DrumBeat: April 27, 2008

Oil strikes new record near $120 on supply fears

PERTH (Reuters) - Oil struck a record high at $119.93 a barrel on Monday, extending the previous session's rally, as a strike closed a major British oil pipeline and as fresh violence in Nigeria reignited supply fears.

Simmering geopolitical tensions between the United States and Iran also helped boost oil prices.

U.S. light crude for June delivery rose 81 cents to $119.33 by 2249 GMT, after striking a lifetime high of $119.93 a barrel at the start of Globex electronic trade.

Oil May Hit $200 as Refiners Buy Costlier Crude, Verleger Says

(Bloomberg) -- Crude oil may rise to $200 a barrel by the end of the year as refiners increase purchases of low- sulfur oil to make diesel fuel, economist Philip Verleger said.

Ultra-low-sulfur diesel powers most U.S. trucks and diesel- burning cars. To make the fuel, refiners are buying more-costly low-sulfur oils such as the West Texas Intermediate crude traded on the New York Mercantile Exchange, said Verleger, president of PKVerleger LLC, in an interview.

``It's conceivable'' oil could rise to $200 a barrel by the end of the year, he said. If economic ``growth resumes, we are short diesel and no way we are going to fill the gap.''

Running on Empty

It used to be that only environmentalists and paranoids warned about running out of oil. Not anymore. As climate change did over the past few years, peak oil seems poised to become the next big idea commanding the attention of governments, businesses and citizens the world over. The arrival of $119-a-barrel crude and $4-a-gallon gasoline this spring are but the most obvious signs that global oil production has or soon will peak. With global demand inexorably rising, a limited supply will bring higher, more volatile prices and eventually shortages that could provoke--to quote the title of the must-see peak oil documentary--the end of suburbia. If the era of cheap, abundant oil is indeed coming to a close, the world's economy and, paradoxically, the fight against climate change could be in deep trouble.

Oil majors rebuked for lack of openness

Most leading oil multinationals fall well short of best practice on revealing financial data and combating corruption, a survey by Transparency International, the anti-graft group, claims.

Thousands protest Mexico energy reform plan

MEXICO CITY (Reuters) - Thousands of people, some dressed in oil worker jumpsuits, protested a Mexican energy reform proposal on Sunday that leftists say is a veiled attempt to privatize the cherished state industry.

Producers to discuss "gas OPEC", Iran says

Iran (Islamic Republic of) - TEHRAN (Reuters) - Representatives from natural gas producing countries meeting this week will discuss forming an OPEC-style grouping, an Iranian official said on Sunday, a move opposed by the United States and the European Union.

Petrol rationed to stop hoarding as supplies dwindle on the forecourts

Britain's motorists faced rationing at petrol stations yesterday, as major suppliers tried to stop them hoarding fuel. Concern over supplies as the Grangemouth refinery in Scotland closed down led to fuel queues on forecourts across Scotland, the north of England and parts of Wales.

Panic over future supplies grew as news spread that BP's Forties pipeline in the North Sea would be fully closed by today and that it could be two weeks before the supply line is fully functioning again.

Transit Strike Strands Riders Across Toronto Without Notice

OTTAWA — Thousands of passengers were stranded early Saturday morning after an unexpected strike by transit workers in Toronto.

The city’s subway, bus and streetcar network was shut down shortly after midnight on Friday after 65 percent of 8,900 unionized workers rejected a tentative contract that had been endorsed by their union’s leadership.

GasHole: Dirty Oil and the Biofuel Myth

This week marked the world premiere of GasHole, a new documentary film (narrated by Peter Gallagher) about the history of oil prices and the future of alternative fuels.

In Argentina’s Grain Belt, Farmers Revolt Over Taxes

WENCESLAO ESCALANTE, Argentina — When the government decided in March to raise taxes on farmers’ profits, it set off a rural revolt in Argentina. For three weeks enraged farmers blocked roads nationwide, paralyzing grain and meat sales and causing food shortages.

Global Food Crisis: The Ticking Bomb - Malthus must be smiling in his grave

Why is there a food crisis and why are global food prices rising?

It is a question much of the world may soon be asking, and its answers are various: high energy costs, the weak dollar, government subsidies to farmers every year in rich nations, increased production of biofuels, bad weather in Australia, inferior distribution processes, food politics, soaring fertilizer costs and rising consumption in Asia, especially in India and China.

Freer Trade Could Fill the World’s Rice Bowl

RISING food prices mean hunger for millions and also political unrest, as has already been seen in Haiti, Egypt and Ivory Coast. Yes, more expensive energy and bad weather are partly at fault, but the real question is why adjustment hasn’t been easier. A big problem is that the world doesn’t have enough trade in foodstuffs.

Bicycle-Sharing Program to Be First of Kind in U.S.

WASHINGTON — Starting next month, people here will be able to rent a bicycle day and night with the swipe of a membership card.

A new public-private venture called SmartBike DC will make 120 bicycles available at 10 spots in central locations in the city. The automated program, which district officials say is the first of its kind in the nation, will operate in a similar fashion to car-sharing programs like Zipcar.

Home Brew for the Car, Not the Beer Cup

WHAT if you could make fuel for your car in your backyard for less than you pay at the pump? Would you?

Governor Lingle Failing to Deal with What is Happening With Small Businesses and Our Fragile Hawaiian Economy

The severe and deep impacts of the petroleum “shortage” are created by politicians and regulations. Oil is only a commodity. It is reprehensible that U.S. is dependent on Venezuela who can mine its petrol reserves beyond our nation’s producers opportunities?

Diamond lanes for the rich

Los Angeles Mayor Antonio Villaraigosa called the move "a great opportunity to think outside the box," and added: "Part of the reason Los Angeles has not been able to grapple with gridlock is because we've been unable to make the tough decisions."

Right. It takes unconventional and courageous thinking to come up with a plan that clears a highway lane for the well-off, while the middle class and working poor are left to inhale each other's $5-a-gallon exhaust fumes.

Trade war brewing over US biofuel subsidies

European biodiesel producers triggered a fresh transatlantic trade war yesterday by urging the EU to impose punitive duties on cheap imports from the US.

Flashback: The Games Oil Prices Play

On Nov. 1 last year, a group called Securing America's Future Energy ran a game-playing exercise with nine mucky-mucks like former Treasury Secretary Robert E. Rubin, prize-winning author and consultant Daniel Yergin, former deputy Secretary of State Richard L. Armitage and Gen. (Ret.) John P. Abizaid. The goal: to dramatize the risks of a price shock if some unexpected event threatened world oil supplies. The scenario: unrest rocks Azerbaijan and an explosion cuts off a million-barrel-a-day pipeline. The scenario was called "Shockwave" and it envisioned an urgent meeting of the National Security Council to deal with the "crisis."

And what was the price of oil during this hypothetical crisis? $115 a barrel - slightly less than the current price.

Energy author expects coal peak production in 2040

Somerset, MA — People in the coal-fired power plant business believe that there is more than 250 years worth of coal production left in U.S. mines.

What if they’re wrong?

Richard Heinberg thinks they are.

Energy crisis spreading, coal executive says

Growing energy costs will force changes in the ways we live and do business in the United States.

A lifelong leader in the coal and transportation industries, Charles T. "Charlie" Jones believes Americans might have to give up their free-traveling lifestyle, where some people drive 50 miles each way to work every day and never think twice about making other daily excursions.

Ben Bova: What has changed since last gas crisis?

“There have been loud cries of despair over the current energy crisis, and equally loud grumblings to the effect that the whole thing is an artificially created problem, a manufactured scare produced by the politicians and the big oil companies, who are manipulating us into allowing the oil companies to raise their prices, escape environmental protection rules, and drill for oil everywhere and anywhere they choose to...

“Are we really in a deep crisis, where we will have to drastically change our energy consumption patterns? Or are we being manipulated by a sinister combination of governmental and industrial Svengalis? … We have the resources, the talent, the technology to solve the energy crisis. The question is, do we have the guts, the heart, the leadership, the will to get the job done?”

I wrote those words in 1974.

Thirty-four years ago.

Lautenberg blames GOP for high gas prices

Blaming Republicans for record gasoline prices, U.S. Sen. Frank Lautenberg (D-N.J.) said this morning that alternative power sources such as wind and solar are the long-term solution to America's energy crisis.

Who Is Protecting America’s Seniors?

The cure is for America to drill and capture our own “known oil reserves”. Capturing “known oil reserves” can reduce oil and gasoline prices, make our government “oil independent” from OPEC nations, and rectify an error for our entire citizens and our economy. The majority Democrats know this, so why will they not vote “YES”, just for the economy?

Move over, energy and food crises

The South African fuel industry is facing a crisis that is going to make Eskom's problems look like a picnic, the Fuel Retailers' Association (FRA) says.

This is because the pipelines used to get fuel from refineries along the coast to inland distribution points are crumbling and refineries past their lifespan are unable to cope with increasing demands.

Orlando-area woman brings back rain barrel during water shortage

Bonnie Kutschera was raised in South Florida, where she watched rapid development strain natural resources. Kutschera recalls such memories when she talks about her passion for the environment. She and her husband, Joseph, are recycling discarded plastic containers by converting them into barrels -- products designed to conserve water. The barrels collect runoff, allowing homeowners to use rain instead of drinking water for irrigation.

Give me the lesson without the spin

Throughout my life, my teachers have told me that school is a neutral environment where my classmates and I can count on teachers and textbooks to provide us with the factual and unbiased information that will equip us for life. Lately, though, I've begun to wonder whether they really mean it.

In my junior year of high school in New Jersey, my U.S. history teacher used the first week of class to preach his religious beliefs. He told students, among other things, that they "belong in hell" if they reject Jesus as their savior, that evolution and the Big Bang are ridiculous and unscientific theories, and that there were dinosaurs on Noah's Ark.

What happens when we've used the last drop?

SIXTY years ago the Orkney poet Edwin Muir wrote some lines which, in the panic surrounding the Grangemouth strike, feel like a premonition. They point to a world not too far in the future where our reliance on oil has become all too clear, and the way we live our lives all too fragile.

And then the thought confounds us with its strangeness.
The tractors lie about our fields; at evening
They look like dank sea-monsters crouched and waiting.
We leave them where they are and let them rust:
They'll molder away and be like other loam.

Something of his prediction seems to be forming itself. The petrol age, scarcely making much of an impact when he wrote, now seems hastening towards its end.

Right-wing pundits, Jeremy Leggett, Bill Clinton, and peak oil

For years, right-wing journalists have been dismissing peak-oil theory as a bunch of hogwash.

The Economist magazine's environment and energy correspondent Vijay Vaitheeswaran poked fun at a group of petroleum geologists that he dubbed the "Depletion Doomsday Gang" in his 2003 book Power to the People.

It prophesized an energy-rich future that would transform the world.

Back then, oil was trading at around US$25 per barrel.

A different view of environmental issues

There are those who claim that "peak oil" is here or shortly will be, that further increased extraction will simply not be possible. They point to the fact that oil prices are historically high and look set to remain so, and yet production has not surged in response to the price signal. Of course, it's not as simple as that. Proven reserves continue to increase, particularly as higher prices change the economics, but bringing more reserves on stream is not just a question of turning a tap: more wells must be drilled and enormous investment in extraction and distribution networks is needed. Given more time, oil supplies will ease.

Powerful Stocks Bull Market As US Hyper Power Prepares for Global Hegemony

Back in the late 20th century there were predictions that the 21st century would be characterized by “resource wars” where fighting breaks out between countries and aligned groups of countries, as they scramble to secure increasingly scarce commodities for themselves, principally oil and water. Barely had we entered the new century when a major resource war began, with the big surprise being that it was not some banana republic suddenly deciding to invade and loot its neighbor's territory, but instead the most powerful country on earth muscling its way around an entire region on the other side of the planet in order to position itself to plunder its oil resources en masse for itself.

It's time to invest in Vermont

Vermonters are pretty tough and used to hunkering down in tough times (like March!). Conventional wisdom says tighten the belt, and the Legislature has been busy paring down the budget. That has always worked in the past but there are good reasons to believe that this downturn is different. The soaring costs of fossil fuels and health care are not mere blips that can be endured. The exportation of jobs is not a short-term threat. The debt that this country has incurred will take a long time to pay off. In this new "flat" world, hunkering down won't work, either.

New energy approach

In just over one hour, the sun gives out enough energy to meet the world’s demands for a whole year.

Now, peak oil and climate change are pressing us to make increasing use of this free, non-polluting power supply. Two distinct technologies are available: solar thermal power (concentrated solar power, CSP); and photovoltaic power.

Rearming the world

As easily accessible global stocks of oil dwindle, the world supply of oil and gas has been concentrated in a smaller and smaller number of hands over just the past decade. Some 80 percent of all reserves now are concentrated in fewer than 10 nations.

The biggest consumers desperately want to protect their secure flows of oil and gas from this handful of key suppliers, while simultaneously preventing their rivals from inking deals with resource-rich nations.

The 'Energy Fiesta' is nearing its end

Welcome to America: a country where energy waste remains our most important and prolific product, even though the long emergency ending the“Energy Fiesta” of cheap oil has begun.

The only realistic solution to the dilemma this country, and the world faces, is reducing per capita consumption and achieving negative population growth. No society will voluntarily entertain such drastic conservation measures, and no government has shown any inclination to reduce both simultaneously for sustainability. The solutions fall into two basic categories: technological and organizational structure, and neither one provides a viable remedy.

It’s a myth that the world’s oil is running out

Another myth: we are running out of oil. According to WorldPublic Opinion.org, “majorities in 15 of the 16 nations surveyed around the world think that oil is running out . . . only 22% on average believe that ‘enough oil will be found so that it can remain a primary source of energy for the foreseeable future’ ”. Those majorities who think we are running out of oil include 85% of the British and 76% of the American citizens polled. Luckily, they are wrong.

Production of oil is being constrained by several forces, none of them due to God’s failure to put enough of the black gold under our feet.

Population explosion means oil at $100 a barrel is here for years

At times like this, it's fashionable to say oil "no longer matters" - because the Western economies now rely on services. Really? So why has America's oil use risen from 16m barrels a day in the early 1970s, to 22m today - and Europe's by the same proportion.

As global oil use balloons from 84m barrels daily now, to 125m by 2030, prices will surely crank up. Between 1999 and 2006, oil rose from $10 to $60. Since then, it has doubled again. Can we really keep pretending oil doesn't matter? Our politicians may exclude "fuel costs" from headline inflation measures. But we all know inflation is now rising sharply - and threatening to reappear as a serious problem.

California's Fuel-Efficiency Battle and Peak Oil

California's arguments for increased mpg standards are based on environmental factors. Instead, what they should be arguing in court in order to demonstrate "compelling and extraordinary" conditions is occurrence of peak oil. If anything in the world today is "compelling and extraordinary" it is the fact that worldwide oil demand will soon outstrip worldwide oil supply! It is an economic argument that should be the focus of California's legal case for requiring increased mpg standards. Imagine for a moment what life will be like in Los Angeles when it's millions of citizens can no longer either afford or obtain gasoline. Boy, if that doesn't scare ya, you've got iron cojones. But, like all US governmental agencies, the facts of peak oil rarely are spoken of let alone properly addressed with a real energy policy.

Rising oil prices seen as 'peak' opportunity

MONTPELIER – The number of political screeds against "Big Oil" seems to be rising about as quickly as prices at the pump these days.

The rhetoric predictably casts local motorists as victims of a price-fixing scheme designed to reap multi-billion dollar profits for companies such as Exxon-Mobile.

Eat locally, survive globally

Industrial agriculture, the current structure of the North American food system, is based on low prices to farmers, high usage of chemicals and copious amounts of oil. These factors must be altered if Canada is to have plentiful, safe and nutritious food in the future.

Britain braces for oil refinery strike

LONDON (AFP) - Workers at a key British oil refinery were to start a two-day strike Sunday, forcing a major North Sea pipeline to shut down and sparking fuel shortages.

The walkout was to begin at 6:00am (0500 GMT) at the Grangemouth refinery, west of Edinburgh, as a convoy of tankers headed from Europe to keep Scotland moving thoughout the industrial action.

Ministers urged to intervene as Grangemouth refinery strike bites

John Hutton, the business secretary, yesterday advised the public that there was “plenty of petrol and diesel” although stocks could be run down “if people change the way they consume fuel.” He added: “There is every reason to believe that we will get through this period sensibly if people continue to buy fuel sensibly, too.”

In Scotland the Ministry of Defence confirmed that it had been involved in discussions over the possible use of troops if it became necessary to safeguard supplies for vital services.

5 dead as gunmen storm police station in Nigeria

Unidentified gunmen have killed five policemen and seized several weapons in a raid on a police station in the oil-rich southern Nigerian state of Rivers.

The attack took place early on Sunday on Bonny Island, the site of one of Nigeria's largest oil and gas export terminals, spokeswoman Ireju Barasua said.

Thomas Homer-Dixon: Flushing of multi-year sea ice from the Arctic basin

The image below is a low-resolution reproduction of a sequence of satellite images of Arctic ice this past fall and winter. The sequence runs in a continuous loop from October 01, 2007, to March 15, 2008. A link to the high-resolution video file is provided below.

Note the stream of multi-year ice flowing out of the Arctic basin down the east coast of Greenland at one o'clock in the image. As of the middle of March, most of the basin, including the pole itself, appears to be covered only by seasonal ice.

Arctic ice melting 'faster than predicted'

The melting of the Arctic ice is happening quicker than predicted and may now be close to its 'tipping point' when the changes cannot be reversed, a conservation group has claimed.

The pace at which both the Arctic sea ice and the Greenland ice sheet is melting has "severely accelerated" and could bring about rapid and unstoppable change in natural systems across the world, according to WWF.

I'm on my way doing something interesting. I wanted to take a close look at the relative value of the dollar and the price increase of WTI. For the former I'm using the EUR:USD exchange rate: The higher the value the weaker the dollar. For the latter I'm using WTI spot prices. I'm taking a look at relative % changes of the two quantities, with the starting point of each being fixed at 100%

First off, I'm showing you the graph with the values (and the datatable) for 1st. October 2007 - 25. April 2008. The data are nominal, it is a rather short period of time and I didn't adjust it for inflation.

(But later on, I will - with historical data.)

Here are the first results:

More to follow.

Here is a nominal dataset for the period between January of 1999 and the 25th of April 2008. It is not inflation adjusted - yet.

Later on, I'll show you the inflation adjusted data using shadowstats and US gov., respectively. At the end, I'll work in exchange rate into the oil prices, so that we can see the change in the 'real value' of oil to the US.

But first, a nominal historical dataset and graph.

About a month ago I did a quickie comparison of WTI in USD, CDN and Euros.
Look here:
At the time it looked like for the past year about one third of the price increase of WTI was related to the dollar decline.
Since the G7 meeting the USD is being defended against the Euro so even tho WTI has kept its cost in USD it has increased in cost vs the Euro meaning that oil is costing somewhat more in USD and a bit more than that relatively in Euros.

I was very much interested in your comparison but unfortunately I couldn't make your link work. Seems to be broken, tried it several times.

Sorry eastender .. it seems to work when I click it .. are you using IE for a browser?


Tried it this morning (9:37 AM here) and still can't make it work, sorry. Neither IE nor Firefox were able to open it. In fact all I got was a 'file not found' screen.


I cannot edit my first post in this thread. The pics are too big in pixelsize, and it has a negative effect on the layout. I'd change it if I could - but I cannot.

Could you please change the URLs of the first two graphs? Thx.

1st: http://img0.tar.hu/tovabba/size2/34430761.jpg
2nd: http://img0.tar.hu/tovabba/size2/34430762.jpg

These are smaller and will work better with the TOD layout.

Thanks one more time.

- eastender -

Another reason you should have your own blog. You'll be able to edit it!


I hear you. :-) I won't be doing this again without former notification. :-)

Thank you one more time for your patience and efforts.

Thanks. That was very useful and helps avoid a lot of fuzzy analysis that wants to blame this mostly on exchange rates. Further, exchange rates may be even less important if one considers the possibility that part of the reason the dollar has gone down is because of increased trade deficits which are clearly related to the demand for oil and the price of oil. So we proabably have a positive feedback effect of oil prices which is helping to drive down the value of the dollar. Maybe that could be quantified in some way, too. Could that be your next project?

For doing what you were talking about I should do a correlation analysis, something I'll probably do later on. It may show that the increase in the real value of oil is driving the exchange rates, not the other way round.

I think it can be shown and I could do it in a keypost, because it takes a lot of space (and time) to do, and I simply do not want to litter this thread with my graphs. (So if someone asks me to do it, I will.)

However, I'm doing one more thing now. In the next step, I'm going to eliminate the exchange rate altogether, working the exchange rate values into the real price of the dollar.

You should start your own blog, if you don't have one. You can get a free blog from Blogger, WordPress, etc., if you don't want to pay for hosting. Posting something that's taken a lot of work like this in the comments is a shame, because it will be hard to find or reference later, and search engines may not pick it up. Trying to follow along if this turns out to be a series will be near impossible.

More than one of our key posts started out as a post in the contributor's personal blog.

OK, thanks for the advice. :-)

Sorry for littering the thread with all these numbers and graphs, but I thought it was useful to post it here. It didn't take that long, 2-3 hours at most.

It's really not about all this going into a keypost or not. I may start a blog later on, but writing blogs and keyposts is not the issue I'm after. :-) I just thought you guys can use it here, and after having read the site for a long time and having learned an awful lot here I felt like giving something back to the community. Contribution... or else, I'm not sure what to call it.

So thank you again for your patience and for all the knowledge you all helped me pick up at TOD. I really appreciate it.

(And I hope you don't find all my long posts offensive. I won't do it often, I promise.)

They're not offensive. If they were, I'd delete them. ;-)

It's just a matter of practicality. The comments of a DrumBeat really isn't the place to post lengthy original work.

I thought for awhile that we might go with a format like DailyKos, where everyone can post their own diaries, but it doesn't look like that's going to happen. So I'd like to encourage people to get their own blogs at Blogger or wherever. I have one myself, here.

You've just convinced me. I'll do this blog thingy. :-) I'll get back to you in a few days with more detailed analysis and data, but that time around with a single URL and maybe a pic or two.

Here is the inflation adjusted data. I was using different numbers for inflation. Three datasets.

1) shadowstats data
2) US Gov data
3) 'mixed' data

In mixed, I assumed that the price of oil has an effect on inflation, so I used a weigthed average of shadowstats and US Gov data. I will show the datatable for mixed.

Here is the shadowstats graph for their inflation dataset vs. US Gov inflation dataset:

1) Inflation adjusted with shadowstats data

2) Inflation adjusted with US Gov data

3) Inflation adjusted with mixed data

4) Finally: datatable for 'mixed' data as shown on 3)

(Note: percentages in the 'own infl' column show 'mixed inflation data' for the period, usually 6 months)

The CPI doesn't include food and energy, why would you use that? I think you'd get an even better picture if you used a the CRB, a good basket of commodities. I think this would make the picture even more apparent.

In the final assessment I used my own 'mixed' inflation data, derived from the numbers given at shadowstats and the ones by the US Gov. Shadowstats data in itself is not sufficient in my opinion, because on the one hand it DOES include energy, but on the other, energy is also a CAUSE of the inflation, not only the result.

Hence, I arrived at the conclusion that I have to use data between the official US Gov data and the shadowstat data. How much it should be weighed in either direction is anyone's guess, I worked with a weighted average of 2:1 in favor of shadowstat data.

(I.e.: shadowstat = 8%, US GOV = 2%, so my mixed was 6%. And so on. In the last graph below, when excluding the exchange rate altogether, I was using the derived 'mixed' inflation data.)

Ohh ok, I see, that is very clever, even if the government data is understated the graph should still be pretty accurate. Either way it shows us an alarming picture. Excellent work though, I think you should try getting a guest post on here with work like this just done in comments. Also would you agree theoildrum should mobilize, and form some forums where members can share for instance campaigning techniques for peak oil awareness? They could share slide presentations for presentation to their own city councils and have formats for informational fliers ect. I've been toying around with the idea for quite some time to set this all up. I want to read Tainter's "collapse of complex societies" though, before I start reccomending people advocate policies that attack solutions and not symptoms.

Hi SoD,

re: "...before I start reccomending people advocate policies that attack solutions and not symptoms."

What do you mean by "solutions and not symptoms"?

Could you possibly please explain this further?

Well, I kind of meant like when your Car gets out of alignment or you get really sick with a sore throat. If you attack the symptoms only, your ultimately working in vain and exacerbating the problem without attacking the solutions. The problem in these examples is your tires keep wearing out really fast and you feel really bad. If you only keep replacing your tires or keep numbing your throat with cough drops your not really making the situation better or solving it. However if you fix your alignment your tires won't wear out so quick and if you get antibiotics your sore throat will go away.

For Peak Oil an example might be, lets only advocate policy's that will use conservation and efficiency measures, ultimately if your energy comes from an unsustainable source, if you don't address the sustainability of such a system your just putting any sort of collapse or economic disaster off a few years into the future. The fact is even if we were to start using wind and solar power then we might avoid an energy disaster and if we survive our transportation fuels problem, we are still creating more problems that will have to be addressed in the future. Everything in the world has limits, with renewable you ultimately have to be able to get to a point to where you can create renewable energy devices from renewable energy. Also you will always be limited by the EROI ratio and what net energy is free for society to use. I am saying Peak Oil is a SYMPTOM of a system dependent upon growth in population and economies. Peak Oil and global warming are a product of the amazing properties of exponential growth. We can help "solve" peak oil by attacking this root cause of diminishing marginal returns and our reliance on a society structured upon growth. However, if we simply tackle the symptom and just try to get more energy other ways, we just put or demise off a little further into the future, and it's quite obvious we can't do this forever. I think this is kind of what people mean is we need a paradigm shift in the way of thinking about how we live and how society functions.

That was a little long, I hope this helped, Thanks for asking


Also would you agree theoildrum should mobilize, and form some forums where members can share for instance campaigning techniques for peak oil awareness?

Well, first of all it doesn't matter all that much whether I agree or not - as I'm a simple poster here, just like yourself and have nada to do with any of TOD's policies. :-)

But I can tell you what I think. Mhmm. I think TOD is good as is. On one hand it is a community, yes. But on the other: it is focusing more on theory than practice - and I tend to think the latter (i.e: focusing primarily on theory) is more important here. We are so far apart, often posting from different continents and cultures (I'm Hungarian, for example) that this phenomenon itself makes it rather hard to work out some common techniques for campaigning.

I somehow doubt that my technique would work in Kansas or yours would in Estonia. Sharing of ideas and basic presentations is a good idea, but I think you can take this only that far. Posters here disagree about more things than they agree on - the 'peak oil phenomenon' aside. But about mitigation/contingency/crash programs... effects, side effects, implications, history, psychology, politics, economics... one can see lots of differing views and takes here. You can't (and I think shouldn't) create a 'one size fits all' solution.

I just like it the way it is.

I would choose diversity over homogeny any day of the year. Diversity, especially during times of stress and chaos, however, is a luxury and inefficient. Let us keep it as long as we can.

The CPI does include energy and food. In fact the basket of commodities is pretty good. There is another measurement the "core" CPI that is also published that doesn't include energy and food.

For all things CPI go to: http://www.bls.gov/CPI/

We've come to the end of the journey.

Here is the real value of oil for the US, with EVERYTHING ADJUSTED. 1999 values = 100%, inflation adjusted data and the exchange rates worked in. Datatable and graph. (Exchange rate not shown, as it is already worked in the value of oil.)

Result: the real value of oil increased by 600% or 7-fold of the original 1999 value. This really is an 'everything adjusted' value, so take it at face value. :-)

I think this is the correct way to do this calculation. What do you guys think? (In case anyone of you need the excel for further modification, just let me know and I'll send it via e-mail.)


Thanks a lot, very useful perspective !


The most frightening in all this is I think the sad FACT of these graphs showing reality, and it is not really a perspective. ;-)

You have to use inflation adjusted values and you also have the exchange rate numbers. Using inflation adjusted prices makes the change smaller (vs. nominal price changes), and working in the relatíve value of the dollar makes the change bigger.

All in all we are looking at a 7-fold increase in the 'real value' of oil in the last 9 years.

Now, if we take a look at the US import numbers (quantity) and multiply it by the 'real value' for the respective years... we are going to arrive at a cca. 10-fold increase in 'real oil expenditure' between 1999-2008.

I'm not going to do it in this thread (unless directly asked to do so by Leanan ;-) ) but you get the picture. It's rather scary.

eastender , you certainly got my attention ! (others should as well!!) ...and for the perspective, I am not going to split hairs ;-)

Very good eastender! This is better than going to college! Thanks! Anyway, if I understand your work then...the bottomline is that the exchange rate has shown to only effect the price of oil on average by about 3%? So then what makes up the 97%? Supply mostly ?

if I understand your work then...the bottomline is that the exchange rate has shown to only effect the price of oil on average by about 3%?

It depends on the period you are focusing on. For example, take a look at this graph showing the change in price and exchange rates between last October and Friday:

The dollar lost some 17% of its value relative to the euro in this period - but the price increase of WTI spot was 47%. So cca. 30% of the price increase (or cca. USD 25) was caused by something else.

What else? Mainly three things in my opinion:

  • commodity speculation
  • inflation in the period (like 3-4%)
  • supply&demand
  • The oil price went up USD 40. USD 15 was due the exchange rate, that much we know. As for inflation, 4% would add another USD 3. Speculation? In my opinion USD 7 at the most. That's 25 altogether. The remaining USD 15 (or USD 20) is simple supply&demand.

    At least that's my understanding of the situation.

    regarding commodity speculation, Moe makes a very convincing case a few threads below: not really much in there. That leaves us again with the usual suspects: supply&demand. Looks like we can rest our case !

    Yeah, I tend to agree with Mr. Gamble. :-)

    As far as commodity speculation is concerned, I think there is a USD 5 minimum, which is in there 'always' and another 1-10% depending on the profit taking period. I.e.: the price of WTI can almost always go down 10-15% at the most, which is at the moment USD 12-17.

    But that amount is not 'always included', some weeks it's there, then it disappears for a few days and then it is in the price again.

    All in all I doubt commodity speculation being more than USD 7 on average. Which is like 6% of the price. So Moe is right in my opinion: the majority of the increase is caused by neither speculation, nor inflation or exchange rates: It is first and foremost supply&demand.

    the bottomline is that the exchange rate has shown to only effect the price of oil on average by about 3%? So then what makes up the 97%? Supply mostly?

    Again, it depends on which graph and dataset you are looking at. If you look at the nominal historical (1999-2008) graph then what you say is not true. Depending on the numbers you use for inflation coming from which institution, you can see that a near 1,000% nominal price change is only like 700% or 450% if you use US Gov or shadowstats data, respectively. (Yes, using shadowstat data means a lower 'real relative value' change in the price of oil. Using US Gov data the increase is more severe.)

    On the other hand, if your data is already inflation adjusted, then all you have to take a look at is the % change in the exchange rate of the USD vs. the EUR. That's some 36% from 1999 to 2008.

    Meanwhile, the price of oil went up by 350% or 600% - again, depepnding on the institution you use for your CPI data.

    I hope this brief explanation helps.


    My compliments, Sir; A very fine piece of work. On that CNBC, and the rest of the MSM has declined to provide for us.

    I really wish that the proprietors of TOD would put it up as a Post so it would be easier to link, and spread around some other sites.

    I would make one recommendation. One series of charts putting WTI against the CPI, minus energy. Personally, I think a chart that uses "shadowstats" marginalizes the end product. If you stick with "official" statistics you won't risk "poisoning the well" with a large percentage of the people you'd like to reach. However, that said,

    It is an impressive work; and I congratulate, and Thank you.


    Hi kdolliso,

    sure I can do all that using US Gov data. But if I do so, the picture becomes even more alarming. Why so?

    US Gov inflation data is far lower than shadowstat data. Resulting in a much bigger change upwards on the 'inflation adjusted oil price'. You may want to compare the two graphs upthread - one using 'shadowstat adjusted' and the other 'US Gov adjusted' data. As you can see, using US Gov inflation will give us an adjusted price increase of 600% (or 700% of the original), and 'shadowstat inflation adjusted data' only in the neighborhood of 350% increase (or 450% of the original).

    You are right, I could do the final graph (working in the EUR:USD exchange rate as well) using US Gov inflation data... but if I do so, the result will be a lot worse... roughly a 10-fold increase instead of an 'only' 7-fold one.

    I thought it was alarming enough as is. :-)

    Oh, I forgot to say thank you as far as your compliment is concerned. This analysis was not that hard to do though, I used only 15-20 datapoints with each curve. The data was there, MS excel was there, I had an idea and some spare time... I just decided to go for it. :-)

    Anyway: Thanks.

    I'm trying to get a handle on the issue of speculation in relation to the cost of oil and food. In regard to oil, it seems that speculation is probably adding some to whatever the background price would be. Any feel for how much of the current price, if any, is driven by investors?

    But in regard to food, I really don't have a handle on what is happening. Is it a result of biofuels displacing food crops? Yet I'm reading that rice crops were good this year, so has demand grown or is the price too high. Is it the higher cost of oil driving up production costs? Is it just investors moving to food crops as they flee the dollar?

    I'd appreciate some insight, and I have no doubt that this is the best place to get it.

    My question is, how can we know that ADM and Con-Agra, etc. are not trying to corner the market on essential grains? It seems like the easiest way to do that would be to induce panic buying and hoarding by using the media to promote the notion of shortage to raise the price of commodities. They will fill their coffers with money as the common folk rush to fill their basements with sacks of rice and wheat -- then when the basements are finally all full and the "shortage" disappears and the price crashes they will pull out some fancy explanation about their great science having alleviated the shortage. Then they will be richer pirate heroes than ever before!!

    The really fascinating thing is that we seem to be getting it both ways -- Irwin Seltzer http://business.timesonline.co.uk/tol/business/columnists/article3823656... ("Irwin Stelzer is a business adviser and director of economic policy studies at the Hudson Institute") claims that oil producing countries are doing just that, so it doesn't seem like wild-eyed conspiracy theory to suggest that the agricultural producers might be trying something similar.

    In reality, everyone seems to be lying and I don't trust anything any more, but it is amusing to watch the various stories unfold.

    I'm reading so many conflicting explanations for both oil and food right now, and it makes it hard to get a read on the reality.

    Isn't "reality" just what everyone agrees on? Or at least, what the most powerful people induce most of the weak to acquiesce to?

    Sure - and I'm trying to define my reality. My goal is only to come to an understanding that works for me, to calibrate my perceptions of the world around me. I'm well aware that what I perceive as "reality" is quite different from what most of the others around me see, and this bothers me not in the least.

    Oil started this.

    Back in the Spring of 2005.

    Everything correlates with that.

    Katrina sped this up.

    The bind on America increased as did ability to make mortgage payments.

    2006 the fundamentals worsen across the board.

    See the Dem Landslide for details.

    2007 oil/gas inventories crash. Up to Memorial Day
    when the "miracle of 400 000 bbls of ethanol per day
    gets blended in.

    This "blending" first showed up the second week of June.

    Denied here on TOD until API facts came out in Dec/Jan.

    By then corn had moved up to $5 the bu (Spring 07) to create the ethanol.

    By Fall 07 the Australian drought had cut wheat harvest to 10 MMT.

    But 3 MMT better than the equally horrible 06 Big Dry, From normal 24 MMT.

    And so the dominoes toppled.

    The US now has zero grain reserves (somewhere between 1937-48).

    Ethanol can no longer "save the day."

    And so Memorial Day looms again.

    From cryptogon:

    —Who Is Financing America’s Current Account Deficit?

    My wild guess is that if just the heroin proceeds were pulled out of the system, the whole show would collapse within 24 hours."

    Oil. Food. Drugs.

    And guns.

    And guns. ;}

    Someone in New Orleans once told me that you know you're in too
    deep, in any business, when you start carrying guns to protect it.

    It's worth considering whether carrying a gun promotes (one's own) security or insecurity. I think it simply feeds a sense of deep mistrust in others. It confuses fear and respect, and switches 'solution' with 'dissolution'.



    I've seen that mistrust when with I came over the Canadian border with a small group of American friends, but I think that insecurity was just because they didn't know what to do with their hands. Cigarettes helped though.

    And here's a story to hint that the CIAs heroin gravy train in Afghanistan is under threat again:


    Might be why the MSM is 'warning' us of increased violence in the region of late, preparing us for an escalation?

    This article from 321Energy may be relevant to your question.

    Twilight -

    I too do not have a good handle on how big a role speculation has as one of the causes for the run-up in oil and food prices.

    I'm probably oversimplifying, but it would seem to me that one could get some sense of how much oil prices are being driven by speculation by looking at the ratio of the total volume (physical volume, not sales volume) of oil changing hands in a given time period with the amount of oil actually taken delivery of in that same period. During periods of relatively stable prices, I would think that this ratio probably lies within some relatively narrow band. However, if we see this ratio taking a very sharp rise over a short period of time, that would imply increased speculation. As to how this ratio might corrolate to prices, I haven't a clue.

    Any people out there knowlegable on oil and/or food commodity trading care to
    comment on whether this makes any sense?

    Net speculative longs (the number of speculator long contracts minus the number of speculator short contracts) is actually rather low right now. The Commodity Futures Trading Commission puts out a report every Friday afternoon called the Commitments of Traders Report. It tells you exactly how many speculators are long vs. short, and exactly how many commercial traders are long vs. short. Here is where you can find the report: http://www.cftc.gov/dea/futures/deanymesf.htm

    Last Tuesday (April 22), when the price was first hitting a new record close to $120 (the June contract hit somewhere around $118.50), large speculators were net long a little over 70,000 contracts. But they had actually reduced their long holdings by 7,482 contracts since the week before.

    What drove the price to new highs was both speculators and commercial traders closing out short positions in greater numbers than long positions. In other words, both speculators and commercial traders who were short got caught by fundamentals and had to abandon their positions, forcing the price up. Another way of saying this would be to say that both speculators and commercial traders had been holding the price "incorrectly" low the week before.

    70,000 net spec longs isn't even close to anything like a record net long position for speculators. Last August, as the price was hitting $78, speculators were net long something like 115,000 contracts. They were over 100,000 net long back in December, as the price got into the upper $90s. I would classify 70,000 net spec longs as low/moderate, based on net spec long numbers over the past five years.

    There have been numerous studies over the past 4-5 years about the drivers of oil prices, and none of them have shown any correlation whatsoever between the bets or behavior of speculators and oil prices. Here is a 2007 study by the Oxford Institute for Energy Studies: http://www.oxfordenergy.org/pdfs/WPM32.pdf. If you don't have time to read the whole thing, take a close look at the chart on p. 33. It shows clearly that there is no correlation between speculator long positions and oil prices.

    And here is the April 3, 2008 testimony of the Chief Economist of the Commodity Futures Trading Commission to the U.S. Senate regarding speculators and commodity prices: http://www.cftc.gov/stellent/groups/public/@newsroom/documents/speechand...

    He shows clearly that there is no correlation between numbers of speculator contracts or speculator "herding" or net spec longs and commodity prices.

    Also, speculators have always been, and remain, a small percentage of the market. The commercial traders are roughly 80% of the oil market, and believe me, speculators can do nothing to influence price if commercials jump on a high price and start selling. Commercial selling steamrolls speculators flat.

    Saudi Arabia and the oil companies are blaming speculators for high oil prices to ward off attention to the real issue--commodity supply and demand imbalances. They are lying, and they know they are lying; it's a propaganda campaign to keep the masses from the truth. The media reports their lies without question, either because they're in on the propaganda campaign, or because reporters are too lazy to do their homework.

    See Stalin and the kulaks for details on the end game
    between gov't and "speculators".

    Consider how differently speculators function in a less-than-full market than they do in a usually full and constrained market. Limits. Limits. Limits. Without constraints, they might even and regulate prices - as in providing a mechanism to finance planting for a coming harvest. With constraints, they exacerbate volatility.

    cfm in Gray, ME

    And one more piece of circumstantial evidence to add to the case. Oh boy, are we in a bad shape !

    Thanks Mo, great work. You, I and a couple of others have argued for months that speculators are not responsible for the high price of oil. If there were one or two more million barrels per day on the market, then oil would likely drop to the mid 80s or somewhere thereabouts.

    The media, in my opinion, are not in on the OPEC deception campaign. After all, the EIA, IEA and BP report the same figures as OPEC. With these three bastions of data all "copy and paste" the OPEC numbers directly into their data base, who can blame the media for believing it? So MO, even if the media did do their homework, who would they more likely believe, the EIA, the IEA, BP, or those peak oil doomsayers?

    And OPEC, in blaming speculators for the high price of oil are just parroting what a lot of the news media is saying. We have been hearing for several years, from the media, that speculators are driving up the price of oil. Michael Lynch has been blaming "the funds" for the high price of oil for over four years. Then of course there is that terror premium we have been hearing so much about.

    There is no such person as "The Media". The media are made up of different people with different opinions and agendas. Raymond J. Learsy is part of the media. He believes OPEC is lying, he believes they could flood the world if they only desired. So even those who believes OPEC is lying believe they are lying for all the wrong reasons.

    Nothing is so simple as black or white, lying or truth-telling, lazy of doing your homework! The situation is far more complicated than that. Those Middle East oil producers are so deep into their story that they cannot possibly come clean. Most of them actually believe it themselves. The EIA, IEA and BP are so set in their method of doing business that they haven't a clue as to why their predictions seem to always be wrong. There are no easy answers as to why the world has a very incorrect idea about the future of fossil fuels. We should try to figure out why they are wrong. But throwing stones of blame is the wrong approach to take. We will learn absolutely nothing by doing that.

    Ron Patterson

    I watched 'The sum of all our fears' last night.
    The Russian president in this film accepted responsibility and claimed he had ordered a gas attack on the Chechen capital, even though in fact it was the work of rogue elements in the security forces, as he could not appear to be not in control.

    It seems to me that the leaders, specifically in the oil producing nations but also elsewhere, have a similar dilemma.

    If, for instance, Saudi Arabia, said, look, oil supplies will be much more limited they risk a severe reaction, both from their own population asking where the money has gone and perhaps from other nations desperate to secure a limited resource.

    All their oil expert know that this will be very bad news for their paymasters too, so you end up with a severe institutional bias to the most optimistic possible interpretation, rather as a staff officer in a war has to give ways his side can win, rather than focus on probable defeat.

    This latter part will also apply to non-oil producing nations' elites.

    The human tendency to rationalise then does most of the rest of the trick as since they have to hold an optimistic position on supplies they come to believe it.

    For economists the situation is even worse, as they have theoretical underpinnings which predispose them to think that the right price signal will call forth supply, and the study of limiting cases for this idea or the influence of time lags is underdeveloped.

    Some hope for a more realistic assessment may lie in the similar attitudes to German re-armament prior to the 2nd World war, and the extreme reluctance to face that unpalatable truth.

    The penny might drop on fossil fuels eventually, hopefully before there is war to make countries supply more of the oil they do not in fact possess in an 'Oil of Mass Deindustrialization' conflict.

    Commercial selling steamrolls speculators flat.

    In other words, the market is setting the price and other than for catastrophic or political reasons, we can expect oil prices to decrease only in the case of world recession?

    Also, speculators have always been, and remain, a small percentage of the market. The commercial traders are roughly 80% of the oil market, and believe me, speculators can do nothing to influence price if commercials jump on a high price and start selling. Commercial selling steamrolls speculators flat.

    Good point. At the recent EIA conference, the Lehman oil analyst said that Lehman (and other Wall Street banks) fall under the "commercial" category - they represent oil companies, but also hedge funds, etc. So the true percentage of speculators may be understated by looking at the CFTC (non-commercial) numbers.

    Thanks Moe - good points. I'm certainly willing to believe that the vast majority of the price of oil (or perhaps the whole price) is based on fundamentals. Indeed this has been my understanding from reading here. So with that fairly settled in my mind, I'll focus on what is happening with food prices.

    I spent a lot of time tilling the garden and cutting a horse pasture today, which left plenty of time for thinking. What I think is key is to understand what is happening with rice and why the price rise/shortages. It is not a biofuel, and acreage devoted to rice is unlikely to be diverted to biofuel. I suppose that the cost of other foods and grains may be rising and forcing people back to rice, which would be an indirect cause, but I have seen no data to this effect. Other possibilities seem to be leave fuel costs, hoarding, and commodity investors, and/or ...what? Anyone have any ideas?

    Start by taking a look at India, and China, and their horrible "Import/Export" Tariffs on food commodities. Many other countries have jumped in (Argentina, etc.) and made terrible decisions as well.

    Demand has jumped, and many of these countries have "Command" economies that have been unable to swiftly ramp up. It's a mess; but, it'll get better in a year, or two. And, of course, the U.S., and the EU share some (a lot) of blame in this. We subsidized our farmers to the extent that we put hundreds of millions, if not billions, of third-world, subsistence farmers out of business.

    A Question for Moe: Moe, Jane Wells, on CNBC, yesterday, said that corn farmers are unable to sell ANY of their current crop forward. That the big buyers just aren't interested in $6.00 corn, and their response is, "Call us in August."

    What do you think about the futures market price of corn under these circumstances? I'm not looking for a tip; just an observation. Is this a "Breakdown" in the market. Is this a normal situation for this tiime of year? what?

    Nice work. eastender showed that it isn't the value of the dollar so much that is driving the price of oil...you have showed us here that it is not speculators. So we are pretty much left with inflation and supply?

    Actually, there is always a constant "spec" component in the price of any commodity, which is the "investment" component ("speculative" is such a dirty word). These are simply all buyers who do not wind up taking delivery of a contract. This money comes and goes into the price a little faster and more unpredictably than what the underlying supply/demand trends dictate. But a very strong supply/demand trend will tend to carry a high spec component all the way up a big climb, so it isn't such a horrible thing as some make it out.

    In my opinion, the primary driver increasing the cost of food is the energy cost of transporting, refrigerating, processing, and planting/harvesting. Biofuels are having an impact. But, in my opinion, it is just part of a much larger and evolving issue that includes growing population, affluence in Asia/The Middle East, and climate change. For example, massive drought in Australia and other areas around the world is also having a severe impact on food supplies. Many basins in Australia have seen a total loss of 50 percent or more of their production. Overall, total Australian grain harvest alone is down more than a third.

    The issue of ethanol, is therefore complicated and imperiled politically as there are many stakeholders that may win or lose on one side of the other of ethanol. Cellulosic biofuels is not as charged an issue -- yet. The reasons for this include the fact that it doesn't produce the volume of liquids ethanol currently does. So it is not so much a threat to those who hold a stake in oil/gas. As the agricultural impact of Cellulosic ethanol is not as pronounced as corn, it is also less of a hot button issue. But once cellulosic fuels ramp up and they start to take up land and water resources, it is likely to become an increasingly heated issue.

    In all, I think the US is likely to move forward with biofuels because of agricultural industry backing and an economic need for liquid fuels. The potential for reduced dependence on foreign oil will also remain a driver. That said, ethanol/biofuels cannot be a long-term solution to the problem of peak oil, without substantial increases in automotive/machine efficiency and developing technologies that incorporate electrical power inputs from a renewable energy base.

    An informative article on the subject of ethanol in the US recently posted today:


    In a letter to the EPA, the Texas governor asked the government to reduce ethanol mandates:

    "Artificial demand for grain-derived ethanol is devastating the livestock industry in Texas and needlessly creating a negative impact on our state’s otherwise strong economy while driving up food prices around the world.

    "While many other factors affect the price of corn, I need only to look at skyrocketing grocery prices to know that granting a waiver of RFS levels is the right thing to do. As I noted to fellow governors at a recent Republican Governors Association meeting, “If you think it’s bad for foreign countries to control our fuel, image what it would be like if they control our food supplies.”

    The Texas Cattle Feeders association sent a letter to support the governor stating that:

    "One need only to look at the price increases for corn since the federal government began its big push for ethanol to see the correlation: More corn being diverted to ethanol has meant much higher prices for livestock feed."

    In what seemed to broaden in to a much wider debate the US Renewable Fuels Association responded with this broadside:

    “While this [reduction] may benefit Texas oil companies, it will certainly hurt consumers in Texas and the rest of the country,”

    A recently published study by researchers Fortenbury and Park from the University of Wisconsin at Madison attempted to delve into the total price impact of ethanol production on corn and concluded a study stating:

    "...a 1% increase in ethanol production causes a 0.16% increase in the corn price in the short run, ceteris paribus...Since ethanol production capacity essentially doubled between the first two quarters of the last and current marketing years, the model results above suggest that ethanol’s contribution to the price rise was about 41 cents per bushel, ceteris paribus. This would have resulted in an average 2007/2008 first quarter price of $2.95 per bushel had nothing else changed. While this is a significant year over year increase, it is substantially less than the actual price appreciation between the start of 2006/2007 and the start of the 2007/2008 marketing year. As a result, while ethanol production has had a significant and positive impact on corn price, it does not fully explain price level changes in the 2006/2007 marketing year.

    ...[corn prices in] first quarter 2007/2008 were well above what would be projected, and cannot be explained based simply on ethanol production and associated corn use (as has been the practice in the popular press). This suggests that there may be an outside factor influencing prices beyond those captured in the supply/demand framework estimated here.

    Researching more carefully the impact on price discovery resulting from a large increase in the amount of risk capital coming from the speculative side of a market seems justified, and this is the focus of current work. In short, there is no empirical evidence to date to justify a suggestion that prices have exceeded their “fundamental” levels as a result of market structure (i.e., growth in the speculative component), but is also clear that attempting to explain current price levels simply as a function of ethanol production is a bit naïve and inaccurate."

    Another study by researchers at Texas A&M noted that rising food costs were more a factor of $100+ oil than anything else. It also noted in its "The Effects of Ethanol on Texas Food and Feed":

    "The ethanol industry has grown in excess of the RFS, indicating that relaxing the standard would not cause a contraction in the industry."

    As you can see from this volatile exchange, the issue of ethanol is clouded by stakeholder interest (livestock farmers, oil industry, renewable fuels industry and others), political interest, and, in the end, determining the winners and the losers.

    On a somewhat related note, A123 systems is producing PHEV conversions for a 100mpg Prius. The added cost is 10,000 dollars. So for the price of an SUV you can, instead, have the coolest kit on the block and save $2,000 per year in fuel costs (at $4 gas).


    Earlier this year, the Motley Fool predicted First Solar would be among its worst picks for 2008. They were wrong:


    According to the article, First Solar stock hit $300 for the first time recently. That foolish Fool ;).

    With petrol at around $8/gal in Europe, it seems as soon as it has sunk in that that is the reality of present day oil costs the day of the plug-in hybrid has already arrived - production jsut has to catch up, the incentive is there already.

    With petrol at around $8/gal in Europe ...

    $9/gal in Germany since approx. Friday last (€1.48/liter). Populist politicians blaming government (should reduce taxes, control prices, or just do something ...), castigating Big Oil, etc.

    On Friday I drove from Luxembourg to Trier and back. No obvious sign of any major change in consumer behaviour. Large cars still zooming past me at 160 km/hour. Same as in 2007, 2006, 2005 ...

    £1.50/litre is predicted for the UK within 6 weeks:

    That's over $11 US gallon, for the info of folk in the States!

    Enjoy your cheap gas whilst you have it!

    When are you guys going to see PHEVs in Europe? Similar timeframe as US? If so, by 2010, I'd expect to see $5-8 gas here and $9-12 gas there. EVs, PHEVs, and scooters, motorcycles, and bicycles look better and better.

    I wish it was likely to be that cheap.
    In Europe taxes go up proportionately to any rise in cost, or more, as it is such a major part of government revenue.

    If gas in the States is $5-8 in the US in 2010, expect $10-16 in Europe.

    Things could be worse in the UK, as the pound is looking distinctly over-valued, so although of course the dollar price would be the same it would be even less affordable.

    Overall though Europeans don't pay dissimilar amounts per year to people in the US, due to a combination of better mpg from the average car and lower average mileage, about a third more and a third less respectively - even SUV's are typically diesel and might get 35mpg.

    Plug-in Prius's may be here by around 2010 or 2011, and for European use the potential of EV's should not be discounted:

    the TH!NK city is a two-seater with a top speed of 65 mph, a zero to 30 mph time of just 6.5 seconds and it’ll reach 50 mph in 16 seconds – perfectly respectable ‘round town performance at legal speeds, and it’ll run another 124 miles after an overnight ten hour charge from any domestic power outlet. The ROI is amazing as total running costs for 10,000 miles in the UKP14,000 vehicle will be the extra UKP125 on your electric bill.

    UKP14,000 TH!NK city electric car ready for showrooms

    35 mpg SUV? Goodness. We are backward over here. TH!NK looks excellent. You'd need a bit more charge for the US market. But battery tech seems to be moving apace.

    I would have thought that it should be adequate for the US market too - not ideal, but adequate.
    The GM volt is aiming for a 40mile battery only range because that covers most of the average commutes, and that is there and back.
    So if you had two of these in the family you can both get to work - maybe not if you do massive commutes, but those folk might have to re-arrange their affairs, and that is a limited sub-set of people compared to changing everyone's lifestyle by not being able to drive.
    That would leave plenty of slack to take the kids to their activities, get the shopping and so on.
    An old ICC car in the garage would do for the rare occasions you needed to do a long run - but it would be expensive.
    Incidentally, EV's that can carry more passengers are on their way from the same manufacturer - and they are very well established, now producing their fifth generation of EV's:
    The Energy Blog: Five Passenger TH!NK Ox Introduced at Geneva Auto Show
    I don't see a smooth transition to EV cars, and perhaps they will only be available initially to the relatively well off, but I also don't see the end of personal transport as some do.
    Beefing up the grid to cope is not that expensive, and in the States present generation capacity should be sufficient.

    Beefing up the grid to cope is not that expensive, and in the States present generation capacity should be sufficient.

    I disagree.

    Current air conditioning loads strain the existing local distribution systems in Suburbia and Urban America. They cannot handle a new load in many cases (computers and larger TVS have been offset by more efficient air conditioners).

    We have neither the natural gas or generating capacity to add major additional loads for EVs (15+%)

    EVs do not have the efficiency gains that one gets from Urban Rail (including a move into more energy efficient TOD).

    A major push to EVs without Urban Rail will be attempted though I fear.


    I hope you don't disagree that building additional transmission lines to beef up the grid is not that expensive, as it was your comments largely that I was basing my remarks on!

    As regards needing additional generating capacity, your comments are premised on the assumption that people would charge their cars whenever they feel like it, I believe from comments that you have preciously made.

    The studies which indicate that no new build will be needed assume that differential pricing by the time of day means that they would largely be charged in off-peak - differential charging works well in the UK, and EV cars would also be well suited to wind-power and solar power generation.
    If they need more base load power, regrettable though it may be, they will probably just build more coal plants if they are in a hurry.

    My comments about EV cars should not necessarily be taken as advocacy of that solution, certainly not in contrast to urban rail solutions, but it does seem to me that many of the comments about extreme lack of mobility in a post peak world are probably overdone.

    Just for clarification, "the grid" has two parts (called TND or Transmission and Distribution by utilities).

    Transmission is the high voltage, long distance part. Hard to get permits for, not that expensive to actually build. Distribution is the lower voltage (say 11,000 volts) from the substation to the neighborhood transformer every block or two that transforms down to household voltage.

    Expanding the distribution system requires no new permits, "just" thicker wires and bigger transformers.

    I fear that widespread use of EVs would "blow" the distribution system in many localities, and would be enormously expensive to upgrade.

    I hope that clarifies things a bit,


    Thanks for the info, Alan.
    I realise this is a very difficult question, but any idea of how expensive local upgrades are?
    Any figures at all would help.

    Your comments make the Nanosolar idea of how to do municipal power generation (not necessarily using nanasolar panels more interesting:
    Nanosolar Blog » Municipal Solar Power Plants
    This would deliver power at 20v not 11,000v, thus avoiding the expense of transformers and partially financing it.
    Presumably shortages of NG are going to mean that the Distribution grid would need to be strengthened anyway, and presumably the incremental cost of a larger upgrade is not so large if you are doing an upgrade anyway.

    Actually, although the relatively well-off are likely to be able to get EV's, I fell that ramping up production for mass -use may be some way off, which gives some breathing space to upgrade the grid - I don't see a quick or easy transition to an all-EV future for most.

    For the well-off though, an extra few thousand for an EV car, and perhaps $10-20k for a solar panel set-up to power it, would be a worth-while cost if the alternative is not being able to get about or sell the house at a loss.

    Sorry, no costs, but let me define the scope of the problem.

    I have been told that the USA has over 1 million distribution transformers (often pole mounted). Newer models save 1% or 2% over older models, but the savings are not attractive given the expense.

    When PCBs were found to a be hazard, it was a multi-decade effort to replace these transformers (often they were taken down, drained and cleansed and filled with a safer fluid and re-used). It took close to two decades despite the decontamination costs of the area every time a transformer "blew".

    Distribution wiring is along almost every city street (sometimes both sides) and rural road. It was a multi-decade (roughly 3 decades) effort to upgrade these to accommodate air conditioning.

    As for compliance with time-of-day pricing, I can believe that early adopters will be compliant. But I am "skeptical" that the second 50% (or even the bottom 80%) will be compliant.

    To me, compliance is an unknown and one should assume the worse case.

    I hope that clarifies the situation and my position,


    When PCBs were found to a be hazard,

    I worked around PCB's in the military and have always known them to be hazardous but have recently heard the danger ridiculed at a HVAC/R-vendor luncheon.

    By any chance you got a definitive link ?

    Well, if you say it's definitive ...

    Thanks for the effort !

    In a country where there is good mass transportation, a personal car is something like a luxury item. When the cost of driving goes up, then the people for whom the cost of the luxury is excessive, compared to its benefits, will stop driving. The people for whom the extra cost is negligible, and who in fact may PREFER the higher cost as one of the desirable qualities of a luxury good is unattainability, will continue to drive.

    Thus, luxury cars/recreational driving would be a larger and larger percentage of personal auto traffic.

    They aren't using PHEVs because they're taking the bus/train/staying at their home town/etc., all of which are better solutions to the problem that a PHEV, which is just a marginal improvement on a fundamentally flawed system.

    In actuality, it costs very little to drive an older car once in a while-the most irritating expense is probably insurance. If you don't drive it much it doesn't wear out and costs you very little IMO.

    It depends on where you live and your personal circumstances, of course, but in general, insurance is a small expense for an older car that you don't drive very much. You can drop comprehensive, which makes a big difference. And your insurances rates are generally pegged to how much you drive, particularly how long your daily commute is. If you don't drive every day, you won't be paying much.

    Speaking of Energy Slaves

    We all talk about energy slaves but here are a few real life examples of mine from this past week.

    1. Grade my road - My private road is dirt and gravel and a mile long. A neighbor found a road grader he could borrow to grade his road and mine. It took over 8 hours of equipment time to do my road (quite a bit of diesel but still a deal even at $4.45/gallon).

    Could it be done by hand? Not really. When I was a kid back east a neighbor used to use his horse-drawn road grader for the road but nobody around here even has draft horses muchless a horse-drawn grader.

    2. Haul dirt for a new Terra Preta garden bed - I'm adding a new bed this year (all of our old ones have been converted to TP :-). Anyway, I needed to haul dirt for it from far down the hill. Naturally, I used a garden tractor. It probably took five hours.

    Could it have been done by hand? Yes, I could have used a garden cart but, really, at 69 would I really have spent days humping dirt?

    3. Mix in the charcoal - I used a mini-tiller. Maybe a half hour at most. I also use the tiller to also grind up the larger charcoal pieces.

    Could it have been done by hand? Yes, I could have smashed the charcoal with a tamper and mixed it with a spade. Not a big deal.

    4. Shred alfalfa hay - I add shredded hay for an instant boost in organic matter in new beds. I dragged out the shredder for this. It took 5 minutes.

    Could it be done by hand? Sure, but the pieces would have been bigger.

    5. Till some beds terraced into the hillside - There are about 1,200 SF of beds terraced into the hillside. I used a big, rear tine tiller for this. It only took 20 minutes or so.

    Could I have done this by hand? Yes, in fact, I've done it and it takes me a few days because I get tired. Remember, I'm 69. I "like" the tiller.

    So, all in all, my energy slaves were a real boon. As far as the new bed goes, it's done and I don't need any more slaves. But that isn't the case with the road. In the case of the road, my expectation is that it won't get graded any more when TSHTF.


    I forgot, there's #6 - I took the big, gas sucking 4x4 pick-up to town (a 30 mile round trip) to get a load of 8' fence posts. Normally, the truck is a "ranch truck" that stays home but there are times when it gets on the highway.

    Could this have been done by hand? I don't think I'm going to walk 30 miles carrying several hundred pounds of fence posts or even hauling them in a hand cart. I'm in the mountains.

    Could this have been done by hand? I don't think I'm going to walk 30 miles carrying several hundred pounds of fence posts or even hauling them in a hand cart. I'm in the mountains.

    The Anasazi carried by hand most of the vegas & latias for building the great pueblos at Chaco Canyon from the Chuska Mountains 60 miles to the west. The remainder they carried from the Zuni Mountains even further from the south. They wore sandals woven from yucca fibers while carrying the logs. We are a spoiled people.

    Darwinsdog -"We are a spoiled people."

    No, I think that Darwin's natural selection worked. To my knowledge, no one alive today has met an "Anasazi." But, I would understand that a "dog" cannot read (at least mine cannot), so you are foregiven.

    "Anasazi" is a corruption of the Dine' term "Anaai' sani" which translates as "ancient enemies." Modern Puebloan peoples are the direct descendants of the Anasazi. Many of us have met, and know personally, Hopi, Zuni, Jemez, et al., people. I forgive your ignorance of Native American cultural history.

    Well, you won't need a graded road "when TSHTF" -- there won't be anything to drive on it.

    When you have enough human slaves (think many Chinese laborers building the trans-continental railroad) you can do pretty much anything you can do with tractors. It does take longer, of course.

    And even at slave wages, feeding and housing all those people in the most meager conditions will cost far more than equivalent work by oil-based machinery at many multiples of the present cost.

    I wonder what the price of oil will be before human labor is cheaper?

    Actually, my expectation is that I'll convert the truck to wood gas so I can still use it around here for hauling firewood. I'll also convert my small 8kW gas generator if the grid gets flaky and the PV can't keep up. I won't mess with the 23kW diesel generator unless things get really bad because it involves lowering the compression.

    BTW, there was a long discussion about wood gas on TOD a couple of years ago.


    Todd -

    I assume that by 'wood gas' you are referring to gaseous output of an onboard wood pyrolyzer, such as was used on passenger cars in both Germany and Scandanavia during WW II.

    While such a system might work in a pinch, its long-term use is highly problematical, mainly because in addition to carbon monoxide the products of pyrolysis also include a whole variety of volatiled tars which can gum up your carb or fuel injection system, as well as carbon up your valves and combustion chamber. Unless, your truck is on it's last leg and therefore highly expendable, and unless you don't mind periodically tearing down the engine, I would be leary of try to go with wood gas.

    Note: While pyrolysis gas can be cleaned up by various means, adapting such added complications to a moving vehicle is probably not easy.

    Here is the 'wood gas' I would use with the abundant scrap cellulose on our 33acres. Clean on engines, also used for home heating, cooking and electricity. ('some' of these various supplies)


    "Once the gas is distilled, washed through small stones in water -- and compressed," Pain explains, "we use it to cook our food, produce our electricity and fuel our truck." He says that it takes about 90 days to produce 500 cubic metres of gas -- enough to keep Ida's two ovens and a three-burner stove going for a year. Leading to a room behind the house, he shows me the methane-fuelled internal combustion engine that turns a generator, producing 100 watts every hour. This charges an accumulator battery, which stores the current, providing all the Pains need to light their five-room house.

    As Ida drives off in their truck, I see on the roof two gas bottles shaped like long cannon shells. These have a capacity of five cubic metres of compressed gas, allowing her to drive 100 kilometres. Jean says that ten kilos of brush-wood supply the gas equivalent of a litre of high-test petrol. All that is needed to use it as motor fuel is a slight carburettor adjustment. "



    Actually, pyrolysis isn't that hard and has been done lots of times in the past, especially WWII. I have lots of hard copy information.

    As far as cleaning goes, one way is to pass the gas through a detergent solution. This works well for stationary engines. I agree it is more problematic on vehicles but not impossible. And, let's face it, if it gets so bad wood gas is necessary, no one is going to be doing a lot of traveling.

    My main interest is firewood. If there is little gas, then I'd sooner overhaul the engine then hump wood up a mountain and save the gasoline for chainsaws. If it's super bad/zero gasoline, I'll fell trees (by hand with one of my misery whips) within walking distance of the house. I dropped a 36"x70+' tree 50' from the house recently because it was causing winter shading. So, it's not a super big deal - just a LOT of work by hand.


    Todd -

    I would agree that if you're able to run a stationary pyrolyzer with the intent of compressing and storing the pyrolysis gas for subsequent use, then you could get pretty fancy about gas cleaning. Plus, you don't have to worry about trying to control the combustion while you're actually trying to drive.

    Just for the fun of it, I once tried to make a mini gasifier but did not have much success with it. The whole trick appears to be maintaining an optimum fuel/air ratio: too much air and you wind up burning up the wood rather than pyrolyzing it; too little air, and you don't make gas fast enough and also wind up with a lot of crud.

    I've seen some pictures of these WW II vintage cars run on wood gasifies, and they look pretty bizarre, with all manner of vessels and pipes hanging out the back. Even though they were crude, under the circumstances I guess it sure beat walking.

    This is sort of OT re. wood gas but it might help some of our city folk understand how different the boondocks are.

    My shop/garage is 20'x74' with a 14'x18' wing. The garage part is 44' long the rest is shop.

    My closest neighbor (1/4 mile as the crow flies and 1 1/4 miles by road) has a 30'x40' shop with a commercial car lift. He is a professional wrench and works for a guy who builds drag racing engines as an engine builder. He's into moderate sized equipment - like wheel tractors. He's also a doomer.

    My other neighbor (1 1/2 miles by road) has a 30'x50' shop for heavy equipment - bulldozers and such. He has lathes, etc. and he is a doomer too.

    Now, between us, we have the tools and equipment to deal with building wood gas units and then some. Actually, what I would probably do first is convert a 1972 Buick with a 455 V-8 I have to a throw-away tractor by stripping the body, etc. That would give some experience. It was to be a retirement project car.


    FWIW, the 455 was rated at 300hp with huge amounts of torque to move the beast it was installed in - in my case a 4 door hardtop that is longer than my 1 ton 4x4 pick-up.


    The 'dregs' (like your old Buick) are gonna prove useful for those who can use em. I was opining the other day about how whole temporary 'communities' will probably be built around semi trucks b/c they can provide shelter/warmth/power in hard climates for very little 'idle' cost. Your situation is interesting and somewhat similar to what we have around here. Distances and such. I'm the mech with the hoist/shop and the doomer outlook. Don't know if it's the best community setup but with neighbors maybe it's better to have knowns than to throw them over for a new set of unknowns.

    We seem to still be able to work through things with each other even though a few still have inflated expectations of how much is going to be done for them and how much more we may be on our own fairly soon. I am doing my best to begin to slowly shift the emphasis around to solutions we can maintain ourselves in simple ways for now. I will have to be a bit more PO outspoken from here on out while contributing to keep the road and water systems up. I enjoy your perspective and can relate somewhat.

    in my case a 4 door hardtop

    Heh. I learned to drive in a 1971 Electra 225 4 door hardtop with a 455. Back in those days I wouldn't have cared about the horsepower but it's utility as a bed on wheels ;)

    Re: "Rearming the World" and comments by Robert Kagan

    Why are these neo-con _________(insert execration of choice) still given a platform to spout their perversions?

    What we have in America today is truly the reign of the absurd.

    You might as well ask why the very practical, sensible German people supported the lies of the Nazis. The psycho-pathology is similar.

    Elias Canetti won a Nobel Prize for Crowds and Power (1960?) for trying to understand this.

    More than that, how can we possibly change it? Canetti thinks it is built into the human psyche. A son-in-law works for the State Department, and is a disciple of Robert Kagan and his ilk. He is generally a sensible, practical man otherwise.

    The article wasn't that bad, except for the comments about Russia/China hating democracy.

    "Got guns and bullets? They're loading up so we need to be ready for them" Pretty basic conclusion no matter which side of the fence you're on.

    The poem quoted above in "What happens when we use the last drop?" is Edwin Muir's The Horses. I think it's probably supposed to be about the aftermath of nuclear war, but it's interesting to read with peak oil in mind.

    You are of course absolutely right.

    The phrase "reign of the Absurd" was coined to describe the revolt of reason and the fear of defeat that propelled the world into WWI.

    RE: It’s a myth that the world’s oil is running out

    The only data presented in that article is the opinion poll showing that most people beleive oil is starting to run out. What a load of dribble.

    What is interesting is how often peak oil is being mentioned in the MSM. Even if it's only to try and debunk it. A couple of years ago, they wouldn't have bothered. I guess $120 oil will do that.

    How fast the price of oil goes up will determine how fast the Peak Oil debate will shift toward widespread acceptance. Once the masses accept Peak Oil the "experts" will meekly follow, all the while pretending to be opinion leaders.

    Strikingly similar to what Mohandas Gandhi said - "First they ignore you, then they laugh at you, then they fight you, then you win" - isn't it? They seem to have reached the fighting stage now.


    Not "dribble". It's deliberate dis-information to serve a political end. These people are neither un-informed nor stupid. They just hope and believe that we are.

    Not "dribble". It's deliberate dis-information to serve a political end.

    I hear this kind of stuff all the time but I have yet to see any evidence that this is the case. In fact this is completely wrong. These cornucopians actually believe the crap they are spewing. Michael Lynch actually believes only 10 to 15 percent of conventional oil has been recovered. Vijay Vaitheeswaran of The Economist magazine actually believes peak oil is a lot of bunk. Jackson, Yergin and the whole CERA crew actually believe that an "undulating plateau" is four decades off after oil production goes to over 130 mb/d.

    They all believe this just as Antidoomer ov this list actually believes the crap he writes. People really believe very stupid things, they always have and they always will. People actually believe that if we were just allowed to drill in Alaska and offshore US, we would have energy independence for "decades to come" as they are fond of saying.

    What is this drive, this desire, to believe everyone that writes a blog, a book or a newspaper column that denies peak oil is lying? No, they really believe the crap they write, they are true cornucopians on the Bjorn Lomborg sense, they are truly ignorant of the situation.

    There are many reasons that people deny the obvious. Some of them may be lying but but they would be only a very tiny minority of the deniers.

    At $40 a barrel (less than one-third above the current world price), shale oil can supply oif for the next 250 years at current consumption. And all in all there is oil enough to cover our total energy consumption for the next 5,000 years.
    - Bjorn Lomborg, “The Skeptical Environmentalist” 2001 page 135.

    Ron Patterson

    No, they really believe the crap they write..

    I've often wondered to what extent religious people actually believe the superstitious crap they spew, or just pretend to. I'm not a mind reader so I don't actually know. And neither do you.

    I'm sure it depends on the person. Some are probably perfectly sincere, some are lying like a rug, most are probably somewhere in between.

    Personally, I doubt Yergin actually believes everything he writes. He seemed to accept peak oil in his younger days. I suppose it's possible that he changed his mind because oil dropped to $10 a barrel in the '80s. More likely, he found that there was more money in offering a more optimistic view.

    I've often wondered to what extent religious people actually believe the superstitious crap they spew, or just pretend to. I'm not a mind reader so I don't actually know. And neither do you.

    Darwinsdog, I agree with most of what you write but here you are dead wrong. I grew up in a family and a community of dirt poor Bible thumpers. I have been to religious meetings and saw people shout, roll in the floor and speak in tongues. These people were not pretending, they were not faking, they actually believed. I have seen people break down and cry because they were "so possessed with the spirit".

    All my family, and I come from a very large family, are believers except me. (Though not Holy Rollers as I describe above.) They believe the Bible is the inspired word of God. They would no more question the Bible as truth than they would question whether the sun is real or an illusion. Once as a teenager, I asked my dad this: "Dad, how did them kangaroos get from Australia to where Noah's Ark was, and how did they get back?" Dad jumped to his feet and put his finger right into my face and yelled: "Son, that is the word of God and that is not for you to question."

    So when you say "And neither do you" you are dead wrong. They believed, and they believe today. And I speak not of just my family but all fundamentalists. In fact, I don't think you have a clue as to the depth of their belief. If you did you would not say such a thing.

    There are some of people who lie about their religious belief. They lie for political reasons, or because it is just "the proper thing to do." But the vast, vast majority of them actually believe what they claim to believe. Bible thumping fundamentalists are telling the truth, they believe. You simply cannot imagine the depth of their belief. I can because was born and lived among them all my life.

    Ron Patterson

    "Dad, how did them kangaroos get from Australia to where Noah's Ark was, and how did they get back?"

    LoL What I've always wondered is whether all that water was fresh or salt. If fresh, did Noah maintain marine aquaria on the ark, large enuf to maintain huge whale & basking sharks, mola, and all other marine osmoconformers in? If salt, did he maintain freshwater aquaria sufficiently large to keep arapaima & arowana, giant pimelodid & pangassiid catfishes, etc.? And what about inbreeding depression from the population bottlenecks all species must've passed thru? Where did current widespread genetic polymorphism come from? I guess goddidit..

    As for belief, have you watched "There Will Be Blood," starring Daniel Day-Lewis as the oilman Plainview? The evangelist forces Plainview to accept Jesus in a revival setting but then later on in the movie Plainview gets his payback by forcing the thumper to admit that it's all crap & to deny Jesus. Just admit that you aren't privvy to the minds of others, Ron. Leanan's correct: some may actually believe their spiel, others are lying, many are simply confused..

    Darwinsdog, a couple of points. When people lie they do so for very selfish reasons. No politician could possibly get elected if he admitted he was a atheist. Also in business, a person can usually get ahead faster if he is seen as a leader in his community. So they will often profess a depth of religious belief that is a lie. However the vast majority, even in business and politics, are actual believers, not liars. Well, not liars about that anyway.

    I can think of no reason however for a person to lie about their understanding of peak oil. Most people believe things will be business as usual and that if there is ever an oil shortage, science will think of something. Look around you at your neighbors and co-workers. Are thy lying when they say they don't believe there is a problem? Or when they say problem is simply created by OPEC, or the oil companies, or the environmentalists or whomever? Of course they are not lying, your co-workers and neighbors actually believe that crap. So why do you think columnists or bloggers are any different? They are just people like your neighbors and co-workers. They actually believe what they are saying.

    And one more important point. Never confuse fiction with reality. A habit of doing that will lead you down a very treacherous path. The movies and books are full of liars, connivers and conspirators. In real life such people are far more rare.

    Ron Patterson

    There is also the issue of cognitive dissonance. While my husband believes that most "preachers" are simply trying to gain power over people, I point out to him the problem of cognitive dissonance. It is very hard to change your view of the world when all your actions up to a certain point were based on a certain set of assumptions. This is easier to do when you are young, much harder to do when you've passed into adulthood. The experience is one of gazing into a large black hole...it's much easier to just look away, deny the hole is there, etc. I have been dealing with this a bit in my discussions with folks in my community about peak oil. Deny, deny is their first reaction. Had one friend question me last night about why I didn't think we could switch to another form of energy..technology to the rescue, etc. When I explained to her how we would have to change our entire infrastructure, and the implications of that, she gazed at me with a stark look on her face. The thought of what's coming down the pike is simply too scary for most folks to contemplate.

    The thought of what's coming down the pike is simply too scary for most folks to contemplate.

    Really, the large majority of people don't believe that their own body's physical death will pose a problem for their social lives. With this level of denial seemingly almost biologically necessary to deal with the dissonance of the "can't die/will die" loop, it's hardly surprising that something as vague and dire as peak oil and its implications will always be disbelieved by most people. And when they're suffering, they will not necessarily be grateful to those who warned them in advance.

    A lot of things tightly coupled to a person's self-identity go into what we could call their "belief structure", which is the model of the world (universe) and how it works, in each person's head. Religion is just one component of this model.

    You will find a fascinating account of a 3-day church retreat in the present Rolling Stone magazine (May 1st edition, issue 1051). The author is a slightly paranoid non-believer who fakes the necessary personal deep trauma in order to fit into the group seeking personal enlightenment and self-improvement (although his story - that his father was an alcoholic clown who beat him with his oversized clown shoes - had me laughing so hard I almost fell out of my airplane seat). But 2 days into into the session he is forced to pose some deep questions: "Who am I?", and what follows is a better introspective self-examination than I expected at the outset of the article.

    At the end of the 3 days the retreat leader takes them through an extreme session of casting out demons and speaking in tongues (for this the author reverts to speaking the lyrics to his favorite Russian rock 'n roll music, in Russian of course). Clearly everyone else in this religious encounter group (with the possible exception of the leader) is absolutely sincere and a true believer.

    I recommend it highly to anyone interested in a well-written study of fundamentalist religion in the U.S.

    - Dick Lawrence

    US fundamentalism is interesting. I did that for several years as a kid (11-13 years old) as a break form my boring catholic upbringing. The initial emotionalism does not carry long enough. Deep faith needs deep roots and not tricks or sleight of hand. The pentecostals got all over central America. I read an article that said they have some big percentage throughout the region(15%-20%?) but there is a limit as people get burnt out with this emotionalism, i.e. turnover is high, new warm recrutis always welcome. Mainline churches and Catholicism is boring of course.

    Agnosticism is just a cop out.

    True atheism is a real achievement. Good luck on that one. The equivalent of Buddhist absoluteness where God is nothingness. Cool. I got this for a few days but had to come down to feel my emotions again and a "Personal God"/love, etc. makes human expereince more real. Atheism works good with science as feelings become irrelevant, only aboslute truth counts for anything from an absolute viewpoint.

    I tend to think that western culture is quite primitive generally but especially US/American culture is qite childish. Religion is hopping on benches and rolling on the floor or denying God based on the idea that those nutcases can't possibly be right. Society's needs are just fulfilled by destroying long-term survivability for individual profit.

    Religion can be made scientific like with yoga and buddhism and integrated with an understanding of natural world as in Chinese five elements which they use in Traditional Chinese Medicine or architecture (Feng Shui), etc. Balance internally and externally, soul, feelings (i.e. personal energies) => environment creates balance and can be maintained long term.

    The US constitiution looks responsible only when you think well they used as an example Greek/Roman/British ideas and were pretty smart guys with their own experiences and very well educated, wise for the time, but "the pursuit of happiness" as a goal without knowing what the hell that is and leaving religion up to individual choice,i.e. separation of state and religion, was just asking for trouble. The whole ideology is an open can of worms. You can't suppress religion, sure but "pusuit of happiness" and separation of church and state making a de facto materialism as national religion as a compromise a nobody could agree was a cop out. People left the old country from everywhere for religious and financial reasons to get away from oppression,etc. and landed in N.America and agnositc materialism is the lowest common denominator. Collapse and die-off will make America grow up and get the world to wake up from the fantasy of the childish American Dream which is just a big concept that everyone can have everything without end responsibility, puritan work ethic or not.

    Anyway you can all cuss me or call it a rant if you like. I think society is on a spiral of development and we have to go through this to mature as a species or peoples. PO is just part of that. A spiritual development.

    Yeah, I'd call it a rant. I liked

    I with you on the spiral development.

    I've even melded my own 'religion' out of Jane Robert's 'Seth' works and Ingo Swann's biomindsuperpower concepts.

    If the species gets through PO/GW I believe the maturity level
    can't help but be higher.

    "I can think of no reason however for a person to lie about their understanding of peak oil."

    I can think of a few.

    And I completely disagree with your assessment of life not being full of liars and conspirators. In order to commit corporate crime there are many co-conspirators - not always of course, but enough. And plenty of liars too.


    But I would agree that the majority of people probably just lie to themselves and actually believe the crap they spin. I have friends who are very intelligent, and yet cannot accept that limited resources will impose anything other than the most minor inconvenience for humans...

    Hi Ron,

    re: "Once as a teenager, I asked my dad this: "Dad, how did them kangaroos get from Australia to where Noah's Ark was, and how did they get back?"

    I can just see this so clearly - the teenage Ron, so sincere and trusting his Dad enough to ask him...anything. The potential loneliness of thinking for oneself. The attachment figure one would never willfully upset, and yet...one possesses a mind that just ups and questions.

    The loneliness of thinking for oneself is what scares most people. The group represents safety and support. It will attack those who question group assumptions and beliefs.

    But those who can think for themselves can use reason to find the truth and that is worth all the loneliness, social discomfort and even rejection.

    Plus if they search a little they will find out that others, maybe not many, have figured out what they have. And that helps ease the loneliness.

    That's why I like TOD and the atheists who post here.


    You are perfectly right --- indeed I confess that until five years ago, I myself was on the cornucopian side. I really, truly did believe that Julian Simons was a kind of environmental deus ex machina, that the 'tree huggers' were just dumb attention-seeking lefties etc. etc.

    People just make mistakes because they are not omniscient and if they deceive others it is often not intentionally, but only because they have first deceived themselves. The tragedy is not so much human evil as human fallibility.

    The tragedy is not so much human evil as human fallibility.

    Exactly! Though I prefer the term "human frailty".

    Ron Patterson

    Only 15% of conventional oil has been recovered. The problem, is, we will only recover about 30% total.

    But there comes a time when the body will go from pretending to be stupid
    to the actual thing.

    An intermediary step would be "believing your own agit/prop".

    When those who use power badly lose it.

    Whom the Gods Would Destroy They First Make Mad.

    Quem deus vult perdere dementat prius

    One of the comments at the end of the top article "what happens when we have used the last drop" lays out the attitude of at least 90% of the auto owners of the world. It is also why this is not going to end well for western civilization.

    If you think I am going to give up my car, to then have to share my space with the great unwash that use public transport, you can think again.

    Trains are expensive, delayed and cancelled all the time.
    Buses are expensive, delayed, cancelled and you have to wait in the pouring rain, this is after you have left the house much earlier becuase it only comes every 30mins, and its poured all the way to the busstop. And you not even guarenteed a seat!!!!

    Nah, I'll leave my house when I want, sit in a temperture which I dictate, listen to what I want to listen to, get to my destination in a decent time, without sharing with the general public!

    I suspect that comment is meant to be ironic. In my experience (I can't claim to know what 90% of any group thinks, of course) people don't really think like that. They either take everything for granted (and don't articulate it in any way) and just expect things to keep on as they have before, or they are scared that something bad is going to happen. The aggressive defenders of the "American way of life" aren't very obvious where I live.

    I agree. I don't really think that most people hold those views overtly - mostly they don't think about it at all. We've all grown up surrounded by so much energy for our whole lives, and that of our parents, that we cannot even see it. Although that may be changing, and when they simply cannot get the energy needed to control all aspects of their environment, the responses will be......interesting.

    This is a Scottish paper - I suspect the American comment earlier in the replies is just a view of our politicians kowtowing to whatever insane idea the American government comes up with. And in the UK, I think a lot of people hold those views on public transport. I'm in the UK, very pro-public transport and I'd agree with everything he said, but with the extra point that because one person per car is not sustainable from the point of view of oil usage, climate change and congestion issues (every day I walk past a "rat run" that still has traffic jams during most of the rush hour) there's not a long-term alternative. I don't think your ever going to convince most of the UK population that public transport is the better alternative to the car; the only hope is that it becomes clear that it isn't an alternative but the only possible option.

    While I don't share the sentiment, I understand it and I think it is probably the most important factor hurting mass transit in the U.S. However, it is also bespeaks the reality that transit in the U.S. generally sucks. When I lived in Frankfurt,Germany, I would have never even considered taking the auto as the public transit was more convenient, faster, and cheaper.

    However, it is also bespeaks the reality that transit in the U.S. generally sucks.

    As an example of how much it sucks in my neck of suburbia, if I go to google maps for directions from my house to work, driving is six miles and takes 15 minutes. If I click on the 'take public transit' link, I'm given a trip that starts with a 25-minute walk, followed by a 20-minute bus ride all for the low price of $2.00. Even with gas at $5 per gallon, I can drive the six miles for less money.

    Nah, I'll leave my house when I want, sit in a temperture which I dictate, listen to what I want to listen to, get to my destination in a decent time, without sharing with the general public!

    If the distance is reasonable, ride a bike. The only control you lose is the temperature.

    IMO the USA is going to urbanize, densify, but the cars aren't going anywhere for a very very long time. In a densely populated area, a car is useful even if you only drive it 3000 miles a year (maybe 20% of the current ave). Double the fuel efficiency and now you are at 10% of the current gasoline usage.

    I'll vouch for that. I drive my car less than 3,000 miles a year, and obviously, I find it useful, or I wouldn't have bought the darned thing.

    People in the US will not give up their cars...only gas shortages will stop them.

    If you have a car that averages 25 mpg, 3000 miles annually equals 120 gallons of gasoline a year. Even at $8, that is only $960 a year. This is one of the reasons I feel prices can go a lot higher than people think-a lot of people can afford it.

    There is a class difference within public transit. Buses are, with limited exceptions, for those with no alternative, trains attract a good % of "choice riders", those with a choice.

    I saw New Orleans' only billionaire several times on a 1920s un-air conditioned streetcar. He would NEVER take a bus.

    In 1970, 4% of DC area commuters took public transit, 100% buses.

    Today, the buses are busier (often as feeders to DC Metro) but DC Metro subway is larger. More people take public transit to work than drive alone today in Washington DC.

    Urban Rail is also much more cost and energy efficient as well as attracting "choice riders". Buses and rail are not equal.


    We seem to be having the opposite in Sacramento. The busses are full and riders are being turned away from many of the relatively affluent outlying towns until more can be provided. The light rail system is busy as well, but many are avoiding it for security reasons. There is no security on the light rail, people are left to themselves, and there is enough crime, noisy or obnoxious groups, and even gangs on them that many people have stopped riding them. This is obviously very troubling.

    I've taken buses in countries with wonderful trains, and even then riding the bus stinks -- at least in urban areas. Rural buses were fine, and charter buses that go direct to a location. Trains are vastly superior. Also, while everyone seems to have a hard-on for "light rail" these days, which usually means streetcars, trains that run on dedicated tracks (subways for example) are vastly superior.

    Another airline casualty:


    As far as I know there has been no announcement by ANY airline as to how air travel is going to expand in the face of static or declining oil production. You hear tech press releases about how they can shave a few percent here or there over decades but nothing to match the %age decrease in available net petoleum products.

    Good luck with thier stock value 1 year from now.


    There is commentary to the effect that Britain and the oil companies are losing money because of oil not being sold because of the strike. This is not really so much a loss as transferring revenues from the present to the future -- to the back end. These so called losses will help stretch out North Sea oil supplies so in that sense the situation is creating a net gain for the future. But I guess the commentators assume that these oil supplies are infinite. If so, then the current losses are total losses.

    On balance, the strike situation will cause a sudden shock which may be of short duration. I don't know about Scotland, but where I live, there is a lot of cushion in the system as a result of poorly planned trips, unnecessary trips, trips to the mountains, rampaging motor cyclists, ATV use, single passenger trips, vehicles too large for the task at hand, inefficient vehicles. In addition, people could cut down on the number of vehicle trips by stocking up at least a month's supplies for non perishables.

    Not to worry, though. Hillary Clinton and John McCain are riding to the rescue by eliminating the federal tax on gasoline.

    Some oil companies were replacing more than 100% of their reserves produced each year. In 2007 the Venezuelan seizure of oil company reserves produced a dip in reserves replacement for oil companies doing business with the Chavez government. There has been a tendency for oil companies to describe their BOE reserves when describing percentage of production replaced per annum. That is their proved developed barrel of oil equivalent reserves including oil, natural gas, condensates, and NGL's. There has been a trend amongst some majors to replace oil with natural gas reserves. Some declining onshore oil assets were replaced with more expensive projects offshore. Other companies were also replacing light oil reserves with heavy oil reserves. The amount of money required to develop deep offshore and heavy oil projects is higher and each company was only able to alot a certain amount of money each year to new projects. With royalty and tax increases around the world, less capital might be availble for investment in oil production. Some oil companies have tremendous resources that will take time to develop. Typically one might publish the next five years of projects, not meaning that it is the end of the project list, only that they cannot fund any more projects with the limited amount of profit they have been earning. Small deep offshore fields require billions to develop. Small onshore heavy oil projects cost billions to develop and have seen increasing operating costs plus higher taxes coming.

    Inceased environemntal legislation has been driving the cost of gallon of gasoline and a barrel of oil higher not lower.

    Re: "Powerful Stocks Bull Market As US Hyper Power Prepares for Global Hegemony"

    So here we have the Neo-con wet dream, denuded of any benevolent pretensions such as "helping those people" or "spreading democracy."

    And as always they are so cocky and sure of themselves--just like they were when we invaded Iraq.

    "...and the best basis for sound judgment is a knowledge of what has been done in the past, and with what results."--J.C. Slessor

    "War involves in its progress such a train of unforeseen and unsupposed circumstances that no human wisdom can caluclate the end. It has but one thing certain, and that is to increase taxes."--Thomas Paine

    Sadly, I have come to believe that the whole point of "war" is to increase taxes. Taxes that can be used to feed the military machine. The enemy changes from time to time, but the show goes on. Didn't George Orwell write a book about that?

    We never learn.

    Norman Angell in 1909 wrote the pamphlet entitled "Europe's Optical Illusion" in which the futility and the danger of war for profit were demonstrated. The pamphlet attracted wide attention which led Angell to expand it into a full documented work retitled "The Great Illusion--A Study of the Relation of Military Power in Nations to Their Economic and Social Advantage." He showed that the existing ways of international finance put the wealth of one nation at the mercy of another. Hostilities would ensure their common loss. Colonies were no asset but a subsidized expense; annexing them or some part of a defeated country, or occupying it to levy tribute was yet more wasteful. Besides, the cost of an up-to-date war would be ruinous. All the resources of all the participants would be drained dry. War in the 20th century is suicide disguised as self-interest.

    That article struck me too...the author seems to be saying that the current financial woes of the USA will disappear overnight thanks to peak oil, and all of the oil revenue flowing from Iraq into the Fed's coffers will allow the US to rule the world once again. I must be stupid - I was under the impression that the US was spreading democracy, and all of that lovely oil money would go to the Iraqi people. Didn't GWB say that? Do you mean he lied? Anyway the author clive maund says oil prices have peaked. He's an independent analyst so he should know.

    A Plug-In Conversion for Prius


    The A123 conversion will allow a Prius driver to substitute electricity, at about 3 cents a mile, for gasoline at three or four times that price. And it would let the United States shift toward the use of coal, wind or sun energy sources instead of imported oil.

    Now all we need are some Plug in nuclear power stations to stop the rolling blackouts when half the worlds population plugs it's car into the wall :-).


    we wait till ITER comes on line in 2050:



    Like this one? :-)

    Often referred to as a “cartridge” reactor or “nuclear battery,” the Hyperion hydride reactor is self- regulating with no moving parts to break down or corrode. The inherent properties of uranium hydride serve as both fuel and moderator providing unparalleled safety among nuclear reactors.

    Sealed at the factory, the module is not opened until it is time for the unit to be “refueled,” approximately every five years or so by the manufacturer. This containment, along with the strategy of completely burying the module at the operating site, protects against the possibility of human incompetence, or hostile tampering and proliferation.

    Hyperion Power Generation Home Page

    As with most things nuclear, the issues are more with licensing than anything, but if things get tough even the regulatory authorities might decide to get a move on, or at least choose one body to do the regulating rather than umpteen.

    Wow, really cool link DaveMart. Are there proliferation issues with Uranium Hydride?

    Not much point in using this stuff for making weapons. Apparently it is only about equivalent to 200tons of TNT.

    It may make it possible to extract much more oil from oil-shales:


    The warranty is a bit more modest, at three years.
    As an add-on, the A123 module is a bit cumbersome and quite expensive, $9,999.
    That indicates a payback period of more than 17 years.

    Wow, 10 grand with a payback period of 17 years. And the battery is only waranteed for 3 years?!?

    I guess there really is a sucker born every minute.

    That's a very expensive techno wank-off. Sheesh, even Eliot Spitzer could find a better deal than that!

    How about this instead?

    $190 electric scooter:
    20-45 mile range
    22 mph
    52 lbs


    At a guess, you probably feel the same way about cars, and almost certainly about high-performance cars.
    Regardless of the merits of your case, most people do not agree, and want a car not a scooter.
    It helps not to turn up for a business meeting sopping wet, and taking the kids out is somewhat easier in a car than on a scooter.

    Actually, my OTHER car is a Mazda Miata modified for SCCA racing. I bought it from a racerhead for less than the cost of this Prius mod. Har!

    Obviously, using a race car to commute to work is silly. (Although it was good fun.)

    In the same vein, powering a 3000 lb car with a battery, in an attempt to get maybe 50mpg equivalent is silly, and a lot less fun, and a lot more expensive overall.

    The Audi A2 gets over 75mpg with a regular diesel engine, with no silly tweaks, and weighs about 2000 lbs. In real-world conditions during the 2005 Nordic EcoRun competition, it got an average of 98 mpg (it won the race).

    Now, if you want to make something really splendid, it would be an 1100 lb car that gets 150mpg, which basically describes the Loremo.

    The basic problem with electric cars is that they become very very heavy and very very expensive as the battery packs pile up. Maybe someone's WonderBattery will cut the weight somewhat, and cost more, giving you a car that's very heavy and very very very expensive. If you're going to go the electric-vehicle route, it makes sense to go for minimal weight and minimal expense, and I think this cheap Chinese scooter really sums up the likely Ultimate in terms of electric vehicles. One thing that's nice is: it's so cheap that you can buy one IN ADDITION to a car, and use it when it makes sense to use a scooter, and use the car when it makes sense to use a car. Cars don't use any fuel when you don't drive them.

    This one is for early adopter enthusiasts.
    Toyota are building their own plug-in, and being Toyota will certainly have longevity and reliability in mind.

    Long term performance uncertainties are one of the main factors delaying the introduction of plug-in hybrids, as the big makers need to be absolutely certain they will not have expensive recalls.

    I suspect that 123 are being very conservative in their batter guarantee for the same reason.

    Toyota are building their own plug-in, and being Toyota will certainly have longevity and reliability in mind.

    Sure, and that's why they are going with proven battery technology.

    Long term performance uncertainties are one of the main factors delaying the introduction of plug-in hybrids, as the big makers need to be absolutely certain they will not have expensive recalls.I suspect that 123 are being very conservative in their batter guarantee for the same reason.

    I agree. When a123 gets to the point were they trust their own battery tech to warentee their own batteries for 10+ years, then maybe they'll be ready for the mass market.

    The former CIA director turned clean-energy enthusiast is part geek, part zealot—and all iconoclast

    Mother Jones

    Bad link above. Here's the direct one to the James Woolsey profile: http://www.motherjones.com/news/outfront/2008/05/balance-of-power-the-hy...


    Lead article in today's Boston Globe's Ideas section: The future of dirt


    The earth's uncertain oil reserves and dwindling freshwater supply may get all the attention, but modern society is also overtaxing the ground itself...

    An increasing number of scientists are starting to emphasize the extent to which soil - even more than petroleum or water or air - is a limited and fragile resource. Managing it better, and even improving it, will be vital to any equation that allows the earth to support the more than 9 billion people the UN estimates will live on the planet by midcentury.

    Terra preta/biochar is highlighted as a soil enhancer of great potential.

    Can anyone who is using charcoal as a soil amendment speak more specifically about what sort of charcoal (bought bags of lump kind, activated, or self-made?) one is using and how much one is adding to a garden?

    I'd like to try this but might add/cycle it thru my humanure-kitchen scraps compost bins rather than add directly to garden beds.

    I screen my wood ashes & return any charcoal to the fire. Charcoal is quite refractile & serves a useful purpose in the soil as a carbon sequestrant, but I'd rather extract all the calories from the wood I cut by burning it. Other organic amendments better supply micronutrients & improve soil tilth. Charcoal has higher value as an energy source than as a soil amendment, in my opinion.

    We usually put it in our compost bins. We've used briquettes, lumps, and charcoal from our wood stove. I try to get the charcoal down to pieces no bigger than a cubic half inch. Charcoal from the wood stove is usually about that size or crushes easily to that small. We soak briquettes until they are easy to crumble in your hand. Make sure you buy briquettes that don't have added starter. It can take a few weeks for them to soften enough. Lump is a real pain. We crush that with a rock on a piece of concrete block.

    I'm looking forward to the day when you can buy this pre-crushed from a pyrolysis plant that also produces useful heat and electricity. It's one of our silver BBs.

    Search through for comments by TOD commenter Todd, or maybe he'll chime in.

    I've been conducting research on charcoal in agriculture since 2003. Here is an article I wrote recently and web published at our nursery site. Included in article are links to additional sources of literature.


    In addition an interesting reading and discussion list is available at


    with an impressive bibliography of articles


    I've been using charcoal as a soil amendment for a couple years. I make the charcoal in one of my clay ovens, soak it in water or water/fertilizer for a week, then dig it in. I live where the summer temps are high enough to 'cook' most of the organic material out of the soil each year, so YMMV. However, for me, the charcoal is probably the single best thing I have done to turn the local clay subsoil into something I can garden in. I recommend crushing the charcoal as the freeze/thaw cycles in the winter make the larger pieces rise to the surface and fall out of my raised beds.

    Now that we have some data for 2008, here's an update to a graph I posted at the beginning of the year, Gasoline Mountain. Someone requested a similar version for crude oil, so here it is, Crude Oil Mountain.

    Suggestions for a new color scheme are welcome. (-:

    Nice graphs. It's a really interesting way of looking at things.

    Love these graphs! So telling. Mabye you could color in the mountains and add d detail like...trees, wildlife, people....cars!

    Thanks, Boo and Leanan.

    After seeing the exchange with eastender, I decided to setup some hosting of my own for these. I wouldn't call it a blog; it's more like a white board in the hallway where I can scribble notes and post pretty pictures where everyone can find them: Pictures of Oil.

    You should put the URL in your profile.

    Good idea, helping with that "everyone can see them" part.

    I'm reminded of a Folgers coffee commercial from decades ago:

    Petroleum oil, good to the last drop.

    I think you mean Maxwell House, not Folgers...

    Electrical Light Rail for Ft. Lauderdale, FL?

    Can a good thing be ruined by power brokers and (re) development interests? Three - only three - miles for $150 million!?

    Read Here


    The USA has developed a "Ration by Queue" system for building new Urban Rail systems. Consultants are seen, and sell themselves, as the guides that know the ways to federal funding (especially by cities that never built a Light Rail systems).

    The result is grossly gold plated systems that cost twice (or more) what they should.

    Parsons Brinckerhoff is the worst. I would recommend LTK.

    New Orleans built a 5 mile Canal Streetcar Line for $150 million that opened in April 2004. $10 million under budget. Almost 30% to consultants. About $20 million was slide in that benefited the streetcar system as a whole ($2 million wheel alignment machine, $1.5 million streetcars paint booth, new roof and roof support structure for 1884 streetcar barn).

    Talking with project managers, they think that they could have built those 5 miles (or another 5 miles) for $100 million or a bit less.

    France plans to build 1.500 km of new tram lines (Light Rail) for 22 billion euros. (I figure purchasing power parity is 1 euro = $1.12).

    Best Hopes for Reasonably Priced Urban Rail,


    BTW, Miami is currently planning/building a 9.5 mile Northern extension of their Metrorail (elevated Rapid Rail, not light rail, that is basically a "Subway in the Sky") that terminates a few hundred yards south of Ft. Lauderdale at Calder Race Course. There is no good reason to stop where it does except for the political boundary as far as I could see.

    I drove the route when speaking at the 2004 APTA conference in Miami, but only drove into Broward County by mistake. It seems that it could be extended north into Ft. Lauderdale at least as far as that small airport (2 miles north ?), which could provide parking for Park & Ride.


    Later when Miami extends another MetroRail line up the FEC ROW, Ft. Lauderdale could connect the two ends in a loop through the city. Streetcars and buses could feed this loop (and Tri-Rail). This line was canceled under GWB, but it could be "uncanceled".

    One hypothetical (with inadequate on the ground knowledge), would be elevated Rapid Rail lines North-South (on University, and Florida East Coast Railroad ROWs plus CSX corridor for Tri-Rail) and East-West streetcars/Light Rail on surface streets.

    IMHO, Ft. Lauderdale should first just add-on to the Miami Metrorail system instead of building their own independent system.

    Thanks Alan. I'm impressed - you seem to know more about my kneck of the woods than I do ;-)

    Born 'n raised im Miami, but now live about 40 miles North in NW Broward (about 15 miles from Ft. Lauderdale).


    EB had this link today: A message from Mike Ruppert.

    Most interesting to me is that he's returned to Los Angeles. Basically, when push came to shove, he decided the best place for him was home.

    I think a lot of people will end up making similar decisions. Despite all the discussion of farmland, water supplies, city vs. rural, moving to other countries, nuclear fallout, train lines, climate, and all...when the going gets tough, most people will simply go home.

    This was like reading a letter from someone de-toxing.

    *shurgs* i agree with him on somethings but i don't agree with him about not attacking iran. resource rich, provides oil and nat gas to our long term foe china(united states wants to stay the only super power), controlling some if not of their territory would allow control of resources into and out of the region.

    Welcome back home Rup. Grab one at the Tiki Ti, take a lounge chair to Venice Beach for a day or so and make sure to write the biography/screenplay.

    Hello TODers,

    Potential postPeak mitigation news? Can SpiderWebRiding be close behind?

    The sky's the limit

    ..."I initially think of this as fitness," Olson said. But "it certainly could be transportation."

    Because the bikes would be mounted on the rail, they don't need to be steered, and they would need less balance than a regular bike. So, they could be used by visually impaired people or people with other disabilities, Olson said.

    "The goal is that it will require no skill at all to ride," he said.

    He said a rail-mounted bike also should generate less friction than a bike that rolls on the ground.

    "This will be flying at 30 miles per hour," he said. "It's going to go faster than any bike."

    "I anticipate that SkyBikes will eventually become the fastest human-powered machines on the planet," according to Olson's PowerPoint presentation.

    In case you're wondering, Olson said people also laughed when he first developed the Rollerblade.
    Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

    There might be a speed limit problem with this contraption. Otherwise, looks like fun.

    Hello Prairiedog,

    Thxs for responding. A long time ago, Alan Drake and I discussed exactly this topic, but we decided this overhead-rail concept would be too expensive and impractical. Then later, I conceived SpiderWebRiding, but this is really nothing new as a google of rail bikes brings forth a lot of hits. But, IMO, the idea of riding atop pipelines and/or narrow canals [where possible] still has merit because of the combined energy-savings, ease of maintenance, and other postPeak pluses.

    I posted a comment to this inventor article with a plug for the reader to check out TOD. I hope others will do the Peak Outreach too.

    Consider the posting upthread for 3 miles of mass-transit for $150 million--although expensive, probably still required for the movement of people and goods postPeak as explained by Alan Drake.

    This link talks about the costs of a bicycle/walking path:

    Efforts to pave trails are paying off, one step at a time

    .."The whole point is for this to connect into the neighborhoods, so people don't use their cars," said Chuck DePrima, the acting director for the city's Parks, Recreation and Cemeteries Department.

    ..the city is moving ahead with constructing 1.5 miles of paved trails on the West Side by fall, extending an existing paved section..

    ..Federal funds will cover 80 percent of the $1.2 million project, with city money paying for the rest.
    This works out to $151.50 per linear foot of pavement. Now I have nothing against bikepaths and footpaths in New Hampshire, but in the postPeak age when these paths will be essential to a city's function--will they be able to cheaply maintain/repave these paths? How well does New England pavement hold up to the weather; will this asphalt have to be totally replaced in five years?

    Compare to a railbike and/or minitrain trackbed as shown in these photos:


    Somehow, I think the cost would be much less than $150 per linear foot, and the roadbed might be easily and cheaply maintainable for 50 years or more.

    The choice is people slogging through the long gone asphalt, mud, and snow with heavy backpacks [Nuahtl Tlamemes], or comfortably pedaling a recumbent railbike with a far greater load an even longer distance.
    Will New Englanders postPeak prefer to year-round maintain a 12 foot wide path or a narrow gauge railbed?

    Hi Bob Shaw;
    Our bike trails in Portland Maine seem pretty durable, Which I'm sure is dependent upon a well laid foundation (many sitting on old rail ROW), but also upon the fact that it is loaded only with bikes, strollers and joggers, and not trucks. With the right grading and drainage, I've no doubt that non-asphalt surfaces could be easily maintained for the ultralight traffic. I've ridden on tight gravel and sand paths that were more than acceptable for bike/walk.

    I liked the Bike Monorail, but keep going to a version that looks more like the storyland train, where you've got 8-20 seats- pedal powered with electric support. I wonder how hard the metering would be to incorporate that gauges the input of each rider's pedals vs. their weight(?) to determine how much your fare is, perhaps?

    I keep thinking of Spiderweb bikes in a way that could let them function as normal bikes, but jump onto the rails for 'cruising' - Long Distance trips between towns, you could stop steering.. just pedal along and read the paper..?

    Bob Fiske

    Hello TODers,

    I have often thought a good place to start railbiking would be at high-end golf neighborhoods. As the cost of golfing becomes more expensive, the operators could save money by eliminating golfcarts, then switching over to pedal or battery-assist railbikes. A golf neighborhood near me has expensive concrete paths throughout their course--no big deal to bolt down rails to this surface. There are probably similar, exclusive golf-country clubs like this around the US.

    The other big savings would be this neighborhood could eliminate school buses, or the more common practice of driving the kids to school in their SUVs, and/or the older kids driving their vehicles to the school itself. Just have the kids walk out their backdoors to the golf course, then a minitrain could shuttle them directly to the school's frontdoor.

    If fuel prices are real expensive: even the parents could ride the minitrain to a bus or mass-transit pickup point. The mailman could railbike the golf-course too--just move the mailbox from the street to the backyard.

    As Peak Outreach spreads: it only makes sense for the very rich to become highly proactive locally, then be the first to drastically curtail their normal fuel usage to reap huge savings.

    Of course, as explained in prior postings, eventually food costs will rise so high that the rich will be happy to convert the golf course [and their front yards and street asphalt] to veggie gardens and pasturage, then the minitrains/railbikes will be an easy network to move these goods to market. Recall my posting on moving eggs on a railbike vs over badly torn up roads.

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


    But even if it doesn't, it's illustrated the point already, which is that someone working alone, with really cheap tools, has a reasonable hope of carving out enough of the cognitive surplus, enough of the desire to participate, enough of the collective goodwill of the citizens, to create a resource you couldn't have imagined existing even five years ago.

    I wonder what the 'killer peak oil' app will be?

    Thanks for the link eric..that was a refreshing read. I like the cognitive surplus idea. Can it work you think? Speaking of surplus...has there been any discussion on the CSPAN showing on the talks re: SPR :

    House Select Energy Cmte. Hearing on Gas Prices (April 27, 2008)
    The House Select Energy Cmte. examines the way gas prices are influenced by the Strategic Petroleum Reserve, the Dept. of Energy's emergency oil supply. Chair. Rep. Ed Markey (D-MA) has called for a temporary halt to filling the reserve while prices remain at record highs.

    So the DOE guy says let's trade the SPR light for heavy oil. This will be a good thing. He said the the rifinery's produce at higher capacity with heavy oil...is that true? Maybe I heard him wrong.

    Hello Eric Blair,

    Thxs for the link. My hope is that when the Google Unlucky Button is unveiled: 300 million 'Murkans will say, "No way! We can do much better than merely continuing into the full-blown Thermo/Gene Collision!"

    Then TOD, LATOC, EB, and other websites get swamped with new users seeking all the good ideas we have already archive posted to optimize our decline. IMO, a lot of good, new killer apps could happen from that point on. TV and video games will be extremely boring compared to the Paradigm Shift.

    I have been thinking about how good the USA information technology and communications technology works. I think it is adequate but not great. I think this infrastructure could bring about the biggest demand decrease in oil if it can be harnessed. For some of us...having our computers at home, being able to connect to the workplace, is as good as being at work. But not all can sit in front of the their phone or computer and still contribute to progress. Take a carpenter or plumber or the myriad trades where this is not quite possible. Or...perhaps some can. Maybe you could get a live feed from a plumber who can show you how to exactly fix your broken pipe? And if you don't have the tools...get a delivery of the tools and parts you need? So, we can end up with a large populace that is drawing very little oil in their daily activities. I think the percentage of US citizens who can perform thier work in this type of "home" work setting...would do a lot to drop demand. Actually I have nothing to really anchor this one...but the idea seemed good...guess I was seeing how this cognitive surplus is spoze to work! This PO stuff is really starting to freak me out!

    If you can sit at home and do your job, your employer will look at hiring a guy who can sit at home in a shack in New Delhi.

    BINGO! I'm constantly thinking about things my kids could do that require physical presence. It is good to keep in mind that not everyone is looking out for your personal best interests. And that if you leave an opening, someone will take advantage of it. What, did you think we were some kind of community or something?

    There is a large populace (unsubstantiated) that can work at home given the communications infrastructure...and if it can happen in New Dehli (and it does)..that is good too. But only if it is effecting the demand on oil.

    It is good if you are a computer programmer that wants to work for $6000 a year (like in New Delhi).

    Yup. This ought to be a growth industry.

    Yikes. I wonder if each of these cubicle workers gets to work by car each day. I doubt they are quite like us in that way...hopefully not!

    Eh. I don't think I buy it. At least at my house, an hour watching TV isn't necessarily an hour not spent editing a Wikipedia article. I can't stand just watching TV. Even when it's something I really enjoy watching, I'm always doing something else while the tube is on. My mom always works while watching TV. She knits, sews, folds laundry, exercises, cooks, dusts, etc. Just about everyone I know has a computer near the TV, or a laptop stashed by the couch, so they can surf the web (even edit a Wikipedia article) while watching TV.

    $119.93----new high already today. If the UK and Nigeria stay on strike, $125 by the end of the week is my bet. What is yours?

    An interesting article in today's Washington Post magazine - about what some think DC in 2025 will look like.

    The city beckoned. Plug-in hybrid cars had finally caught on, and only the city was equipped with government-subsidized charging stations attached to every parking meter. With gas at $12 a gallon and air travel still trying to rebound from a devastating series of crashes that were blamed on cutbacks in maintenance budgets, the idea of living in a self-sufficient city made more and more sense. (To the great surprise of many, while energy prices soared steadily for almost two decades after the 9/11 attacks, in the past few years the cost of fossil fuels had stabilized. Depending on your political ideology, this was the result of either the Total War for Energy Independence that President Jeb Bush launched in 2021, or of Iran's velvet revolution and the new openness toward the West that the secular-friendly Young Islam movement was exporting across the Middle East.)


    $12 in 2025 is absurd. Gasoline would be $12 US in 2025 with no supply issues at all (CERA being accurate on supply)-$12 in 2025 is only 7.3% annually-fits in with the probable real inflation rate. A more realistic estimate would be $35 in 2025 IMO.

    Yeah- the article is definitely the optimistic case.

    It won't really matter what the price of gasoline is by 2025, most ordinary people won't be able to get a ration for it.

    Feet, or an electric bike or scooter if you are lucky, or mass transit if you are really lucky, or an NEV if you are REALLY really lucky, or maybe a horse & carriage in the countryside. That will be it for the bottom 95-98%, i.e. most of us. Plan on it.

    Hello TODers,

    Interesting article on how drought and sulphuric acid combine to produce a huge watershed environmental disaster--extreme cascading blowback. Gee, I can hardly wait until the same thing happens in my Colorado River Basin. :(

    UNLESS there is heavy rain in the Murray-Darling Basin over the rest of the year, 90% of South Australians face environmental catastrophe caused by the movement of heavy metals in solution up the river by osmosis.

    Osmosis is the process by which any solution that is in higher concentration in one part of a body of fluid will flow into the other parts with a lower concentration until the solution is evenly distributed.

    Heavy metals such as arsenic and lead in solution already poison Lake Alexandrina at the mouth of the Murray. The lake's bed is exposed to oxygen because the lake is half empty, so the sulphates are converted into sulphuric acid, which leaches the heavy metals such as arsenic and lead out of the soil.

    The poisonous solution then goes into the food chain...
    Perhaps this explains why some fossilized dinosaurs were found whole. A few gulps..a few staggering steps... even the scavengers left the carcass untouched?

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

    of course, those that collapsed into the pool of sulfuric acid and toxic metals completely chem-dissolved.

    D00m at my doorstep! Pics of the Mississippi River flooding in Davenport, IA. Current level when pictures were taken is 16 feet. Crest at 19.5 feet on Tuesday morning. =/