequences of their actions. Localization forces people to take responsibility for the consequences of their actions on their fellows and the planet.

The article says: "The end of growth will not mean the end of progress, to the extent that we can redefine progress as consisting of something other than accumulation."

RE: Massive, Far-flung Systems.

I agree, which is to say that I expect systems that are currently set up as somewhat monolithic to become increasingly resilient and Fractal to include structure on a local scale. I don't doubt, unless our course shifts in the meantime, that we will find ourselves faced with the breakdowns that come from the aging infrastructure in the present-day grid, and I see reactions in two directions.. One would be users, both businesses and private citizens would start to find and create energy equipment that can deal with intermittency (ie, a Fridge that can store enough cold or compressed refrigerant and is well-enough insulated to hang on through XX? hours/days without power), and to have some degree of self-generation and energy storage available.. This is to say, adjusting away from our 'Just-in-time, no-inventory' approach to energy supplies. and TWO, an availability of options for Resilient, Localized grid management and more localized generation sources, even if such would only be capable of a 'Skeleton-Crew' level of power during emergencies, which might translate to your 'Smart Meters' telling you that it's $100/kwh, assuming most users would have their smart-appliances and meter constraining all-possible use when the prices were only up to maybe $5/kwh.

Of course, if you are grid-tied with Solar or Wind, you might also be selling at a premium, too, and still letting your Fridge stay in 'LockDown' mode. (This is why I'm curious about the economics of WT's ELM.. what's worth more, the Energy or the Money?)


I would rather have a barn full of food and no place to get money than a barn full of money and no place to get food.

A paragraph is a device used to prevent reader fatigue.

Well, as someone who is the last person on our power line in the boonies, my expectation is that lines like mine will be abandoned over time. My line serves about 20 households spread out over 6-10 square miles.

Just to get to parts of our line require a 4x4 truck. Which leads to an interesting story: The last time our power was out the guy wanted to check the line on the lower part of our land. There was snow on the jeep trail leading to the lines. He had a 4x4 bucket truck but with city tires. I said it was a bad idea and rode along with him. He got stuck a quarter mile in. There was a cliff on one side that his truck wanted to go down. We spent nearly two hours winching his truck around so he could get out.

I see that sort of thing leading to our provider, PG&E, saying the heck with it.


In the telegraph era, that sort of maintenance work was done on foot. That may be unthinkable in the present time, but won't be in the future. If the centralized authority can't be bothered, the power users themselves may do the work, or hire someone.

Here in towns in Britain, plumbers and so on used to walk to the job carrying their tools - and they are heavy.

That is only around 30 years ago, too.

They will moan, but they will manage.

My brother, who owned a children's book store in Bristol twenty-five years ago, was also a milkman. He delivered his milk with an electric truck. Apropos of nothing, I'm sure, but I found it interesting since we tend to think of EVs as somewhat novel and, because, you are apparently from Bristol. He is American, by the way, but married an English woman and lived and worked in Bristol for several years during the late 70s and early 80s.

I've done that! Charmingly, they put the brake and accelerator pedals on the opposite side to on normal cars!

Delivering milk early in the morning, I tried to prevent the float rolling forward on a slope when I took the handbrake off, but hit the wrong pedal and demolished a wall!

What was the name of his store? I probably knew it!

'I think that's quite possible. Which would mean the grid collapses...or at least contracts...in roughly the reverse of how it was built.'

What if we no longer own the electrical grids? Suppose all or part of them are owned by SWFs that might want to pursue different interests than the prior owners? Isn't it interesting how conflicting geostrategic goals continue to pop up in the midst of FF depletion scenarios. :)

...snip...'At a recent House Financial Services Committee hearing on the topic of SWFs, Rep. Paul Kanjorski (D-PA) painted this extreme hypothetical:

If I were China, I’d put my sovereign funds . . . in the energy field of the United States. I’d buy as many electrical utility companies as I could. And then, at my own desire, rather than send an army over here sometime in the future or an airplane to do damage, I’d just issue the order as the owner of the electrical utility networks in the U.S. to turn off the power. What’s going to stop them from doing that?'

That scenario reflects the growing concern that SWFs might pursue strategic and political objectives rather than purely economic ones.'...snip...


Do not underestimate very old cultures and societies...they have been playing the game a lot longer than America.

What prevents American owners of electric utilities from simply ordering their generators to turn off in order to gain a political advantage? They could stop buying coal next July just to discover what Americans want more, air conditioning or clean air. Look at what Enron did to California in order to jack up their profits.

"Then there's the problem of increasing vandalism. The cost of metals has increased so much that people are stealing light poles, stadium bleachers, signaling cable, train tracks, etc. In some places, they are switching to fiber optics because copper is stolen so often. I think it's quite possible that maintaining infrastructure will be an uphill, and ultimately losing, battle."

Cheers Leanan.

One of my old jobs used to be country assessments. One of the indicators for a destabilized country was theft of vital infrastructure elements like power lines. It is indicative, not only, of a break down in the rule of law but also in a society's ability to care for those who are not so well off. In the end, once the support structures fail, lawlessness and brutality are not too far off. Seems that what was once the curse of Africa is starting to shift and become more general.

Here we've got rural grain bins getting stripped for their copper. It's quite annoying for the farmers - pull up, fill up, try to turn it on, and discover you've got an expensive repair.

Copper theft will get that sharia style hand amputation going here before too long ... can't be pulling bits off things that are working, now can we?

I'm suprised that we don't see more of those PV panels on the side of the road disappearing. You know the ones about 2' square for remote power on a small pole.

Many country mile with those out in the middle of nowhere.

The transmission lines from windmills will likely also be stolen quite a lot.

I can see millions of spy cameras being installed- they are cheap and getting cheaper.

Sorry, but making off with utility lines is not going to be much of a problem. They are A.) high in the air or buried B.) deadly when powered which is always because they're connected to the grid and they're live even if the wind turbine isn't C.) SCADA would give immediate notice of an outage and that would only happen once before some mondo security measures get put into place, assuming the perps live and D.) that stuff is rather unique and J. Random Speed Freak is not going to 'find' a bunch of it in a dump and haul it in for recycle.

We'd have to see a total breakdown in law enforcement before this becomes a problem, and things would have to be so bad power & turbine guys who know how to do these things without getting killed are involved. We've got several other sorts of trouble that precede this :-)

I'm hearing more and more stories about the solar panels from variable message boards being stolen. (Those are those lighted sign panels with changeable messages that they use by the side of the highway to warn people about conditions ahead - congestion, accidents, exit closures, etc.)

I´m living in South America- Every few months the water goes out for a couple days.

The neighbors kept on telling me "oh yes, someone stole a pipe and it will take a while to replace" and I innocently assumed it was some dumb kid taking one of the copper pipes you can see in the stairwell. I thought the plumbers were just torturously slow in replacing it.

It turns out that more than once some construction company has bribed the complex guards, dug up the Gigantic! pipe that feeds the whole building complex, and taken it away. I presume that they installed it in some other project. I've since heard similar rumours about stadium lighting, the cable from the touristic cable car, the pumps and filters from an olympic pool, a machine used to dig subway tunnels and anything else that you can imagine.

People work very hard, but are constantly faced with bizzare interruptions that wreak havoc. The effect tends to snowball down the supply chain. Its difficult to fulfill deadlines, or even to do detailled project planning beacuse you really have no clue what delays will ensue. For example some of my neighbors have spent a sum equal to two or three months wages to install a water tank and pump in their apartment. Others regularily spend 30 minutes filling up a big garbage bin with water, and dumping out the scummy water a day later to repeat the process.

Why would the power grid in the US fail due to high oil costs?

My understanding is that very little of it runs on oil.

Natural gas. Dig around for Simmons' comments on natural gas. LOTS of the grid depends on natural gas.

cfm in Gray, ME

I understand that, and the arguments other posters are making about more difficult repairs and so on.

I was asking the OP to clarify what seemed to me to perhaps be indicating an over-direct connection between oil and the grid.

It boils down to that it seems to me that it might take awhile, which gives some leeway at least for corrective action.

Yes - its a death by a 1000 cuts not a full crash - in order to maintain the grid diesel based trucks and other equipment needs to be deployed.

Once the budgets get strained due to high costs and electrical based replacements are not available (how are we doing with industrial electric based mobile equipment?) then less maintaining is done - if the problem is ignored then its just a matter of time before the grid is effectually off line.

I don't think this will happen, but the people need to wake up and deal with reality very soon with realistic plans to be implemented.

"(how are we doing with industrial electric based mobile equipment?)"

Another vote for electrified rail, combined with an HVDC Grid that exists along the same Rights-of-Way.. Electric Trains with Lifts and Cherry-picker Cars, Flat Cars that can deliver Electric Repair Equipment to the site, etc. (You might ask, if that section of the grid is down, how do I propose to get the electric train down that stretch of rail, to which I would just grin mysteriously and excuse myself to the punchbowl again... but I'm sure the PhD's could find an answer even to that)

That, or we could just have a big food fight and throw jello at each other.. I don't know.


Many 'free market' misconceptions pop up in the responses to these things. Stuff only has to get a little funny before the correlation between the compensation one received in 2005 and the availability of fuel breaks down. The man in the van who works on infrastructure will be picking up hitch hiking investment bankers and mortgage brokers on his way to his next repair in 2015. The FWOs might not like it, but reality rules, not some funny money they had and lost the prior decade.

We're stupid, to be sure, but we're not that stupid.

Because it will be cheaper for people to use electric power to heat their home than use $4.50/gallon heating oil (northeast)or propane (rural midwest).

Hi mb,

This is something I've been worrying about for sometime. I currently pay $1.00 per litre for heating oil and $1.25 for propane, which makes electric heat a much better value -- at $0.1067 per kWh and at 80%AFUE, a propane boiler is twice as costly as electric and a conventional propane water heater (0.55 EF) is three times more expensive. Moreover, many homeowners can't afford to purchase the minimum amount of fuel required for delivery, which can easily exceed $400.00 or $500.00. The obvious solution is to turn to electricity, especially if the utility is prevented from terminating service during the winter months if the account should go into arrears.

I live in an older, semi-rural area that has seen a lot of new development in recent years. The line on my street is 60+ years old and operates at 2,200-volts. Three years ago when temperatures dipped to -27C the transformer that serves my home and several others failed due to a combination of age and chronic overloading. It took NSP several hours to locate one compatible with this odd-ball voltage and a couple more to bring it pole side and install it. This line and supporting infrastructure dates back to a time when there would have been fifty homes in total, all oil heated and all equipped with 60 or 100-amp services. Today, there are probably three hundred homes, most built in the last ten years, roughly half of which are electrically heated and all with either 200-amp or 400-amps services. This system is already stretched to the breaking point, but imagine what would happen if those of us who heat with oil were to begin using electric space heaters to cut our costs or swap-out our oil-fired boilers and hot water tanks for electric models. I'm afraid I’ll find out soon enough.


Why would the power grid in the US fail due to high oil costs?

They want to scare you. they believe we won't have the oil to get people to the power plants and etc. it's pretty much nonsense.

Hello John15,

So, if you are wrong: I am very glad that you will cheerfully postPeak volunteer to laboriously rickshaw transport these power plant workers back and forth to their daily jobs. Of course, entirely at your own expense and repetitive injury, no matter how deep the snow or mud. Hell, even the Zimbabweans won't do this, and their blackouts are nearly constant.


haven't you read John's posts? the free market will provide! Africa is merely an example of poor management and has nothing to do with oil prices surging and increasing demand meeting limits to growth

John 15, I've tried, I practice trying to be more optimistic - I talk to physicists with whom I am friendly, and a number of them shrug off the problems like you and say "It'll sort itself out" or "we'll come up with something, I'm not worried" - when I press them on details, they tend to be short - "oil shales?" "nukes?" "fusion?" "aren't there a lot of tar sands?" etc. etc.

when I point out the problems with any or all of their "solutions", they shrug and say "we've worked it out in the past, we'll find some technological solution"

it worries me - these are VERY smart people, people who are not math challenged like so many in our society - people who face the exponential function every day in their work - and yet, when pressed for details on solutions they shrug and act as though a Deus ex machina will solve it all for us (I think as physics budgets rely on Federal budget surpluses, there may be an intrinsic desire/hope for a magic solution that does not allow these scientists to see the magnitude of the problem)

I see possible mitigations (conservation and increased reliance on renewables) - but more, I see your precious "Free Market" fighting many of those solutions - I see GM & Ford getting the Federal Gov't to block California's mandate to higher mileage (as if California doesn't have a right to want cleaner air! you want to sell cars in Cali? come up with a car that gets decent mileage for God's sake!), rather than coming up with a hybrid that actually competes with the Prius - I see Oil interests manipulating the Gov't for access to
offshore and AWR drilling, rather than investing in large PV farms in the Mojave - in short, I see the free market attempting to game the system, rather than adapt. And at the same time I see the US gov't trying to do the same; rather than encourage conservation (how about better tax incentives for insulating homes or adding pv or solar heating?) or helping developing markets in PV and wind - they waste taxpayer $ on ethanol mandates and wars in oil countries - they decry Chavez as some sort of monster and Russia for charging what they want for gas and oil - in other words, they play the system to benefit a few, rather than encourage workable solutions (how about Alan's rail ideas for God's sake?). I see France's non-free-market solution with electrification of their trains (and Russia's as well), France's single (apparently) very safe nuke design - and I see mitigation, preparation - and guess what? not a completely "free market" solution. AND they aren't setting the system up for short-term gain by a few in the way our "elected" officials are

and then I despair - and I think your little links about some new battery or an electric scooter are going to be far too little and far too late to prevent the sort of catabolic collapse Leanan is talking about

I believe Leanan may be concerned about collapse world wide.

With respect, the US is far from being the world, and since, perhaps unlike Leanan, you see hopeful measures being taken elsewhere, then one can perhaps hope that at some stage similar measures will be adopted in the US, not without great loss compared to if they had been adopted earlier, to be sure, but nevertheless far better than a universal collapse.

It is perhaps somewhat difficult to see why France should collapse, as to provide more or less all of their energy needs they might have to about double their reactor fleet, from 50-100, taking into account better conservation and so on, which is well in hand there.

Areva plan to build about 100 reactors by 2030, so even if they did not up their proposed build, they could still provide around 50 reactors elsewhere, which might help to both provide trade goods for them and to kick start recovery elsewhere.

It is perhaps even more difficult to specify why China should collapse, as until fairly recently it managed on a fraction of present energy supply, and coal is not going to run out in the immediate future.

By 2020 they plan to be able to build at least 10 reactors a year, and are ahead of schedule.

Sure, they will need substantial materials imports, but a lot of that will be displaced if America does not take so much goods.

Because your country, and even more mine, the UK, are making a pig's ear of things, does not herald universal gloom, perhaps!

You appear to be more optimistic than I - can we (US & UK), WILL we make necessary changes in time? I am dubious - where will credit come from in the next few years for nuke start-ups?

France may be fairly well situated now, but what happens if Spain, Italy and Germany start falling apart? (the German Greens have really made a mistake with their anti-nuclear stance I believe)- France is no island, and your neighbors problems have a tendency to become yours very quickly - remember Weimar and how THAT all worked out?

China? hardly a model for a post-oil world I would think - the rate at which they are ramping up coal plants, their apparent desire to become the next US - their rivers are drying up and are so horribly polluted it defies the imagination - the Green revolution requires fossil fuel inputs and irrigation, when those costs are too high or the inputs unavailable, what happens to 1.3 billion people? Overshoot practically defines China at this point I believe

and I think interconnected nature of the world at this point means a collapse (or near) of the US will have devastating effects on other nations - who will Japan sell their autos and electronics to if not the US - can China keep it's economic miracle going if Walmart stops selling cheap junk? Just look at how a collapse in US mortgage markets is echoing through the world and you see why no nation is truly safe from the effects of peal fossil fuels

There was a rather nice quote by Schumacher at the top right of the page here the other day, to the effect that:

'It does not matter if one is optimistic or pessimistic, what counts is that one should act'

If you asked me what the odds are, I would say, not good.

That however is beside the point.
It is pointless to assume the very worst, all you do is take away your own capacity for action.

The only rational course is to act on the assumption that you can take actions which will help - after all, your calculations may be wrong, and you have lost nothing by trying.

What encourages me is that the actual technical obstacles whilst formidable seem surmountable.

None of us know for sure what the outcome will be, but that is the human condition.

'The only rational course is to act on the assumption that you can take actions which will help-'

Let me see if I have this right...It was OK for Hitler, Stalin, Mao, Atilla, Alexander, et al, to act as they did because they THOUGHT they were being rational and THOUGHT they were acting on assumptions that were correct and they were taking actions that they THOUGHT would help. Is that right?

'after all, your calculations may be wrong, and you have lost nothing by trying.'

So, all the bad guys that I listed above are absolved of wrong doing because their calculations were wrong and they LOST nothing by trying? Is that right? Even thought countless people, property, resources and entire cultures were wiped out?

River, I have no idea at all how you managed to get to where you are from what I wrote.

To say that it is wise to take action does not imply that you can just go out and murder someone.

The nature of the action you take also has to be justifiable.

Since I do not, actually, advocate mass murder, but in the subject under debate advocate installing insulation and conserving as much as possible whilst vigorously deploying all affordable low carbon energy resources I really can't see how your comment is relevant.

Dm, I was simply attempting to follow your aimless, wandering, thoughtless, mind numbing posts...yes, posts...as in countless, multiple, endless, and plural. Don't get me wrong, I can always use a good laugh.

Are your fingers detached from your brain? You are not posting to a bunch of children that need lecturing. We are adults, we can and do think independently, we each have our own opinions, we generally take time to consider a concept prior to engaging our fingers.
If anyone attempts to read the post that I responded to as a stand alone, they would come to the same conclusions that I did and would probably respond the same way. It is senseless and I made fun of it in hopes that your future posts contain some grain of knowledge that will be helpfull to other visitors to TOD...Not mindless blather, IOW.

I did have a vauge inclination of what you were talking about, but I thought it a good opportunity to show you just how one of your posts can be interpreted to mean anything and nothing at the same time.
Can you please try to read each of your posts and see if it makes sense prior to posting?...And please don't feel that you need to address everything that anyone posts. We are not all experts in everything and sometimes we can learn from reading and not responding...And, no one is here is handing out awards for most posts of the day. As my father said to me...'I never learned anything when I was talking.'

Thank you.

You're way off in left field here.

Dave was clearly using the quote in the context of 'Can we do anything to address a precipitous energy shortfall?', and that we should at least TRY to do something to help the situation, no matter where we see the odds of success.

It was not a wide open invitation to say that 'Doing whatever you like' would be just fine, including genocide and freakish mayhem.

Dave has a lot to say, and clearly that tweaks you, but his posts are well reasoned and respectful.. (and I disagree with plenty of them) but I've never seen him 'go off' on someone like you're doing.

"a good opportunity to show you just how one of your posts can be interpreted to mean anything and nothing at the same time." << It's YOUR opportunity to try to understand his point, or instead to insist on misapplying it to conclusions/themes that you bring in yourself.

Bob Fiske

River, some of the time you speak like a normal human being.

Some of the time you just completely loose it.

Your last was just to put it bluntly, completely mad, equating a comment that we should take some action on global warming and power supply to a justification for Hitler's mass killings.

It probably all makes perfect sense in your own head, but without in any way trying to be rude, the thought patterns you exhibit display many of the traits of someone in serious need of help.

I don't care if you don't like my posts - don't read them - they do not usually have your name on them, unless you directly address me, as here.

The internet is rather like the television - lots of people are talking about all sorts of things, but we listen to the bits we want to.

Unless you feel that the newscasters etc are directly talking to you personally?

Some of your comments make that seem possible.

'The internet is rather like the tv-lots of people are talking about all sorts of things, but we listen to the bits we want to.'

Occasionally the signal to noise ratio causes the signal to become almost unreadable. You are the noise part of the S : N ratio.

Now you are insinuating that I am deranged? What happened to your 'reasonable and thoughtful' personna? Are you a psychologist or psychiatrist? A mental health professional of any sort? Did you work on the set of the soap opera 'General Hospital'? Lord knows you consider your self an expert on all else.

BTW, I do not watch tv news. If you haven't figured out that it is a waste of time, I dont know how to convince you.

Also, it's LOSE not LOOSE...unless you are speaking German.

I expected a reversion to personal attack since your posts are indefensible. Thanks for living up to what I expected of you.

Yes, River. That's exactly what he meant. Well paraphrased. oy, vey~!

Good way to torture an example and intentionally lose the point. (The root of torture is appropriately related to 'Spin')


"when those costs are too high or the inputs unavailable, what happens to 1.3 billion people?"

china will adapt far before the inputs are unavailable.

Hello MacDuff,

Thxs for responding with good points. I don't wish to personally attack TODer John15 [I am sure that he is a very nice gentleman if he and I were to ever meet], but I just think he is vastly underestimating the combined effects of complexity, entropy, and Overshoot, plus all the other things rapidly building up to set severe limits to what we can postPeak accomplish. I give him much credit for being Peak Aware--that alone sets him far ahead of most of the sheeple. I am just trying to nudge his mindset to a more realistic recognition of what lies ahead.

Consider: there are probably more people golfing in Phx today than the total daily viewers of TOD. Probably more daily births statewide than the daily TOD headcount. Probably more illegal immigrants crossing the border faster than the number of postings we type out. More Ponderosa Pine trees dying statewide from bark beetles far faster than our Arizonan one-time use of multi-million rolls of toilet paper. On and on....

I just think he is vastly underestimating the combined effects of complexity, entropy, and Overshoot, plus all the other things rapidly building up to set severe limits to what we can postPeak accomplish.

Whether people are aware of PO or not they are aware of very high oil prices so that's pretty much the same thing. economics is working.

Africa is merely an example of poor management and has nothing to do with oil prices surging and increasing demand meeting limits to growth

I don't know about Africa, but South Africa was a manmade crisis and the lights are on right now.

I am very glad that you will cheerfully postPeak volunteer to laboriously rickshaw transport these power plant workers back and forth to their daily jobs. Of course, entirely at your own expense and repetitive injury, no matter how deep the snow or mud.

The power plant workers will take the company bus. they'll be paid to spend their week in a boarding house near the plant and go home on the weekends.

of course, they could just use more fuel efficient cars and conserve.


Hello John15,

Your getting there. Just keep pedaling ahead in time. Tell me what happens when Depletion and ELM is now so severe that there are no tires or fuel for the company bus. They are using oxen-carts as Zimbabwean ambulances now.

Tell me what happens when Depletion and ELM is now so severe that there are no tires or fuel for the company bus.

you don't have to overstate your case. that could be decades away. most people will have probably have moved closer to their work by then because of high gas prices. I guess you'd have to tell me when there isn't enough rubber to make new shoes or to make new tires...

Not such nonsense, look at the oil depletion curves by ACE toward the end of the comments here:


And the U.S. is in worse shape than much of the world. For the U.S., the decline in supply of oil will be far more accelerated than for the global oil depletion scenarios. The U.S. is the most dependent nation on oil and on imported oil. Soon exporting nations will stop exporting in order to supply their own domestic needs. And as the price of oil increases, the U.S. (as world’s largest debtor nation) will lack the financial resources to buy the amount of oil needed to sustain its economy. It is not clear whether the U.S. will use military power to attempt to obtain oil in the future, nor is it certain that military power would be effective in garnering oil from diverse global locations. For the most optimistic oil supply scenario for the U.S., terminal oil depletion would be pushed back some years, but the end result is the same—terminal depletion.

my posts are pretty much nonsense.

Fixed that for ya.

High oil costs would contribute to an inability to maintain, repair, and grow the grid infrastructure.

The electrical grid would likely fail due to complexity.

Complex Systems Analysis of Series of Blackouts (PDF warning)

Lack of gasoline, lubricants for machining parts, asphalt, and plastics, all due to a lack of oil, would be contributing factors.

The power grid would not fail from high oil costs alone.

The main thing that would cause a power grid to go down (and not come back up) would be a lack of fuel - and even then, you will always have things like hydro and wind power(!). The way you control a power grid is based on frequency control - you maintain an equilibrium between generation and load so that the frequency is 50 or 60Hz (US). If you are short on generation, then you need to load-shed (cut off some parts of the network to reduce load). You can always connect them back up later and cut someone else off. Any power network will have several alternative routes for electricity to flow if some lines come down. The way I see it, if we run short of natural gas or oil, then you will have rolling blackouts. That paper you cited was more to do with blackouts caused by protection equipment malfunctions, where faults (short-circuits etc.) are not cleared in time, leading to low voltages and a phenomenon called voltage collapse. The authors happened to use some techniques from nonlinear dynamics to analyse it, and the title of the paper makes it seem more ominous than it actually is.
Every power system operator has a black-start plan, where they practice restoring the network from a total blackout under various different scenarios. Of course, if there is social chaos, or a pandemic etc., well then that's a different story.

I think the knock on effects will be profound. Imagine a major city/cities with a grid that went down for a day or three? Do you know how much food that is that will be thrown out from warm freezers? If there is a meat availabiity problem, etc No one will be able to restock for months maybe.

That is just the problem with freezers thawing out, what others?

Right. Cascading failure situation. A grid failure that doesn't come back up in two days is big trouble esp. in extreem weather. I know we've mentioned retail fuel and swipe card pumps affecting food deliveries. Food spoilage in stores and warehouses will happen too. Large electric pumps needed for fuel and water's backup gen sets will need refil. If tank farms and terminals have problems with fuel that's another possible MOL situation.

Failure would likely occur against a backdrop of depressed economy. Riots and looting are likely because people will tend to have less on hand before crisis. Helicopters for food drops have limited range. Trucks need safe unblocked passage. The social chaos will be Katrina-like except bigger. Ad hoc food/aid stations probably the most effective like NO.

Why would the power grid in the US fail due to high oil costs?

It should not, as most power is part of a monopoly that makes sure they get a profit - fuel costs won't matter.

My understanding is that very little of it runs on oil.

But the lineman drives about in trucks, and the parts are JIT shipped in - and THAT runs on oil.

Speaking of FEMA, I'm currently being trained as a voluntary disaster worker by the San Francisco Fire Department. I'm taking the training for a few reasons, not least of which is that I live in an area that FEMA puts at a 67% chance of having an earthquake in the next twenty years. I'm also gathering information to provide input to the San Francisco Peak Oil Task Force. Oakland did not mention disaster cleanup and rebuilding at all in their report, which I view as a major omission.

In any case, disaster cleanup will be much more difficult post-peak, especially so if (when?) the grid goes down surrounding the disaster area. My sense is that we will see brownouts first as coal supplies have difficulty reaching the coal plants for assorted reasons and we'll have to ration electricity, like everything else.

The Neighborhood Emergency Response Team (NERT) is an excellent program. (As an aside, I recommend that everyone take free classes such as these while they are available.) Our last class we covered triage (our simulation group had 3 dead, 4 needing immediate care, five needing delayed care, and 3 uninjured) as well as light search and rescue. Apparently over 15,000 citizens have been trained under the program, although it's unlikely that all of them still live in SF.

NERT is no longer recommending that San Franciscan's store three days of food and water — after seeing FEMA's response after Katrina, they upped the recommendation to seven days.




Do you have any other class recommendations? Or training programs?

I have been thinking about what kind of skills I would like in the neighborhood in the future and here are some ideas:
Stress levels will be high and tempers short.
1. People trained in how to diffuse violent arguments.
2. People able to teach anger management.
3. People who can give advice on marriage and relationships.

Do you have any other thoughts along these lines? As more and more people become peak oil aware, they will be looking for ways to contribute. There are a lot of things that trained professionals could teach more widely. And many things that faith organizations could provide.

Do you have any other thoughts along these lines?

Do a google search for the "Peak Oil Shrink" There is already a website by a person who looks at Peak Oil etc from that perspective.

Hi Jon and Andre,

I highly recommend checking out the "CERT" newsletters posted online on the website of the Ashland, Oregon CERT homepage (if you can google it for me) - really amazing work they're doing. Trainings and resources.

Also, you might enjoy www.cnvc.org and www.newconversations.net. on your other points.

Hi, JonFriese.

The NERT program I'm in is just one of many CERT (Community Emergency Response Team) programs across the country. Check the CERT website (https://www.citizencorps.gov/cert) for your state to see if there is a local one. If there isn't one in your area, you can start one. Also check with your local PD, FD and community center for life saving and other classes (like CPR).

One thing that struck me during this training class was a map of the continent and the number of earthquakes of magnitude 6 or greater — virtually every state except for two had at least one dot, most had two or more. I hadn't realized how common earthquakes are of that size.

As for the other areas the suggestions Aniya made seem good to me.


Of course, FEMA is probably working on some contingency plan

As was demonstrated via Kat-Rita, FEMA's mission is a "Contingency for the Continuation Of The Goverment" Not average poor people.

Hi Samsara,

I encourage you to check out the websites and what Andre' says just above - he's right about "Citizen Corps" - and I'm really glad he pointed out that *anyone* can start up a CERT program, apply for funds, etc. It may be somehow distantly related to FEMA, but only in that this is a gov program (the funding that is) - it is different.

This program works, it is aimed exactly for "average poor people" - or any "average" or "above-average" persons or group. The funds are there.

People I know who are active in it say that the funds really help, as the community can hire a coordinator. This makes all the difference - someone who can take the time to do all the organizing. Really great materials, a wide variety of applications and methods, and...they also have some fun in working together, and taking on whatever projects they envision (check out the "Visioning Retreat".) The Ashland CERT does trainings where teenagers are specifically invited, for eg.

The decline will be slow. So slow that many won't even notice.

I hope you are correct, it's my plan A - my pension depends upon it.

The Roman empire took ~300 years to collapse but it also took a long while to grow.

OECD economies have doubled in size in just 50 years or so - my plan B assumes they may well contract at the same rate.

The poorest are being affected first by the already apparent symptoms of peak oil, so, I watch what is happening in poor nations and try and learn from them.

The downslope of the collapse will be important, even if the collapse takes 150 years. Will it be linear? If so, it might be barely noticeable on a day-to-day basis. But I'm skeptical about it being linear.

I expect it to be more like the downside of a depletion curve, with collapse accelerating over time, then flattening out with a long tail. If the tail takes 100 of the 150 years, the first 50 years are going to be exciting...one of those log flume amusement park rides comes to mind.

Chaos: Making a New Science, by James Gleick

Nonlinear Dynamics and Chaos, by Stephen Strogatz

The Tipping Point, by Malcom Gladwell

The decline of a complex system, very much like the mechanism of individual death, will first appear to be slow and gradual. Then the collapse will pick up speed until it passes a tipping point and the managing mechanisms of the system will shut down abruptly.

The decline will initially be slow, so most won't notice. This is where we are right now, we are currently in a slow collapse. Then it will pick up speed, and most people still won't notice because of the recency effect. Then it will abruptly grind to a halt, and everyone will notice, and no-one will be able to do a thing about it.

To hold entropy at bay, to restrain the various forces of competition, dehydration, hunger, our own environmental wastes, and the elements, we now expend a few hundred hours' worth of equivalent human labor per person per day through fossil fuels. This is on top of the 8 to 12 hours of labor that the individual actually does.

Humans in tribal environments were sustainable for aeons on only a few hours of labor per person per day to meet all their needs.

Our means, dependent infrastructure, and way of life centers around being able to deal with those forces by consumption of more resources and more energy, and through adding yet more complexity.

With the decline of available energy to reinforce civilizational structure, the various disorganizing forces have cumulatively more deleterious effects on our society.

"How" will it fall apart? That is as unknowable as the facts surrounding my own death. That it will fall apart suddenly is as certain as the reality of human mortality.

Now, despite how we all live in fear and denial of the unavoidable and undeniable, we still manage to survive as a species. How? Well in advance of individual death, we create new people through the mechanism of sex.

Some similar mechanism needs to be implemented on a group, cultural, or societal scale in advance of the collapse of the system.

This illusory "slow" collapse that is happening right now will accelerate by 2010 at the latest. Our system will crash hard by 2014 at the latest.

What can we do about the collapse? Absolutely nothing but spin our wheels, and waste more time, energy, and resources.

What can we do about survival? Plenty, but any workable solution has to revolve around (1) exiting the system in advance of collapse and (2) working with other people in a self-organized community.

So back to the land survivalism is roughly equivalent to having sex on a social scale and giving birth to a new socio/economic paradigm. I kind of like the metaphor.

Got a package full of wishes
A time machine, a magic wand
A globe made out of gold
No instructions or commandments,
Laws of gravity or indecisions to uphold
Printed on the box I see: ACME's Build a World to Be.
Take a chance, grab a piece
Help me to believe it

What kind of world do you want
Think anything
Let’s start at the start
Build a masterpiece
Be careful what you wish for
History starts now

By Five For Fighting

The decline of a complex system, very much like the mechanism of individual death, will first appear to be slow and gradual. Then the collapse will pick up speed until it passes a tipping point and the managing mechanisms of the system will shut down abruptly.

Possible, but I don't think there's any proof on the timing. For all we know, the slow and gradual part may last until 2100, not 2010.

Leanan, you seem to misunderstand the magnitude of the coming collapse. Even if it does take 92 years, until 2100, a decline of perhaps 90 percent of the population in less than a century is catastrophic, not catabolic.

The Mayan collapse was definitely catastrophic. The collapse began between 800 and 830 AD, not 750 as Tainter suggest. Experts differ as to how long it lasted and as to how many Mayans died in the collapse, but a general consensus puts the time scale at 100 years and the decline between 70 and 90 percent of the population. That is catastrophic, not catabolic.

No one, to my knowledge, is suggestion that the die-off will take only a decade or so. It will probably last a half a century or more. But it will be catastrophic, not catabolic, and people will definitely notice.

Ron Patterson

Ron, you said 'catastrophic, not catabolic' three times in three short paragraphs. Thank you. :)

Hmm, if you are absolutely certain there will be a massive die-off, the difference between 50+ and 92 years is pretty irrelevant.

BTW, do you know what catabolic means?

Hmm, if you are absolutely certain there will be a massive die-off, the difference between 50+ and 92 years is pretty irrelevant.

My point exactly. My point is that if the vast majority of the population die-off, then anything less than 2 to 3 hundred years is catastrophic.

BTW, do you know what catabolic means?

"n. The metabolic breakdown of complex molecules into simpler ones." Or "slowly, slowly, so slow that no one hardly notices." A breakdown of a complex society into smaller simpler societies. I cannot say that the word is used correctly in this essay How Civilizations Fall: A Theory of Catabolic Collapse. However that is how the author of the essay intended it to be used and how Leanan uses the word. So whether I agree with the use of the word or not, I am obliged to reply in kind.

Ron Patterson

LOL, it's always fun to talk with you and hear that whooshing sound.

Or "slowly, slowly, so slow that no one hardly notices."

Where do you get that from? I don't see it.

Ron, even though we disagree in that I feel that it may be possible to prevent a complete collapse, I am entirely with you in thinking that we will see a very rapid and accelerating problem, rather than one which is so slow as to be hardly noticeable.

Indeed, that is one of the reasons why I think we are in with a shout, as it may wake people up, with luck!

Dave, seriously.

What was the point of that post. Did it contribute anything to the discussion?

Well, it sure as hell contributed a lot more to the discussion than did your post.

I thought so, as I was confirming that people who with very different outlooks may both feel that the decline will be rapid.

Most people who post do so with the impression that they are contributing something, even though you may disagree.

I have more trouble seeing the point of your post, which after all prolonged a discussion you already felt pointless!

Perhaps you have not used the net extensively - most posts are not of earth-shattering importance, but obviously meant something to those who posted them.

It is usually best just to pass over those that don't do anything for you, as you will certainly not succeed in getting others to post according to your criteria.

It is usually best just to pass over those that don't do anything for you, as you will certainly not succeed in getting others to post according to your criteria.

I normally agree with that. But, just on this drumbeat alone, you have posted 24 of the 206 posts. Thats 11% of this drumbeat. And its not an isolated event. You've been doing this for weeks.

Seriously man, you don't have to post every little idea that pops into your mind.

Dave - I'm with Rethin. You are always civil, and I appreciate that, but posting so much is like hogging the conversation at a party. Ask yourself, before you post, whether what you have to say is so interesting or important that it's worth pushing someone else's post down the page.

The "culture" is different at different web sites, and while lots of casual chit-chat is welcome at some sites, it's seen as a waste of bandwidth at others. Here, we have the technical limitation of 300 posts before it rolls over to two pages, loses the "new" flags on the second page, and basically makes continuing the conversation difficult or impossible. For that reason, I discourage "posts devoid of content." That is, posts with just a smilie, or that just say "I agree!" or are off-topic, are re-posts of things already said in another thread, etc. I realize that such posts are considered part of the social glue that holds communities together at other sites, but here, it's discouraged. You don't need to respond to every comment; people won't think you're rude if don't reply.

Hmm, I happen to be off work sick at the moment - I do not usually hang around the internet so much - people usually come and go, posting a lot at one point of time, and then not posting for a while, according to their individual circumstances.

If that is the way you want to run your site, it is not a problem to me.

I do wish that you would take a grip on grossly abusive postings though, which in most places are of more concern than if someone happens to be posting a lot at a particular point in time - it is rather like allowing drunken and abusive guests at your party.


I disagree, if what you mean by "grossly abusive" are occasional posts with four-letter words in them.

I discourage four-letter words, because they can get us filtered by schools and libraries. However, I do not delete messages with salty language unless they cross the line to personal attack. (And the line is generally the word "you." "I don't effin' believe it" is not a personal attack. "Eff you" is.)

After all, look at our sidebar. We have a link to Kunstler's web site - Clusterf*** Nation.

Hi Dave,

I hope you feel better soon. Being sick does bring home the realities of the vulnerability of our human situation, esp. WRT energy and our future.

Wanting "human contact" is a healing response, so here's some validation for that.

DM...did you ever consider the old saying...'It is better to remain silent and be thought a fool than to open your mouth and remove all doubt.'

Food for thought.

I am suggesting that after a hard crash and die-off begins, that die-off will be rapid. From peak population to the end of the die-off will take much less than 50 years. Here's my thinking.

What does it take to keep a human alive?

Breathable air, potable water, immune response to disease, waste sanitation, food, shelter from the elements, and social interactions. With the exception of air, the rest of these are currently delivered to 6.6 billion people via fossil fuels and monetary agreements, to the tune of about three hundred hours of human equivalent labor for each person every day.

For the survival of the species, adequate ongoing societal stability is also necessary for the raising of children.

Why does it take so much extra energy in our civilized environment to sustain people individually and society as a whole, when our ancestors thrived on a meager three to four hours of work per day?

Because collectively we are working against far stronger forces of disorder and resistance than our tribal predecessors. Our forebears had highly integrated understandings of mutual support. Our only societal agreement for mutual support is monetary and abstracted.

These forces will all work against us in concert when the system shuts down. Hunger, thirst, disease, an unreliable climate, and lack of mutual support. Disease will be a big one, with no pesticides for insects and rodents that carry disease, limited heat for cooking food and boiling water, and billions of literally unwashed humans packed so tightly together.

The few hundred hours of work per day, work done by our invisible energy slaves against forces of disorder, will no longer be available to nearly the entire population.

What's a reasonable estimate for the number of people worldwide who are significantly aware of the issues currently at play, with climate change, overpopulation, resource depletion, mass extinctions, and complexity? I'll be generous and say 6 million. That still leaves 6.6+ billion people who will be caught unaware as the collapse accelerates and crashes, with no preparations for alternate support, water, food, heat, sanitation, or medical assistance. And no energy slaves.

Even if a near-term hard crash is unlikely, going from 6.6 billion to 500 million or less in 90 years is a net loss of over 180,000 people per day, births minus deaths. Births minus deaths is currently about 200K on the positive side. If the birth rate doesn't decline, the death rate must increase dramatically.

Thanks for the links

Will 2008 be the year of arrival?

My guess is no. Anything's possible, but I've always thought "catabolic collapse" was our most likely fate, and recent events have only bolstered that view.

The decline will be slow. So slow that many won't even notice.

My 2c.
Another likely course of the economy might be a 'ratcheting down' effect. We could see an economic crash, who knows how bad, followed by several years of depression followed by a recovery until we hit our heads on a lower energy supply, followed by another downturn. Rinse and repeat.

It seems to me that the current US mentality of its version of 'free market' is very firmly entrenched and the same economic strategies will keep this process going for several cycles before there is enough of a sea change for people to accept something that might work better. Who knows what that might be. Insert your favorite socio/economic model here.

I suppose this is a catabolic collapse in a way but if we have a major economic downturn on this path, it will seem like TEOTWAWKI to many.

I would guess that 2008 may be the 1929 of this particular economic epoch. Although it is a "separate" issue from peak oil, the economy has been mismanaged for some decades now and the reversal is about to become obvious. With most of our money in virtual electronic form, credit can be issued at a much faster rate than it was in the 20th century. It will be an interesting time.

But with that said, the real economy (as measured in BTUs or Joules or MCFs or BOE or quads) will continue to stagger along. People are not inclined to just lie down and die, they'll maybe be eating dog meat and growing turnips, there will be patches of famine here and there, the USA may (~99% probable) become a much less affluent place -- South Africa may give us a bit of a preview -- I think with his deep understanding of history, ecology, and human nature, our Archdruid friend is spot-on the really big picture of the future of human life on earth. He recognizes the inherent futility of the technofix, the probability of significant losses of knowledge and technology, the major reversals we all face, and yet manages to write in a soothing and almost optimistic manner.

I'm thinking of taking up Druidism. Druidry? Something like that.

I am increacingly irritated by people putting the collapse of the Roman Empire to energy reasons. In about 380 the invasion of the Huns from Asia pushed the Germanic Tribes on mass in to the Western empire. The Empire was unable to cope with that influx and collapsed. The Eastern part of the empire which escaped the influx lasted another 1000 years. Had the Huns not appeared the Western Empire may have survived indefinatly as well.

Yes, but that begs the question, why was the Empire unable to resist the influx of Gothic peoples, and why did an influx of these refugees cause collapse, when the Empire had successfully resisted previous such influxes? Normally, more people are an asset.

The fact is the Roman Empire was already heavily overstretched, due to war with the Sassanids, among others. Roman provinces had been squeezed of funds to fight these wars. The Goths may have been the final straw of collapse, but they certainly weren't the real cause.

That again begs the question why the Eastern Empire survived another 1000 years. The difference was the West had the Goths(and others) and the East didn't. The empire had severe internal problems but the East shoed that without the Goths they wouldn't have been terminal.

That is a good question, but it has a much more interesting answer than your trivial observation.

it survived because it's first ruler set in stone the long term trend of the country being a theocratic dictatorship of Christianity. the old roman empire before this though was religion agnostic, as long as a temple or church paid it's taxes, even if it was one what worshiped cesar(yes there was one). they were left alone, their followers wern't killed on the spot by soldiers if they were caught in any way of worshiping any god but a selected one.

because they did not resist. the gothic people presented a less painful alternative to the roman empire at the time. the gothic people on the other hand just wanted a piece of the good life or at least to the point of the rumors of how good it is in the roman empire. kind of like how rumors still exist that the u.s. is still a land of milk and honny.

I think it's questionable that the Eastern empire survived for another 1000 years. The thriving economic and cultural centre of metropolis of Byzantium was arguably not an emprire at all.

I think the idea of a slow decline, that can be managed, that is so slow many won't even notice, is a comforting illusion, and this is understandable.

Personally I don't believe most of us will experience the effects of Peak Oil on society. Long before that happens society will be radically altered by the economic and political repercussions of 'Peak Oil' like the flash of lightning is seen before it's heard.

The Great Depression in the 1930's happened quickly, as did it's precursor, the Wall Street crash.

I think we are facing a similar situation today. An unprecedented financial and economic downturn, worse than in Great Depression. A depression we may never get out of, at least not most of us. The elite who rule will still be the elite, only most other people will see a drastic fall in their standard of living.

None of this is really hard to understand is it? After all there isn't enough wealth to go round is there? Perhaps we're facing Peak Wealth too? A substanitial re-adjustment and re-alocation of wealth is necessary if the really wealthy are going to maintain their lavish lifestyles and in a crisis situation it's the rest of us who are going to pay and pick up the tab for the excesses of the 'free market' system, not the rich and powerful elite.

This too is obvious. Those with power are not going to share the burdon, the poor are going to pay disproportionally. This is the way our system works. There is no reason to assume history will change, that the fundamental mechanisms of Capitalism will suddenly alter.

The great cake of society is going to shrink and the slice most of us receive is going to shrink as well, but perversely the relative size of the slice the rich get is going to actually grow bigger because they control society and weild the biggest knife.

I believe we will see the return of leftist-populist candidates in politics as the middle and lower middle class find their route to 'upward mobility' blocked by the reality of severe recession. TPTB will resist the socialist influence and will weild government and media power against the rise of populism and socialisim, much as was done in the last depression. The actors will be different but the play much the same.

Looking back at the hard times of the 1930's, one must remember that there was still lots of energy to fuel the economic system of the Capitalist. TPTB have evolved since thru the use of that fossil fuel in ways which kept the masses happy with lots of great toys and other forms of entertainment. The notion that the energy supply won't be available to keep things moving suggests that the ability to keep the shepple in line will also be diminished.

What we are seeing now, for example, Bear-Stearns, is the government bailing out TPTB in ways which have been called corporate socialism. As things get worse, isn't it likely that we will hear louder calls for more "socialism" from the people on the bottom? You know, calls for things like relief for high heating oil prices, lower electricity prices, rent subsidies, food stamps, unemployment payments, national health care, etc? OF course, TPTB will resist this, since they will be paying for it. It wasn't that long ago that the maximum marginal income tax rate in the U.S. was 70%, as I recall.

In the earlier problems, such as the Great Depression, the solutions seemed to gravitate toward anti-democratic solutions, as in, cults of personality and then dictatorships. People seem to follow a charismatic leader in times of trouble and totalitarian governments do have a way of getting things done fast. The ultimate question is whether the democratic forms of government will survive the temptation to drift toward totalitarian solutions as the problem of Peak Oil ratchets downward. Historically, the totalitarian governments found easy prey in nations without a history of democracy, such as Germany, Japan and Russia after WW I. If, as they say, all politics is local, then the lack of energy may strengthen the local governments over the national, thus giving hope that the local democratic processes will survive, since they are directly responsible to the people. Time will tell.

E. Swanson

That particular quote by the author is referring mainly to the terrorist threat to the US in 2008.

In the THE WALL STREET JOURNAL blog article above, "Peak Oil? Industry Numbers Disagree,"


I see that the first comment is by a TOD regular, me. I hope this helps to counter the disinformation campaign of CERA. And, it is the Ides of March for CERA.

the disinformation campaign of CERA.

That's pretty rich coming from a company hoping to make hundreds of dollars from "telephone consultations" about peak oil.

CERA has rendered them self into oblivion.
They SUDDENLY understand that previous customers now get their info from other sources (in addition to their own reflections, the customers that is).

Cera just try to get reckoned with once again but has lost their grips, just as OPEC has…. And good is that.

At what year is this 100 mb/d supposed to be available , THAT WAS LEFT OUT....

The WSJ blog had only two or three comments from the cornucopean crowd and nearly half of comments sounded like TOD bloggers. Surprising.

Main thrust of anti PO crowd was the oil shales and tar sands will save us.

There are hot environmental arguments swirling around the Alberta Tar Sands. For a sky high view of the area in question go to fort McMurray on Google Earth and move north.

Environmental battle brewing. http://www.youtube.com/watch?v=Eucr370Oz60
Nuclear power to the rescue http://www.theglobeandmail.com/servlet/story/LAC.20080314.RBRUCE14/TPSto...
or http://tinyurl.com/26le22

The latest IEA Oil Market Report appears to have been overlooked this week. Some quotes:

Global oil supply increased by 185 kb/d in February to 87.5 mb/d with higher January OPEC crude supplies lifting the base. Output recovery in Canada, Mexico and the Caspian republics offset reductions for Norway and OPEC in February.

OPEC crude supply fell by 120 kb/d to 32.1 mb/d in February. Middle East Gulf and West African output fell 300 kb/d, offset by a 150 kb/d increase in Iraqi supply.

OECD industry stocks built by 32.6 mb in January from an upwardly revised December, to reach 2,617 mb or 52.9 days of forward cover. December OECD revisions totalled +29.5 mb, including large upward adjustments to US and Japanese crude and European distillate stocks.


Actually there was some discussion about the IEA's definition of "oil" regarding its reports, as it seems that ethanol and other biofuels are now "oil," which allows for the "peak-busting" 87.5Mbbd.

Since my living depends on good numbers, I now ignore the IEA's numbers. I find they are just not credible.

What Matthew Savinar is saying is that we now live in societies whose very existence depends primarily on using oil.

We have an economy that relies on just about anything.

we need money.
we need people.
we need food.
we need shelter.
we need electricity.
we need the sun to come up in the morning.

You never hear that our economy runs primarily on humans getting up in the morning to make a livelihood.

Because it doesn't rely primarily on humans at this point. It relies primarily on humans using oil. Our entire infrastructure is built around oil.

Our entire infrastructure is built around oil.

Just about every barrel of oil relies on human work and ingenuity to get out of the ground. without humans oil is pretty worthless!

You could argue that transportation is build around oil, or that our infrastructure is built around energy, but otherwise that is nonsense.

Oil is really not essential to society. The only issue is how fast it is likely to decline.

Re: "Why are food prices going up?" up top.

In recent posts we have learned that the proportion of energy used in agriculture is about 21% of the 10% of total energy use going for food at retail. How is it then that an increase in the price of corn, as cited in the article, is the cause of the increase in the retail price of the turkey sandwich? Even if ethanol is the granted to be the main cause of corn price increases, which it is not, how is it that a doubling in the price of corn inputs in the 20 percent of cost of retail food outweighs the quintupling of the price of oil in the other 80% of energy used in the retail price of food? The answer, of course, is it does not. Why then is corn and ethanol being used as the whipping boy for food inflation when, if the statistics are valid, agriculture energy use is only 20% of energy use for retail food? Stupidity? A hidden agenda? I think so.

The facts are that meat prices, especially pork, have been falling lately as hog factories cut back sows by sending them to slaughter. If futures markets can tell us anything, hog prices will rise later as the supply decreases. If that trend continues and it is true for other meats long term, it will create an economic base for those who wish to return to the land post Peak Oil. The trends to ethanol use and high food prices are absolutely necessary to transform the agricultural economy from being subsidized to being a source of wealth to sustain the country after Peak Oil. The alternative of low food prices and high oil prices makes no sense and will IMO lead to disaster.

Brilliant summary!

The problem is the subsidies. We are paying 3 times for ethanol: tax payer subsidies, higher food prices, higher gas prices.

If ethanol is this cure all to our problems, there is no need to subsidize it, or mandate it. Let the open market determine the fate of ethanol.

The last sentence will never happen: As oil prices go, so does food, and ethanol has nothing to do with it.


The Blenders Tax Credit will come out to about $4.5 Billion this year, but we're saving about $9 Billion/Yr in Farm Subsidies.

The most important thing, though, is that Gasoline is, probably, between $0.40 - $0.50 Gallon Cheaper, as a result of ethanol. Since we use 144 Billion Gallons/Yr, that is a HUGE Savings.

And, NO, the oil companies DON'T like it.

Ethanol capacity in the US is set to rise to nearly 1mbpd in the next five years. In volume, looks like we've got a renewable equivalent to ANWR.

From the Energy Information Agency:

"The slowing economy, combined with high petroleum prices, is expected to constrain growth in U.S. consumption of liquid fuels and other petroleum products to just 40,000 barrels per day in 2008. After accounting for increased ethanol use, U.S. petroleum consumption falls by 90,000 barrels per day."

So Ethanol is taking the edge off US demand growth and freeing up a small but noticable amount of oil. Let's hope, short term, that other biofuels help pick up the slack. What's really heartening is that biofuel use is helping the US push back up the decline curve.

Now let's see what happens when we start adding more efficient vehicles, transportation methodologies, and a greater proportion of hybrid, PHEV, and EVs. Also worth noting, in 2007 wind represented the largest growth sector in electricity generation in the US.

Things are starting to shift. IMO the great thing about the peak oil crisis is it gives us the opportunity to change, to become cleaner and much more self sufficient.

Will someone please find Robert Rapier and tell him he's needed here?

He's gone to India!

Exactly. Oil was neat. It was plentiful; and, thus, cheap. As it gets more expensive we'll replace it like a lame, rented mule.

I can't speak for Europe, or the U.K., or anyplace else; but, we have scarcely a county in the U.S. that can't be energy self-sufficient. Between, biomass, solar, geothermal, wave, waste, etc. we're awash in energy.

Add in the vastly more efficient engines coming down the pike, along with hybrids, and we should be able to cut our transportation fuels needs by a third easily.

Also, if we consider the extraordinary strides being made in bio technologies, seeds, ag techniques, plus, the possibility that with $10.00 gasoline we could, probably, consider it viable to irrigate with desalinated water the whole state of Texas, the whole thing looks pretty easy in the long run, to me.

Also, if we consider the extraordinary strides being made in bio technologies, seeds, ag techniques, plus, the possibility that with $10.00 gasoline we could, probably, consider it viable to irrigate with desalinated water the whole state of Texas, the whole thing looks pretty easy in the long run, to me.

Wow. And I am considered a Cornucopian around here because I think that with luck and a following wind if we use all the options we have available we just might squeak through more or less intact!

The things we actually have some realistic costs for at the moment are wind and nuclear power, and I am very comfortable in saying that we will be hard put to provide basic energy needs with these two for a number of years, without paying to desalinate enough water to irrigate the whole of Texas.

Presumably you are hypothesising some sort of ultra cheap solar power, as you would certainly not be able to pay for it with the other two.

You would then have to not only make up for the serious and unsustainable present depletion of the water table to prevent the water supply actually going down, but would actually have to plan to enormously increase the current water supply.

You would need to build a vast number of plants along the gulf.
Not only would the energy cost be massive, even if you used the best membrane technology we think may be workable, but more importantly the excess salt which would be rejected would pretty well kill the Gulf of Mexico.

You would then have the little matter of constructing a vast network of, presumably, pipes, or evaporation would kill you, and pumping the water in them.

In the words of the great man: 'You CANNOT be serious!' :-)

Okay, okay; I went a slight bit hyperbolic, there. But only a bit :) We'll just irrigate within 100 miles (maybe, 50,) or so, from the Gulf. We won't kill it; we're better than that.

Within 10 years we will probably have very few ethanol plants using natural gas. I'll try to find some good links to Poet's "Project Liberty." It's probably pretty much the future of (corn/starch) ethanol production in the U.S. In short, ethanol is pretty positive EROEI, now; and, will become much more so in the future. Biodiesel works very well; we just need to develop a good feedstock in the U.S. Cellulosic will probably be profitable now. Some pretty smart folks are betting the lunch money on it. In the days of $6.00 gasoline it's gotta rock n' roll.

Beer time, folks. Keep the faith, the Cataclysm ain't just late; it ain't comin. Sorry

I'm afraid I feel exactly the same about your comments as I do about those of the doomers, or those who feel that we can do everything with renewables alone without considering how much it will cost.

Never mind the projections, or the press releases either from companies who are hoping for funding or political organisations with an axe to grind, show me what we can do now, or something that can be done only with modest extensions to present technology, and we can talk ABOUT something.

Henry Ford thought that the electric car was the wave of the future - he may have been right but he was seriously ahead of his time.

What you are saying cannot really be called argument, since it is unreferenced in exactly the same way as the arguments of most of those who espouse the contrary position are.

These are just clashes of assumptions and faiths, as opposed to rational discussions.

If you ask me what will happen, I have not got a clue, but can discuss some of the technical possibilities to a degree, once they have become serious propositions rather than the glint in someone's eye.

The cost to desalinate water has been coming down. Normally it is about $1,000 but it can be done for about $650 per acre foot. Still, that is about $2,000 per acre to irrigate with 36 inches per year, about half what we get here in the south. That is impossibly high for farming. One acre will not produce $2,000 profit.

A promising method to desalinate seawater is the "reverse osmosis" method. Right now, the high cost of desalinization has kept it from being used more often, as it can cost over $1,000 per acre-foot to desalinate seawater as compared to about $200 per acre-foot for water from normal supply sources. Desalinization technology is improving and costs are falling, though, and Tampa Bay, FL is currently desalinizing water at a cost of only $650 per acre foot. As both the demand for fresh water and technology increase, you can expect to see more desalinization occurring, especially in areas, such as California and the Middle East.

Ron Patterson

GE says they're going to cut the cost by 90% in the coming decade.

Add in Solar/Wind for power, and factor in Drip Irrigation, and There's another 50 Million Acres, or so.

If you've got a megawatt of electricity available continuously you can turn an acre foot of water into 850 tons of ammonia in a year's time using the old fashion Haber Bosch method. Once solid state ammonia synthesis gets rolling the power requirement drops by around 50% and I will have to check with the process designer - I'm not even sure you'd have to desalinate to do that.

The tide comes in, the tide goes out, the ammonia tanks fill, and pipelines move it or tankers come to collect it. Very nice, very nice indeed ...

Gasoline yields 20,800 BTU's per pound (6 lbs per gallon). Corn contains about 9.000 BTU's per pound. According to some studies the yield of energy from corn in the conversion to ethanol is much lower than the content of the BTU's in corn.

Ethanol is low EROEI. One study showed that a bushel of corn might yield the comparative energy of about .53 - .83 gallons of gasoline. One might need to replace the natural gas used to boil off all the water in fermented corn mash with ethanol from the bushel of corn, and use ethanol from that same bushel in the manufacture of fertilizer, fuel for the tractor, fuel for the transport of grain and liquids etc. to get the EROEI. It was like alchemy to conclude that there were no energy inputs in getting the ethanol output.

Since converting the entire United States grain harvest, the grain harvest of the largest grain exporter in the world to ethanol, would only satisfy about 18% (EPI) of our transportation fuel needs and cause widespread starvation.

Already the switching of soybean acreage to corn cultivation has caused record soybean prices. Since there was less corn available for livestock feed, some used wheat for awhile to satisfy their livestock, until the price of wheat increased. There is not enough surplus grain in the world to drive Winnebegos to Lake Wobegon and claim to have solved the world's energy problems.


Every year there are crop failures somewhere in the world. There has never been a year of perfect weather over the entire globe. Current U.S. government plans require five times more grain diverted to ethanol and massive cellulosic ethanol production when currently there is no commercial production of this supposed cellulosic ethanol. The effort to convert to ethanol has been a bipartisan effort with President Bush calling for use of switchgrass in cellulosic ethanol production and Senator Clinton drafting legislation requiring ethanol use. The President later signed an energy bill requiring ethanol use without revealing or properly forecasting the effects of such legislation. Some people think we have food price increases due to ethanol production. What happens if the U.S. and E.U. go through with plans to greatly augment use of grain ethanol as a fuel for transportation?


rather than get too deep into the weeds on what Some Person, or other, might have "figured;" we can just look at the observed facts. The Univ of N Dakota, and Mn State test showed that 3 out of the 4 (newer) vehicles they put through the EPA cycle got better mileage with a midlevel blend (E20, or E30) than they achieved with straight gasoline.

The State of Minnesota put a large group of their vehicles (some, older) through a year-long test, and the vehicles running E20 achieved, once some high-achieving E20 users were excluded, within 1.4% the same mileage as those running on straight gasoline.

This was not Too unexpected to those who hypothesized that ethanol's much higher Octane (113 to 86) would allow it to make up for it's lower btu content (76,000 vs 116,000.) It's, also, to be noted that the EPA had already conducted tests that showed that Ethanol, when run in a high compression engine, could achieve equal, or higher, efficiency than gasoline.

Oh, The new energy bill limits corn ethanol to 15 Billion gallons/yr. We're, at present, doing 8.1 Billion gpy; so, we're NOT going to increase our usage of corn ethanol by five times. More like, less than a half.

When we get to 15 Billion Gal/yr we'll be, after accounting for distillers grains, using about 22 million acres out of the 90, or so, million acres we'll be planting in corn.

And, we'll STILL be paying farmers NOT to plant 36 Million Acres. It'll work out.

the same university paid with money from the agri-company that stands to profit most from bio-fuels.. yea like i would trust that. come back with independent work.

-One fifth of the United States grain harvest is being used for ethanol production.

-Government law requires five times more ethanol production in less than fifteen years.

-Worldwide grain stockpiles are near record lows, grain lost to ethanol production reduced grain stockpiles.

-Getting better mileage out of ethanol gasoline blends required using a more ethanol per gallon than 85/15 blend. There is not enough grain in the world for that.

-The era of one car per person may be coming to an end.

Earth Policy Institute Paper: http://www.earth-policy.org/Books/PB3/datarelease.htm


Corn ethanol production in the United States will be capped at 15 billion gallons in 2015. Currently about 6 billion gallons of corn ethanol are produced per year


Dec. 16, 2007: http://www.farmpolicy.com/?p=569


To produce 15 billion gallons of corn ethanol would use about half of the United States harvest. Lester Brown, EPI.

A huge drop in the amount of grain available in the world grain export market might cause a worldwide depression.

Lester Brown is an anti-ethanol zealot. Here are the numbers:

We grew 13.1 Billion bushels of field corn this year.

You get 2.8 gallons of ethanol for every bushel of corn processed.

To get 15 Billion Gallons of ethanol you would have to process 15 B/2.8, or, 5.35 Bushels.

You get the equivalent of 40% of your corn back in the form of distillers grains; which means you get back 2.14 Bushels.

This means you have used, for all practical purposes, 3.21 Bil Bushels of Corn, or 25% of your corn crop.

However, Don't Forget, Pioneer says they're going to increase the yield of field corn by 20% in the Next Five Years.

It's gonna be alright.

Ethanol can't meet our transportation wants, rainsong, but it can easily meet our needs. After rail electrification police, fire, ambulance, and delivery services will easily run on a mix of biodiesel and ethanol. Some people see PHEV in our future, but finances and timeframes are going to dictate we face a scenario like the Germans did during the Allied onslaught - piece together stuff that works quickly out of what is readily available.


Twelve miles up the rail line from POET's Emmetsburg plant is the site where we're putting in the wind driven ammonia plant. Fertilization first, ammonia as a fuel next, helped along by the Tier 4 emissions requirements for ag engines that comes into force in 2011. I was at the POET Project Liberty roll out in Emmetsburg a few days ago ... the ag machinery makers were quite intrigued with ammonia as a fuel, the economic development folks chased me down the hall when I left a seminar to go to the bathroom, wanting to make sure I didn't escape - lots of energy in the winds around here, both atmospheric and political.

The POET guys are trying to figure out how to collect corn cobs for their cellulose - they're a nice, regular shaped feed stock that can be cleanly collected during the corn harvesting phase, they're planning on just leaving them in big piles in the field until needed as they don't decay very quickly, and they're offering the farmers $30 to $60 per ton, with an acre of 200 bushel corn producing about 1,200 pounds of cobs. A 3% to 6% increase in revenue isn't such a big deal but I suspect as gas goes from $4 to $8 to $12 this price will scale linearly.

Even so I am not sure how all of this works. When 25% are unemployed ... and 33% of houses go empty ... who pays for road upkeep? We'll still need liquid fuel for the road, but just how much remains to be seen.

Have you driven across the state of Texas? I have...several times. I see no possibility of irrigation of such a vast area with current technology...or, any technology that is 'in sight'. There is no technology that will replace FFs. There is the possibility that some new break through technology will come to the fore quickly but to think that way is to be very optomistic. Notice the word 'optomistic' is inclusive of the word 'mistic'. :)

Oil was neat. It was plentiful; and, thus, cheap.

I look forward to your White paper explaining the effects of the end of cheap oil on the economy.

How the non-concentated solar power (because that is what oil is - concentrated solar power) will work in the new economy!

This site can you someone as clear headed and right thinking as your post shows you to be.

the whole thing looks pretty easy in the long run, to me.

And here I thought you would not be up to the task of the White Paper! So go forth and show us all!

I'm just a starry-eyed optimist, Eric.

I don't see anything insurmountable, here. Sure, it's going to be a bitch in the short run, but the needed technologies are developing too rapidly for me to consider "Doomerism."

I can do a "white" paper. It's all that chicken-scratching that I try to pass off as "writing" that gets me in trouble. :)

I'm just a starry-eyed optimist.....I can do a "white" paper.

Good. You do that, show how the math and physics backs up your optimism.

And I'm sure, if the math and physics backs up your position, the TOD staff will post it on the front page.

agriculture energy use is only 20% of energy use for retail food?

Because energy use doesn't set the price for food. Supply and demand does, which is why your simplistic argument fails.

But even if you are right, so what? To keep to simple numbers, suppose only 20% of the millions of people who die from starvation in coming decades die from corn ethanol. That's still hundreds of thousands to millions of dead, so you can make money sucking at the government teat.

Even if it is true that 80% of the price inflation is caused by oil, you won't find very many people here at TOD who will argue we shouldn't do something about that. But our oil dependency grew over more than a century, and it won't be easily fixed. We don't have a corn ethanol dependency, not yet anyway.

We inherited an oil problem. We're making a brand new corn ethanol problem. There is a difference.

Vasectomy Myths

Myth: A man will lose his sexual desire.
Fact: A man's sperm count has nothing to do with his sexual desire.

Myth: A man won't be able to achieve an erection.
Fact: A man's erection does not depend on sperm count.

Myth: A man can no longer enjoy sex.
Fact: A man's pleasure is not dependent on his sperm count. For many men, knowing that pregnancy is no longer a risk can make sex more enjoyable.

(From http://www.ppscm.org/vas.html)

FYI announcement:

Just came across these two websites/organizations related to the war for Iraq's oil, Oil Change International, http://priceofoil.org/ and Iraq Oil Report, http://iraqoilreport.com/

Antonia Juhasz is the author of the book The Bush Agenda: Invading the World, One Economy at a Time and is with the group Oil Change International. She has a new book coming out, The Tyranny of Oil: The World's Most Powerful Industry and What We Must Do to Stop It, and wrote a NY Times op/ed "Whose Oil Is It, Anyway?" http://www.nytimes.com/2007/03/13/opinion/13juhasz.html

There's another book on the subject of oil's insidiousness that provides some valuable insight, Petro Tyranny by John Bacher.

All the above items are indicators of why it's hard to convince folks of all political-types of the validity of Peak Oil as many see it as a Big Oil/Big Government plot. The latter may be plotting to exploit the situation, but they didn't institute the physical/natural aspects that creates the phenomenon of peak oil.

As with global warming there is political contamination of the discussion. People are arguing from their ideological platforms and not from objective positions. At least with climate there is some factual input into the picture. For economics issues like peak oil there is no mainstream analogue of science. Economics is not science and is all about political conformity. And politics isn't as free as its painted to be.

So geology isn't science?

Peak Oil is half geology and half economics. That leaves plenty of wiggle room.

Of course it is. But discussion of oil in the MSM is firmly in the economics realm. If only the geology had as much input into the public information space as climate science does in global warming. I wonder, if there was a more immediate economics impact from GW would the science then get as much attention?

IMO, with AGW the science is massive to the point of being overwhelming and involves many different disciplines. The opposite is the case with Peak Oil. The physical science is by comparison simple and involves very few disciplines, to the point where it's almost esoteric. Add into the mix the corporate media's duping folks into equating proven scientific theory with guess along with widespread scientific illiteracy. Although it does seem more people are listening with an open mind now that gas and diesel are going past $4.

I don't think economics is about political conformity but suffers from the twin problems that it's tackling complex problems (there's a joke that the definition of a successful economist is the person who can convince you there was a good reason why his previous predictions were flat out wrong) and that economists tend to be much more involved monetarily in the success of their theories (whether through startups, government consultancy, book sales, etc) than most scientists. When there's no direct experiment that can conclusively show your ideas are wrong and you've got money riding on defending your theories there just isn't an incentive to rethink things when your theories don't work in the real world. That's what irks me dealing with economists: they're more concerned that they win the argument than that they figure out what's actually happening (which might involve admitting they were wrong).

Economists are not as bad as lawyers for defending their case right or wrong - a lot of them end up so low that they become politicians!

what about politicians who write books on economics?

Another important problem that economists face is response to economic action is sometimes seen many years after the action is taken. In America, a society that is used to instant gratification, an economist cannot say 'well, I made the necessary corrections to monetary policy, all you citizens sit back and wait for results.'

Re: Russia's Gazprom settles Ukraine gas row, but profits could dip

This article is based around a lie. Gazprom did not and does not buy cheap central Asian gas for resale at a profit. The Associated Press had a similar article including the lie that Gazprom makes a profit selling cheap central Asian gas to Europe. All of Gazprom's imports from Turkmenistan (which is the biggest supplier with about 43 bcm in 2007) go to Ukraine without a markup. That is why Ukraine did not have to pay $350 per tcm. Gazprom exports some Russian gas to Ukraine at the same price as it charges EU.

Gazprom imported about 15 bcm last year from Uzbekistan and Kazakhstan which it partly sent to Ukraine and the rest went to Armenia, Georgia and Moldova to lower their price.

These articles in the MSM are clear anti-Russian propaganda. You never hear the truth about Timoshenko's history where she made her billions siphoning Russian gas transiting through Ukraine in the 90s. But you get large doses of fictional articles like this one.

IMO, the MSM is little more than propaganda these days.

Like the quote above from the Washington Post:

political strife has limited oil production in Nigeria and Venezuela.

What political strife in Venezuela? Oil production may be suffering in Venezuela from the inefficiencies of the Chavez government, or because they've cut themselves off from the IOCs, or because of depletion, or because the Venezuelans don't want to pour their national resources down the black hole of the US consumption machine. But political strife? The only political strife in Venezuela is what is fomented by the US government and the CIA.

The animus in the US press against Chavez is remarkable. Chavez was democratically elected twice by huge majorities in free elections. Unlike the US president, he actually appears to obey the laws and constitution of his country. Yet Chavez is regularly referred to as "tyrant" or "dictator" in the MSM. Putin gets the same treatment, as does pretty much anyone else who doesn't toe the US line.

Now, this is not to say the Chavez or Putin are saints, or even admirable people. They both have flaws enough. But could we please stick to the facts and cut the Goebbels-like propaganda? A vain hope, I know.

Yeah, the "political strife" is inaccurate. I have a coworker from Nigeria, and I asked him why the rebels attack the Western oil facilities, etc. in Nigeria. He replied that you don't see attacks on Chinese oil companies operating in Africa. The Chinese model is to use trade and aid for oil - e.g. they invested $2 billion in Angola's infrastructure in exchange for oil exports. The Western model is more along the lines of bribing an official or two.

Ah yes, "petrotyrant" Chavez. Imagine if Chavez was some death squad dictator like the ones the US thought it needed during the cold war. The howl in the MSM would be even more intense. There is a resource war in progress but it has not gotten conventional yet. The lunatics are running the asylum and they think they can win.

This article blames a falling dollar, speculation and political risk premium for high oil prices, disputing peak oil and supply demand mismatches.

“In addition, world surplus oil production capacity has gone from a very tight 1.5 million barrels per day a couple of years ago to more than 3 million barrels today, says petroleum economist Michael Lynch.”
Oil Price Bubble?Supply is up, demand is down, yet the price is soaring. Here's why.

Is the world surplus really bigger lately? Is this just selectively quoting numbers in yet another disinformation piece?

So what will happen to oil prices over the next few years? No one is predicting $10 per barrel oil. However, once the current bubble bursts, both Evans and Lynch believe that the price of crude will settle at around $60 to $70 per barrel in the next couple of years. "It's very hard to pinpoint just how long a bubble can expand before it breaks. Getting the timing right is not an easy matter," says Evans. But he adds, "I think that this is the riskiest time to be long in crude oil since 1980."

LOL.... suddenly everyone's an expert at identifying a bubble while it's in progress, hey?! Strange how they couldn't during the dotcom and the housing ones.
IMO, if these clueless clowns are saying it's a bubble, then that is the one thing it sure as hell isn't!!!

I thought the surplus was getting smaller year over year, moving to a point where there was not slack. I'm no expert and I haven't kept up with the OilDrum lately. Thought someone here would know. Seemed like a suspect bit of journalism.

IMO, the true oil price bubble occurs when Danny boy gets on board (that is the clear sell signal).

These bubble talkers are only looking at the US inventory situation, and even there, only the part they want to see.

An article above says there are short supplies of heating oil, and diesel is also in short supply due to strong demand from Europe. The IEA says February OECD inventories are falling, despite some rise in the US.

Granted the price of oil is subject to fairly rapid fluctuation, but the bubble talkers don't want to even review the basic facts - which I think is because they failed to see the effects of the peaking of oil supplies and strong demand on prices.

My beef with Matthew Simmons...

With all due respect, Matthew Simmons has been a major pioneer in bringing the issue of Peak Oil to the public eye. I don't think the issue would be anywhere near as visible or as discussed without that plucky investment banker continuously facing off against the ridiculous predictions of people like Yergin.

So for my part, I'm a huge fan of Matt Simmons and what he is doing. So please don't take my comments as disrespectful. In all honesty, I hope the guy continues doing what he's doing which, for the most part, has been an amazing public service.

That said, I do have one small bone to pick with good ol' Matt. And that involves what I consider to be a somewhat bare bones approach to dealing with the impacts of peak oil. In most of his presentations, Matt has only addressed the issue of Peak Oil itself, leaving most solutions out of the equation. Recently, however, he has begun to advocate some level of change.

While some of these changes are, in my opinion, very good ideas and potential mitigations, they are just mitigations and do nothing to solve the problem long term. Furthermore, there are some solutions that he recommends that, in my opinion, are just backward. So here' a breakdown:

1. Matt's recommendations to move more toward local production and supply of goods gets high marks for helping conserve valuable energy and to move away from dependence.

2. Matt's recommendation to shift from long distance trucking, and air transport of goods and food around the world is also, in my opinion, a fantastic mitigation.

3. Matt's recommendation to rebuild the oil producing and supply infrastructure is, in my opinion, a step in the wrong direction. Why, if oil is depleting, we'll be lucky to have decent utilization of the massive infrastructure we already have much less new infrastructure. In my opinion, this would be on the order of an overbuild large portions of which might well become worthless in the medium term future.

Last of all, Matt omits any recommendation for alternatives to fossil fuels save a vague reference to Ammonia production through OTEC. In my opinion, this is pretty short sighted and, overall, a rather hopeless way of looking at things. OTEC is one of the least developed forms of new energy out there. With other renewables already at various stages of market penetration, you would think that someone so aware of peak oil would at least recommend shifting to a basket of new energy forms.

Again, I think Matt is doing an excellent job spreading the word about Peak Oil. I just find his post-peak strategy to be a little narrow -- focused primarily on mitigation, liquids, and traditional/depleting fuels.



Matt has only addressed the issue of Peak Oil itself, leaving most solutions out of the equation.

Solutions? Robert, there are no solutions. There are things you can do as an individual to enhance your chances of being among the survivors. But there are no solutions to the peak oil problem. Perhaps Matt realizes this. Perhaps it is time you did also.

Ron Patterson

Maybe you haven't been reading TOD? All the technology to mitigate PO is known about; it is not primarily a problem of lack of solutions. It's a question of motivation and action. You may have decided to give up, if everyone did the same, that becomes a self fulfilling prophecy. But not everyone is giving up just yet.

I get so very damn tired of this crap of people saying I am giving up, or advocating that other people give up. I worte: There are things you can do as an individual to enhance your chances of being among the survivors. Now does that sound like giving up?

I do advocate that you spend your precious time and precious resources in trying to save yourself and your family. But if you spend your time and resources trying to save the whole damn world instead, you will likely lose both yourself and your family. And you sure as hell will not save the world.

I have been a member of TOD almost since its inception and I know exactly what it is about. It is about different people with a lot of different ideas about peak oil and its consequences. Some believe that peak oil can be mitigated so that is has very little effect on the population of the world. Most are not so foolish however.

I would say that over half are doomers just like me. They believe there are lots of things one can do to increase ones chances of being among the survivors but everything else is just another form of denial. The world as we know it will not survive the demise of fossil fuels.

Ron Patterson

I can imagine that as viable strategy in parts of America.

With 60 million people on a very small and cold island like the UK in the event of a major breakdown of the technological base you would really be playing last man standing.

With a bit of luck you might go down to around 2 million people, around that of the early middle ages which relied on non-fossil fuel resources, with around 600,000 more likely, perhaps about the same population as after the fall of the Roman empire according to some reckonings, as the degree of social disruption more closely paralleled a post-peak collapse than the highly organised early middle ages. I won't even go into considering the degree to which we may have degraded the carrying capacity of the land since that time - sea food, salmon and mussels etc were certainly more readily available then.

That is if we avoid major war.

At 57 I doubt that I stand much chance of being the one in a hundred, so even from the most strictly rationalist point of view then my best chance would be to put all of my effort into trying to ensure that the society does not break down.

It will not be the hippy paradise some fancy, with a stable population living in tune with nature and without major die-off, of that at least I am confident, and on the other hand the realities of the density of population here do not give much prospect of success to the strategy you are considering in an American context.

I worte: There are things you can do as an individual to enhance your chances of being among the survivors. Now does that sound like giving up?

Yes, you are giving up on a collective solution, i.e. civilization.

If anyone thinks they and/or a small community can survive independently of the rest of society, they are deluded.

I would say that over half are doomers just like me.

Yeah, there are 2 types of article on TOD:

(A) Articles which make an assumption e.g. food=oil, then project the collapse of society die to PO
(B) Articles which examine the assumptions in (A), e.g. can we generate sufficient energy in the absence of oil, and generally conclude that the assumptions are either unfounded or nowhere near clear cut.

Despite the evidence of (B), the doomers doggedly stick to the mantra "TEOTWAWKI", with what can only be described as religious fervor. With a neat bit of reverse psychology, they claim everyone else is in denial.

The world as we know it will not survive the demise of fossil fuels.

I thought that for a while too. But whenever I drilled down to the detail, the assertion falls apart. Everything that can be done with FF has an alternative method, which is more or less cost effective. Many of these areas are under developed, simply because of the umbrella of cheap FF. The availability of cheap FF also gives rise to a huge waste of FF, particularly in USA, so there is plenty of scope for reduction.

In the human factors arena, we are geared up for rapid change. PO groups like this are influencing and guiding debate. Some political leaders "get it". While ethanol may be a dead end, it does show there is a willingness and capacity to engage in alternatives. And all this, before any severe effects of PO become apparent.

This leaves me somewhat baffled that there is a hardcore of doomers still maintaining the TEOTWAWKI doctrine.

Bob, you totally miss the point. Nobody is suggesting going it alone, the difference is between people who assume the current system will be able to adapt and those who would prefer to reduce the risk via diversification. Re-localisation and preparation are life-boats, you may not believe the ship will sink, you are free to stay a bail if you wish.

Then you miss mine. I do not believe the life-boats idea would work, if the ship sinks it will suck under all the life boats. If there is going to be a die-off, either government will step and appropriate resources, or anarchy will break out and any resources will be quickly looted. There are no practical steps that you can take that will be useful in those situations.

The only hope is to stay on the ship, and work from within. Getting in the lifeboat just means you drown in a smaller boat, so it's equivalent to giving up.

Maybe you haven't been reading TOD? All the technology to mitigate PO is known about; it is not primarily a problem of lack of solutions. It's a question of motivation and action.

All we need for all these wonderful technofixes from the JIT tech gods is higher prices which will happen because of peak oil.

A few years ago my friend told me hybrids would never take off because gas prices were too low and you didn't save any money. fast forward a few years and the Prius is outselling the Ford explorer!

In fairness, sales of Explorers are crashing. Currently, hybrids aren't yet worth the extra money, and sales aren't that great yet. They probably will increase substantially, but being able to outrun a dying man isn't necessarily anything to brag about.

You always say the market and technology will save us.

So explain to me why people don't buy VW TDi diesels vs Toyota Hypebrids when reports say they GET BETTER GAS MILAGE and in the long run are cheaper to own.?

My guess, we DON'T have a free market. The EPA and California have decided they don't like diesels and have made it impossible or nearly so to get one. (Unless it is a made in the USA diesel pickup.)

Hypebrids took off because Toyota used marketing strategies, lobbying and basically dirty tricks to prove that they were a green, American company. It had nothing to do with saving the planet or getting better gas milage. They want to be #1 in car sales and this little marketing dream is working out great for them. They didn't aim at Europe and guess what Hypebrids don't sell in Europe.

I see at least 10 Hypebrids a day. Most of which are doing traffic speeds. I am getting about 48 mpg at those speeds, I know for certain THEY are not. Most people that buy Hypebrids are trying to be green not financially savvy.

You always say the market and technology will save us.

And he gets called out on the 'market' statments he makes - and doesn't bother responding.

I think Matt once said that "Kunstler may have been an Optimist"

Ron states it like is is. Even an airline hostess will tell you to attach the oxygen to yourself first before helping someone else.

If you don't prepare yourself and your's, you can't help anyone else either I guess.

Again, all one has to do is sit in front of the local DMV, Walmarts, Targets, etc for an hour and really look at the people, do you see a populace that is steel eyed bracing for an economic/energy black swan? or do you see a populace that looks like it will be bitch-slapped by reality in 10,9,8,7... ?

An Optimist believes this is the best of all possible worlds,
The Pessimist is afraid that he's right

Hi Robert,

I'm glad to see you address these points, and I hope Matt sees them.

To offer a comment on just one point here:

re: "1. Matt's recommendations to move more toward local production and supply of goods gets high marks for helping conserve valuable energy and to move away from dependence."

In the near term, a move toward local "production and supply of goods" does not necessarily conserve energy across the board.

We would need to take a look at individual sectors to see when it might. Matt's example of exchanges of similar foods across long-distances - perhaps there's some room there for saving energy without affecting the end product and/or its price.

However, in many other cases, not only does this appear not to be the case, the opposite - namely, a continuation of the current BAU direction - appears to be the most logical way corporations and manufacturers will go in order to save both energy and money.

The non-local production facilities are already built, already connected to both their individual energy sources and their supply/delivery chains.

If one wanted to save energy in total, where would one begin?

How does (and will) the fact of already existing facilities affect either the goal of energy conservation and/or the manufacturer's goal of saving money in view of higher energy prices?

As was pointed out in a (much) earlier TOD discussion, as energy prices rise, it well may be that corps attempt to compensate and cut costs by *continuing* to "outsource" and/or move production (or parts of production) to the places of least labor costs, less regulatory-associated costs, etc. In the (perhaps foreseeable) near term, this means the drive toward increased outsourcing (AKA "global-ization") will only continue. At the very least, it may not reverse without some deliberate money and/or energy subsidy and/or other deliberate policy - (put in place by whom?) - of some sort.

I.e., a "move toward more local production" for many items would have to be subsidized in some fashion. (Would it not?)

This "move" is a worthy goal, since shortening supply chains makes the supply problem infinitely easier, once we are in a confirmed condition of energy constraint.

The problem is getting from here (long supply chains) to there. While there is some chance of doing so.

The actors in this equation are...whom? The corporations, the shareholders (?), the government(s), the consumers and...any others?

Who is in a position to act in the case where the short-term result is perhaps a net energy-use increase and/or a net financial loss?

Hello TODers,

More cascading blowback news:

Which bank is going to follow the Bear?
March 15, 2008

...He said that should the US Federal Reserve, the US Treasury and the Securities and Exchange Commission not devise a broad rescue plan to address the credit turmoil on Wall Street this weekend, “I would not be surprised to see an emergency bank holiday announced. That hasn’t happened since Roosevelt.” During the Depression, 75 years ago almost to the day, Franklin Roosevelt declared a four-day bank holiday, which stemmed a frantic run on banks.
Have you hugged your bag of NPK today? I sure hope the venture capitalists start my suggested 'Federal Reserve Banks of I-NPK' soon.

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

The US consumes about 20 mbpd of petroleum product. Assuming a probably conservative estimate of a $1 per gallon increase since May, 2005, Americans are now paying about $25 billion more per month for petroleum products that we did in May, 2005.

The mortgage meltdown was a disaster that was waiting to happen, but IMO declining net oil exports was the trigger.

Which leads to one of my recurring questions: What is the intrinsic value of the 100 largest financial institutions without the 100 largest oil fields?

Hi WT, I made this same observation 18 months or so ago and got flamed. I said essentially that GDP would remain the same but discressionary spending would drop by at least tha amount with dire effects on the service sector. And that was without the financial and ethanol boondogols. As things worsen, my prediction for the year is $1Trillion less in service sector spending, a very large contraction that will be masked by rising energy and food costs, so the hit to GDP will seem small.

Hi Bob, I posted this yesterday but it was late. I don't think it was seen by many so will break the rules and post it again. It is Sat and I am rationalizing...:)

Financial Times

IMF tells states to plan for the worst

By Krishna Guha in Washington
Wednesday Mar 12 2008 19:00
'Governments might have to intervene with taxpayers' money to shore up the financial system and prevent a "downward credit spiral" from taking hold, the International Monetary Fund said on Wednesday.

John Lipsky, the IMF's first deputy managing director, said: "We must keep all options on the table, including the potential use of public funds to safeguard the financial system."...snip...


The FDIC insures all savings and checking accounts in FDIC approved institutions up to $100,000. per account.

During the last banking crisis 1989-1992 many Savings and Loan Banks were closed by the FDIC because they made bad loans. The FDIC guarenteed the deposits of those saving money at the banks, but the shareholders of bad bank stock were not compensated, nor were bankrupt developers and people holding worthless mortages bailed out.

The RTC -- Resolution Trust Corporation was formed to take over the assets, foreclosed properties, of bad banking institutions and held them until they could auction them off. It took years for the real estate market to recover, almost a decade before the recent real estate bull market that resulted in widespread speculation and people putting too much into real estate investment, hoarding properties, and making plans for thousands of new units in areas with high rental vacancies.

Regarding the hydrogen station above - is hydrogen considered a boondoggle like ethanol? How many years before hydrogen power becomes feasible and economical, if at all?

Hydrogen becomes practical about the same time that nuclear fusion becomes physically and economically viable. Probably not in time to replace fossil fuels.

Use of hydrogen in a fuel cell is around 60% efficient, same as burning methane (CH4) in a combined cycle power plant. So, even if we have hydrogen from future nukes, the problems are great in finding a way to store it, transport it, convert it into usable energy for motion. For heat, best to use the sun in its various forms and make usable storage system for its energy.

In terms of transport and storage, hydrogen is worse than ethanol. In terms of production, hydrogen is sourced from natural gas (also peaking), or electrolysis, which is much more inefficient than charging a battery with the electricity and skipping the combustion cycle.

A hydrogen economy is pretty much a non-starter. The only people who seem keen on the idea are auto manufacturers, but they don't have to deal with the infrastructure.

I think the infrastructure issue with hydrogen is kind of a red herring. if there is money to be made in hydrogen infrastructure the money would be there. so far that is not the case and probably won't be for most of the world. norway has a hydrogen highway and california seems to be working one but that's about it. I think norway is only building a hydrogen highway because it's hydro plants produce excess hydrogen.

"if there is money to be made in hydrogen infrastructure the money would be there."

so that's the final word? transport and storage of the smallest element on the damn chart just goes away because your free market wants to make cash off it?

can we just repeal gravity too if there's money in it?

why don't you explain why the infrastructure issue is a red herring....because everything I've read (and this is completely ignoring the fact that hydrogen is a [rather piss poor] energy storage method not an energy production method) indicates that the problems with hydrogen are rather serious and limiting

your (misplaced) faith in the (so-called) free market is as inexplicable as some religious fanatic's - you may as well be telling us that Jesus is going to refill all the oil fields any day as claim that if there is money to be made, problems just go away...

I read you posts and I agree with Darwinian - we're toast - most people will ignore the problem until they can't - and then look for someone to blame or a quick-fix - and you and the Daniel Yergen's of the world will cheerfully tell them everything is fine, we just need to have a free market, the whole way down....

if there is money to be made in hydrogen infrastructure the money would be there.

That's not true, because of the payback time on large projects. Even if there are profits somewhere down the line, the need to raise capital can make it a non starter.

The best chance for commercial success is evolutionary change. The Norway and Cali projects are being driven by government on CO2 emissions concerns.

Hydrogen is what a certain really useful engine would call a muckle nuisance. Two protons escorted by two skittish electrons, sneaking out every little crack and crevice, put it under pressure and it causes trouble with metals much the same way loose neutrons do in a nuclear reactor - why, if it weren't a component of ammonia I'd say we ought to outlaw the stuff.

Hydrogen as a fuel:


Ammonia as a fuel:


Conventional burning of NH3 will generate vast amount of NOx in the troposphere and stratosphere. In the former it will increase O3 and in the latter it will destroy it. NOx is also a very efficient greenhouse gas collection.

Any combustion process for NH3 should be designed to produce N2 instead of NOx. So fuel cells make sense, but ICEs don't.

why, if it weren't a component of ammonia I'd say we ought to outlaw the stuff.

It can be combined with the known dangerous Oxygen.


(and Visit the watt http://thewatt.com/ They talk about how H2 is a dead end for fuel cells)

I don't know if this one has been posted yet here, I picked it up off a PO thread I have been watching. Check out this Canadian site http://ice-glaces.ec.gc.ca/app/WsvPageDsp.cfm?id=11892&Lang=eng, at the bottom of it there are year over year quikscat images of the arctic. Note how this year there is little to no bright white perennial ice coverage even though we have had a cold NH winter. Then look at the animation of this year and you can see the old ice being pushed out into the Atlantic and melted. There doesn't look like there will be any really thick ice to stop the melt if it is anything like last year. The pole may have tipped, you can see the old ice fracture and fall apart.

I can't recall where I heard it or saw it - could have been a National Geographic, The History Channel, or even The Science Channel - whatever - but ice issues in the Artic are and have been as much about reduced thickness as coverage.

I cannot cite references but I suspect that thickness might have been reducing before the coverage was "noticed".

Anyone know?

Antartica similar?


Sorry for no links, but as I recall there were three meters of ice on average above nuclear submarines in the area during the 1950s when we started traveling that way and now we're down to about two meters. So 66% of remaining thickness times 75% remaining area is ... 49.5% Recall last summer when the ice went down to an absolute minimum, then another million square kilometers (25% of the area) simply collapsed in ten days? We'll watch carefully this summer, but I bet our ice free arctic summer will be here in less than a decade rather than the more than a century estimate that pleases the fossil fuel industry.

We've lost 80% of the ice at the summer minimum. Not 50%.

I was making a statement about the year over year ice in the same month - yes, the ice does expand and contract in a cyclical fashion, what I'm saying is that January 1957 to January 2007 we've lost 33% of thickness and 25% of area, resulting in just half of the ice we formerly had in the area.

Is that less unclear? I realize winter to summer are dramatic swings and I just wanted this to be clear for folks.

This year could be interesting because the trend looks to be pointing at collapse, yet we have recently (in the last few months i think) had a strong La nina develop. This does 2 things, decreases average NH temps slightly and conincides with increase NH hurricane activity. So we might see a not so catastophic melt this year.

As a side note it is interesting that AGW is often cited as increasing probability of higher hurricane activity and yet a strong La nina which lowers global average temperatures can increase hurricane activity. Seems a bit counterintuative. Complex beast the climate!!


From The Economist:

This will be the fate of a few automobiles. The rest? They'll be melted down to make rail and locomotives. We can reset to 1940 ... or 1490 ... and which we get depends on how swiftly we act.

I think in geneal we substantially underestimate the economic and political ramifications of Peak Oil, which I believe are part of wider dysfunctionality that exists in the very core and in the structure of our modern 'free market' society. I think Capitalism as we know it is incompatible with our physical environment. Put crudely, we are sacrificing the planet on the bonfire of Capitalism.

I wish that Capitalism and the Free Market system could continue for ever, and my children could experience the wealth and pleasure I've been blessed to have experienced, alas I don't honestly believe they will or would even want to maintain our lavish lifestyle, at least not when so many others will be suffering around us, too many to ingnore and oversee. Too many in our own backyard.

Fundamentally I believe the 'solutions' to climate change, the environment, Peak Oil, world poverty, require a root and branch reform of the Capitalist system and the establishment of far more state control. It's not as if we don't have massive state control of the economy now, only we choose to call it 'freedom'. What seems true is that the current economic/social model vastly and disproportionally benefits the few at the expense of the many. We could, in theory at least, reverse this ratio. Instead of a market dictatorship we could establish a democratic 'dictatorship' which benefitted the majority instead of the wealthy and powerful elite. But somehow I doubt whether this is a realistic proposition under present circumstances. I doubt the ruling elite are just prepared to give up their position of unrivalled privilege just because the majority want them to. So we'll just ingnore the cause of our problems and move on towards economic and environmental disaster.

Not sure if this has been posted earlier:
Nauru seeks to regain lost fortunes

From independence from Britain and Australia in 1968, until the 1990s, Nauru earned a fortune exporting its phosphate for fertiliser.

They gave up their jobs, brought in migrants from other Pacific islands to do the hot, dirty work of digging and sat back waiting for the royalty cheques to drop into their hands.

They then went on an extraordinary spending spree. Families who had never left the island would charter aircraft to take them on shopping expeditions in Hawaii, Fiji and Singapore.

Now all the money is gone.

Maybe it should be renamed 'Metaphor Island'.

I wish that Capitalism and the Free Market system could continue for ever,

Where exactly are YOU existing that there is a "Free Market" system?