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DrumBeat: May 14, 2008
Posted by Leanan on May 14, 2008 - 9:16am
Huge study documents changes from climate warming
A landmark new climate study released today reports that global warming is already changing the life cycles of thousands of animals and plants — as well as hundreds of physical systems — worldwide.It documents rapid glacier melts in North America, South America and Europe; trees and plants sprouting leaves much earlier in the spring in Europe, Asia and North America; permafrost melting in Asia; and changes in bird migration patterns across Europe, North America and Australia, all in response to rising global temperatures.
While previous studies have looked at single phenomena or smaller areas, this is a new analysis on a continental scale looking at data that had not been previously assembled together in one spot, says lead author Cynthia Rosenzweig, a scientist at NASA's Goddard Institute for Space Studies in New York.
ConocoPhillips CEO says record crude prices a foe
HOUSTON (Reuters) - The CEO of ConocoPhillips, the third-largest U.S. oil company, said on Wednesday world crude oil supplies are adequate and not to blame for record prices, which have taken a toll on the industry."High oil prices have not really been our friend as an industry," Chief Executive James Mulva told the company's annual meeting.
Imperial Oil Loses Battle for Oil-Sands Water Permit
(Bloomberg) -- Imperial Oil Ltd., Canada's largest oil company, lost a legal bid to overturn a federal regulatory decision that could delay a planned C$8 billion ($7.98 billion) oil-sands project in Alberta.
Petrobras ups oil output in April
Domestic oil output by Brazil's state-run Petrobras rose 2.3% in April, reversing three straight monthly drops, said the company.Petrobras said in a statement that it pumped an average of over 1.84 million barrels per day last month, a 3.5% increase over the year-earlier period.
Oil at $US200 a barrel: that was the warning from Goldman Sachs, published last week. The real price is already at an all-time high. At $US200 it would be twice as high as it was in any previous spike. Even so, it would be a mistake to focus in shock only on the short-term jump in prices. The bigger issues are longer term.Here are three facts about oil: it is a finite resource; it drives the global transport system; and if emerging economies consumed oil as Europeans do, world consumption would jump by 150 per cent. What is happening today is an early warning of this stark reality. It is tempting to blame the prices on speculators and big bad oil companies. The reality is different.
U.S. April jet fuel demand lowest in 5 years - API
WASHINGTON (Reuters) - U.S. jet fuel demand in April fell to the lowest level for the month in five years, after three small airlines ceased operations and thousands of flights at other carriers were canceled for safety reasons, the American Petroleum Institute said on Wednesday.
Money motivates Iran to consider oil output cut
Refiners are refusing to pay up for heavy Iranian crude that is difficult to convert into transport fuels and Iran is refusing to cut prices further."This is about the price and quality of the oil," said one buyer of Iranian crude. "This crude is a nightmare for refiners. There is a price for everything and if they want to get rid of the stuff they will have to stomach selling at a lower price."
As Canada scrambles to dig up some of the world's dirtiest oil, a bush doctor tracks mysterious diseases, poisoned rivers, and shattered lives.
How credit cards boost gas prices
NEW YORK (CNNMoney.com) -- Buying gasoline with a credit card could be hurting your local independent gas station owner - and you may have to pay for it.That's because credit cards charge merchant fees in the form of a percentage of sales - and those fees eat into the fixed per-gallon sum that gas retailers tack onto pump prices.
World's largest offshore wind farm in the works
LONDON (Reuters) - British utility Scottish & Southern Energy Plc (SSE) will build the world's largest offshore wind farm and has awarded $3 billion in contracts to U.S. engineer Fluor Corp and Germany's Siemens AG.Despite industry doubts about the viability of offshore wind SSE said on Wednesday it would build the farm off Britain's east coast. Work would begin on the 504 megawatt Greater Gabbard project shortly and power generation would start in 2011.
Australia Coal-Mine Floods Raise Costs of Cars, Planes, Washers
(Bloomberg) -- At about 1 a.m. on Jan. 19, some of the heaviest rains in a century caused the Nogoa River in Queensland to burst its banks, sending 32 billion gallons of water into one of the largest coal mines in Australia."It was like watching Niagara Falls," said Peter Westerhuis, 46, general manager of operations for the mine's owner, Ensham Resources Pty. "It filled the whole pit up in five hours."
Almost four months later, two of Ensham's six coal mines, along with others owned by companies including Melbourne-based BHP Billiton Ltd., remain submerged. The greatest damage was in the Bowen Basin, the source of 40 percent of the world's steelmaking coal. As production fell, the price of coking coal tripled to a record $300 a metric ton last month, raising costs for the steel that goes into automobiles, airplanes and washers.
Kenya: Fuel shortage threatens South Rift wheat output
Wheat farmers in the Southern Rift Valley on Tuesday said they were unable to prepare their land for planting due to a serious shortage of diesel.
Greece: New wave of strikes hits
Another surge of strikes is gathering pace across the country as tanker truck owners are due to meet today to decide whether to continue with action that has caused a severe shortage of fuel across the country.Greece’s largest union group, GSEE, has called a nationwide strike for some of its members tomorrow to protest government plans to reduce its stakes in OTE telecom and the country’s two largest ports in Piraeus and Thessaloniki. Transport, hospitals, ports and banks are likely to be worst hit.
Putin sees Russian oil output up 13.6% by 2015
UST LUGA, Russia (Reuters) - Russia's Prime Minister Vladimir Putin said on Wednesday he expected Russian oil output to rise by 67 million tonnes (1.3 million bpd), or 13.6 percent, by 2015.
Putin urges tax breaks to revive Russian oil growth
UST LUGA, Russia, May 14 (Reuters) - Russia's Prime Minister Vladimir Putin urged on Wednesday to grant tax breaks to new oil provinces to revive output growth and add over a tenth to current production levels by 2015.
Mexico presents plan to help deep water oil output
MEXICO CITY (Reuters) - President Felipe Calderon sent a proposal to Congress on Wednesday to reduce taxes on oil output in difficult places to produce crude, such as the deep waters of the Gulf of Mexico.The plan is part of Calderon's push to reverse declining oil output in the world's No. 6 producer. It joins a proposal Calderon sent to Congress in April to overhaul energy laws.
China oil giants vow to ensure oil supply in quake-hit areas
BEIJING (Xinhua) -- Two Chinese oil giants on Wednesday said they were stepping up efforts to guarantee the oil supplies to quake-stricken areas in southwestern Sichuan Province.
Herman E. Daly: Climate Policy: From ‘Know How’ to ‘Do Now’
Recent increased attention to global warming is very welcome. But much of it is misplaced.We focus too much on complex climate models, which ask things like how far emissions will increase carbon dioxide concentration, how much that will raise temperatures, by when, with what consequences to climate and geography, and how likely new information will invalidate model results. Together these questions can paralyze us with uncertainty.
A better question for determining public policy is simpler: “Can we continue to emit increasing amounts of greenhouse gases without provoking unacceptable climate change?”
CO2 rise continues, but check out methane
What is new about the NOAA's greenhouse gas report this year is that methane levels also showed a clear increase for the first time in a decade.Methane is a potent greenhouse gas, warming the planet 25 times more, molecule-for-molecule, than CO2. It doesn't last as long in the atmosphere, which tempers its kick, but it's still enough to give you nightmares.
Firms Seek Patents on 'Climate Ready' Altered Crops
A handful of the world's largest agricultural biotechnology companies are seeking hundreds of patents on gene-altered crops designed to withstand drought and other environmental stresses, part of a race for dominance in the potentially lucrative market for crops that can handle global warming, according to a report being released today.
Ways of Ancient Mexico Reviving Barren Lands
SAN ISIDRO TILANTONGO, Mexico — Jesús León Santos is a Mixtec Indian farmer who will soon plant corn on a small plot next to his house in time for the summer rains. He plows with oxen and harvests by hand.Under conventional economic logic, Mr. León is uncompetitive. His yields are just a fraction of what mechanized agriculture churns out from the vast expanses of the Great Plains.
But to him, that is beside the point.
Starbucks struggles with reducing environmental impacts
Starbucks customers who care about the environment ask first about the paper cups.The cups are not recyclable, and even if they were, many Starbucks stores do not have recycling bins.
Ben Packard, Starbucks' vice president of corporate social responsibility, knows it's an issue.
Tiny Smart car gets crash test kudos
The Smart ForTwo earns the top rating for front and side impact protection in crash tests by the Insurance Institute for Highway Safety.
As the price of oil continues to rise, low-emission diesel cars are being seen as a cheaper, greener alternative, and demand is soaring. But there are fears that the fuel's health dangers are being ignored.
Oil Refiners See Profits Sink as Consumption Falls
While drivers are facing sticker shock at the pump these days, here is a bigger shock: high prices are putting a strain on oil refiners.After last year’s stellar profits, American refiners are going through a traumatic period. In a time of record gasoline prices, some of them actually lost money in the first quarter, and for virtually all refiners, profits are down sharply.
GM's sales focus to get 'dramatic redesign' as gas soars
After months of holding out hope that U.S. truck sales would rebound, General Motors Corp. is accepting that the market shift toward more fuel-friendly vehicles isn't likely to end.The automaker, which has made billions off its hefty trucks and SUVs over the years, said Tuesday that it's been over-promoting its largest vehicles and plans to change course.
Instead, GM will implement a "dramatic redesign" of its marketing strategy that places a much greater focus on its high-mileage cars, new hybrids and other fuel-efficient vehicles.
EIA: US Preliminary March Crude Imports -9.3% Vs Year Ago
NEW YORK -(Dow Jones)- U.S. crude oil imports fell 9.3%, or 963,000 barrels a day, to 9.385 million barrels a day in March, preliminary data from the Energy Information Administration show Tuesday.March crude oil imports were the lowest in any month since February 2007 and also posted the biggest year-to-year monthly decline in any month since.
Officials to weigh exports of Japan-refined gasoline to U.S.
HONG KONG (MarketWatch) -- Officials from Washington and Tokyo are to meet Thursday to explore ways to utilize Japan's spare refinery capacity to offset a chronic shortage of capacity at refineries in the U.S., in a deal that could result in exports of Japan-refined gasoline products, according to a Japanese media report.
More disclosures urged in oil deals
The founder of a Berlin-based anti-graft group is promoting a global voluntary standard for companies to reveal what they pay resource-rich countries for access to produce oil and gas, and for those countries to disclose the payments.Peter Eigen, founder of Transparency International, told the World Affairs Council in Houston on Tuesday that the Extractive Industries Transparency Initiative is designed in part to help companies reject bribery demands while increasing revenue disclosure.
"My advice is, don't bribe — because it will backfire," he said.
Get Used to It -- Sky-High Oil Prices Are Here to Stay
This ain't a bubble, folks. Better get used to it.We've gotten a a little relief in recent days, but the stubborn upward spiral of oil prices isn't going to let up to any significant degree. Yes, there's some debate between economists and industry analysts who fall into two camps -- Bubble, Not-a-Bubble -- but the evidence suggests high prices are here to stay.
Economic Consequences Of Sky-Rocketing Oil
While my little lady was canvassing for Hillary in the Indianapolis suburbs (10 hours, daily) she noted pickup trucks sitting in driveways even though nobody was home. Families now carpool to work, their gas guzzlers abandoned.
US diesel prices wake from short slumber
After a temporary lull last week, American diesel prices shot back up as the national average retail price soared 18.2 cents to a new record high of $4.331 for the week ending Monday, May 12.
Americans Crossing Border For Cheap Gas
The price difference between the two countries was hard to ignore. Hansen found that while California drivers are paying nearly $4 a gallon for regular gas, in Tijuana it's $2.75 at Pemex gas stations.The difference in diesel prices was even more significant, Hansen said. The average in California is $4.71. But in Mexico, truckers are filling up for $2.10 a gallon.
Worried about Price of Gas? End US Wars
There is evidence that the heightened price of energy is a direct consequence of the destabilizing wars and geopolitical insecurity in the region. These include not only the raging wars in Iraq and Afghanistan, but also the threat of a looming war against Iran.
Media should pump more coverage into energy crisis
"Issue #1" did have a warning of things to come in a report last week that said people are now coming out in the morning to find their gas tanks empty. The price of gas is so high that stealing gas by siphoning if out of several cars can be worth hundreds of dollars. It gives grand theft auto a new meaning.
'We're becoming active choreographers of nature'
In 10 to 15 years, the price of oil will be so high, and the price of solar-hydrogen power will be so low, that the two curves will cross. And when these two curves cross, it will usher in the solar-hydrogen age. (When I say solar hydrogen power, I include everything from solar cell to geothermal energy to wind to hydrogen, etc.)Beyond 30 years, the goal of the ITER project in France is to find a way to control fusion. Within 40 years, commercial fusion power, which uses ordinary sea water as fuel, may become a reality. So the dangerous period is the next 15-20 years, during the transition to a solar-hydrogen economy. Already, we see the North Polar ice sheets melting. No matter what we do today, we will probably lose it by mid-century.
Canada - Biofuels not ‘crime against humanity’: Ritz
Agriculture Minister Gerry Ritz says the opposition is playing “silly games” by blocking the government’s plans to mandate ethanol content in gasoline.Ritz defended the plan in the House of Commons against criticism from the New Democratic Party, which once supported the use of biofuels but has switched its position. The bill would mandate a five per cent ethanol mixture in gasoline by 2010 and a two per cent mixture of biodiesel by 2012.
“It’s an excellent situation for the environment, it’s a great thing for farmers, and a great thing for rural communities,” said Ritz.
Oil industry costs continue steep rise: CERA
NEW YORK (Reuters) - Costs to tap into new oil and gas projects escalated about 6 percent globally over the past 6 months and the climb can be expected to steepen on soaring prices for steel and other raw materials, according to a study released on Wednesday.Cambridge Energy Research Associates (CERA), a unit of information and consultancy IHS Inc, said that costs to build new refineries and petrochemical plants also rose 6 percent.
"So long as oil prices remain high and demand for the end products remain high, I think we're going to see continued high level of costs," Candida Scott, senior director of cost and technology at CERA, said in an interview.
Good Morning Middle America, your King of Simple News is on the air.Oil has gone from $32 per barrel just a few years ago to today’s staggering $126.
The Democrats are blaming George Bush and Dick Cheny for the hike, saying they influence “big oil.” Yet, U.S. oil companies produce only 25% of our current oil needs and their reserves are in serious decline.
Navigating The Great Turning From Empire To Earth Community
We are all well aware of the crisis unfolding around us. The day of reckoning for our reckless human ways that many of us have for decades warned would be coming is here. The future is now. Peak oil, climate chaos, financial collapse, and spreading social disintegration are all consequences of deep cultural and institutional dysfunction. The imperative to address them presents us with an epic test of our human intelligence and creativity.
The truth and lies about world's oil supply
MYTHS about the current world oil situation and rapid fuel price increases are causing confusion for consumers, businesses and government policy makers. Unfortunately, many people don't have ready access to alternative points of view. I strongly recommend that the reader do some research on the Internet to verify the truth of the following claims.The first myth asserts we have plenty of oil, and that discussion of depleting supplies is not a serious matter.
Australia: The Government blew its lines
There is a lot of speculation about economic conditions. Are we heading for a recession on a scale not seen since the 1930s depression or an inflationary boom driven by peak oil, staple food shortages and climate change? Either way, we are more likely to weather the storm if serious structural measures are taken now to minimise the shocks now.
Metro’s new plan will assume ramped up transit in traditionally underserved eastern areas of Metro Vancouver.“Communities are very focused on the issues of climate change and peak oil,” Corrigan said. “There’s more recognition growth that has to be intensive and it has to be transit served.”
At around $125 a barrel, crude oil has more than doubled in price since the end of 2006. How is it possible that the vast majority of government forecasters, stock analysts, economists, traders, and journalists who follow the oil market failed to foresee this? Moreover, how can it be that even today, the bulls and bears on oil are extremely far apart, disagreeing not only on the oil outlook but even the present situation?The answer is simple. You can't predict what oil prices are going to do even in the short-to-medium term unless you have a good handle on the forces of supply and demand. And that requires thorough and reliable data—which don't exist. Regrettably, the world oil market is no more transparent than a fragrant barrel of extra-heavy Orinoco crude. And the situation is getting worse because the world's fastest-growing oil consumer is also one of the most opaque: China.
We rely on it to power our everyday lives, and it drives the economy worldwide, but oil faces an uncertain future in the 21st century. Black gold is increasingly expensive, environmentally damaging and, in the view of some experts, increasingly scarce.
Aging steel oil pipelines latest threat facing United States
Simmons, whom I met last year at a peak oil conference in Boston, began by emphasizing that steel deteriorates the minute it is cast, because "rust never sleeps."There are 335,890 miles (some 530,000 km) of aging steel pipelines in the U.S. alone, all subject to corrosion, leaks and metal fatigue. And that is only a fraction of the oil network: 1,127 tank farms plus hundreds of refineries have many more millions of miles of steel tubes, both monstrous and minute. Because the price of oil has been so low for so long - it was $10 per barrel 10 years ago - there simply was not enough money to properly inspect this decaying mesh of intricate tubing and replace them where needed.
Oil: why it’s different this time
As soon as people say, ‘it’s different this time’, you can be sure the top will be in within a few weeks. But, when Peak Oil – the point at which we are getting as much oil out of the ground as we ever will - strikes, it really will be different this time. Is Peak Oil kicking in now? I would say fears of Peak Oil have certainly been pushing the price up for some five years or more.
Lost in the bullish talk of $200 oil was Goldman's notes about demand destruction. The same report which predicted the super-spike also said that by 2012 the price of crude oil would fall to $75 normalized. Goldman expects the current euphoria to lead to a spike in crude oil prices, which will spur new supply development and also lead to permanent demand destruction.
High oil prices rekindle oil production in Mo.
DEERFIELD, Mo. - Pumpjacks, the oil rigs that resemble those thirsty bird toys, are going up in Missouri for the first time in two decades, the latest region to revive a long-faded industry as crude nears $130 a barrel.The sky-high price of oil has turned extraction methods recently considered cost-prohibitive into cash cows.
Military: Gunmen in Nigeria oil region hijack boat
PORT HARCOURT, Nigeria - Unidentified gunmen in Nigeria's restive south have hijacked an oil-services vessel carrying 11 crew members, the military said Wednesday.The hijackers are demanding about $250,000 for the release of the boat and the crew, including one Portuguese and one Ukrainian, said military spokesman Maj. Sagir Musa.
US wants to boost Trinidad energy ties
PORT-OF-SPAIN, Trinidad - A top U.S. energy official says Washington wants to boost ties with Trinidad and Tobago, a Caribbean nation that is the No. 1 supplier of liquid natural gas to the United States.U.S. Energy Secretary Samuel Bodman says it is "absolutely necessary" to protect the two countries' oil and gas pipelines and drilling platforms.
High fuel prices curtail RV trips – just a little
With fuel prices at record levels, they allow that the trips may cover shorter distances – especially when they get 10 miles to the gallon. There will be some sacrifices for the retirees: perhaps fewer meals out, maybe working a part-time job.But they can't imagine giving up the RV lifestyle: a sense of freedom and adventure mixed with close friendships developed over years of traveling around the country. They don't plan to turn in their wheeled home for a condo.
"I don't know how high fuel would have to go for us not to do this," says Mr. Timko. "God has created so many great places to see, and we just haven't seen them all."
Where Are Oil Prices Taking Stocks?
So far the stock market has mostly ignored the jump in crude oil prices, but high energy costs could eventually take their toll.
U.S. buys more Med crude to replace lost Nigerian
LONDON (Reuters) - U.S. oil companies have been boosting purchases of light, sweet crude from the Mediterranean to meet peak summer gasoline demand, in place of unreliable, similar quality supplies from Nigeria, traders said on Tuesday.At least six very large crude carriers (VLCCs), each carrying 2 million barrels, have been fixed on a spot basis over the past month to transfer Azeri Light from Ceyhan in Turkey and Saharan Blend from Arzew in Algeria to the United States.
China quake hits gas output, oil impact mininal
BEIJING (Reuters) - A powerful earthquake that hit southwest China on Monday has shut in some 3 percent of China's gas output, but the impact on oil demand is marginal due to the loss of power, companies said on Wednesday.Quake-striken Sichuan, largely a rural province that accounts for 4 percent of China's economy, is a major gas producer and user accounting for more than 20 percent of China's total, but a small oil consumer.
Iran Expects OPEC Supply Cut as Heavy Oil Demand Weak
(Bloomberg) -- The Organization of Petroleum Exporting Countries will eventually have to cut production of lower-quality crude as warmer weather in the northern hemisphere reduces demand for oil, Iran's OPEC governor said today.``If OPEC isn't cutting production officially, they will do it in secret because the price is so high'' and supply cuts would not be popular with consuming nations, Hossein Kazempour Ardebili said in a phone interview from Tehran. ``Cuts will start on a voluntary basis, and will have to become formalized once secondary sources make the numbers clear.''
Iran has no plans to cut crude exports: official
TEHRAN - Iran is exporting oil as usual and has no plans to cut crude exports, a senior oil official told Reuters on Wednesday, a day after the president was quoted as saying Tehran was considering a plan to cut output."There is no plan to cut exports and we keep our promises (to clients) ... and we export as usual," said Hojjatollah Ghanimifard, international affairs director at the National Iranian Oil Company (NIOC).
Lula's Remarks on Brazil in OPEC Just Bragging, FT's `Lex' Says
(Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva's remarks that the country should join the Organization of Petroleum Exporting Countries may be a bit of bragging rather than a serious comment on where Brazil may be headed, the Financial Times said in its ``Lex'' column.
The Reason Behind High Oil Prices
It's not a supply crisis that explains the sharp spike in oil prices. It's unregulated commodities markets and greed.
Two billion trees planted in UN campaign
NAIROBI (AFP) - More than two billion trees were planted around the world as part of the UN's campaign to combat climate change, the world body's environment programme (UNEP) said Tuesday in a statement.
NOAA chief urges creating National Climate Service
WASHINGTON - With concerns about global warming rising along with the planet's temperature, the head of the federal agency in change of weather research and forecasting is proposing creation of a new National Climate Service.
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Ahh the power of free markets and following the words of the big sky guy. Who needs anything else when you have the protection of God and look for free markets? (Oh, and honesty of the people in the fly-over states eh?)
http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20080513/NEW...
Ahh yes. Large corporations in the free market add the spice to life. Oh where shall the observant turn to for their meat?
http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20080513/NEW...
No wonder there were protests! God *AND* free markets assaulted!
At least I now know that:
1) Meth is kosher
2) Meth makes for a spicy meatball!
(Come on you posters on 'the market', 'capitalism' and 'large corporations' - I look forward to your spirited defense of the market at work. And for the rest of you - a big hot mugging of snarkanol)
The raid was also a good opportunity to test out procedures for mass arrests of people, and their subsequent "processing." Ironic that the processing was handled at the National CATTLE Congress Fairgrounds.
However, thif the allegations of the workers being paid below minimum wage is true, the people who authorized that should do jail time. Whether here legally or illegally, they should have been paid minimum wage as defined by the law. In fact, if some workers were not paid minimum wage, that shows they were complicit in hiring workers with fake identification.
The raid was also a good opportunity to test out procedures for mass arrests of people
And with my outrage meter recalibrations so the needle can still move - that registered a 'meh'.
Ironic that the processing was handled at the National CATTLE Congress Fairgrounds.
And who says that government agents are not funny? Someone is still laughing over getting that choice approved.
Think of the reams of school papers that this one case can provide footnotes for.
(Your list of laws broken just shows how much the free market is prevented from operating BTW. As todays Free Market advocate on the topic, it is my job to point that out.)
Obviously the owners didn't pay ICE enough protection money. Sounds to me like the market worked.
As Gore Vidal pointed out in today's interview on DemocracyNow! (May 14), the coup has already happened. Laws broken, oh please, isn't that why we have Deciders now?
And now the not free market is gonna drug the people who get shipped out.
http://wonkette.com/390390/get-your-psychotropic-drugs-free-with-each-de...
No wonder the people who speak of free markets and capitalism don't like the government giving out drugs on the taxpayers dime!
This is very strange.
1. How can the same meat plant produce both "kosher" and "non-kosher" meat? That would seem on the face of it to violate kosher laws.
2. There are allegations that some of it has to do with immigration issues and some of it to other illegal activity -- drugs? Money laundering? The comments at the ends of the articles are interesting.
3 "Cheap" meat to eat (what Americans have come to take for granted) means without question that you can not really value a man or a beast's life at anything other than at a vegetable level. Who is going to work in those conditions except human beings who have been denied all reasonable options -- mainly the new immigrants, legal or illegal? And who would own or manage such a plant except someone who is either totally amoral or completely desperate him/herself?
4. And why, knowing that this is the way things work, would the government suddenly undertake a "surprise" raid -- except to advance someone's political career?
This is all old news -- Upton Sinclair exposed all this almost 100 years ago, and guess what? nothing much has changed.
There is a free market, of course. It exists between the anode of the sun and the cathode of the cold, dead granite of the Earth's crust. Captitalism is just one of many ways to exploit and distort that ineluctable energy flow -- it is merely a literary device, a sort of conceit, to call it a "free" market. But only fools and the young believe that, and so we must move on.
The most interesting thing is that putin anncounces that russian oil production will be up by 13 % in 2015 while everybody believes russia is in decline. I followed russian politics for the last seven years, and putin is a really calculating person who doesn't follow any illusions. he is extremly well informed, and he never says anything without a solid foundation. sechin announced that production will be up this year, too. LUKOIL executives say production wil be down, but perhaps they will change their mind because of the today announced tax breaks for new fields in yamal and eastern siberia. Well, Putin foresaw that the future would be about energy at times where oil was really cheap. Well i really don't know what to believe, but putin seems to know more about energy than any other western politician...
Have you got links?
thanks!
The Putin stories are coming out piecemeal and a bit disjointed. I'm wondering if he's saying the increase will come if the tax cut he wants happens.
Don't forget that Putin, unlike Yeltsin before him, is old-school Soviet, and would no doubt like a return to the USSR.
Hence, it is possible that he is making an oblique reference to increasing production by increasing the area called "Russia"
Or, to put it another way, annexation of Kazakhstan and Azerbaijan would boost the (expanded) Russian production by the amount Putin quotes.
AKH
This morning a friend was mentioning Kunstler's Blog of The Day post about Walmart's announced increase in earnings. I wonder how much of that is due to increased fuel prices (both for the "warehouses on wheels" as well as for the bunker fuel for the trans-oceanic container ships)?
Ignorant, by what logic do you use to come to the conclusion that an increase in Walmart's transportation costs would result in an increase in earnings?
Ron Patterson
Darwinian,
They would have to pass on the costs of fuel. Price of items would go up ... if people bought same number of items at higher cost then total sales (gross earnings) would be up.
Yes? ... No? ...
(I don't call myself "Ignorant" for nothing. Perhaps I am ignorant of some details; if so, please enlighten.)
Ignorant - Despite some difference in terminology that is used: (1) Sales; total sales; gross sales, gross receipts; etc. - these terms generally are not a true indication of financial well being. (2) Earnings; net income; net earnings; total income; etc. - these terms generally are an indication of financial well being.
Those terms noted in (1) are before deducting costs or expenses. Those terms in (2) are after deducting costs or expenses.
For example: You have gross receipts from selling your house for $200,000. Did you do well? Unknown, until you tell us what your cost was. Then you either had income or a loss.
Your equating of Walmart's "total sales" with "gross earnings" would generally be apples to oranges, since you have equated a (1) with a (2).
Jbunt,
Well, THAT was my original question....
Where did these extra earnings for Walmart come from?
Are they "net"?.. or are they "gross" earnings added on to cover fuel costs?.. if so, how much fuel costs were additional?
I think this is a relevant question as it would be an 'indicator' as to how sustainable this particular economic sector currently is.
I think Wal-Mart really is doing well. For the same reason McDonald's is doing well. People are "trading down" - spending their money at less expensive places.
In case you missed it, jbunt, Ignorant asked a question. Then in his followup he asked another question.
And yes, I am aware that you can take certain statements of Ignorant's out of context to try to prove that he asserted something. But read in context he did not and simply stated something then asked "Yes? No?"
So you might try answering the question, eh?
And for me, to attempt to assist Ignorant, I refer him to Wal-Mart Q1 Earnings Up 6.9% as part of the explanation. Simply put, it looks like more people are shopping at Wal-Mart. So both sales and earnings were up.
I can find no public statement relating to fuel costs and Wal-Mart's first quarter financial position so all we can do there is speculate.
No... Just to expand a bit on Jbunt explained. You are confusing "gross receipts" with "gross earnings" and perhaps gross earnings with net earnings. Gross earnings is earnings before taxes. Net earnings is earnings after taxes. Net earnings is what is reported when a company gives "earnings per share", not gross earnings. Marking up prices because of increased transportation costs would add not one penny to either gross earnings or net earnings.
Ron Patterson
Darwinian,
I thought net earnings were free & clear, those after all expenses, not just taxes.
Ignorant, you are still confused. Earnings are not earnings until expenses have been deducted. Gross earnings are earnings after ALL expenses except taxes have been deducted. That is wholesale cost, payroll, utility bills, transportation costs, rent and anything else that must be paid before you have anything left over. What the company earns is what is left over after all this. Then they must pay taxes on their gross earnings. What is left over are earnings or what is normally called "profit". Profit and earnings are exactly the same thing. Just think of it that way and you will not get confused. Then, if it is a public company these earnings are reported as "earnings per share". This is done by dividing the net earnings by the number of outstanding shares.
Ron Patterson
Darwinian,
Thank you.
Ignorant, Grey Zone and Darwinian - I was truly just trying to give an honest explanation. No other message intended. Thanks to Darwinian for making it clearer than I did.
In response to the previous article on % of household income going to fuel costs in Sydney... I've done a similar blog post for my own region on Vancouver Island in BC, Canada.
I'd greatly appreciate the comments of people here... I will also perhaps ask Stoneleigh (or someone could pass the link along?) to have it cross-posted at TOD:Canada if they so chose.
I will be doing one for commuters to Victoria as well.
Permalink: http://www.murkyview.com/archives/2008/05/13/calculating-commuting-costs...
or just
http://www.murkyview.com
A teaser:
I've added your blog to my bookmarks.
I used to live in Nanaimo and left for the same reason you are blogging about plus that big gas guzzling ferry required to bring EVERYTHING to the island started to scare me.
Maybe that could be a future blog? What the price of diesel will do to BC Ferries service?
This link was from yesterdays drumbeat showing diesel was up $10 in the last few days.
http://www.aip.com.au/pricing/marketwatch.htm
I have come to believe that the Southern passage will fair better because the Government needs to be serviced.
I agree 100%, up Island needs to get that rail system back up and running.
We live in Delta and have numerous friends and family on the islands and Vancouver Island. 2 years ago this july we decided to travel without the car from Tsawassen to Swartz Bay for a family get together. We got there 15 minutes before sailing time and the lineup of walk-ons was huge. BC Ferries was caught off guard and wouldn't allow all the walk-ons on board as their Transport Canada certificate had a certain number of persons allowed. It was also clear from people who took the bus from Vancouver, that the bus service had to leave people behind as there was a shortage there as well.
At that time, it was after high gas prices caused by Katarina, and people were concerned that between high ferry prices and high gas prices, that they had better conserve and leave their vehicles at home. My concern is that BC Ferries is not only unprepared for the changes that are taking place, but also that their understanding of how to deal with these changes seems out of touch. We drive a very short car at 8 feet long and any "undersized" vehicle charge is for a maximum length of 20 feet, so one can see that we are subsidizing all the longer vehicles. At this rate of increased gas prices, BC Ferries will soon be forced to cancel sailings and lay off workers, as many of us will no longer be able to afford travelling to the Island(s).
We look forward to taking the train up island one day as well.
As much as people talk about the price of gas implicitly they know that it is still cheap. Their habits do not really change. Conservation is a joke in this country. Only when prices become much higher will any serious discussion take place. Right now it's just an expectation that things will return to the way they were before - gas, housing, the economy will recover and it will be BAU.
At $10/gallon, a full-size car that gets 25 mi/gal can take 6 people in reasonable comfort 500 miles for $200. By any historical standard (except the most recent post-WWI American experience) that is unbelievably cheap. If that were the only thing that changed, people would just restrict a little here and a little there and go on BAU. And of course, that's what's going on right now.
However, the fly in the ointment seems to be that nothing is stable-- rising gas prices raises the price of everything else. People will lose their jobs because business models that rely on cheap oil will become non-viable. Others, whose jobs depend on high energy prices will find themselves in a better position, etc. So the economists (professional as well as the armchair variety) can have a field day trying to track it.
The most interesting thing about the Oil Drum for me is the reports from around the world about what is really happening in real time -- although the informed speculation is interesting and thought provoking and I appreciate that as well
I agree completely that this is a tiny price to pay for that much energy. As I've said before, we've been awash in enormous quantities of energy for so long (cradle to grave for generations now), that we cannot see it all around us. One must go out and try to do something without our fossil fuel energy slaves to begin to appreciate it. Imagine yourself trying to do some of the tasks that people did before with just human and animal power - how about clearing a field?
Having said that, it doesn't mean that an increase in the cost of this still-cheap energy won't be a problem - because we've built up our infrastructure and society on the assumption that all this energy will always be available at next-to-nothing costs. Our population and its energy use have grown to the limits of the available energy, and now retrenchment will be difficult. To say the least.
"Retrenchment" is certainly imaginable -- even in non-apocalyptic terms. If everyone stopped having babies right now, the population would be half what it is now in a couple of decades. Plenty of time for adjustment to decreased oil supply.
No doubt someone in the various government agencies has plans for some kind of super-sterilizer bomb, that doesn't cause any property damage, to apply selectively to non-favored populations. Some say AIDS virus was a step in that direction -- far fetched, and probably wrong, but it points to existing natural as well as potential invented methods of achieving population control when the time is right. We are already being set up to accept some kind of devastating epidemic ("avian flu"), and no doubt there are worse things in the pipeline.
The Neutron Bomb was developed to kill people while allowing infrastructure to stand. So, your "super-sterilizer bomb" already exists.
Actually, Karlof, the neutron bomb was developed to provide the right kind of high energy particles that could penetrate tank armour. It is, in general, no less destructive of property than a noraml atom bomb of the same approximate size, but since tanks are not affected by the blast and are impenetrable to the usual radiation, they have no effect on tanks outside of the 'melt' zone; hence, the 'neturon' bomb.
Correct. I was in the US Army when it was developed. Everyone thought it insideous.
VS the happy go lucky sun-tanning regular type fission and fusion weapons?
We all got NBC training, and we all knew it was worthless, although if the nukes went off far enough away and you followed your training and had all of your equipment and it was in A-1 condition, you did have some chance. Now that DU is in the mix--it's a poison weapon, illegal--there's no protection for anyone.
HAVE we reached "the limits"? Sure, perhaps with current fields. But the entire planet? I'm still not convinced...
Could it simply be that the decade-long spike in oil prices is in fact (in large part) to cover the run-up costs of exploration, expansion and upgrade? Is it possible there's another Saudi Arabia, or North Sea out there, out of reach of current search-technology? Or three or four such fields? Or more? That there actually might be hundreds of years supply left?
Recently, an Australian warship (HMAS Sydney) was discovered sixty years after its terminal battle - merely five or so nautical miles from where it was thought to have been attacked. It wasn't hidden a mile beneath the ocean floor, wasn't made out of stealthy, radar-deflecting material. It was sitting ON the ocean floor, made out of metal. Doesn't sound that tough to locate, surely... But Planet Earth is - when you sit back and have a good look - pretty darn big and to find stuff, particularly when its location isn't certain, often takes a lot of searching. And boy, those oceans are rather huge!
So perhaps the real problem is not that there isn't enough "easy oil", but that the Big Boys just need bigger (and better and many more) toys to find it. And they've just been a little complacent lately, 'cause things have been pretty darn good for them for quite a while now. A bit like not upgrading safety features on a speedway 'cause no-one's died on it for a few years.
No doubt, crude oil is finite and PO is an obvious reality. But isn't it also a possibility that there's still many more fields to be found, both large and small? No? Would you bet your house on it?
"But isn't it also a possibility that there's still many more fields to be found, both large and small?"
There is also the possibility the Creator will drive up with the Cosmic Tanker and refill us.
Not to mention the possibility Jeff will date Julia Roberts.
"No? Would you bet your house on it?"
I did. That's why it has lots of fruit trees and solar PV and two ponds.
Rat
I hope you are right, Mr. Average... But if this were the case, Big Oil would be discovering more and more fields as time goes on... But, data tells a different story. Here's the discoveries Big Oil has been making since 1900:
(Kudos to Gail the Actuary for this...)
Not to say you are wrong, since I genuinely hope you are right...
So you WANT all the polar ice to melt, & biomes to shift latitudes? You WANT forest fires & hurricanes of increased severity? You HOPE to see biodiversity fall to mass extinction due to dysregulation of climatic feedback mechanisms? Are you genuinely that hateful, that you hope for discovery of massive deposits of reduced carbon that can be extracted, oxidized & emitted to poison the atmosphere & surface ocean beyond what's already been accomplished? Shame on you.
If all those things you mentioned were the worst of the problems facing humanity over the next 30 years, then I'd be happy and relieved. I'll take melting ice and shifting biomes over mad max and a global nazi empire ruled by corrupt elites.
All of those things are in fact inseperable. Mad Max could result from an ecological catastrophe - Australia seems to be turning to desert faster than it's running out of gas pumps.
The corrupt elites might already have known many years ago about the ecological crisis that their own policies have promoted. Now what would you expect such people to do next?
1. Steal everything that's not nailed down for their own private kingdoms.
2. Hide the crisis until they can spring it on their citizens packaged with fascist emergency measures that end up converting civil society into - private kingdoms.
So we may not end up with one single Nazi empire, but with something like what happened when Rome fell and its foremost nobles and barbarian mercenaries divvied up the towns and farmlands. Yet they were united by a class ideology that imposed a uniform feudal system on the continent for over a thousand years. Ironically, the Nazis were great admirers of the medieval Teutonic knights and other feudal institutions...
Yup. My blog is titled aperfectstormcometh. And I came up with that idea before I even knew much about Peak Oil. How can people not see the connections between all the problems.
Cheers
You mean like the military junta in Myanmar?
I think they are about to be hit by another cyclone.
Just for the record I still think it's far easier to overthrow a corrupt regime than solve the other problems mentioned in the previous post.
I was going to express a similar 'concern,' but it seems you've beat me to it. Granted, I mightn't have used such strong language (interestingly the firefox spell-checker doesn't take offense to the word "mightn't").
Story-time:
My brother-in-law is among the most well-read and knowledgeable people I've ever met, but sometimes I feel compelled to beat him over the head with a biology text-book (I imagine osmosis to be the quickest way to learn). He has absolutely no conception of even the simplest environmental processes. I recently sent him an article about the die-off of bats in the northeast and he reacted with genuine glee since that would solve the "bat problem" at our cottage (in southwestern Quebec). As far as I can tell the bats' principal crime is that of existing. They've produced nothing in the way of property damage, keep the place surprisingly insect free, and contribute to the size and productivity of our freakishly large, omnipresent raspberry bushes... that everyone enjoys.
He, in general, seems more concerned with banishing the very benign wildlife in the area than with doing something about the 'civilized critter' responsible for: stealing 5 boat motors, a chainsaw, a generator, frying the solar panel inverter AND batteries, and dumping phosphates in the lake to produce lovely blooms of cyanobacteria producing algae (to name a few transgressions).
Just an anecdote, but I wish more people would meditate on that great Garret Hardin aphorism (paraphrased): "You can never do one thing."
OK, DD, point taken...
Damned if we do, damned if we don't.
Hehehe, I must agree with DD here. It is a favorite saying of mine that: "The only thing worse than peak oil would be no peak oil. Or, as Garrett Hardin put it: "The choice is always between evils--the greater evil and the lesser one."
Ron Patterson
My answer to Joe Average's question is that I would not bet that this graph is going to suddenly change direction. And the point is valid that from a climate change perspective, it would not be such a good thing if it did - we are screwed either way it seems.
As far as the analogy to finding a ship on the bottom of the ocean - I think there has been quite a bit more effort and money spent trying to find oil than there has been trying to find that wreck, given the relative difference in the value of the two. Lots of whistling past the graveyard going on here.
They've had a pretty good look most places where oil is likely, or at least where recovery isn't very difficult indeed - the oil field off Brazil is way down deep.
About the only way I can see that major, ie big enough to change the ball-game, amounts of oil might come to light that we don't know about is if oil is not just produced by the decomposition of plants, but is in fact also due to natural processes within the crust.
That would mean that we might be able to look in other places and find substantial quantities.
The likelihood of that does not seem to be high.
Likelier in my view would be new processes to exploit non, conventional sources, microwave for oil sands and oil shales, or means to exploit methane buried in the tundra.
Any alternative though is going to take years to get going, and shortages are going to bite really soon, most of us here think
The need for bigger and better and more "toys" implies hard-to-get oil. A Ghawar II with, say 285 Gb of light, sweet crude, that's located in source rock under a mile of Antarctic ice is still difficult-to-obtain oil. The drilling station might, however, make a good setting for The Thing II.
-best,
Wolf in YVR BC
Oil companies aren't stupid. They aren't looking in the more difficult and expensive places first and saving the easy ones for last.
Some most recently heralded finds are in: 1) very deep water GOM (Jack 2), ridiculously deep water off Brazil, and these are rather questionable.
If the found ship was loaded with gold, perhaps people would have been more diligent about finding it sooner.
Consider that the entities in more control of the price (OPEC) are not the ones primarily engaged in exploration in the difficult regions.
Exxon is buying back its stock. What does that tell you? Oil is priced based upon how fast it gets pumped out of the ground vs. how much people want it. It is not priced by how expensive it is to find. Yet.
Hello JoulesBurn,
Heh,Heh--I am trying to remember Deffeyes' joke about this stock repurchase program:
Something about the last person to own all the billions of paper stock certificates that will represent the last barrel of oil on the planet--- the energy of burning those paper shares will be greater than the energy in that last barrel of oil. :)
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Strewth! I really didn't expect such a response (I'm kind of hiding under my desk as I type this). For the record, I work from home and pretty well live and holiday locally. And frankly, I'm all in favour of solar-charged golf carts or whatever taking over the world tomorrow (might even alleviate a bit of congestion).
But like a child in Sunday School becoming "aware" for the first time - asking the teacher such things as, "Did we ALL really come from Adam and Eve?"; "Was the Earth and ALL the animals really made in seven days"; "Does God REALLY exist?" - I'll continue to seek full answers to this issue, and further, have them confirmed by a trusted public voice or face (the Prime Minister would be nice!). Because this is a very grim reality, if PO is upon us.
So the question stands: Is there THE POSSIBILITY that Big Oil will find the fields that retain our way of life for decades to come? I seek a definative "Yes or No"...
Thanks again. Regards, Matt B from Oz.
Years Yes, Decades, No.
USA would continue growing gasoline use 1.2%/year; China and India would continue towards Japan 1965 levels of oil use, etc.
With the depletion of the big finds of the 1930s, 1940s, 1950s, 1960s, 1970s, 1980s, 1990s, and 2000 (Kashagan), there is no way that the big finds of the 2010s could 1) replace them *AND* 2) handle growth for decades to come.
We are at the limit, or within spitting distance of it.
Best Hopes,
Alan
Thanks, Alan (as the senior member) and others. I think...
Can I sneak one more Q in? I don't know how many active TODsters there are, or how much of a "real" community TOD actually is, but as you all seem to be convinced the days of easy oil are rapidly drawing to a close, is there anything we can do to AT THE VERY LEAST warn the other 99+%??? My fellow Joes and Janes, that is.
I know it's a bit like trying to tell a devout catholic that God doesn't really exist (perhaps worse?), but more than anything I'd love to be able to chew the fat around the BBQ. I've even thought about placing a little PO-warning banner somewhere on my DVD mailouts, but the target audience might pause for completely the wrong reason (I run a wedding video business and can just picture a prospective bride's expression! What the?). Perhaps I'll try it anyway and see. Just for fun!
Thanks again, Matt B (still hoping your all barking mad, though suspect not).
is there anything we can do to AT THE VERY LEAST warn the other 99+%???
In theory you have been warned, and are now expressing concern. So, do onto others what has been done onto you.
The best you can do is be armed with a good set of data so that you can rattle it off and be able to challenge others claims. Pick something that scares the hell outta you, get the data on why, then repeat it. If it scares you, odds are others will find it spooky.
Find paths that are a good idea even if it turns out that somehow the oil becomes $10 a gal, fusion works, zero point works, solar PV becomes $0.10 a watt and lasts 80 years. Westtexas's ELP would be an example. Getting outta debt. Having 3 months of food. Stop buying crap.
ELP----"Economize, Localize, Produce". Yes, I like the sound of this but I need help with the "L" one. "Economizing" is easy--thrift shops, don't eat out, repair an old hat instead of buying a new one, etc. "Producing"--OK--grow own veggies, knit one's own mufflers, tell stories instead of renting a movie, keep a sheep to provide wool for you. Fine.
But "Localize"---this is where things get murky. People are competing NOT to have to localize. Toyota is trying to sell cars overseas, outsode Japan. Barack Obama and Hilary Clinton want desperately to NOT be local senators and instead run a whole country. Colleges are trying to get students from abroad (and paying agencies to find them) so they won't have to rely on local populations of older people or poorer people (ie so they won't have to localize). Best Buy just entered the European market (because Americans aren't spending enough on TV sets anymore and Europeans still have money since they don't use so much oil??). Local eggs or local produce sounds great, but when it comes to making money no professor or politician or businessperson with ambition wants to localize. Localizing is like capitulating, it means letting the other guy win while you watch your career go down the drain. It means the other person made it to the "major leagues" while you were stuck in the minors. It means, effectively, failure.
Please tell me if my logic is skewed here!!
Your logic is sound... for the set of values that got us into the trouble we are in.
Learn how to define "winning" differently. Start from different assumptions and you get to a different conclusion. And remember, just because everyone else wants something, it doesn't mean it's worth having.
No-one actually did anything "onto" me, which is still kind of my point. I stumbled across a lonely, new-release DVD copy of "A Crude Awakening" at Blockbuster six months ago. It was enough to get me hooked. And if that's how the message has to spread through mainstream, bugger...
But I will look into "zero point" and the like a little further, for sure. Thanks again.
But I will look into "zero point"
Slow down. Woah.
Zero point as an energy source is 'mythical' - don't spent a whole lot of your time.
Be careful out there. What you want is a plan that allows you to thrive whether conditions are 1930's tough or 1990's easy. There is more than enough seductive snakeoil out there to power a personal wish factory right down into a cardboard shanty.
My quick estimate on odds:
$10/barrel oil - 3%
$0.10/W solar - 5%
Fusion (at any price) - 20%
Electrified transit - 40%
Zero Point Energy - nil (0.0%)
Perpetual Motion - nil (-0.0%)
I bring up perpetual motion because there are some slick operators out there hawking the latest perpetual motion scam on YouTube, and we all know that "Seeing is believing".
I feel like I've just gone back to school. Worse, I know I'm at the bottom of the class. Strewth, do I have to know all the details to draw a conclusion?
Matt B
Rising prices will warn them.
Really? Oil has experienced a 1200% increase in price since 1998 and there has been NO visible modification of behavior until very recently and even now it is barely visible and might even be a statistical fluke due to other pressures.
Your assertion runs contrary to the available facts. Wishing that your assertion were true does not make it true. But alas, this is the typical behavior of those close to the voodoo quackery known as "economics".
But will they pay attention?
The French have NOT been warned, but they are taking the right measures (if too slow by half). There may be psychological reasons that prevent a majority of people from accepting Peak Oil before the majority does (i.e. it will never happen).
Right action is more important than right belief. I use the argument locally that "We have seen just the first winds of the coming oil price storm" and then advocate responsible action.
What state are you in ? Several state MPs have made strong Peak Oil statements, which may help your case.
Best Hopes,
Alan
Joe,
I am also an Australian, and have been reading here virtually every day for a couple of years. I think "Peak Oil" has been in my consciousness (in various forms, including Limits to Growth) since I was an undergrad environmental design student in the early 70s. I have certainly wished petrol-powered cars would disappear for about that long.
This is a great forum – they really do not come better in hosting popular, wide-ranging intelligent and informed discourse. However it is worth always remembering that it is heavily American, and adjustments need to be made. Australia has a similar "standard of living" and per capita income, however the two cultures are quite different. The US has taken conspicuous consumption to the level of religious belief - there is enough recent English / Irish background in Australia for that not quite to have happened – yet.
The level of complexity and energy dependence in the US is quite staggering. The devotion to the motor vehicle is beyond everyday experience in Australia – and goodness knows, most Australians would consider a car essential for the good life; people who can actually have a good life without a car, live in the most exclusive and expensive enclaves in our major cities and best beach resorts. Everyone else drives a lot.
The level of consumption in the US is staggering as well. Cities and towns with a similar income and population as Australian equivalents can support vast emporiums to consumption that ours cannot or do not choose to, and other resources like major airports. Even modest Albuquerque in New Mexico – a city of about 800,000 and therefore far smaller than Adelaide, has a pulse and energy that is way beyond Adelaide – huge freeways and a surge of traffic and an overall energy level that is much higher. And this is one fairly modest US city – there are dozens of them, many richer than ABQ as well.
This higher level of consumption (relative to Australia, and much of Europe and other OECD) I think also leads to two things: (1) a sense of entitlement that feels outraged if it is ever hampered, and hence no politician will ever tell their constituents it is their duty to drive less, eat less, buy less – in a word, conserve …, and (2) a tendency for very intelligent and educated people (here on TOD as well) to frame their PO philosophy in the doomer camp. The reality is that Americans could live easily on 50% or less of their current consumption levels, as could we, but the question is whether society would survive; it seems psychologically impossible for that model to be embraced, and even welcomed. Nevertheless, the doomer threads on here can be both engrossing and tiresome at the same time. Having said that, there is so much to learn, and a lot of the pointers to the right stuff (ELP and energy conservation) can be found here.
This is a great site, and finally, one of the best things – no, the very best thing – about Peak Oil awareness, is that so many elements of consumption, and the never-ending chasing of the Western middle-class "good life" through material acquisition almost exclusively, just simple pale into total insignificance. It is a hugely liberating position to be in.
I've made this point before, but it bears repeating. We could live fine here in the US on half the oil, if we had set up our infrastructure that way. We could some day live very well on 1/2 to 1/4 the oil. It's getting to there from here that's the problem.
Cargill, thank you for your reply. Again, I'm quite overwhelmed by the level of detail. And perhaps I'm being a little selfish in wanting the whole world to start talking about PO (or at least be warned), just that I feel it's some sort of obligation to pass some of this on. I started donating blood regularly a few years back, not out of any care for humanity, though that's what it's perceived as, but because I simply thought it was time to give something back.
And you're right about seeing things differently; we are so truly wasteful, aren't we?
Matt Blain from Melbourne
Oh, Cargill! I just thought of another Q (should have been obvious before, but that's the Average IQ for you): Back in the seventies, did you believe PO was "just around the corner", or that we had plenty of time to problem-solve it? I mean, fifty years away, 100 years? How do you compare then to now?
Regards, MB
You can warn them, but you can't force them to listen (even my own mother thinks I'm slightly nuts).
Fact is, most people will actively avoid listening. Once they realise there's a problem, they'll have to do something about it. Which, in most peoples minds, means living in trees.
No.
"Is there THE POSSIBILITY that Big Oil will find the fields that retain our way of life for decades to come? I seek a definitive "Yes or No"..."
The answer is surely no. It will be an exciting challenge for us all as we learn a new way of life without cheap oil.
We weren't looking for it all that hard, really. For a country that makes a big deal out of it's military achievements (including going so far as to go out of its way to commemorate a defeat - Gallipoli), that's a surprise, and a disapointment. When we did go and look for it, the wrecks of both HSK Kormoran and HMAS Sydney were found within days.
On the other hand, it was only men on board the ship, not something valuable like Gold, Oil, or Sarcanol...
In the last few days, there have been several comments in the DB about Paul Krugman's recent column on The Oil Nonbubble .
Since I keep thinking about one aspect of what he says, I would like to come back to the issue here:
The discussions here mainly were about electrifying mass transit and if that could be done in an acceptable/realistic time frame.
What I would like to point out is something else:
Krugman doesn't see any apocalyptic consequences of PO, he thinks that having less oil will simply mean that people switch to mass transit and live like the French. I don't consider myself a doomer, but I am convinced that the consequences of PO will be much, much worse than that.
Personally, I had assumed that the tough part is convincing people of the reality and imminence of PO. That having ever less oil available will mean changing everything we are doing (or at least the way we are doing everything) seems obvious to me. But now there is Krugman, certainly an intelligent and economically knowledgeable person, who is seemingly convinced of the reality of PO, but who can't find anything particularly alarming about it.
How come?
IMO you are forgetting that higher oil prices are regressive-they hit the poorest people hardest. Oil depletion does not (at least in the medium term) cause a % decline in the economy from top to bottom. Paul Krugman might not feel any negative effects for a long time, along with all his friends and associates-to him it is all theoretical-it is like yourself reading about a cyclone in Myanmar.
It seems to me that he just hasn't absorbed the implications, and he is also not peak oil aware as such.
What I mean by that is that although he sees oil as in demand such that a $125/barrel price is sustainable, and perhaps even sees it going up to £200/barrel, he does not see it following a geometric progression up to $400 and so on.
He is still fundamentally operating from an economic model where demand calls forth supply, not indeed enough to drive oil prices back down, but enough so that they become fairly stable.
He looks as though he also is relying on substitutability, so rising prices will lead to falling demand and a move to a more French style of life, but has not taken on board the transition costs involved, and the vast amounts of capital tied into unsuitable real estate locations, the lack of insulation and so on, or the large costs of building nuclear or renewable sources instead.
Whilst the outcome does not appear certain to me, there is certainly a significant risk of doomer scenarios happening, and substantial disruption and financial pain is overwhelmingly probable at the very least.
Vast amounts of capital will be worthless, ranging from the vehicle fleet to poorly insulated suburban homes, and the costs of alternative energy sources are high, so even short of a catabolic collapse huge resources which would otherwise have gone to consumption will need to be diverted to investment and tough times are ahead.
It can be hard to acknowledge your fears in public - especially in a forum like the New York Times. Also as a prof. at Princeton, he has a reputation to maintain, colleages who are, let's just say, not prone to talking about The Greater Depression (or at least that's how it looks on the surface)...
http://www.econ.princeton.edu/faculty/permfaculty.html
Okay, there is Ken Deffeyes, but he isn't active faculty, plus he's over in Geosciences.
I suspect that Krugman privately isn't always so sanguine about the risks associated with a near term peak, something that we are utterly unprepared for. But the point made about his high level of economic security must also factor, at some level, in limiting what he thinks is possible.
Krugamn in effect says that if the French can do it (did it) - so WILL we. I dunno...
IMHO it will be more about the journey than the destination.
France's journey resulting in their consumption of half as much oil per capita occurred - and continues - but started many years ago when energy prices were much lower. Might they have had more foresight?
We - the USA - on the other hand, it could be argued, have not really started (acknowledgement to the light rail projects that many do point out).
France is well along on their journey. We have really yet to start.
France did not go through an apocalypse and may not ever because of where they are on their journey. We, on the other hand, may not be so lucky.
As many point out it's not can we it's will we.
Pete
France has actually had several apocalypses. The Revolution of 1797, Napoleon(s), WWI, WWII -- to mention a few. Millions of people killed, property devoured, populations displaced. Just possibly, France as a culture knows something that Americans do not. Maybe they have tempered their natural human arrogance just a little, and realize that there is some value in trying to get along with their neighbors?
Yes the doomer scenarios are indeed possible, but so are some other scenarios.
Yes we could do the French thing and there's a bunch of evidence that Americans are indeed transiting to transit.
On the other hand, we now, for the first time ever, have *almost* competitive electric vehicles, both automobiles and trucks as well as minibuses. They are around 2-3 times the price of an average ICE or Diesel vehicle but running costs are much lower. It's possible we may follow a hybrid North American electric vehicles/French route.
Or we may collapse.
Or we may do something entirely different.
Take your pick.
The various economic analyses here on TOD - Gail's and Hall's - both suggest that we cannot simply do as the French do because the proportion of the economy that must go to energy (and probably all sorts of other resources) will have to increase enormously. It will leave less - if not less than nothing - for rebuilding infrastructure. Look what's happening right now to state budgets - is that going to get better somehow? The Europeans are where they are because they took a different path; we cannot simply teleport there.
That we (humans, US, wealthy whites - cut it any which way) are fabulously rich and can rebuild seems a conceit. $100T Simmons said recently - simply for necessary updates to oil infrastructure. What will it cost to put the ice caps back? Thermodynamics and entropy tell me we cannot go back, just as they tell me that everything is going to get much harder as energy becomes scarcer and yet again harder because all the easy pickings have been taken. I don't think Krugman gets the "full planet" implications.
Edit: John Robb at globalguerrillas has post about the thermodynamic analysis - what Krugman doesn't get, I think.
cfm in Gray, ME, on a full planet
You mean, like the large light rail system for central Florida that was just scuttled by our wondrous legislature?
Shaman, can you post a link to the Florida Legislature voting to scuttle the light rail system? I don't doubt you; it's just that I wrote a column today in which I praised the rising ridership on Tri-Rail. If the Fla legislators are being especially stupid, I should probably mention that on my blog.
do a Google News search on Central Florida Light Rail or some variation and you'll find all sorts of stories. The legislative session just ended two or three weeks ago and the story was all over the place. One local representative, John Mica, is trying to revive the plan, but without a special session it is unlikely he can do anything.
There is some disagreement over exactly what de-railed (sorry) the plan, whether it was the 200 million the house wisely removed from the previously approved plan with CSX, or maybe the liability issues, or maybe the revenue shortfall (we cut education first in this state). But, whatever the pundits say, the reality is that the Florida legislature has actively worked against the people of Florida for the last 15 years or more and this is just a continuation.
Here's a link to one of the local commentators that talks about the failure in a broader context.
http://www.orlandosentinel.com/community/news/deltona/orl-miket0408may04...
Just a technical note, this was commuter rail, not light rail.
And very few cities world wide run commuter rail systems without subways, trams and/or Light Rail to feed into.
The stereotype (using Miami as an example) is that commuter rail (Tri-Rail is an example) feeds into Miami MetroRail (Subway in the Sky) which feeds into a People Mover downtown (MetroMover) and buses.
Nashville and Austin are bucking this trend with as yet uncertain results.
Tampa and Orlando need to build Light Rail first IMVHO, although I certainly do NOT oppose putting in commuter rail first. It is just not the "normal" sequence of events.
Best Hopes for SOMETHING in Central Florida,
Alan
TriRail spent about $900 million double tracking it's 76 (?) miles and expanding it's fleet. The result is slightly faster and much more reliable and frequent service. And now higher ridership :-)
The projections I saw years ago suggested break even in a few more years.
Four Categories of Urban Rail (USA definitions)
Rapid Rail - Subways and the same type rolling elevated or isolated at grade. Multi-car trains that operate off an electrified third rail (usually). Stops every mile or so. VERY high volumes (called Metro in most of the world)
Light Rail - Multi-car trains (usually only 2.65 m wide) that can operate in mixed traffic, or private ROW with at grade crossings or short distances in subway. Stops every mile or so. Power from overhead wires. Medium volumes.
Streetcars - Single cars (sometimes doubles) entirely at-grade, stops every few blocks, power from overhead wire. Light volumes.
"Trams" is a "rest of the world" term and can mean Light Rail or streetcars.
Commuter Rail - Usually (not always) run on freight car tracks, often diesel loco pulled, stops every 3 to 5 miles. Routes can be up to 99 miles long.
Hopes this helps,
Alan
Your comments are always helpful, Alan. Thanks to you and Shaman both. We need SOMETHING in Florida, and I'll say particularly South Florida where I live. I know too many borderline-solvent working class folks who are painfully squeezed by long commutes and high gasoline prices.
Thanks for the distinctions, Alan. They are useful. I was using the terminology used in the media locally by both reporters and state officials. From your categories list and what I know of the project it would have been something between light rail and commuter rail, or maybe a transition between the two. The northern leg was to run along the I-4 corridor on CSX leased tracks from some of the outlying bedroom communities (stops every 3-5 miles) and then more frequently in town and finally running out to the tourist strip. I don't remember off the top of my head what the power source was to be. The hopes were that this would be the start of a Tampa to Orlando line, which would certainly be more to the definition of a commuter rail.
But alas, they are more likely to fall back on the old plan of putting up toll booths on 1-4 and railing (oops, did it again) against "big oil."
A good example of a hybrid system in from my old friend Mulhouse France (pop 110,900, metro 237,000).
http://www.railway-technology.com/projects/mullhouse/mullhouse1.html
The black line as an existing diesel (AFAIK) commuter rail line, blue is their tram lines (dashed is expansions).
Yellow-orange is their "tram-train" that interlines with both (a first in France, several in Germany). New Tram only stations are in red.
http://www.mulhouse.fr/fr/citoyenne.php?PAGEID=478
An EU overview of tram-trains
http://www.euronet.nl/~wijzer/elders.htm
And a depressing (unless you are French) list of new inter-city rail lines in France.
http://www.rff.fr/pages/projets/lignes_nouvelles.asp?lg=en
Mulhouse is scheduled to be the temporary terminus of the Rhin-Rhone TGV line in 2011.
Best Hopes for the French,
Alan
Perhaps we should send our Florida legislators to Mulhouse. At a minimum, we'd be rid of them for awhile. And if we were lucky, maybe they would actually learn something.
The French may have hope. But I have little hope for rail in central Florida.
Again, thanks Alan.
Actually a junket to all of the French towns that got their first tram in the last dozen years (about 12-15 from memory, pop. 100,000 to 300,000) and a side trip to Switzerland and their 31 billion Swiss franc effort (= to USA investing $1 trillion) to shift freight from trucks to trains would be a VERY good idea.
Perhaps it would open a few eyes.
Alan
They were to be diesel.
water?
I'll be happy if the state DoT is able to complete the new bridge at the north end of Lake Jessup AND remove the old bridge so that the old river flows can be re-established and the lake flushed out. This would pretty much solve the water problems in my area once the decline is in full spring and the bedroom communities empty out.
How is the water management going in Florida and along the Louisiana coast?
We heard a fair amount about it post Katrina, but not much since.
Multiple issues seem to be involved, from the preservation of the Everglades to hurricane mitigation to agricultural run-off.
From your link "...The fatal blow came from the Tallahassee legal lobby, which apparently feared a state deal with CSX would limit how much lawyers would make filing lawsuits in the event of a train wreck. So the lawyers got their lap-dog Democrats in the Senate to block the deal..."
What a stupid country you live in! lawyers blocking trains that are many times safer than cars.
John McCain in 2000 publicly became an avid opponent of ethanol. McCain then changed his position completely in 2006 when giving a speech in Iowa.
Hillary Clinton voted against ethanol many times. But surprise, surprise when she visited voters in Iowa she spoke out strongly in favor of boosting the production of ethanol.
What is it about Iowa that causes those vile and contemptible figures who will say anything that suits their political needs to change their opinion? Oh yes its whose caucuses launch the money chasing circus that is the presidential nominating process. Maybe now they have Iowa "in the bag" they can change their minds again?
It would be interesting to work out how much it costs the end consumers for these votes. From what i understand there are subsidies to grow corn, subsidies to turn it into ethanol and because of this there are higher food prices. I bet it runs into billions every year, how much rail would that buy?
Perhaps it is more of a 'vile and contemptible' process.
If you don't please the special interest groups, you don't get elected, it is as simple as that.
Not only the ethanol lobby, but notably the alliance with Israel is contrary, as far as I can see, to every conceivable American interest, and conducive to war without end.
Oil, Zionism and fundamentalist Christianity though make an unbreakable alliance.
The interest of the general populace do not weigh as a feather compared to the special interest groups.
It is notable that in ancient Greece, it was not the totalitarian Spartans who were incorrigible war-mongers, but the democratic Athenians.
Democracy in America seems to have become pathological.
Physical infrastructure and cultural patterns matter enormously.
Madrid, Spain is a lovely city for pedestrians and people are walking around the city centre even at 2:00 AM. Excellent bus, subway and (electric) train service. And some of the buses and taxis are already running on compressed natural gas. If Spain had to use 20% less petroleum, they would likely just do "more of the same" - i.e., it's probably feasible to totally ban cars in a city like Madrid, and people would still have a good life.
OTOH, I can't see this happening in a city like Dallas, TX. The city seems to have been totally developed around super highways and the "ring road" system. So, can Dallas become like Madrid and can Texans learn to live like Spaniards?
Dick Cheney made the famous remark that "the American (Texan?) lifestyle is non-negotiable". Newsflash for Dick Cheney - Mother Nature isn't going to negotiate either.
Madrid is a superb example of "building a lot of Urban Rail fast". They started with a few lines inherited from Franco (some before him) and built out a massive system in a dozen years.
Arguably the most subway/rapid rail per capita in the world.
http://en.wikipedia.org/wiki/Madrid_Metro
Best Hopes for duplicating Madrid in a dozen US cities,
Alan
# And what did the USA "invest" in during those same years ?
Suburbia, SUV's and Air Conditioning.
And Iraq :-((
Alan
And... Structured Investment Vehicles!
Maybe you meant S.U.V.s
"Structured Underwater Vehicles" :)
ptoemmes--What you point out is crucial: France developed its energy efficiencies over considerable time and used tax policy to prepare its public and infrastructure for the day--today--when oil and its fuels' prices got to the level previuously reached through the tax regime. This is also the case for most of Europe. I mentioned yesterday the possibility of the US providing a decent way of life at oil imputs equal to those of 1950. I've also said on numerous occasions how this could be done financially--complete rollback of the US Empire and moving the revenues wasted on it to developing the future transport structure the USA requires. So we don't need to raise taxes, other than the repealing of Bush's and Clinton's tax cuts, because they are already sufficient to do the job. What's lacking is the political will. The public seems very receptive to such a change in direction, based on ongoing polls since 2000. And I've shown why it's also in the interest of the dominant class/power structure to follow this path.
We shall experience economic dislocation regardless because of the country's economic structure and the fact that if Change is chosen it will take time to fundamentally change the structure to what the future will require. That dislocation is already happening and will accelerate.
Why is it good that France has and is planning and building electric rail?
I think I may have a few more questions when that is answered.
It's just that I don't understand how electric rail transport will be a panacea.....anywhere.
It certainly would be good right now and even much better years ago, it would have allowed us to burn oil on other projects for longer.
The future of electrical rail travel and transport is unclear to me though.
Because it will mean that the French will be able to quickly, easily, cheaply and comfortably get to work and leisure destinations?
They will have no problem powering them as they also have clean, cheap nuclear energy providing most of their electricity.
So you expect France to continue BAU?
Could you explain what you expect life will be like in France post peak oil. What do you think the rest of the world will be like if France will be better off?
Not BAU, but quite likely a decent quality of life.
The Suburban development of the last 25 years in France will likely have to be abandoned in part, the bicycle will return as one of the primary means of transportation. There will be significant economic dislocation (Mulhouse has a large auto factory and the largest car museum in France).
It is worth noting that Mulhouse is building 13 km of bikeways parallel to the new tram lines and separate from the streets.
France will be able to feed itself well :-) and export some food. It will also have industrial exports desired by the rest of the world (nukes, high speed trains, trams) that will find customers, including among oil exporters.
They are developing the ability to adapt, a parallel Non-Oil Transportation system. Not fast enough IMVHO, but the plans for 2011 could be accelerated to completion by 2010, and the vague extensions after that could be open by 2012.
This parallel Non-Oil system gives France the option to adapt depending upon the evolution of oil. Gaps and disruptive shortfalls (particularly in the movement of freight) will appear in France BUT they will have the ability to fix these and adapt to life with a minimum of oil.
Best Hopes for Non-Oil Options,
Alan
BTW: I chose Mulhouse to concentrate on (out of over 20 French cities and towns) because they are one of the smallest towns and they seemed to have an aggressive program. But they are hardly unique in France, there are quite a few other "Mulhouses" in France. Grenoble (pop close to 300 K) has an extremely aggressive bike + tram plan that is much more than Mulhouse, but it has a larger population as well.
I see, France will be an island of plenty in a sea of want.
Plenty of free travel and freight trains to service a thriving business sector. People travelling all over the place to see grandma and holiday on the Isle Of Capri, tourism will be a big earner.
They won't have business as usual but everyone will be travelling to work on the high speed trains.
I get it, everyone will be employed running and maintaining the railroads. Why didn't I think of that. Their stockpile of spares and metals will ensure it.
If you don't agree, why not? And in detail, with the sequence of collapse you see and the reasons for it.
Or were you just wasting the not-inconsiderable time and effort we put into responding to you?
No it might be better if I like you, detail all the projects and schemes we can/will do to prevent the collapse that isn't going to happen anyway.
If you don't think there is a problem with the world what the hell are you doing here?
You haven't a clue as you said. You peddle hopes and dreams as if they are the future.
You claim electric trains will allow business as usual then concede the rest of Europe will be in trouble.
Explaining what can happen is a far cry from what will happen.
You want to shuffle deck chairs then get me to tell you why your dreams won't work, you have yet to prove they will. First you have have to be truthful to yourself and ask why you think your dreams are necessary. When you understand why they are necessary then you can come to grips with what we face.
Until then you will be forever deep in denial.
Just generalities and blanket assertions from you then, with no effort put into genuine analysis or constructive thinking.
If you are so sure of what you think the answers are, then stop asking fake questions and wasting other people's time.
I find your quasi-religious convictions uninteresting, as is your sub-101 psycho-babble.
Please advise me of the fake questions, do you mean a fake question has no answer, or just a question you can't or won't answer.
Maybe it's because you consider yourself all knowing and you should not be questioned. You are so all knowing and above reproach that you even jumped in and answered for someone else.
Why do the questions waste your time? I made no blanket assertions or generalities, I just reversed your claims of what you consider electric rail transport will do for France.
Unlike you I have no religion. I don't believe in god or gods. So being accused by someone who doesn't even know me of being religious is interesting.
What are my quasi-religious convictions Dave, I must know so I can properly deal with them as you obviously think they are a very bad thing.
I characterise your assumption that a complete collapse will occur as quasi religious because it has no discernable underpinnings of reasoning but relies on assertion.
At any rate, if it does you do not show them.
If you don't think that what I and others are saying will work, why not?
I characterised your question as fake because it appears to me that no conceivable answer would satisfy you, as you had already made up your mind and your reply boiled down to that of Widow Twanky, 'Oh no it won't!'
I have no objection whatsoever to others holding different opinions to myself, and enjoy the debate, as in my view there are very serious and substantial reasons for feeling that the situation may be irrecoverable - but that does not mean that the case does not need arguing properly, rather than adopting a 'oh, that is just silly response'
If something won't work, why not? I laid out in some detail why there seems good reason to believe that there are no immediate show-stoppers for France.
I am agnostic as to whether we will make it through in reasonable shape, but tend to concentrate on what can be done and possible positive outcomes, as if we are screwed anyway, what difference does it make to be aware of that in advance, other than having a warm glow of self-satisfaction?
Dave - knock it off with the personal attacks. This is not the first time I've had to warn you.
There are many here who are not in denial. Most however, are not so rude.
Alan, one of the interesting things is that just like the establishment everywhere, the French elite is not peak oil aware as yet.
What will be fascinating is that when it sinks in, which I suspect will be in the next year or two, but by 2012 at the outside, that the French will certainly form a plan to deal with it, and will not rely on Anglo-Saxon improvisation.
Some elements that are probable in such a plan are already apparent, one would imagine.
The reason for their nuclear build in the seventies was to ensure security of energy supply since they had no oil.
I doubt that they will be any happier at dependence on Russian gas, and unlike the German's are unlikely to consider building solar thermal capacity in the Mahgreb and importing it.
The first thing they are likely to do is to move aggressively to secure uranium supplies, if necessary using military force. It seems likely to me that they will also fund other methods of stretching fuel supplies, either through a re-activation of their fast-breeder program or through the development of molten salt thorium reactors or other technologies - in any case funding for development is likely to be substantial.
They are likely to greatly expand their programs to build residential solar thermal and air heat pumps, by several fold, I would have thought, form a target of 5 million solar thermal installations in the next few years up to total coverage, say 25million units, in around 10-15 years, and air pumps from 50,000 a year to maybe 2million or so a year.
Programs to up standards to the equivalent of the Passivhaus system in insulation also seem likely.
Freight will be redirected to both rail and water, and your rail programs much expanded - I won't presume to further comment on that, as you can specify much better than I what changes there are probable.
I would see a nationwide program to install power points for electric vehicles being introduced, on the same lines as in Denmark and Israel, and the car industry will be re-modelled to produce electric and perhaps compressed air vehicles.
Bike programs, and wind power programs would likely run without needing a lot of adjustment, as substantial steps in that direction are being taken already.
What is most unclear to me is how much the nuclear industry would expand.
Conservation and heat pumps between them might mean that even without gas not much more power is needed than can be provided by the current fleet, and doughnut fuel is likely to increase capacity within a few years.
However, France needs it's neighbours to prosper to prosper itself, and many will have great difficulties ramping nuclear within a reasonable time-frame, so as you suggested for the English channel area, France may build quite a few reactors with the view to exporting the power - certainly at minimum they need to ensure that Germany does not get into difficulties.
Whatever they do, it will be fascinating as the details of their scheme emerge, as it will certainly be monumental in scale and cover every detail, as even when they make a mistake they do things in the biggest way.
Yes, it will be interesting !
Italy and the UK needs to follow the French model (as does Spain, but they are already making moves).
I could see a Grand Strategy to help all the neighboring nations (except the Swiss, who only need food) follow more or less the French model. With the French at the center and assuming their natural position as "first among equals".
Russia is building 2 x 1000 MW export reactors in Kalingrad (former East Prussia), and the French could line the Rhine with more, till the Germans change their minds @ nukes.
The French would show up every place the Chinese do today, and there is already a French naval base in the Persian Gulf.
A 2CV-EV (souped up NEV) could come to pass. Two fabric seats, aluminum frame with fabric covering and plywood (or aluminum) floor, top speed of 75 kph, no a/c and a charcoal heater with PV solar on the roof. A trailer with a diesel generator for when extended range is required. I do NOT see the French being so insistent on an EV that matches an ICE in performance and capability as us Americans. Just enough will be good enough.
One surprise may be opening up the tracks to everyone (already underway in the EU). The SNCF is hopeless in handling freight today. Instead of reform, perhaps let "anyone" operate freight trains on their tracks.
Significant double tracking and the start of trolley freight.
The 1,500 km of new tram lines could be built in 6 or 7 years instead of ten. After that, one begins to wonder at what are the saturation levels of urban track. Regional interurban trams appear to be the next step.
Of course the goal of 100% electrification of SNCF would be moved up from 2025.
I would expect a significant increase in spent fuel reprocessing (x5, x10 ?), this alone could satisfy French needs for several decades. And become more helpful to South Africa (and anyone else with desirable resources).
A repeat of the recent China-Venezuela deal (in 2013 China will get 400,000 b/day of Orinoco tar for a specially built refinery) for France.
Nukes on Corsica & Reunion (probably smaller than 1.6GW, unless they want to put an aluminum smelter or ammonia synthesis there), although wind + solar + pumped storage (+ biomass for Reunion) may be enough for Corsica and Reunion. I suspect that HV DC to Corsica will be minimized.
And much more !
Alan
Thanks for a very informative analysis, especially on the rail situation - I had not realised that SNCF was so bad at freight.
It sounds to me as though the next priority may be building tracks to get railway stations close to major industrial enterprises.
Any appreciation you have of how big that task would be?
Just one caveat:
I doubt that they will bother trying to adapt EV's for long range, as they already have a fine system for hiring cars, at the moment it works in reverse of that which they would need, as you hire an EV, but it could be adapted so that when you need it an ICC is available.
The system of replaceable batteries that they are introducing in the Danish and Israeli networks would also be sufficient, although it would be a bit annoying to travel far as you would have to swap batteries every 150km or so.
In any case, they will likely be advised by Renault that within a few years rather more expensive battery packs giving longer range will be available - the use of silicon Nanotube anodes, for instance, should increase range by perhaps 3 times, although the full benefits with a perhaps 10 times range increase would rely on a new cathode too:
http://www.sciencedaily.com/releases/2007/12/071219103105.htm
New Nanowire Battery Holds 10 Times The Charge Of Existing Ones
One other thing that I expect to catch on in a big way in France is electric bikes - handy for hillier regions where pedalling takes a lot of puff!
I don't have a crystal ball, and don't do predictions - I don't know who will win the 3:30 race tomorrow, and until I do will refrain from the predictions other seem fond of, such as 'everything will totally collapse', or 'technology will solve everything, no problem'.
It is however apparent that France has many characteristics which mean that it will have an easier transition to expensive oil than others - to paraphrase Frank Sinatra, 'if they can't make it there, they won't make it anywhere.'
They generate over 80% of their electricity with nuclear power, but still have a massive wind turbine build getting going, they plan to install 5 million residential solar thermal water heaters in the next few years, and are installing 50,000 air source heat pumps a year, and have fair solar resources in the south of the country.
They are Europe's biggest food producer,and are relatively uncrowded compared to much of Europe.
Their public transport system is superb, and the TGV means that for many who will no longer be able to afford very expensive air fares, a holiday in 'La Belle France' will still be a practical possibility.
Their nuclear industry guarantees that with fossil fuels getting more and more expensive, they will have a ready market for equipment and expertise.
OTOH they have a huge problem in their suburbs, with disaffected largely muslim populations at war with society as a whole.
There chief problem post peak would likely be catabolic collapse following problems elsewhere in Europe.
The southern tier of countries in Europe run huge deficits, and rising air fares and a large reduction in tourism will cause massive disruption, and in my view their speedy exit from the Euro.
Germany suffers from a totally unrealistic energy policy, which in cold, dark Germany imagines that if you bung a few billion at it solar power will be fine.
What they are actually likely to do is increase coal burn.
Britain suffers from a terminally inept establishment, who have absolutely no sense of urgency in dealing with energy issues or anything else, and plan to spend the next few years re-checking French, Finish and Canadian approvals for different reactor designs, whilst 40-50GW of their generation capacity will go offline within a few years.
It is also far more indebted and housing prices more inflated than the US.
So it boils down to that France is a lot better placed than most, but could still get dragged down by it's partners and neighbours.
I would answer that France is providing an example of what ought to be done, and as the EU goes, France is only one of many cases, so it stands as a proxy for EU devlopment. Another aspect of the answer depends on what sort of lifestyle is aspired. One poster above provided several good reasons why the French have what they have and the sufferings throughout their history. If a country could insulate itself to the travails of Peak Oil and Climate Change, then that is what the French and others are doing. My expectations are that as transport fuel prices soar and the US economy unravels as a result, France and the EU will absorb the higher prices and continue their dynamic lifestyles with minor adaptations because they prepared.
There's a particular freedom when one doesn't own an auto and is still able to travel easilly across town or to another country. In that sense alone, France has more freedom than the USA.
I was struck by the same, and sent Mr. Krugman a brief note:
Mr. Krugman,
Regarding yesterday's post: "France consumes only half as much oil per capita as America, yet the last time I looked, Paris wasn’t a howling wasteland."
One critical difference is that France has an extensive public transit system, with both efficient fast and light rail. We in the US are much more dependent on individual motoring than the French are. Oil accounts for more than 90 percent of all the energy used for transportation in the United States. By contrast, the French use diesel as their primary fuel as opposed to gasoline and enjoy increased efficiencies. Their higher fuel costs, which includes much higher taxes, results in few miles driven in that country.
If you have not done so, I would suggest reviewing the concept of the "Cubic Mile of Oil", here http://www.theoildrum.com/node/2186 and here: http://www.theoildrum.com/node/2320
The energy density of oil is staggering and impossible to replicate with any individual or combination of alternative sources. Few, if any of the general populace understand the constraints we are up against.
I appreciate your efforts in bringing this new reality into the open. I wish I could share your hopeful expectations for getting though this without extensive pain.
Thank you for your time.
David J. McCartney
Yes, it will be harder here than in France, and it will hit the poor the worst, but it may be possible nonetheless:
"A City Cooler and Dimmer, and, Oh, Proving a Point"
"JUNEAU, Alaska — Conservationists swoon at the possibility of it all. Here in Alaska, where melting arctic ice and eroding coastlines have made global warming an urgent threat, this little city has cut its electricity use by more than 30 percent in a matter of weeks...."
"... What the avalanche has underscored, however, is that Juneau is largely on its own...."
http://www.nytimes.com/2008/05/14/us/14juneau.html?_r=1&partner=rssnyt&e...
There's a big gap between the possible and the probable, though. The problem arises when supplies aren't rationed by price, they're rationed by scarcity. That's when the compounding effects of uncertain supplies start shutting down whole segments of the economy. The South African mines facing rolling blackouts, China at 12 days' coal reserve, shops in Pakistan shuttered by fuel riots - There are examples cropping up more frequently now of systems going unstable even though their energy reserves are theoretically still above MOL.
The message is always the same:
Economize - learn how to before you have to.
Localize - get your salad from your yard, and know your neighbors.
Produce - your skills at molecular-beam epitaxy may prove to be less valuable than your ability to set up a liquor still.
Yes, French society is set up to run well on less oil. It is very possible to set up a society that can give a high standard of living on little oil. Unfortunately, we have not set up our society that way.
It's not that we can't get to a society that works well without much oil, it's about how we get there from where we are now (cheap oil dependent). That's where the problems are.
Sheesh, what a bunch of ninnies. China and India are happily building out infrastructure, but the U.S. ... IMPOSSIBLE.
It's really psychological. People don't want to give up the idea that the Suburbs are the Best Possible Arrangement That Everyone Aspires To. Because, if people thought they stink, then they would go about changing it.
it's cheaper to build it from the start rather then tear down the old and rebuild.
Do you think that the urban construction in China and India, both with populations over 1 billion, is happening on greenfields?
No, but their suburbs are.
It appears to me that Krugman is missing another rate problem--namely the rate at which we can convert our society to one that runs more like the French--at a time when the necessary infrastructure changes have to compete for energy with all the unmet needs of BAU. The cost of not doing these changes in advance of shortages will be an extended period of hardship and potential chaos.
Mark Folsom
Hi Punt,
re: "How come?"
Well, I guess you could ask him, maybe?
re: "seemingly convinced of the reality of PO"
Seemingly...it's hard to know what information someone actually has looked at.
Convinced...well, again it depends on what information he's tried to understand. And how he understands it.
There are also emotional factors, as Hirsch said in his GPM interview, it takes several months (loose quote) to begin to emerge from shock. This means you have to kind of "be able to" be in shock in the first place. Many people cannot allow themselves, so to speak (not that it's a necessarily conscious choice), even while it's the reality they are experiencing.
re: Not "particularly alarming"...Krugman probably hasn't encountered ELM.
The Thief Who Stole Last Night's Dinner
Probably only a matter of time before cars with tinted windows pull up to fast-food drive-thrus and demand used cooking oil at gunpoint. Of course, they might get hot grease thrown through the window.
Psst, are you gonna eat those fries?
re:Aging steel oil pipelines......
aging pipelines are a problem, no doubt, but if maintinance was neglected because oil was at $10/bbl, won't maintenence become a priority at $ 120+/bbl ?
aging equipment is also an abstacle for any eor or redevelopement effort. in some cases, it can be overcome, and in other's the stockholders will get drilled.
I think the problem is the old "receding horizons." Higher oil prices mean higher maintenance costs, too, since the cost of steel, etc., goes up with the cost of energy.
Suppose you owned a gravel pit for many years and most of the gravel on your land is now gone (the end of your operations were in sight). The road leading to and from your pit is falling into disrepair. Would you construct an expensive new road or keep patching the old one to keep it just functional enough to use? What effect would the price of gravel have?
i dont see supply or demand (for fossil fuels) reaching zero anytime soon, and as long as there is supply in one location, demand in another, there will be pipelines for transport.
what that has to do with a depleted gravel pit, i dont know.
Some insight from people in the petroleum industry such as yourself would be appreciated.
If we assume that oil prices continue to increase, but volume becomes relatively restricted, in line with Dr Bakhtiari's forecasts:
http://www.energybulletin.net/19701.html
Peak oil and Bakhtiari's 4 phases of transition | EnergyBulletin.net | Peak Oil News Clearinghouse
then oil pipelines would have to carry very different volumes compared to today.
I don't know what the engineering implications of this are, whether the pipelines can be easily adapted, or whether it is relatively difficult and expensive.
For sure though it would mean that the cost of the infrastructure per barrel would increase, taking account of now essential repairs due to the high value of the commodity.
The situation for gas is even more hazy, as there is more widespread dispute as to the amount of resources which will be available, and it is my understanding that you have to have a certain amount of flow for the pipelines to work, so they might need replacing presumably if flows dropped greatly.
Any insight you can give on these concerns and costs would be appreciated.
DaveMart -
Regarding the impact of reduced reduced oil consumption on the pipeline transport system, I don't think the direct impact would amount to much if say the reduction were in the range of 30 to 50%.
Oil pipelines are designed to accomodate a certain range of flowrates. If future flow rates are less than what they are today, it's mostly a matter of just throttling back on the pumping system. However, if we get into a situation where there is simply no oil to put into a particular pipeline and that pipeline stays idle for a period of time, then that could create problems, as it is not all that easy (or desireable) to shut down and start up pipeline systems.
Also, some pipeline systems consist of two pipes running in parallel. In such cases it might be possible to simply deactivate one of lines permanently and run the remaining line at design capacity.
Hello Davemart,
Good points on rusty pipelines & MOL.
Take my Asphalt Wonderland for example: currently dual-serviced by Texas & California pipelines. Eventually volume will decrease to the point where only one pipeline will supply my area.
Future Extreme example? When petrol reaches $1,000/gallon, the pipeline from CA to AZ will be similar in look & size to just a typical garden hose--no energy-slave pump power required--the thousands of constantly moving armed guards will just periodically heft the hose onto their shoulders, internally moving the fuel along by this human-slave gravity-assist. No theft, no rust, no muss, no fuss.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Thanks to both respondees.
Useful information there.
Anyone got any insight into the situation for gas?
For us in the UK that is a pretty imminent concern, as our own gas is running out and we buy our supplies on the spot market.
Norway has openly said that under those circumstances long -term contracts will have priority, so I can easily see gliches where there is inadequate supply to keep the pipes full enough to provide flow, if I have understood the engineering correctly.
What would be the consequences of this, and to what level would they need to drop to cause this problem?
The point I was making by way of analogy is that it is irrational to perform proper maintenance on mineral transport systems if the end of the resource being transported is within sight (not necessarily globally, but at a specific extraction location). In my gravel pit analogy, the operator may even abandon operations early to leave some gravel "in the pit" if the cost of minimal road maintenance exceeds profits from the last few truckloads.
Your point is correct, though your analogy is flawed. A gravel mine can mine gravel and use it to maintain an access road very easily, and then canibalise the gravel road all the way back to the tarmac or railroad connection!
Many platforms damaged or destroyed by Rita have not been replaced. Perhaps if oil prices climb to 200, 300, or 400$ per barrel?
The example of the airlines is not encouraging. Higher fuel prices along with pressure to keep prices down is leading to scrimping on infrastructure maintenance-- and whatever else can be scrimped on. A good reason, IMO, to avoid flying these days.
The great inflation lie is being told again today. The financial headlines today are that inflation pressures ease despite food price jump. Well, looking at the details the food price jump of .9 percent in April was offset by a 2 percent decline in gas prices. Well, of course we all know gas prices have been going down right???
As it turns out in real terms and money gas prices actually rose 5.6 percent in April. But why let facts get in the way of government CPI numbers. Well they didn't and applied their nice springtime adjustments and came up with the "fact" that gas actually dropped 2% in April - gotta love those seasonal adjustments:) I'm not sure what fuzzy math they use but I'm pretty darn sure gas prices were a lot higher in April 2008 then in April 2007 so even seasonally adjusted something seems rotten in Denmark. But who am I to question:)
http://biz.yahoo.com/ap/080514/economy.html
But there is hope:
http://www.share-international.org
Casey
Yeah, right. Energy prices down. It's amazing that they can get say these things with a straight face. More amazing that people lap it up.
We seem to be moving past the Brezhnev-level lies to a whole new fantasyland.
Kim Il Bush.
I have to wonder why the government even bothers publishing their inflation numbers anymore. No one (and I mean absolutely no one) I know or even talk to in passing believes these "statistics." They have absolutely reached the level of farce.
Because people still don't understand that these phoney numbers are then used to calculate other phoney numbers, like the GNP growth rate, cost of living increases for you and me, and the value of the US dollar in the eyes of foreign currency speculators.
They should cease publishing CPI as they did the M3 money supply if they really don't want us to look at how much they are screwing things up. Kevin Phillips has a new book out called "Bad Money". A piece from it is in the May Harper's called "Numbers Racket" wherein he states
People don't really believe what our government is publishing today. This morning's inflation report even had the word "phoney" announced along with it by Mark Haynes of CNBC!
The stock market also knows about real money supply and the phoney CPI and is discounting all this along with oil supply problems and food inflation and growth in China and a bunch of stuff you or I aren't even thinking of. It's a very efficient information analyzing machine. Think of it - millions of hard working researchers dig up the numbers, weigh the imlications, then set a market price. For every errant, numbskull conclusion drawn from the numbers that's bullish, there is an errant, numbskull conclusion that's bearish. After all, if it's errant and numbskull, it's just as likely to be wrong bullish as to be wrong bearish. It's just like flipping a coin - baseless. So all the information is looked at and the error tends to cancel out.
So what is this marvelous machine saying about the oil/food/inflation worry ahead?
The stock market seems to be in limbo between continuing the bear decline and breaking back into a bull market again. The VIX index shown is a measure of investor sentiment going between fear (high) and complacency (low). It tabulates options activity and the like and is not an opinion poll. Shown above is a comparison between the VIX chart over the bear market of '00-'03 and the current VIX chart . A VIX of 18 seems to be a sort of turn point between topping out in a bear market rally and going on to a quiet bull climb on the proverbial wall of worry. We sure have a nice wall of worry placed in front of us now with even Daniel Yergin and main stream outfits like Goldman Sachs publishing $150 or higher for oil and food inflation seemingly out of control.
The marvelous discounting machine is just now at a pivot point where it will resume the bear crunches or go happily climbing up the wall of worry. A crippled credit system no longer seems to be the issue with the market. What is the big issue is inflation (real, not phoney) and the economy and stock market may just find a way to live with it. Who knows? Maybe Mr. Vick Market knows.
Nice analysis
I don't see any of the long-term issues favoring a quick recovery. Any market, any system, has natural variations. I think the current market looking like a shift to more positive footing is nothing more than an Indian Summer. That is, we ain't done yet. Miracles *do* happen, eh? Maybe the Lutec device will save us? Or the Steorn device? Or a miracle solar film and dirt cheap battery will pop up?
Or maybe we'll all achieve instantaneous group consciousness and go all Gaia. Kumbaya. Anything is possible; I am not being facetious. But what is probable when energy costs are still rising, food production troubles still exist, AGW is accelerating (top link), the financial system is still falling (despite the reduced media coverage), etc?
Perhaps "bumpy plateau" applies to more than just oil production.
Cheers
PS: What do you think of the numbers produced by Shadow Government Stats? http://www.shadowstats.com/imgs/sgs-cpi.gif
The Shadow Government Stats chart agrees closely with what Kevin Phillips is saying for real inflation. At financialsense.com they also publish a tabulation of M3 money supply, a primary inflation driver, and something the Fed stopped publishing in '06 when it was at 8% annual rate (took too much paper and cost to publish they said - I wish they were so conscientious with our tax money elsewhere). Since then it has grown to about 15% annual money supply growth - just what we need to go along with food and oil inflation.
I share your skepticism about a renewed bull stock market, but this one thing I know - the market knows more than I do. One thing I find amazing is the trouble brewing in the Middle East being such a dangerous thing now with no spare swing oil capacity any where in the world and also being so conspicuous by its absence from the headlines or even back pages. There is a fairly serious renewal of war going on in Lebanon with heavy Iranian involvement, but it's a stepchild amongst the news stories - for now.
In a world where the gov't manipulates the truth so blatantly, we cannot be surprised by these moves, though I wish more people realized these are not innocent changes and have the potential to lead to a nation that is not fascist in name only. We are perilously close. There is literally no step to be taken to unequivicoally be a fascist nation than to implement the martial law as written into NSPD51 (I think it's 51... continuity of gov't.)
If Americans knew inflation was at over 10%, that the US had been in nothing but recession for the last 8 years or so but for a short period a few years ago, and what was really coming for this economy... BuCheney simply would not now be in office.
We know that little of the MSM is free, per se. We also know the BuCheney administration undoubtedly sees itself blameless in the energy emergency and further are certain they would "get it right" this time.
Man... a perfect storm cometh almost doesn't do justice to current conditions.
Cheers
Jump in food prices biggest in 18 years
Economic 'misery' more widespread
The food price jump was .9% month to month or about 10.8% adjusted for an annual basis.
Time might show more devastating affects of the ramping up of biofuels production and the slower moving effort to bring land under cultivation. Ten percent food inflation is not the result of tight monetary policies at the FED.
I heard some Senate testimony on C-SPAN radio about a farm bill being considered in Congress. Not all the increases in food prices were realized as profits by farmets. Fertilizer prices are up more than 100% YOY.
Some new farm subsidies were recommended or disputed. One remarked that the subsidies might not be paid out if the commodity prices will be higher than the price triggering subsidy pay-outs.
Oil Refiners See Profits Sink as Consumption Falls
More evidence that a gas tax holiday would mostly give refiners/gas retailers maneuvering room to raise prices faster - meaning the benefits would not go to consumers.
Also interesting was the item about USA using Japanese refineries "to offset a chronic shortage of capacity at refineries in the U.S." Last time I looked, last week, refinery capacity was at about 85%. Something not mentioned is the time lag for higher oil prices to enter the price system. Today's imported crude was bought at prices several months old, as were imports of diesel, gasoline, etc. When one looks at the slope of the chart here, it seems clear refiners won't be moaning about slim margins much longer.
How much of our rising gasoline imports are due to the different (and changing) rations of diesel/gasoline demand in different regions of the globe? It is easy for me to imagine, that a diesel heavy economy, would produce of surplus of gasoline, and a deficit (made up by imports) of diesel. In the end supply/demand for each component of refined product must balance out. But if that is not happening locally, imports/exports would be part of the balancing process.
Your question often appears, and I have yet to see a good, easy answer because there are several parts to the story. First, most US refineries favor the production of gasoline over distillates, while most of the world's are the opposite; this is done during the construction of the refinery, a difference in the types of cracking tower, IIRC. Second, I think it helpful to look at where US gasoline imports originate (The dropdown menu for Product provides even more data for distillates, etc., which should be viewed). Third, both spot and futures prices for gasoline should be looked at. (I prefer to look at the graph here to see the spread between wholesale and retail prices.) This is difficult to do since we don't know the price being paid in other markets; for example, of three prolific exporters, UK Belgium, and Netherlands, two are countries with very small markets and appear to be producing product primarilly for export. Commonsense tells us that there's money to be made otherwise we wouldn't see exports from other markets.
So, I have done what's been done before to this question: provide a bunch of muddle that doesn't really provide an answer.
Summary of Weekly Petroleum Data for the Week Ending May 9, 2008
And this is what they expected:
Price Elasticity of Demand
4 Week Averages 08 vs. 07
Products Supplied
Finished Motor Gasoline. . . 9,265 . . 9,288 .-0.2%
Kerosene-Type Jet Fuel . . . . 1,554 . . 1,641. . -5.3%
Distillate Fuel Oil . . . . . . . . . 4,202 . . 4,169 . +0.8%
Residual Fuel Oil . . . . . . . . . . . 778 . . . . 727 . +7.0% Propane/Propylene . . . . . . . . . . 957 . . 1,048. . -8.7%
Other Oils. . . . . . . . . . . . . . . . . 3,778 . . 3,722 . +1.5%
Total Products Supplied . . . 20,532 . 20,594. -0.3%
Not Much Hope,
Alan
Alan,
All waterfalls must begin with a drip...
Regards,
TFD
Well, Alan --
There isn't any short to medium term elasticity in OECD demand generally, and in the U.S. in particular. The usual assumption is that efficiency takes (many) years to implement, as we can obviously see in the Plug-in Hybrid Hope or the need to finance and build all sorts of infrastructure for trains, mass transit of all sorts, etc. Your specialty.
My column today explains the fundamentals behind the price (including lack of shorter term elasticity) to the layman and a few other pertinent things :-)
The Age of Aquarius
-- Dave
Dave, is that chart supposed to represent some sort of reality(?) …. or is it more like: if there was more oil flowing up from the ground nowadays than so much more would have been sold in the market? I don’t know.
Obviously that blue demand-curve represent virtual reality … or wishful thinking (!) in the vicinity of “I wish I could fly like a bird” or something. The blue line follows the red one, that’s it! And there is no hocus-pocus to it (believe me)
PS ! I know that IEA is having a mental breakdown on an idea that the world will demand TWICE the energy it uses today in 2030; obviously they are playing around with numbers for “the sake of playing with them” . Such numbers have NO value IMHO.
You have residual fuel oil + 0.8 but it went from 778 to 727. Surely that must be a decline.
Seasonally adjust, toss in a few hedonics, allow for some substitution and wa-la
Are you a government statistician? - you seem to know what to do! :-)
Getting that sign wrong makes the whole thing wrong. Alan fron Big Easy has a great future in corporate accounting.
I cut and paste from the EIA site into MS Word. There I format it (see all of the periods and spaces) to make up something that lines up and looks good. I also add "%" and "+" signs (EIA supplies the "-" signs) and two bold #s (the % gasoline and total oil).
I could make an error in this formatting process (all to make it look presentable) but I did not this time.
The 2008 #s (as labeled in upper left) are in the left column and the 2007 #s in the center column (% change in the right column).
Alan
No one else has pointed this out yet, so I thought I'd state the obvious - read the headings: 08 vs. 07. This year is on the left; last year is on the right. Left value > right value. So that is an increase.
And residual increased 7%, it's distillates that increased 0.8%.
Looking at the data for consumption, I notice that the EIA has begun reporting a comparison between this year and last year using a 129 day trailing average. It's important to remember when looking at these data that the average actually represents a point in time some 65 days previous to the end of the series. Thus, the series says almost nothing about the current supply situation. The other data is a 4 week average, which also should be viewed as being for a date 2 weeks earlier.
Could there be a reason for this slight of hand statistical distortion, beyond ignorance? Inquiring minds want to know.
E. Swanson
I have a question (for anybody) on the build in US oil stockpiles and imports. Imports dropped 695,000 barrels per day (a total of 4.865 million barrels) from the previous week. Inventories were up by 200,000 barrels. Assuming that U.S. domestic production remained the same, we’re actually using a lot less crude. And considering that refinery runs increased, the implied build may actually be more. Am I reading that correctly?
It makes no sence, refinery inputs were UP, imports DOWN and still inventory is UP?
I have a couple questions for those who know more about the refining process than me, which means just about everybody on this site. :)
Are gasoline and distillates produced from the same process at the same time (i.e. when you crack a barrel of oil, do you wind up with X amount of diesel and Y amount of gasoline)? If so, how much flexibility is there in the values X & Y (i.e. to what extent can refiners favor diesel over gasoline, or vise versa)?
Thanks :)
I know we have a post on that. Hang on, brb.
Don't know if this is the one you were thinking about, but it answers a lot of questions around that theme that frequently crop up:
Refining 101: The Assay Essay
Thanks, Robert! I think between that post and the links it references, I can get the answers I'm looking for.
I happen to agree with the "The Reason Behind High Oil Prices" article.
IMO oil prices are in significant overshoot and are bound to fall precipitously. Spare a war with Iran, nothing justifies maintaining them at those levels - and while it is true that supply may have plateaued (or being on a slightly rising plateau), demand especially is US is dropping fast and oil stocks are growing. Actually there are indications that oil producers are wondering what to do with their oil... see Iran's floating oil storage problems.
I think I'll wait for the bust and then buy. The "free market" tends to both over and undershoot, I think the point of buying will be after they've reached the bottom and then start to recover slightly. It may take an year or two though.
demand especially is US is dropping fast
See my every Wednesday post on Price Elasticity of Demand upthread. -0.2% and -0.3% are not what I consider to be "fast drops" in demand over a year.
Alan
History has shown that under normal conditions (which we don't have) there is a natural rise in demand, which IIRC is around 1.2% in US. I wouldn't discount the 0.2% drop, since it goes to show that demand now is 1.4% lower than what would otherwise be. Is this due only to the higher prices or the economic slowdown is not that important re predicting the "real" equilibrium price; what matters is that oil stocks worldwide are growing and sooner or later there will be a correction. Judging from the way markets tend to behave I would expect the correction to be hard and fast. My prediction for the end of the year - $80/bbl.
BTW in this situation the calls to OPEC to "pump more" come only to show how hypocritical our political leadership can be. If they wanted to lower gas prices they knew what needs to be done - put an end to speculation and tighten the money supply. But this would hurt the economy (read the huge corporations and market speculators) so nobody talks about this.
Given over all world oil supplies, it matters little what US consumption "would have been". Or that we conserved -1,4% over what "would have been". We need to be down at least -3.5% today over last year to stay "ahead of the curve" of ELM.
A nation that can reduce consumption faster than world exports shrink has a far better chance of maintaining a good (or at least decent) economy, attracting investments, etc.
The -1.4% number can be useful in extrapolating what consumption will be with $160 & $200 oil (remembering our growing population and formerly growing sprawl).
Yes, tighter money supply and 9% unemployment will reduce oil demand and prices. Speculators are the froth and affect day to day price changes, but have little cumulative effect.
$80 oil ? Perhaps a 2% probability, and then only for a VERY short time.
Alan
Every investment in oil which is not motivated by its direct use is speculation. A lot of money go into commodities as an inflation hedge, ironically fueling inflation in the end. We can all thank the FED and Alan Greenspan in particular for starting all of this.
But I don't want to digress - I think you underestimate the amount of investor money which is pouring in oil and commodities in general. It is true that in the end speculation cancels out but I think it is not only day-to-day speculation, the timeframe can be year to year, or even decade to decade - as long as it takes for the market to "realize" that it is underpricing or overpricing something. Remember, beginning of last year oil dropped to below 60$, after reaching almost 80$ before that. This can very well repeat.
All of that wouldn't be possible of course if supply was not so tight, but tight supply does not mean there won't be temporary over/undershootings.
LevinK - - "put an end to speculation and tighten the money supply. But this would hurt the economy (read the huge corporations and market speculators) so nobody talks about this."
Sure, oil is up. Met coal $90/ton to $300/ton in 1 year. Thermal coal $15/ton to $90/ton. Similar rises for Corn, wheat, rice, potash, gold, platinum, silver, steel, etc. I think that I see world demand exceeding world supply in many areas - not "speculation."
Suggest that parenthetical be changed from "(read the huge corporations and market speculators)" to "(read millions of hard working Americans lose their jobs)."
But, you probably have a doctorate in Economics, which I do not.
Hundreds of millions of Americans are already hurting by the inflation which reduces their real wages. It is a matter of time the commodity bubble will percolate even further through the prices of just about everything of importance; and this would hurt the lowest income classes disproportionally. And no, I wouldn't trust the govt inflation statistics even for a minute.
I think if the FED was not so busy in bailing out banks and blowing out bubbles we were going to have a whole different story now. What they are trying to do is to reduce the debt through inflation, possibly hyperinflation but from my POV all they are doing is transferring wealth from the hands of people on fixed income (95% of americans) to all those "investors". And no, it doesn't have to go through a depression and millions of unemployed, if there was a sane and more responsible monetary policy we wouldn't have been here at the first place.
I liked the arguments in "Oil's Murky Math" a lot better. We don't really know the details of global supply & demand, because the data isn't transparent enough. All we know is that global production has been essentially flat for 3 years while global demand has continued to increase exponentially. Then in the past few weeks we've had a sharp uptick in oil just as OPEC production falls 350,000 barrels per day. That sounds like tight supply to me.
I think it is a bit of hyperbole to say US demand is dropping fast. It may be dropping or it may be noise in too few data points, but global demand is what matters, and global demand is still rising. If diesel demand is what is really driving prices, and there is a glut of gasoline as a byproduct of diesel production, then US consumption doesn't really matter; we'll continue to use the world's diesel waste byproduct, and gasoline prices will continue to lag oil's rise.
Now, oil may well drop from where it is, and "precipitous" is in the eye of the beholder. But I see no evidence that prices are being driven by anything but (a) supply & demand, (b) fiat currency devaluation, and (c) war and rumors of war.
You forgot (d) - speculation. Speculators are using information on (a), (b) and (c) just as signs for investment opportunities. Speculators are using speculation itself as a sign of investment opportunity, fueling self-inflating bubbles. It's true that the oil market is big but just compare it with the amount of money sloshing around... it suddenly turns tiny. Ultimately it has to be only supply and demand and there is always a reality check somewhere down the road. Then I expect to see speculation working in reverse and make oil cheaper than it should be.
I didn't forget speculation. I just don't believe speculation is driving prices. One of the functions speculators perform is to speculate whether future oil prices will be higher or lower than current prices. If the bulk of speculators believe current prices are too low, they will go long. If the bulk believes they are too high, they will go short. Presumably there is a kind of "group wisdom", and speculators on average will send accurate signals about where prices "should" be. Of course, speculators can be wrong, and they will get burned when that is demonstrated.
I think a sensible perspective for speculators to take is that oil prices are too low, so I would expect the majority of speculators to be long oil right now. This is what we see, though there are certainly a lot of speculators who are short.
I think what you are referring to is "momentum investors", which buy something for no other reason than that it is going up, with the idea that what goes up will continue to go up. Momentum investing in commodities is extremely dangerous, because commodities turn on a dime, and you can lose a lot of money in commodities quickly if you're betting in the wrong direction.
If there was a lot of momentum investing in oil, I would expect down momentum in oil prices to be self-reinforcing, as the momentum investors switch from long to short. People seem to think that speculators want oil prices to go up. Speculators don't care which way oil goes, and momentum investors will be even quicker to jump on the down momentum ride as oil gets ever higher. Oil prices experienced technical downward momentum on several occasions this year, most notably in late January and early February and again in late March and early April. What happened during those two occasions was that commercial buyers (i.e. NOT speculators) stepped in to halt the decline in oil prices. This likely hammered the momentum investors. In any case, since momentum investors have been unable to drive the downward momentum, I find it unlikely they are behind the uppward movements in prices.
In short, we have real evidence of supply & demand (as well as the other two reasons I gave) driving up prices and not very good evidence of momentum speculation driving them up. That's why I left speculation off. IMO, to the extent that speculation has moved prices it has moved them in response to fundamentals as opposed to a bandwagon effect.
Speculation only makes sense where supply is tight.
I'm sure there will be a drop sooner or later. The price trajectory will be a sawtooth, not a straight line. The long term averaged trend will continue upwards, though.
I keep a fairly big excel spreadsheet graph I look at of the price over the last 10 years (with daily data) and eyeballing it from a purely statistical viewpoint, elliot wave gubbins and stuff, I would guess the price should sawtooth down to between $90 and $100 before recommencing it's relentless climb.
Marco.
Absolutely agreed. My opinion though is that this time the "tooth" will be bigger and it would take longer to recover. I think that energy prices already reached the "point of pain" where they are substantially affecting demand, and in OECD countries too. People are making already long-term arrangements, buying smaller cars etc.
This is seen by the data of US demand which is softening and also by the growing oil stocks. It seems supply is responding too, as there is a slight growth in there. Bottom line - there is some more time of BAU... it could be years out.
I think at this stage of the game, in the age of oil, price does not matter. Supply is the only thing that matters. How will we use the rest of what is left. The fundamentals of supply and demand economics will drive us to ruin. In other words...the short term picture gets us into trouble...we need to think long term...collectively, globally. In other words we are doomed. Unless we can get this to happen.
About 99% of what one hears about the price of oil is cacophony, and "Oil's Murky Math" does a good job of explaining why.
Combine the derth of reliable information concerning supply and demand with the unpredictablility of key political actors and forecasting near-term oil prices becomes nothing but a crap shoot.
NASA to Announce Success of Long Galactic Hunt
http://www.nasa.gov/home/hqnews/2008/may/HQ_M08089_Chandra_Advisory.html
NASA finally found it! The planet with a creamy nugget core of oil! And puddles of the stuff on surface!
Now I know the food crisis is serious...
Afghans swap poppies for wheat as food costs soar
Biofuels will account for 63 percent of oil supply growth from non-OPEC countries this year, taking global production of crop-based fuel to more than 1.5 million barrels a day, the International Energy Agency said today.
"While it seems unlikely that biofuel targets will be reversed in the near future, it is sobering to realize the amount of oil that would be needed to replace them," the IEA said. "Just offsetting the biodiesel and ethanol added to the U.S. and European markets since 2005 would require around 1 million barrels a day of additional crude oil supplies to be processed."
http://www.chron.com/disp/story.mpl/headline/biz/5774916.html
I wonder what THAT would do to the price of oil/gasoline in the U.S.
The only thing I can read from this is that crude growth is next to nothing, thus this added bio sounds much. It spells a severe rise for the oilprice, yes (!)
I also wonder if they take into account the oil spent growing and processing the biofuels. I suspect not.
Hello Leanan,
Thxs for the link.
Yep, when even 'reality super-denialists', like a potential heroin addict, would rather eat than seek a temporary dreamworld--the times are a changing.
For those goldbugs slightly less down the denial-scale as FF-energy depletion & ELM starts hammering home to reduce Overshoot headcount; "my precious, my precious...
http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=52982&sn=Detail
-------------------------------
Rotations continue: gold vs. potash
------------------------------
You buy gold, it just sits there. FFs & NPKs only go pfffftt just one time to accomplish their specific and entirely different tasks, then you are seeking ever more.
One person could own all the planet's gold, but be dead of starvation inside a month. Recall my Ft Knox posting. MPP doesn't apply to gold.
It is not the size of the various resource reserves, but the flowrates. Mighty tough to keep flowrates moving without FF-energy. Recall my posting of hiking a 40 lb potash boulder to the South American tip. If we ever have no trees for boats: How about trying to merely swim across the Strait of Gilbraltar while holding a 40 lb boulder of Moroccon phosphate? Life's Bottleneck can be brutal.
Job specialization depends upon food surpluses. Have you hugged your bag of NPK today?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
One person could own all the planet's gold, but be dead of starvation inside a month.
This assumes that no one who has food would not trade it for some of the gold.
Job specialization depends upon food surpluses.
Agreed. But for worrying about hugging a bag of fertlizer, one must have land, sunlight, temprature withing a range, seeds/transplants and water for that bag to matter. And an intact enough social structure that you can keep the results from the combination of the above.
Hello Eric Blair,
Thxs for responding. Yep, my example was purposely designed to be illustratively extreme-- your last paragraph points out the other required inputs to complete the circle of life.
Just doing my part to help people realize how important NPK is to future foods...I worry greatly that people, especially the J6Ps, think that I-NPK is even easier to get than their belief that just punching a hole in the ground, almost Jed Clampett-style, brings the oil a bubblin' up.
I think most 'Murkans have by now seen enough commercials by the API and IOCs to have a minor grasp of deep offshore exploration, production, and refining, and the FF-prices are starting to expose them to ramifications. IMO, they know a whole lot less about the NPK, topsoil & food chain topic. Remember, nearly everyone drives a vehicle, but hardly anyone grows anything.
In fact, I bet there are even Master Gardeners that have no idea of the energy required to mine the thousands of miles of underground tunnels in Saskatchewan, EurAsia, etc. Or how 1% of global energy goes into Haber-Bosch N, or the sulfur dependency to make activated phosphates like DAP...and so on. My postings are trying to make clear to all the critical double-whammy energy-NPK-food process, how vulnerable I-NPK flowrates are to FF-depletion, and the need for rapid ramping of O-NPK recycling to avert the scale and duration of machete' moshpits.
Just doing my part to help people realize how important NPK is to future foods.
Yes it is. But with land and animals to go and gather the material and man managing the resulting poo - the issue can be addressed.
Just not with the amount of people who exist on the planet today.
In fact, I bet there are even Master Gardeners that have no idea of the energy required to mine the thousands of miles of underground tunnels in Saskatchewan, EurAsia, etc. Or how 1% of global energy goes into Haber-Bosch N, or the sulfur dependency to make activated phosphates like DAP...and so on.
But again, with the 'correct' numbers of humans and grazing animals per section - not a worry.
The 'trick' here - far too many people.
need for rapid ramping of O-NPK recycling to avert the scale and duration of machete' moshpits.
Alas, the O-PNK cycle can't ramp up. The upper bound limits of land to gather photons to have plants mine the soil for PNK to be gather by critters is the limiting factor.
EricBlair--gotta ask...is your username a reference to George Orwell?it was his real name.
I find the gold/potash comparison wanting. The value of potash comes from it's use in an industrial process (modern farming). There are replacements, albeit they require dramatic changes to said process.
The value of Gold, on the other hand, is intrinsic. That is, it is valued for itself, not for what it will do. Essentially, it is money.
While the coming collapse of modern farming will likely lead to the death of millions, if not billions. Owning the next ton of potash will do nothing protect you from being one of those who die.
However, when the collapse of our monetary system comes, it, too, will cause the death of millions, if not billions. But owning the next ton of gold would almost certainly guarantee that you would not be one of them.
Hello Shaman,
I respectly submit you are wrong on suggesting that there is a replacement for the ELEMENT Potassium [refer to Periodic Table]. Please read some of my prior postings in the TOD archives.
Potash, or Pot-ash, was originally gathered by burning untold numbers of trees, then processing the ashes. Please google the first US patent for info. I hope we can avoid replicating that process again postPeak by having Earthmarines to protect these habitats.
In the Overshoot decline phase: I expect people to trade gold for food or water much like a few Holocaust victims traded some hidden jewellry for a crust of bread or a canteen of water [checked how busy pawnshops are lately as people trade heirlooms for fuel & food?].
Oops-drawn away by phone call--let me finish my thoughts:
Your quote: "The value of Gold, on the other hand, is intrinsic. That is, it is valued for itself, not for what it will do. Essentially, it is money."
This is, of course, a complicated topic, and I am certainly not the expert here, but I will just finish by saying the tribespeople in New Guinea or Borneo intrinsically saw cowrie shells as wealth and currency. Much more ecologically beneign than our lust for gold.
Bob,
Thanks for the response. The substitute is not for Potash - the substitute is for the industrial process we call agriculture. Industrial agriculture is no more sustainable than any other industrial growth industry. The replacement will not feed 6.5 billion people, much less the 9 billion projected for mid century. But it is also doubtful that industrial agriculture will continue to feed us all. It is said that industrial agriculture is akin to mining the soil - and you know what happens to a mine over time.
As for reading your other posts regarding potash and other inputs to NPK fertilizer, I have and typically have the same response. The continuation of industrial agriculture is all you are really talking about, and even if no other issues (e.g., peak oil, global warming) were involved, that project is not worth continuing.
Let me state the opposite point of view. The value of NPK is intrinsic to life, particularly to the vastly overshot pyromaniac ape populations currently in existence. Gold is shiny and heavy and relatively rare, so has traditionally been afforded an arbitrary value as exchange medium.
I have sold off gold and bought into POT in my IRA, and will probably be storing a bit physically. One probably should only buy gold if they have 'extra' money left and nothing to do with it...
ymmv
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From today's Drumbeat:
http://www.reuters.com/article/environmentNews/idUSL1483748320080514?fee...
World's largest offshore wind farm in the works | Environment | Reuters
At a capacity of 30% which the Government expects for off-shore wind that is a staggering $20m/MW, £10/MWand it is a third higher than the already huge projected cost of the planned 33GW offshore build to £66bn, bringing it up to £99bn, and that does not include the connection costs, high off-shore maintenance or back-up and storage needed.
Just as I feared, this increase is nearly as bad as the recent projected rises in the costs of nuclear builds, which is estimated at £4.8bn for a 1.6GW reactor:
http://business.timesonline.co.uk/tol/business/industry_sectors/utilitie...
Nuclear reactors will cost twice estimate, says E.ON chief - Times Online
If you take around 1.4GW per hour as average output, that would cost around $6.5m/MW, £3.2/MW
This offshore build is crazy,
The chickens are coming home to roost... rising commodities prices are making everything more expensive - from wind farms to nuclear plants to tar sand projects.
Despite that I find it hard to believe these are real figures. If the price tag is so high, why don't you hire the russians to build the nukes? AtomEnergoStroy recently signed a contract for building 2x1000MW units in Bulgaria, which is now also in EU, for a total cost of euro 4bln. Obviously much better deal than one 1.6GW unit for euro 6bln., almost twice as cheap on per MW basis. And you get two units for redundancy.
I don't know how much of these ridiculous costs are due to real inflation and how much is simply poor management, or worse - government or corporate pork. But it doesn't look good when astronomical amounts are quoted without proper justification.
The estimate is EON's, who may have an axe to grind to try to get favourable treatment by the Government, but are based on the experience in Finland, but there they were re-designing as they built, and had an inexperienced workforce.
Part of the difference with Bulgaria will be due to cheaper labour there, but a lot of the rest is probably die to the inertia of the British planning and authorisation procedure - they are planning on taking a leisurely 4 years or so to approve designs which have already been passed by France and Finland, hardly underdeveloped countries with inadequate standards.
The British establishment has absolutely no sense of urgency regarding the energy supply situation, or it's conservation.
Recent rises in electricity prices were heavily loaded against LOW users - with some increases as high as 70%, penalising the sole occupants, the poor and anyone who tries to conserve energy.
OTOH, the UK has quite good on-shore wind, and LOTS of NIMBYs
www.sobergroup.org.uk
www.soul-online.co.uk
www.socme.org
www.wind-watch.org
www.savethevale.org.uk
www.windaction.org
http://www.wind-farm.co.uk/
and more.
Best Hopes for Freezing in the Dark ?
Alan
Building the turbines many places on-shore may release more greenhouse gases than it saves:
http://news.scotsman.com/politics/Scientists-agree-placing--.3990531.jp
It seems inappropriate to prematurely characterise opposition to measures you support as NIMBYism, with the clear implication that that is selfish, and not a natural and appropriate concern for one'e immediate environment, and a wish to ensure it's environmental health.
Many plans for off-shore wind also rely on great lengths of transmission lines being built on this delicate environment.
It is a good idea to make sure that the cure for burning fossil fuels is not worse than the disease.
Sorry, no link but just happened to catch on one of the cable finance shows that the credit card companies reported a 7% drop in gasoline purchases by credit card last month. Anyone else catch that?
Yeah, a number of gas stations have reverted to cash/credit pricing with the discounts I've seen as much as 10 cents a gallon for cash. That is one good reason to discount gasoline demand figures from Master Card, et al.
Didn't catch it but there have been a few of these
reports out. Together with a leveling off in consumption it causes some to speculate as to demand elasticity in the US.
Dave Cohen on his site here
has a good piece on it and Alan from BE keeps a running tally on the actual products delivered. Still strong (cash discount buying?)
I would only note. There was a draw on total gasoline stocks last week of 1.7 million barrels ,that seems like good demand, so we can watch and see which way RBOB goes in the next week. Thinking the traditional great American drivefest will happen on schedule this summer despite $3.75 a gallon.
Oil prices are falling. Air travel decreasing with fuel surcharges and airline bankruptcies. Another multi-million barrel inventory build this week. Little know fields that did not produce at lower prices are being brought into production. Onshore horizontal drilling rates about 10 million dollars per well set in some cases. Offshore deep water rig rates were close to half a million a day, according to one analyst might average $600,000 a day over the next three years. Those who guessed found it difficult to make any money in the oil industry.
People who declared we were at peak oil in 2005 were proven wrong.
A fragile economy is hurting from recessions in several industries: home construction, finance, the auto industry, and the airline industry.
Our historical production models, such as the Lower 48, are based on annual data, and the recent monthly fluctuations in production data (subject to revision) are basically within the margin of error. In any case, I agree with Ron that the annual 2008 data will probably be lower than 2005.
But fundamentally, IMO, oil prices are being set at the margin as importers bid against each other for declining oil exports, and that means that someone will be forced to conserve with each reduction in net oil exports, and with each corresponding price increase.
Drake U. economist argues that oil prices will fall if wars against Iraq and Afghanistan and the economic war against Iran would cease. However, this professor doesn't seem to have done some essential research as shown by this: "The claim that there is a supply-demand imbalance in global energy markets cannot be backed by facts." There are also other problems I have with the item, but this topic sentence almost kept me from reading the rest of it.
Oil prices are falling..
???? What time frame are you talking about?
Oil prices are $1.74 off their all time high! That hardly qualifies as falling. Oil prices, by any stretch of the imagination are rising. The inventory build today was .2 million barrels. That is two tenths of one million barrels. That hardly qualifies as a "multi-million barrel inventory build." The average oil production for 2005 is still the high.
Rainsong, you should learn how to tell the truth instead of BS. You will gain a lot more credibility on this list if you do that.
It remains to be seen whether or not 2008 will surpass 2005 or not. And we must remember that hurricanes Katrina and Rita took an average of 300 kb/d off the market in 2005, averaged out over the entire year. Had Katrina and Rita not happened, 2008 would in no way have surpassed 2005. And it still may not yet. The IEA has March production 300 kb/d below February and April production down 700 kb/d from February. If that trend continues.....
Ron Patterson
crude oil production in Dec 2005 would have been
74,524 MMb/d
Did Katrina Hide the Real Peak in World Oil Production? and Other Oil Supply Insights
http://www.theoildrum.com/node/3052
Kempthorne at Interior announced Threatened status for polar bears under the ESA today. Hopefully, this will interfere with any plans to drill the ANWR & elsewhere along the Arctic coast. He said that he ran the decision by the White House. Aren't decisions supposed to be based on science? If so, why seek Bush's approval first? Bush knows as much science as a polar bear does.
Caught a 66.5" bullsnake today. Record is 100" if I remember correctly. Still a pretty big snake for around here.
Food...tastes like chicken?!
That's a big critter. I'd love to have him around here for the pocket gophers, but folks keep mistaking them for rattlers, and the big ones are not seen. Watched a 30 inch the other evening trying to burrow, but it was cold and it was pretty slow.
They can wallop a nasty bite. Years back, a friend of my son when they were boys was trying to catch one in shorts, it lunged and bit him on the calf. They couldn't get it to release its bite, and his mother ended taking him to the ER to have it removed.
There's plenty of rock squirrels, prairie dogs, pocket gophers, mountain rabbits, & deer mice around the farm for the bullsnakes & Western rattlesnakes to eat. I catch 'em, measure 'em, then release 'em out away from the buildings. I've managed to convince the staff not to kill them. I never get bit. I've been catching snakes since I was a kid.
I couldn't cite anything definitive, but I believe they have a fairly substantial territory, esp from denning to feeding. I noted a fairly distinctive and large one killed last fall on the road about two miles from our pocket gopher "Hong Kong"-very high density, where I often saw "him". That and denning areas over a mile from the river, where many of the snakes and rodents congregate as the summer dries out.
Chance to see how the MSM - in this case CNN - handles a timely topic. Let's see if they mention to P-O word.
We Were Warned: Out of Gas
That's an old show. I think it was made back in 2005 or thereabouts. They rerun it regularly.
Might be interesting to see if they've edited it, though. The original version of We Were Warned held up ethanol as the silver bullet that would solve all our problems.
They aired it again a year later (during the next oil price spike), and they had changed the section on ethanol. They added a lot of stuff that was critical of ethanol.
House prices down up to 30% in Spain
http://news.bbc.co.uk/1/hi/business/7400846.stm
And this is before higher fuel prices really hit the tourist industry!
I think that Spain will have a really, really tough time - the budget deficit is huge.
It seems doubtful that they will be able to stay in the Euro.
Odd that Iran has difficulty selling its heavy crude...are refineries that were taking it perhaps acting in a coordinated move to strangle Iran economically in a prelude to more war-like activity? Just coinkydink or what?
I took this as a sign that the increased Saudi exports are probably heavy crude. They seem to have plenty, expecially in their offshore fields, and seem to be challenged in their ability to bring more light, sweet crude to market. Heavy oil has to be run through refineries which are designed for it, not just any old plant. As I have seen noted here before, and know personally, refineries are reasonably sensitive, within a certain range, to what type of oil they can handle. Gathering systems in the US engage in blending crude with condensate streams to get a mix which best fits their own or their customers' needs. If the balance gets too far out of line, that doesn't work well. The practice started as a way to blend 40 gravity oil, which brings, or at least used to bring, the best price.
youtube trailer for 'World made by hand' Kunstler.
I don't know who made it, I watched the first 30 seconds, looks OK. More of a slide show.
I stopped it because I'm reading it at Chapters when I stop by the mall for 20 mins here and there. I'm enjoying the novel very much. Maybe I'll head over for a chapter or two tonight. I'm sure I'll buy it as gift for someone when the time is right.
http://www.youtube.com/watch?v=-zi_u0Q1RwY
Saw that, through the link on Kunstler's own site... it is not so much a 'trailer', but rather a simple dramatization of the novel. Not sure if the book will ever be made into a movie, but I suppose Jim would be happy should that occur.
I'm confused about this. Isn't most of the commodity market speculation just side bets on what price someone is willing to pay for oil at a future point in time? Kind of like a bet that gas will be $5 a gallon a year from now. How can the act of placing the bet affect the price that the oil is sold and physically traded?
For instance, through NYMEX you can buy an option to pay $150 for a barrel of oil, delivered in December 08. The option will cost you $4.53, last time I looked. But I can't see how the act of purchasing the option would affect the price.
Or is the author referring to some other type of commodity speculation or instrument?
It would help if you provided a link so we know what article and which author you are talking about.
That said, it seems to me that "unregulated commodities markets" is a euphemism for a "free market". Obviously the author desires regulated or rigged markets and participants who do not strive to maximize their own personal profits.
Can someone explain to me how to read the Nymex site?
Strike price is, I assume the cost of an Option for 1000 barrels (in tenths of a cent, so 4000 = $4), but what's allthe 'Settle, 'Change', and 'Open Interest' Colums for?
Re: http://www.nymex.com/lsco_opt_pscall.aspx?product=LO&month=Z&year=8&list...