DrumBeat: April 15, 2008

Melting mountains called a water 'time bomb'

VIENNA - Glaciers and mountain snow are melting earlier in the year than usual, meaning the water has already gone when millions of people need it during the summer when rainfall is lower, scientists warned on Monday.

"This is just a time bomb," hydrologist Wouter Buytaert said at a meeting of geoscientists in Vienna.

Those areas most at risk from a lack of water for drinking and agriculture include parts of the Middle East, southern Africa, the United States, South America and the Mediterranean.

Phil Flynn: A matter of Faith

Peak problems are facing oil and asking you to take a leap of faith one way or the other. Are oil prices near the peak or is oil supply hitting a peak?

Does oil keep moving higher because the world is starting to believe that we are running out of oil or is it because in a world of economic uncertainty, oil seems to be a safe happy place to put some money? Sure, yesterday we saw another record close in oil as pipeline problems and the lack of passion about the dollar. Yet it dose not answer the larger more all encompassing debate on oil: Are we very simply are we running out?

High Energy Prices Reshape Climate Debate

If the peak-oil crowd is right, and oil prices are stuck in triple digits regardless of what the dollar does or where commodities investments go, what does that mean for the shift to a new-energy landscape? Mark this: High energy prices could prove the most important factor in the debate over what kind of international system will replace the Kyoto Protocol when its caps expire in 2012.

Has 'Peak Oil' Arrived

We are not at peak oil yet, not even close. There are huge reserves in several places around the world including Africa, the Gulf of Mexico, Alaska, and South America. The problems today with high prices have much more to do with politics as they have to do with the world running out of oil.

McCain reveals hypocrisy, cynicism with call for gas-tax holiday, energy budget freeze

Any remaining glimmer of hope that Senator John McCain might be the principled, non-cynical politician to transform our energy policy and avoid the dual calamaties of peak oil and climate catastrophe died today.

Brazil's oil snafu - much ado about something big

RIO DE JANEIRO (Reuters) - Brazil's oil market regulator may have jumped the gun by providing a huge new oil reserve estimate with little data to back it up, but analysts have little doubt about the country's oil potential measured in billions of barrels.

Just how many billion remains to be seen, and the discovery in the subsalt cluster at great depths represents major technological and cost challenges, they said.

But in any case, a big new find under evaluation that follows last year's announcement of a giant subsalt field known as Tupi boosts Brazil's prospects as a major world oil province. It also reinforces arguments of those in the government calling for a higher take from oil projects.

Troops deploy as Nigerian oil state election quashed

PORT HARCOURT, Nigeria (Reuters) - Troops deployed on the streets of the main city in Nigeria's oil-producing Bayelsa state on Tuesday after a court quashed the election of its governor and ordered a fresh vote within 90 days.

An appeals court in the southern oil city of Port Harcourt annulled the election of Bayelsa Governor Timipre Sylva of the ruling People's Democratic Party (PDP), the tenth such ruling since nationwide elections a year ago marred by irregularities.

U.S. liquefied natural gas terminals poised to receive their first deliveries

Three new U.S. liquefied natural gas terminals, two on the Gulf Coast and one in the Northeast, should receive their first deliveries in the next week, according to a Houston-based consulting firm.

Oil hits record, Britain calls for OPEC hike

Britain's prime minister, Gordon Brown, on Tuesday called on OPEC members to boost production to counter rapidly rising oil prices, which have shot up 80 percent since a year ago, adding his voice to similar requests from the administration of U.S. President George W. Bush.

"We are not producing enough oil ... and we can take collective action to persuade OPEC and others to get the oil price down," Brown said in an interview on Sky Television.

Poland, Ukraine pipeline plan seen as way to cut Russia's energy clout in region

Poland and Ukraine yesterday stepped up plans to extend an oil pipeline that bypasses Russia, a duct that could help diversify supplies and reduce Moscow's energy clout in the region.

Income For OPEC To hit nearly $1-trillion

WASHINGTON - OPEC member nations are expected to rake in almost US$1-trillion this year from their oil exports due to record crude prices, the U.S. government's top energy forecasting agency says.

Fuel Choices, Food Crises and Finger-Pointing

The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy seemed to reach a high point last year when Congress mandated a fivefold increase in the use of biofuels.

But now a reaction is building against policies in the United States and Europe to promote ethanol and similar fuels, with political leaders from poor countries contending that these fuels are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, putting pressure on Western politicians to reconsider their policies, even as they argue that biofuels are only one factor in the seemingly inexorable rise in food prices.

U.S. and Britain shift the blame for high oil prices

LONDON (Reuters) - Britain and the United States blame OPEC for record high oil prices that have exacerbated a global economic slowdown, but some analysts believe the cause for oil's run-up may lie closer to home.

British Prime Minister Gordon Brown and U.S. President George W. Bush, both struggling to boost their slumping popularity, have pressed OPEC countries to open their taps to help ease oil prices.

But some analysts believe oil is being driven more by a battered dollar, weakened by a U.S. housing market collapse and credit crunch.

Only recession will spur Opec oil surge, experts say

CALGARY -- Only a sharp recession across the United States and possibly spreading to Europe will coax the Organization of the Petroleum Exporting Countries into increasing oil capacity and result in an end to sky-high energy prices, experts said on Monday.

Petrobras seeks to buy Valero refinery in Aruba

RIO DE JANEIRO (Reuters) - Brazil's state-run oil company, Petrobras, will resume talks this month to buy a refinery in Aruba owned by U.S. firm Valero Energy Corp, a Petrobras director said on Tuesday.

Kuwait posts record 72b dollar income

KUWAIT CITY - Oil-rich Kuwait posted a record actual revenue of 18.93 billion dinars (72.2 billion dollars) in the last fiscal year that ended on March 31, the finance ministry said on Tuesday.

The figure is a mammoth 127 percent higher than budget projections of 8.32 billion dinars (31.3 billion dollars), figures posted on the ministry website showed.

Oil giant calls eco-award winners 'con men'

SAN FRANCISCO - Chevron Corp. is sharpening its attacks against two opponents in a 15-year legal battle over whether the oil company should foot a multibillion-dollar bill to clean up a toxic stew in the Amazon rainforests.

The San Ramon-based company intensified its criticism Monday while two Ecuadoreans, Pablo Fajardo and Luis Yanza, were in San Francisco to pick up the Goldman Prize, a prestigious honor and $150,000 award given to individuals for their environmental achievements.

Food Shortage Rises With Prices

Until the late 18th century, Western countries were in a similar situation. This led economist Thomas Malthus to argue that population growth pressure would hold down food consumption per person to the level of bare subsistence. Three factors allowed Western countries to escape this Malthusian trap while they industrialized, namely:

● the availability of huge areas of good uncultivated land in the Americas and Antipodes;

● mass emigration of surplus European population to these areas; and

● falling transport costs that made international trade in food profitable.

A conversation with Michael Klare, author of Rising Powers, Shrinking Planet

Your last book, Blood and Oil, warned of the United States’ growing dependence on imported oil and the dangers it brings to Americans at home and abroad. Has there been any change in the world’s resources since that book was published?

Two things have happened: First, the intensity of demand has increased dramatically as China and India (and other rapidly industrializing developing nations) have stepped-up their consumption of oil, coal, natural gas, and uranium to meet the rising energy needs of their booming economies. Second, energy experts have become increasingly pessimistic about the future availability of petroleum, due to an increased rate of decline of many of the world’s existing oil fields and a failure by the major energy firms to discover many new giant fields to replace those in decline.

Australia: Fuel price rises cause spike in stolen car plates

Rising petrol costs have led to a huge spike in the number of registration plates stolen from car parks across Sydney as desperate motorists find ways to avoid having to pay for petrol, the latest figures from the Bureau of Crime Statistics and Research reveal.

...Dr Weatherburn said there was a direct link between rising petrol prices and plate theft. Thieves were concealing their own plates with stolen ones so they could drive away from service stations without paying for petrol.

Bell County (TX) looks for solutions to road funding woes

One of the reasons a flat tax on miles driven is being considered in parts of the nation is because of the negative effect increasing fuel efficiency is having on road funding.

“That’s working against us in paying for our roads in the state and the nation,” Skopik said. “Over the next 10 years vehicle fleet averages are projected to be at around 50 miles per gallon. Right now they are at 16 miles per gallon.”

A gas tax increase would only partially help the problem, unless the tax was increased by $1 a gallon, Skopik said.

UK: Transport costs rise by record 7% as food prices soar at fastest rate for 17 years

Families already struggling to cope with the credit crunch face huge increases in food and transport bills, official figures have revealed today.

The ONS figures showed the highest upward effect on inflation coming from transport costs, mainly due to rising air travel prices on European and long-haul routes.

The annual rate of increase for transport costs reached 7% - the highest since records began in 1997.

The First Oil Shortages

Russia is the world’s second-largest oil exporter. But something ominous is occurring in the land of the bear. Russia’s oil production has fallen for three months in a row, and Russia is now pumping less than it was last year. I repeat: Russia is the world’s second-largest oil exporter. If its production is stalling, this could be the beginning of a way-of-life changer for America.

Mexico Congress oil row deepens

Leftist politicians in Mexico who last week stormed both houses of Congress have vowed to remain in protest at planned reform of the state oil giant.

The government says the Pemex oil company needs outside investment to boost falling production and increase exploration for new reserves.

But the protesting deputies and senators argue that this will lead to a creeping privatisation of Pemex.

South Africa: Mass action on prices gives food for thought

THERE is mixed feeling over the wisdom of the SA Communist Party and Congress of SA Trade Unions mass action in Polokwane, Limpopo, at the weekend against soaring food, fuel and electricity prices.

Thousands of workers took to the streets, demanding that something be done about the worsening situation. They also demanded an urgent summit to find lasting solutions to the energy crisis.

Marianas: CUC fuel shortage doesn’t surprise administration

PRESS Secretary Charles P. Reyes Jr. told the Variety that the administration anticipated the Commonwealth Utilities Corp.’s fuel shortage, and this is why it recommended a 20 percent salary reduction and other emergency regulations for CUC.

But CUC did not implement the governor’s proposed cost-cutting measures, Reyes said.

The Fitial administration issued a state of emergency for CUC months ago, proposing a 10 percent pay cut and a reduction of work hours of its employees.

India: Oil scarcity hits Mizoram as tanker drivers agitate

AIZAWL: Mizoram which is facing famine due to bamboo flowering, is now hit by acute shortage of petroleum products following an indefinite strike by the Mizoram Oil Tanker Drivers Association.

Fuel shortage following Papua New Guinea mudslide

Our reporter in Port Moresby, Firmin Nanol, says major businesses and mining companies operating in PNG's five highland provinces are expressing fear, and some may halt their operations if the highway is not cleared within this week.

The price of basic food items has tripled.

Comments on Michael Lynch’s Commentary: “Peak Oil, Uncommon Ground”

First of all, using his terms, I should categorize myself as a “flow rate pessimist,” but I’m more optimistic than many others in this category. (I like to think of my being “realistic,” rather than “pessimistic.”) Although I see world oil production ultimately reaching no more than 10% above the present level, a decline will not be noticeable until after 2015. I will go so far as to offer that the annual decline rate in the 2020s is apt to be barely 1%, maybe all of 0.5%/year during 2021-2025. A 1% decline rate translates to a numerical loss of production in the neighborhood of 800,000 - 900,000 b/d each year. I don’t think that a global decline that size will occur for 15-20 years. (So much for the specter of an abrupt and steep production decline that some critics attribute to Peak Oil views.) To emphasize, I have always viewed production rates (not necessarily production capacity) has being paramount to the future trend of world oil supply.

Oklahoma City soon to be world’s natural gas capital

“I’ve been doing this for 27 years,” he said, “and never have I been more excited about the potentials that exist.”

His enthusiasm spins from a dynamic change in the economics of natural gas supplies over the last three to four years. McClendon said the discovery of how to effectively and efficiently free the fossil fuel from shale deposits could change our nation’s economic and energy strategies.

Why IS our food costing so much?

Up to now, the 'Green Revolution' — the technological miracle of better fertilisers, herbicides and pesticides and new varieties of crops — has meant that the world's farmers have largely been able to keep up with demand. After all, there are twice as many people alive now as there were in 1960 and fewer people go hungry now than then — a remarkable achievement.

But the Green Revolution looks set to run out of steam.

And the population increase has had dramatic knock-on effects.

With more people needing more homes, there is less land available for farming.

Oil price surge propels planes back to basics

With oil prices hovering at close to $110 a barrel, many are betting that new technologies — biofuels, hydrogen cells and solar power among them — will solve the world's energy crisis. A large part of the airline industry, however, is looking back to basics: planes with propellers.

The real Good Life: An entire village turns against supermarkets and grows its own food

It was a sitcom that inspired many a household to live off the land.

And although it might not attract the likes of Margo and Jerry to move to the area, an entire village is trying its hand at the Good Life.

Eco-towns will not be green ghettoes, but thriving communities

We don't want to create green ghettoes, but dynamic and thriving communities - with the highest standards of design, an acre of green space for every hundred homes, and outstanding public transport with a stop within 400 metres of the doorstep. Jenkins is snooty about eco-towns "being for the poor"; but with a third of homes set aside for affordable housing, eco-towns will be within reach for ordinary families.

Brazil oil field could be huge find

"This would lay to rest some of the peak oil pronouncements that we were out of oil, that we weren't going to find any more and that we have to change our way of life," said Roger Read, an energy analyst and managing director at New York-based investment bank Natixis Bleichroeder Inc., which buys and sells stock in offshore drilling contractor Seadrill, a Petrobras contractor.

Oil and the 'New International Energy Order' (audio)

With both the cost of and demand for oil rising, nations with large energy reserves are redrawing political and military alliances, and oil-rich countries like Russia and Venezuela are enjoying greater influence. Michael Klare, author of Rising Power, Shrinking Planet, calls it the "new international energy order."

Drilling The Future

Energy: America's energy crunch is sadly self-inflicted. While others around the world engage in a mad dash to find more oil reserves, the U.S. seems to think $111-a-barrel oil won't be affected by more supply.

Making the Most of the $100 Barrel

OIL PRICES OF $90-100 a barrel have significant implications for the oil sector in the Middle East and North Africa. They can create a perception of greed in the industry and could encourage the development of alternate energy resources. However, record oil prices also provide huge financial resources to invest in new field development. In addition, high prices also make the development of almost any field economically viable, when sustained over a long period. Faced with a market that absorbs high output and offers massive returns, any public or private sector company in the region will be eager to develop oil resources at its disposal during the course of 2008. While some analysts doubt the official level of Saudi oil reserves, Saudi Aramco is confident that it is on course to boost national production capacity to 12m barrels a day (b/d) by 2009, but the company has experienced one recent setback. Production on the Khursaniyah oilfield, which is expected to yield 500,000 b/ d, was expected to begin in December 2007 but has now been delayed by several months. Aramco has not given any explanation for the delay but has indicated that water injection infrastructure, production wells, trunk lines and pipelines have already been put in place.

There's Still Oil In Them Hills

LONDON - Oil is trading once again at record levels, but the doomsday scenario of peak oil does not yet seem to be upon us.

Soaring prices may hit oil firms` expansion plans

Huge retail losses due to soaring global crude oil prices are likely to hit the expansion plans of domestic oil marketing companies.

“If we continue to incur these kinds of under-recoveries for another year, our project funding will get impacted,” said Indian Oil Corporation (IOC) Chairman and Managing Director Sarthak Behuria.

Green group defends clean coal push

Environment group WWF has called for urgent testing of carbon capture and storage (CCS) to determine whether or not the low-emissions technology for fossil fuels can work.

Oil hits record high

LONDON (Reuters) - Oil advanced to a lifetime peak above $112 a barrel on Tuesday as investors sought to hedge against a battered dollar.

U.S. crude rose $1.04 to $112.80 a barrel at 1115 GMT (7:15 a.m. EDT), after touching a record high of $112.97.

Oil is up 17 percent from the start of the year and is averaging near $100.

London Brent crude was up $1.30 at $111.14, a new record high. The May Brent futures contract expires later on Tuesday.

McCain to propose summer "holiday" from taxes on gasoline

Republican presidential contender John McCain this morning will suggest "that the federal government suspend all taxes on gasoline now paid by the American people –- from Memorial Day to Labor Day of this year," according to excerpts from a speech he will give that have been released by his campaign.

The Arizona senator, speaking in Pittsburgh, plans to make the case that "the effect will be an immediate economic stimulus –- taking a few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up."

He will also propose that the federal government "suspend the purchase of oil for the Strategic Petroleum Reserve, which has also contributed to the rising price of oil. This measure, combined with the summer-long 'gas-tax holiday,' will bring a timely reduction in the price of gasoline. And because the cost of gas affects the price of food, packaging, and just about everything else, these immediate steps will help to spread relief across the American economy."

Brazil's Petrobras denies giant oil field discovery

RIO DE JANEIRO (Xinhua) -- Brazil's state-owned oil company Petrobras denied Monday an earlier announcement of the discovery of a gigantic oil and gas field in southeastern Brazil.

The salt layer of the second well drilled in block BMS-9 of the announced oil field has not even been reached yet, and the huge field, if it does exist, lies below the salt layer, the company said in a statement.

China Becomes A BP Shareholder

HONG KONG - China has quietly accumulated nearly a 1% stake in BP to help secure its oil supply to fuel rapid economic growth. The silent investment from China has come to the attention of Downing Street, which has been monitoring the situation carefully.

OPEC sees enough oil supply, risks to Q2 demand

LONDON (Reuters) - OPEC is pumping enough oil to meet demand and the U.S. economic slowdown could lead to weaker-than-expected consumption in the second quarter, the group said on Tuesday.

The comments, in OPEC's latest Monthly Oil Market Report, underscore the group's reluctance to pump more oil to lower record prices near $113 a barrel, which it says are being lifted by factors beyond supply and demand.

Oil Prices Set to Increase Further

One of the more high-profile debates in the crude oil market today and at the EIA conference is the concept of "peak" oil. Peak oil is simply the idea that global oil production is at or near a limit and wont be able to expand meaningfully in coming years. Even worse, many argue that global oil production will actually begin to decline; that decline rate could be rapid, given the age of some of the worlds largest fields.

If peak oil theorists are correct, crude oil at $100 per barrel would seem ridiculously cheap. Rapidly rising oil demand from the developing world coupled with shrinking supplies would likely produce an oil spike of epic proportions.

When the oil runs out

Transition Towns is based on several key assumptions, says Samuel, who details the first one: "Life with dramatically lower energy consumption is inevitable and it's better to plan for it than be taken by surprise."

"Our settlements and communities lack the resilience to enable them to weather the severe energy shocks that will accompany peak oil."

New Ways to Store Solar Energy for Nighttime and Cloudy Days

Solar power, the holy grail of renewable energy, has always faced the problem of how to store the energy captured from the sun’s rays so that demand for electricity can be met at night or whenever the sun is not shining.

The difficulty is that electricity is hard to store. Batteries are not up to efficiently storing energy on a large scale. A different approach being tried by the solar power industry could eliminate the problem.

The idea is to capture the sun’s heat. Heat, unlike electric current, is something that industry knows how to store cost-effectively. For example, a coffee thermos and a laptop computer’s battery store about the same amount of energy, said John S. O’Donnell, executive vice president of a company in the solar thermal business, Ausra. The thermos costs about $5 and the laptop battery $150, he said, and “that’s why solar thermal is going to be the dominant form.”

British Airways could plunge to 120p, warns analyst

British Airways shares could fall to as low as 120p amid a soaring fuel bill, weakening traffic figures and the ongoing problems at Heathrow's Terminal 5, a leading City analyst has warned.

BA shares fell 8 to 215½p after Penelope Butcher, an analyst at Morgan Stanley, cut her price target for the shares from 245p to 120p after halving her earnings per share estimates for the year to March 2009 to 20.2p.

S. American defense spending not arms race: Brazil

CARACAS (Reuters) - South America has a right to beef up its armed forces but is not in an arms race, Brazil's defense minister said on Monday, as the region raises military spending on the back of high oil, food and metals prices.

EU defends biofuel goals amid food crises

BRUSSELS (AFP) - The EU Commission on Monday rejected claims that producing biofuels is a "crime against humanity" that threatens food supplies, and vowed to stick to its goals as part of a climate change package.

"There is no question for now of suspending the target fixed for biofuels," said Barbara Helfferich, spokeswoman for EU Environment Commissioner Stavros Dimas.

UK: Blow to introduction of greener fuel as oil firms face production delay

Government plans for the introduction today of cleaner fuel on all the country's forecourts have been thrown into turmoil, with the oil companies ready to offer biodiesel but warning they will not have bioethanol available for greener petrol until the beginning of next year at the earliest.

Already hit by mounting concerns about the impact of biofuels on food prices, ministers have had to accept that oil companies are not ready to meet the target of 2.5% of all forecourt petrol being derived from crop-based sources as required under their Renewable Transport Fuels Obligation (RTFO).

Monbiot: Credit crunch? The real crisis is global hunger. And if you care, eat less meat

Never mind the economic crisis. Focus for a moment on a more urgent threat: the great food recession that is sweeping the world faster than the credit crunch. You have probably seen the figures by now: the price of rice has risen by three-quarters over the past year, that of wheat by 130%. There are food crises in 37 countries. One hundred million people, according to the World Bank, could be pushed into deeper poverty by the high prices.

But I bet that you have missed the most telling statistic. At 2.1bn tonnes, the global grain harvest broke all records last year - it beat the previous year's by almost 5%. The crisis, in other words, has begun before world food supplies are hit by climate change. If hunger can strike now, what will happen if harvests decline?

Biofuels Threaten Food Access In Latin America – UN

BRASILIA - A global increase in biofuel production threatens to make food for Latin America's poor less accessible, a United Nations body said on Monday.

"In the short term, it is very probable that the rapid expansion of agrofuels at a world level has important effects on Latin America's agriculture," the UN's Food and Agriculture Organization said in a paper.

Europe's Food Supply Not At Risk From Biofuels – EU

BRUSSELS - Europeans should not fear a fall in food supplies caused by the European Union's ambitious targets for using biofuels in transport fuels, the EU's executive Commission said on Monday.

Biofuel: the burning question

The production of biofuel is devastating huge swathes of the world's environment. So why on earth is the Government forcing us to use more of it?

UK: Thousands of North deaths blamed on pollution

THOUSANDS of people have died in recent years from pneumonia caused by pollution, a study out today will say – with the problem particularly bad in the North.

Bangladesh faces climate change refugee nightmare

DHAKA (Reuters) - Abdul Majid has been forced to move 22 times in as many years, a victim of the annual floods that ravage Bangladesh.

There are millions like Majid, 65, in Bangladesh and in the future there could be many millions more if scientists' predictions of rising seas and more intense droughts and storms come true.

Sizing Up the Utilities, if Carbon Caps Take Hold

FUEL prices and dividends are usually big drivers of the share prices of utilities. Now there is a new variable to consider: how much carbon their power plants emit.

Scientists Debate The Accuracy Of Al Gore's Documentary 'An Inconvenient Truth'

There is no question that Al Gore’s 2006 documentary An Inconvenient Truth is a powerful example of how scientific knowledge can be communicated to a lay audience. What is up for debate is whether it accurately presents the scientific argument that global warming is caused by human activities. Climate change experts express their opinions on the scientific validity of the film’s claims in articles just published online in Springer’s journal, GeoJournal.

Japan Ups CO2 Offset Buying As Nuclear Power Slows

TOKYO - Japan is stepping up efforts to meet its Kyoto Protocol targets by buying more greenhouse gas emissions offsets from abroad than previously planned as its own emissions rise and nuclear power production dwindles.

Bush floating new climate proposal

WASHINGTON - The White House has told a group of House GOP conservatives it may be forced to support a limited cap on greenhouse gases and avoid a "train wreck" of regulations involving climate change, sources familiar with the meeting said Monday.

Oil advanced to a lifetime peak above $112 a barrel on Tuesday as investors sought to hedge against a battered dollar

I don't think so -dollar is flat over last few weeks and oil is up 10%...

The russian oil story is on todays cover of WSJ. Isn't that where the cornucopians (CERA et al) expect large growth in the coming decade?

But according to some on this board Russians have never heard before of the concept of peak oil. For supposedly ARAMCO style denialists there sure are a lot of articles from (not just about) Russia that don't hide the reality. This decline will lead to reduction in exports faster than the ELM model. Strategic preservation of resource choices will start playing an increasingly dominant role.

I have had many Russian friends over the years before and after the end of the cold war (one of the advantages to living in a college town in the USA, you get a small window into lots of other countries cultures even if it's from the perspective of the top 1%.) Anyway most people in the West (peak oil believers of not) think we will someday run out of oil that is worth extracting whether that's in 50 years and were already on the downhill slide or 1000 years out, my experience is that 95-99% believe oil is non renewable and will someday go away. From my limited interaction with my Russian friends this number seems like 50% maybe even a little less for some reason many of them subscribe to the Abiotic theories. This maybe why it seems the Russians are so slow to grasp the idea of peak oil, hard to have a peak when the earth will just bubble up more and quickly not over geologic periods of 20,60, or even 100 million years.

I believe the abiotic theory was developed in the USSR during the Cold War. For some reason, the guy who developed it was politically connected, so it did get quite a lot of exposure - with "evidence" -within the scientific community there. May explain the reason for the large percentage difference.

I haven't seen much data on it.

Considering that this is the same culture that produced Lysenkoism, it may not be all that surprising

For some reason you seem to think that Lysenko's ideas are widely accepted in Russia today.

Your sample is not representative. Also, the MSM in Russia do not push the abiotic oil theory. In fact, this crank "theory" seems to get much more play in the west. In spite of the caricature picture being painted in the western MSM, Russia is not trapped in a 1950s Soviet timewarp.

I think that the dollar is tanking largely because of the energy shortage, the claim that the crashing dollar is the reason for the rise in oil prices is blaming the disease on the symptom and not visa versa.

There was an op-ed in yesterday's (or day before) WSJ frankly advocating inflation, that the Fed print more money, as the least among evils.

The rising cost of energy is devaluing everything in the US (except, in a certain sense, the military). All asset classes are affected. In reverse gear, high leverage based on these assets is destroying paper wealth on a gargantuan scale. Those being destroyed demand bailout by the printing press, to hell with the consequences.

You are absolutely right. The price of oil is behind it all. And since oil is peaking (or has peaked) it is fatuous to speak of a bottom. This time, there is no bottom. It's a hard sell, because there has always been a bottom before. What's new is that we are on the down slope off the oil age. Brave new world.

Here's the noon price from the NY Fed reserve for 2008 and since the Euro became "live."

It seems there must be a reason why mouthpieces for some of the major supplier countries are becoming acceptingly philosophical about peak oil, and in some cases seem to be embracing it. My money is on the idea that they realize that the resource can pay them even more if they cry shortage and dribble it onto the market for decades.

I don't know. A long term price in this range is not in the supplier countries interests. It will and is stimulating the search for alternatives. One of the ideas mooted for replacing oil may turn out to be valid. I think a price of approx $50 a barrel suited them best in the long term. It looks like the reason they don't increase supply is because they can't.

Does anyone have a reasonable 'guide' as to what a single dollar/barrel increase equates to at the pump, give or take the usual machinations between the wholesale price, refining, tax and distribution etc? Remember, this side of the pond we now think in litres, so dollars or euros per litre would be welcome!

Here is a chart with the equations the equation at the top is for all data, the equation on the upper right is for 2007, and the equation in the lower right is for 2008.

Gasoline weighted average pump price in cents per gallon and WTI spot prices in $/bbl. These are the weekly average price for WTI (from the previousl week) and the Monday reported price for the gasoline marketing report from the EIA. You will note that gasoline SHOULD BE about $5/gallon from the total dataset and that it took and abrupt turn in 2007.

Thank you.

"Blending" 420 000 barrels of ethanol per day
started June 2007.

Not sure I follow your comment. Blending didn't start in June 2007. It was incrementally lower as you backtrack from June 2007, and incrementally higher going forward. A year earlier we were blending some 300,000 bbl of ethanol per day.

"Despite a one percent year-on-year increase in the first quarter, gasoline demand was lagging about half a percent below 2006 levels by the fourth quarter. On the other hand, distillate fuel oil demand rose 1.5 percent in the year amid rising diesel demand and higher home heating demand.

The demand data includes an increase in the amount of ethanol blended into gasoline, which averaged more than 400,000 barrels per day. Excluding ethanol, which accounted for nearly five percent of all gasoline sales during the year, total domestic oil deliveries in 2007 actually fell half a percent. An estimated 6.7 billon gallons of fuel ethanol were used by refiners in 2007, some two billion gallons more than the 4.7 billion gallons required by law but more than two billion gallons less than the recently-passed requirement for 2008.

In the Classroom
About API

Latest News

U.S. fuel demand slips for February - API

API: Time for informed energy policies

Updated:January 17, 2008"

Your chart shows the exact bifurcation for when ethanol blending hit it's stride.

Second week in June EIA Gasoline Inventory soared 6 million bbls.

Everyone scratching their heads. No follow up.

Even claims that Ethanol was not a blending agent.

Then in the Dec/Jan period I found that 400 000 per day figure.

It all made sense.

And ethanol cannot be blended with diesel, ergo diesel is soaring.

hmm even with ethanol thrown into the mix gasoline should be about 4.50/gal...

if 1 gallon = $5 then 10% of gallon = 50 cents

$5 - .50 = $4.50

I guess refiners are just taking it in the rear. O_o

You will note that gasoline SHOULD BE about $5/gallon from the total dataset and that it took and abrupt turn in 2007.

You have to think about the impact of higher prices on demand. Gasoline prices had a very steep rise and hit all time records in 2007. This encourages consumers to start modifying behavior, which makes it harder for refiners to advance prices. So what happened? Margins eroded as oil prices increased. There was probably some impact from ethanol, but you can't overlook the fact that prices won't go up in a straight line because demand is changing.

Except, just as Hubbert showed a number of years ago, sometimes relationships just change. You can take each one of the 52-53 weeks (depending on year) and see how the individual year did not change relative to the least squares fit. And the argument that people's behavior would change might be true, but so far, it's been very minimal.

Actually, the shape of the top of the real data I call the diaphragm effect (as in birth control) as a message that we aren't going there.

Besides, the disconnect between oil prices and gasoline prices began right after the July 4th weekend in 2004...strangely coinciding with the political conventions of both parties. It was that plot that really got me interested in the oil/gas/diesel prices and the way they react.

The data points for oil prices in the upper end of the range are rather sparse. What would your graph look like if the prices for both oil and gasoline were indexed by 2008 dollars?

I might try that to see. The CPI data might be too coarse to give a good view. But that will have to wait until the weekend...too much stuff to do.

How about diesel?

My impression is that the diesel demand is less elastic than the demand for gasoline, so I'd expect less of a deviation from the trendline than we see for gasoline. I'd be really interested to see if this is the case

On the contrary, the recent data from the US (last couple of months) seems to show a decline in diesel use (reflecting reduced economic activity, presumably), but a near-constant usage of gasoline (as individuals have hardly changed their driving habits, thus far).

Which makes it even harder to explain why diesel prices kept on rising while gasoline price is abnormally low, relative to crude. Some of us are really tempted to think that the price of gasoline is being manipulated for political reasons, although the mechanism for such manipulation seems obscure. Can the pricing still be explained by the preference of Europeans for efficient diesel cars, leading to a worldwide shortage of diesel coupled with some surplus gasoline available for export from European refineries to the US?

Vtpeaknick, You were wondering how diesel could be going up in price so much. Well, here's a link to an article that claims demand for diesel in China rose 49% in March. http://news.yahoo.com/s/afp/20080415/ts_afp/commoditiesenergyoil;_ylt=Aj...

When I read of the increase in China, I wondered what the base used was that reflected an increase of 49%. Was it March of last year, Feb. this year - when? 49% is a huge increase, so there must be some rationale for China needing that much more.

Diesel Grenerators for independent electrical power?

Try this out. I happen to have it set up for the period since 2002. Updated as of April 14, 2008.

Thanks ST. I figure refineries must be making money somewhere, and if it ain't on gasoline it's probably on diesel. WT's theory about refineries holding back to wait for better margins makes sense. Here in my city in the midwest region of the US gasoline is $3.29 today. I see SUVs lined up to pick up the kiddies after school down the block just like I have for years. They're driving to McD's for nuggets and to the corner store for avocados and oranges.

I'll be surprised if I don't see gasoline at $3.69 here in the very near future.

You are welcome.

There is something else I did not mention. In the past, if you wanted to use actual prices to predict the average price for any given year youtook the 15th week price of gasoline and the 15th week price of diesel and your average error over the years between the predicted average and real average for the year would be about 2% (and I don't know whether this relationship will stay valid).

So for 2008, using this past history, the average for gasoline would be $3.438/gallon (the running average is $3.198/gallon) and for diesel it would be $4.059/gallon (the running average is 3.61/gallon). That gives you some sense of how high and how long those prices will continue.

If you assume a gallon of oil refined generates a gallon of gasoline (I'll bet it is less). Someone on TOD can probably provide a better figure (hint). Then $1 per barrel works out to 2.5 cents per gallon. That would be approx .015 Euros/gallon, which is maybe .004Euros/liter. Of course most European nations gas taxes are proportional -not fixed like over here, so taxes might well double the sensitivity. While crack spreads have largely absorbed most of the recent oil price increase, refiners margins are now razor thin, they would rather idle capacity then sell at a loss, so further oil price rises would have to increase consumer cost.

Good graphic - will have to send this one to the fam!

But keep in mind that this is probably an average of US refineries based on their average crude input. The actual production can vary quite a lot and the global average production would probably have a lot less gasoline and a lot more fuel oil.

good point.

Nuclear plants sucking the sea life from British waters, researchers claim

The nuclear industry in Britain is killing billions of fish every year and taking a devastating toll of stocks, an Oxford University academic suggests.

The impact can be so severe in the worst-affected regions of the seas around Britain that death rates are equivalent to half the commercial catch for some species.



“All of these sites are suitable for new nuclear power stations,” said Sue Fletcher, of British Energy, who maintained that the industry would “strongly contest” any suggestion that unsustainable quantities of fish were killed in cooling systems. A spokesman for Magnox, the operator of a coastal nuclear plant at Wylfa on the Isle of Anglesey, said that the group undertook “extensive monitoring activities”.


The PR machine will take care of the problem.

"...the industry would “strongly contest” any suggestion that unsustainable quantities of fish were killed..."

Looks like we have another resource peaking: Intelligence. Funny..it seems to be the one thing I never hear anyone complain about having a lack of.

Seriously, this is similar to opposing windpower based on related bird deaths.

Seriously, this is similar to opposing windpower based on related bird deaths.

Seriously, I DO oppose windpower turbines because they kill birds.

Then you're suffering a crisis of perspective. Orders of magnitude more birds die every year to domestic cats and buildings than wind turbines.

*clap* *clap*

I do feel it necessary to mention that without the feeding that man does at bird feeders, the bird population would be less.

An overshoot of birds means more mortality via man's machines/structures.

Not to mention you are both ignoring bats.

"The nuclear industry in Britain is killing billions of fish every year"

How many birds was that? Did you say something about orders of magnitude...?

And part of the reason this sucks isn't just the number being killed, but also the flippant attitude of the industry (and supporters if you are any indication). As I said: the PR machine will take care of this. Nothing to worry about. Move along.

And part of the reason this sucks isn't just the number being killed, but also the flippant attitude of the industry (and supporters if you are any indication).

Sorry, the problem isn't that there is any harm done, its the attitude at the lack of a problem?

I am a little disappointed in the level of comment on this news item, which I posted as Leanan does in her news, giving the title and first paragraph of the story.
Many prior positions seem to have been adopted, rather than the item being read and critiqued carefully.
It would certainly concern me if this article is true, however as is clearly stated in the article it would be possible to avoid this affect by the use of dry cooling, which may be anyways advisable as on occasions in the past reactors have not been able to run due to drought.
What the costs of such a solution would be I do not know, but Ausra apparently have high hopes of reducing the costs of dry cooling in their solar thermal plants where water use is even more important, as by their nature they operate in hot, cloudless environments where water is usually scarce.
It should also be noted that coal plants also use water for cooling, although I believe rather less of it due to technical differences, but OTOH coal is heavy and expensive to transport, so many coal plants are built close to where the mining takes place, where the water resources may be limited and the impact of the heated water more severe.
the siting of nuclear power stations is much more flexible, and can be done where there are good water supplies.
Whilst we are talking about heated water, it is also unclear from the article what impact this has on the ecosystem, as it may possibly increase abundance in some ecosystems, this art least partially offsetting impact from creatures being drawn into the intakes.
If this problem is real, it may also be possible to re-design the intakes, perhaps filtering through a micromesh.
In fact, no-one has picked up on the fact that this is not a peer-reviewed paper, and so may be way off-base.
The presentation of it, as it talks very much in terms of the problems with nuclear power, might lead to some suspicion that this is the work of someone who is fundamentally opposed to nuclear power, and so to some degree arouse some suspicion that the conclusions might be partisan, although it could also be a spin placed upon it by the reporter at the newspaper.
In short, it seems possible, but not established, that there are difficulties for the eco-system with the present intake system for power-stations, nuclear and other wise, and that this may need addressing.
In the light of this it seems that most of the commentary in this thread is a bit OTT, although the way the article was written encouraged this.


Energy in America
Living in a state of denial

"In addition, other subsidized countries such as Venezuela, Mexico and Russia are exhibiting soaring domestic demand growth and are beginning to cannibalize oil exports. That is indeed the crux of the issue. If this rapidly growing demand in the developing world continues, then demand must fall rapidly in the developed world, or shortages will be upon us."


From Bloomberg-

"Petroleos Mexicanos, the third-largest supplier of crude to the U.S., shut its crude oil export terminal on the Pacific coast yesterday, the fourth terminal to close because of bad weather since April 13.

Terminal Closure

The terminal at the port of Salina Cruz closed today, Mexico's Merchant Marine reported in a weather bulletin posted on its Web site. The three Gulf of Mexico terminals at the ports of Pajaritos, Dos Bocas and Cayo Arcas remain shut."


Is Mexico exporting any oil?

". . . beginning to cannibalize oil exports"? That's pretty funny. Domestic consumption = cannibalism.

Cannibalism is terrorism. The cannibals desire a cannibal empire from Russia to Algeria. Giant cauldrons will proliferate and no white man in a pith helmet will be safe, especially if he's chubby. America must not allow the cannibals to prevail. The Marines are on their way.

It is the most ironic state of affairs. The invasion of Afghanistan (Russia 1979)and the birth of the "evil empire", the retreat, the collapse of the Soviet Union, destitution and rape of the economy by Western business interests, the ascendancy of the American Empire and an epitaph for Russia.

Now a little over a decade later, the American Empire in tatters, caught in the quagmire of Afghanistan and Iraq, considered an "evil empire" by much of the world, destitute and ready to be devoured by eastern business interests.

What a pithy comment!

"especially if he's chubby"

One word: biodiesel.

Is McCain's suggested tax relief for US motorists the first step on the path to some genius on Capitol Hill proposing fuel subsidies for the poor motorists? What next, a arbitrary price ceiling like in Nigeria or Venezuela? Your first 300 litres per month at 50 cents like Iran? Expect a thriving black market to follow, and some very tedious queues at fuel stations.

That is exactly what I was thinking, only not just for the poor. The contempt for the American public exhibited by its "leaders" is often breathtaking. Stage 2 could be shortages followed by some complicated gasoline credits trading swaps system run through connected investment banks, billing the taxpayers a hefty sum for their valuable work (only half joking).

We're living in COG (Continuity of Government)
begun by Cheney in his "tunnel call", unless/until someone
shows me different.

It didn't take a rocket scientist to know that massive ethanol
production would decimate US Grain Stockpiles.

And now, with the latest EIA inventory report, we know that
ethanol was only a stop gap at best.

Famine is now guaranteed.

"’In accordance with the principles of double-think it does not matter
if the war is not real. For when it is, victory is not possible. The
war is not meant to be won, but it is meant to be continuous.’”

I'm a war president.
— George W. Bush

No. It's election retoric.

Oh, McCain has lost what little credibility he had with me! How incredibly daft and sophomoric a proposal this is! This is as transparent as our $600 S.T.F.U. bribe check! Bread & Circuses, I do say! I'm so incredibly pissed off by the politicians of late, I can't properly express it!

Do yourself a favor and just turn it off. It is nothing but a circus, a distraction to allow the masses to believe they are participating. Recognize it for what it is and pay it no mind - you'll still be pissed about it but you won't waste any time on it. And after all, there is much to do.

More voodoo economics.

McCain is feeling big oil's downstream pain. The price is what the market will bear. Today the gasoline/diesel market is not bearing enough to earn refiners and retailers much, if any return, on investment. Removing the fuel tax will not significantly* affect the price that the market will bear but will see more of that price end up in retailers' and refiners' pockets.

* In practice, the downstream actors may want to hide their windfall by artificially maintaining a somewhat lower price while pocketing most of the money the gov't would otherwise have collected. And overtime, motorists faced with more potholes will have less money for gasoline after increased repairs. And other factors are at work. Nonetheless, McCain's proposal will hurt the average American and benefit refiners and retailers.

Shutting off the revenues to the Hightway Trust Fund will look really brilliant when the next bridge collapse kills a few dozen motorists and pretty much shuts down a metro economy.

McCain flip flops around and will say anything he thinks will help him get elected. This is why I can't stand the guy. He is either so senile he can't remember what he said in the past, just plain mixed up or a fraud. I'm not sure which.

He was against ethanol and then he is for it if he thinks it will help him in Iowa. The other day he said he wanted to stop filling the SPR for now, which I agree with. Funny thing is, that doesn't jibe with his hawkish Bomb, Bomb Iran baloney. Nor does it fit with the madness of staying in Iraq for a 100 years or more.

A tax holiday for Federal gas taxes this summer again shows how out of touch with reality he is. Clearly he hasn't got a clue about Peak Oil and it's implications and what needs to be done about it. If he does, then he's proposing a fraudulent temporary solution for high gas prices. He is all politics and not to be trusted with the highest office in the land.

Well, we're not going to rebuild Atlanta if it has a long-term water problem, or San Francisco (especially!) if it has an earthquake. Soon Rome will withdraw its legions from one town after another, the baths will run dry, the coliseums will fall silent, and the barbarians will close in.

That thought might win the war, but not those battles you just picked.

You really think they would leave San Fran a pile of rubble?

Tunnel Vision, brother.

You really think they would leave NOLA a pile of rubble?

Why just 3 months ago FEMA signed the deal to pay for (as required by federal law) the rebuilding of the NO Fire Department firehouses (that is, the ones not rebuilt by the French in 30 days after the city was reopened).


If ever a city deserved to be ruined on the basis of its response to a disaster, it was New Orleans. FEMA has always* been incompetent at handling emergencies while they're happening - that's what your local government is for. In the case of San Francisco, for all of California's many faults, disaster response in the state is very good, so I expect that San Francisco would be rebuilt if destroyed (as was Oakland after the fire, LA after Northridge, SF after the 87 quake etc. etc. The difference wasn't the federal government's level of commitment or skill, it was the local response. If you live somewhere that is prone to disaster make sure your local government has a real plan. New Orleans didn't and lots of people were killed and made homeless because of it. Also, keep 3 days of food, water and important medications on hand. It will, at the very least make you a lot more comfortable in a disaster and might save your life.


No time to address point by point, but three days food and water would have run out three days before the US military CHOSE to send relief to New Orleans.

The white Republicans in Metairie, with a bit of rain water in their homes, got a bus pick-up (with Port-a-lets and ice for those waiting) on the 4th day. Only after they were safely evacuated was relief sent, over bone dry roads, to the Convention Center. The overhead of trucks going through water was a detour just for PR.

The USS Bataan could have been docked at either the US Navy base in the Upper 9th Ward (no state permission required, since the Mississippi River is, per US Constitution, under federal control as are US military bases) or docked behind the Convention Center, the day after Katrina. Instead she was detailed to the Mississippi Gulf Coast where she was "under utilized" per her commander.

The USS Bataan has a couple of dozen helicopters, 600 hospital beds (where our hospitals could have been evacuated to), the ability to desalinate 100,000 liters of water/day and many tons of MREs (she is a Marine Assault Ship).

BTW: the Contraflow evacuation from New Orleans went flawlessly, the evacuation from Houston for Rita (with 80+ hours warning vs, 40 hours) was the pinnacle of incompetence (over 40 killed due to Texas Gov't bungling). Perhaps Houston should be destroyed because of their gov't incompetence ?

And if Gov't incompetence is a reason to destroy a political body, what does that say about the USA under GWB and Cheney ?


No time to address point by point, but three days food and water would have run out three days before the US military CHOSE to send relief to New Orleans.

I agree. The absolute minimum anyone should have on hand is 2 weeks of provisions. Even here in Arkansas, having 1 week's worth on hand is considered prudent if there is going to be an ice storm, as you may not be able to get out of your neighborhood due to dozens of downed trees! (Of course, it doesn't take long for the locals to pull out their chain saws and handle the problem themselves.. We don't wait for the government to help.)

Everyone I know who's lived in southern Louisiana always had at least 2 weeks of provisions on hand, as they knew it would take at least a week or two for basic items to be on hand if a hurricane were to hit. As such, I was surprised to learn that some people who chose to STAY in NOLA ran out of food and water within days... I'd have all of the bathtubs filled with water along with every bottle I could round up.

The bathtubs WERE filled with water, the same nasty stuff the houses were filled up with.

Yes, 3 weeks' provisions, maybe something kinda yucky but decent for you, like dry cat food, is a good idea.

San Francisco was actually better after the last big quake, they put the Embarcadero back into operation, and did not build the ugly freeway. They made it a bit less car-centric. SF is still terribly car-centric, it's in the US after all. So, there are ugly car parks in even the nicest areas with garish signs, and pedestrians still have to be very quick-witted.

San Francisco was rebuilt after the 1906 quake, and it's kind of part of local folklore. People lived on the streets, the founder of the Bank of America set up a card table and started lending out money, etc. The thing is that it was not the gov't, it was the people themselves, who made it work.

I personally think Katrina is a bigger scar in my memory than 9-11. I think people would band together more, and count on gov't less, in the next big emergency. But people DO need to get more serious about keeping provisions for a few weeks without outside supplies.

I'm not defending the Federal response. It stunk. However, the disaster was made much worse by poor planning on the part of New Orleans and Louisiana officials. A good local disaster plan assumes that the federal government will be useless and relies on local resources. It was at this most basic level that NOLA failed and deserves what they got. As for the 3 day supply of food and water, you're right, it would have run out, but it would also have left me in much better shape than most of NO's residents who had made no preparations.

As for the U.S. government, I'd say that being into the profitless war in Iraq is the just reward for their incompetence.

No, I think NOLA has been a blatant, racist and classist land-grab. It was entrenched by people who 'didn't fit the profile'.. It seems that the rebuild is contingent upon it being in the right hands, destined for the right tenants. Clearly different circumstances, not that I have anything but repulsion for what has happened there. Whether it has been callous disregard or intentional undermining, I think the many things that New Orleans represents and carries including a vibrant culture and a great deal of poverty are elements that this Administration possibly doesn't even acknowledge in existence.. San Fran has a LOT of wealth, and would be treated far differently, because that is something TPTB can actually see.

Look at Ground Zero. 'High Value Property' Is there any doubt that it will be rebuilt?


EDIT; pardon the omission.. 'George Bush and co. don't give a flying f.. about poor black people.'

There are such thing as poor white people too (pausing so you all can gasp) and Bushco don't care about them either.

Conceded. Should have said it better. 'Racist and Classist' on the top line was closer to what I meant.

But it also partisan. NO was strongly Democratic, especially the demographic groups that were most ignored. San Fran is even more liberal, so I suspect the federal response would be different depending upon which party is in control.

Good point. I don't think Bush really cared whether the people were white or black. But poor whites tend to be Republican, and poor blacks tend to be Democrats, and I suspect that mattered.

I remember people complaining about that in Florida, that year they were hit by four hurricanes. The GOP neighborhoods got the water, ice, generators, tarps, etc., long before the Democratic neighborhoods.

Yesterdays'good news of 33Gb off shore find is todays' bad news; Petrobras denies having found the 3rd largest oil field in the world, I see.

I'm not sure what's going on with that. A lot of news sources are still reporting the "good news," with no mention of the denial.

They better start looking for about 10 more-Chinese diesel imports up 49% (!) in March.

Your link says: "The Securities and Exchange Commission of Brazil, which supervises the operation of the stock market in the country, criticized the announcement by the ANP director, which prompted a sudden climb of Petrobras' stocks on the Sao Paulo Stock Exchange (Bovespa)."

But Petrobras says: "More conclusive data on the discovery’s potential will only be known after the other phases involved in the assessment process have been completed, and they will be announced to the market in a timely manner."


The juxtaposition of the two stories from Brussels are quite instructive.

Apparently as long as biofuel production does not affect the EU it is acceptable to divert food resources to produce transportation fuels. Biofuels while they may beneficial in a local area their production and environmental impact are detrimental overall.

The governments of the developed world are not showing true leadership. The EU, US etc should follow the lead of their own people, like the transition towns movement, government should lead, follow or at least get out of the way.

And what will Mac Ane use to keep those roads maintained for the straight talk express? Oh, that's right. The ST express has gone off the road and doesn't need them, anymore. And what will he use to replace these taxes? And why just to Labor day? Just abolish all taxes everywhere on everything. The deficit is so out of control, anyway, what's a few more trillion dollars in debt for whatever generations survive this mess.

That's right, McCain. Make sure we drain the U.S. treasury while we are simultaneously sending all our money overseas to OPEC,etc.

No, we should do the reverse. Jack up gas taxes and substitute them for income taxes. Do everything we can to staunch the bleeding of the U.S. dollar, not to mention issues like security, peak oil, sustainability, and global warming. This campaign has gone on way too long. The longer it goes on, the more ridiculous the proposals become.

Edward Abbey said: "The government should be weak, ametuerish, and ridiculous. So far we have one in three".

or to follow Grover Norquist's lead,

This is how our government will drown itself in the bathtub..

(not unlike the way 'Capitalism will sell you the rope to hang it with')

Old Grover needs the State to enforce Capitals policies, often violently.
Abbey would be nauseated:
"Anarchism is not a romantic fable but the hardheaded realization, based on five thousand years of experience, that we cannot entrust the management of our lives to kings, priests, politicians, generals, and county commissioners."

"Filling out the form: Race? Human. Religion? Paiute. Occupation? Criminal anarchy. Hobbies? Survival with honor."

I don't doubt that Norquist's idealism (?!) is fully dependent upon a carefully crafted set of blinders.. but then my take on Anarchy, too, is that 'The Response to poor leadership shouldn't be NO leadership' that's exactly the problem I have with Norquist's presumption in that line.

Not all Governments are Authoritarian and Insulated from their people.

Anarchism has a natural belief in order (from observation in nature and society). Anarchism is the anthisis of chaos, a meme very well cultivated by the State.
I agree it is a optimistic view of human nature, just look at the GOP or Dems, the Soviet Union, China, etc.
But some of our brightest thinkers have embraced it, from Thoreau to Chomsky.
It it a very developed political stance, and should not be dismissed.

But some of our brightest thinkers have embraced it, from Thoreau to Chomsky.

If the average person was as intelligent as Thoreau & Chomsky (& Ed Abbey) anarchism might be viable.

Hehehe, good one Darwinsdog. I think you are exactly correct. My dad used to say "wouldn't it be a wonderful world if everyone was honest." Of course everyone is not honest that is why you need rules and regulations along with a government force of some kind to enforce them.

Back in our hunter-gatherer days, we had no government. Everyone got along within their own tribe. But when things got overcrowded or some other tribe invaded their territory, all hell broke loose. The invading tribe would have been driven out of killed. That is the environment in which we evolved. And should the government disappear, that would be the mode we would revert to.

It would get extremely nasty. We would be even further from the Utopia that anarchist envision. Without law and order, as Thomas Hobbs put it "life of man, solitary, poore, nasty, brutish, and short."

The invading tribe would have been driven out of killed. That is the environment in which we evolved. And should the government disappear, that would be the mode we would revert to.

Yup. No one should be surprised at human xenophobia. In the environment of ancestral adaptation, anyone you didn't know personally was likely out to eat your kids. The ontogeny of our nervous systems & resultant behavioral repetories haven't changed much since Pleistocene Africa. Freed from external constraint, the ape reasserts its cannibal nature.

hightrekker - Anarchism has worked for Italy for the last half century. They haven't invaded anybody lately.

Untrue, Italy joined W's crusade to escalate the Iraqi Holocaust, and it took an election and change of government to force their withdrawl.

Yes that proves my point! Italy has a hard time pulling the same wagon because they have a weak central government that actually has to answer to their people .(whoever they are?)

The U.S. on the otherhand has a highly organized central government, at least when it comes to invading countries, suppressing dissent or reading it's citizens e-mails. You wanna bet there isn't some pencil-necked geek working for Homeland (Fatherland) Security monitoring the Oil Drum.

"I am a Patriot. I believe that it is the obligation of every citizen to protect his country from his government" E.A.

Italy has a great system, if you want the Mafia running things.

ET - The proper nomenclature is La Cosa Nostra. I grew up in Las Vegas when it was run by that group. Take my word for it, it was a much classier town then than it is now run by a bunch of greedy, mindless, corporate beancounters. Now you have 14 year old hookers walking the strip and a room cost $300.

The guys that I knew back in the good old days were pretend gangsters. Most of them put in 60 hour work weeks and came home and went to the Parrish social on sunday with their families. For the most part they were really good business men. I never saw one that carried a gun.

Now you have scum like Steve Wynn and Nathan Adelson racing to see who can build the biggest private jet hanger at McCarren Airport.

You wanna bet there isn't some pencil-necked geek working for Homeland (Fatherland) Security monitoring the Oil Drum.

Bah, not only HLS, but I'm betting each agency + a few local coppers are watching, with the locals doing 'an investigation' of person X Y or Z.

The issue that divides libertarianism from anarchism is whether property is itself inherently a source of oppressive power, meaning political. Norquist tells you that you were freer in 1859 than 1980 - which obviously depends on your race and gender and whether starving to death is a form of freedom. This system of oppression demonizes true self-government in favor of religion and landlord plutocracy. It was, after all, a very successful system for controlling poor whites, who still hold the balance of military power in this country.

The US infrastructure is deplorable, there is not enough money to maintain the roads and more importantly the bridges, they are literally falling apart. The states are selling their freeways and turning them over to private industry to run as toll roads.

More importantly the gas tax is also a funding mechanism for public - mass transit. Any scheme that denies aid to public transportation will be counterproductive.

The sad thing is that Mc Cain knows that this is a non starter and he is trying to have it both ways he proposes a tax cut that will never pass so he gets credit for it and avoids any responsibility for the consequences as he knows it will never happen.
It is a shame that he does not use his strong media voice to push for something, any thing that would better serve the future, i.e. a more robust funding for inter and intra city public transit, reducing the dependency on the automobile and thereby reducing demand for petrol products.

Mc Cain, apparently just does not get it, he shows no idea or belief in Peak Anything, if he did believe in it he would not propose such a program.

I was just discussing the contrast in 'transport' links between London-Paris and Houston-Dallas with colleagues. In London or Paris you can get of the high speed train and then continue the journey across town on public transport. I have no knowledge of any rail link between Dallas - Houston, but I'd guess that taxi ride, or a hire car would be your only hope to complete your journey at either hub if you made a train journey in the first place.


Dallas has the beginnings of a decent Light Rail system (45 miles from memory). They were going to directly serve Love Field (SW Airlines) with the line that they are currently working on, but GWB's FTA vetoed the extra expense, so a shuttle will connect Love to the nearest Light Rail station.

Houston has an 8 mile Light Rail line that was built w/o federal funding. All sorts of issues expanding despite voter approval. (I have not followed closely, it kind of depresses me).

One can take Amtrak from Houston to San Antonio (3 days/week, leaves Houston @ 10 PM and arrives San Antonio after midnight. Wait and catch train to Dallas, unsure of schedule).

Or one can bicycle from Houston to Dallas.

Not Much Hope for Non-oil transportation in Texas today,


Presumably the day will come again when one can ride an Ass or a Mule between the two cities. We will have to find something for all the unemployed politicians to do, after all.

Presumably the day will come again when one can ride an Ass or a Mule between the two cities.

I doubt it. Anyone with a firearm will shoot the ass or mule & eat it. If you're armed the famished will shoot you from ambush & eat you too. Then they will have a full belly & your gun also.

In a doomer decline (using examples from Cambodia & Liberia) what is left of the railroads will still be preserved by locals because of their self interest.

In a state of decline just above that, I can envision where the organization required to keep the railroad running is the fundamental organizing principal in a society that has otherwise collapsed.

An analogy is that the Natchez Trace was infested with bandits, but the US Mail courier was never bothered.

There is strong self interest in maintaining transportation and communications. An incentive fro co-operation.

Best Hopes for Not Sliding THAT Far,


Thank you, Alan, for responding to my post in a civil manner.

I'm sorry if I offended you by pointing out that the Mississippi watershed has been horribly degraded by agriculture, the hydrology of the great river horribly mismanaged by the Corp of Engineers, and the delta buffer zone between NOLA and the sea virtually destroyed, leaving the city wide open to hurricanes. It's all true, tho, as Katrina made clear.

I forgive you for all the ad hom attacks you've leveled against me.

My home town existed because it was located where the Illinois Central & Penn Central tracks crossed. The town was even named after some long dead railroad exec. The Illinois Central still runs but the PC tracks have long since been torn up and the right of way developed. In New York too, when I was there, defunct RR RoWs were being converted to bike paths - "Rails to Trails." I decried the decline of the American rail system, as I witnessed it occur during my lifetime. You may well be correct in predicting that rail will make a comeback as fuel prices soar. I hope so.

Many things, including the need to maintain communication & transportation networks as you assert, may serve as incentives for cooperation. But hunger is an even more powerful incentive. I still maintain that as famine grips the population, anyone who attempts to travel on horseback (or ass- or muleback) will have his or her animal killed & eaten by desperate starving people.

I drove the Natchez Trace Parkway many years ago, when I was planting trees along the Pearl River near Philadelphia, Miss. (The restaurants were still segregated in those days. Hell, maybe they still are!) It was a nice highway back then, I seem to remember.

Best wishes.

Gees Dawg, I nearly pissed myself laughing at that.

Long ago Dallas had a light rail system called an interurban. Among other places it went to Ft Worth, Denton, Denison/Sherman and south to Waco. During my youth I rode it from Dallas to Waco; a slow miserable ride. It is no wonder that people greatly preferred to travel by automobile.

The Inter-Urban from Houston to Galveston covered 51 miles (including a number of stops) in 75 minutes. One would be hard presses to do as well today on the Gulf Freeway (12 lanes in sections, most of it at least 8 lanes) even without any scheduled stops.

It was discontinued in 1948.


Alan, the railroad industry is going to have to make substantial improvements to their service if they want to capture more business.

I just received a carload of landscaping stone in Kenosha, WI from Gillette, WY.

How long did it take? Three weeks. A couple days spent in Edgemont, SD, a side detour to Kansas City.

Something has got to change.

IMHO. reliability (knowing that it will arrive in 20 days + or - 12 hours) is even more important than speed (90% of the time it will arrive in 3 days, but 5% of the time it will take 2 weeks).

Today the US railroads are built to capacity. New track is added only when there is a prolonged and significant bottleneck.

IMO, the railroads have to be built with an excess of capacity almost everywhere/everywhere. Combined with new management/marketing, choice shippers (those that have a choice) can be offered several levels of premium service that matchs or exceeds truck speed and reliability for those willing to pay premium rates.

Check out an extended discussion on the April 12 Drumbeat.

Best Hopes for Better Speed & Reliability,


Amazing how they can say pretty much anything without supporting data. Battered dollar? - it actually has strengthened vs. yesterday.

"Forex - Dollar strengthens after stronger-than-expected U.S. data" from CNBC

BTW Nymex is up to 113.63.

I have seen this far too often - the MSM has a few pet reasons - "weak USD, supply disruption, fire in oil refineries!!!" whenever oil jumps up to new highs.


There are four intersecting emergencies: Energy, water, food and climate. These sorts of headlines/alerts are now part of our everyday world. Hang on, it will be a very bumpy ride.

For amusing listening try to understand how the mainstream media interprets this; if listening to NPR have a barf bag handy. MSNBC, a few weeks ago, announced that there *was no oil shortage*. Just evil speculators (and oilmen).

Five emergencies. The fifth: indebtedness.
Debt will make society a lot less likely to
adapt peacefully to the other crises, and
there is less money capacity to invest in
mitigating alternatives.

There are four intersecting emergencies:

I'm intrigued by the parallels between the current day environmental crises and the four 'classical' elements of Earth, Fire, Air and Water. Each of these, with Fire representing energy of course, represents the focus of major environmental problems. Our biological foundations are cracking.

What you don't hear anymore are the stupid forecasts for oil to possibly drop to $35 in an American downturn-before these guys are finished you won't be able to buy a cup of coffee for $35, much less a barrel of oil (only slightly exaggerating-this is their target).

One of the primary differences between inflation and hyperinflation is inflation is reported as an annual figure. Hyperinflation is reported as a monthly figure.

Germany in 1923 ws a case in point. Prices doubled every 2 days.

Antedote: A guy in 1923 Germany goes into a cafe and orders a cup of coffee. The waiter brings the coffee and the bill. The coffee was so good he orders another cup. The waiter brings him another cup and the bill for the second cup of coffee is almost double the price of the first cup. The customer complains. The manager comes over and explains to the customer that if he wants to lock in the price of the second cup of coffee he needs to order both cups at the same time…

So as the world bumps up against obvious limits to growth which are manifesting itself with high prices in commodities during global recession, something that is unexplainable according to many of the economic analyst I read, (sure many try and explain it away by pointing to developing countries demand but the numbers don’t seem to work out, yet).

It ain’t demand its supply schtouped.

Instead of spreading the information that we live on a finite planet and realities of what that means, The IMF is urging that we goose the world into gear again;

“IMF Managing Director Dominique Strauss-Kahn says that the “need for public intervention” to address the global financial crisis “is becoming more evident.” Strauss-Kahn has urged for a global fiscal stimulus, writing that, “Timely and targeted fiscal stimulus can add to aggregate demand in a way that supports private consumption during a critical phase.”


What does the petre dish full of yeast do as it stops foaming, growing right up to the lip of the dish?

It wobbles across the table, clickity, clickity, clickity, and bumps into the sugar bowl, spilling more sugar into its maw.


I might have to move my tent over by Darwinian’s camp fire. I gots bourbon as well as triple distilled sarconol.

There is no global recession. The boom sadly is continuing in Chindia. It is the US which is in decline, but like Zimbabwe that is mostly due to the quality of its political leadership.

But I would agree that limits to growth are becoming apparent.

"There is no global recession"

I disagree. Everyone is feeling it.

"Global Recession On The Way"


It's definitely global, and it's definitely the 2nd time the United States exported its Depression. Now during the Depression some dictatorships like Germany and Russia were able to detach from the global system sufficiently to appear to be in better shape - now much debated. The problem for China is detaching itself from its sticky embrace of US consumers. That practically requires that China create whole new consumer populations, presumably ones with oil to trade. So watch the trade numbers from Central Asia, Angola, etc. If they're not huge, then all China can do is redeploy its massive currency resources into internal economic development ala the New Deal - but the New Deal was able to exploit hypercheap energy and resources.

Note the Chinese government is massively raising the reserve requirements of Chinese banks and driving down its stock market. The leaders know a reckoning is coming.

Chindia is not in recession. China, India and other countries in the region are booming.

Exports to the US account for 8% of China's GDP and 2% of India's. Yes, they will feel the effects of the decay of the USA and they will be constrained by resource limits. But that is in the future, likely a fairly near future. In the meantime, more and more of 'our' resources will become their resources. All the toys at the Pentagon's disposal will not stop this trend.

For some reason, Americans appear to think that Copernicus was only partially right, that the earth orbits around the sun, except for the US around which the universe turns.

China's moves on reserve requirements, currency, etc. are adjustments.

My point was that even China & India are bumping up against limits such as food, water, minerals, etc.

Some of these issues can not be resolved even with huge $ reserve$.

Any whoo. I don't think the IMF was talking about stimulating Chindia's economy, just everyone else.

In fact Chindia would benifit the most from this IMO.

But where will the resources for this new bubble come from?

April 15 (Bloomberg) -- China's economy probably expanded more than 10 percent in the first quarter and inflation may have stayed near an 11-year high, maintaining pressure on the government to do more to cool prices.

Gross domestic product rose 10.4 percent in the first quarter from a year earlier, according to the median estimate of 24 economists surveyed by Bloomberg News, after expanding 11.2 percent in the previous three months. The statistics bureau is due to release the figure at 2:30 p.m. tomorrow.

Faster yuan gains failed to stop inflation topping 8 percent for a second straight month in March, according to the survey. China's cabinet, the State Council, said this month that the world's fastest-growing major economy faces dual risks: overheating and the threat of a slowdown.


April 15 (Bloomberg) -- China, the world's second-biggest energy user, plans to increase coal output by 19 percent this year to meet rising domestic demand.

Coal output will reach 2.73 billion metric tons, said Wei Jianguo, the general manager at Zhong Neng Power Industry Fuel Co., the coal purchasing unit of State Grid Corp. of China, the nation's largest electricity distributor. China produced 2.3 billion tons of the fuel in 2007, according to data from the National Bureau of Statistics

Coal is energy for the economy in China. If this does not work out as there is Peak Coal then ther is no more growth in China andthey are stuck unless they can get super energy efficient or grow smart by exporting all the heavy manufacturing like the Americans did. Only problem is that there is no place left so global growth is over when the coal in China is all out or when the amount cannot endlessly grow 10%-20% per year. This is not a given anymore than food production growth or oil production growth.

Hey Soup; (a pleasure meeting you the other day BTW);

The demolition derby special will tank up at $3.50 a gallon but she is lookin' pretty sorry. Gearing up for another run at that wall.

The US is suffering from a condition IMO called 'economic obesity'. It was ok awhile back before the peak now it's terminal. Lowering interest rates and helping crude along ,to what, $114 today against that wall of supply ,willing to do anything other than scale back the operation aint helping. As long as we can't function with less than 27 barrels a year per person and China can grow on 2 and 1/2 we are screwed. 'We' are running a marathon against a much fitter athlete, the weight loss program is gonna be painful, and all along leaders are telling us we just need to have another doughnut.

AND the soup was great!

Xburb & partner - Glad you could make it in.

Best hopes for less doughnuts and more SOUP!

Taking some figures from the world factbook...

US per capita GDP is $45,793 for 2007.

China per capita GDP is $2,458 for 2007.

Source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita

By your numbers, 27 B/year/person in the US.
Thats $1696/B.

For China, 2.5 b/yea/person.
Thats $983.2/B.

Who does more with a barrel of oil? The US.

What about exports/barrel, to pay for those imported barrels ?

That is probably the more important number.


Hello Freeyourmind;
As a balance sheet that $45.7k GDP has come to obtain some pretty significant liabilities. Every year we hold up the governmental processes so that Congress can add another trillion dollars or so to our collective debt ceiling. A $274k a minuet Iraq surcharge for instance. We need to add to this the personal debt owed by the average American and top that off with a negative savings rate. Due to the lifestyle trap it seems even with high earnings we can't save a dime. Not so in Asia.

Also economic growth in this country is stagnant. (I would argue among other things that economic unfitness and PO has made it impossible for this to be otherwise) But it is still not the case everywhere. IMHO for productivity to be high enough to grow (not advocating growth BTW) with this level of oil consumption we would have to both increase production and increase efficiency significantly.

Much wealth was created in the US as of late through the inflation of asset bubbles somewhat divorced from actual production. Those appear to be in the process of unwinding and it is difficult to see where the currency and the actual buying power of the typical American is going to finally end up. I'm betting much lower. On China I'm betting flat or higher for a while yet.

Have to agree too to Alan's point that export products per barrel would be perhaps a better measure because it cuts straight to the issue of fitness as do his rail initiatives.

I can see the argument for current consumption and earnings. My point is to the 'relative economic fitness' going forward down from Hubbert's peak which I believe is already exacting a stiffer penalty from high rate users and will continue to give more efficient producers the edge. And I do see the potential for this to turn from an issue of production to one of survival fairly fast.

There are implications for PO mitigation, infrastucture maintenance, and employment which all remain constrained by the 27 barrel curse. Vast sectors of the US economy are directly in the PO/ELM crosshairs. It's happening. China's not so much because they have many sectors which are currently operating on very small oil inputs. (much personal transportation, small land farming model, even some construction) We currently are geared for oil's over-consumption and post peak we don't have it. If we can't function w/o it we indeed are screwed.

China 'now top carbon polluter'

China has already overtaken the US as the world's "biggest polluter", a report to be published next month says.

Some way to go before they catch up in cumulative emissions, however. See p. 5 of this.


And, of course, no mention of China's population being four times that of the United States or that the U.S. effectively exported much of its pollution when it shipped its industry overseas and, with a further twist of the knife, demanded imported goods be provided at the lowest possible cost, regardless of the environmental consequences.


jrwakefield - Does that mean that the U.S. is less evil?

It seems that carbon rankings are the new PC. Pathetic!

I celebrate the fact that Mr. Wakefield has come to recognize that carbon dioxide is pollution. I fervently await the rest of the epiphany that comes with this.

I wish. Unfortunately those who ply climate denial flip-flop between:

1. Its not happening
2. Its happening but its natural
3. Its happening, we're to blame but cannot do anything about it.

They probably have some randomizing function that provides the meme of the day.

PS. Of course, getting Mr Wakefield to acknowledge cumulative CO2 emmissions between the USA and China is probably beyond his powers of intellectual honesty.

Russia has peaked,

says Leonid Fedun, the Vice President of Lukoil.
(German, sorry)

It was already reported in yesteday's drumbeat, but now it is also on Spiegel, the leading German journal.

Also in English in the Turkish Press http://www.turkishpress.com/news.asp?id=225762.

Leonid Fedun, the Vice President of Lukoil said Russia has peaked and need to invest at least a trillion dollar to keep production at level of 8.5 million barrels of oil per day.

In Russian

Also on the WSJ Blog "Peak Oil: “Da” Say Russian Oil Execs"


Also on Page One of WSJ (behind pay wall):

Russian Oil Slump Stirs Supply Jitters
Production Decline Is First in 10 Years;
Squeeze in Siberia

Russia's stumbling production growth highlights a troubling reality: Despite soaring oil prices in the past five years, crude output from nations outside the Organization for Petroleum Exporting Countries has remained essentially flat since 2005, defying the normal link between high prices and increased production.

In an interview, Leonid Fedun, vice president of OAO Lukoil, one of Russia's biggest oil companies, said a mild winter and higher temperatures mean Siberia's icy ground is less stable, making it harder to move drilling rigs between oil wells.

He acknowledged that the fall also reflects a longer-term trend -- the depletion of Siberia's older fields. "Western Siberia is repeating the fate of Prudhoe Bay, with a time lag of five to six years," he said. "When the well's productivity falls, you have to keep drilling more and more. You've seen it in Alaska and the Gulf of Mexico, and now you're seeing it in Siberia."

There's a version that's not behind a paywall here.

On the BNN this morning they interviewed the CEO of an oil and LNG tanker company. He said in spite of the flat EU and NA oil consumption, China's comsumption increased 13.6% Y/Y. He said he's seen no drop in demand, in spite of the US slow down, but a change in the direction of the demand to Asian countries. He said his company is shipping more oil and LNG than ever and is currently building 4 new super LNG tankers to fill the Asian demand. They will be the largest ships of their kind.

Four benchmark crudes above 3 yergins (1 yergin = $38) and WTI within 50 cents of this important threshold.

Will today be 3 yergin day in the USA?

Could be. We're about 7 cents away.


What happened to that picture that someone posted? I found the title (in French) on the beer bottle ironically funny... especially if one is a "doomer."

BTW, I've tried that brand twice... very pleasantly distinct flavor.


I deleted it. It was off-topic, and it was bloody huge. Some people are on dialup, folks. Have some consideration.

"Some people are on dialup, folks"

It was me, and I am...26.4 K on a good day.

Can't remember how to shrink.

Ended up going to bed early and not drinking it, after the grid went down. Fitting :>)

"... very pleasantly distinct flavor"

That flavor is people!!!!

Let me guess...Le Fin du Monde? (The end of the world)
I'm more of a fan of the Belgians (beer, that is) myself. Of course the Belgians as a people I've met are quite agreeable also...

And it's only April... I wonder if this strong La Niña will help keep things a little more calm this summer...

I can hear it now....the chant of "Yergin! Yergin! Yergin!...."

The Yergin

Oil, Gasoline Climb to Records as Investors Move to Commodities

April 15 (Bloomberg)...Oil climbed to $113.99 a barrel in New York, the highest since futures began trading in 1983. Rising global demand for raw materials and a weakening dollar have led to record prices this year for commodities including corn, rice and gold. China said today diesel imports surged 49 percent in March.

I think that's near enough!

There it is. 114.01.

Smug we are that all three yergins look so foolish.

Smug and frightened perhaps?

Happy Triple Yergin day! I poped in and 114.04! Time to bust out the party hats

Hello ZerOnerve,

I hope that all TODers, by celebrating with a yeasty beverage their acknowledgement of Yergin's dismal prediction track record, will remember to do their Peakoil Shoutout when their glass reaches half-empty. I continue to work to make this a new cultural tradition-- I hope this toast will be universal at 4 Yergins!

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

Drinking as fast as I can

- Saw a you tube vid of DY saying - in effect 60.00 dollar oil was coming in 2008

coming - it ain't even breathing heavy.

"said Roger Read, an energy analyst and managing director at New York-based investment bank Natixis Bleichroeder Inc., which buys and sells stock in offshore drilling contractor Seadrill, a Petrobras contractor."

back when I was a youth, we called this a "pump & dump" scheme.

not sure what the kidz call it these days.

re. McCain and gas taxes.

This country (Good ol' US of A) will never raise taxes on fuel again. We will eventually lower and/or eliminate the ones we have. It only makes sense, given how politics works in these parts. Hillary came out big the other day - against crime. She's really really against it. And how often does one senator's wish/idea suddenly become reality - and in only a month? Not filling the SPR will alleviate demand, but 'suspending' tax will increase demand... and as someone pointed out, at the end of Summer, with the election looming, we're going to reinstate the tax? And what if a couple big hurricanes spin thru the GOM?

Look in the dictionary under 'pandering'. There's so many pictures it'll be hard to get thru them all, but John and Hillary will be up top.

The fact that a dubious announcement about a large oil find off the shores of Brazil could be used as an excuse to move stock markets in Europe and elsewhere is as sure a sign of market desperation as any. Clutching at straws...

33 billion barrels is a lot of oil ... if you use it for cooking French fries.

If you burn 85m barrels a day, then it would last one year. That is, it would shift peak oil from may 2005 to may 2006.

Next things to do on my action list
- Find a field like this every year
- Make sure the URR is indeed 33 billion
- Keep all the Chinese and Indians from burning our oil.

I have to go, I'm busy as you can see.

Richard, it would not shift the peak at all. Even if there are 33 billion barrels there none of it will come on line for at least a decade. That would mitigate the downslope slightly, depending on the flow rate.

Ron Patterson

I think he is not serious

Good to do list

Farming practices 'must change'


Paul Krugman appears to now be a believer in Peak Oil (he even links to The Oil Drum). Maybe he will write about it in his column soon.

One of the defining features of the last 8 years or so has been the way ideas go from crazy stuff that only DFHs believe to stuff everyone knows, without ever going through a stage in which the holders of conventional wisdom acknowledge that they were wrong. Oh, and the people who were right are still considered DFHs; you see, they were right too soon.

It looks as if peak oil may be going that way:


I had to look up "DFH". I sort of expected something along the lines of "tinfoil hat" or some such. I didn't expect it to be "Dirty effing hippies".

The Dirty F***ing Hippies may end up being right about almost everything from the last 40 years. First Normals quietly admitted they'd been right about air and water pollution - without giving them credit. Then they suddenly understood that Vietnam was a mistake and Nixon was a Nazi, but voted for Reagan anyway. Now we must consider that our children will be forced by conditions to live the way the hippies only tried to live for a few easy years. We could have handled this crisis a whole lot better with a 40 year head start.

who was it that said there's no such thing as 'Bad PR'? How right do you have to be to live down a long lost hairstyle?

Bob, crunchy granola peacenik geekboy (&chromedome)

Hi super390. since you manage to combine dirty hippies, children Nixon and Reagan and Nazis all in one breath I think I would like to cut in here and see what you think of shoving in some Texas too?

Haven't noticed anything on DB about those Texas 'authorities' separating 133 mothers from their 419 children and putting them in a kiddie concentration camp? Sorta keen that one can make one anonymous call and have all that go down.

I think this is a glimpse of the future for any that don't toe the officially approved, after things get depression-like and all. Only with a little more fire-power in spots. How can you keep em restrained down on the farm after they've seen Iraq. I bet even those slave holder Founding Fathers must be doing some spinning in their graves watching all this go down, and I bet they have better channels than Fox or CNN to turn on, tune in and spin out to.

I'm now having second thoughts about starting my hippie sex commune. ;) Seriously though, I'm surprised there wasn't a Waco type incident with this whole thing. I have mixed feelings about all of this, because it is a blatant violation of rights to take everyone's kids just because one guy had a 16 year old bride. If that was EVEN true, they should just get a search warrant, find the bride, question people, etc... The other children should not have been removed from the ranch.

However, Texas has a history of CPS taking kids away from people who are "different" or don't put their children into public schools.

I have a question. If you can only extract about 20 gallons of gasoline out of a barrel of oil and we are past $100 dollars a barrel, why isn't gasoline at $5 a gallon?

This question is asked so often I'm thinking we should do a key post, or a FAQ or something.

Basically, customers are resisting paying more. Gas stations are making very little on the gas they sell. Some are even losing money, using gasoline as a "loss leader" to get people to their minimarts to buy milk, soda, cigarettes, etc.

This can't go on forever.

Basically, customers are resisting paying more.

Is it resistance or more 'our studies are showing effects X Y and Z' and [X-Z] are scary enough that firms either by their own choice or by 'other pressure' are opting to try and keep the price lower?

Because in the often claimed 'free market' - what reason would firms have to keep the prices low?

Because in the often claimed 'free market' - what reason would firms have to keep the prices low?

Competition. If they raise their price, they lose market share. It's tough to charge $5 when the station across the street is charging $4.

The way around that, of course, is collusion. Make a deal. We'll both raise our prices together. But that's illegal in the free market.

But insurance firms and baseball have laws that allow for 'discussions' between firms.

What is up for debate it would seem is the idea that at $100 a barrel gas should be $5 but is not. I get $2.38 a gallon crude for $100 a barrel crude. Thus - are the refining, taxes, and distribution expensive enough to justify the $5 question.

Dunno about insurance, but baseball is special. They are a legal monopoly.

The "demand destruction" high gas prices are causing is impacting oil companies' bottom lines. They are making big bucks off crude oil, but their refineries are getting squeezed.

Gas being sold at as a loss-leader is becoming old news. Anyone remember gas stations of say 20 or even 10 years ago? There are still some of the older ones, a single booth, or little room, with a grumpy guy to take your money and a key to a filthy bathroom if you asked nice and you're buying.

Now, they're like 7-11s a lot of them are damn NICE. There's one on my way to/from Town that has Guinness in pints, all kinds of neat stuff. Huge candy rack, sandwiches, good coffee, you name it. Even some decent clear glasses for motorcycle riding, of which I might buy a pair. It's a regular emporium. They make large profits on the energy drinks and Harley beef jerky, and may not make much of anything on the gas, or even lose a little on it.

Gas at $7 a gallon might see plenty of little 250cc tiddler bikes and scooters, people buying 2-3 gallons at a time and still buying stuff in the store part of the station. It'd actually work out better for them.

Wait till demand picks up after Memorial Day. Gasoline should at least catch up to diesel then. If it doesn't, it will be a sign the economy is in pretty bad shape.

And if others are not across the street?

Pulled in yesterday to fill, marquee said diesel $4.10. At the pump, started filling, but it was real, real slow. After what seemed 3 or 4 minutes, had only pumped 3 gals. Finally thought the heck with it, get more later, had a half tank anyway. Paid for what was pumped, and as we drove out, the marquee reads diesel $4.31.

Edit I never would have thought that kind of price hike would occur-middle of the day, and 21 cents per gallon instantaneously. Later we figured we had tripped the nozzle before they could hike the price, so they slowed delivery to a trickle. It seems they could have let one more sale at the advertised price, only a pickup. But it was a one horse town on a long road.

Competition. If they raise their price, they lose market share. It's tough to charge $5 when the station across the street is charging $4.

Exactly. Here's one way to help people understand. Look at refinery utilization. It is way below the level of a year ago. Why? Because margins are low, thus there is no incentive to run full speed ahead. But that also means that there is lots of spare capacity waiting to step into the gap. If XOM raises prices, and BP has lower marginal costs, they have the capacity to crank up and steal XOM's customers.

This was not the case a year ago. Refineries were running pretty much full out, so there was nothing to stem rising prices.

"This was not the case a year ago. Refineries were running pretty much full out, so there was nothing to stem rising prices."

This is perplexing. If refineries are NOT running full out, then how can the amounts being delivered and consumed be the same or higher than last year? If refineries are NOT running at full capacity, then why aren't we having shortages/gas lines if quantity demanded remains unchanged or slightly higher than last year? If gasoline demand remains about the same Y/Y and refinery utilization is down, shouldn't we see a big spike in gasoline imports to make up the difference?

We have seen a big spike in gasoline imports. That is what drove inventories to ultra-high levels. Last year at this time they were at record low levels.

This EIA data sheet, http://tonto.eia.doe.gov/oog/info/twip/twip_gasoline.html shows imports as higher in 2007 and is displayed directly below the table in graph form. The US Finished Gasoline Production graph shows the lower refinery utilization rates in question. The table showing US Gasoline Demand does show demand to be down ever so slightly from 2007, the graph underneath showing just how little this reduction is.

The weekly dataset, http://tonto.eia.doe.gov/dnav/pet/hist/wgtimus2w.htm shows some of the seasonality of prior import spikes.

So, if there's a "glut" of inventory, why are gas prices rising when they were much lower with a smaller inventory level?

This EIA data sheet, http://tonto.eia.doe.gov/oog/info/twip/twip_gasoline.html shows imports as higher in 2007

Look at December 2007 versus December 2006. Imports surged during that time year over year, which is why we are in the present inventory situation. (Actually just looking at the link, and they do in fact show this years imports higher than last years).

So, if there's a "glut" of inventory, why are gas prices rising when they were much lower with a smaller inventory level?

Because oil prices have risen so much. Gas prices rose, but not as fast as oil prices because of the problem with refiners having excess capacity - and because imports surged. Margins eroded as a result.

Do you think there is some simple relationship between the crack spread and maximum refinery utilization rates? Ie, utilization won't go over 85% until the crack spread is >$15, utilization won't go over 88% until the crack spread is >$20? Ok, maybe not a "simple" relationship, but maybe some guesses about some key points on such a curve?

You could probably sketch out a rough relationship. The two - utilization and margins - definitely have a relationship. Inventories and imports also factor in, and all are interrelated.

We'll both raise our prices together. But that's illegal in the free market.

I'm not sure that oil is a free market at all - OPEC clearly controls about half the supply and there are distorting taxes and subsidies in most countries of the world.

If there were a free market for gasoline wouldn't we all pay the same price.

Why is it OK for governments to manipulate the prices we pay, and for the G7 to act in collusion - surely the G7 is a cartel as well?

Given the history of OPEC it was only during the early 1970s that it kept oil prices high. The rest of the time Saudi Arabia was flooding the market and most of the OPEC members cheated on their quotas. So OPEC has been a toothless cartel. Some think that OPEC is distorting the market today, but they are not aware that OPEC does not have the production slack it had before.

The "free market" is totally incapable of anticipating decline and rationing depleting resources. Khebab once posted a figure of price and production of whale oil (I believe) that shows the standard schizophrenic response. Instead of gradually increasing prices well in advance, the market pretends there is no problem until conditions of shortage develop. Then the price goes into a wild oscillation as consumers are driven out of the market leading to price drops and then surge back to drive prices up again. There is no invisible hand to guide anything (and that is not what Smith meant by that term anyway). You need regulation to give the market any sort of intelligence.

The EU has the right policies: high gasoline taxes and subsidized public transit.

Or another hypothesis is that we're in an election season, and the oilcos are absorbing losses and trying to lay low until they get past November.

Because you get other things out of that barrel in addition to gasoline.

Because the Other 22 gallons of product have value as well. For instance after you get your ~20 gallons of gasoline. You Still get about 6-7 gallons of Heating Oil and about 5 gallons of kerosene Jet Fuel. After this you get a whole host of other useful industrial petrochemicals and at the bottom of the barrel literally things like asphalt.Unlike the 1920's and 1930's no part of a modern barrel of oil is not resold for something. All this processing of course takes energy see the discussion of EROI for a discussion of the ratios involved.

It's true that there are 42 gallons of crude in a barrel, which means at $110.00/barrel you theoretical get $2.61/gallon. But that's probably the price that the refiner pays. Then there are operational (refining) costs, shipping costs, profits, and overhead costs. Also consider that some of the products of those 42 gallons are burnt off to generate heat to get the distillation towers working. These factors raise prices.

On the other hand, some of those refined gallons (kerosene, for example) sell for up to $5.00-to-$7.00 per gallon, so that counter-balances the price downwards for the gasoline. However, the actual pricing process for each gallon is a confusing mystery to me.

the $110 you quote is for wti, crude oil is discounted for gravity and sulphur content. domestically, there can be price differentials as well, depending on supply and demand. during the winter months, there is an abundance of heavy oil coming south from canada.

OPEC’s Monthly Oil Market Report is out this morning, with production data for March 2008. The data is on the very last page of the 57 page PDF file.

Production figures, in thousand barrels per day and comparison to February production, also in thousand barrels per day.
Algeria … 1,400 … down 10
Angola … 1,880 … down 10
Ecuador … 500 … unchanged
Indonesia … 880 … up 10
Iran ……... 3,960 … up 90
Iraq ……... 2,390 … up 60
Kuwait … 2,510 … down 40
Libya ….. 1,740 … unchanged
Nigeria ….. 2,020 … down 40
Qatar …… 840 … unchanged
Saudi ….... 9,020 … down 40
U.A.E. ….. 2,530 … down 50
Venezuela … 2,330 … down 60
OPEC 13 …. 32,010 … down 80

Ron Patterson

There's a more detailed chart on P31 with slightly different figures.

Thanks Undertow for posting this. I had missed it because I always go straight to the last page because I know that is where the figures are. There are two reasons these numbers are slightly different. One is because the numbers posted on page 57 are rounded to the closest 10,000 and two, the numbers for February have been revised in the above table. I was using the February numbers from last months report.

Ron Patterson

IOC Response To Recent Posturing on Oil Company Profits.

Yesterday, I received an unsolicited email at one of my freebie Yahoo! accounts from the "Partnership For Energy" which is apparently a spokesman/lobbyist/arm of/mouthpiece/advocate/defender (choose 1 or more) of the American Petroleum Institute. [Note: As far as I know I'm NOT a "Partnership Member"]

Dear Partnership Member,

In many cases, misinformation or misunderstanding is creating hostilities that threaten to damage our nation’s energy security, now and in the future. To promote understanding and positive progress, the American Petroleum Institute has produced “The Truth about Oil and Natural Gas: An API Primer,” an in-depth look at the economic, political, and social factors that are affecting the oil and gas industry, and energy in general.

As an advocate for energy security, we strongly encourage you to read this primer. To help promote broader understanding of global energy needs and the factors that must be considered as we make energy decisions, please also take a moment to share it with your friends and colleagues.

Thank you for your continued support of the Partnership for America’s Energy Security. With your help and the help of others like you, we’re fighting for energy security in America by promoting a balanced approach to our nation’s energy policy and legislation.

Link for the "primer" (35-page PDF warning) is:


A video version was linked at:


At first glance, the arguments presented seem fairly level-headed and plausible, and resemble some of the observations Robert Rapier has made in the past. Anyone care to look at their claims more critically??

I posted on this document last week and asked the same question with no response of which I am aware.

The facts seem to be in order, but the obfuscation is masterful.

For example, page 24. The standard API plea for unrestrained drilling and production everywhere within the US. "We have abundant volumes of oil and natural gas resources beneath federal lands and coastal waters..." "For example, according to federal government estimates, there is enough oil in these areas to power more than 60 million cars for 60 years."

Abundant? The charts says 112 Billion barrels. They don't cite a source. Even if it is truly 112 Billion barrels, at 21 million barrels a day, that is 14 years of supply for the US. So why did API state that there is enough oil to power 60 million cars for 60 years? There are 250 Million cars in the US, more than FOUR TIMES as many as they cite.

The reason, of course, is that they don't want the average person to realize that even if we allow full unrestricted access to every area of the US for oil production, we are still screwed before our newborn is old enough to drive. They are still trying to give the "everything is OK message".

The responsible message in my opinion would be that even if the US produces everything it can, we are going to be in a world of hurt soon, so let's come together and figure out how to have a smooth transition while responsibly extracting the remaining treasure. Is that so bad? Apparently so.

I hate how I sound more and more like a conspiracy theorist, but in my opinion the scarcity message is being suppressed because if reality hits Joe Public between the eyes, they are going to put two and two together and the reality of the reason behind the middle east wars will become apparent.

Shallow Yerginite at Deutsche Bank?

Deutsche Bank downgraded Transocean Inc. late Monday, saying the offshore drilling contractor may be focusing too much on deep-water operations and not enough on shallow-water risk. "Thematic" investing interest in deep-water opportunities may be overshadowing the true value of the shares, he said. A trend that is unlikely persist in a commodity industry, he wrote.


If you have any gift cards kicking around, it may be prudent to use them soon. And don't count on being paid for the time you've worked either.

Retailing Chains Caught in a Wave of Bankruptcies


A quote:

"Changes in the federal bankruptcy code in 2005 significantly tightened deadlines for ailing companies to restructure their businesses, offering them less leeway.

And the changes may force companies to pay suppliers before paying wages or honoring obligations to customers, like redeeming gift cards, said Sally Henry, a partner in the bankruptcy law practice at Skadden, Arps, Slate, Meagher & Flom"

Peak Retail

Someday all of these chain stores will be gone -- all of them. This is just the first wave.

Good riddance

That's my feeling. Most of these stores were just feeding the hyper-consumerism binge. It sucks that people lose their jobs, but I don't know how else these sorts of imbalances get corrected.

I don't know about that. There are advantages to economies of scale that do indeed result in cost benefits to consumers (more benefit to shareholders). I know its not a popular view but the development of China is a good thing even though it has resulted in considerable hardship for some sectors of the US economy. My feeling is that China today has far less reason to embark on foreign adventures than it did in 1970s primarily due to economic disruptions that would result. There has to be a middle ground between large scale enterprise and small scale enterprise. I am not sure how will be accomplished but I would imagine that price signals & quality of service would be strong drivers.

Additionally a large scale reorganization to local production (of food but not exclusively) will be very hard for the US. Lots of those skills have been dispersed and, quite frankly, lost. So in order to build them back, we will have to embark on changes to the education system. We will also have to accept less packaging and more bulk purchasing. Co-operative purchasing clubs will need to be developed as well as neighorhood markets. These are all good things in the end, but people will still look back at those well stocked grocery shelves, with out of season produce and inexpensive goodies from around the world, with great nostalgia. Those days will be seen as the "Good Old Days".

We will also have to accept less packaging and more bulk purchasing.

I think most people living outside the USA would say that Americans bulk purchase already - and then some!

The thing is, there are examples of independent, locally owned alternatives to every single category of these chain stores. Such independents could exist in every community of every size and totally fill the niches vacated by the chains (at least that small portion of the niches that really needed to be filled). The independents have been fighting for their lives against these chains with their sweet local-government tax abatement deals and their predatory pricing practices. Given a truly level playing field, the chains would never have come to predominate retailing to the extent that they have.

If the chain shuts down the store, the store is still there and can be leased/bought by somebody else. The local governments make a lot more money on the sale of stuff than the stores do, because the sales tax is far higher than the profit margin, so that local governments will do whatever is necessary to fill any store that shuts down.

I don't think you can make an argument that local government tax abatements account for much of the lower prices. Economies of scale and better management are much more likely. And what you call predatory pricing, is really just being cheaper, which benefits consumers.

In Thailand we used to have horrible mom and pop retailers with half of the items out of stock and the other half collecting dust way beyond its expiration date. If you bought something and it broke, it was your tough luck.

When chains sprung up and ofered people better goods at cheaper prices, they became very popular. I know they have made my life better and I barely buy anything anywhere.

What I call predatory pricing is deliberately selling a lot of stuff below cost when a new chain store first opens up, until the local competition has all been driven out of business, then jacking their prices back up to their national averages. Yes, it most certainly does happen. Read "Big Box Swindle" for yourself.

There was a time when this was supposed to be illegal, back when this country had laws and a government that cared about protecting the little guy, or at least maintaining a fair and level playing field. Now it is just called "efficiency". An efficient way to line the pockets of politicians and fat cat corporate CEOs, mainly.

I hate those %*^ %*$@&% chain stores.

And we have so far to fall too, I think this is just the beginning. In the US, we average over 20 sq ft of GLA (gross leasable area) per person in the retail sector. Right behind us is Sweden, at 3.3 sq ft.

This is great. Can you post a link?

The source appears to be this April 2004 article:

today Italy has 430 shopping centers, totaling 67.4 million square feet. But taking into account a national population of nearly 58 million, that amounts to 1.2 square feet of retail space per capita, compared with 2.3 square feet per capita in the United Kingdom, 2.2 square feet per capita in France and 1.3 square feet per capita in Germany, according to Cushman & Wakefield Healey & Baker. (The United States has 21 square feet of retail space per capita, according to ICSC.)

If you right-click on the photo and select properties, you will get the URL, http://www.oftwominds.com/photos07/retail-sq-ft.png

Google's site search provided this link:


Its a helluva long page, and very interesting.

I was aware that since 1950, average or median (trying to remember) SFR (single family residence) size has increased 240% (as household size shrank) and per capita retail space has increased x10.

It appears that the rest of the world did not follow suit.

I will have to pace off the dimensions of Zara's Grocery tomorrow (already shopped there today :-)

Best Hopes for narrow aisles and busy neighborhood stores,


Britain biofuels usage requirements began today. As British law requires, the situation might worsen:


The world's grain stockpiles were near record lows. If the United States goes forward with its plans to convert more grain to biofuels, then they will need massive grain imports in a world starved for grain. Some sort of changes might be required.

Top of the Hour News: 11:00am Pacific (US) time

Consumer prices up 1% last month; oil up to a new record high, analysts say "for no solid reason".

"for no solid reason"..

If we could just let them know that there's a 'No Liquid' reason as well..

Leanan's link to Oil scarcity hits Mizoram as tanker drivers agitate does not tell the whole story. from national geographic, crazy,Some species of bamboo flower only every 40 to 50 years

Hello Earldaily,

Thxs for the informative links! Interesting how bamboo blooms sets off a rodent Overshoot which then causes the human Overshoot to receive a serious whack.

Interesting how bamboo blooms sets off a rodent Overshoot which then causes the human Overshoot to receive a serious whack.

A good pinyon crop supports a deer mouse boom & more Navajos die from the rodent vectored Hanta virus. That's just nature for ya.

The Albania Model

Looking outside, where spring is kicking in for real, I’d almost get all happy and positive. Looking at the news, though, I get the opposite effect. The reality of what is going on at Fannie and Freddie (we can include Ginnie Mae, FHA and FHLB) is hitting home in the main media. Of course this comes long after you have been able to read it here, nothing new there.

I must admit, some of the numbers surprise even me. F&F’s share of the US new mortgage market has increased to over 80%. That is totally insane. How bad do you imagine home sales would be without all that public money? It’s Nationalization 101.

...Since last Wednesday, when the Fed announced the intention to become a giant debtor to the American people, instead of the creditor it is by law required to be, the whole discussion about nationalization has become sort of obsolete. Or, to put it in the symbolic terms, or metaphors, I have been using here, we are on the doorstep of the cross-over between The Bulgaria Model and the next phase, The Albania Model. The difference is of course that in Albania, secrecy and oppression were -perhaps still are- an order of magnitude more severe. Think of it as meaning that you yourself are being nationalized, not just the housing and finance sector.

Hello TODers,

NAIROBI, Kenya (AP) — Fears of retaliation from an outlawed Kenyan gang kept thousands of buses off streets and snarled transportation for commuters Tuesday, a day after street clashes between police and the gang killed at least 13 people, officials said.
As a fast-crash realist: I expect things to get much worse soon as cascading blowbacks reinforce each other to accelerate decline.

Recall my recent posting on Kenya's commercial farmers just planting enough for their own families because of skyhigh I-NPK prices or outright shortages, plus insufficient rainfall, plus high fuel prices. I hope and work for Peak Outreach so everyone in the US will forget Britney Spears, then study Third World decline, which I expect to be horrendous, so that we can mitigate our decline. Time will tell.

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

I agree with you, that things will get much worse soon. Recently there was an article about Indian farmers not able to pay enough for the fertilizers they need. And then was the story about Uralkali hiking their prices again. And then one could read, that China is imposing massiv export taxes over their phosphat exports.

How can the crop worldwide surge, when there is not enough fertilizer awailable resp. when more and more farmers cannot afford it?

That's peak oil. Oil is the lifeblood of all economies.

Inflationary trends in food and energy... I don't expect this pattern to really change.

Wholesale prices soar in March

The Labor Department reported Tuesday that wholesale prices rose by 1.1 percent last month, the largest increase since a 2.6 percent rise last November, which had been the biggest one-month jump in 33 years. Analysts had been expecting a much more moderate 0.4 percent rise in wholesale prices for the month.

For March, energy prices jumped 2.9 percent, the biggest increase since November. The price of gasoline was up 1.3 percent while natural gas rose by 4.2 percent. Home heating oil shot up by 13.1 percent and diesel fuel, used to power the nation's trucking fleet, increased by 15.3 percent.

Analysts believe the economy will be hit with more energy pressures in coming months, reflecting the fact that crude oil costs are remaining at record levels above $111 per barrel.

Food costs rose by 1.2 percent in March, reflecting big increases in the price of vegetables, rice, and beef.

Outside of food and energy, the price of soap and detergents jumped 2 percent, the biggest gain in more than two years, while pet food increased by 1.3 percent.

However, the price of new cars dropped by 0.2 percent and the cost of light trucks was down 0.3 percent, indicating the struggles that automakers face as a weak economy dampens demand.

Deflationary trends in auto, housing & finance- inflationory trends in food & energy... I don't expect this pattern to really change.

Thanks westex... er wait, I mean euro... O_o

I know, these are westex words.

But this is so important, that I repeat it. Better than to read those "analysts", which change their minds every day. I stick with it!

Hello TODers,

The Philipino leader is showing some common sense:

MANILA, Philippines - President Gloria Macapagal Arroyo on Tuesday encouraged farmers to use organic fertilizers instead of chemical fertilizers like urea, the price of which she said had skyrocketed by 200 percent in the last two years.

She said billions more would be spent on infrastructure such as ports, airports, farm-to-market roads and the rehabilitation and establishment of new irrigation systems.
I don't agree with spending money on airports. I would rather see her direct those funds for buying bicycles & wheelbarrows, plus building SpiderWebRiding infrastructure, to further boost O-NPK recycling from the cities and towns back to the growing areas.

Recall my earlier posting on railbikes riding atop adobe irrigation networks, then compare to the earlier image of a farmer hiking home with a 100 lb sack of I-NPK on his shoulders [doing a perfect imitation of a Nuahtl Tlameme, which is exactly the last thing we should be doing!].

I hope any biometric specialists here on TOD are closely investigating the larger dispersive area, geo-logistic postPeak limits of bicycles, wheelbarrows, and railbikes. IMO, it has to be much more efficient and resilient than the iconic pictures of African women carrying loads on their heads, or the Chinese porter carrying a heavily laden loadpole across his shoulders.

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

How about wheelbarrows on rails? Railbarrows. Anyway, keep generating those great ideas. Just wanted to say that I am always interested in reading your posts as I can always expect something creative to come out of that interesting brain of yours. You appear to be even smarter than yeast.

Tom in Colorado

Hello Tstreet,

Thxs for responding. I have briefly elaborated on precisely that in earlier postings. A person on a cargo-railbike might be able to pedal a 500 lb load 10 miles for the same caloric burn as a poor bastard carrying a 100 lb load across his shoulders for two miles. I have no idea on the biometric specifics, which is why I hope biometric specialists will investigate this before we get too far postPeak.

Some more thinking: nearly everyone can pedal a railbike; everyone can physically contribute to this moving of vital goods from the endpoints of Alan's ideas. For example: an older person could be assigned to a short haul route; pedal 100 lbs just two miles, then return with much more weight if the backhaul is a downhill glide. Let's say this took one hour of their time. Then this older person could spend the rest of his/her working day teaching Peak Outreach to kids in scholl or some other useful task.

Obviously, the young Lance Armstrong-type studs would do the more arduous and/or greater distance hauls, but they could be rewarded with greater pay or foodstuff rewards. To my imagination, it could be a pretty cool pedaling job: you are comfortably recumbent, listening to your IPOD and watching the scenery go by, or you could be pedaling away and simultaneously surfing TOD, EB, and LATOC on your solar-powered wireless network laptop.

Recall my prior posting on a female giving a male railbiker a free lapdance during a long downhill glide to save their greater caloric energy burn of foot-hiking this distance. This is much better than the currently ongoing, but unsafe sex system of Zimbabwe women having to offer 'bottom currency' to close a deal. I posted the link detailing this unfortunate trading system some time ago.

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

This is old, but funny. Kinda angers me at the same time though...

Is racing a waste of gasoline?

"I think the fuel consumption is insignificant compared to the number of people who are enjoying the consumption of the fuel," Smith said. "When you've got up to 200,000 people at some tracks getting some pleasure out of the consumption of 10,000 gallons of fuel, that's a much better ratio than the person who commutes 50 miles back and forth to work alone in his SUV."

Hello Spudw,

Thxs for the link, but live attendence at circuses such as this will rapidly decrease as energy costs rise. Picture mostly empty stadiums, but lots of cameras until the low TV ratings kill off sports such as this. If most people are pedaling, I would expect local bicycle-racing to be the popular sport.

If US Peak Outreach does not become universal: the future local sporting events you can expect to be popular will be those trying to burn cars, buses, trains, and looting shops vs those trying to prevent such actions [as is currently seen in many Third World countries]. I just don't understand how people think throwing a molotov cocktail will lower food & energy prices permanently. They should use the bottle for food storage or for building a solar hot water system for their house instead. I wonder if, while they are later carrying 30 lbs for 5 miles on their heads while foot-hiking, it finally occurs to them that burning and wrecking infrastructure is a pretty dumb thing to do.

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

My fiancee is a big Nascar fan. I don't get it myself - every race looks the same as every other, and sports that are loud really start to annoy me. I get her back though - I watch professional bicycle racing on TV - she really doesn't get that :-).

My point though is that the vast majority of the fuel that is consumed is to get those 200,000 people to and from the track. The amount that they consume during the actual race is inconsequential in the broader scheme of things. They might as well be racing horses for all the difference it makes. Some (not all) Nascar tracks are out in the boondocks, which guarantees that fans might have to drive long distances.

To an extent any spectator sport could be subject to the same thing. Baseball on the other hand tends to have the stadiums in large cities, so fans don't really have to travel very far at all to watch a game. In some cases, mass transit is available.

Getting back to Nascar, say for example, people arrive two per vehicle, and on average they drive 300 miles each way to get there. Further assume 20mpg (probably high - many drive RVs). For 200,000 spectators, that gets me to 3 million gallons of fuel for the spectators. Then when they get there, they have to pay to park the RV, pay for food (prices increasing), alcohol, tickets, and other assorted things.

My fiancee was telling me that Nascar has started sounding concerned that demand for tickets is softening. That people who used to go to 6 races per year are scaling back to 3. Those who did 3 might scale back to 1. I gather that they still sell out nearly all of the seats, but it doesn't go quite as quickly as it used to.

One can now pay to watch Nascar on Direct TV. I am not a fan but did watch on the free preview day. There are cameras in the cars and fans can watch and can often listen to continuous two way radio transmissions involving a favorite driver. "You are in in 4th place, car 33 is immediately behind you, car 7 is trying to pass on the left" The subscriptions to this and other sports are not cheap but like so much of modern technology, allow one to sit on the couch and save energy.

I don't think Kunstler et. al. are necessarily opposed to the gasoline consumed at a Nascar race itself. Rather, after going to the race, people start to think that looking for a parking space at the local mall in a 450hp vehicle would be pretty fun.

It's hard to get out of this mindset, and into the mindset of: walking out my door and down the street to the local subway stop, and then transferring to a train at the city station and taking it virtually anywhere in the country, at low cost and high convenience, would be pretty fun.

Edmonton Alberta uses the airport in the city as a race track for one weekend a year, this might just be a leading edge thing. A good use of all the down time for the reduced time that big airplanes will be using runways all over the country in the future. Seems to me that a holiday in town might be cheaper than flying to some deforested beach.

I expect NASCAR to become a PO religion as we slide
done the backside of the production curve ..

Triff ..

Battery vs heat storage.

What the Ausra guy says may be true but I think it needs a dedicated facility, not a back yard. At Australia's King Island wind farm they have a vanadium flow battery which occupies a large building for just a few hours storage. They are going to get a graphite block, smaller than a shipping container I believe, that can do the same job. However there will be moving parts for steam machinery and the problem of heat regulation as the block cools. I wouldn't give up on batteries yet for grid storage.

I wouldn't worry about those melting glaciers. Senator Inhofe says the winter in his home state of Oklahoma was the coldest he could remember, and said none of Al Gore's predictions have come true. Of course Oklahoma is regional weather, not international, it is a La Nina year which are colder and Al Gore's movie only came out a few years ago so there hasn't been enough time to know if he is right, but also Glenn Beck agreed with him. So there's two wacko pseudo scientists that agree with each other. That should give us all some level of comfort - cough, cough.

Inhofe probably has a very short memory, not to mention the fact that Oklahoma hasn't really had any real winters in several years. In fact, they have been having wildfires in the middle of winter. We don't need additional time to know if Al Gore was right; we have the global record to prove it.

Hello TODers,

Equity Bank will give loans worth Sh1 billion to farmers growing maize and cereals, to help them buy fertiliser for the current planting season.

The price of the input has trebled recently due to global high oil prices. The credit will be offered in partnership with farm inputs supplier and fertiliser manufacturer, Mea Limited.

The loans will attract a 15 per cent interest rate charged on a reducing balance, he said. They will also come with a three-month grace period. However, the service is only available to stockists recommended by Mea Limited.

Fertiliser use in Africa is still low, and companies are using innovation to increase its penetration in the country, that would in turn lead to higher yields.

“In Kenya, the current usage is 8 kilos per hectare while in the West it is about 100 kilos per hectare, which is a huge contrast,” said Mea director, Titus Gitau.
I think this bank hasn't been reading my 'Federal Reserve Banks of I-NPK' postings; it should be called 'Parasite Bank' instead of 'Equity Bank'.

If they understand Peak ramifications: they should postPeak participate in the rising costs of fertilizer by helping the farmer purchase early with the investor/farmer scheme I outlined earlier. This way all can get ahead of the curve and profit equitably. The investors, especially if they help the farmer with soil-testing and modern practices, can then reap solid biosolar asset rewards vs ficticious fiat rewards.

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

Hello TODers,

LOS ANGELES — Link Leaven's fertilizer bill has been growing faster than the lemons and avocados on his Ventura County farm.

Every week or so, when he orders another truckload of the nutrients, he's been getting hit with a price hike of up to 20 per cent.

"It's like there's no end in sight. It's very scary," said Leaven, who pays US$600 for a ton of some fertilizer mixes that he paid half as much for just six months ago.

...Joe Burdullis, co-owner of Oxnard, Calif.-based fertilizer supplier AG RX, said he's been receiving a constant stream of price-hike notices in recent months from dozens of manufacturers.

"We'll get four or five different price increases in any one day," said Burdullis, who has been supplying growers in Ventura and Santa Barbara counties for about 50 years. "I've never seen anything like this."
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Hello TODers,

Hedge fund managers, those masters of a secretive, sometimes volatile financial universe, are making money on a scale that once seemed unimaginable, even in Wall Street’s rarefied realms.

One manager, John Paulson, made $3.7 billion last year. He reaped that bounty, probably the richest in Wall Street history, by betting against certain mortgages and complex financial products that held them.
My guess is he read Stoneleigh and Illargi here on TOD, probably still avidly reads their stuff over at Automatic Earth.

same NYTimes link:
Since 1913, the United States witnessed only one other year of such unequal wealth distribution — 1928, the year before the stock market crashed, according to Jared Bernstein, a senior fellow at the Economic Policy Institute in Washington. Such inequality is likely to impede an economic recovery, he said.

“For a recovery to be robust and sustainable you can’t just have consumer demand at Nordstrom,” he said. “You need it at the little shop on the corner, too.”

And Mr. Gross, the fund manager, warned that the widening divide among the richest and everyone else is cause for worry.

“Like at the end of the Gilded Age and the Roaring Twenties, we are going the other way,” Mr. Gross said. “We are clearly in a period of excess, and we have to swing back to the middle or the center cannot hold."
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Hello TODers,

When the famous bank robber Willie Sutton was asked why he heldup banks he replied, "That's where the money is".

I guess it is now more lucrative to rob farmers:

Search across two states for fertiliser thieves

Detectives from two states are searching for thieves who stole $32,000 worth of fertiliser in Western Australia.

A farmer from Salmon Gums, in south-west WA, discovered the 23 tonnes of fertiliser missing when he checked his shed.
$1,391 AUS/ton or $1,286 USD/ton--> Ouch! That has got to really hurt if this farmer didn't have any insurance to recoup his losses!

It wouldn't surprise me if these thieves get the maximum sentence to quickly halt any future growth of this sad trend.

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

I just had to react to this even if late in the day....

There is plenty of food. It is just not reaching human stomachs.

from the article by Monbiot.


The recent rise (not so recent but at a tipping point in the mainstream media) in food prices is catastrophic for many and I don’t mean to make light.

But it ain’t new. Ppl have been starving since 1950 to take off only then...

The present disturbance and outcry seems to be spurred by fear in developed countries. (One factor only.)

Either because ppl *at home* may be hungry or just feel deprived, and pissed off, and object, or do other non PC things, threatening the present system of ersatz, TV, democracy.

Or because the dominant world order, which prides itself on furnishing better conditions in ‘emergent’, i.e. poor countries, the fairy goodness of free-market rapine, all that - is menaced.

Current prices overall represents a failure of modernity, modern agri, finance, re-distribution, etc. (all in inverted commas) - a blow, a setback.

Nobody knows (?) what is due to ‘low’ stocks, reserves, and future predicted low (or high!) productivity; to perceived scarcity; leading to hoarding for higher profit; as well as the casino crowd, the commodity traders, gleefully cashing in or trying to, heh a Mars Bar, Sushi, poulet gumbo, bubble!

Food prices will not come down, or maybe only a little next year, not enough to make a difference.

I used to quite like Monbiot till I read more by him. Blame is shunted down the chain - it’s those ridiculous bio-fuels (which can be championed in other articles, not targetting him specifically, just the softie-collaborationist-left), people eating more meat (he is right in that, but takes it as a fact of life, there is nothing to be done...), all those foreign corrupt Gvmts, faulty transport, stupid UN, crappy bureaucracy, rain, drought, etc., to take up what is often mentioned, the standard fare, not specifically that one article.

Hunger, disease, death, (not genocide...) is related to a kind of failure of calculation by bureaucrats, the imperfections of the free market, and other minor glitches, thus reassuring all in the ‘west’ that they are doing good, and there are just a few problems to iron out. Or simultaneously, it all so *gasp* terrible there is nothing to be done, but we can still scoff Mars Bars. Readers can choose, and turn the page, or turn on the TV.