DrumBeat: May 18, 2008

In Siberia, Shopping Malls Are Sprouting All Over

Siberia, where Russians waited in long lines to buy food with ration cards not long ago, is the improbable epicenter of a huge mall boom. As retail businesses shrink in the United States, provincial Russian towns like this one have become targets of retailers and shopping center developers from around the world. Malls in this area are even poaching managers from as far away as California.

Across the great expanse of Russia — on plots cleared of birch groves and decrepit factories, on the territory of old airports and collective farms — big-box stores are rising at a rate of several a month. Russia is projected to open twice as much mall space as any other European country this year, and Europe will open more shopping centers this year than ever.

Energy seeks a boom in youth

Finding young scientific and engineering talent also is a growing concern for the world's energy companies as they face what Chevron Corp. calls the "big crew change."

During the next decade, more than half of the energy industry's employees are expected to retire, said Peter Robinson, vice chairman of Chevron, who was in Houston this spring to give a speech at Microsoft's Global Energy Forum.

World’s Poor Pay Price as Crop Research Is Cut

The budgets of institutions that delivered the world from famine in the 1970s, including the rice institute, have stagnated or fallen, even as the problems they were trying to solve became harder.

California farm product exporters face shipping squeeze

As the weak dollar makes the fruits of California farms ever more attractive to overseas buyers, big exporters like Sacramento's Blue Diamond Growers are finding it tougher to get their products to far-off customers.

The high price of oil and shifts in the global balance of trade have made space on container ships hard to come by. Cargo rates are up sharply. Delays of several months have become routine.

Hezbollah’s Actions Ignite Sectarian Fuse in Lebanon

After almost a week of street battles that left scores dead and threatened to push the country into open war, long-simmering Sunni-Shiite tensions here have sharply worsened, in an ominous echo of the civil conflict in Iraq.

Juneau's utility faces consequences of past actions

AEL&P was operating close to the edge financially even before a series of avalanches took down a series of transmission lines feeding power to Juneau.

With the loss of the Snettisham hydroelectric project's 78,299 kilowatts of power, the company - and the city - were left to rely on the few thousand kilowatts it could squeeze out of three old, small power dams and several big diesel generators. And suddenly, diesel had become frighteningly expensive.

Govt in no mood to revise fuel price: Finance Minister

KATHMANDU - At a time when the country is reeling under the shortage of petroleum products, Finance Minister Dr Ram Sharan Mahat Sunday announced that the government was not in a position to revise the fuel price.

Minister Mahat also informed that the government cannot extend more loans to the cash-strapped Nepal Oil Corporation for the time being.

Chávez Seizes Greater Economic Power

CARACAS, Venezuela — Faced with shortages of foods, building materials and other staples, President Hugo Chávez is intensifying state control of the Venezuelan economy through a new wave of takeovers of private companies and the creation of government-controlled ventures with allies like Cuba and Iran.

To teens in the first decade of the 21st century

A university degree is not the best choice for a significant number of young people. They and society at large would be better served in other pursuits.

Peter Drucker (1909-2005), was one of the world's wisest men on topics related to business, economics, and the future. A university professor himself, Drucker in 1997 predicted the demise of the residential college campus within 30 years (by the year 2027).

Los Angeles Eyes Sewage as a Source of Water

LOS ANGELES — Faced with a persistent drought and the threat of tighter water supplies, Los Angeles plans to begin using heavily cleansed sewage to increase drinking water supplies, joining a growing number of cities considering similar measures.

Germany Debates Subsidies for Solar Industry

Now, though, with so many solar panels on so many rooftops, critics say Germany has too much of a good thing — even in a time of record oil prices. Conservative lawmakers, in particular, want to pare back generous government incentives that support solar development. They say solar generation is growing so fast that it threatens to overburden consumers with high electricity bills.

The Simple Way To PoP The Oil Bubble Speculation

What is the simple answer to end the craziness?

The USA government should pass a law that declares every oil contact bought on the mercantile exchanges must be delivered to the buyer and held in storage no longer that 6 months. It cannot be traded back onto the exchanges and its end use must be in an oil related business. Likewise, all sell contacts have to originate straight from companies that extract oil from the ground and they cannot trade contacts that have been purchased on the exchanges.

Legendary oilman says it's time to go green

"Three hundred dollar a barrel oil is where I think we are going," Thomas Homer-Dixon said Thursday night in Petrolia, Ont. -- the birthplace of the North American oil industry 150 years ago, in 1858.

This pundit is immersed in oil data

Tom Kloza, chief analyst for the Oil Price Information Service, is the go-to guy for those who want to know why gasoline prices are soaring and where they're heading.

Can Stephen Harper learn anything from Vladimir Putin?

Whereas Canadian Prime Minister Stephen Harper is eager to allow the private sector to control this country's energy future, Putin went in the exact opposite direction.

Reading Klare's work, it's clear that Putin never would have allowed the Chinese and the Americans to engage in a bidding war for Russia's bountiful oil and gas reserves.

Harper, on the other hand, doesn't seem to have the same concerns.

Growing pains for farmers

It's a crazy time for farmers, torn among environmental interests, the demand for cheap food and a chance to earn more.

Concerns about pipeline were ignored, inspectors say

Three former inspectors on the western portion of the Colorado-to-Ohio Rockies Express natural gas pipeline said a contractor on the project in Kansas used stealth, threats and bribery to make safety shortcuts while they hustled to get the pipe in the ground on deadline.

Pedal power beats $4 a gallon

"With the train, I have to walk 20 minutes to get to the train, it's 30 minutes on the train, and then I have to wait for the shuttle here," he said. "It ends up being about an hour. The bike takes an hour-and-a-quarter, but then I don't have to go to the gym."

Besides the health benefits, bicycling advocates say the potential savings for regular riders may be driving more people to consider a two-wheeled commute.

Coal, new gas to help avert crisis

What should Bangladesh do when oil price hits a $200 per barrel mark?

Russian Energy and U.S. Implications

Lost in a lot of the oil analysis these days is Russia's role. Over the past 5 years or so, Russia has provided roughly 80% of non-OPEC oil production growth. This increase in Russia's oil production was just what the doctor ordered to match concurrent increased demand from China, India, the Middle East, and Russia itself.

That said, Russia's oil production peaked a few months ago and is now contracting - under the 10 million BPD average production rate of 2007. One can find multiple explanations for the decrease in Russian oil production: aging infrastructure, less Western oil company participation, high tax rates, or perhaps just Russian government officials asking themselves. Or perhaps depletion rates are catching up with new production.

Australia: Fears over state's food security

VICTORIA'S ability to feed itself is threatened by new farming practices and cheap imported fruit and vegetables, warns a major food report commissioned by the State Government.

Competition for water and increased fuel costs are driving farmers away from essential food production to high-value export-oriented crops such as wine, almonds and dairy.

The Secure and Sustainable Food Systems for Victoria report said food supply problems were so severe that consumers' access to affordable, healthy diets was jeopardised.

No need for emergency OPEC meeting: Attiyah

DUBAI • Oil markets are balanced and there is no need for an emergency OPEC meeting before September despite record oil prices, Qatar’s Deputy Prime Minister and Minister of Energy and Industry H E Abdullah bin Hamad Al Attiyah said yesterday.

Iran sees daily gasoline imports of 20m liters

TEHRAN: Iran expects to import about 20 million liters of gasoline per day during the 2008-9 year, less than half the amount it would have imported had it not launched rationing last June, an energy official said yesterday. But the figure was still 5 million liters higher than an import estimate given by another oil official in February, before Iran allowed the sale of extra, higher-priced gasoline outside the rationing system launched in June last year.

Oman to invest $10bn in oil production

Oman is investing $10bn until 2011 in a programme to boost oil production. By using enhanced oil recovery – using gas to pump out additional crude – the country believes it can hit 900,000 barrels a day.

A big cause of the high price of gasoline

Here is a test question for you: The next time you find yourself irritated by the price of gasoline, you need to remind yourself of how much -- or little -- of that nearly $4 per gallon charge is the oil company's profit. How much is that profit, anyway?

Record oil may hold stocks hostage

NEW YORK (Reuters) - Stocks will face major obstacles to extending their gains next week if the price of oil continues to break records, as fears about inflation and the discretionary spending power of the embattled American consumer are forced into the spotlight.

When cars compete with people for food

Crude oil prices hit $120 a barrel this month, translating into gas pump prices above $4 a gallon in parts of the United States. As a result, the rallying cry of energy self-sufficiency is gaining strength, reinforcing the U.S. policy of promoting renewable fuels, particularly corn-based ethanol, to reduce dependence on imported oil.

But a different rallying cry - food self-sufficiency - is becoming louder in many developing countries where rice, wheat and other staples are in such short supply that food riots have erupted. China, India, Argentina and several other countries have raised export restrictions on key crops to ensure food supplies for their consumers. That move has further increased world prices.

Iran confirms Khatibi as new OPEC governor

TEHRAN (Reuters) - Iran has officially announced the replacement of its long-time governor to the Organization of the Petroleum Exporting Countries (OPEC), the Oil Ministry's website Shana said on Sunday.

Four bucks a gallon is no gas

"If you extrapolate what happened with gas prices the last two years over the next 10 to 15 years, something has got to happen." Mast said. "We've laid our country out - where we live and where we work - based on the automobile and cheap gas."

Mast said consumers better get used to the term "peak oil" - the moment when oil production reaches its highest point and begins to decline because all petroleum sources have been tapped.

An emerging energy apartheid?

Our contention in 2000 is the same as today: It is poorer communities and families that can least afford to waste energy. Our agencies, churches, public schools and homes are the first to feel the effects of quadrupling energy prices, causing us to make the hard choices between heat, food, gasoline to power older cars to get back and forth to lower-paying jobs, and the important civic and educational uplift programs we need to survive in an increasing hostile economy.

Was Malthus just off a few decades?

There are some 75 million more people to feed each year! Consumption of meat and other high-quality foods — mainly in China and India — has boosted demand for grain for animal feed. Poor harvests due to bad weather in this country and elsewhere have contributed. High energy prices are adding to the pressures as some arable land is converted from growing food crops to biofuel crops and making it more expensive to ship the food that is produced.

Plans for new coal plants under fire

Protesters are to launch one of the hardest-hitting environmental campaigns for more than a decade over plans to build a new generation of coal-fired power stations in the UK.

Senior scientists, City investors, international leaders and MPs from all parties have joined environmental groups in condemning plans to approve coal plants before there are guarantees that they will be fitted with equipment to stop the release of harmful greenhouse gases.

Market developing in carbon credits

The European Climate Exchange is based in London.

The Chicago Climate Exchange is based in Chicago.

The Global Emissions Exchange wants to open a branch in your living room.

Zones of death are spreading in oceans due to global warming

Marine dead zones, where fish and other sea life can suffocate from lack of oxygen, are spreading across the world’s tropical oceans, a study has warned.

Researchers found that the warming of sea water through climate change is reducing its ability to carry dissolved oxygen, potentially turning swathes of the world’s oceans into marine graveyards.

Does anyone have a guess of when the US will see the first major shortage?

Demand destruction is just a shortage by economic class. If you are poor there is currently a shortage. If you have the money, gas is just expensive.

Pretty soon that has to shift to a broader shortage. My hope is that we will seriously wakeup at the first general shortage. There are so many potential causes, we cannot avoid them all forever; trucker strike, terrorist attack, hoarding, hurricane (Gulf), earthquake (LA), pipeline decay, etc....

What would TOD recommend as the actions that should be taken today to decrease oil use?

Today ?

Walk more, bicycle more, travel less, relocate closer to work and in walkable communities.

A "free market" will not have prolonged shortages. 5 digit gas prices ($22.78/9 per gallon) perhaps, but not shortages.


I'm amazed at the traffic in Italy at about $9 per gallon. Smaller, more efficient vehicles, and lots of scooters, but very heavy traffic nevertheless.

Of course there is traffic. People just love to GO! and without oil, they walk!

I remember a couple of years in Brazil in the early 60's, before anyone had cars. Life was good except for the very poor (who probably weren't that much worse off than the very poor today in the USA). The streets were filled with people -- walking.

Nostalgic, I know, but I could get used to a city that didn't have petroleum-fueled vehicular traffic. To be sure, people's ranges would be restricted, but would that be such a bad thing?

Hey N, I've been wishing decades for people to be able to stop saying "golly what a small world" Everywhere you go not only 'there you are' but also there is a effing MacDonalds or Wallmart and some god awful paunchy camera toting tourist looking at one like out of a mirror.

Interesting questions are average trip length and km per day. I speculate it's much less than typical US patterns.

My guess would be even US patterns aren't at all typical-i.e. the yearly miles driven per vehicle cover a broad range. Urban USA auto owners IMO will be able to tolerate extremely high gasoline prices-as development densifies, more auto users can tolerate even higher prices.

I started walking to work this past week. 1.7 miles each way, and I even lived to tell about it! ;-)

I'm in the process of getting an article about walking to work written for TOD:Local, I hope to get it done in the next few weeks if I can find the time.

One of the great things about walking to work is that I am now insulated from motor fuel price increases. This applies equally for those that bicycle.

Yes, one of the biggest problems is not the automobile necessarily, but automobile dependency. If you don't need a car -- able to walk to work and the supermarket -- then you can look at gas prices and decide IF you want to use the car or not. Thus, high gas prices are completely avoidable. Cancel the tour of Civil War battlefields and spend the weekend gardening and enjoying a barbecue with friends instead. Big deal.

Yes, check out the invite for TOD:Local over in the sidebar, folks...you'll see what we're looking for.

The first major shortage has already hit, the shortage of capital.
Bill, I am not being frivolous in saying that the shortage of capital has led to a shortage in loans which has lead to a shortage of customers (c.f. the housing market) which has led to a shortage of jobs which is leading to a shortage of customers and taxpayers which is leading to a shortage of capital. The first hoarding seems to be the hording of capital by many of those who have it. In watching the machinations of the markets (equity, exchange, bonds and commodities) it seems these folks are frantically trying to find safe places to hide their capital until it is safe to apply it again. The price of oil has led to huge capital accumulations in some corporations but they are not applying most of this to new activity but are simply dispersing it in share buy backs and dividends. This money is mainly going to those refered to above who are trying to protect their capital. As the job shortage increases it may balance the supply and demand of all other goods for some time. As others have pointed out there are economic "shortages" at the bottom of society and these will gradually creep up to higher income levels as the median income level declines. Baring some physical reason for a sudden shortage things may just deteriorate with no line ups or shoot outs at the pumps or anywhere else.

The capital constriction appears accurate.

I am not sure about the "no line ups or shoot outs at the pump". Instability seems to lead to more instability. It seems the economy in sustained by the ability to trust, transport and transact. Transport is in significant trouble. Trust will likely breakdown if transportation fails.

Sadly I think you are correct. However the destitute are already resorting to theft of fuel because of their cash shortage. There are no line-ups in suburban driveways at 2AM but we will probable see more shootings there soon. As far as FF shortages go I think we will see diesel (home heating oil) and propane shortages first. My understanding is they are pure distilates from crude and cracking methods are not used to make them so their availability is directly correlated to the volume of crude being processed. Crude availability and refinery utilisation come into play here. Perhaps someone can tell us if heavier crudes have less or more diesel grade and propane than the light stuff. Of course diesel demand seems to be sensitive to economic activity so that a recession may ease the problem.I also agree that once food and fuel stop arriving reliably at the retail outlets things could get ugly very fast.

I do worry about propane. Since I've started walking to work, our household is now down to using well under 200 gal of motor fuel per year. But we probably use about five times that much or more in propane, and that's with the programable thermostat set to 66/60F all winter. I'll be chopping a lot more wood for the wood stove this winter, and need to be getting solar hot water and solar space heating on a fast track. With any luck, the next administration will increase the credits for these.

WNC...If you write that piece, you should submit it to the MountainX as well. Also, check the Iwanna...occasionally I see solar water heaters pop up in there General > Heating and Cooling > Other Heating. Generally dirt cheap.

Solar hot water collectors. 18" x 8', aluminum frame, parabolic, plexiglass face, 1.5" copper piping. Used to heat swimming pool. $40/each.

Crappy insolation where I am and the house isn't mine, so I can only look at them and sigh.

Thanks for the tip. Since plumbing and I don't get along very well, I'm inclined to leave the solar H2O to a professional. A homebrew solar air heating panel might be within my DIY capabilities, though.

I'm not sure where you live, but here in the UK residential solar thermal in contrast to PV power is a very viable alternative - it is good for up to around 55 degrees north at least, and not many people live above that latitude.
You should be able to save around 50% of your hot water bills, and could always take the panels with you.

My lattitude is fantastic, but I'm on the north side of a mountain and surrounded by trees.

Yikes! :-(

You might want to consider relocation. I'm on a south slope with an E-W roofline, giving me a good southern exposure. That's a big reason why I bought the house - I knew that some day I might need to add solar.

Instability translates into higher risk premiums, which raise ROI thresholds impossibly high.

the shortage of capital has led to a shortage in loans which has lead to a shortage of customers (c.f. the housing market) which has led to a shortage of jobs which is leading to a shortage of customers and taxpayers which is leading to a shortage of capital.

This kind of circular dependency is not only showing up in the capital markets, but in resoource and infrastructure markets as well. Shortages of drilling rigs can be traced around a circuitous route right back to ... a shortage of drilling rigs.

It brings to mind the childhood ditty about "There's a hole in my bucket"


Exactly right. People should start noticing that high oil prices are not resulting in a huge surge of new investments in FF exploration & production, nor in a huge program of new nuclear power plant construction, nor in nearly enough new investments in alternative energy facilities, nor in major energy efficiency schemes like Alan's EOT. There is some of this going on, to be sure, but not nearly enough. It is very much a case of much too little, much too late. Lack of capital is indeed the problem, and this is ominous, because it means that it is unlikely that the investments that need to be made ever will be made. This is the fatal flaw in cornucopian thinking: even if their technofix ideas are theoretically feasible, the lack of funding will render them economically impossible.


Facilitate and Vocally Promote this nationwide, as a clear way to cut commuting gas consumption and the cost to these consumers in half, third, quarter, as well as reducing road congestion and wasteful Rush-hour jams (where cars approach 0 mpg as they sit there..).

With internet and cell-phones, we have some great tools to help make this possible. Employers could help by working with employees on scheduling issues, city and state leadership should promote this, possibly hosting web-services.. while some private sites are already doing this.. (Anybody know links to this, and how well they work?

Google Search hit these ones..
http://www.smartcommute.ca/ (and news story about this one.. http://www.canadiandriver.com/news/051125-1.htm )


(that was the 'do as I say, not as I do' post. I am a freelancer, about to fly to Vegas for two weeks, where I'll walk to work and around the strip while I'm there, or get to the casino with one of my colleagues' rental cars. Last time, I never even picked up the Rental car that the client provided for each of us. I take the bus, walk, and ride with the other guys. Who wants to drive in Vegas anyway? Of course flying there is automatically 'Plane-pooling', right?

Meanwhile, I'm in the basement, working on custom 'machining' some plywood pulleys to open and close the 'concentrator barndoors' for my Solar Hot Air heater, so it's shaded in Summer and warm days.. I hope to have TWO of these on my roof by summer's end, to cut down our use of Heating Oil in those chilly Maine winters, as well as a few other solar collectors for Electricity, Lighting and Heat for Washing, Home heat and Cooking. Lotta projects!)

Here's a link to the Hot-Air Heater concept that mine is based on..
the root 'build it solar' site has a gazillion project ideas people can try. MANY can be done with scrap and scavenged materials, which is recycling AND saving bucks! Great payback when the materials are 'Dumpster-Sourced' I have 12 sheets of Porch-door sized tempered glass 34"x70" to use for these kinds of projects! FREE!

ps, collect Glass and Mirrors! High energy materials, but durable and extremely useful for countless energy projects.

Ride sharing is not just for daily commutes. We tried, without success, to find a rider on our last holiday trip to visit my wife's mother 450 miles away. We'll keep trying on future trips; things will eventually get bad enough that we'll start getting takers.

I have also tried this on several trip via CraigsList. It was not easy and I was offering a free ride.

I think the time just hasn't been ripe up to now. I sense a shift in attitudes and behaviors is underway. There are several websites dedicated to matching people up for ride sharing, those are probably better places to try.

Personal lifestyle changes work for me. These days I walk as many places as I can and, aside from saving fossil energy, my physical energy has increased enormously.

We can also effectively increase fuel efficiency by carpooling. One car carrying three people uses one-third the fuel of three cars carrying one person.

Finally, modern offices make increasingly little sense. What I see is people commuting into work, taking the elevator to their office in a skyscraper, then sitting down at a computer to communicate to collegues by email. That could be done from home.

Of course, teams do need "face time" but, for many teams, once a week (or less) would do fine. Also, getting out of the house may be important for some people to work effectively. In that case, mini offices at a local shopping mall could be a solution.

We are spending enormous amounts of energy to support a communications mechanism (the office building) that doesn't really need to exist anymore.

We are spending enormous amounts of energy to support a communications mechanism (the office building) that doesn't really need to exist anymore.

Is it actually consuming more energy than it saves overall? All the people in the building are getting heat or air conditioning communally for their tiny cubicles, which must be cheaper than having them all sitting in their individually heated or air conditioned McMansions. Of course there is then the energy cost to get to/from the building from home. I'm sure these sort of analyses have been done, but I haven't heard the results.

You forget that the heat & a/c are left on at home to keep their pets comfortable.


Define 'major'.

I've been thinking about a response to those that believe that "speculators" are adding X amount of $'s to the price of a barrel of crude oil and have come to the conclusion that these folks may be correct. If so, does this bring some kind of comfort to the reality of the price of oil? Think about who the speculators are. Who has so much money to throw at the price of oil to make such a sustained effect? Is it just masses of individual investors deciding to buy their own barrels of oil contracts? Don't think so. Or if there are speculators jumping in to up the price of crude, is it the folks with HUGE amounts of money and control of hedge fund directions?

People like George Soros (Soros Fund Management LLC), Warren Buffett (Berkshire Hathaway Inc.), Bill Gates , Matt Simmons (Simmons & Company), James Simons (Renaissance Technologies Corporation), Ken Griffin (Citadel Investment Group), and Steven Cohen (SAC) don't make bad bets very often. What if the "speculators" are making good bets RIGHT NOW?? If the price of crude is 20% due to speculators and those speculators are pretty damn good a making bets, shouldn't this concern people as much as if the price of crude was merely due to supply and demand tightness?

Food for thought.

We've seen an ironic role reversal lately. As Paul Krugman pointed out recently, traditionally people on the left demonize speculators for high commodity prices; but lately economic conservatives like Steve Forbes have blamed speculators for the escalation in oil prices, even though in other contexts they defend speculators for the allegedly beneficial role they play in anticipating and managing the supplies of scarce goods in the market, along with their ability to extract huge profits by doing so.

The Peak Oil aware crowd knows its not speculation. Its the deniers that say there is plenty of oil in the ground who conclude it is speculation.

Two signs that it is not speculation: First, hoarding is not rampant. Crude oil tank facilities are not full of oil that speculators are keeping off the market. Second, there is not any volatility in the longterm futures vs. short term futures. Looking forward 10 years, low price is 120 high is 128, thats a 7% diference. If the market was speculation driven, you would expect more volatility.

Does investment = speculation?

Who knows the investment strategy of hedge funds. Perhaps they have a strategy of only investing in short term contracts and then dumping them at set times. You are looking for "typical" indicators of speculation. Old rules and patterns do not necessarily mean the future will operate this way.

If there is speculation the oil has to be stored somewhere - it isn't being stored above ground - but I suspect it is being stored below ground (another word would be hoarding) since with the current rate of price increase the oil is worth more if produced in the future rather than now, this has not been possible until recently.

I have no idea what futures market you are looking at ArianB, but if you are looking at the NYMEX your figures are a little off. Looking at NYMEX Crude Oil (Light) the highest price is the June 08 contract at $126.29 and the lowest contract is the Aug 2010 contract at $123.66. That is a 2.11 percent difference. The furtherest out contract available is the December 2015 contract. That is priced at 125.94 or 35 cents below the June 08 contract. That is a difference of .28 percent.

But you are correct, it is not speculation. With the price seven and one half years out going for almost the exact same price as the near term contract means traders expect the price to stay high. No speculator or hedger in their right mind would bid so much for a contract so far out unless they foresaw an actual shortage.

If the oil companies, who know about what they will be producing 7.5 years hence, thought that was too high they would sell that contract like crazy, locking in that $126 a barrel price for oil they believe might be priced at a much lower price by then. That would drive the price down. But they are not doing that which means the oil companies expect the price to be as high as it is today in 7.5 years.

Ron Patterson

What some are calling "speculation" might more accurately be called "risk premiums". The economy and the oil business are extremely full of risks right now. Let's see, the economy was over-goosed under a conservative administration, and the Persian Gulf was turned into a war zone under a conservative administration. From where, then, do those risk premiums derive?

How can you tell the difference between "speculation" and "prudent investment?" Maybe at the margins, but everyone with any brains pays as much as necessary, and as little as possible for a commodity. Since no one can read the future, not even Warren Buffet, who because he commands a greater share of the present reality may seem to control the future by manipulating price to a certain degree through control of giant pieces of the pie:

"Who controls the past controls the future. Who controls the present controls the past."

But he doesn't, of course.

Rich people tend to command a greater proportion of media resources, as well, and so they are able to influence what most people think about whatever it is that they want us to think about. However, there is always (for now) TheOilDrum, and has always been the skeptical press. You don't need the Internet to spread radical ideas.

I think we should tend our own sheep, and not worry too much about what the Lords of the Manor are doing.

I think we should tend our own sheep, and not worry too much about what the Lords of the Manor are doing.

Your thought dovetails with this study (link below) of China's electric bike industry. The industry is growing at 3X/per year. The U.C. Davis study's authors believe this rapid pace is due to "modularity" meaning: batteries, dynamos, and scooter/bike frames are widely manufactured, widely available, components. Assembly is secondary.


Gasoline vehicles are not modular. The sheep tenders are assembling electric bicycles. Check out the growth graph... Then go over to Electricrider and check out the prices on their hub dynamos (as in: up! up! up!)

The sheep tenders are assembling electric bicycles.

I read this line and immediately thought of the title of Philip Dick's Do Androids Dream of Electric Sheep? which later was adapted into the movie Blade Runner.

Odd how the mind works sometimes.


How about 'The Silence of the Lambs' new Commute' ?

"grassroots" is not a political paradigm -- it's how people work in functioning societies. A good idea will spread very rapidly when the conditions are right for its employment. Right now in America it is still, even at $5 or $10/ gal gas, easier to drive to the store for a frozen dinner than to weed a garden. And easier to ride than walk or bicycle. And safer, too. I haven't ever been hurt in a car, but I have been hurt on a bicycle. All this will change some day -- and I can't for the life of me see how it will be the end of the world. Though I wonder what stockbrokers and investment bankers will do in the New World Order.

We can only hope that the change will be accomplished without turning NYC and Tehran into nuclear wastelands. Who knows what the folks who run the world think? If there hadn't been Hiroshima and Nagasaki, I might think this was all bluster. We have to take it on faith that the essential core of the ruling class is sane.

I recall paying about $.35 a gallon back in the '60s when a cup of coffee was ten cents and I was making a buck twenty an hour. Because the fall of the FSU produced a temporary supply glut we forgot what oil cost back when we were still drilling a lot of holes. The question is whether the price will now stabilize at the inflation adjusted normal we are currently at or continue upward. The third worlders who are now being shut out by 'high' prices weren't even in the market forty years ago.

As to speculation, if you want to run a commodity up you have to take production off the market; as a producer that is simple but as a speculator you have to hope that when the music stops someone will be there to take your goods. In the long run the actual goods get delivered, thus it's only a speculation until then. When someone explains where one is supposed to speculate and hoard TO, I'l take the argument seriously.

I keep posting this question and nobody including my broker and my commodities firm seems to be able to answer. How do the speculators manipulate the oil futures market. For something with indefinite life like stocks or real estate or something that can be stored the speculators can take it off the market and thus drive up the price.

On the contrary a futures contract has a finite life and then physical delivery must be made unless the speculator has bought the opposite contract. If there were really a surplus of oil at the end of the month producers who has sold delivery contracts to speculators would insist that they take delivery.

I don't see how speculators can control the price of the forward month contract unless they have someplace to store the oil.

GoodTower, speculators do not manipulate the oil futures market. That is a myth. Speculators can cause wild interday swings in the price but over the long term, (a few days), the fundamentals always control the market.

Another widely believed myth is that if a contract is still held at expiration then the holder must take delivery if long or make delivery if short. Contracts, even held until expiration, can still be settled for cash. And the vast majority of contract that are held at expiration are still settled for cash.

Glossary of Terms: Delivery

After receipt of the delivery instrument, the new owner typically can take possession of the physical commodity, can deliver the delivery instrument into the futures market in satisfaction of a short position, or can sell the delivery instrument to another market participant who can use it for delivery into the futures market in satisfaction of his short position or for cash, or can take delivery of the physical himself.

Ron Patterson

My belief is that the noise about speculators is misdirection put out by OPEC et all. I understand that most contracts settle for cash but the key point in my mind is that at the moment of expiration the forward month price will converge to the spot price so it can't be true that speculators are putting some kind of a premium on the price unless they could actually take delivery and store the oil.

This confirms what I've suspected all along. Speculators are merely placing side bets on the price of oil at some future time. In the end the physical trade of oil for money has to take place for the bet to be in the money. And commentators who blame speculators overlook the important role that the oil market has to play for many businesses. Take the airlines for example.

Air New Zealand has a hedging programme in place that means 83% of its fuel usage is covered at $83 a barrel, instead of the full $160 for aviation jet fuel. A different story later in the year though.

I don't see how speculators can control the price of the forward month contract unless they have someplace to store the oil.

Right. And the other thing you need is lack of a profit motive.

Here is the best I can do in dreaming up a scenario. I am not saying I am right, but it seems possible:

Driving price up is easy - you buy and store the oil.

Driving price down:

1. Sell back month (6 month + and out) future contracts in bursts at times during the day or night when trading is light, so that you get maximum effect to lower the price. (Assume you do this on ICE, where the Brent contract is traded). You help drive the market into backwardation (future oil is cheaper).

2. Enter into long term direct contracts with producers (not through futures) for oil delivery. These contracts normally use Brent as a benchmark. Since you have driven the market into backwardation, you will get them to sell you oil at a price below front month. Use this oil to satisfy those of your future contracts that stand for delivery. (Many will settle for cash, so you dont have to buy as much as you are selling).

3. Rinse and repeat on a large scale. The more you drive the market into backwardation, the cheaper you get your front month oil contracts. (Arbitrage plays a role here as well).

4. Of course, you are losing money, since you are paying more for the oil you get than you get for the oil you sell, but you are not into this for the money. You are trying to drive oil prices lower than what they would have been otherwise to prevent a contango situation from developing. (Once we are in contango, it will pay to withhold oil from the market, and all hell will break loose).


We are awfly close to contango right now. The Dec 2015 contract is $125.94 only 35 cents below the forward month.

It seems that once the futures market grasps peak oil, then contango will be permanent and becoming worse.

GoodTower, I’ll give you my take on your questions.

In the first place “speculator” is largely just a perjorative term with no precise correspondence to futures markets participants. To understand who influences prices you have to look at the commitment of traders report. The categories of traders are noncommercial long, noncommercial short, commercial long, commercial short, nonreportable long, nonreportable short. For the NYMEX crude oil contract the commercial longs and shorts are much larger than the noncommercials and the nonreportables. It would be impossible for small players to influence this market in the least. Commercial shorts are large oil sellers. There are 104 participants in this category so they are huge entities. They essentially take the short side of the great majority of all long positions. I have a graph of all weekly open positions since 2005, but I don’t know how to put it in html. The dramatic thing about this graph is the increase in commercial long positions since 2005. There are only 91 participants in this category so they are also huge companies. In theory they should be large oil users such as refiners but could also be companies such as airlines trying to hedge oil costs. What I don’t know is if any large investment companies such as Goldman Sachs have managed to get themselves rated as commercial longs rather than noncommercial longs. In any case the message from this graph is that there has been a huge inflow of money into long positions in the past 3 years that simply cannot be accounted for by companies that actually use oil. I assume that this represents investment money from around the world. What you have to keep in mind is that all of these long positions can be purchased on margin. The current margin requirement is only something over 3%. This margin feature of commodities trading is what allows “speculators” to drive the price up, because a position that goes strongly into profit can then be used as margin to take more positions. It’s a classic price inflation created by paper money and is why commodity markets fall hard when they correct. In my opinion, as oil supply has started to tighten the natural rise in price has attracted a rotation of the huge worldwide oversupply of paper money into commodities. This is why all commodities are rising in a unison that cannot be completely explained by shortages. There is a lot of inflation in the commodities. This is the only respect in which you could say that speculators are driving oil prices.

To understand what happens when the front month contract expires you have to keep in mind that every single long position is offset by a short, so the massive liquidation of these paper contracts occurs more or less around the spot price, although expiration often creates volatility. Obviously there is no such thing as speculators manipulating price by actually hoarding physical oil. Although I did read somewhere that Goldman Sachs might actually be taking oil deliveries, building up a stash.

So to return to my basic question if non commercial longs bid up the price of future months they will loose money unless the spot price is at or above the price they bought the contracts at. At expiration they will only make money if they correctly anticipated the ratio of demand and production. I conclude that for OPEC to say that 60% of the current price is speculation simply cant be true no matter how much money the GSs of the world put into the market. (absent them really having storage capacity)

You're right. If you take a long position on the back months and hold until it becomes the front month, to make money the market has to rise or the back months had to be backwardated. Historically the crude oil contract has been backwardated. When oil started to spike in 2004 the market was extremely backwardated for months and was a great speculative opportunity. I remember that at Christmastime 2004 the 2008 contract was 38 dollars. Now of course it's much flatter or sometimes even contango.

I have no idea what OPEC is talking about when they talk about speculators. But I think it is a very interesting question how much of the oil price is just inflation. In my opinion the single thing regulators could do that might bring down the price of oil would be to radically increase the margin requirement on the NYMEX. In fact I think that is the main risks to owning long oil positions presently.

Some posts on this site addressed the question of how much of the increase was due to inflation.
You can google-search this site, but the short answer is 'some, but not much'

As a quick and dirty surrogate for this, you could look at the rates of the dollar against the Euro last year and this, and match it against the oil prices.

The dollar has not dropped nearly as much as oil has risen.

By the way, if any of those mentioned above happen to be reading TOD today and would like to drop their two cents (or more) onto the board, please jump right in.

I know Matt Simmons reads TOD and suspect Buffett and Soros do as well.

For the record, I believe that the upward trend of prices we have seen in the last 3 years has been due to supply, demand, production, export land model effects...geology and politics.

I just wanted to say that if there is some % of the current price rise due to hedge funds moving in to buy up crude contracts, that in itself is no comfort.

Americans still leery of bicycles


The technology we need to use is *NOT* computer monitors that inform us when we are driving economically, but century old non-oil transportation.

Bicycles are the one and only technology that can scale quickly and on a large enough scale to make a significant difference in the next half decade.

I can think on no equivalent.

Best Hopes for More Bicycles,


I can think on no equivalent.

I can.

Not traveling.

I would agree.

Simply NOT traveling by oil based transportation, be it by air or road, for 1,000 miles or 10 miles, can make a substantial difference.

And "reduced economic activity" will help us travel less.


well if there was sane people who do not travel for long periods then that is different for sure. I am In Idaho right now but its the first time traveling out of the area where I live in 2 years. And I hate travel :)

I agree Alan, NOT TRAVELING using anything oil-based.

The only reason I plan to escape here on a motorcycle is that I have the thing, and I figure it's probably pretty rough crossing the Sierras on one. It will be "interesting" as it is on my little 250cc. Once I'm back out at the coast, or near it, well, the CA coast holds no fears for me, I can walk it if I have to. No problem.

The thing is, even as cheap as it is to get around by small motorcycle, it's even cheaper by bicycle. It can make a difference of $1000 at the end of the year, by my own experience.

How many of you out there would like to find an extra $1000 in your bank account at the end of the year?

That doesn't include the value of not wearing out your car. I have a 2000 Mazda that is all paid off and still runs great, since I bike 90% of the time it gets little wear and tear and I expect it to last me a long time. If it can just last a few more years then I'm hoping I'll be able to convert it to electric somehow for a reasonable cost, then it could last me for another 20 years I would hope.

Some studies show bicycle use is down in the USA. http://www.peopleandplanet.net/doc.php?id=3284

While biking remains popular for recreation in the United States, it is woefully underused for transportation. Total cycling participation has declined nationally since 1960, dropping 32 per cent since the early 1990s, and now accounts for just 0.9 per cent of all trips. Cycling to work is even less frequent, at 0.4 per cent of trips.

Too dangerous, maybe? Aging population? Not stylish? Inconvenient? Government opposition? People too fat and out of shape?

All of the above, probably. It is an obvious solution -- the blazing simplicity of it once again suggests that we are not ready for a real solution. High tech cars are still seen as the main answer.

In my case it's 100% because it's dangerous. I live in NYC, and riding a bicycle is very dangerous, with nearly all of the risk coming from motor vehicles.


On Tuesday morning, the DJs on the local Clear Channel radio station, KLOL (101), turned Saturday's
event into entertainment and advocated that their listeners use their car mirrors to hit cyclists.
Yes, another Clear Channel affiliate like in Cleveland!


Clear Channel DJs advocate violence against bicyclists. "One caller said her dad had purposely hit a biker on the road on the way to church one Sunday and kept on going. That got laughs." Clear Channel apologizes, but won't release transcripts or tapes of the broadcasts. Don't you love responsible radio journalism?

One advantage of walking to work rather than bicycling is that it does leave me with free hands. In one hand I carry a hiking staff. Not one of those wimpy "trecking poles", but an honest to goodness big stick, an inch in diameter and over five feet long.

Should a car try to swerve toward me, I can almost certainly hear it and jump back out of the way. It sure would be a shame if somehow my stick happened to cause some sort of damage to their car as they sped by.

Somehow, I suspect that most drivers - seeing my stick in hand - would anticipate that little scenario before it happened, and thus would be dissuaded from ever trying it in the first place.

Your implication seems to be the the greatest threat to a cyclist or walker is from malicious, intentional actions of drivers to threaten them. While that surely exists to varying degrees in varying locations, I think the far great threat is from accidental collisions. Your big hiking staff would be of no value in a true accident.

BTW, you say if a car swerves toward you you can hear it and jump out of the way. Presumably you would be walking on the left shoulder of the road as you are supposed to so you could see it, not hear it. Unless perhaps if walking facing traffic is not a universal rule everywhere. I've never heard of anything different though.

I walk on the side with 1) the shade and, if raining, 2) the side with the most overhanging balconies.

On one way streets. it does not matter which side you walk on.

Best Hopes for "Local Rules",


I walk facing traffic going home, but not going to work - there's a water-filled ditch on the other side of the road. No sidewalks, you see. Fortunately, it is a lightly traveled street, and there are plenty of trees, telephone poles, etc. I could get behind. There are not likely to be many drunk drivers on the road at 7:30AM. I suppose an inattentive driver on the cell phone or scarfing down an Egg McMuffin or applying makeup or all of the above simultaneously would be the most realistic threat. Since I am not wearing headphones and listening to music (a really STUPID thing to do, btw), I can hear approaching cars from behind me at least several hundred feet away, and I do glance back behind my shoulder when I hear them.

Am I 100% invulnerable? No, but then again, I wasn't when I was driving either, was I? It is a question of risk management, and I think I've managed my risks well enough.

I'll tell you one huge reason: consider all the kids that rode a bike to school in 1960 (and that was a LOT of us - boomers, remember) vs. all the kids now that ride a school bus (IN TOWN!!! We NEVER saw a school bus picking up & dropping off kids in town, it was just for the rural kids) or are hauled to/from school in SUVs or vans by soccer moms. I suspect that in many places, if parents let their kid ride a bike to school today they would have their kid taken away from them and they would be arrested for child endangerment or something.

There are a lot of inhibitors to wider adoption of bicycles in the US, but we will get there. People in the US are human, and humans in other countries have a much wider adoption rate.

1) Bike lanes and bike paths are an unavoidable need for bicycle MASS transit, as long as distracted drivers are guiding two ton vehicles irresponsibly. Most people are too afraid to mix with the general traffic flow. I am not advocating parallel bike paths unless they make sense. Even a two foot wide shoulder is infrastructure, and could make a huge difference. In dense cities, people are just going to have to learn how to ride in the mix, and it can be done.

2) Secure storage and showers at places of work.

3) More SUV-like bicycles. Really. The standard fenderless MTB or road bike sold in the US needs at least $100 worth of accessories to be commute worthy. Luckily, several manufacturers have stepped up. REI sells a couple of beautiful commuter bikes. Easy to maintain internal hub gearing, chain guards to protect clothing, racks, lights, bells, fenders. If you are really dedicated to using the bike exclusively, the Xtracycle can turn your standard bike into a real mule. Or, the now ubiquitous kid trailer can be used to haul groceries.

4) Creative thinking. People tend to look at their entire commute and shoot down the bike as an option based on an obstacle on the route. Drive halfway and park and ride from there. Voila, you've saved half of your commute gas bill.

5) Technology. Electric bicycles have taken off in China. There are several power modes available, some which assist the pedal power, some which power the bike independently of pedaling. Restrictive legislation needs to be removed to allow this area to flourish. I believe a lot of people would be comfortable with a 20-30mph commute in work clothes on an electric bike.

And maybe more reliable bikes. I happened to read this blog post this morning, written by someone in Britain who gave up biking to work because he got tired of fixing his bike.

Bicycles are generally reliable, but the primitive (yet efficient) drivetrains are finicky and require constant tweaking to produce even close to desired results. Roadies (road bicycles) are evil. That's probably what that guy had. I've certainly given up on them...they're fast, but those little skinny tires get punctured by a gnat (and are useless on gravel roads). I once had a little piece of roadside gravel sneak around and puncture the sidewall...the air wooshed out so comically fast I almost laughed, but was immediately stopped by the realization that I was about 7 miles from Anything and wasn't carrying a spare tube, let alone tire. I tried to thumb a ride from a bunch of people - even people with bike racks and bikes! None were in the mood to stop. It was the last straw, haven't ridden it since. This contrasts to about 10 years of riding mountain bikes, on road and off, in which time I acquired perhaps two slow leaks which I eventually just patched (pretzled a derailleur and broke a twist-shift in that period as well, but that's another story). That mountain bike is a tank. Shifts slow as mollasses but I racked up considerable mileage on it without any worry of it letting me down. I've recently acquired a Sun Bicycles EZ-1 SC (recumbent). The 'bent is wonderfully comfortable, though geared a little high for the hills around here (I'll probably swap out a chainring soon), and at times frighteningly skittish because of the tiny wheels, it's much more fun to ride than my other bikes. I'd guess that more people would actually consider riding viable if more people rode recumbents. Not only bad-ass comfortable, but you can hang a bookbag off the back of the seat and carry stuff without having to bear the weight. Visibility is excellent (you can actually see more easily rearward and to the side on the EZ-1, and of course phenomenally better forward) and you're just overall in a more relaxed position. Damn that gravel road and the tiny tires, though. At least they're wide and can handle it, however jarring and drifty.

Not to sound like a jackass but there is no reason not to carry a puncture repair kit and a hand or CO2 pump as part of your riding gear. Generally I have the following:

1. Tube repair kit
2. Pump
3. multitool
4. glucose pack (in case of "hitting the wall")
5. cell phone.
6. cash money, identification (in case of hitting a car)

The pump goes on the frame, the rest goes in your saddle bag.


Well, it was a nice day amongst crappy days and I was just out for a "leisurely romp" so all I had with me was the pump and some water. The sidewall incident let the air out of the tire in about one second (literally) - there was no pumping that biatch back up. When I got back I tried to patch it. Had to patch both the tire and tube and the final result was two noticeable bumps in the ride of the tire. Needless to say I was miffed.

I've never had a terminal problem like that with the fat-tired bikes and can recall on one hand the number of incidents my friends have had while riding with them. One was a "snakebite", clearly the work of neglected pressures (and a big-ass rock) and I gave him the spare tube I was carrying. Another, perhaps a good parable of believing you're prepared but not, was a road ride (on mountain bikes) and my friend hit something - can't remember what - that obviously had started a slow leak. It wasn't too bad and we were just a little less than halfway through the ride and decided to push on and just pump it when it needed it. When it came time to pump it - his pump failed, it was a piece of feces. I, of course, wasn't carrying mine. In his rage he threw the false saviour over the bank and it landed right next to an old washer, and a bunch of used tires - an illegal dump - a fitting resting place for the thing. Since we were out so far (and this was before the ubiquitous cell phone) he decided just to try to ride back. So off we went. It looked like he was riding through sand, and eventurally the nipple slipped through its hole and made a nice "bump...bump...bump" but he was able to ride the roughly 5 miles or so back to our starting place on a completely flat tire. The rim wasn't damaged, the tire looked a little rough but was salvageable, and the tube was chucked because the nipple had suffered some questionable damage.

I do agree with your list, though...it's stuff you should carry - but who ever does what they *should*? ;) As for #6, it's usually the car that does the hitting and not you.

Hm, the one "strand me" flat I've had was in Mountain View, no pump on me and no one looked like they had something that would handle Presta valves, actually the bike crowd have left when I rode back around, on a rapidly-going-flat front. So, I just walked to the train station and hopped the train home. Had 'em fix it at the bike shop near the Sunnyvale station, just because it was easy.

Carry a spare tube, patches you know how to use, and a Zefal pump, you'll be fine.

Visibility is excellent...

Yes for the bikerider, but not necessarily for the oncoming or following traffic. Even with an orange flag on an 8 foot pole, I was tapped from behind on a curve while pedaling my EZ-1 SC. Road rash and minor concussion resulted. Haven't ridden it since.

The EZ-1 is pretty upright and tall as recumbents go, though still lower than a regular bicycle. I've been carrying something white and flappy (shirt) on the back to increase visibility, though I eventually might build a yellow aero-box for the back. Visibility is a problem, and vibrant colors and blinkies are probably about the best you can do - nothing can stop a moron on a cell phone driving a three ton behemoth from getting distracted and crashing into things. Hell, one of my friends was reaching down for a CD wallet on the floor of his car and ran off the road and right into a telephone pole. Bicycles just really aren't safe among cars - cars aren't safe among cars - you just take your chances.

Roadie you're full of it and here's why:

You can get good tires for "roadies" that puncture seldom. Notice I don't say never, because I've still had a goathead puncture my nice Gatorskin tire. But, you also learn to fix flats. Way way back when, I rode a decrepit old Fuji with whatever tires I could get. I still kept on rollin', to work and everyplace else, because I knew how to patch a tube. I had a rule that a tube had to get 3 patches before replacement. I replaced tires when the fibers under the tread started showing, by then they were full of road-glass, ah the good old days! My handlebar tape on the Fuji unraveled and fell off one day - I learned to re-tape bars. The seat finally got sodden and rusty, due to rain, and I got a new one. I maintained my bike. I've taken a skinny bike through stuff most MTB riders would avoid, or not even know is there.

Bikes are about a million times simpler than cars. You can learn to do everything on your bike, including true wheels and service your bottom bracket if you want to. They are not hard to maintain.

When I'm back in the Bay Area, I'll probably be riding a singlespeed, skinny-ass tires (700cX25's probably), you won't miss me, look for a bright-ass yellowish Bailyworks bag lol.

BUT ..... to someone who didn't grow up wheely'ing Schwinns, the MTB is a good starting out bike. Most of them have too many gears, but there's a singlespeed MTB crowd too.

BTW Bianchi makes a kick-ass bike, for commuting and general pooping around, that's really cool looking too. Sealed 5-speed(?) hub, very "classic" looking, and fairly light too. We're going to see a lot of interesting bikes, as people take different things from different areas of biking and different eras and combine them.

The League of American Bicyclists holds classes on street riding, and while I've not taken one, I've heard they're very good.

I had more tire problems in six months of riding a road bike than I did in 10 years of riding an MTB - on and off the road. That speaks for itself. I do all of my own repairs.

Most of the people around here that ride the road bikes are Tour-de-France clones and drive their bike on the back of their SUV to the river park to set off. The commuters come from closer in-town and rarely ride the skinny tire bikes. They're generally mountain bikes with more road biased tires, or what appear to be hybridized bikes which are road-like but with fatter tires. There is one guy I see around a lot with a skinny-tire bike that's obviously been converted to single speed.

I love internal geared hubs. Haven't ever tried the newer ones but the old Sturmey-Archer 3 speeds worked flawlessly. Still have two sitting around, but they're cruisers from back in the days of flatland living and just aren't geared right for the hills here (and are a bit rickety to boot). I've considered adapting the rear wheel with the hub to a more modern mountain bike and simply locking out the rear derailler on the single rear gear so I could have the sturdier frame, three chain rings and three hub gears which would provide ample gear range, and the nice instant (and dead stop) shift of the rear hub.

I've been cycling in LA for almost all my transport needs for the last 3 years and have never had a serious problem, using two different folding bikes from Dahon... http://www.dahon.com check it out.

Funny thing, whenever I ride around town on my Dahon bikes, I am frequently stopped by people who ask me how they work and how much they cost...I get the feeling that a lot of people can immediately see the utility and practicality of it from my example.

Folding bikes fill the gap for getting around Los Angeles, its too big to bike everywhere here but it is easier to get on and off transit if you have a little folding bike, at least you have the option of folding the bike and carrying it on the bus/train if conditions are really crowded (like rush hour on the subway).

Broken chain? Either he's flogging a mountain bike severely, he's strong enough to pop a chain good for a 700kg pull, or he's full of it. Most likely he's full of it.
Creaking pedal? So what?
One of the prime reasons bikes are being used and enjoyed more is that they ARE more reliable. No, you can never convince a whiner that this is true. Anyone who rides and wrenches his own knows it to be absolutely true.

Broken chain? Either he's flogging a mountain bike severely, he's strong enough to pop a chain good for a 700kg pull, or he's full of it. Most likely he's full of it.
Creaking pedal? So what?
One of the prime reasons bikes are being used and enjoyed more is that they ARE more reliable. No, you can never convince a whiner that this is true. Anyone who rides and wrenches his own knows it to be absolutely true.

I commuted by bicycle for a number of years, but I came to the realization that on balance this is not a wise thing to do. The simple reason is that bicyclists are at great risk of injury and death at the hands of car and truck drivers that are unable or unwilling to drive safely (i.e., take the safety of cyclist fully into account). Specifically, my 1 in 10000 (or whatever) chance of dying more than wipes out the other benefits of bicycling.

Given that, I think it's unwise for bicyclists (or pedestrians) to spend a significant amount of time within 20 feet or so of a roadway, unless protected by something like a serious concrete barrier.

Personally, I could manage with gasoline up to at least $50-100 per gallon, and economics wouldn't lead me back to my bicycle at likely near-future prices. I would consider riding again if I saw a sea-change in the safety considerations. If half the vehicles on our roads were bicycles, this might change things, but it's difficult to see this happening any time soon.

Narrow one way streets with 25 mph speed limits# and numerous pedestrians are also relatively safe to bicycle on.

The health benefits of bicycling (exercise) also need to be included in the calculation.

# 28' wide with parallel parked cars on both sides has a "traffic calming" effect making bicycling safer. And motorists already looking out for pedestrians will also look out for bicyclists.

Best Hopes,


This is all true, but even after accounting for all of that, it doesn't seem to me like the decision is even close.

I pay attention to local news reports, and car vs bicycle and car vs pedestrian incidents are invariably described as "accidents". I can't recall a recent incident in which a driver was even ticketed for killing a bicyclist or pedestrian.

I have a small car (a Corolla) from before my wife and I got married, and she's been campaigning for me to replace it with a nice, big (gas-guzzling) SUV, for reasons of safety. I've been resisting, but she's winning me over, for pretty much the same reasons as why I no longer ride a bicycle or motorcycle.

I'm weird, I see a motorcycle as often being safer, because there are so many places you can *go* if things turn ugly.

But, basic and advanced MSF courses, and tons of miles of experience on 'em. And before that, rode a bicycle around everywhere.

Having somewhere to go is an advantage, but a minor one. The huge differential is that in a car you can strike someone or something at 30mph (wearing your seatbelt) with little chance of serious injury. On a motorcycle, on the other hand, you'll likely be injured, perhaps seriously, and death is not out of the question.

There's a much higher risk of accident rollovers in SUV's. Stay away from truck chassies.
If you must sacrifice fuel efficiency for weighted safety, pick a lower to the ground vehicle like a station wagon style vehicle with better crash safety ratings.

Yeah, I've heard these things. I also worry about the bumper height problem, though (high-bumpered cars tend to ride up over lower-bumpered ones).

Bicyclists are their own worst enemy. The vast majority of bicyclists don't stop at stop signs, run red lights, cut of motorists. I live in San Francisco and 95% of the bicyclists put their own health at risk due to their belief that they don't need to follow the rules.

I ride a scooter to work and for errands. I have come close to running down bicyclists that blow through a 4 way stop, which we have many in the city. I am all for commuting by bike but I have no sympathy for reckless @##holes on bikes that can actually put everyone else at risk due to their behavior.

I would love to see dedicated bike lanes with some sort of barrier from the main road to prevent double parking by other car driving @##holes in the bike lane. Maybe those who double park in bike lanes are the bicyclists? If not they deserve each other.

Hello TODers,

May I suggest SpiderWebRiding again?

Never get a flat, always super smooth ride @ minimal frictional losses, comfortable recumbent pedaling, no balancing skills required, spending much time on [cellphone, IPOD, Wi-Fi laptop, reading a book, or just people-watching] vs constantly watching for dangers where you are going, railbed costs a mere fraction of concrete or asphalt installation and maintenance costs, the slight elevation eliminates most pedaling through sewage, ice, snow, rainwater, and so on.

Lots more info in the archives.

In dense urban areas: a single rail for one leg pushing, other leg riding on scooter--more efficient than walking. Much easier for a crew to lay a single rail than hand-mixing lots of concrete in wheelbarrows.

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

Some bicyclist drive dangerously, and I wish they wouldn't, but it's also true that it's pretty difficult to kill someone with a bicycle--mostly they are just risking their own lives.

I'm not really sure I see the point here. When I'm out on my bicycle, I'm not concerned about being killed by a bicyclist, but rather by someone driving their multi-ton vehicle in a negligent manner.

Good points.

One paradoxical part of the 'Bikes Running Stopsigns' problem is, of course, that once you're riding, you are Keenly aware of conservation of energy, and how much it costs you to slow way down or stop, and then have to accelerate again. I'm not saying it's right to barrel through intersections endangering others and flouting the rules.. but it's a real energy issue. I'm even pretty peevish about having to brake the car suddenly when a pedestrian decides to step out to cross a street. What a huge waste of energy. It also means that when I'm walking, if I so much as look across the street, an oncoming car will often feel compelled to play it safe and slow down in case I'm going to cross. It makes for a very jittery and unsettled street atmosphere for both Cars and Peds.

I am a constant pedestrian, and I don't like that bit of 'small town driving etiquette' from the drivers or the Ped's perspective. I want the intersections to have dedicated walk signals at every cycle of the lights, instead of having to hit a button and wait a cycle and a half before I get to scoot across. Having my traveling access predicated on the 'generousity of some drivers' is a rough way to promote a pedestrian culture.


Toonsmith, watch the *messengers*.

If you see one running a red (after looking you'll notice) and doing the "messenger hook", crossing around behind a car, taking a short-cut along the sidewalk, etc., know that a lot of the time these behaviors are *safer* than going "by the rules".

I really don't get all this scared talk about cycling, I ride in Hollywood everyday in heavy traffic and I never feel scared for a second. I either ride on the sidewalk or ride on the side streets where there are few cars, so its really no more worrisome than walking across the street when the light changes. If you think its dangerous, SLOW DOWN.

It would nice if we had better bike paths, etc., it makes it easier and safer to get around quickly. When I was in Berlin last year I rented a bike and it was great cycling at top speed everywhere on the designated bike paths. Here in LA I take it slower and concentrate on taking the safest/easiest route at all times. I always yield to cars/pedestrians, etc.

I guess my feeling is that no matter what the statistics are, you can make a HUGE difference in your odds of having an accident depending on how you ride and how careful you are.

BTW I've been riding here in LA for 3 years and never had an accident with pedestrian or other vehicle...

so its really no more worrisome than walking across the street when the light changes

Yeah, this is what I'm worried about. I was almost run down in a crosswalk in LA when I lived there.

I lived in LA for five years, even commuting between El Segundo and Westwood (12-15 mi?) by bicycle for a while. In hindsight, it's actually a much safer place to ride than other cities where I've lived (in the Mid-west). Bicyclists here fall somewhere between Libruhls and illegal aliens, and there's not a strong sense that their safety matters.

It isn't just the risk of death that worries me. In some ways, the risk of disabling injury is even more of a worry. First of all, the probabilities are far worse (i.e., higher chance of happening). Given that I am counting on being able bodied enough to keep on working long enough to pay off my mortgage, plus grow a lot of my food and chop a lot of wood for the rest of my life, becoming permanently disabled would be a disaster for me. I am extremely doubtful that the US legal and insurance system would ever provide me with adequate compensation. Meanwhile, the motorist would go on their merry way, with probably nothing more than an increased insurance premium for a couple of years to show for it.

Of course, car drivers do have accidents too, and some of them do suffer disabling injuries, and some of them die. Driving is not totally risk free.

I run those risks with walking, too, but I suspect that they are lower. I am not actually sharing the road, but off the road to the side. The road I walk besides is a lightly traveled street with a speed limit of 35 mph - and the local police force is non-busy enough that they do actually enforce it occasionally. By walking, I can hear the sound of car tires on the road, and I do look around behind me often when I'm not facing traffic, so I'm aware of what's coming up behind me. I can probably get out of the way, or get behind a tree or telephone pole or something if a car seems to be bearing down on me. All in all, I feel that I've identified and minimized my risks pretty well.

I suspect walking is safer than bicycling. I also suspect that we all tend to overestimate our ability to detect and get out of the way of a car that's about to hit us at 35mph. If you know it's coming, sure, but people aren't that good at vigilance.

I know I HAVE to be good at vigilance - I can't afford to risk not being vigilant.

One final thought: The survival strategy for a pedestrian about to be hit by a car is to roll over the top of the car rather than being knocked down and run over. Very tricky to pull off, and not everyone can do it even if they try. It is very much worth trying to pull off if you possibly can, though, because your chances of surviving a collision with only minor injuries go way up.

Greeting from a unseasonably warm day in Seattle! Taking a break from gardening, couple items to share:

Dunno if this will help, but did you know there's a U.S. company that provides bicycle road assistance? I met their Vice President of Activism at the recent Green Festival in Seattle, and feedback from the Bike Club at work has been positive.

The nation's first and only bicycle roadside assistance service is now available exclusively through Better World Club.

Bicycle Membership Benefits:

Nationwide emergency roadside assistance. Service for you and your bicycle up to 30 miles annually with a maximum of two service calls per covered member, per year.

Seattle is also implementing its Master Bike Plan through the creation of "sharrows":

You know those symbols showing up on the edges of streets around Seattle -- the ones that look like a small bicycle wearing an oversized pointy hat?

That's a sharrow, and it's not a license to drive in the middle of the street, run down cyclists who aren't riding over the marks, or otherwise cause mayhem on the city's roadways.

Sharrows are a friendly reminder from the Seattle Department of Transportation to drivers: Leave room for those who choose to pedal their way around town.

A 2004 study by the San Francisco Department of Parking and Traffic showed sharrows do provoke drivers to leave about two feet more between their car and cyclists when passing. The study also examined which sharrow design was most effective; in the end they -- like Seattle -- chose the chevron symbol pioneered in Chicago and Paris.

And finally (Leanan, edit me if you need to :-), I invite any Seattlites reading this to enter Sustainable Ballard's Bike Rack Design Contest, deadline 7/15/08. More information at http://birdie.sustainableballard.org/contest_guidelines.pdf.

"The technology we need to use is *NOT* computer monitors that inform us when we are driving economically, but century old non-oil transportation.

You mean something like this? :)

I considered geting a bicycle for my daily commute instead of walking, but concluded that there were still just too many cars on the road, too many of them were just too big, and too many of them were going too fast, for bicycling to be a safe alternative for me. I simply cannot afford to suffer a disabling injury, even if I actually survive a collision. For my particular route, walking seemed to be the safer alternative.

I suspect that once gasoline moves into double digit territory, driving behaviors and traffic patterns will start changing substantially, and bicycling will then be safer. I'll probably be getting a bike just beofre that point, to avoid the rush.

I try to cycle everywhere it's possible to cycle, within the time and distance constraints. If I have to fly, I cycle to the Logan Express bus station, backpack strapped to the rack, about 16 miles each way, then bus to the airport. This saves a $50 taxi expense by the way, or big parking fees at the bus station.

Wednesday I met with MA state legislators re. starting up a Peak Oil group in the legislature. I cycled to Boston, about 30 miles. The state trooper providing security had no idea where a bike rack was - he had never seen anyone cycling to the state capitol building before. That's kind of pathetic.

Weekends, I ride with local cycling groups like the CRW, Nashoba Valley Pedalers, or 7 Hills Wheelmen (Worcester group). I like to go fast and socialize with them - but I have to say the world would probably be better off if these people did not cycle. Same for the thousands of extremely fit, healthy U.S. amateur athletes participating in bicycle racing or triathlon events.

Why? With few exceptions, they never cycle anywhere for a practical purpose. Worse, they load up bicycles onto or into their ICE vehicle and drive to the start of the ride, sometimes hundreds of miles - and then just cycle around in a big circle, often another hundred miles. What a waste! Privately, they will dismiss those who ride for a reason, like commuting or getting groceries, as "granola heads".

I hope a few of them see the light soon and realize how they could transform their energy and talent into a direction that could save them $1000 or so in fuel costs, reduce wear-and-tear on vehicles to almost nothing, stop spewing CO2 and pollutants into the air, and still be as fit as they were when they only rode on weekends, in big circles, for no reason.

What a change that would be!

- Dick Lawrence

Alan I applaud you for stayng with the bicycle theme. You are correct that if we in the USA have a chance to keep semi functional and sane there will have to be the continuing buildout/integration of bike, trains and busses which you have long advocated. This build may help somewhat to offset the devastating collapse of freight truck and air transport employment just ahead.

We just returned from St. Louis where we rode the Metro several times. There is good use of bikes especially around the Forest Park and University areas and the little bike vestibule areas in the back of the metro cars are being used. Despite the desperate need for the addition of a N/S link for the system it is providing a vital stabilizing effect in that community presently IMHO.

We face the spectre of wholesale job elimination as fuel hikes eat their way through air travel, hospitality, and truck freight along with all the related support activities. (and there are a ton) Most retail sits next in the crosshairs. Massive layoffs w/o ambitious work projects will mean a kind of income gridlock. I highly doubt that many leaders grasp anything near the full knock on effects of increased crime, rioting and the inability to commerce safely that will ensue.

Bike riding and trains will no longer be mere issues of personal safety or convienience but their use and providing the infrastructure for them will quickly become matters of survival for maintaining social order. Little village units, permaculture, and localization are the goal but moving an active city there w/o viable transport alternatives to cars will be social hari kari.

My partner and I bike and run actively. I turned my work car off last September and have not touched it since. We are going on 55 and can crank out up to 100mi. in a day and love it. Keep up the cycling advocacy, we get it! Best hopes, the burbs.

St. Louis has almost 100 miles of Light Rail routes already planned out, but no money to build more.

They did build a 8 mile spur to the SW in Missouri (opened 2 years ago I remember) and a 5 mile "corn field" extension further east in Illinois to a local airport is planned but GWB pulled the funding.


MetroLink is often mentioned as a key factor in reversing the decline of St. Louis.

Best Hopes for building that 100 miles ASAP,


Interesting. Yeah my strong impression is they really need that additional line. Perhaps a somewhat wild notion. Lambert has an East terminal one stop short and separate from the Main. I wonder if any airport has ever been converted to an intercity rail or bus terminal.

Frankfort Germany and Charles de Gaulle airport in Paris are the two most famous examples. High speed rail stations at both.

The Copenhagen airport is a stop for the rail line to Sweden (to be extended more directly to Germany later) and Copenhagen Metro.
Best Hopes for Multi-Modal connections,


yeah? thanks, the whole time we were there I was intensely aware of just how many people are employed through the airlines and support services. It's going to be tough to keep people working, I hope the next administration will help somewhat to kickstart these shelved projects. Jetlag has finally set in thanks for the good words.

Alan...why did you post this message THREE times? It wasn't just a server burp, because there was quite a bit of time between re-posts.

Once is enough, please. And if a message is deleted, do not keep re-posting it.

Problems on my end. Typical post-K.

I have been w/o land line service (also suppled by Cox Cable, the most reliable of available choices by reputation) several times today. Twice calls were interrupted mid-call today.



No wonder Iceland has the happiest people on earth

Highest birth rate in Europe + highest divorce rate + highest percentage of women working outside the home = the best country in the world in which to live. There has to be something wrong with this equation. Put those three factors together - loads of children, broken homes, absent mothers - and what you have, surely, is a recipe for misery and social chaos. But no. Iceland, the block of sub-Arctic lava to which these statistics apply, tops the latest table of the United Nations Development Programme's (UNDP) Human Development Index rankings, meaning that as a society and as an economy - in terms of wealth, health and education - they are champions of the world.

Makes me suspect that the problem in the US is not broken homes, but the way we as a society deal with them.

The Iceland economy is set to melt down according to The Automatic Earth.

This story is a lovely picture of a special place. I'd say we need to know a lot more about Iceland before we could generalize their (possible) success to the USA.

Certainly the economy is in serious trouble but other European countries have just stepped in to help.

Scandinavians unite to end Iceland's financial chaos

The central banks of Norway, Sweden and Denmark have joined forces in a stunning move to rescue Iceland, offering a credit line of €1.5bn (£1.2bn) to beat back speculators and shore up the battered krona.

The solidarity gesture is a powerful signal to hedge funds betting on Iceland's downfall that they are up against the international system. The swap accord doubles the foreign reserve cover of the Icelandic government at a stroke.

Iceland's central bank said the deal was a "precautionary measure" to stabilise the currency, which has crashed 25pc this year.

Stefan Ingves, head of Sweden's Riksbank, said the accord aimed to restore stability after months of mayhem. The Icelandic krona surged 3.7pc on the news.

Björn Gudmundsson, an economist at Landsbanki, said the Bank of England might need to join the Nordic front to stop the crisis spreading.


President Bush said Saturday that the Saudis' modest increase in oil production "doesn't solve our problem," and that the United States must act itself to help bring down soaring gas prices.


Gov. George W. Bush of Texas said today that if he was president, he would bring down gasoline prices through sheer force of personality, by creating enough political good will with oil-producing nations that they would increase their supply of crude.

Thusly - how can GEorge Bush use his personality to get you to consume less oil?

An article about rising food costs, how to contain them, and an admonishion that food prices might double this year:


One might also check the cost per calorie of the foods one buys. A person might fill his/her stomach cheaper if one is aware of how much one is paying to get 2000 calories per day. Heavier people burnt more caolories than thinner people. Active people needed to eat more than inactive people.

Vegetable oil contains a large number of calories per fluid ounces. While cookies do not provide much in terms of vitamins and minerals some brands are a relatively inexpensive source of calories.

Buying cookies is silly for the most part. The calories, after all, come from sugar or perhaps corn syrup and some kind of fat. If you want cookies get the fat and sugar yourself and make them. That way, you can pick the fat and sugar you want, rather than going with what ever the cookie company thought it most profitable to use. Most recipes can take that kind of substitution. Of course, if you lack an oven, there might be a problem.

I think, however, that eating health food lower on the food chain, for example pasta and beans, and skipping cookies for the most part is a better way to do it. After all, calorie deprivation is not a problem for most people in the US, at least, to pacify the doomers, not yet.

Jeez it's starting to get scary. The sixth great species die-off is going to cost a boat load of moola!
Bad eough to be dead, but in a depression as well?
Well, that's really depressing!

"The destruction of flora and fauna is costing the world two trillion euros (3.1 trillion dollars) a year, or six percent of its overall gross national product, according to a report trailed by German news weekly Der Spiegel."


It is official: Contango!

Jun '08 $126.29 NYME as of 05/16/08 21:14:43
Dec '16 $126.64 NYME as of 05/16/08 18:50:54

Does anyone know the last time (if ever) oil was in Contango?

Hello Realist,

I am no expert, but I doubt if there is an I-NPK futures market because it will be much easier, and much more profitable, to hoard I-NPK as FFs deplete. Recall that even O-NPK potent dry cave bat guano can be thousands of years old.

Even a slight supply chain delay can have drastic price consequences [and associated volativity] due to our food supply being dependent upon seasonal planting optimality.

Recall my earlier postings on NPK agro-timing mismatches or shortages in various locales. Dr. Duncan's Olduvai Theory is the default example for electricity. I am trying my best to develop an equally dire 'Death Valley Theory'. But I hope some TopTODers will do the heavy graphical and statistical heavy-lifting.

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

I'm not sure what your point is. If I can guess your jargon, I-NPK is inorganic fertilizer from fossil fuels and O-NPK is poop. I assume you are saying that contango will be stopped by storing fertilizer, but I'm not sure how that helps our transportation system.

The data speaks for itself.

Hello Realist,

Thxs for responding. No disagreement from me on your posted data--it does speak for itself.

I apologize for not being more clear. You are correct: crude futures contango will not be stopped by I-NPK hoarding. I was merely pointing out the criticality of NPK to create food surpluses that allows continued job specialization going forward. Thus, any massive agro-input failures [blackouts?], shortages or bad delays [brownouts?], if you will, sets off far-rippling effects of cascading blowbacks much worse than even Olduvai. IMO, Zimbabwe is a clear example of this agro-failure phenomena.

As posted before: sitting in the naturally occuring darkness with a full belly is pure luxury compared to starvation. As FF depletion kicks in and ELM hammers home: our dependency on global I-NPK flowrates will run into enormous difficulty. There are No Substitutes to I/O-NPK [and the other trace Elements like sulfur] to leverage photosynthesis growth above Liebig Minimums.

Recall my earlier postings on the Guano Wars and deadweight tons of 'immigrants' into the British Isles.

From Wiki:
"In 2005 and 2006 the crude oil market was in contango. This was a result of the perception of a future supply shortage. Many hedge funds took advantage of the arbitrage opportunity by buying present oil, selling a future contract and then simply storing the oil for future delivery. It was estimated that perhaps a $10-20 per barrel premium was added to spot price of oil as a result of this. The contango ended when global oil storage capacity became exhausted."

If memory serves me correctly it was 2 summers ago just before the price headed toward the mid $40s range. Maybe westexas has a more accurate time line. John

It is official: Contango!

This matters why, exactly?

Historically the oil market oscillates between backwardation and contango every few years. The definitions are slightly woolly however as the curve is never a straight line. The key question for traders is what is happening in the front few months where most of the trades happen. So I would argue we are still firmly in backwardation.

It affects what happens when you roll over a position from one month to the next. If the market is in backwardation you can profit simply from rolling from one month to the next. If it is in contango you will normally lose money as the new contract you are switching to is more expensive.

I am not a trader, but I have owned oil Exchange Traded Funds.

BTW, Yahoo disagrees with your figures http://finance.yahoo.com/q/fc?s=CLZ12.NYM

As the US economy shrinks due to high fuel prices, increasing debt load and the mortgage meltdown, other countries around the World have economies that are expanding for either of two main reasons. The first is oil wealth from exportation, and the second is a much greater role in manufacturing and or service related businesses. As Russia builds new malls to provide adequete retail outlets for their increasingly upscale citizens due to increased oil revenue, Brazil's economy expands for the same reason. China's economy expands due to exportation of manufactured goods, while India benefits from a large base of well educated service workers taking the world's phone calls regarding various products and services.

During previous periods the US could anticipate the rest of the World's economies to shrink as ours did, but we are now in a different period in which our economy is being replaced or substituted by a variety of other economies.

Our country needs something to counter this replacement scenario. Something like a scaled up mass produced algae ethanol, or some other way of producing oil with microbes, bacterial or otherwise. In so doing we would achieve several goals. Namely we would be headed towards energy independence, while at the same time combatting global warming by producing a carbon neutral fuel energy source, but also and at some threshold of production we could become an exporter of this new oil, in which case our economy would start to expand with these other countries instead of being replaced.

I know the technology isn't there yet, however with enough focused intent, R&D, and political will, it could come to fruition.

Re China, everybody focuses on exports, meanwhile their retail sales are up 23% YOY. There has never been an economy the size of China growing retail sales at a 23% clip. The savings rate is around 50%-it is quite amazing that there is little understanding in the USA of the diminished global economic influence of the country and economy.

China will likely start building passenger jets for the airline industry. After Boeing moved a production plant to China, the Chinese learned the technology of how to build jetliners.

By the time the Chinese are making commercial jetliners, the market will be shrinking fast anyway.

Last night, my partner and I completed one more step in our quest to get off oil and although this particular leg in our journey was not without its moments, no lives were taken (in my partner's mind, a monkey wrench + brut force = swift moving blunt object = massive trauma to side of head = problem solved). As of 01h30 this morning, we now have a small, 120-volt/1.5 kW electric water heater to pre-heat the water that is feed to our indirect DHW tank. This indirect tank is powered by our oil-fired boiler and accounts for roughly two-thirds of our remaining fuel oil consumption. Last year, we consumed a little over 700 litres (185 gallons) of fuel oil for space heating and DHW purposes and with this electric water heater in place, that number should fall to 250 litres (66 gallons) or less. At current rates, our estimated savings are $150.00 a year, but we expect that to increase substantially with each passing year.

This new tank is just 67-litres/18 gallons in size so its storage capacity is somewhat limited, but it should nonetheless serve our needs well. We've set its thermostat at 70C/160F and the main tank that it feeds at 50C/120F so that the water entering the main tank upon initial draw will be substantially hotter than what is being taken out. We expect the hotter water being pulled through the main tank will not only be satisfy our modest requirements (in our case, two 5-minute showers consume about 25 litres of hot water in total), but also compensate for the standby losses of this secondary tank (according to manufacturer, the standby losses of this SuperStor Ultra tank are 0.5F per hour). The standby losses of the electric tank are quite reasonable due to its small size, but the higher set point will bump that up somewhat; in addition, tank life will take a bit of a hit. I plan to monitor its performance closely and slowly reduce the setting just high enough to prevent the boiler from kicking on; we may be able to drop it during the summer months when supply temperatures are higher then, if need be, bump it back up come winter when inlet temperatures are lower and when draw downs are greater.

We could have simply by-passed the main tank altogether but this arrangement works better from our point of view because we can rely on oil to help out during times of unusually high draw (e.g., when we have overnight guests) and, furthermore, I don't want to shut down the boiler for an extended period of time for fear that this might result in operating problems down the road. Our boiler has a Tekmar control system so every two days it turns on the circulator pumps, opens up all the zone values and circulates water through the entire system for about five minutes as a preventative measure; in addition, unless the DHW tank or a zone thermostat calls for heat, the boiler is allowed to fall to room temperature, so never a drop of oil is wasted. [Without exaggeration, over the past six years, this Tekmar system has probably saved us a couple thousand litres of heating oil (some $1,500.00+).] In effect, other than the additional standby losses related to the main tank (which are minimal and for six or seven months of the year provide useful heat in a conditioned space), there's no real penalty to plumbing it in this manner.

So, starting with a home that initially used some 5,700 litres of heating oil a year, our new target is 250 litres or less. With respect to our electricity use, we'll have to make some adjustments elsewhere, but my intention is to keep us under the 12,000 kWh/year mark (including the heat pump, we now use roughly 10,500 kWh/year).


Edit: A picture of the new tank can be found here: http://www.datafilehost.com/download-458c4344.html. Although hard to see, the tank sits on 80 mm of styrofoam insulation to help minimize heat losses through the base.

There is a strong global demand for distillates. This article (5/15/08) by Tom Whipple might be of some use:


This shortage might affect users of home heating oil in the autumn.

Still waiting for the drop in oil prices. Not sure when it will come or how long it might last. The oil markets were volatile. I imagined people were trying to switch from heating oil to electric or natural gas. More evidence of this in the post above.

Benjamin Franklin invented the wood burning stove and wrote: "If you split your own wood, you are warmed twice." He was trying to encourage his neighbors to be thrifty and industrious.

Hi rainsong,

I suspect things are going to get truly ugly for those who heat with oil and that most of us will be shocked when our tanks are refilled later this fall. As I mentioned in an earlier Drumbeat, heating oil has already reached $1.36 per litre/$5.00 a gallon in some parts of Ontario, so someone sitting at a quarter-tank could be looking at a a $1,000.00 hit by the time that hose is dragged back to the curb.

I'm not exactly thrilled about using a premium fuel like electricity to perform a low-grade task, but I feel I have no choice. For those who heat their DHW with a stand-alone oil-fired water heater, the economics are even more compelling. A conventional oil-fired water heater has an EF of 0.50 to 0.55, so almost one-half of the heat generated is simply lost up the stack (to add further insult, conditioned or semi-conditioned air is being sucked up this same stack and out of your home 24-hours a day).

A gallon of heating oil contains roughly 139,000 BTUs and at an EF of 0.55, your net gain is 22.4 kWh per gallon. At $4.50 per gallon, the operating costs are similar to that of an electric water heater at $0.20 per kWh and although electricity rates vary widely by state, the U.S. average currently sits at $0.103 per kWh (source: http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html). With TOU rates, the potential savings could be even greater and for households with high DHW demands, a heat pump water heater could cut those costs in half again.


I am also using a 19 gallon electric hot water heater, though not really by choice. It's what was here in this essentially all-electric house.

Electricity is an expensive way to heat water. But, hot showers are nice. I've been thinking of ways of reducing hot water needs. I figure the best thing is to have an insulated shower. Instead of just a shower curtain, you'd have an enclosed shower stall. In this small space, the air would heat up quite quickly, and you could keep warm while using a very low-flow showerhead.

One of the main uses for hot water in the shower is not for washing the body, but heating it. In that regard, I would put an infrared heater-light in the shower stall as well, of 350 watts or so.

Hi econguy,

Electricity may seem expensive, but to those who heat with oil it's a relative bargain. As noted above, at $4.50 a gallon an oil-fired water heater with an EF of 0.55 is the equivalent of an electric tank operating at $0.20 per kWh or almost double the national average.

Your idea of using a heat lamp within the shower area makes sense provided, of course, it conforms to local code -- on cold, winter days, I often use a long, hot shower to help steal the chill from my bones and an infrared heater could potentially do the job with a lot less waste. I have a single 250-watt heat lamp located just outside the shower but, as you can appreciate, it's only effective after you step out and towel-off.


I use a little portable electric space heater in the bathroom, probably runs at about 1000 watts. I use it because I keep the house pretty coolish and that makes showers kind of chilly-drafty. Turn it on about 5 minutes before you head in and it's got a thermostat and turns off at a preset temperature. Usually cycles a couple of times while showering. Makes life more pleasant and should be better than the 3000 or so watts of the water heater.

Hi Substrate,

That's one of the virtues of electric heat. Although it can be more costly than some of the alternates, per BTU, it's extremely flexible and a good choice for spot or zone heating. Used wisely, as in the example you just described, it can greatly improve comfort and lower overall heating costs.


You could try putting a timer on the cord into the heater, say only allowing heating from midnight til 4 am. Also turn the thermostat down to a minimum, usually set to 55C. Provided you don't use too much of the tank requiring a strong reheat that shouldn't trip the fuse set at say 10 amp.

Then there's 'Navy showers' and low flow shower nozzles and not wearing jackets in summer.

Hi Boof,

Navy showers - check! Low-flow showerhead - check! With respect to not wearing jackets in summer, I take it you've never visited the Maritimes (and when you do, remember to pack your scarf and mittens). :-)

If Nova Scotia Power switches us over to TOU rates, we'll definitely install a timer, but for now it makes sense to simply let it cycle on and off at will. Again, the temperature is set rather high because we want to eliminate as much oil demand as possible. We'll see how low we can set it without causing the main tank to kick the boiler on because the temperature of this tank has fallen below 50C. It will likely be several weeks before we'll know the correct answer.

The electric water heater draws about 12.5 amps and the cord that feeds it is rated at either 13 or 14 if I recall correctly. For now, it's plugged into a single duplex plug that is served by dedicated 15-amp circuit; eventually, it will be hard wired to a junction box with a proper metal encased cable.


I am curious why you did not install a tankless electric hot water heater (say dual pole 30 amp circuit to support about 5,000 watt heating element) instead of a small tank hot water heater ? With copper piping inside the tankless unit, appliance life should be quite high.

Best Hopes,


Hi Alan,

Well, as it turns out, there are a number of reasons. One, certainly, is that our 100-amp panel is maxed out with just a single slot remaining. As it is, to add a second, inverter-drive ductless heat pump, which is something I hope to do either later this year or next, is going to require some creative re-jigging. In addition, the electric panel and boiler room are some distance apart and the entire lower level is finished with plaster walls and ceilings, so it would be prohibitively expensive at this point to try to run a new 240-volt line. Thankfully, we had an extra 120-volt circuit kicking about, so this made the decision to go with a 120-volt tank pretty simple.

Next, this small tank cost $150.00 which I take it is considerably less than the alternative and it fits within the small space available (it sits on the floor tucked under the lower portion of the basement steps). And although this sounds silly, from a utility point of view, a 1.5 kW load is a little kinder than 5.0 kW and spreading this load over a longer timeframe puts a little less stress on the system -- admittedly, a tiny speck of sand on the beach, but it's more the principle than anything. Plus, if we switch to TOU rates at some point down the road I don't want to be heating water on-peak, so this tank controlled by a timer would ensure our operating costs remain low.

Lastly, a storage heater would simply perform better than a tankless unit. Our low-flow showerhead uses roughly 2.7 litres of hot water per minute and an average temperature rise of 38C (remember, our winter inlet temperatures are barely above freezing) would require a continuous draw of 7.2 kW, or 1.5 times more than what a 5.0 kW tankless unit could provide; the situation as it pertains to the dishwasher and front load washer would be even worse because they draw water at much higher flow rates (i.e., litres per minute). Having up to 67 litres of 160F hot water at our disposal allow us to have two, back-to-back showers without any additional support from the boiler and the higher temperature water blended with what is stored in the secondary tank should hopefully cover-off the additional standby losses. Likewise, back-to-back loads of laundry which we typically do in the evening shouldn't be a problem because the tank would have ample time to recharge during the 45-minutes or so it takes to complete each full cycle.

If my thinking is correct, the boiler should kick-on only during times of unusually high draw or when there is no demand for an extended period of time and, consequently, the temperature of the main tank is allowed to fall below 50C (i.e., there's no new supply of hot water to offset the the standby losses of this second tank).


A tankless heater may seem more efficient, but one "advantage" of a 19-gallon tank is that you don't dilly dally in the shower, unless you like washing out the conditioner with 45 degree water! Our hot water use is probably cut in half as a result.

And that's an important point. If a large-capacity/high-recovery tank or tankless water heater allows family members to enjoy "endless" showers, then total energy use increases accordingly. Knowing that you could very well run out of hot water should you over-extend your time dictates greater prudence.

A friend of mine has one of those multi-head full body showers that blasts more water than a harbour fire tug and wonders why his water heating costs are so much higher than in his last home. I just shrug my shoulders and say "hell if I know!". :-)


Some people have been advocating the ground source heat pump, it is more expensive than the air circulation heat pump. As I recall the air circulating heat pump switched from heat pump mode to electric resistance heating when the temperature drops into the low 20's or colder. They are more effective in the sunbelt where people who also needed airconditioning.

Electric baseboard heaters might be an option. The price of Northern Appalachain Coal has doubled in a year, some people will see higher electric bills after new rate hikes will take affect.

I cannot give advice about oil or gas furnace effectiveness, I am connected to a central heating plant.

My brother in New England added super thick insulation in his attic floor and ceiling where he and his wife built an additional bedroom. He claimed the insulation greatly reduced his heating bills. He also had a forced air wood burning stove, but realistically when he got busy he did not want to be stoking the stove and used heating oil instead.

I've challenged those who advocate ground source heat pumps to provide me with data that would help me better understand their economic performance. They could very well be a great choice, but without rehashing what I've said here many times before, for what it would cost to install a GSHP, I tend to believe you'd be further ahead spending those same dollars on a good quality air source heat pump and allocating what's left over on improved insulation and air sealing. As a rule, you get far greater return from every dollar spent reducing your home's energy demands and once you get demand down to the point where you can basically heat your home by the friction of your thighs as you walk to the refrigerator, you don't need an expensive heating system.


I'm in the process of replacing my HVAC unit with a ground-source geothermal unit (unit is in, but the wells are not drilled yet). I had a air source heat pump in my first house, and I hated it. It cut over to the electric backup whenever the temp dropped much below 40F, which means every night in the winter. My electric bills in the winter were bigger than in the summer, and I used my AC a good bit.

The house I live in now is one of 4 in what used to be a farmer's field. All 4 of the houses have the same HVAC unit, including an air-source heat pump. All 4 of the houses have the heat pump disabled and an oil burner added. I haven't talked to anyone who has had a good word to say about air-source heat pumps. Maybe they make sense in a warmer climate than Pennsylvania.

Besides the run-up in oil prices, two things made me go with the geothermal. It gets pretty hot & humid in SE PA in the summer, and I really want to be able to run my AC on the nastier days. I'm expecting to save about 80% on my AC bill, and there's nothing an air-source heat pump is going to be able to do to help with that. The second reason is that PA is scheduled to deregulate electricity in a couple years. We're expecting our electric bills to increase 2x to 3x when that happens (over and above whatever PO is going to do to electricity prices). There's no way I want to have to depend on electric resistance heat when that happens.

Hi shargash,

Sorry to hear of your poor experience with air source heat pumps. If your system is more than ten years old, its performance won't even come remotely close to matching the best of what's available today. When I bought my home in Toronto back in 1997, the SEER rating of the CAC was either 6 or 7. I replaced it with a 13.5 SEER model that was pretty much the best available in the Canadian marketplace at the time. Now, if I so wished, I could buy one that is three and a half times more energy efficient (i.e., 21 or 22 SEER).

In addition, a lot of heat pumps were improperly installed or, as more often the case, certain assumptions were made by the installer as to how they should operate. These decisions may have been perfectly reasonable in their day but perhaps much less so now. For example, your system could be technically capable of operating well below its current balance point, but transfers to backup electric heat sooner than need be to avoid any potential issues related to that dreaded phenomenon known as "cold blow", i.e., air temperatures that feel uncomfortably cool at higher volumes (variable speed fans and a number of other improvements have helped to address that, btw). When electricity was relatively cheap, it was easy to trade-off added comfort for a little extra operating expense, especially if it resulted in fewer complaints and call backs.

Likewise, in years gone by, heat pumps were typically undersized for heating demand because too large a unit would aversely impact their a/c performance; that is, they'd end up over cooling without removing excess humidity. Today, with multi-stage compressors and inverter drives, they can be properly sized for winter use without making the home feel cold and clammy during the summer months. That one thing alone represents a huge jump forward in terms of comfort and operating performance.

There's obviously a lot more (e.g., improved refrigerants, advanced, fuzzy-logic defrosting controls, etc.) but I think you get the picture. What's important to note is that you can no more judge today's air source heat pumps by yesterday's models than you can today's new vehicles by their 1970s and 1980s predecessors.


Folks, just a reminder or two...

1. TOD is on twitter now with our RSS feed: http://twitter.com/theoildrum . If you are on there, give us a follow.

2. If you have a blog, or are a member of a messageboard, or play at a link farm like metafilter, the more you plant links to our stuff, the more eyes it gets...it's that simple. Every little bit helps.

We're all doing this for free, but we really do need your support. That and "doing good" is what keeps us all going.


i put the link on my blog and also i got a mediocre song if anyone is interested ...songs name is .......spoiled.


feel free to download it and use as you like.

Hello TODers [especially any welcome newbies],

This link gives a good food supply and agro overview [plus possible dire info teaser-posted below]:

Grain Markets Panic Buying, Export Controls, and Food Riots

...As he's done every spring for 20 years, agricultural meteorologist Elwynn Taylor spent the past week barricaded inside his office at Iowa State University, poring over weather patterns to answer a crucial question:

Will a drought strike the Midwest's corn and soybean crops?

Last month Taylor delivered some bad news. He pegs the odds of a major drought at 1 in 3, about double the usual risk. "There is a significant chance of drought," he said. At Iowa State , Taylor seeks to put the reams of weather data into historical context. A major drought typically strikes the Midwest every 18 or 19 years, and the last one hit in 1988. Taylor noted the average length of time between major Midwest droughts is 18.6 years. "The longest gap between major droughts in 800 years is 23 years, so if we don't have one by 2011, we'll break an 800 year-old record," Taylor said "We're overdue," he noted.

In addition, the past 17 droughts were preceded a year earlier by dry conditions in the Southeastern U.S., just as occurred last year. "That gives a significant chance of drought," he said.
Have you hugged your bag of NPK today?

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

Hello TODers,

In response to the above research on higher risks for a massive North American 'dustbowl': With Brownie gone, I thought FEMA would have posted everything from massive mitigation plans, to personal strategies, in event this transpires. Going to the FEMA website, then typing 'dustbowl crop failure' into their site-specific search engine brings back this result:

Your search - dustbowl crop failure - did not match any documents.

I tried other word combos too: nothing of substance. My guess is they will treat us just like the Myanmar Junta treats their citizens if we have massive food shortages.

Hello FEMA. I think it is safe to assume that you read TOD. I think you can do better than this to foster Peak Outreach!

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

Any hear of any FEMA stuff on Peak Oil impacts?????? Surely they have lots of information on how to deal with Peak Oil!!!

Hello Cjwirth,

Thxs for responding. Yep, we are not getting much value from our taxdollars sunk into FEMA and Homeland Security [although Michael Chertoff would make a great looking Grim Reaper!]. This is just another reason why I want Google to premiere the unlucky button.

If I was the FEMA topdog, I would require any FEMA search that couldn't find any specific search results to auto-link to a results page that would offer the following Peak Outreach WEBLinks:

Jay Hanson's Thermo/Gene Collision

Dr. Duncan's Olduvai Gorge Theory

Prof. Bartletts Video on Exponential Growth

plus the usual websites: TOD,EB,LATOC,DIEOFF, etc, to help get newbies quickly up to speed on Peak Outreach and the need for Paradigm Shift. Time will tell.

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

you produced a search failure. They spell it "dust bowl", not dustbowl. They have stuff about dust bowl.

Hello Biologist,

Thxs for responding. Yep, I earlier tried 'dust bowl' too, but I was not impressed with the results.

What I want to read is detailed mgmt scenarios for just about any situation at any location. Cool 3D simulations, risk assessments, ramifications, interactions, expected citizen reaction, numbers of Nat Guard required [Blackwater #'s ?!?], typical evacuation routes, anticipated deathrates, what requires martial law imposition, rescue rates, death rates, supply exhaustion rates, expected rioting & looting and where... I could go on & on.

IMO, TODers could read these reports, then offer great suggestions for improvements. I suspect that lots of FEMA staff/writers operate with a Yergin-like prediction accuracy.

The article about Juneau's electric situation, linked to their financial situation, is a classic.

AEL&P first built the Snettisham power plant, which is now off line because of the avalanche. They sold this power plant to a state agency, under a contract under which they have to pay, whether or not they receive power. I would presume that the purpose of this payment is to cover some debt which the state agency now holds, but AEL&P is really on the hook for.

AEL&P then borrowed $46.6 million to build another power plant at Lake Dorothy. While they were waiting for the power plant to be built, they invested much of this money in mortgage backed securities. Guess what? Their investment lost value.

AEL&P debt rating was BBB- when it did all to this borrowing, but it bought bond insurance from AMBAC, to bring its rating up to the equivalent of an AAA rating.

There was no insurance on the transmission lines, and now there are huge repairs to be made to them, so AEL&P is on the hook for them. The Lake Dorothy project is behind schedule, and some of the money to pay for it is gone. AEL&P has to pay under the Snettisham contract, whether or not it is receiving power. AEL&P is on the hook to pay for diesel fuel at high cost to cover the current outage.

This looks like a situation where the state most likely will have to get into the power business to get things straightened out. I wouldn't make a whole lot of bets on AMBAC's ability to really provide the bond insurance is selling, if there are more than a handful of these situations out there.

Hello Gail the Actuary,

Terrific cascading blowback info-thxs! Useful postPeak warning phrase to spur mitigation?

"You Know Juneau?--Better get your Peak Outreach mojo on!"

If I was a Peak Outreach Putin: I would declare that no Haber-Bosch natgas-generated N would be exported until Russia had at least a twenty year stockpile carefully stored and distributed close to the arable farmlands. IMO, processing, then moving these multi-millions tons early, while they still have the mfg and transport energy, is much better than waiting until their only major source of N comes from crop rotation and O-NPK recycling.

Anyone have a link to an energy bulletin article that has a map showing which countries have the oil, and which countries use the oil? The map artificially inflates the size of the middle east countries based on their oil reserves. I have tried some searches and can't seem to find it. Any help would be appreciated. Thanks, -Tim

I am not sure this is what are looking for...the oil depletion atlas:


Thanks! found the link now that Perpetul Energy posted the pic. Was able to search google "who has the oil?"


This is a picture of who tells the biggest lies. Saudi Arabia, Iran, and several other OPEC members don't allow independent audits of their reserves.

Winds of Change

The world recently reached 100 gigawatts of installed wind power:


The world used 1.7 terawatts or 1,700 gigawatts of average continuous electricity in 2001 (Wikipedia)


fine, make that 20 GW continuous production (at 20% efficiency) or 175200 GWh annually or 175,2 TWh .. or 1,5 x Norways annual el. consumption still at only 4,7 million inhabitants.

Over the same years 1980-2008 world population grew with a whopping 2 billion people ! WTs are a fad (in the big picture) and will never do anyting for the world as a whole as long as the 24/7/365 scheme of things is mandatory. Sorry for not being able to celebrate with you rainsong. Or maybe it was just plain info from your side :-)

I'll talk positively about them in a different setting, though. Forinstance like if 20 GW of coal was abandoned forever, due to this wind addon/substitution. Fossils would have been stretched out in time as a secondary effect , CO2 reductions and so on ... blah blah

Hello TODers,

Sad that the machete' moshpit is rapidly gaining newfound popularity among the Overshoot:

Foreigners Attacked in S. Africa
Zimbabweans, Others Chased From Homes

JOHANNESBURG, May 18 -- Gangs of men armed with guns, clubs and threats have chased thousands of Zimbabweans and other foreigners from their homes in this nation's poor townships over the past week, leaving at least 12 people dead and scores injured, according to news reports.
Won't that be fun when it occurs with regularity inside the US? :(

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

Hmm. A machete fund? Moshpit futures? Vivoleum plant?

Nah, it just hurts to think that.

Hello TODers,

Some recent NPK news as the quest continues:

Nation halts fertilizer export over domestic shortage

Earlier, the Ministry of Agriculture and Rural Development had called for stopping fertilizer export to channel local sources into the spring-summer crop, noting that world prices were rising.

New Zealand’s illegal trade in North Africa

In the meantime, New Zealand has been engaged with Morocco for nearly the past two decades in a highly questionable trade in phosphate extracted from Western Sahara. On its website, the Ministry of Foreign Affairs and Trade lists Morocco as New Zealand’s main source of phosphates and fertilisers, and these natural resources made up the vast bulk of our $167.9 million imports from Morocco recorded in the year to June 2007.

Given how crucial fertilisers are to NZ agriculture and farming’s role within the national economy, the importance of this trade can hardly be exaggerated. Unfortunately, trading in the exploited resources of the Western Sahara is in violation of UN resolutions on such non self governing territories as Western Sahara, and of an explicit UN legal opinion. In that respect the trade is not only morally reprehensible, but is, in all likelihood, illegal under international law.

KTDA suspends fertiliser imports as costs increase
Do things appear to becoming unhinged in the fertilizer markets? Has depleting FF price increases reached the point where problems in global I-NPK markets might setoff a massive decrease in harvest yields? Recall that I-NPK roughly leverages a 20:1 photosynthesis bang per pound of fertilizer applied.

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

Hello TODers,

Matthew R. Simmons has of course talked about the difficulty of recruiting new and young workers to the FF-industry as the older generation retires. The adequate transfer of skills and knowledge is vitally important postPeak.

Imagine the difficulty of trying to recruit new farmers, plus the extremely detailed farming knowledge transference, where the older farmers commit suicide:

No relief in sight for farmer suicide zone as food prices soar

HAMIRGARH (AFP) — Unlike his father and brother who hanged themselves, Labh Singh gulped down pesticide to end his misery, leaving his wife to look after five children and pay off the family debts.

Seeds of Suicide
India's desperate farmers
Recall my earlier posting whereby I suggested biosolar mission-critical NPK investors could do much to reduce global rates of rural suicide.

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