DrumBeat: May 16, 2008

High Steel Prices: A Preview of Peak Oil

I use the phrase “Crunch Time” to denote the period after Peak Oil during which oil prices are so high due to production shortfalls that the normal functioning of economic activity is curtailed. Not only are the poor - and eventually the middle class - kept from buying the oil products they need, but industry’s capacity to ameliorate the problem by making what is needed to free society from the grip of oil is also greatly slowed, thereby extending the Crunch Time.

Such necessary products fall in two categories. First are those consumers can use to free themselves of oil: cars, trucks, and trains that operate on electricity instead of gasoline or diesel. Second is the capital equipment needed to make both such consumer items and to obtain more oil and other energy sources. Steel is one of the inputs to those products.

Are there just too many people in the world?

This is a column I don't want to write. Its subject is ugly; it makes me instinctively recoil. I have chastised people who bring it up at environmentalist meetings. The people who talk about it obsessively have often been callous about human life, and consistently proved wrong throughout history. And yet... there is a grain of insight in what they say.

The subject is overpopulation. Is our planet over-stuffed with human beings? Are we breeding to excess? These questions are increasingly poking into public debate, and from odd directions. Phillip Mountbatten – husband of the British monarch Elizabeth Windsor – said in a documentary screened this week: "The food prices are going up, and everyone thinks it's to do with not enough food, but it's really [that there are] too many people. It's a little embarrassing for everybody, nobody knows how to handle it." He is not alone. A strange range of people have voiced the same sentiments over the past few months, from the Dalai Lama to Hu Jintao, from Conservative mayor Boris Johnson to Democratic Governor Bill Richardson.

Oil could reach $200 before demand gets hit

LONDON (Reuters) - The price of oil could rise to $200 a barrel in the next two years before it starts to seriously hit demand, fund manager Tim Guinness said on Tuesday.

"I am increasingly comfortable with the analysis which says the oil price is going to have to go to $200 before demand is dampened enough," Guinness, who is the chief investment officer of Guinness Atkinson Funds, told Reuters in an interview.

The new realities of record oil

Emerging economies are fighting soaring prices with subsidies and price controls. But are their methods part of the problem?

Is the world’s food system collapsing?

The global food market fosters both scarcity and overconsumption, while imperilling the planet’s ability to produce food in the future.

Conspiracy Theory

Climate-change litigation is heating up. Will the legal strategy that brought down Big Tobacco work against Big Oil?

Richard Heinberg: Oil and Politics

On Tuesday, Senate Democrats introduced legislation that would halt a US arms sale to Saudi Arabia worth $1.4 billion. The implication is clear: no more war toys for the Saudis unless they agree to up their oil output.

The same day, the House approved a Senate plan to suspend oil deliveries to the Strategic Petroleum Reserve in hopes of diverting that oil to the market, thus lowering the pump price a tiny amount.

A week earlier, a handful of senators proposed a bill threatening a trade dispute with members of OPEC if the organization doesn't stop its "anti-competitive practices and illegal export quotas on oil."

It's understandable that our elected leaders would want to do something about the meteoric rise of gasoline, diesel and heating oil prices that are now bankrupting independent truckers and forcing many folks in colder states to choose between being able to stay warm and being able to drive to work. Yet, efforts like the ones just mentioned are based on a profound misperception of why oil prices are rising.

Richard Heinberg: Saying Goodbye to Air Travel

The airline industry has no future. The same is true for airfreight. No air carrier has a viable plan to make a profit with oil at current prices—much less in years to come as the petroleum available to world markets dwindles rapidly.

That’s not to say that jetliners will disappear overnight, but rather that the cheap flights we’ve seen in the past will soon be fading memories. In a few years jet service will be available only to the wealthy, or to the government and military.

Oil production has peaked as demand soars

In 1998, oil cost $10 per barrel and experts said the price would return to $5 per barrel, but it never happened. Many people believed we had huge oil fields that would never run dry, and that new fields would meet our growing demands. Ten years later, the evidence is beginning to align to tell a much different story -- one that we are just beginning to read.

I serve as a member of the Minnesota House of Representatives Energy Committee. This year our committee held hearings on "peak oil."

US will stop sending oil into strategic reserves

WASHINGTON -- The Energy Department says it has canceled oil shipments into the Strategic Petroleum Reserve beginning in July when the current purchase contract expires.

In Colorado, an unlikely alliance against drilling

Plans to open up a swath of wilderness are bringing hunters and environmentalists together – and reshaping state politics.

What Michael Pollan Hasn't Told You About Food

As both obesity and hunger are on the rise, a new book shows why we shouldn't feel guilty about our food choices but angry with a corrupt food system.

Manufacturing a Food Crisis

The Mexican food crisis cannot be fully understood without taking into account the fact that in the years preceding the tortilla crisis, the homeland of corn had been converted to a corn-importing economy by "free market" policies promoted by the International Monetary Fund (IMF), the World Bank and Washington. The process began with the early 1980s debt crisis. One of the two largest developing-country debtors, Mexico was forced to beg for money from the Bank and IMF to service its debt to international commercial banks. The quid pro quo for a multibillion-dollar bailout was what a member of the World Bank executive board described as "unprecedented thoroughgoing interventionism" designed to eliminate high tariffs, state regulations and government support institutions, which neoliberal doctrine identified as barriers to economic efficiency.

Oil sets record near $128; pump price at high, too

NEW YORK - Oil prices surged more than $3 Friday, shattering a previous record in a spike near $128 a barrel, as prices at the pump pushed to new highs of their own.

The gains come 10 days before the Memorial Day holiday, the traditional start of the peak U.S. summer driving season, suggesting that retail gas prices have further to rise.

Americans are now paying a national average of $3.787 a gallon for regular gasoline, up nearly a penny from the previous day, according to AAA and the Oil Price Information Service.

Diesel prices also have risen to record levels, meaning that even Americans who don't drive will likely face even higher prices on all sorts of goods because of increased shipping costs. A gallon of diesel now sells for $4.482 a gallon.

Light, sweet crude for June delivery rose as high as $127.82 a barrel on the New York Mercantile Exchange, before easing somewhat to trade up $2.64 to $126.76 . The contract settled at $124.12 Thursday.

Saudi Arabia Declines Bush Request to Supply More Oil

(Bloomberg) -- Saudi Arabia, the world's largest oil exporter, rebuffed a call by U.S. President George W. Bush to pump more crude for a second time this year, saying it would only boost supplies to meet customer needs.

UBS Now Sees Oil Marching to $156 Yearly Average by 2012

Crude oil prices are set to steadily rise over the next four years and will take the earnings of major oil companies along for the ride, UBS told investors Thursday.

The firm now sees crude oil prices averaging $115 a barrel this year and reaching an average of $156 a barrel in 2012. This will benefit major oil companies including Chevron Corp. (CVX), which it upgraded to buy, as well as oil service and drilling companies, several at which UBS started coverage Thursday also with buy ratings.

Does not a doubling of oil prices need a fitting response?

If the price of beans doubles, most shoppers at the local vegetable market will have no hesitation to switch to the cheaper green vegetable and will tell the vendor so in no uncertain terms. If the price of staples such as potato or onion doubles, they may be as unequivocal; nevertheless they will buy smaller quantities.

Vegetable market economics do not seem to apply that easily to crude oil. Over the past year the price of crude oil in the international market has doubled. This should have evoked either of two responses. One, consumers would have tried their best to reduce consumption or two, producers would have stepped up their production to cash in on rising prices. In this rapid run up in crude prices, neither has occurred in any significant sense. Petroleum products are demonstrating their price inelasticity.

Oil prices: Wall Street's game

Big fund money is flowing into oil markets sending prices to levels never seen before. Is it profiteering or an essential way to ensure supply?

Time to convene a summit on oil

The inexorable rise in the oil price, from below $20 to $126 in less than a decade, makes governments look powerless. But governments can ease the economic harm of a high oil price – if they act together. In order to do so they should put oil at the heart of the next Group of Eight summit, or even better, organise a wider summit to bring together industrialised countries, big emerging market oil consumers and large oil producers.

MMS Prepares for 2008 Hurricane Season

In preparation for Hurricane Season 2008, which begins June 1, the U.S. Department of the Interior's Minerals Management Service (MMS) today discussed actions to reduce risk of severe damage to oil and gas infrastructure in the Gulf of Mexico in the event of hurricanes this season. Key goals of the preparations are to enhance the nation's energy security, provide environmental protection, and continue the emphasis on personnel safety.

The Food Crisis and Latin America

'Control the oil and you'll control the nations; control the food and you'll control the people.' -- Henry Kissinger (1970)

I've known that phrase from Kissinger for a good many years. I confess that until now I had not given it much importance. It is an absolute truth, almost an axiom, that could become a terrible reality.

Concern over small biomass option

Small-scale biomass power plants can have a greater environmental impact than other renewables, a study says.

UK researchers found that although the facilities offered carbon savings, they produced more pollutants per unit of electricity than larger biomass plants.

They suggested the way the feedstock was transported produced proportionally more pollutants than larger sites.

Paul Roberts: Tapped Out

In 2000 a Saudi oil geologist named Sadad I. Al Husseini made a startling discovery. Husseini, then head of exploration and production for the state-owned oil company, Saudi Aramco, had long been skeptical of the oil industry's upbeat forecasts for future production. Since the mid-1990s he had been studying data from the 250 or so major oil fields that produce most of the world's oil. He looked at how much crude remained in each one and how rapidly it was being depleted, then added all the new fields that oil companies hoped to bring on line in coming decades. When he tallied the numbers, Husseini says he realized that many oil experts "were either misreading the global reserves and oil-production data or obfuscating it."

Time Running Out for Energy in Mexico

WASHINGTON -- Mexican Energy Secretary Georgina Kessel's warning to the Mexican Congress last week sounded ominous: If legislators did not approve reforms within the oil sector, the country would suffer a "severe energy crisis" within a decade.

That's probably an understatement.

Why investors are so worshipful of Old King Coal

Oil attracts the anger and the ink, but coal, mined here in the U.S., has joined the club of rudimentary resources blessed by the energy crisis.

What we are paying up for is the dirtiest fossil fuel in the ground, infamous for wielding a heavy hand in the planet’s warming. In Beijing they wear surgical masks to ward off the soot from coal-fired plants, which then drifts across the Pacific to further foul the air over Los Angeles. That’s not all. Black lung disease, mercury and sulfur emissions and the ravaging of Appalachian mountaintops are part of the legacy that keeps our lights on.

Airline fuel cuts concern pilots

WASHINGTON — Airlines have reduced the amount of spare fuel on airplanes in a money-saving effort that is raising concerns among some pilots and a government watchdog.

Gas costs push commuters to park and pedal

More commuters are turning to bicycles today for national Bike-to-Work Day as gas prices continue to reach record highs.

"It's going to be the biggest yet," says Bill Nesper of the League of American Bicyclists, which promotes May as national Bike Month. "Our phone is ringing off the hook. We're getting lots of calls from around the country. People are doing this because of gas prices."

Oil Traders Draw Congress' Ire

When it comes to high energy prices, OPEC is quickly losing its status as Public Enemy No. 1. Alongside Big Oil, where profits are fattening as gas prices rise, a new bogeyman has emerged: the oil speculator. With the stock market in retreat so far this year and the dollar crumbling, these investors have flooded the commodities markets in hopes of cashing in on rising prices [BusinessWeek.com, 1/17/07]. High oil prices are creating a ripple effect of inflation that's angering consumers; gasoline prices topped yet another new record on May 14, an average of $3.76 per gallon.

"GasHole" Movie Review

The continued rise in prices of gasoline has the great majority of Americans brimming with frustration and anger. The makers of the documentary film "Gas Hole" have provided a movie that demands the attention of anyone who curses quietly under their breathe every time they pull into the gas station after looking to see what the price is now.

The Oil-Addiction Fallacy

Watch any talking head, and when the subject comes to energy, one can expect to hear the mantra, Americans are “addicted” to oil, and especially “foreign oil.” This is repeated as though the repetition is proof that the premise is true.

Thus, American taxpayers are currently being forced to contribute billions of dollars – and will be dunned many billions more in the future – for a number of measures that supposedly will “secure” the United States’s energy use and supplies in the coming years. What’s more, the debate about whether or not these energy programs are even necessary is considered passé. The major question on energy today, unfortunately, is this: How much will government central planning replace relatively free markets in determining America’s energy future?

Wildlife populations 'plummeting'

Between a quarter and a third of the world's wildlife has been lost since 1970, according to data compiled by the Zoological Society of London.

Populations of land-based species fell by 25%, marine by 28% and freshwater by 29%, it says.

The Peak Oil Crisis: Diesel

The evidence is mounting that the U.S. might just encounter the first real crisis of the oil depletion age before the year is out.

The crisis at first will be one of spiraling prices for diesel and heating oil, followed by actual shortages here in the United States. In the last two weeks, the wholesale price of heating oil has moved up by nearly 70 cents a gallon and no end is in sight. Many observers are starting to note that what they call “a tight market for distillates” –- the industry’s term for diesel and heating oil – may be what is driving up the price of crude and consequently gasoline.

US-Saudi oil axis faces day of truth

When President George Bush went to see Saudi Arabia's King Abdullah in January to plead for higher oil output, he was politely rebuffed.

The rematch today is likely to be a great deal more strained.

If the Saudis deny help once again, they risk incalculable damage to their strategic alliance with Washington. The price of crude has rocketed by over $30 a barrel since that last fruitless meeting, briefly touching the once unthinkable level of $127.

Bush To Prod Saudis Again On Oil Prices

Anthony Cordesman, a security analyst for the Center for Strategic and International Studies, said Abdullah may produce something "simply because it's good manners," but nothing that would have a significant effect.

"U.S. influence over OPEC and Gulf oil production is diminished," he said. "It's not clear what the incentive is to Saudi Arabia. We can't deliver on (Mideast) peace. We can't deliver on arms transfers. We can't deliver on the Iraq that Saudi Arabia wants. We are raising problems in terms of Iran. And the reality is the market isn't being driven by us; it's being driven by China, by India, by rising Asian demand."

Who Really Controls the Oil Market?

Does OPEC really control the crude markets? Instead of embarking on political rhetoric, Bush needs to comprehend the situation. The combined oil production by all 13 OPEC member countries averaged 31.87 million bpd in April, the OECD Energy watchdog International Energy Agency reported. As compared to the OPEC output, IEA believes the global oil product demand to be 86.8 million barrels of oil equivalent a day for 2008 - some 1.2 percent rise from 2007 levels. Thus OPEC has something like 37 percent of market share at the moment.

And this leads to another deduction. Non-OPEC producers today control 63 percent of the global crude markets. It thus remains unclear how the Saudis have any more power to control the skyrocketing prices than the Americans.

Why America Doesn't Need Foreign Oil

The U.S. had reached peak oil long ago. The world resources are now reaching, if not already reached, peak oil. There's nothing more substantially new to drill that will fill the gap. Our economic way of life and security are in imminent danger.

The U.S., however, has coal reserves to last hundreds of years. We have advanced technology now that will enable us to process coal with much less pollution. We can get oil from coal. It will still be more expensive but the government can subsidize the cost and the money doesn't have to come from tax payers.

Australia: Opposition fails to deliver alternative to building fund

The Greens, however, want less spent on roads and freeways, with Senator Christine Milne using the Greens budget reply to argue for increased investment in rail projects.

"No government that takes peak oil or climate change seriously would spend only five per cent as much on rail as on road funding in the coming year," she says.

Expert warns climate change will lead to 'barbarisation'

Climate change will lead to a "fortress world" in which the rich lock themselves away in gated communities and the poor must fend for themselves in shattered environments, unless governments act quickly to curb greenhouse gas emissions, according to the vice-president of the Intergovernmental Panel on Climate Change (IPCC).

Oil price surges to record high above $127

LONDON (AFP) - The price of oil rocketed to a record high point of 127.43 dollars per barrel on Friday, as US President George W. Bush prepared to urge Saudi Arabia to pump more crude, analysts said.

New York's main oil futures contract, light sweet crude for June delivery, beat the previous all-time peak of 126.98 set on Tuesday owing to worries about tight supplies despite a downgrade to global oil demand growth for 2008.

Some see oil bubble; others see trouble

The recent trajectory of oil prices — a fairly steady increase followed by a much more vertical rise — has a familiar look to it. Remember those charts of tech stocks and housing prices? It's hard not to wonder: Are oil prices forming the next big “bubble?"

U.S. says it will help Saudis protect oil

RIYADH — The United States said on Friday it had agreed to co-operate to protect Saudi Arabia's oil and will help the world's top crude exporter to develop peaceful nuclear energy.

The White House announced the agreements as President George W. Bush flew into Saudi Arabia on Friday to renew his appeal for the kingdom to help lower record oil prices.

Keep stockpiling oil

Legislation to halt deposits to the Strategic Petroleum Reserve may be the most popular initiative from Congress this year. But it's a bad economic bet, bad for national security and gives the American public the false impression that lawmakers are actually doing something about skyrocketing gasoline prices. President Bush should veto the bill -- even though Congress passed legislation by huge margins Tuesday and could actually override his veto.

"Hungry" Nigeria oil hijackers slash ransom demand

PORT HARCOURT, Nigeria (Reuters) - Gunmen who hijacked a supply ship working for U.S. energy giant Chevron in Nigeria have drastically reduced their ransom demand to 5 million naira from 30 million naira, security sources said on Friday.

Nigeria pipeline burns for second day after deadly explosion

LAGOS (AFP) - Nigerian firefighters battled Friday to put out flames pouring from a burst oil pipeline a day after a huge explosion that Red Cross officials said killed 100 people.

An excavator accidentally pierced the pipeline, creating a lake of petrol that ignited into a huge fireball which engulfed a local school, cars and shoppers in the Lagos suburb of Ijegun around midday on Thursday. The inferno raged through the night.

Oil industry beefing up storm plans

The U.S. offshore oil and gas industry is much better prepared to deal with hurricanes than it was in 2005, when major storms whipped through the Gulf of Mexico, damaging many offshore operations, government and industry officials said Thursday.

Not only has the scientific knowledge improved about hurricane behavior in the Gulf, oil companies now are following new regulations designed to keep offshore facilities in place during even the biggest storms. Government and industry groups also have beefed up hurricane response measures, the officials said.

Biofuel bacteria wrecks engines

Biofuel is wreaking havoc with car engines. Due to Government rules, all diesel sold in the UK must be blended with the eco-friendly fuel.

But what the authorities didn’t bank on was the filth inside filling station tanks. With no rules forcing forecourt owners to clean them, the reservoirs are rife with bacteria. And when they come into contact with the vegetable or wheat-based fuel, the result is oil clots, which clog up engines.

Duke Energy cutting off service more often this year

The newspaper reported Friday that Duke disconnected 14 percent more North Carolina customers in the first four months of the year, compared with the same period in 2007. That's an average of more than 500 disconnections every working day among the company's 1.8 million customers.

Clean-air rules for national parks may be eased

The Bush administration is on the verge of implementing new air quality rules that will make it easier to build power plants near national parks and wilderness areas, according to rank-and-file agency scientists and park managers who oppose the plan.

Peruvian 'Switzerland' melting under climate change

LIMA (AFP) - Peru's Cordillera Blanca, a snow-topped northern mountain range sometimes called the "Peruvian Switzerland," is slowly disappearing because of climate change, a key issue on the table of a Latin America-EU summit being held in Lima this week.

Obesity contributes to global warming: study

GENEVA (Reuters) - Obesity contributes to global warming, too.

Obese and overweight people require more fuel to transport them and the food they eat, and the problem will worsen as the population literally swells in size, a team at the London School of Hygiene & Tropical Medicine says.

This adds to food shortages and higher energy prices, the school's researchers Phil Edwards and Ian Roberts wrote in the journal Lancet on Friday.

'Nitrogen cascade' called threat to ecosystems - Studies cite compounds in fertilizers, fossil fuels with cascading effects

WASHINGTON - While carbon dioxide has been getting lots of publicity in climate change, reactive forms of nitrogen are also building up in the environment, scientists warn in two new studies.

"The public does not yet know much about nitrogen, but in many ways it is as big an issue as carbon, and due to the interactions of nitrogen and carbon, makes the challenge of providing food and energy to the world's peoples without harming the global environment a tremendous challenge," University of Virginia environmental sciences professor James Galloway said in a statement.

Social ripple effect of gas pumps that only go to $3.99

From today's Washington Post, an article about how many of the gas stations that cannot afford to upgrade their pumps also function as important social spots in rural areas. They may be forced out of business if they can't sell gas because people will fuel (and eat and socialize) elsewhere.

Like a lot of small-scale entrepreneurs, Cathy Osborne worries that she'll go out of business if fuel prices rise above $4 a gallon. Not because she won't be able to buy gas at that price, but because she won't be able to sell it.

Read article at http://www.washingtonpost.com/wp-dyn/content/article/2008/05/15/AR200805...

It's really hard to tell whether this is one of those Pentagon Post fluff articles to shield us from what is really going on in the world, and direct our attention elsewhere, or whether Kafka was right after all, and every bureaucracy, no matter what the underlying political paradigm, has its own mindlessly stupid dynamic.

Apparently it is illegal to simply multiply the number of gallons (available even in the old technology) by the current price with a $2.99 calculator? Merchants do that with cabbage and bulk olive oil -- so why not gasoline?

To me, it's not the "news" that's disturbing. It's that this is "news".

How can we expect our youth to navigate this BS?

I wish they would go after the folks who design our tax forms with the same fervor for simplicity they want to hold gas stations to.

How is the government going to figure out how to convert us to to an electrified non-oil transit system, when they can't even seem to figure out how to let people pump gas when the price part of the pump is broken. If you know how many gallons you pump, and what the price is, you can charge people correctly.

I think I just became a doomer.

The problem is that this manual recalculation would require disabling pay at the pump mechanics for those stations unable to mark above $4. These stations would then lose business to stations with newer pumps and eventually go out of business.

Sounds like some new contracts for the Y2K programmers!

I just have to wonder what the conversations are going to be like around where to set the new bar? Or will they just let it have 'floating point' and be able to multiply like any of those $2.99 calculators?

It's kind of astonishing we have these issues. It's like the 'Paper Trail' for your voting machines. Heaven forbid an ATM system was as challenged about printing out reciepts. (For a ONE-DAY event)

Time to climb up on the roof and measure out some PV racks.. get some air.


They need to convert the pumps to sell in liters like most of the rest of the world. That would probably solve the problem for 10 years or so.

I was a fuel & lube distributor during the Arab Oil Embargo and the problem with pumps not being able to reflect current prices happened then, too. Frankly is was a problem, an extra expense, but not the end of the world. I don't recall this putting anybody out of business in my part of the world. First of all the majors own a lot of stations and I am sure they are already ordering and updating stations with older pumps as they did then. Many pumps will not have to be changed. If a station was marginal then they might close it and remove the pumps and put the property for sale, in lieu of a complete renovation that also includes new pumps. Often these get sold or leased to a convenience store chain that they make a deal with to provide the gas. Many convenience stores own their own pumps and I am sure they are scrambling to replace older pumps, too. If they can't do it timely I am sure they will do what they did years before.For example gas @$4.00/gal. the pump price will reflect 1/2 of the retail price and all gas will be prepay. Want $40 worth of gas you pay the cashier $40 and they set the pump for $20. The pumps have a sign that says double pump price for your cost. It's not perfect, and will cost the store some business for the extra inconvenience but most customers hang in there till their favorite spot gets new pumps. Gas is the #1 money maker for these stores and new pumps last a long time so independents will grumble, spend the money, and try to markup gas a penny or two more when they install their new pumps.

Consumer - "I think I just became a doomer."

Oil Drum Watch Alert: Saturday and Sunday on CNN at 8 P.M. "We Were Warned: Out Of Gas"


Well...Doomers are about to get a big recruitment drive.

That's an old show. Made in 2005, I believe.

I guess so, but CNN is rushing it into prime time with a big advertizing blitz to take advantage of the hysteria over gas prices.

It might get an audience this time!

They do that every time there's a spike in gas prices.

Might be worth watching to see if they've edited it, though. They added new footage critical of ethanol about a year after it first aired.

Just price a factor of 10 lower and paint a 0 behind the price counter, changing the background color of the 1/10 dollar reel. Gas at 40.1 cents/gallon indicated is 4.01 per gallon. 10 gallon rings up as 4.01 old reels and is 40.10 with the added 0 on the pump.

I believe you have the most logical approach.

At this point, I do not intend to quibble over the funny 0.1 cent short of the next penny thats been traditional on gas pumps for ever since I can remember.

<painful memory>
Do I need to be reminded every time I fill up at one of these pumps that I actually used to buy this same gas with an order of magnitude less price? God forbid, it might even be the same physical pump!
</painful memory>

How about ' actual fuel price is double indicated' ?


There is a station in Tenced, Idaho that does just that...their pumps only go to $1.99 so they taped a sign on the pump which says " actual price is double that shown on pump". Seems to work just fine. Though I suppose they will have to change the sign this summer to "actual price triple..."

Is this really a big deal?

gas pump Y2k

I imagine it depends on the local regulations.

I remember hearing that back in the '70s, they switched to selling gas in liters instead of gallons, to get around this problem.

And somebody could probably get rich making some kind of conversion kit, that would allow pump prices to go higher for much less cost than replacing the entire pump.

How about 'price is in dollars per quart'?

Edit: Now that I think about it, this wouldn't help without modifying the pumps. But it might be easier to quadruple the output of the fuel-flow counter than to add another price digit.

Maybe the "nightclub system": $5 "cover charge" to pull up to the pump...

or...we can honor Simmons and price it per cup.

Perhaps just switch to liters?

The dram: a unit of measurement for precious liquids.

Dram (volume)
The fluid dram is defined as 18 of a fluid ounce, which means it is exactly equal to

  • 3.696 691 195 312 5 mL in the United States and
  • 3.551 632 812 500 0 mL in the Commonwealth and Ireland.

In the United Kingdom, a teaspoon was formerly defined as 1 fluid dram.
Dram is also used informally to mean a small amount of liquid, especially Scotch whisky.

The state of VA won't allow it.

This should only be a problem for a few months; then gas will be at $9.99 and all of the stations will be in the same boat. The article is focusing on the immediacy of this minor problem as if it is the only consequence of $4 gas. Such fluff only distracts the public from the looming longer term problems. "OMG $4 gas, how will I be able to keep paying for it" not "OMG there won't be any gas soon, what can I do to reduce my reliance on it."

My first post here...just my $0.02...

When they built the new Costco here about 5 years ago, I was surprised to see the pump display had space for double digit a gallon gas...

I think the simplest solution would be to move the decimal over one point. Gas would be $0.40 a gallon as far as the machine is concerned. Then you can just draw in a decimal point in the proper spot on the front of the pump. Or just multiply the final price by 10. That is simple math that (almost) anyone can do.

Anyone who cant multiply a number by 10 should not be allowed to operate a motor vehicle or anything that uses gasoline.

The fact that it is so simple is evidence that a solution is not sought.

In other words, DENIAL!!!!

Or to set the pump price at 40c and multiply by 10, or add a dollar and set it at 3.05 for 4.05 and add $1 x the gallons poured? ($2 once it gets to $5 per gallon - next year).

Too much math for our grade 1 population.

Government's Rosy Data Doesn't Reflect Real Life


Why is the stock market rising every day regardless of the data? The governments numbers also look like a sleight of hand.

Should we assume that the fix is in?

Should we assume that the fix is in?

Long ago, my friend, long ago.

My advice:

Believe what's in front of your eyes, not what is printed.

There was a Groucho Marx line that went:

"Who are you going to believe, me or your lying eyes?"


Denninger runs a daily running counterpoint to all this nonsense, but of course only a "few" will ever read it.


Also kudos to The Automatic Earth for much of the same.



I saw mention this morning at this site


where companies are cutting hours. And here's the part that caught my eye:

"Companies did not cut as many positions as expected, they cut the hours instead. The average work week plunged 0.3% (and, aggregate hours worked were down at an annual rate of 1% in the past three months), which, by the way, would be the equivalent of 400,000 job cuts."

Is there still a lot of worry that the financial system might collapse? Seems like a few months ago, there were a lot of apocalyptic news stories about we could be facing a worse collapse than the Great Depression. I haven't seen any recently. Many are even saying there won't even be a recession.

I currently subscribe to the Jim Puplava Oreo cookie theory over at financial sense. He describes that the first qtr of this year would be a hard cookie outside and the 2nd and 3rd qtrs would give way to the soft creamy center fooling everyone into believing the hard times are over(new highs in the market, effects of stimulus, etc.) then the 4th qtr would be the other hard crunchy side of the oreo as all of the gains are wiped out and energy costs sink in their teeth. I think it is pretty entertaining, I like listening to the saturday podcast while I clean house in the morning.

The mother of all suckers rallies? Scary stuff (Double Stuff?).

There are still plenty on the LATOC breaking news, daily. It's less then a few months ago but the stories are still there.

doom and gloom on LATOC??

Yes, I'm glad I was sitting down when I read that. Stunned, I was.

Leanan - There is another story that you just posted from the Seoul Times: Why America Doesn't Need Foriegn Oil.

This puddinhead wrote the following: "What about inflation? As long as the money is being actually used in the economic machine to produce goods and services there shouldn't be a serious problem with inflation. We've had years of new money printed without serious inflation problems.
After WWI Germany actually solved their inflation problem by printing even more money but making it useful in the economy."

So Germany didn't have to worry about rising inflation? Please!!! Germany in the 20's experienced hyperinflation because they kept printing money.


This guy could have gotten a job working for Hank Paulson.

Germany was kind of a one off. The allies said (adjusted for inflation and just for illustration purposes) you owe us a trillion marks for war reparations. Germany had lost and had nothing. So they printed a trillion marks and said here it is.

The allies didn't collect reparations from Germany. The US loaned Germany three and a half billion dollars and then Germany paid three billion to the allies and spent the other half billion. Germany suffered no damage during WWI, unlike Belgium, France, Italy, Poland, etc, that were devastated.
We gave reparations to Germany because we were afraid that they would go communist if we didn't.

joemichaels-that guy is delusional:

" It will still be more expensive but the government can subsidize the cost and the money doesn't have to come from tax payers. [apparently government revenue doesn't come from taxpayers]

"I highly recommend to all the book "Free Money: Plan for Prosperity" by economist Rodger Malcolm Mitchell. This book explains wonderfully why printing mass new amounts of money is possible without inflation."

This is probably the most perfect example I have ever seen of Kunstler's 'wish upon a star and your dreams will come true' hallucinated economy!

Errol in Miami

The writer forgot that excess money causes infaltion in different forms. In the US in the 1920's credit was loose but retail prices didn't rise. Instead tke excess money caused a massive stock market bubble. We all know how that ended.

First it caused a real estate bubble which fed the stock market bubble. Now we have another imploding real estate bubble. Doesn't bode well, does it?

Since the stock market is rising the commentary is getting more positive. However, none of the core problems that caused the credit market to seize have been addressed. In fact the fundamentals just keep getting worse with housing still going to be a major drag on the banking system, credit is going to be harder and harder to come by at higher rates, the credit card situation is getting out of control fast, and the most ARM's reset in March and April in history which has at least a six month lag time for us to fully feel the effects. A little known trouble spot is that the trillion dollar credit card market is also packaged up and sold off into SIV investments and can easily implode like the sub-prime investments are doing.

Add to that the crazy inflation thats going on led of course by energy costs which I think we know are not going to get much better anytime soon plus the job loses that are really just starting not near the end. All of this adds up to the fact we are more in the 3rd inning then anywhere near the 9th. Hold on to your seats the ride is about to get very interesting.

This in my opinion will lead to actual beneficial changes though so have hope:


Wow, if Leanan hasn't seen any recently they must be getting rare.

Then Leanan is either not looking or not paying attention. I see the stuff all the time even on Google Finance, let alone financially related web sites.

I think leanan is simply living up to her name;)

I listen to BBC radio a lot, and one thing that has really taken off in the past month or so is phone-in discussions about finances, credit, oil and other energy prices, etc. One thing that's noticeable is the overwhelming majority of people just say "my income isn't increasing at the same rate as my expenses increase", but what's interesting is that, with the exception of people wanting a cut in the UK tax on fuel, no-one seems to comment on why this might be happening and whether it's going to be a short or long term phenomenon. So people are certainly feeling that they're in hard times, but they don't seem to be talking about what'll happen in the future. Of course, anyone in the government/business world keeps saying that everything's if not rosy then at least reddish.

Leanan, the MSM has little patience for things that take time to unfold. If you read about the dissension within the Federal Reserve, Bernanke's statements about ongoing banking problems, the FBI investigations of Countrywide, Bank of America and now even J.P. Morgan, the statements from the European Central Bank, the problems in Europe (especially Spain) with the housing collapse there, the continuing rising foreclosure rate in the US and Europe (which puts banks in worse and worse capital positions daily), well... the implosion is still happening but the MSM has just decided to ignore it.

And more to the point, oil is the pin that helped burst this latest financial bubble and is keeping any other bubbles from forming. Web sites that cover finance and economics are noting the relationship between oil prices and the current slow motion economic implosion. From Mish to Ticker Forum to Econbrowser to TAE, we see this theme brought up over and over and over.

Yet here on TOD nary a serious word about the interplay of finance and oil, except whether the price went up today or down. However, I stopped expecting serious discussion from TOD a while ago, given that it was you who said that TOD doesn't do finance and economics. Any peak oil site that cannot or actively refuses to try to evaluate the economic impact of peak oil, is just a bunch of peak oil cheerleaders.

The technical discussions are interesting but it is the impacts that will matter. And the impacts are so potentially explosive, that TOD seems afraid to even go near them. So enjoy your pom-poms while TOD keeps up the "everything will be ok if we all buy a Prius and move closer to work" mantra.

Did I say we don't do finance and economics? It's not our forte, but we do cover it...as it relates to oil. Nate and Gail in particular have written key posts on it.

We don't do finance in general; there are so many other sites that concentrate on that subject and do a better job that we do. Yeah, it's related to peak oil, but what isn't? We can't be everything to everyone, and it's not like there aren't a million other sites out there that cover things ourside our bailiwick.

So enjoy your pom-poms while TOD keeps up the "everything will be ok if we all buy a Prius and move closer to work" mantra.

LOL! You gotta be kidding me. I get constant complaints about how doomerish this place is. I think doomers are the majority, at least in the DrumBeats.

TOD must be pretty balanced-half the time you are criticized for being hide in the wilderness doomers, half the time you are criticized for being Prius driving cheerleaders.

When I first started posting at TOD, it was common to compare peak oil acceptance with Kubler-Ross's "cycle of grief."

1. Denial: "It can't be happening."

2. Anger: "Why me? It's not fair."

3. Bargaining: "Just let me live to see my children graduate."

4. Depression: "I'm so sad, why bother with anything?"

5. Acceptance: "It's going to be OK."

TOD was a "bargaining" site. And I think that's still pretty much true. We know it's going to be bad, but we're hoping there's something we can do that will make it less bad.

The DrumBeats might be darker than the rest of the site, partly because I'm probably among the most pessimistic on the staff, and partly because "if it bleeds, it leads." Pipelines not blowing up doesn't make headlines.

TOD was a "bargaining" site. And I think that's still pretty much true. We know it's going to be bad, but we're hoping there's something we can do that will make it less bad.

There is allways something to do to make it less bad, peak oil is a period of change, not an irreverisble trauma.

The readers/commenters of TOD (especially in Drumbeats) may be doomers but the main articles presented by TOD overwhelmingly are not.

I think that's a fair assessment. Perhaps there's a bit of denial involved. We aren't wealthy, but most of us are science and engineering types - that is, people who have done relatively well under the current paradigm, and tend to see technology as an answer.

Also...there's really not much point in peak oil activism if you really think it's hopeless. We all work so hard on this site. If the extreme doomer view is correct, TOD will go dark forever very soon, and all our work will be gone forever. If we really felt that was the future, why would we bother?

Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.

Though wise men at their end know dark is right,
Because their words had forked no lightning they
Do not go gentle into that good night.

Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.

Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.

Grave men, near death, who see with blinding sight
Blind eyes could blaze like meteors and be gay,
Rage, rage against the dying of the light.

And you, my father, there on the sad height,
Curse, bless me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light.

Yeah, but if we really thought it would be back to the stone age, we'd be carving our immortal lines of deathless prose on the cave walls, not posting them on the Internets. ;-)

EXACTLY. I don"t buy you are a doomer.

I don't think I'm a doomer, either, though I am often accused of being one.

I'm realistic. The rest of you are all either doomers or cornucopians. ;-)

The Hope in Black

Oh Human!
How have you fallen?
Into this sea of oily black,
Burning it
Eating it
Warring over it

Are you ready Human –
For when the precious black will dwindle?
What then will light your homes oh human?
What then will swell your grain?
What then will weave your clothes?
Or turn your engines?
Or pave your roads?
Or side your homes?

Can you call new fires –
From metals or suns,
From winds or waves,
From light or air,
When wells are dry?
With the secrets of blood and bone –
Can you swell the grain?

What art will you find, oh human –
For chemistry
When wells run dry?
And nothing is known of gas
Or Alkali?

In this hour,
In the stink of burning,
On your melting world, human
You should know this –

There is hope in black oh human
But it lies not in the black of rock
Nor of wells
Nor of shale or sand

That way leads only to dwindling

There is hope in black oh human
But it lies not in the black of polyester
Nor rayon
Nor radials

That way leads only to sighs

There is hope in black oh human
But not in gas,
Nor diesel,
Nor petroleum

That way leads to empty

At the end of black
That black which will fail
Lies a desert land
Where they drink sand
And eat straw

But there is hope!
In the endless black,
A-glitter with stars,
There you may find every kind of black!

Oh human!
On worlds that myths named –
Titan, Ganymede, Io, Venus
On wanderers that mark your way –
Jupiter, Mercury, Saturn, Mars
For as they wander
For as they WANDER!

So should you!

So should you wander!

As you did in the beginning

You were mighty then
Rock and stone
Blood and bone
You were strong

And inherited the world
The world you named
The only world you won

That precious her

You won her as you sought her
You sought her as you wandered

Do you hear me!!?


Spirit of human
Oh hear!
Oh hear!
Oh hear!

Hear or dwindle
Within sight of the black
That is your precious
Your most precious!

So now you are mighty!
Mighty as angels
To build yourselves wings
Of rail and rocket
Of fusion and fire

So that you may wander!!!

Wander on!

Oh wander on!

And inherit the black that is without end

For it is yours
The black is yours
Oh glorious human
If you will only claim it –
Your future in black
If you will only WANDER –
Into beautiful, endless black


I think I was more optimistic then. But I still think there is so much at stake if we are to fail. Isaac Asimov characterized civilization based on its ability to produce energy. The first stage of development was civilization based on muscle power only (hunter gatherer). In the second stage, domesticated animals were also used. In the third stage machine energy from non-renewable sources emerge. And in the fourth stage, civilization is able to master machine energy from entirely renewable sources. According to Asimov, such a civilization would likely move rapidly to space travel and multi-world colonization.

So I see peak oil as a challenge for us to transform our civilization. If we fail, we fall back to stage two and likely have a terrible die off. If we succeed, well, then we have something extraordinary to pass on to our children.

Back in 95' I had no idea when the point of crisis might be. Seems a pretty safe bet it's starting to happen now.

Fantastic poem - one of my favourites. I read it as advocate for the strength of the human spirit - or aspirations for such. Not for doomer views! Verses 3& 4 are for you aging surfers out there.

I read it as advocate for the strength of the human spirit - or aspirations for such.

Really? I read it as satire mocking the futility of human aspiration in the face of the inevitability & finality of death.

Dylan Thomas didn't really do satire. But everyone is certainly entitled to read poetry however they want. It's just out there as a gift to us.

I stopped expecting serious discussion from TOD a while ago, given that it was you who said that TOD doesn't do finance and economics.

An economist would probably find the discussions concerning economics on TOD pretty naive & elementary, just as a petroleum geologist would find the discussions concerning geology the same. Likewise, I find the discussions concerning biology & ecology on here pretty rudimentary. What's cool, tho, is that people can benefit from one another's expertise. Can benefit, that is, if they don't get all adamant about that which they know little, and all butt hurt when they have their ignorance pointed out to them.

Economics isn't geology-it is closer to psychiatry. Economics is a "soft" science, with the emphasis on "soft". MSM economists make or break their careers on their ability to promote and sell, usually whatever their employer needs sold.

Economics seems like a mushy "science." With the emphasis on science

Near putrid, even. Con game, start to finish.

"There's an awful lot of talent in this room," you might say. As something of a generalist myself, I love the breadth of experience that this board brings to the table. I could gripe about the lack of neuropsychology discussions on this site, but I don't, I can always got to The Neuropsych Drum for that. If finance was my bag I might mosey on over to The Money Drum, etc. Personally, though I visit a few finance related sites, I like Naked Capitalism, it's fairly balanced and not over the top libertarian-y.

There's a fairly extensive "blog roll" on the right that links to sites catering to a variety of interests.

One way of framing the issue is that if TOD provided one-stop-shopping for all your collapse needs then it would crowd out all the other wonderful sites that provide a diversity of views on a wide range of issues. We wouldn't want TOD to become the WalMart of doom now would we?

As a geoscientist I can say I don't find the discussions here naive or elementary. Yes - a lot of folk commenting don't always have the core background info, but the key posts are good. Having sat through more than a few hundred detailed, but excruciatingly dull, technical presentations, the 'filter' applied to those presented here mean that they are generally informative and accessible. (Which is a good thing!). I can't possibly speak for economists though!

An economist would probably find the discussions concerning economics on TOD pretty naive & elementary, just as a petroleum geologist would find the discussions concerning geology the same. Likewise, I find the discussions concerning biology & ecology on here pretty rudimentary.

I have exactly the opposite view. Terms like naive, elementary, and rudimentary are by their nature designed to belittle those outside one's "profession" or area of expertise, and as a result, hype the self-importance of one's own specialism. Such professional privilege is - in the main - apple sauce.

I think the discussion of economics, geology, or ecology on here is far superior - in terms of the breadth of experience and knowledge brought to the table, and the connections made to peak oil and much else - to anything you would find in a discussion comprising just a gaggle of economists, geologists, or biologists playing egotistical ping-pong.

Your tax dollars went to bail out the financial system by quietly replacing bad debt with t-bills. The Federal Reserve created a New Deal for the rich. The rest of us are already living in a Depression. Depressions last until debts are paid down, and no one is paying down debt yet, or even knows how to go about it.

Haven't you been reading The Automatic Earth?

We have had steady inflation since the creation of the Federal Reserve. Hell, plot it and it's another geometric curve. But particularly over the last 9 years we have had steady (if not rising) inflation but the stock market is lower today than its high at the beginning of the century. That is one full decade of steady losses, in real terms, for most people who have been saving or who have pensions or other retirement plans. In the meanwhile, jokers like the CEO of Countrywide have taken over $1 billion out of the system for their personal gain while the companies they head up crater into the ground so hard they have to be bought up (like Countrywide) or even bailed out by the government (like Bear Stearns).

As Matt Savinar sometimes says, the future is already here. It's just not widely distributed yet. But don't worry. It's coming to a hometown street corner near you soon enough.

GreyZone - TOD is absolutley one of the BEST sites for investment information. If you read all of the TECHNICAL articles they say one thing loud and clear - INVEST IN ENERGY!!!! That is why I have been coming here and if you do what the experts say (they are not investment advisors, so you have to act on what their articles are telling you - there is a shortage, it is not speculators, and it is going to get worse) it is very, very, very, etc. profitable. Screw the averages, they include all of the companies that are losing money.

HINT - Do not buy any refinery stocks; there are many new ones under construction around the world, and the amount of oil to refine is going down.

Your post is an example of why one needs to understand both the technical side and market dynamics. While the technical analysis clearly points to peak oil, that is not sufficient to tell you what the price of oil is likely to do in the near term. We have seen a rapid run up in commodity prices, fueled by fear and speculation, that is typical of a commodity top. Commodity tops often show rapid reversals as speculation shifts into reverse (see the recent spike top in silver for example).

In addition to peak oil, we are facing an extremely serious situation in the credit markets that is leading inexorably toward credit deflation. Deflation will cause massive demand destruction, even for essentials, as there will be very little money and less credit (and demand is what one is ready, willing and able to pay for). The most likely scenario IMO is for oil to fall in price in nominal terms, while becoming simultaneously less affordable, as purchasing power should fall faster than price. If you are betting on the nominal price going up for evermore due to peak oil, then you would likely lose, even though your understanding of the technical situation was sound. Taking financial dynamics into account is essential.

Stoneleigh: You might be right, but I don't think so. In your scenario, the US dollar remains very strong-I just can't see it happening-fundamentally, things couldn't be worse for the US dollar. Oil could fall against Swiss francs (although I don't think so), but US dollars? Why do you feel that the US dollar will remain so strong (or gain strength) as the country slides down the slope?

Leanan it's because they're so worried about it, that they're trying to keep it from being discussed in the news, and running fluff pieces about the bounce, the recovery, etc etc etc.

The fundamentals just keep getting worse and worse, but the herd has gone back to sleep because of a rally lasting all of a few weeks. After the March 17th low I said there would be a rally correcting the decline since October, and that I thought it would probably last a couple of months. I said it would probably be over just about at the point where people began to declare the Fed victorious over the credit crunch. Market psychology is a particular fascination of mine, and this rally has been a good example of human herding and post hoc rationalisation.

IMO the rally is either over, or nearly so, in terms of both price and time. My best guess at this point is that it may have a little further to go on both counts, but I wouldn't bet on it. Everyone is metaphorically slapping the Fed on the back and congratulating them for a job well done, but this is only a short interlude. A depression is inevitable, and we will continue to chart its course at The Automatic Earth.

And indeed you do a fine job. Thank You - both ;-)


I read somewhere once that it was 4 years into the Great Depression before they finally admitted it was one.

Related question: How come the declining dollar is rarely used to explain the rising stock market? When oil rises and dollar drops, we hear that dollar devaluation explains the run on oil prices. When stock prices rise during the same time, the declining dollar value is almost never used to explain the run up- i.e. you rarely see the charts showing the NASDAQ priced in Euros the way we often see oil priced in Euros.

That's easy. Go into a casino and lay out some cash. The dealer immediately converts it to casino chips. House rules. The NYSE is a gambling hall of sorts and fiat currency is the U.S. dollar.

I can see two ways that stock prices and currency prices would couple.

1) Many NYSE companies do business internationally. If they can sell widgets abroad at constant euro prices, and make constant euro profits on those sales - or even better, keep costs constant in dollar term so profits actually rise - then dollar profits will rise with the euro or even faster. Higher profits should drive up stock prices.

2) If investors are targeting some fixed ratio of dollar-priced stocks to euro-priced stocks, then as the euro rises, those investors should be selling more euro-priced stocks and buying more dollar-priced stocks, thus driving up the price of dollar-priced stocks.

The publacally traded software company I work for released "outstadning" Q4 and YTD earnings with a lot of that coming from overseas markets.

When asked - internally - what effect currencies had the unofficial response was maybe 3%.

That was on just about $6B US annual revenue.

I suppsoe the Q might be what effect would $180m have on EPS.

I do not kow if that makes any sense to anyone..


Why is the stock market rising every day regardless of the data?

Such a question assumes that there is logic or, dare I say, a science to Economics.

No one has shown that 'economics is a science'.

Hi joe,
The fix is in, it has been in since 1776. Don't mean to rant, but wtf, here goes. I don't, and never have believed our Big Bro. is all that incompetent. I posit it's (these scenarios of incompetence) by a wierd design that's not outwardly apparent. I don't think "they" sit down and make doodles on a white board in some lofty conference room working out a "screw em" policy. I think, though, that "by design", this business of capitalisic governance is set up in such a way that, based on the shear unmanageable size of this country, ensures stealth for behind the scenes shenanigans. That, and the sheeples cognitive disonance just makes this overt subterfuge too easy. Tell me the ptb didn't see this coming. It's all been gamed and studied years ago. There may be no step by step game plan, but I'm sure there is an abstract being followed. "If this happens, we do this, if that happens, we try this, if it all stalls out, we wait for an inroad..." kinda something like that. Hope I'm not sounding like Alex Jones here, just my not so humble opinion. (rant be gone)


Ignore the seasonally adjusted CPI-U of .2% in April 2008. The not seasonally adjusted CPI-U is .6% for April 2008 which translates to an annual inflation rate of 7.2% which I think is still a bit low.

I was just watching good morning america and they did a segment about oil saying that it "just" hit 125 a barrel as I sit and refresh the futures page that reads 127(heading toward 128 in a hurry) a barrel. /facepalm.

One thing they said which I found interesting and I wish to post here is that there is a 6 week lag time from the price per barrel to the final price for gas. They mentioned that at 125 a barrel in 6 weeks the price of a gallon of gas will go up a dollar more to put us at about $4.75 at the end of June.

Is there a kernel of truth to that? I know the crack spread right now is crazy and I read a comment in yesterday's drumbeat that for every $25 for oil =$1 rise in gas prices. Gasoline in Santa Fe is 3.80 a gallon. Diesel is 4.60 a gallon I was not expecting something so stark from good morning infotainment!

That sounds about right! Better do your driving now!

"I know the crack spread right now is crazy..." That term is taking on a new meaning. As in "bend over, please...."

Anthony Cordesman has it about right.

"U.S. influence over OPEC and Gulf oil production is diminished," he said. "It's not clear what the incentive is to Saudi Arabia. We can't deliver on (Mideast) peace. We can't deliver on arms transfers. We can't deliver on the Iraq that Saudi Arabia wants. We are raising problems in terms of Iran. And the reality is the market isn't being driven by us; it's being driven by China, by India, by rising Asian demand."

or so it would seem. And now it shows up on the mainstream media http://www.cbsnews.com/stories/2008/05/16/world/main4102506.shtml

Things are moving faster than most, even on TOD, predicted.

Hi NeverLNG,
If you've seen this before, disreguard, but anyone else, check this out:


I think this just applies to N."murika", but all others may get a world wide incling. Key in your town, and you can get a nice graph comparing crude and gas price history going back 6 yr.s I think. Quite a tale to be told if you cross ref. dates on this graph with world news and events during any particular "anomolies" detected on the graph.
I wanted to ask westtex about certain dates, but his absence of late has been glaring. Did I miss something?

Jeff (apologies for idiot spelling, never could properly)

Very interesting site. Going back a few years there was some lag, but I don't see 6 weeks delay from crude to gasoline in the last few months. Gas prices seem to track crude within a week, or sometimes lead the crude prices. How does that work?

There's also a "jagged edge" behavior in all the midwest prices that doesn't seem to exist on either coast. Very odd.

He is on vacation in Italy.

Nice to own a few oil wells :-)


Thanks-- Fascinating. It allows for creation of stories about what caused what and endless amusement. Given the current, and likely future price of oil, we will all be doing a lot of sitting at home telling stories. Just like in the old days.

Not necessarily. Look at it this way - crude costs have risen by 100% y-o-y, diesel costs have risen by about 50% y-o-y and gasoline costs have risen by about 20% over the same period.

Currently the refinery, distribution and retail segments of the US gasoline business are working to an exciting new business model known as selling every gallon at between break-even and a loss. The integrated operators can continue this policy for a long time; the independent operators, less so.

As long as crude prices remain sticky above about $112 per barrel, the price of gasoline will continue to rise through the summer, as there is a massive pressure wave of rising crude acquisition costs that is still working its way through the system - at the margins, some of the crude entering the US refinery complex may have been acquired at prices that were set 3-6 months ago. The longer that crude costs continue to stick or to rise, the longer that this pressure wave continues, and instead of the seasonal downturn in gasoline prices that is supposed to happen, we get a relentless grind upwards in the price that continues until crude tops out its price run. I'd anticipate seeing prices hitting the $4.50 mark sometime late in July if crude stays between $120 and $130 per barrel.

Somewhat OT but a hell of a good read;

"China's All-Seeing Eye"
With the help of U.S. defense contractors, China is building the prototype for a high-tech police state. It is ready for export.
NAOMI KLEINPosted May 29, 2008 3:24 PM


It's being beta-tested in England.

Hi souperman2,

Freakin excellant heads up article. "the crack cocaine of capitalism"...totally killer! Thanks.


"Fortress world is a situation where the rich live in enclaves, protected, and the poor live outside in unsustainable conditions." Mohan Munasinghe at Cambridge lecture.

I just finished reading Kunstler's 'World Made By Hand' and although it was reviewed on this site I have my own take on JHK's vision for a dystopian post peak world. Based on what I could discern about the time frame he places his charachters about 2025 in upstate New York with no autos and no gas or coal or even infrastructure. Although I would give it a C+ for entertainment value I found it woefully inadequate in projecting how we might be living 20 years from now.

Mohan Munasinghe however paints a much more realistic vision of the future (detailed in above article: "Expert warns climate change will lead to 'barbarisation'") . With the world rapidly moving into two camps, the haves and have-nots and the coming failure of the middle class we need look no further than our current cities to discover our own Future Shock.

Are we going to have the rich behind guard gated enclaves with the poor living marginally on the outside like Haiti? For large parts of America (LA and Las Vegas) that is already becoming an all too true reality.

Of course-that is called Globalization-everybody voted for it, all economists and politicians embrace it. Re 2025, what JHK misses is that it is not just sprawling suburbia but also the middle class society that wastes energy-make the whole world like Chindia (they are working overtime on this one-on your nickel) and you save an enormous amount of energy-the increasing % of poor are quite efficient at conserving energy.

That is my prediction for the medium-term future, too, and has been for years. I suppose if there's nuclear war, all bets are off, but if we avoid that, I think we will simply become more like a third world country. The rich will still be rich, the poor will still be poor, the middle class will vanish.

I have my doubts about the rich being able to live in gated (guarded) communities. What are they going to eat? Their money and credit cards? It would take an entirely separate infrastructure, starting with agriculture, guarded from the hoards and I just don't see the feasibility of that.

Throughout history (think French Revolution) the poor have rebelled against the rich when push came to shove. I have no reason to believe it will be any different this time.

Money (the stuff that makes the rich rich now) is just a token of energy available to do work. No energy, no work. Period. It takes work to have anything like an industrial economy - at any scale. When we are rolling down the slope from the peak of production of oil, all bets are off as to how society will organize and react. Or on what the outcome will be.

Question Everything


What are they going to eat?

The food we peons grow for them, of course.

Throughout history (think French Revolution) the poor have rebelled against the rich when push came to shove. I have no reason to believe it will be any different this time.

"Throughout history," my anklebone. Throughout history, the poor have put up with their lot.

There is a lot of dispute over the causes of the French Revolution; many point to the rising merchant class, not the peasants. In any case, it was hardly the historical norm. Other countries at the time were poorer, with fewer freedoms...and there were no revolutions.

And many third world countries exist now, with stark income inequality, and no guillotines being fired up.

I think you are right...way more peasant revolts suppressed than successful. OTOH, rarely has a mass of proto-peasants been better armed and military training is broadly distributed among the middle and lower classes. Consider how much difficulty the Military is having suppressing Iraqi "peasants". I think the ideas of John Robb and Jeff Vail may be a countervailing force to the historical precedent you cite.

It is difficult to find any historical examples of a large middle class being forced back into permanent peonage, though. I mean, people are always going to remember how it was. A real reason for the passivity of the poor majority through the ages was the universal belief - enunciated by Plato and Jesus and Shakespeare, among others - that nothing else really worked. There were no counter-examples. But people are henceforth going to remember the period 1850-2050 and disbelieve any new forms of the monarchical, great-chain-of-being arguments with which the nobility always previously defended their own dominance. Without belief on the part of a subjugated majority in their own inferiority the ruling minority will have to come up with something a lot more forceful. Maybe an Orwellesque Permanent War. Or, I think more likely, a turn to a kind of socialism. Historical memory matters. The Majority won't passively forget what it once was.

Currently, probably 85% (guesstimate) of the USA population is using psychotropic medication to survive their life, including anti-depressants, prescription stimulants, booze, pot,etc. They are coming up with new products every day. How are you going to have an organized revolt in a society where the prevailing mentality is the solution to your life is pharmacological? You aren't.

Yup. And IMO, we haven't reached "peak population control technology" yet.

All made available in an environment of cheap energy. These means will largely go away.

Peak Oil, if its ramifications are as bad as many here on TOD believe, is a force of nature. A tornado, an earthquake, an asteroid impact. And like such forces of nature, Peak Oil will sweep away the lives and livelihoods of people from all social positions. No one is immune.

Anyone who thinks otherwise is dreaming, in my humble opinion.



Simply not true-there is more doping in the USA at $127 oil than at $10 oil.

It's a force of nature, but rather than being sudden and catastrophic, it may be slow (but just as devastating).

Four years ago, many peak oilers assumed we'd be rioting in the streets if oil was over $100/barrel. Well, here it is, and we aren't rioting. Griping and running up our credit cards, but not rioting. Neither are we in another Great Depression.

I think peak oil is going to unfold a lot more slowly than you think.

I think peak oil is going to unfold a lot more slowly than you think.

I don't think so. I believe things will go pretty much as is, getting just a little bit worse each year, until we reach a tipping point. And after that tipping point things will happen fast and furious. I cannot predict when that tipping point will happen but I expect it to happen by 2017.

Ron Patterson

Darwinian - "I expect it to happen by 2017."

I respect your posts but on this point of timing I think you're premature.

Systems take a long time to break down. I would put the collapse out 100 years. However there will be a steady march of unwindings that will go on for years and years.

The Long Emergency JHK

My guess would be 2044 (by which time coal reserves will be seriously depleted).

My guess would be 2044 (by which time coal reserves will be seriously depleted).

The absorption capacity of the atmosphere for taking up the CO2 from burning coal is already depleted for 20 years at least. The result is now the disappearance of the Arctic summer sea ice in the next years which will dramatically change the climate on the Northern hemisphere. I would not give coal expansion more than a couple of years at which point the world has fully understood the seriousness of the situation

My guess would be 2044 (by which time coal reserves will be seriously depleted).

I'll repeat this until it sinks in: the limiting factor with coal is not the resource base but the absorption capacity of the atmosphere for taking up the CO2 from burning coal (sink depletion). In fact, this absorbtion capacity IS ALREADY DEPLETED for around 20 years now, at least.

The result is now the disappearance of the Arctic summer sea ice in the next years which will dramatically change the climate on the Northern hemisphere. I would not give coal expansion more than a couple of years when the world has fully understood the seriousness of the situation.

I would put the collapse out 100 years.

100 years! That is beyond all reason. If the world as we know it has not collapsed in 100 years then it is not likely to happen at all. That is because in 100 years virtually all the fossil fuels will have been long gone. That means that we would be living on, and driving on, alternatives. And if that happens, why would you expect a collapse at all?

Grain harvests that were once rising everywhere are now falling in some countries. Fish catches that were once rising are now falling. Irrigated area, once expanding almost everywhere, is now shrinking in some key food-producing regions.
- Lester Brown "Outgrowing the Earth"

The slow collapse has already started. All we are debating is when will it slip over the cliff. My guess is that it will be in nine years or less.

Ron Patterson

Ron - Perhaps we are in agreement.

I define collapse as:

massive die-off; end of any remnants of society or modern civilization; Charleton Heston Planet of the Apes

"massive die-off; end of any remnants of society or modern civilization; Charleton Heston Planet of the Apes"

The Die off will start much sooner than 100 years, probably in the next 10 years. Some regions are already showing signs of die-off (Africa, Myanmar) as poor regions are priced out of sufficient food supplies.

Remember that people rarely die of starvation. They die from diseases triggered by mal-nuetrient (European Black Death triggerd by food shortages). As the calories consumed and the quality of food (more grain, less vegetables\fruits\meat) decline people become more susceptable to disease. This can lead to a pandemics that quickly and unexpectably cause large regional die-offs.

Consider what is happen in Africa today. People are fleeing their homes because they no longer can feed themselves. Weakened by mal-nutriention, they pick on diseases. As refugees the spread diseases they carry to neighboring regions. Large influx of refugees destablized neighbor regions as the increase in people taxes food and medical supplies. Over time, the neighboring regions collapse and trigger another wave of refuges (usually much larger then the previous). The cycle continues until all the regions are facing trouble or until the population declines to a sustainable level.

Since the world is far more interconnected and dependant, the risks of a global pandemic are higher than ever since the bigging of civilization. Todays food shortages (if not quickly addressed) will lead to tommorow's pandemics. In the West we now have drug resistant bugs. As the cost of drugs and medical services rise, people will forgo treatment. In other cases the will only pay to for drugs until their symptoms have disappeared, causing the development of more drug resistant bugs. This will continue until a pandemic occurs.

War is another source of massive die-offs. Declining resources and rising populations lead to only one outcome. War! We will see Africa tear itself apart as the have-nots fight to survive. No human is simply going to accept death without a fight. I think there is a 50-50 chance of at least a regional nuclear war. Consider that all of the nations with large populations possess nuclear weapons. When these nations with large population endure food shortages, the risks of anarchy increase. This leads to factional groups obtaining by nuclear materials to be used to either secure power or use them against their neighbors to obtain resources. Consider the situation in Pakastan, Food and energy shortages are undermining the gov't control. The risks of a radical group over-throwing the Pakastan gov't are rising. Once the gov't does fall its very likely that nuclear materials will be compromised and used.

FWIW: I think will see Africa start to tear itself apart in the next two years unless food and energy resources are restored. I think we will see the Pakastan gov't fall in the next three years. Hopefully the West will remove all nuclear materials in Pakastan before the population overthrowns their gov't. If not, I would expect a use of Pakastans nuclear materials against their neighbors, domestically (faction group kills their own citizens to gain power) or against the West.

Ron, have you ever considered a catabolic collapse? In other words, a stairstep series of smaller collapse events until homo sapiens can reach some longer term sustainable situation?

Catabolic collapse is not a Tainterian idea, at least originally but it is derived from Tainter's work in observing that societies collapse when they are unable to sustain their current level of complexity. But as John Michael Greer notes in his description of catabolic collapse, we can take Tainter's basic theorem and apply ecological principles to it to arrive at the theory of catabolic collapse, which coincidentally maps very well to the multi-step collapses of multiple prior civilizations.

If we go down the road of catabolic collapse, I'd expect to see some initial impacts by 2020, which maps well to your estimate of 2017. After that how fast we reach each next stairstep down will depend on many variables.

To joemichaels, I think you placing "the" collapse out 100 years misses the point. Again, I'd reference catabolic collapse as what I think is the most probable outcome. Therefore, how do you prepare for these stairstep events as well as prepare any family you have including your children?

Note: One reason I use 2020 as a marker is the work by Bakhtiari and Ace both points to a precipitous decline of total global oil production into the 55mbpd range by that date. Such a change in oil production would force change, at least initial change, upon global civilization.

I find Greer's catabolic collapse to be the most plausible, and his most recent column ("The Same New Ideas") was interesting in support of this. It's also refreshing to read his excellent prose. But I do have one reservation, which is that previous large societies that collapsed did not have access to the vast numbers of fossil fuel energy slaves that we do, and these FF slaves have been far more capable than the human and animal ones available previously. They have allowed us to achieve far greater populations with far higher degrees of specialization than was ever before possible.

I am still thinking about the impact of this, but I suspect it will mean that some of the steps down may be quite a bit bigger than they would have been. I'm not sure if it should extend the time scale, but I don't think so (it certainly didn't on the way up). So while I think the collapse of the western industrial empire (and I guess the eastern ones being built now) will be playing out for the rest of my life, and for generations after, some of the near term events may be pretty hard to distinguish from total catastrophe.

GreyZone, I would consider a catabolic collapse very probable if it were only one nation, say the United States, that was in trouble. But we now live in a global economy. Consider there are several very populous countries, Japan, South Korea, Taiwan and several others that have virtually NO natural fossil fuel whatsoever. They must import everything. Also they import most of their food.

Now consider that in eight to ten years many countries, like Mexico, who are now exporters, export nothing. Other exporting countries, like Saudi Arabia and other OPEC countries begin to "save some oil for the next generation" as the King of Saudi Arabia put it. And Russia, suddenly aware of the power of oil stops exporting altogether. If....no....when that happens, all hell is going to break loose. Japan, South Korea, Taiwan, Singapore, Bangladesh and at least a dozen other countries will be in a very desperate situation and will be forced to take desperate measures. What those desperate measures would be I would not venture to guess.

I simply cannot see the world economy collapsing in steps. Once international trade breaks down then the desperate situation that results will assure a global collapse.

If there were a huge impenetrable wall around the US and Canada, then we might collapse in steps. But no such wall exists.

Ron Patterson

GreyZone, I would consider a catabolic collapse very probable if it were only one nation, say the United States, that was in trouble.

I too think it would be plausible if it were only Peak Oil. But it's not. The average person (Hell, even the average TOD poster, me included) doesn't seem to have the mental capacity to consider all threats simultaneously.

Grasping the implications of a single threat can be difficult. When I'm thinking about the fisheries collapse, only a handful of familiar species comes to mind (Chinook Salmon, Cod, etc.) But the reality of the collapse is much, much worse. I do not have sufficient background knowledge to even begin to contemplate the catastrophic impacts on other fish, shellfish, invertebrates, and marine ecosystems in general.

This is cognitive load theory applied to one threat, fisheries collapse. To expect people to simultaneously take into account multiple threats, each with its own set of positive feedback loops and downstream effects, is in my opinion outlandish. We should not be surprised that well-informed people continue to predict the more palatable catabolic collapse.

It's worth remembering (GreyZone often points this out) that thus far, even the so-called experts on each threat have consistently underestimated severity and immediacy with which they are unfolding (e.g., climate change, food shortages).

Dr. Worm said he analyzed the data for the first time on his laptop while he was overseeing a roomful of students taking an exam. What he saw, he said, was “just a smooth line going down.” And when he extrapolated the data into the future “to see where it ends at 100 percent collapse, you arrive at 2048.”

“The hair stood up on the back of my neck and I said, ‘This cannot be true,’ ” he recalled. He said he ran the data through his computer again, then did the calculations by hand. The results were the same.

“I don’t have a crystal ball and I don’t know what the future will bring, but this is a clear trend,” he said. “There is an end in sight, and it is within our lifetimes.”

I am expecting two major tipping points or discontinuities within my remaining expected lifespan:

1) Somewhere maybe around 2012-13, Peak Oil stops becoming a theory to be debated out in the fringes, and becomes generally known about, agreed upon, and talked about constantly. The impacts are becoming real, are becoming more serious, and are becoming more painful. A lot of airplanes are no longer flying, a lot of cars are no longer being driven on the highways, a lot of poor people are suffering. If we ever get motor fuel rationing in the US, then I think it likely that this is about the earliest that we would see it. Crude oil is several hundred dollars per bbl, gasoline has crossed the double digit threshold and is rising rapidly. No one is debating about whether the economy is in recession or not, and you aren't hearing many people talking about a turnaround hapening either. There begins to be serious talk about how we're going to manage decline, and how we are going to mitigate; most people are still in denial though, wrt the fact that it is already too late, and that whatever can be done at this point will be too little.

2) I expect the second tipping point or discontinuity to happen sometime around 2020, or possibly a few years later. This will be the point when the rations have been pretty much cut to zero for most ordinary people; except for the "important" few, everyone must walk, bike (if they are lucky), take mass transit (if they are really lucky enough for it to be available), or drive a very small and very limited range NEV (if they are REALLY really lucky). I expect that what Heinberg just wrote about only the rich, govt & military personnel still flying to be reality by then. I expect that some serious economic dislocations will have to happen by then: corporations, governments & institutions declaring bankruptcy and shutting their doors in massive numbers, the dollar having been hyperinflated into worthlessness, a longer term deflationary trend beginning to operate -- essentially, something at least as bad as the Great Depression, and possibly worse. No "Happy Days Are Here Again" at the end of this one, though. Just the beginnings of the long, inevitable decline to the much lower level we must reach for sustainability.

What would it take to falsify the different expectations we hold on this board?
For myself my median projection is based around collapse occurring in some regions of the world, and severe financial dislocations, with some increase in death rates in the third world and consequent set-backs to dropping populations as people in hard times have more children.
However, my central projection would look to solar energy costs in particular rapidly falling, and hence energy being available at some reasonable cost, together with some increased coal burn in much of the world.
However it seems that supplies of fossil fuels may be lower than the lowest of the scenario's given by the IPCC, so my central projection would be that we would not have ruinous increases in CO2.
At a later stage I would look to a much expanded nuclear build for baseload together with solar for peaking power

On the upside what could falsify these projections would basically be really cheap energy resources, perhaps high altitude wind or very cheap solar.

There are a lot of things which could go wrong on the downside, so I will not attempt to list them all, as massive climate change, a large nuclear war and so on obviously mean game over.
On the energy front the indicators I would look for to show that I had been too optimistic would include great difficulty in reducing costs of solar energy, no decrease in resistance to nuclear power and most capital being diverted to try to bolster consumption rather than invest in new supplies.
The signals in the financial environment which would indicate that total collapse was difficult to avoid would include the rapid spread of collapse in some countries to others, with efforts to insulate the more successful economies in vain - China and France are two countries I would look at very closely in that respect.

Predictions of collapse are difficult to make on purely financial grounds as it is basically an intellectual artifact - after initially going down the pan, the German economy was driven on from the Great Depression, by choosing a different set of rules to play by.

Anyone else car to play by sharing the indicators that would tell them they were mistaken?

My predictions could be falsified by:

1. World C+C production in any given year averaging over 100mbd.

2. Saudi C+C+refined products net exports averaging over 11mbd in any given year.

3. Heidi Klum leaving Seal for me.

I had dinner today in a house (in upstate New York) that was built in 1817. It's gorgeous! Better than almost everything built after 1950, including rich people's homes. The house was built by a hatter. As in, a person who made hats.

Do you remember 1817? Lewis and Clark had departed just 14 years earlier to venture to the Pacific Ocean. There were twenty states, with Mississippi joining in 1817. There had just been a war with the British. It was 28 years since the signing of the Constitution.

In 1817, there were no income taxes. Money was made of gold. Americans were not only well off, they were wealthy, even then.

In 1817, you could look back upon three thousand years of European civilization (Americans were mostly displaced Europeans in those days), and see a continuum of culture. The civilization of 1817 wasn't all that much different from that of the Romans. Steam power, the basis of the Industrial Revolution, was just getting started, and was still something of an anomaly. The handmade wood, brick or stone buildings of 1817 wouldn't have surprised the ancient Athenians one bit. People got around on horses or on foot.

Today, I think of the Oil Age as being sort of an interruption of civilization, to the point where people look back and they see just sort of a blank time "before oil," and cars and television afterwards. Culturally, it has been a sort of epileptic seizure.

That is the rosy view of history. In 1817 America was covered with forests (i.e., easily recoverable stored energy) and the population was maybe 10 million.

After the easily recoverable oil is gone, a population 30 times that size will have no easily recoverable stored energy to fall back on. The ecosystems are trashed. I guess maybe people can burn asphalt paving from the shopping malls.

I think the distribution of wealth would have been extremely unequal as well - with millions of people living poor, if not in squalor. Your hatter was part of the merchant / guild class. Your view of history is also rosy in the sense that the advances in virtually every field has been enormous since 1817 - public hygiene, health, medicine, dentistry, child mortality, to name just a tiny percentage. That is what makes peak oil / peak everything such a worry - there is a lot at stake, because no-one except certain flat-earthers actively wish to return to pre-industrial life.

I am glad you enjoyed lunch in an historic home, but it is not conducive to an objective or comprehensive view of the advance of history of the last 200 years!

If the hatter still practised his trade at all, it was not all roses for him either - the expression 'mad as a hatter' arose because many became neurologically damaged by the mercury they used in their trade.

I believe things will go pretty much as is, getting just a little bit worse each year, until we reach a tipping point.

That "tipping point" might be as dramatic as the collapse of the West Antarctic Ice Sheet or biological terrorism bringing down an entire growing season's standing crop of rice, wheat or maize. Or it may come in a form so subtle that it isn't even noticed until it's a done deal. In fact, the point may have already tipped without our even knowing it. Human extinction within the lifetimes of those already born is more probable than most people think.

Human extinction within the lifetimes of those already born is more probable than most people think.

I cannot concur. Humans have adapted to every possible niche in the world except Antarctica. There are, today, people living in the jungles of South America without any outside assistance. No, no, the odds are thousands to one that there will be survivors. Perhaps even less than one hundred million but there will definitely be survivors of the human species. Unfortunately I cannot make such a optimistic assessment for the survival chances of any of the other great apes.

The total number of all other great apes combined is about 200,000. The human population grows each day by slightly more than 200,000.

Ron Patterson

Human extinction within the lifetimes of those already born is more probable than most people think.

With eight or nine billion people in that time, the likelihood is vanishingly small - impossible in effect, without extreme runaway global warming, and the time-scale (80 years) is far too short. And as noted above, many other species of large vertebrates are in much more trouble because of our monopoly of resources (and those that out-lived us would certainly benefit from our demise).

I think there are many more pressing issues to be concerned with, than speculating on near-term human extinction.

Human extinction within the lifetimes of those already born is more probable than most people think.

If by this you mean that most people think that human extinction is impossible, but that the probability is actually greater than zero, then this is undoubtedly a true statement.

If you mean the probablility is actually greater than 50% of this occuring within the next 100 years or so (which is what I think you mean by "within the lifetimes of those already born"), then that is a more debatable proposition!

But if it-devastating, complete change-occurs, might it not be PO? If conservation, accrual of alternative energy, shifts in transport, etc slow the descent, then the system may be overtaken by other issues-existing levels of horrendous debt, cascading, ill formulated foreign wars, etc. Like bacterial infection killing a previously ill patient. It wasn't the original illness that was the cause of death.

I too recall the prognosis of doom and gloom at $100 oil, now stories center on likelihood of $200. As was recently lamented, by the Quatar finance minister I believe, Europe running relatively smoothly on $10 fuel is $5 they feel should be theirs, not the government ala taxation. Just as important to the level of the actual trigger price-$200, $300, whatever one believes, is also the speed it is reached and maintained.

Rapid prices increases will only hasten additional knots in the climate change noose, a noose already almost unremovable. As the world screams about food and grain scarcity, not nearly enough draw the connection to GW and the prolonged worldwide droughts which set the grains in motion. Now we blame scarce fertilizer, biofuels, high fuel prices for both farming and distribution, neglecting the cause which started it all.

That's sort of like Thomas Homer-Dixon's concept of 'tectonic stresses,' where it's not one thing, but a confluence of factors that interact in unexpected ways. We can deal with problems in isolation, but when they start to team up...

Perhaps so, I can see your and Dixon's point. Mine was more that if it isn't fast and rapid, then we will adapt to PO. If something else doesn't knock us, primarily GW. Adaption could range from backyard gardens and bicycles or energy too cheap to meter from thorium reactors.

That seems the purpose of this blog, to raise awareness and hopefully slow the descent.

As it is, I'm of the opinion that energy is too cheap already, and that it creates a world of problems unique to it. Cheaper energy and the rise in human population it would enable is ludicrous. Not to mention the health problems from our push button society. I was recently touring a university where the fitness center was touted. Row upon row of stationary bikes, each with someone aboard with earphones, all heads turned up and forward to a supersize TV screen tuned to a daytime interview show. It was Orwellian, and as an aside, an energy waste.

Based on the ELM, we will hit zero world exports around 2030. That seems a reasonable point for when TSHTF.

Clearly the ELM curves will bend, as the price skyrockets. The consumption binge that these countries are on depends on the oil export revenue stream. As the volume exported get low, that revenue stream decreases, which will cut into their ability to consume. So I don't expect exports to approach zero at anything like a linear pace, but more likely exponentially approach zero. This is basically Zeno never being able to reach his wall, because each step only takes him half way there. You won't notice the bend in the curve until export revenues begin falling, i.e. the product of price times exports begins to decline. Economies like the UK, or Indonesia don't fit this model, because they have significant other export goods to sell. Perhaps the Gulf states will develop enough alternative export production independent of oil/gas in time to avoid this, but if they don't they will have to keep exporting oil/gas in order to maintain some sort of currency for needed imports.

The oil exporting Gulf states will slow down exports as their domestic use increases. Continuing to rake in large profits on decreasing exports as the price of oil increases. Still that will not isolate them from an economic collapse.

If the world has only a very limited supply of energy and the exporting states eliminate or limit their exports then from whom will these countries purchase their manufactured goods and food? The Gulf states have growing populations and aside from Oil and Gas little industry or other natural resources.

Any industry that the Gulf states develop would be limited to the use of the domestic market or the market of other oil producing states, for at that point there would be no one else with money or funds to purchase their goods, the Oil states would be relegated to taking in each others wash.

The Gulf states would however be hard pressed to feed their people. What the gulf states need to worry about is an ELM food model, they will probably end up trading fertilizer for food.

Leanan, note that I put an "if" in my statement. :o)

In the good ol' US of A, I've seen rioting in the streets during eras with much cheaper oil (1990s). Plenty of gunplay and blood. This kind of thing unfolds very rapidly and is quite mind-numbing when you're caught in the event by surprise.

Perhaps the mistake you might be making is that you're thinking the outcomes will be linear. I suspect that the outcomes of Peak Oil will be nonlinear. Civilization is metastable, in my mind.

Bakhtiari reflected on "The Century of Roots". One of the ongoing memes in US culture is the "law of the gun." I don't think it's that far-fetched to see a return to justice by supersonic lead--perhaps modified somewhat by new technological and social realities--in a post-peak scenario.

Perhaps another way to look at Peak Oil is that energy scarcity puts an additional strain on the fabric of society, such that rioting and other forms of chaos may be more likely to happen. It doesn't mean that this will happen at every location, nor all at once. In some instances, one of these chaos events may become large enough to cause a major societal dislocation (a la the American Civil War). The higher the stresses due to resource limitation, and/or the longer the stressors last, perhaps the higher the probability of a significant dislocation (significant widespread chaos).



In the good ol' US of A, I've seen rioting in the streets during eras with much cheaper oil (1990s). Plenty of gunplay and blood. This kind of thing unfolds very rapidly and is quite mind-numbing when you're caught in the event by surprise.

Yes, but then we tend to return the status quo. IMO, you're the one who sees linear outcomes. Once we start rioting, the rioting will continue until there's nothing left. I don't think it's going to go down like that.

Look at what happened with credit crisis. There was legitimate worry that it would all come crashing down. Some were predicting economic collapse in January (after the Christmas shopping was over). Did it happen? Nope.

That doesn't mean the problem is solved, or that we won't have similar, even worse crises again soon. And it may yet all come crashing down.

But I think it will happen a lot slower than many here are expecting.

"IMO, you're the one who sees linear outcomes."

Nope: I put enough qualifiers in my statements, and enough description, to make that clear, I believe. I have no idea about what the outcome of Peak Oil will be save some wild-assed speculation, though I think nonlinearity could play a big role in outcomes. I suppose some positive feedback loops on the down-slope could prevent major altercations (dampen nonlinear events), but I'm not sure. There's much uncertainty.

Here's an idea: Clinging to the "slow decline" (catabolic collapse) idea, one which I believe has merit, is perhaps the outcome of some cognitive dissonance. Slow decline is comforting, in a way. Perhaps much more comforting than facing the prospect of mass chaos. This parent, for one, would rather see a very slow decline, or none at all.



Slow decline is comforting, in a way. Perhaps much more comforting than facing the prospect of mass chaos.

Greer argues the opposite. That fast-crash doom fulfills our cultural expectations. Ties into Christian end of the world scenarios. Perhaps more importantly, ties into our Hollywood-infused expectations of a fast pace and obvious ending.

We have a short attention span. We expect things to happen quickly. Which isn't to say we necessarily want them to happen quickly, but we expect it.

I am not ruling out a fast crash (and I'm on the record for that for a long time). But I've thought all along that catabolic collapse was more likely. I also think catabolic collapse is the most doomerish scenario possible. Because it gives us time to trash the environment all the way down.

I think catabolic collapse is most likely because that's what's happened in the past. Rome took four centuries to collapse. Easter Island, where they had very limited resources indeed, took maybe 50 years to collapse. Yes, I know, some argue that our complexity will lead us to a quicker collapse. But I don't see any evidence of that.

Indeed, the evidence is piling up that collapse will be slow. Katrina caused some excitement, but now it's practically forgotten. New record high oil prices barely make the news these days. So far there's not even a Great Depression level of social upheaval.

As for the fast/slow thing: here in the Hew-Hess-of-Hay, we could see some rather seismic disruptions as ELM kicks in. But I agree with you, in that Mr. Greer is spot-on about the scope and scale of the collapse. It won't be a sudden dieoff leaving a few lonesome survivors wandering the empty streets. Lots of people will survive, as people always tend to do. They'll (we'll) Easter-ize the whole planet on the way down.

after thinking about it a little, i don't think catabolic collapse is going to happen till after the large breakdown.
what is most likely to happen is a gradual buildup of pressure, each time the screw is turned tighter people will just adapt and bear it. until one thing, which most likely no one can predict will cause the system the heave and shake like a earthquake. this will last a day or two and then order is restored in a different way followed by many smaller and similar events. Only whats left will be subject to the slow gradual decay of catabolic collapse.

a non-linear collapse for a non-linear world.

IMHO the big stress riser for tipping point is employment.

Again IMO a good % of the population is employed at makework that can only be maintained in a cheap, ever-increasing energy environment.

Many are self-employed, RE, construction, finance, investment, etc. but are currently not raking it in anymore and their future situation doesn’t look bright.

Gov. employment, the main area of job growth as of late, looks set to launch into some serious lay-offs due to budget shortfalls.

It’s gon’a get ugly out there. SOON!

I've no doubt it's going to get ugly. But I think how soon is still in question.

Someone pointed out awhile back that people are better at predicting what will happen than they are at when. Some of the talking heads started warning about the dot-com bubble about three years before it went bust. It was the same with the housing bubble. It went on far longer than many Cassandras expected.

Brian - Gosh! Hadn't thought of that one...but you're right.

If you look at cities like LA there are huge skid row areas that are peopled by "Zombie Hordes"* already. I think they'll only grow as times get harder.

Footnote: I was living in Central Louisiana in 1981 when due to budget cuts, Louisiana closed the State Mental Hospital in Pineville. They solved the problem by buying the patients one-way bus tickets to (you guessed it) L.A. Those very same people (if they are still alive) are clooging up the prison and homeless networks in CA to this day.


Geezz thanks. It may be good to keep in mind that we are talking about human beings not potential bullet targets in some survivalist porn montage.

And here in LA the Zombie hoards have become a major political football as the city is trying to clean up Skid Row. The developers have found that some of the new yuppies want a walkable hood with an edge not the classic west LA car dependent lifestyle. The underclass is now testing the political will and capability's of the city.

Downtown LA has rail connections to the ports and to the rest of the US. It wont be abandoned - but it will change.

Victorian England perhaps?

redcoltken - "L.A. ...It won't be abandoned - but it will change."

Absolutely! As a matter of fact the population of LA will swell as more and more desperate suburbanites flock to the central city. I see townships like Beverly Hills/Westwood/Brentwood becoming ever more isolated. They might as well gate those comuunities right now because they are so heavily patrolled that you can hardly get in now without a Gold Card.

I was in LA after the Rodney King riots and they (cops) withdrew from East LA and allowed the areas to burn but they set up road blocks at Rodeo Drive.

The Richie Rich's will be insulated...

At the end of the Roman empire, even the "poor" had high quality pottery for daily household use. Within a mere 200 years, not only had this level of pottery making been lost but even the art of using a pottery wheel was lost. Pottery recovered from the tombs of nobility during this period were inferior to the pottery owned by the poor of the Roman empire just 200 years prior.

If an entire region of Europe can lose the memory of an essential like a pottery wheel in just 200 years, the memory of some golden age of the middle class will fade into myth and legend and never be taken seriously, even if it is remembered. Your assumption that people will never forget is disproved over and over and over again in history. The only way to preserve that memory is to preserve the middle class. Lose the middle class and the memory of the middle class will be lost with it.

Did Rome have a middle class? What happened to it when collapse occurred?

Rome had a middle class, not as large as ours but they did. And the Roman middle class died off. Literally.

IIRC...according to Tainter, as Rome collapsed, the poor suffered first, then the middle class, and lastly, the wealthy. The wealthy fled to their country estates, where they became feudal lords with the lower classes as their serfs. (Said serfs were often farmers who abandoned their farms because they could not make a living, between the roving armies and the ever higher taxes demanded of them. It was a better life to work for a large landholder than to own a small farm yourself.)

Historians here will correct any errors I make, but I believe that in Rome the army was traditionally made up of peasant freemen, small landholders, and this was held to be one of the virtues of the Republic.

After the First Punic War with Carthage, Rome became alarmed when Carthage recovered and threatened Rome's hegemony of the western Mediterranean, and manufactured a pretext for the second Punic war.

During the course of this, the cost heavily impacted the Roman economy and inflation and prices soared.
Great landowners one way or another appropriated the peasant's lands whilst they were away fighting, and a the former free peasantry became part of the landless masses.

Analogies are rather to easy from this!

I expect to hear the cry 'Iraq delendo est!' any day!

According to Tainter, Rome had a problem with abandoned farmland. Rather than being stolen, people just walked away from it. He points to the increasing number of laws passed that tried to find ways to tax abandoned land. Taxes were so high on farms that it was actually easier to get food in the city (where eventually, a third of the population was on the dole) than on a farm. They even passed a law saying that the sons of farmers had to be farmers, too, trying to keep farms from being abandoned.

I wonder if that was at the same period in Roman history?
It went on for some time!
Certainly in the Eastern Empire various plagues and raids often depopulated the country, and taxes had to be raised to ruinous levels on the remaining peasantry to try to maintain the army.
By this time there had also been considerable degradation of many of the soils where much of the food for the empire was produced, and some cities which had formerly been harbours were now well inland, as cutting down trees in the surrounding highlands to grow wheat had lead to erosion and silting up of the estuary, and they were abandoned.

At other periods in history land obviously of some value, as it was part of the retirement package of the legionnaire, but they may at various periods have had tax privileges not available to the common peasant.

My understanding is that at the time of the Punic wars agriculture was being industrialised, and formerly peasant holdings ended up in vast latifundia, worked with the slaves from, amongst other places, the Carthaginian dominions.

As I said though, I am not an historian.

Davemart, the phrase 'Iraq delendo est!' is perfectly applicable right now. It translates to 'Iraq is being destroyed!'

The phrase, 'Cartago delendo est!', attributed to Cato the Elder, is probably apocryphal; he is thought to have been referring to the future and the need to destroy Carthage. So, he would have said 'Cartago delido sit!.

Thanks for that! My dim and distant memories of fiddling around with Latin at school in a rather disinterested way still left me rather uneasy at the phrase, and it's present tense, but I was certainly not up to the task of transferring it into a future imperative, or whichever of the jungle of Latin tenses it needs to be in!

As you say, that is the way the phrase has come down to us anyway. I rather suspect that someone in the Renaissance who was not as well up in Latin as he pretended had a hand.

Can't wait to see what 'Scipio' McCain gets up to!

Iran delido sit, anyone?

It's got rather a ring to it, hasn't it?

'Iraq dilendo est, Iran delido sit!'

I think I will phone in and suggest that to McCain as an election slogan.

Will the desperately poor revolt when things get really bad. They did in France during the French Revolution, and they are revolting right now in Nigeria. But they did not revolt in China during the Great Leap Forward when up to 30 million died of starvation. They did not revolt in North Korea where the people are so hungry that they are several inches shorter than their neighbors in South Korea. They did not revolt in Ireland during the Great Potato Famine. Over the last five hundred years there have been about a dozen famines in India, the last one in 1943, without a single revolt.

So I would say the odds are against any major orginized revolt. However America is a gun toteing country. I would lay odds that there will be many areas of serious violence in the U.S. when things get really bad. There will most likely be serious riots all over the U.S.

However I do expect serious resource wars, especially in countries with large populations but virtually no natural resources like Japan and South Korea.

Bottom line: There is no historical precedent for what is about to happen. We don't know how fast things will collapse nor what form the collapse will take nor how people will react. Everything is just a guess. There will likely be revolts in many parts of the world but none in others where the government rules with an iron fist, like in North Korea.

But there is one thing we do know. It is about those people who think we will develop "alternatives" that will allow business as usual for decades to come. They people are are living in a dream world!

Ron Patterson


With all due respect, the US is the third largest oil producing nation in the world. Peak Oil is going to hit a lot of places a lot harder then it hits us. (The UK for instance) I'm not saying it won't hit us hard, but there are a million ways we can conserve and still keep things going. The US is going to be one of the better places to be, IMO.

Now don't get me wrong, we most definitly won't be sustaining the same levels as today, but more towards the level of Robert Rapier's prediction's of 100% increase in costs and 50% less income. That would put the average American at about 1/4 the living standard we have now. Smaller houses with more people living in them, fewer and smaller cars, less stuff...

We ARE going to drill off the coast of Florida and ANWR eventually. We have huge coal reserves we can tap. Nuclear won't happen over night, but it will happen eventually.

I don't think the collapse is going to happen that quickly.


Egg71, while I do not disagree with you please read my reply to GreyZone above concerning catabolic collapse. Consider that a reply to your post as well.

I am sure we are going to drill ANWR and off the coast of Florida. But what will that do to prevent a worldwide collapse.

Five countries, United States, Russia, China, India and Australia have over 75% of the world's coal reserves. Most countries have none. Coal exports will completely cease in only a few years. We have plenty and Americans will demand that we keep it that way.

You must understand that once the world becomes aware of the finiteness of our natural resources, everyone will begin to hoard what they have.

Ron Patterson


I totally agree that energy exports are going to go the way of the dodo bird in 5-10 years.

Collapse in 3rd world, resource poor countries, will definitely happen first. It's already happening to some extent. The thought of millions of people starving to death in Africa, India and Indonesia is just not one that is easy to reconcile with my every day life in here in America.

All that being said, I think that the US is in a far better situation resource wise then a lot of places, and that we will use our knowledge and ingenuity (not to mention vast energy reserves) to sustain a slow decline for a lot longer then you imagine. Life will be different, but hopefully we can sustain some sort of technological civilization.


At the moment, these guys are on doom fantasy crack. Though we are moving into a crisis and risk severe trouble or collapse, nothing is inevitable.

US renewable resources are rapidly developing:

Wind Energy 20 gigawatts. Growth rate: 4+ gigawatts per year (most rapdily growing electricity generating resource in the US).
Solar Energy 2 gigawatts. Growth rate: 1.5 gigawatts first quarter of 2008 (extrapolated to 3 + gigawatts per year).
Biofuel Production: 550,000 barrels per day. Growth rate: approx 150,000 barrels per year.

Despite lack of responsible government action, efficiencies are starting to work their way into the system:

Hybrid vehicles account for 3% of total US vehicle sales in April.
Sales of SUVs and Trucks significantly down.
Sales of fuel efficient automobiles significantly up.
Sales of motorcycles and scooters significantly up.
Registration of electric vehicles becoming a new trend.

Recent break-throughs in battery technology provide rational hope for new electric vehicles in the US in the next few years.

In short, with each passing year, we are better able to withstand the crisis as the renewable economy grows and added efficiencies take out some of the sting. So the slower the crisis evolves the better we will be at dealing with the trouble.

In my opinion, in order for a doomsday collapse to happen, we'll need some kind of severe crash in the world energy system in the next few years. After that point, we're looking at better potentials for dealing with the problem.

I agree with the thrust of much of what you are saying.
However, it does seem likely to me that severe turbulence and/or crash conditions are likely shortly.

The following notes need to be made to the data on resources you give:
Wind energy: For actual average power output due to intermittency you have to reduce the figures you gave to around 0.3% of those installed capacity to find the equivalent of the output form a coal or nuclear plant.
So you end up with a total equivalent generating capacity of around 6GW installed, and an annual increment of around 1.2GW.
It also gets tougher to integrate wind power as it increases in percentages of the grid, and you need larger amounts of either storage or power lines.
This means that it was not the largest incremental power source on the grid last year.
That honour belongs to nuclear power, which through increased efficiency exceeded this.

For solar power the capacity figure is around 0.18 on average for the US, perhaps 0.22 for areas where it is typically being installed, so you end up that the 3GW gives around 0.66GW equivalent

So unfortunately it is very early days for some of the renewables, and we could certainly do with a few years to grow them before they have to take centre stage.

Hi Ron,

"Will the desperately poor revolt when things get really bad".

Oh yeah, they're doing it now. I'm in Toledo, OH, and 'round these parts, the Home Invasion method of earning a living has become a meme that's being swept under the rug around here because of the concommitant panic that would ensue if it was reported in the main stream. Here in T-Town, the cops respond to crime with their lights blazing and their sirens blaring in hopes they scare off the perps so the boys in blue can avoid a possible gun fight. Johm Denver's "Saturday Night in Toledo, Ohio" is a romantic, fading dream now. Edgar Winter's "They Only Come Out At Night" is now our city anthem. And if your stupid enough to hang out when the cops finally do get to the scene, hope yer dressed for football practice, 'cause they don't even take names anymore.

Welcome to the rust-belt...


I believe I did say "when push comes to shove".

For most of history the poor have been at subsistence level. They don't rebel as long as they can eat. It is when they fall below subsistence that the trouble starts. And every major civilization that has fallen has experience some version of the oppressed and hungry revolting. It isn't the only cause. But it has been more significant than you seem to understand.

Hi GM, and may I add one thing for what its worth, many of the future rioterz of the world most likely once had a semi-cozi lifestyle, but since set adrift by current events, well "I used to have a house, used to have a car, used to have a job, used to have a family, used to shower every day, used to have hobbies, used to have a social life, used to have a phone, but now I don't, and it's not mah fault, now gimme somebody ta blame, cause I got nothing left ta loose. "I ain't goin' down alone".
As they say..."eat the rich"...


George - I think you're correct about the poor revolting but I was referring to a scenario of 20 years from now. It will take quite a while (probably over 100 years)for the entire system to crash (if it ever completely does).

Remember that during the depression all of the Rockefellers, Duponts and Rothchilds had their private yachts gassed up and ready for immediate launch from Long Island in the event of a Bolshevik Style revolution. Times were tight for most but it was good for them. The rich will always get by.

As for the poor: "Make us your slaves by all means...but please feed us!"

Remember that during the depression all of the Rockefellers, Duponts and Rothchilds had their private yachts gassed up and ready for immediate launch from Long Island in the event of a Bolshevik Style revolution. Times were tight for most but it was good for them. The rich will always get by.

That's what I was thinking too. I just finished reading the Grapes of Wrath by Steinbeck and what surprised me about it was just how plausible and believable it was (All I know is that rather than exaggerate, he played down the conditions in the workers' camps). He spends several pages in the book describing how the rich became afraid of the poor and a lot of the profits that they made by exploiting the migrant workers in the first place went into buying guns and paying guards, etc. The migrants in the book continually talked about unionizing or organizing and fighting back but had a hard time actually doing that.

Another example is that during the 30 years war, there were some peasant armies or revolts, but usually rather than taking power, these were a result of final desperation after having the peasants had their crops ruined or stolen for the umpteenth time and they either marched or starved. As far as I know, usually these peasant armies didn't fare very well against the well armed, organized and trained mercenary armies that were running roughshod over everything.

My guess is that if we really do get the worst case scenario and TSHTF, it's possible we could see the Grapes of Wrath all over again. Look south from the U.S. border: central america imports food in the best of times, what will happen if they can't afford it? What will happen to the U.S. agriculture industry if the diesel-powered system based on monocultures, fertilizer and pesticide, breaks down? Who knows, maybe the migrants would be treated better this time if human labor does get cheaper than diesel, pesticide and herbicide.

Gwydion - "I just finished reading the Grapes of Wrath by Steinbeck"

That is really timely that you would bring up that particular novel at this time. Steinbeck was labeled a Communist for the publication of that book and it was perhaps the most controversial novel of it's time. According to legend Steinbeck took to the road and lived with the migrant pickers in order to gain an authentic point of view. CA farmers resented the implication that they were less than fair with the migrant workers. The truth was Steinbeck under the urging of his editors significantly tempered that part of the story in order to make it more palatable. It was still quite caustic!

There are a couple of important symbols in the book that are worth noting:

1. The turtle that is dodging traffic on the highway represents the fragility of natural life threatened helplessly by the mechanization of society in the form of cars and trucks.

2. The starving man being fed by the pregnant girl after her baby is stillborn. This gives a glimmer of hope but that hope is populist in nature not in the institutions of govt. or business.

An interesting thing about Steinbeck, he was always more concerned with social and biological systems (an early ecologist) than political systems. He was under constant FBI suveilance. He was denied an Officers commission in WWII because he was "ideologically unfit". Indeed! He also had the courage and integrity to stand up for his friend Arthur Miller when he was being grilled by the House Un-American Activities Committee Trials.

I look forward to the time when being "ideologically unfit" becomes the new Red Badge of Courage.

Thanks for the info. its interesting stuff! One has to wonder if there wasn't the Cold War and the Russians to think about, would there have been such a phobia of socialism in the U.S. or did the cold war provide an excuse to limit socially progressive policies? You look at what Steinbeck wrote, there's no communists in it, only Americans. Furthermore, I don't know how many Russian spies the House Committee on Un-American Activities actually caught, does anyone else? The only one that the wikipedia article lists didn't appear before the committee, he was the vice-chairman, Samual Dickstein. (Yeah, you read that right, I was taken aback as well.)

Gwydion - The U.S. paradigm requires an enemy or a conflict. If it wasn't the Soviets or the N. Koreans it would be somebody else.

I lived in a small city in S. CA for about 10 years called El Segundo. If you ever saw it you would think it's the prettiest little town you've ever seen. It is a total scam. The town is a paranoid military fantasy come to life. Consider that to the north there is LAX, to the east is the largest area of high-tech military contractors in the world, to the south is the Chevron Refinery that makes JP-4 for Jet Aviation and they run the fuel directly via piping under Main St. to LAX, to the west is CAL Edison Power and the Sewer Processing Plant. Go there sometime and look homeless and lost or black and see how long it takes to end up in custody.

The military industrial complex in America will be the last institution to fail.

We are privileged in the fine City of Brockville, Ontario to have had the opportunity to provide the Fuller construction family with substantial tax reductions to create their own fortress on our St. Lawrence River waterfront, along with a marina and docking for their tall ship. If they had any democratic sense, the Fullers would also invest in a merchant sailing school for us peons. Meanwhile, the three-line rail junction to Ottawa, Montreal, and Toronto, languishes six blocks away. I spoke to our Mayor a year ago about the coming crises, and he assured me that the Invisible Hand would save us ...

This enclave idea is nutty.

Rich capitalists require a large consumer class. If society is energy deficient, it cannot support either manufacture or consumption. If there no consumer class, there are no rich capitalists. It's a tautology.

Using Haiti as an enclave example is bullshit. There's no way this society will submit to that system. There will be a lot of dead stockbrokers before we eat mudpies.

The "society" is global-that is the whole point of Globalization-you can throw a lot of Americans down the garbage chute without missing a beat. The global consumer class is expanding every day, just not in the USA.

You are right on.

When the Big Crunch comes, the pain will hardly be evenly spread around. Not by a long shot. Even when (not if) global oil product drops down to 20 million bbl/day, there will still be a small group of the politically/economically privileged being driven around in body-guard driven large SUV-type vehicles. Ditto for air travel.

Think Soviet-era party bosses being driven around the near empty streets of Moscow in their huge ZIL limos (which, interestingly, were essentially '56 Packards, the dies of which were purchased by the USSR after Packard ceased to exist).

Think 'Baby Doc' Duvallier's attractive wife once chartering a Concorde to fly herself and coterie of her rich girlfriends from Haiti to Paris for a weekend shopping spree. Even though this is the country with the lowest per capita income in the Western Hemisphere, they evidently did not hesitate a moment to ponder that such extravagance might be just a bit in bad taste.

Think rich Brazilians in Sao Paulo hiring death squads to 'clean up' their neighborhoods of squatters and other undesirables.

One of the few growth industries I can think of is the private security business. The worse things get for us, the better it gets for them. A totalitarian security apparatus will keep the little people in line (or at least try to), which the privileged attempt go about living more or less as they do today.

In this game of global musical chairs, the seemingly empty remaining chairs have already been spoken for.

And think Mukesh Ambani building a $2 billion house in a city where at least 50% of the population lives in slums with no sanitation.........

And people in the US wonder why Che is an international hero.

The movie, "The Motorcycle Diaries" played very well in places like Palo Alto, California, by the way. Was it rich kids intriqued by the idea of fighting for freedom and ideas, and riding an unsafe vehicle forbidden to them, a motorcycle, the idea of giving one's last pocket money to help lepers, all things forbidden to them, or was it a deeper titillation, the ideas and experiences and motives of those whose class-comrades will be doing their best to kill them in 20 years?

The US needs a Che. Many Che's.

Good G-d, no. The last thing we need when civilization is so strained is a psychopath like Che happily swinging a machete at every last remaining support.

I like things like trial by jury, thankyouverymuch.

That was a great movie. Another one that is worth a look is El Norte if you haven't seen it or even if you have.

It showed people from Nicaragua during the 80's trying to escape the death squads by running to America.

At the beginning of the film it shows people in a grass hut looking at magazines by candlelight. As the camera focuses it shows titles like Good Housekeeping, RedBook and McCalls.

They all want to live like Americans.



How ya doing with your music stuff? Got that harmonica thing sussed yet? How's SF treating you? Just wondrin'. Been doing some jammin myself lately (mandolin), just can't put it on the street yet tho, having been payed for playing (bass) the last 30 yr.s Retired don't ya know. May have to get back out there tho, if I'm gonna eat. ;^))


Joule said;
"One of the few growth industries I can think of is the private security business. The worse things get for us, the better it gets for them. A totalitarian security apparatus will keep the little people in line (or at least try to), which the privileged attempt go about living more or less as they do today."

Read Naomi Klein's piece in Rollingstone to see just how right you are.

This from the article;

"Remember how we’ve always been told that free markets and free people go hand in hand? That was a lie. It turns out that the most efficient delivery system for capitalism is actually a communist-style police state, fortressed with American “homeland security” technologies, pumped up with “war on terror” rhetoric. And the global corporations currently earning superprofits from this social experiment are unlikely to be content if the lucrative new market remains confined to cities such as Shenzhen. Like everything else assembled in China with American parts, Police State 2.0 is ready for export to a neighborhood near you."

Souperman - Haven't read that piece yet. Is it in the current issue?


Joule Wow! That is quite a detailed portrait of the future. I started writing a journal about 4 months ago and I posted it on a web site:


In that I detail what I see happening to that city as it unravels. Check it out!

joemichaels -

Thanks. I very much enjoyed that little riff on Las Vegas. Scary.

I've never had the pleasure of visiting Las Vegas, but it's looking more and more like a bad dream come to life.

I suspect you've probably read Hunter Thompson's book, 'Fear and Loathing in Las Vegas' and/or have seen the movie version starring Johnny Depp. Man, doing Las Vegas while on LSD and an assortment of other controlled substances must be the ultimate bad trip!

I can easily picture some archeologist several thousand years hence stumbling across this grotesque buried city in the middle of the desert and puzzling over what the hell THAT was all about.

joule - Yeah I read all of the books on Vegas. I even met Erica "Fear of flying" Jong in the 70's on book tour at UNLV. She was actually cute then.

The book that is a must read for understanding how American Finance developed and the role Las Vegas played in it is well covered in the following book:

The Money and the Power: The Making of Las Vegas and Its Hold on America

by Sally Denton and Roger Morris (2000)

Las Vegas is wrapped around America like a cancer...the failure of Las Vegas will take a large part of America with it.

That depends on how far we fall. There seems to be a threshold below which there is just not enough surplus energy to support a coordinated and oppressive ruling class. If the general population expends fifty percent of their energy supplying their own needs, then they have fifty percent left over. So for every farmer or herder you could have one craftsman, priest, soldier or politician. If the surplus is ten to one, then for every one food generator, you can support nine ‘others.’ If, on the other hand, the return is closer to one to one, as in subsistence or hunter gatherer societies, then it’s pretty much everyone for themselves. It doesn’t matter how much clout you have, you can’t get blood from a turnip.

After the last plague in Europe, there were so few peasants that the ones remaining could demand better treatment from the ruling class. The back of the feudal farming system was broken, ironically, by fewer peasants, not more.


Although this is utterly trivial, as a Packard fan I have to clear this up.

The 1942 Packard long-wheelbase dies were given to the USSR under Lend-Lease during the war. For some reason Russians, as far back as the Romanovs, always loved Packards. After the war US-USSR trade practically ceased, so the later ZIS (renamed ZIL after de-Stalinization) was simply a visual copy of the 1955-56 Packard.

Although this is less strange than the story of how Kaiser-Fraziers were still being built in Argentina in the 1960s, and circa-1965 Ford Fairlanes could still be had there in the 1980s. Or how prewar Royal Enfield motorcycles continued to be built in India until finally succumbing to smog regulations this year.

Fascinating stuff - thanks for the info

There were still "original" VW Beetles being made new in Mexico until a few years ago, and there's a company in Russia called Ural making (40s 50s?) era BMW motorcycles (from the original BMW production machines).

super390, will Enfield be discontinued ? Their homepage is still alive n' kicking

super390 -

Thanks for correcting my faulty recollection of Packard history. If I understand you correctly, the later ZILs were just knock-offs of the '56 Packards rather than actually produced using real Packard body dies. (No wonder they looked so ugly and so 'Soviet'.)

I too am a Packard lover, but alas have never owned one. However, about a hundred years ago (well, actually 1963) I commuted during my freshman year at engineering school with a guy from my hometown who used two cars: his old man's '47 Packard and his own '57 Hudson, the latter actually being a full-size Nash with a Hudson badge on it. The Packard, though badly worn, was one substantial and high-quality automobile, while the Hudson was a total piece of crap and a disgrace to the real Hudsons of only a few years prior (I once owned a 1950 Hudson).

I was not aware about Kaisers still being built in Argentina. I do know that India once produced a knock-off of the Morris Minor. Now THAT must have been a superbly built car to lust after!

Clearly Halliburton and Blackwater were groomed for this purpose. It was done incompetently, but enough money was fed to the mercenaries to last them for years. So when the GOP is in power, it starts wars to give the Blackwaters blank checks misruling the 3rd world, and when the GOP is out of power it builds up the private police state at the local level. This is why Blackwater is tied to evangelical Christians; the hardliners there have no regard for democracy or the Constitution, and can draw upon a rich Southern-separatist tradition called "the Lost Cause". Laid-off Blackwateristas will get money from mysterious sources to carry out surveillance and sabotage against Democrats, making the state dysfunctional for anyone but the GOP. It worked against Reconstruction, after all. When they get back in power, they will settle matters for good. Or at least that's what they wish. Their ignorance of larger dynamics from the outside world, like their KKK forebears, will trip them up.

super390 -

While certain individuals here at TOD (you know who you are) would dismiss what you've said as just another whacko conspiracy theory, I think you have painted a pretty accurate picture as to where the US may be heading.

I too am totally convinced that Blackwater and their ilk are not merely contractors trying to successfully operate a business. Rather, I view them as an extra-governmental arm supported financially and politically by certain factions within the government, i.e., Blackwater represents people who can 'fix' things that the people in power deem need fixing outside the normal channels. Blackwater may be to the future US as the Gestapo was to the Third Reich, an entity answerable to no one but the Führer. Congress will have absolutely no control over what they do.

When we start seeing Blackwater getting involved in handling 'security' for the government during domestic disturbances or 'terrorist' incidents, then that will be a clear indication that they have become an extra-legal arm of the ruling regime. Katrina was just a preview of the future relationship between the US government and its citizens (correction: 'subjects').

Things are going to get ugly in the US sooner rather than later.

I don't thing the rich psychopaths will survive--
Just ask the French Aristocracy (there aren't many, as 200,000 were slaughtered in the French Revolution)--
Or how about the Romanov's in Russia? Shot in a basement.

As Abby pointed out: "Society is like a stew, you need to stir it on a regular basis, or the scum rises to the top"
The elite almost always end up castrated and swinging from a lamp post.

You know, that's about what happened to nobles before the French Revolution, too. When the noble families fought, the losers were lucky if their surviving sons were exiled and their surviving daughters sent to nunneries. No kidding. Nobility had too many kids to make them nobles in their own manors. Just not enough to go around. A true zero sum society.

Hi joemichaels,
Don't mean to chronically respond to your posts tonight, but they are thought provo'ing. I personally disreguard JHK's time frames. I think "his" time frames are, ultimately unimportant. I think, however, he poses quite the likely outcome. Albeit, via a transition from other social commentarians posits. Ultimately, for a time, I can see America set up just as described in his book. When will that description arrive, how long will it last, doesn't really have relevance imho, I see us living that way for a time. My lifetime ?(I'm 50), I have a strong feeling yes. Our western society may "settle out" and find an equilibrium that may last in a stable state for a generational length of time. We will fall back, tho, imho, into a more primitive way of life. For sure agrarian. Kunstlers "other arrangement" meme. Who knows what comes next, but tech's gonna take a hit, and I think we will loose "knowledge, like we always have thruout human history.
Anyway, I can see a scenario where the elite live in a separate world from the "lumpens". We probably won't know what the other is doing, but we'll be aware of each other nonetheless. I'll take first watch. :-)



Peak Oil Doomsters debunked, end of civilization called off
Fabius Maximus | May 14, 2008

Summary: a brief analysis of Matt Savinar’s Life After the Oil Crash. Are we doomed? Probably not. My title is, of course, fun but absurd. Peak oil is too vast a subject, the range of expert opinion too wide, for any blog post to pose as more than a introduction — showing one perspective of the many possible. Still, I believe this makes a good case for betting that peak oil will not result in depression and war. Please see the conclusion at the end for caveats, and the links at the end for more information.

This guy takes a run at Matt with some backwards logic that doesn't really hold. I think he makes a couple of good points, but misses on most of the analysis and doesn't really debunk peak oil at all. He is not thorough enough to draw any valid conclusions in my estimate and therefore lacks any credibility.

The guy wasn't even interested enough in the subject to spend a few hours researching it (obviously).

Fabius Maximus wrote that a week ago... and it was pushed by Instapundit prominently. Fabius has written several articles on the subject. Sadly Instapundit never seems interested in getting beyond the shallow end of the pool on these topics, and Fabius tends to discount too quickly counter arguments (though he does seem to accept that production flows are important.)

I think it was actually a pretty good debunking of the peak oil doomer viewpoint.

His objective was not to debunk the peak oil theory which he seems to endorse in his conclusions.

We got the war first, now the depression. But the war was a pre-emptive strike by a peak-aware Dick.

Now as to how serious the wars and depression will get, there will be no end to the arguments.

can anyone explain why the u.s hasn't gone all out in helping mexico with its oil-pemex issues?

considering the amount of mexican migration we've absorbed and its financial and social costs you would think america's number one priority should be preventing that country's collapse.

Because Mexico does not want our help, nor do they need our help. Their constitution forbids foreign oil companies from having any interest in Mexico's oil business. If and when Mexico decides they need foreign help, they will change their constitution. When that happens they will get plenty of help. But until that happens there is nothing anyone can do.

Mexico's Oil Dilemma However, Mexico's constitution, which declares that all oil belongs to the state, bars Pemex from signing conventional "risk" contracts with international oil majors that would compensate them in oil or cash for the amount of oil found. Representatives of oil companies in Mexico say it makes little sense for them to invest hundreds of millions of dollars in a joint venture with Pemex and lend their expertise if they would be unable to register proven reserves on their books, as they normally do.

Ron Patterson

What is not clear to me is why they should need our help. Pemex can hire the best independent oil companies in the world (e.g. Schlumberger) without giving up an interest in their fields. I can't understand why anyone would deal with the IOCs any more. Countries should be able to pay a fee for the service they need without surrendering an interest in their oil. I think the IOC's business model is dead, at least not without a lot of help from the US military.

If the gov starts restricting speculators in the oil markets, won't the speculators just offshore to other markets? (cranial/rectal inversion?)

When we really ramp up our importation of refined gasoline and diesel this summer, how will our weak dollar reflect in the price at the pump?

Worse than that. It would reduce the authority of the NYMEX WTI contract as a benchmark for oil and stick our industrial users in a more opaque market for oil.

President Bush was in the oil-rich country Friday to appeal to King Abdullah for greater production to help halt rising gas prices in the United States.

But his national security adviser, Stephen Hadley, says Saudi officials stuck to their position that they already are meeting demand.

Hadley told reporters, "What they're saying to us is ... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy."


That's Arabic for "Go Schtup yourself"

Summon the head of Saudi Aramco and tell him to reduce production another 400,000 b/day. And reduce those discounts to American refiners.


Does anyone believe the Saudis can increase production? I keep reading here and there that they have about 2-3 mb/d spare capacity.

Hi Peak,

I'm starting to wonder myself if it matters what I believe anymore. The guy with the doomzday briefcase rolls in to ksa, and can't sqeeze ksa for a few more drops? What does that tell me? They don't have it, and brifcase guy knows it, so it's window dressing, they got it and are saying F.U to the guy with the briefcase?, or they got it and the guy with the doomzday briefcase knows it, knew it all along, and the king of the desert sands and briefcase guy are orchestratin'...? If I was the king of ksa, and I knew Darth Vader back in the USA was scheming, I'd be pumpin oil outta my mothers you know what if I could. I think it's kahootz myself...just a thought.


Doesn't the photo and the caption say it all?

☺☺"President Bush receives a kiss from Israeli President Shimon Peres, right, as first lady Laura Bush receives a kiss from Israeli Prime Minister Ehud Olmert, second from left, as the Bush's prepare to board Air Force One at Ben Gurion International Airport in Tel Aviv, today."

You think this isn't a slap in the face to the Saudis and other oil producing countires in the region?

Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy


But if KSA priced their oil at 'production cost' + 'reasonable markup' they would not be able to meet demand.

KSA is talking about flows and USA is talking prices - oranges and apples - compromise is impossible, get used to it!

If you live in a 'free' country do not expect the Government to tell you how to live - they pass laws that tell you 'what-not-to-do', they leave 'what-to-do' to you.

How you decide to lead your life is your affair, the Government don't know any more about the future than you, they are reactive, not proactive - do not expect to be led - freedom is the OECD way.

Looks like they changed their mind. What the hell is going on here?


That was fast! I wonder if Bush threatened to call Pres. Hu and have a strategy meeting.

"At Golman Sachs, we believe the price for oil is not defying fundamentals but rather experiencing a structural re-pricing much like it did in 2004, searching for a new equilibrium against an uncertain long-term supply environment".

An uncertain long term supply: Hmmm, sounds so familiar...

Bush might as well be asking for a flock of dodo birds as far as I'm concerned.

As General Sherman said when he confiscated Southern "energy" slaves from their owners; "They can no more have their slaves back than their dead grandfathers."

I found this tidbit interesting. And this is only for bottled water...not sure it includes the various flavored varieties

According to the Pacific Institute’s fact sheet [PDF], manufacturing the 30+ billion plastic water bottles we bought in 2006:

> Required the equivalent of more than 17 million barrels of oil - enough to fuel more than one million vehicles for a year. (Note: This was erroneously reported by the New York Times as 1.5 million, and the error is repeated in many places.)
> Produced more than 2.5 million tons of carbon dioxide.
> Used three times the amount of water in the bottle.


From the "The Peak Oil Crisis: Diesel" story above:

Many observers are starting to note that what they call “a tight market for distillates” –- the industry’s term for diesel and heating oil – may be what is driving up the price of crude and consequently gasoline.

A number of reasons have been floated for why diesel is more expensive than gasoline. The simplest is probably that demand for diesel fuel is higher. Since refining distillates yields gasoline as a "byproduct", it could be that the world is critically short of disel fuel and has a relative glut of gasoline. That would explain why the US is importing gasoline rather than refining it domestically (I would think the US uses proportionately more gasoline than the rest of the world relative to diesel fuel).

If this is true (i.e. shortage of distillate, glut of gasoline), the implications are significant. First, it means US driving habits will have almost no effect on oil prices. Cutting back on gasoline consumption will do little to reduce diesel consumption, and hence little to reduce the price of oil. Second, it probably means there will be some shift from diesel to gasoline, which over time should have a moderating influence on diesel demand. It also means that gasoline is going to stay relatively cheap, at least for a while. Finally, it means people who point to rising gasoline stocks as evidence that there is not an oil shortage are completely missing the significance of it.

Subtle but important distinctions.

They may also help to explain why refineries in the U.S. are operating at less than peak output and why they cannot pass along the higher price they are paying for crude oil to gasoline consumers. This combined with the fall of gasoline usage in the U.S. portends badly for U.S. refiners.

Good catch and interesting hypothesis, shargash. Can we think of any way to prove that or more generally support the thesis?

Story from calculated risk a few days ago. Check out the plot. Looks like oil prices and gasoline prices decoupled in mid 07. I think if you plot diesel prices with oil prices and they haven't decoupled then this would supply some evidence diesel demand is driving oil prices.

They have, but not to the same degree as gasoline prices.

I chose a 20:1 scale for crude prices vs. gas/diesel. They seem to mesh well going back to 1990, except for a few spots in the '90s when a plunging crude oil price would only bring gas/diesel down so far.

It looks like both gasoline and diesel prices have a lot of room to grow even if the oil "bubble" (ha!) is real and contracts a bit.

You beat me to it, but here is what I did with eia data (clickable thumbnail):

Free Image Hosting at www.ImageShack.us

Not sure what to make of this. Although gas and diesel prices are for US/EU. So demand from China, India, etc. could of course be the culprit. But it doesn't look like diesel and gas are in too much of a different place.

My guess is either Oil/Gas/Diesel are out of whack and we are in for some sort of correction or developing countries are now driving oil price.

Why not both? In other words, developing countries are now driving oil price but we are in for a correction on diesel and gasoline prices (which looks like it will be up if the developing countries truly are driving prices).

I meant that if developing countries weren't driving oil then the correction would be in oil prices coming down. That is, oil prices are higher than they should be. If they aren't then, sure, you could be right about a correction upward for products.

The WSJ has an article on diesel today. It's behind a paywall, but as usual, you can get in through Google News. And it might be free later today or tomorrow.

Refiners Tilt to Diesel Over Gasoline

U.S. refiners by now would be moving full-speed to ramp up gasoline production in advance of the summer driving season, but instead they are trying to maximize output of more-profitable diesel fuel.

The global hunger for diesel, coupled with tight refining capacity, has made diesel one of the few bright spots in the refining business, catapulting prices higher than a parallel rise in gasoline.

The other day I asked here about how flexible refiners were in the ratios of gasoline to distillates. Robert replied with some links that I read as saying it wasn't very flexible at all. After reading about that, I'm not sure how refiners would "tilt", unless they were buying oil that yielded more diesel. Do you get more distillates from light oil than heavy?

They can tilt about 5%, but not a whole lot more (but given the size of the refining system, that amounts to several billion gallons). Obviously, at these diesel prices, refiners are maximizing diesel production. You can do that by pushing some of your intermediate cuts into diesel instead of letting it end up in gasoline. But unless you are building a new refinery from the ground up, your hands are pretty tied.

New refinery, or just new crack towers (and increase the capacity to hydrogen treat diesel to make VLSD, if VLSD is the goal) ?

*VERY* loose SWAG, $300 million rebuild for 150,000 b/day refinery ? And likely an extended shutdown.

Best Hopes for More Diesel,


New refinery, or just new crack towers

Not towers, but different types of crackers. Most refineries have a cat cracker, which makes more gasoline. Hydrocrackers are used to make more diesel. There just isn't enough hydrocracker capacity to be able to make a big shift toward diesel.

*VERY* loose SWAG, $300 million rebuild for 150,000 b/day refinery ?

I read your question wrong first. I thought you were asking about building a 150,000 bbl/day refinery. I was going to say that it would be 10 times that number. To put in a hydrocracker and associated equipment. That number was in the ballpark a few years ago, but probably not any more. Of course it depends on a lot of factors, but I would guess double your number.

I asked this question a long time ago, but never seemed to get an answer. The energy content of diesel is higher per gallon than gasoline, and this is one reason for the higher mileage of diesel powered vehicles. Given a barrel of oil, how many gallons of diesel do you get if you tilt the refining in favor of diesel vs how much gasoline do you get if you tilt in favor of gasoline? Is some of the relative efficiency of using diesel due to getting "less" volume per barrel of oil as compared to gasoline and hence not really efficiency at all?

Given a barrel of oil, how many gallons of diesel do you get if you tilt the refining in favor of diesel vs how much gasoline do you get if you tilt in favor of gasoline?

I used to have these numbers in a spreadsheet. It is highly dependent on the particular crude that is being run, but generally 20 gallons of gasoline and 10 of diesel from a barrel of oil is a good rule of thumb. You can only swing that by a gallon or so per barrel in an existing refinery.

Is some of the relative efficiency of using diesel due to getting "less" volume per barrel of oil as compared to gasoline and hence not really efficiency at all?

No, it's due to the nature of the diesel engine, plus the fact that the longer chain carbons in diesel are more energy dense. But it's mostly the engine.

Thanks for the reply Robert.

"It is highly dependent on the particular crude that is being run, "

So with heavier oils in existing refineries, do you get less gas and more diesel, or less of both or neither?

Depends on refinery configuration. With the heavier oils, your primary products end up being a lot heavier. Those products - like gas oil and residuals - need to be further processed. How you process them determines whether you tend to make more gasoline or more diesel, but in the U.S. the tendency of light versus heavy oil would be that heavy oil is going to end up producing more gasoline - because those heavy oils will feed into cat crackers and cokers.

Check the assays in my Assay Essay:


That tells you what you more or less get off of your crude tower, and then further processing is required.

The high mileage of diesel powered cars is mostly due to the engine, I agree, (i.e. spark vs compression ignition) but that is not exactly the question. There is 11% more energy per gallon of diesel compared to a gallon of gas, and the fuel mileage is of course more than 11% better (something like >30%) for roughly the equivalent vehicle.

The actual question is how much a large scale conversion to diesel would save. It should use less, but how much less is not entirely straightforward to calculate, since there is no direct translation between barrel of oil and a variable number of gallons of gas and/or diesel, measured over the entire vehicle fleet.

So much for encouraging people to switch from gasoline fueled vehicles to diesels because diesels are more energy-efficient.

"Just" rebuild a number of US refineries to produce 25% gasoline instead of ~50%. A change in crack towers as I understand.


If this price differential between gasoline and diesel is expected to persist, or even get worse: makes one wonder if a business opportunity exists for Caterpiller or Cummins to make a big gasoline engine for swapping out the truckers' diesel engines.

Of course, that would quickly close the pricing gap, but it might help more people afford heating oil, help keep diesel costs down for the RRs, and additionally, take lots of gas-guzzlers off the roads. Truckers moving food with gasoline is more important than chrome penis owners driving aimlessly around in full peacock plumage display mode.

They may not have to pay the high costs of cellulosic ethanol if they switch to diesel.


Screw that diesel sh*t right now and forever. I live in an urban environment, and every time a diesel bus goes by the main artery I live on, followed by a diesel walMart delivery semi or 2, and I have to cover my face till the fumes rise up into the 'sphere. No, diesel is good how? Better mileage / v / sh8tty emisions? Are you telling me diesel burns cleaner than what? Lock yourself in a garage with a diesel anything running. Have your twin locked in a garage with a '69 Chevy Nova running. You'll die before your twin.


Virtually every piece of Farm machinery runs on Diesel. No Diesel no food. its that simple

While biofuels as a wide-scale solution have been justly beaten up here, I continue to assert that small-scale growing of biodiesel feedstock crops and the processing thereof into biodiesel right on the farm using low-tech appropriate technologies is quite feasible. This can all be done with the dedication of no more than 5-10% of crop land to biodiesel production. I think it quite ludicrous that farmers everywhere are just going to let their machinery go idle and starve when they have it within their means to grow sufficient fuel right on their farms to keep the macninery running.

I don't know if it will have to come to this, but I do know that worrying about farm equipment being idled for lack of fuel is an utterly needless and silly worry. We have a lot more things that are real and serious worries.

Actually Jeff, no, your twin will die first. The gasoline powered Nova produces much more CO than the diesel car. The diesel certainly smells worse though due to the soot, I'll give you that. But that's not even the case anymore with the new diesels. A neighbor has an '08 Ford truck with the diesel, and the exhaust just has an odd and not unpleasant odor sort of like popcorn. Zero visible exhaust smoke too, the downside of course being that all the new emissions controls have seriously reduced fuel mileage on the new vehicles.

Barrett open Zero Carbon House

Its new kind of concrete walls and floors, combined with super insulation and triple-glazed windows makes it airtight, meaning the requirement for heating is minimal. Fresh air entering the passes through a heat exchanger, which transfers the heat from the outgoing stale air and puts it back into the house. A rainwater harvesting system collects water for use in flushing toilets.

House builders in the UK will be forced by government legislation to build only zero-carbon houses from 2016 onwards but, given the long lead times in the industry, they are already trying to meet that target.

Barratt plans to roll out its zero-carbon homes on the site of Hanham Hall hospital near Bristol. It will build 200 of them, a third of which will be affordable by lower income buyers. All will be code level 6 and will completed in 2011, five years ahead of the 2016 deadline.

The Barratt house makes no use of gas. The air-source heat pump is powered by electricity produced over the year by the solar photovoltaic cells on the roof. Hot water comes mainly from a solar thermal panel on the roof, backed up in winter by the heat pump. Automatic shutters slide across the windows to prevent the house getting too hot in the summer, although you can manually override them.


Picture and more details here:

Hanham Hall is near me - I will go and have a look when they are built.

... and the cost? ... is it competitive with existing houses? New houses near me are being offered with 0% finance for two years and still don't sell!

Houses in the UK aren't selling well either, but population pressure perhaps supports demand more than in the US.
The only price link I could find said it added 10% to costs, but does not make clear 10% of what:

A lot of that is probably the PV panel, which at this latitude are a darn expensive way of not getting a lot of output in the winter.

Here in the US the award winning design is ..


Hello TODers,

From Ethanol Producer Magazine:

Perfect Storm for Fertilizer Prices

It isn’t only grain prices that are skyrocketing these days. Prices for all three major plant nutrients—nitrogen, phosphate and potash—have climbed dramatically, as well.
Also, consider the thirteenfold increase in sulphur pricing--lots of sulphuric acid is used in ethanol mfg.

As the net energy from FFs decreases and ELM hammers home: IMO, I think people will be shocked at the rising percentage of this ever-decreasing energy that will be directed to maintain NPK global flowrates. Remember: No Substitutes exist for NPK to leverage plant growth; it is a conversion process-- pouring crude oil on topsoil won't help-- we have no choice but to mine, process, and move I-NPK and O-NPK globally.

As posted before: the earlier Guano Wars will be nothing compared to the coming NPK wars.

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

"Also, consider the thirteenfold increase in sulphur pricing--lots of sulphuric acid is used in ethanol mfg."

Processing of sheet steel, used in vehicles, appliances, building ventilation systems, and machinery, also requires sulphuric acid. Steel prices have more than doubled in the last couple of years, partly because of the price of sulphuric and also the cost of coking coal. So sulphur, another comodity, affects the price of many things beside fertilizer.

Hello Mbnewtrain,

Thxs for responding with good points. Yep, there is no doubt that sulfur and sulfuric acid is a huge market, used in practically every process including water purification. But the USGS sulfur PDFs, and other links I have posted before, say that the predominant use is in fertilizer; more specifically for the beneficiation of phosphate rock into activated-P such as DAP, MAP, etc.

What I found interesting is the prior posted weblinks that say: the application of smokestack scrubbers to reduce acid rain are now so successful in some areas that the area farmers now need to buy sulfur-based fertilizers for their topsoils.

Anyone know what the current Yergin prediction is? In 2002(?), didn't he say that $20/bbl was the norm for the foreseeable future. He was correct, if you assume that he just forgot to write the 1 in front of that $20.

I liked the post that Prof. Goose did earlier this year on Yergin and CERA, and haven't been following the drumbeats or oildrum very often since then. Maybe I missed a good update?

I'll hazard a guess and say that Yergin/CERA is predicting that the current price ($127) "is not supported by the fundamentals". ;-)

Yergin is now predicting $150, I believe. This year.

It caused considerable debate in a previous DrumBeat. What does this mean for the yergin? Does this mean we now have a "new yergin" and an "old yergin"?

If Yergin's track record holds up, his prediction of $150 would imply a $300/bbl price by year end. Shades of Matt Simmons... :)

Wow! Being so far off in his predictions - for so many years - seems to have [finally] impacted his thinking.

"It's not that the genie is out of the bottle -- it's that 100 genies are out of the bottle," said Daniel Yergin, chairman of Cambridge Energy Research Associates. Normally known for optimistic forecasts of lowering oil prices, Mr. Yergin's firm now says the price could rise to $150 a barrel this year.

Thanks, Leanan.

Based on all of his other predictions, I'm tempted to think that oil prices will start dropping now that he thinks they will go up to $150 this year.

Then again, I'm not that tempted. ;-)

As he has been consistently wrong on the low side for quite a while, I have to wonder if a Yerign call for $150 a barrel oil really means oil in the $200 a barrel range or more.

It's absolute fun to trash Yergin (and Steve Forbes, and John Tierney of NY Times, and Peter Huber and ...) but really folks, Yergin has been thoroughly discredited and is irrelevant. The debate is over. Peak Oil is here or very near to here. We've had our "we told you so" moment. Now it's time to move on.

Peak Oil is here. What do we do about it?

1. Let the market work its magic?
2. Go to KSA and beg for more? (oops, it's been done and didn't work)
3. Government subsidized nuclear?
4. Government subsidized ethanol? (oops, it's been done and didn't work)
5. Government subsidized solar?
6. Government subsidized wind?
7. Government subsidized ocean waves?
8. Other ideas?

Conservation, insulation, residential solar thermal, air heat pumps, electricity legislation altered to align with some of the measures in California so that they make money by saving energy, new zoning laws to encourage mixed neighbourhoods with work close by and walking access to necessities...the list goes on with simple measures which would cost little.
Stop doing stupid things before you start trying to do clever things.

Last night I got invited to a dinner that was hosted by my financial adviser, and the guest speaker was a guy who works for a commodity fund. My financial knows me well enough to know I have a particular interest in commodities (such as oil), so he had me seated next to the guy at the dinner part of the evening, so we could chat a lot more.

The general question of the evening was whether there is a commodity bubble or not. And for the most part, his feeling was that there may be some speculation here and there, and that the low prices we had a few years ago are unlikely to return. The thing that was interesting was that I didn't really disagree that much with what the guy was saying. He agreed with me that corn ethanol was a horrible idea - driven mainly by farmer subsidies. He agreed with me that KSA probably can't increase production to drive the price down.

The one area of disagreement that we had was in relation to coal. He trotted out the "300 years" thing - I called him on it, and suggested that peak coal could come a *lot* sooner than most people would expect, but he said that they disagreed with this.

To be fair, the guy wasn't really in favor of CTL or any such technology - really for environmental reasons. In the same way he said he was opposed to ethanol in part because of the food vs fuel problem. In his position however, the market acts based upon where the money is - it takes government to guide the process if there are certain outcomes that are more desirable than others.

Before the whole room, he talked about such things as how many barrels of oil it takes to raise a calf. Asked whether anyone had solar cells on their roof.

And in terms of government, he was of the opinion that what we have now is so corrupted by lobbyists and special interests that what we really need is someone to come in and do a top-to-bottom housecleaning.

And that in private conversation he was willing to go a lot further than he was willing to go when he was speaking in front of the whole room. In my view he was sugarcoating it like crazy so as to not spook people, so nothing he had to say in front of the room was very profound (at least to me). Yet at the end of the evening as others were leaving, they thanked him for a "sobering assessment".

A Cool Trick for Solar Cells


Staying cool: A liquid metal cooling system developed by IBM could help allow concentrated photovoltaic cells to have more solar energy focused on them. As a result, more electricity could be produced without vaporizing the cells. By employing a trick normally used to cool high-performance computer chips, IBM researchers have found a way to make concentrated photovoltaic cells that are more efficient in converting the sun's energy into electricity.

Unfortunately, for some weird inscrutable IBM reason, in a move which may become as infamous as Xerox's decision not to develop their computer interface, it appears that IBM intends to do nothing at all with the technology.

It may, however, lend greater credence to the efforts of Sunrgi, which plans what looks like a similar concentrated PV system:

Arguably the biggest breakthrough for Sunrgi is in the area of heat management, which is essential to any concentrated photovoltaic system. The intense heat created by concentrating the sun so much can reduce both the efficiency and the life of the solar cell. At 2,000 times sun concentration, temperatures can exceed 1800 °C--similar to the heat from an acetylene torch, and hot enough to melt the solar cell.

connected to the bottom of each cell is a small fluid-filled chamber that acts as a heat sink. Murthy says that the fluid contains high-temperature composites and nanomaterials that rapidly remove the heat from the cells. This "super cooling" allows the cells to stay cool enough to work, about 10 to 20 °C above ambient temperatures. Murthy won't say what materials are in the fluid. "It's our secret."

Electronics engineer Thomas Forrester, another founding partner at Sunrgi, says that the chamber isn't filled with much: "We're talking as little as drops of liquid." But it's enough, he says, to absorb the heat and move it to another part of the cell so that it can dissipate rapidly into the environment.


They are aiming for $0.05Kwh, which would be sensational if they hit it.
Installations should also be very compact.

Many in the industry are sceptical.

There is every reason to be skeptical. The article mentions a few points, including this:

Concentrated photovoltaic systems need direct sunlight to work, meaning that they must be designed to track the sun through the day. Fafard says that Sunrgi's system, at 2,000 times concentration, will need to use tracking with pinpoint accuracy to keep the light focused on the tiny solar cells. He compares it to looking at a star through a telescope: the higher the magnification, the more accuracy is required to keep the star within view of the lens.

Take a look at the second figure, which shows several of the cells grouped in a linear fashion. That's not two axis tracking, which adds complexity and increases the effective cost of the collectors. Furthermore, consider the cost of the lenses that do the concentrating (which are likely to be made of acrylic plastic) and the cost of the heat finned heat sink on the back (made of aluminum). There's really no need for that 2,000x concentration, a concentration of 100x would do just as well as it would reduce the cost of the PV section of the modules by 100 when compared with 1x illumination with traditional PV arrays.

Besides, these guys are wasting all that left over thermal energy. If they used water cooling, that energy could be harvested instead of dumped into the air. All that's been obvious for more than 30 years, but, hey, this is NEW (read new hype) technology...

E. Swanson


Front month up $1.91 to $126

DEC 2012 up $5.06 to $125!!!!!!!!!!!!!!!!!!!!!!

The race is on.

Leafing through the local paper today I came across some promising stories:

Stop the Madness of Building Roads

So, you say, if the municipal government doesn't build roads or widen them, how will people get to work? I have confidence that Ottawa residents will find a way to get to the place where they support themselves, that allows them to buy their food and raise their children. Ottawans will get smarter because they won't have a choice.

Transit plan flexible: manager

With the city's transit ridership growing at rates unseen for years and the price of fuel marching ever upward, planning officials are making sure construction of a proposed city-wide light-rail system can be accelerated and expanded if needed and that the money to do so is available.

I'll believe it when I see it, but that's unheard of clarity of vision from city council.

The heart of the 'tribe'

It may happen after one year, or 10.

One day, you live in a house, on a street, in a space you call home, within borders you call property. And the next, you are part of a tribe -- a fairly small one -- a clan made up of neighbours. Your news -- death, divorce, renos, a new car, a new baby, a new dog -- becomes theirs, and theirs, yours.

You can't live in isolation anymore. Your life is now extended.

There is NO doubt in my mind that the Ottawa Citizen City Section staff all got copies of World Made By Hand. Some see Kunstler as a gloom and doomer, but I've always seen (to paraphrase Thomas Homer-Dixon) the upside of his down. I also quite liked Darwinian's "the only thing worse than peak oil is no peak oil" from the other day.

In the area of Bristol where i live it is not too difficult to imagine any outsiders being ruthlessly slaughtered, by which I mean anyone living more than a mile away, and heads being placed on stakes to warn off the other tribes.

Heads apart, not much change to now.

The 'tribe' article (if you didn't read it) was actually a heartwarming obituary about a guy who was the consummate good neighbour.

We are in the midst of the Tulip Festival here in Ottawa and we've had a whole bunch of speakers here, including JHK, Jared Diamond, et al, and I think they've really done a number on our 'newspapermen,' for the better. We still have some absolute wingnut lunatics writing for the paper (who get full-body, colour photos of themselves printed on the weekends), but I'm hoping our 'paper of record' can continue it's recent progressive slant in spite of it's wildly conservative, wingnut-laden parent company... once owned by LORD Conrad Black (Canada tried to kick him out when he accepted his Lordship).

Guess your not in Clifton then eh? Or maybe you are and the locals have a new sport to replace chasing foxes!

Here's a funny one. Someone on one of the bicycling forums found this.

Let's make Phoenix an automobile haven

May. 15, 2008 12:00 AM
Does every major city in the United States have to follow the socialist central planner's edict that we all must live in a high-density area and take mass transit?

Besides the fact that it is an incredibly stupid and inefficient idea to force travelers into these 19th-century modes of travel such as rail, most people prefer the independence that the automobile brings. This independence is, of course, exactly what the central planners cannot allow because it removes the traveler from their control. (Mass transit is an especially wasteful idea in a low-density metropolitan area like Phoenix.)

Why not retain at least one major city in America that is friendly to the automobile? Let's build adequate freeways and city streets and parking and tell the world that we are proud of our independence and that we want to be known the world over as a city that believes in individual liberty. Let's broadcast the message that if you like to drive your car, Phoenix will welcome you. - Roy Miller,Phoenix

Hello Ericy,

I would prefer that my Asphalt Wonderland would broadcast our likely parched wasteland message:


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

Yes, if only ONE city in America could remain car friendly. Is that too much to ask? S85.

Besides the basic reason, I find the BBC story about how we're killing every living thing on the planet troubling because they actually feel the need to point out that it's NOT, to quote Martha Stewart, 'a good thing.'

The charity also warned that a failure to stop biodiversity loss would have a direct impact on humans.

Is it not screamingly obvious that killing off every other organism on the planet is bad?

I was heartened to see that the CBC (Canadian version of BBC) omitted that little tidbit from their version of the article, but that really put me in a foul mood last night when I first saw it.

Don't worry, genetic engineering will solve everything. Just give Mondiablo enough money and they'll set their evil scientists to the task. The World will be repopulated with a multitude of creatures'n'things, knocked together from old bits of genetic material from all over the place. Everything will be as good as new(ish)!

The added benefit is that we can then use all the World's organic matter to make green bio-fuel so humans can drive around and make-believe they're busy doing important things.

ps. I wish they'd hurry up with that new line of fire and hurricane resistant wheat that will grow under salt water or on bare rock. It might come in useful....

Watching CNN yesterday proved to me that most people don't get it. Jack Cafferty asked the simple question of whether it made sense to reduce the speed limit to 55MPH to save gas, and the vast majority of the responses were negative. Check them out at The Cafferty File for 5-15-2008.

Additionally, the misinformation out there is increasing. A group of conservative Christians launched an effort to get one million people to sign a petition stating that they don't want anything done to stop global warming.

The joke is, I'm not joking. From The Christian Post:

While it may seem like everyone believes in global warming and the impending catastrophe it will bring, a group of conservative Christians countered that message Thursday by launching a national campaign to gather one million signatures for a statement that says Christians must not believe in all the hype about global warming.

Why must these people scare me so with their selfishness and ignorance?


Moreover, why is our faith-based President down on his knee today in front of a Muslim king, kissing the ring and begging for more oil?

Shouldn't he be in a Christian church, down on his knees in a pew and praying to the true Lord to let loose a gusher of oil in the Heartland of our God-blessed country?

BTW: the Muslim king said, "no".
No word yet from the Lord.

Just to scare you more...you should read this congressman's speech he made the other day in the House.


While I don't disagree with him on everything he says...it is the voice of many on the conservative front..that GW is more alarmist than real.

Rohrabacher's speech is an amazing amalgamation of all the current denialist crap. He repeats many of the distortions from the right wingnuts, in ways which make his claims seem valid. He starts with the claim that the idea of AGE is a "theory" and that (taking the common meaning of the word theory) the problem can be dismissed as AGW isn't proven. I can't begin to list all the errors in science he throws out, errors he should not be making as he claims to have chaired the subcommittee on Research and Science Education. It's really scary that this guy is so uninformed, or so capable of lying if he does understand.

Maybe he says it best:

I'm sorry, fellows. Do you really think the world is filled with morons?

Actually, scientific research has more-or-less confirmed that there is a considerable lack of understanding of science in the U.S. So, yes, scientists probably do think the world is full of morons as that's what the data shows. Many of those "morons" are suffering from delusions they acquired as part of their religion, especially the Young Earth Creationists.

E. Swanson

Hi DadlyEdly! Glad to see you posting here. :o)

Maybe a two-tiered speed-limit system on the nation's highways:

Max 60 mph for electrics ("ZEV")
Max 45 mph for ICE

Might encourage people migrate away from ICE.

Ah, I do realize that such a system has a snowball's chance in Hell, but, it's an interesting idea.


Wolf of Epona fame.

Actually it is not too far from what is happening in London.
I haven't followed the latest details with the change of mayor, but the plan was to not make EV's pay the congestion charge, which can be up to £25 per day, and to allow them access to priority lanes.

Taxis and delivery vehicles are also going EV in some numbers - it would not surprise me to see ICC's for those purposes banned in due course.

Here's the taxi news:
Green Car Congress: Manganese Bronze and Tanfield to Produce Electric London Taxis by 2009

Here's the delivery vehicles (or some of them!)
J Sainsbury plc : Responsibility : Case studies : Case studies - Environment

The big 12 ton job by the same people who are building them for Sainsbury's are going to America too:
English electric trucks heading to America | Diesel Progress North American Edition | Find Articles at BNET.com

I've been posting here intermittently since you told me about it. Finals over yet? :D

I rather like your system. The main problem either way is enforcement. That was the main argument against the move in comments to Cafferty's blog. While I agree that the 55 MPH speed limit wasn't enforced in the past, I think there might be enough of a push now to make it work.

Besides, if you really want to get worse MPG, you will pay more for it. Perhaps that will get people to slow down.

Take care Wolf!


Brilliant summary worth reading:

Peak oil: Alive and well


I agree ....

Sent it to my children's school teachers , who have been telling them that we have plenty of oil. Seemed to be a non threating article. I wonder if I will get a response ?

Oil prices closed at a new all time high today, $126.29. Interesting that the December 2015 contract closed only 35 cents below the near term contract at $125.94. While the near term, (June) contract was up $2.17 the December 2015 contract was up $5.29. The further out the contract the higher the gain today.

NYMEX Crude Oil (Light)

Ron Patterson

Goldman Sachs said a few weeks ago in their study that oil would hit $200 per barrel by 2010. That's less than $75 more than it is now. Is it possible that we'll hit that price point much sooner? How ready are we for $7-$8 per gallon gas?

I gotta wonder...


[Note: I originally said "$7-$8 per gallon oil". I meant gas and edited the post to reflect that.]

$200 oil is $4.76 per gallon. add 75 to 80 cents for taxes, refining and distribution and you have gas for $5.60 per gallon at the pump.

24 cents/gallon for crack spread is $10/barrel.

$200 oil is very real maybe this year.

I actually didn't come up with the $7-$8 gas from $200 per barrel estimate. That was from the Goldman Sachs report. Your estimate seems better to me. Mind if I use it in the future?

Yes, it seems the speculators are grasping future reality.

Beating the Energy Efficiency Paradox (Part II)


We must also change the way we supply the world's energy. Here there is a huge opportunity for bringing up to scale the advancements in wind and solar power that are happening all the time. We can also take much better advantage of small, distributed power sources -- such as plug-in hybrid vehicles and on-site cogeneration -- in the evolution of the electrical grid. In combination, renewable and distributed power sources can meet the increasing demand for energy worldwide without resulting in rapidly escalating greenhouse gas emissions. Taken together, radical resource productivity and renewable energy supplies bypass the global rebound effect created by development. They are, in fact, a primary means of using technology to create sustainable development.

Indonesia is planning to reverse a period of declining production this year with the start up of numerous new fields:


There is currently more money available for oil field finding and development. Indonesia may not be capable of exporting oil this year. It is not yet certain whether or not they will push their new field developments to the point of being able to export oil again.

Excellent article on the cost of Steel and its direct connection with the price of oil. My wife is a professional sculptor and we've observed first hand the price of bronze going up over the past five years. Due of course in great part to the industrialization of China, a voracious and ever increasing consumer of steel for new construction. I wonder how much of that steel went into the Three Gorges Damn.

In any case, when oil started going up and we heard it was due to increased demand from China, my wife and I were not surprised. Really scary though to think about how this will play out. Its 'Crunch Time' alright.

I just got done watching Kudlow talk about Oil with his guests. He was wild eyed as he spoke, advocating the deflation of the asset bubble and praising the decision to stop filling the SPR.

Just my gut, but I get afraid when I see this type of rabid rhetoric.

Advocating the deflation of the Commodity by the Fed action would have the appearance of throwing gas on a fire. With the suburbs crashing, we need more positive feed back loops for a lower energy way of life. Drilling in the Arctic and the Continental Shelf are sure solutions, but nary a mention of a long term strategy dealing with declining cheap energy. New York is scary.

Irrational behavior in the face of all the evidence:

V8 car sales in Australia are increasing, apparently because buyers want to get in before the price of petrol goes even higher.

One in five Holdens sold last year was a V8 - the highest annual V8 sales in the company's history.

Until recently, car makers have not understood why V8 sales have increased as the cost of petrol has risen, but a glance in the rear-view mirror provided a clue.

When Ford announced it would axe the V8 Falcon in 1982, the company built enough V8s to last two years - but sold out of them in six months.

"We now believe there is an element of people getting in before petrol runs out, or it becomes so insanely expensive they'll never be able to afford it," said the head of Holden Special Vehicles, Scott Grant.


Or maybe to some people, its completely rational. i dunno...

I think it's rational, and not necessarily bad news.

Kinda like people rushing to order drinks when they know closing time is near. At least they know the bar is closing.

Maybe I should have bought an SUV after all.


More comfortable to live in...

They seemed pretty stoic about it, but it must be unpleasant to be older and homeless.

On the other hand, if you were young, I could imagine it might even be a little fun, a little liberating. If you had no debt, rent/mortgage, or utilities to pay, you could easily live off a hundred to a few hundred dollars a month. If you had a little bit of savings, you could live bohemian style for quite awhile.

From the Reuters story

"We think that the supply situation in 2009 and 2010 is looking increasingly bleak," he said, adding that poor growth in non-OPEC supplies was mainly to blame.

Peace in Iraq, which could potentially bring up to 6 million bpd of additional capacity into the market, was the only hope to bring prices down, Guinness said.

If Iraq is our only hope we are going down in flames!