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DrumBeat: May 31, 2008
Posted by Gail the Actuary on May 31, 2008 - 8:35am
Oil prices could hit $200 a barrel in the next few months. How the spike changes everything.
This spring, America hit a historic point. With average gas prices per gallon edging toward $4, America's notoriously profligate ways started to change fast. Americans are driving less, using mass transit more, buying fewer gas guzzlers, indeed shopping less wantonly in general, and lowering their previously unshakable confidence as consumers. Suddenly, Americans are acting differently; if not exactly like Swedes, then not quite like themselves, either. It's a shift that could change the world.
Boston: MegaBus yesterday charged into the ultracheap bus wars with an offer hard to beat - a free ride to the Big Apple.
Like BoltBus, which rolled out service last month, MegaBus offers at least one seat per bus on its Boston-to-New York route for $1. Other seats cost up to $14 each way. Chinatown rival Lucky Star matched the fares.
Haynesville Shale: Penn Virginia natural gas well hits big
Shares of natural gas producer Penn Virginia Corp. soared nearly 19 percent after an East Texas well showed the ability to produce as much as 15 million cubic feet per day.
The Radnor, Pa.-based company's Fogle 5-H, a well drilled 11,378 feet vertically in Harrison County and 3,861 feet horizontally, had an initial production rate of about 8 million cubic feet of natural gas per day, which was greater than expected.
Pipeline capacity constraints currently limit production to about 5 million cubic feet per day. But increased pipeline capacity, expected in July, will enable an initial production rate of 10 million to 15 million cubic feet per day, the Philadelphia-area company said.
QUEENSLAND'S sugar growers increasingly could diversify into more lucrative crops given fears global sugar prices are set to continue their slide as a prolonged supply glut is worsened by easing demand.
Push for ethanol hits grain supplies
Farming industry leaders and analysts say the push by governments to ensure 10 per cent of petrol is made up of biofuels such as ethanol will leave the nation critically short of grain.
They claim that despite assurances by the NSW and Queensland governments and the biofuels industry that it would use only plant waste for ethanol, tens of thousands of tonnes of animal feed-quality grain and wheat starch are being used to make the taxpayer-subsidised fuel.
Amazing coal seam gas bubble may burst
Turning coal seam gas into liquefied natural gas is a promising technology -- but nobody has actually produced large amounts from it so far and the projects now in focus will take several years to bear fruit.
Companies with strong LNG expertise might have the patience and resources to see their investments through. For ordinary shareholders, impatience -- cashing out now to take advantage of the dizzying rise in the sector's share prices over the past two days -- would be smarter.
Tourism hit by fuel costs, economic downturn
The last time the tourism industry was hit by an economic downturn was after the Asian crisis in 2000.
But that will be just a blip compared to what operators are now facing, says Paul Yeo, head of the inbound tour operators council and the travel agents' association. . . Yeo reckons the last time New Zealand's tourism industry faced such strong headwinds as it does now was in the years after the 1987 sharemarket crash.
WoodMac: Climate bill would affect gas processors, cut production
WASHINGTON, DC, May 30 -- Global climate change legislation due to reach the US Senate floor as soon as next week could reduce natural gas supplies and greatly increase prices, concluded a study by Wood Mackenzie Ltd., Edinburgh.
The study, commissioned by the American Exploration & Production Council (AXPC), examined consequences of a provision inserted into S. 2191 that would require gas processors to buy cap-and-trade program gas emission allowances for ultimate end-users (OGJ, Apr. 7, 2008, p. 80). Sens. Joseph I. Lieberman (I-Conn.) and John W. Warner (R-Va.) introduced the original bill Oct. 18, 2007.
US drilling dips below 22-year high
US drilling activity slipped below a 22-year high this week with 1,877 rotary rigs working, 12 less than the prior week but up from 1,774 units a year ago, said Baker Hughes Inc.
The decline was primarily in land drilling, down 11 to 1,788 active rigs. Inland waters activity dipped by 1 rig to 22. Offshore drilling increased by 1 rig to 65 in the Gulf of Mexico, but the total count in US waters was unchanged at 67.
Among the rigs still working, 1,479 were drilling for natural gas, 390 for oil, and 8 were unclassified. Directional drilling increased by 3 rigs to 388. Horizontal drilling declined by 11 to 533.
No respite with huge fuel hike
Johannesburg - The retail price of petrol will increase by 50c a litre on Wednesday next week, according to a statement from the Department of Minerals and Energy on Wednesday.
This follows the 55c a litre increase last month. The price of unleaded petrol in Gauteng thereby increases to 996c a litre and to 972c at the coast.
Govt to decide on fuel price hike today
Prime Minister Manmohan Singh, UPA Chairperson Sonia Gandhi, External Affairs Minister Pranab Mukherjee, Defence Minister AK Antony, Home Minister Shivraj Patil, Finance Minister P Chidambaram and Petroleum Minister Murli Deora deliberated over options for nearly two hours on Friday evening. None of them commented on the issue.
However, options that are believed to have been discussed are of raising petrol price by Rs 3, 4, 5 or 7 a litre and diesel by Rs 1, 2, 3 and 4 per litre. Besides, a Rs 20 per cylinder hike in domestic LPG price may also be proposed.
Global biofuel output to soar:
Paris • Global production of biofuels will rise rapidly over the next decade, helped by high government blending targets and subsidies, the OECD and the UN’s FAO food agency said in a report published yesterday.
These rises will boost already soaring world agricultural commodities prices and their availability for food and feed, the Organisation for Economic Co-operation and Development and the Food and Agriculture Organisation said in co-drafted report. “With a biofuel output that should more than double over the next 10 years, according to the most conservative estimates, the pressure on agriculture will flare up,” Jacques Diouf, head of the Rome-based FAO, said.
Gazprom calculated that production cost of 1.000 cubic meters of gas at the Yamal peninsula equals to $91 compared with $7-10 at older large gas fields that the monopoly inherited from the Soviet Union. As to the Arctic shelf, these figures may double, or even triple. So, mining will be efficient only if energy carriers prices go up, which is hard to imagine now.
The yesterday’s meeting of TNK-BP BOD was aimed to decide on employment of CEO Robert Dudley and Executive Director German Khan but ended by a scandal. Russia’s holders left the meeting stripping it of required quorum. Formally, the third party is yet outside the conflict, but the RF government is forging an instrument already. A new criminal case is likely to be initiated to extent to both Russia’s and Britain’s managers of TNK-BP, including Robert Dudley.
Iceland is still shaking with aftershocks from the big quake
With Iceland being located on the junction of the Eurasian and North American Tectonic plates, large parts of the country are volcanically active. Some of the volcanoes even erupt with somewhat regular intervals. Consequently the Icelandic Meteorological Office keeps a close watch on all seismoligical activity in Iceland. The image from their website shows the current and last 48 hours’ level of activity with yesterday’s large earthquake, magnitude of 6.1 - 6.3, literally off the chart. The green stars on the map represent quakes over 3 on the Richter scale.
Shocked! How the oil crisis has hit the world
British pensioners who cannot afford to heat their homes. European hauliers and fishermen whose livelihoods are under threat. Palestinians forced to fill up their cars with olive oil. Americans asked to go down to a four-day week.
Oil price profiteering to be curbed at ICE Futures Europe and Nymex
Two of the world's largest energy exchanges have forced traders to deposit significantly more money when investing to curb volatility in energy markets and drive out speculators.
Funding bonanza for oil-from-algae firm
Sapphire CEO and co-founder, Jason Pyle, is being cagey about revealing how much it costs to produce his algae-based product or how much it would cost at the petrol pump. In interviews, he indicated that production costs per barrel would be similar to petroleum-based fuel, which is very much a moving target at the moment.
Energy boss with the wind in his sails
But can he be happy that half his term has gone by and his industry is beginning to resemble a bunch of turbines becalmed by lack of wind at a time when traditional alternatives such as oil are more than $130 a barrel?
A four-cylinder solution to the mid-size crisis
As the cost of putting a tiger in the tank keeps going up, drivers are opting for a smaller cat under the hood.
Small-car sales have been a rare pocket of strength for the slumping auto industry in recent months as Americans sought relief from sky-high gasoline prices. But many buyers are sticking with mid-size or larger vehicles and choosing a smaller engine instead -- saving money on the sticker price and at the pump without downsizing their ride.
A drop in oil, and a pall in Germany, give solar stocks a shiver
Crude futures slid more than $4 a barrel, and when anxiety about fossil fuel supply eases, alt-energy shares often wilt. The other issue has been less discussed. Despite its gray skies, Germany has used public-sector largesse to become a leader in solar installations. Here's the worry: If lawmakers in Berlin quicken planned subsidy cuts, as they are contemplating, solar's future gets cloudy in a key locale.
The Huge Hybrid: Few Takers for a New S.U.V. Twist
General Motors and Chrysler are betting that their 5,500-pound, eight-seat S.U.V.’s — long the scourge of environmentalists — can be reformed as hybrid models, albeit ones getting 20 miles to the gallon.
As Iowa Job Surplus Grows, Workers Call the Shots
Last year, the state added nearly 13,000 nonfarm jobs, in part because of growth in ethanol and wind energy, and lost 3,300 people from the workforce. With statewide unemployment at 3.5 percent, compared to a national rate of 5 percent, nearly everyone who wants to work and can work has a job. “We’re looking for ways to grow our population,” Ms. Buck said.
It’s Easier to Be Green if It Also Saves Money
One quick way to save gasoline is to drive less.
In normal times, the number of miles driven in the United States rises each year, as more people drive more cars and as rising housing costs force some commuters to move farther and farther from their jobs.
But the Federal Highway Administration estimates that in March — the most recent month for which data is available — vehicles traveled 246 billion miles. That is a lot of driving, but the figure is down 4.3 percent from the previous March.
Oil bubble could prove threat to pension funds
NEW YORK (Reuters) - Pension funds and other investors who rushed into oil through commodity indexes this year chasing big returns as other asset classes tanked could face steep losses if prices fall from record highs.
An avalanche of cash has rolled into commodities through simple long-only indexes this year, feeding the record-setting oil rally some experts say could be a bubble that is becoming more vulnerable to shifts in supply and demand fundamentals.
More critically, the bill, which also calls on companies to reduce their carbon emissions by about 66% by 2050, will drive up both the demand and the price of natural gas (a low-carbon alternative) to unprecedented levels, which will in turn further erode the number of U.S. manufacturing jobs.
Limited natural gas supply capacity will pit power-sector purchases in direct competition with demand from the residential, commercial and farm sectors. . . .None of this would be a problem if we had plenty of natural gas production capacity, but U.S. production of the commodity is fragile, despite record well completions.
Russia - Power, Manufacturing Building Natural Gas Demand, Says RNCOS
A new research report, “Russian Oil and Natural Gas Industry”, from RNCOS, a leading market research company, predicts Russia’s domestic natural gas consumption to grow at a CAGR of 4% from 2008 to 2012. . .
The RNCOS research also says that Russia might see a rise in gas prices in coming years but the consumers will remain relatively inelastic towards price growth. Thus, the gas demand will not slump; rather, it will steadily increase in future. Consequently, the Russian natural gas industry will overwork to add to the current production level during 2008-2012. In addition, independent natural gas producers are expected to post high growth in future due to government support.
Michigan peak oil conference begins today
The International Conference on Peak Oil and Climate Change: Paths to Sustainability begins today in Grand Rapids, Michigan with an introduction by U.S. Congressional Peak Oil Caucus member Vern Ehlers and a keynote by Dr. David Goodstein, author of Out of Gas: The End of the Age of Oil. . .
The conference starts at 5 p.m. today and runs through 5 p.m. on Sunday, June 1 at the Calvin College Fine Arts Center in Grand Rapids, Michigan. Additional information is available at the web site: PeakOilConference.org.
You Think Flying Is Bad Now...
Something has to give as airlines adjust to $130 oil and brace for a record yearly loss. Not all of the majors will survive. . .
This consolidation will come with a cost: Experts believe that for the U.S. industry to shrink to a size that would allow the surviving carriers to earn a profit will require hefty fare hikes and a 20%-to-25% cut in capacity. That means fewer routes, fewer flights, and even more crowded planes. The biggest losers would be smaller cities like Cedar Rapids, Iowa, and Baton Rouge, La., that became accustomed to dozens of daily flights, usually on 50-seat jets that the majors use to feed traffic to their hubs. But oil priced near $130 has rendered those smaller jets uneconomical, meaning that carriers are likely to fly one much larger plane on marginal routes each day, but no more. "We might keep one flight just to keep Congress off our back," muses one industry executive.
Coast-to-coast flights will change, too. With roughly 30% of the weight of any transcontinental flight consisting of the fuel alone, meaning airlines are burning fuel just to carry fuel, carriers can be expected to replace many of those longer nonstops with one-stop flights, intended largely for refueling.
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http://www.financialsense.com/fsn/main.html
Good discussion of Peak Oil/Peak Exports in Part One of Hour #3.
IMO Puplava and Co. are criminally dismissive of AGW, Polution in general, the pain that the "free market" inflicts on the lower income 90% of the population.
Their solution is drill everywhere and burn more coal.
Of course they have a pretty huge inve$tment in BAU which is why I believe that the concept of protecting "store of wealth" is what garantees that we go screaming up to the edge of the cliff.
OTOH, they are money managers and offer investment advice-you can logically only compare them to their competitors, a majority of which are bunco artists and grifters.
Ultimately I think the drill/mine more energy for the sake of keeping modern man running is going to win over any environmental concerns. Money and power really do make the world go round - and we will unfortunately be dragged kicking and screaming into a low carbon age.....but not one where carbon rationing has happened because of green concerns.
There is talk all over the world (especially here in the UK) of revisiting all those previously uneconomical coal seams.
Also carbon sequsetration will remain the echelon of the ever hopefull greens and big corps mouthing off about new green technology to seem like they are doing something (whilst actually doing virtually nothing.)
I can't remember specific figures but BP's "green" investment is a drop in the ocean compared to their total profit. Disgusting? Yes but then the shareholders and director always come first.
Furthermore the NOC's don't give amonkeys about being green.
Marco.
True, but economic descent will make such moves difficult, as will energy descent (eg South Africa) and possibly Climate Change too (eg. Australia). These overlapping crises will make doing anything extremely difficult. Especially for the UK which would be facing serious problems even without the aforementioned crises.
Governments are going to be in a funk, bombarded from all sides and trying to appease a very angry population (especially the poverty stricken former middle-class). In the UK the impact has hardly been felt and Gordon Brown's popularity is already at lows not seen since the 1940's.
I think there is a general underestimate of just how bad things are going to get (no I don't mean Mad Max bad) and that what we have today and what we are capable of doing today will somehow still be the same in the future. It won't, it will be gone. Economics is the Command and Control system for our civilisation, its destruction via the economic collapse will leave us as helpless as an army without communications.
Yes, things will be attempted, there will be successes and of course enormous failures, but overall it will all be lost in the overarching chaos.
"Their solution is drill everywhere and burn more coal."
As oil detoxification takes hold, the junkies will not be rational. I suspect it will get weirder and weirder with every uptick in price. The longer I study the subject and the response of our society to the issue, the bigger doomer I become.
Amen to that. Character (or lack thereof) determines destiny.
WT, is the Newsweek article the one you couldn't talk about a few days ago? This is really the MSM dropping the sugar coating and beginning to tell it straight.
Hope for motorists:
Ivanhoe Energy
Ivanhoe Energy has successfully tested a patented technology that upgraded Athabasca bitumen feedstock to 19 API pipeline ready heavy oil. The technology might be used in tar sands areas to upgrade bitumen onsite for pipeline transport to refineries eliminating the need for diluent pipelines from refineries currently used to transport bitumen downstream of existing tar sands SAGD bitumen extraction facilities. The upgrade process produced distillate rich heavy oil and enough petroleum gases & C-5 naptha to fuel the upgrader and to power steam generators used to extract bitumen underground using proven SAGD methods without consuming any natural gas.
http://www.ivanhoe-energy.com/i/pdf/2008_WHOC.pdf
This above ground technology is a major step change in the oil industry and might provide pipeline ready heavy oil in the years to come as many conventional light oil fields continue to decline in production.
If you want to "upgrade" long hydrocarbon molecules to shorter ones you have to add hydrogen at some point. If not "upstream" then "downstream", i.e. at the refinery at the other end of the pipeline. The usual source of this hydrogen is natural gas. Theoretically the hydrogen source could be water, but that would require even more energy, that would have to come from something, e.g. coal or nuclear. In this case they probably are just trying to get around the limited amoung of NG available "upstream".
This process cracks the longer molecules. The plant only did the lowest part of the upgrading to 19 API. It incorporated a process called fluid cracking and fluid coking. There was some coke produced as a result of the operation. There was also a desulphurization unit to remove sulphur from the emissions. There was less surface disturbance and no tailings ponds to clean up. The layers containing tar sands are already polluted with the oil that occurs in a natural formation.
Another company called Petrobank has been trying underground THAI fireflood recovery. Other companies tried vertical fireflood methods for decades then gave up as SAGD appeared better to them. Per a recent presentation they have been able to get an average 12 API oil (12 is heavier than 19). This is similar to the API grade output that Suncor gets from its SAGD Firebag steaming operations. In the lab tests of the THAI process the initial API output was supposed to be higher (lighter oil). In the field testing the lab process cannot be duplicated. There is also a problem with sand production and irregular flow of liquids.
In a previous Drumbeat (maybe six weeks ago) a story described difficulty with the THAI -Toe to Heel Air Injection- process having big emissions problem. Too much air pollution and CO2 coming out with the bitumen. THAI does not look promissing for getting tar out of the sand in Alberta.
I did as much research as I could about the THAI process and after learning that the API increase in the process was less than what the initial lab tests suggested was possible, became skeptical. Later I learned of sand control issues. More recently there were issues about well control and well flow stated without quantitative data to define the situation. Am not sure whether or not these issues will be resolved. They seem to be planning as if the issues might be resolved, yet cannot state they have solved these problems. Their holdings in the Bakken field might help them generate cash flow while they try to resolve their issues.
if something sounds too good to be true........, well, you know.
the fortunate thing for petrobank is that their heavy oil operations are a small part of their business. they are doing very well in columbia, or so it would appear.
From the article, it sounds like they're getting the hydrogen from the feedstock itself, disproportionating the tar into lighter hydrocarbons and coke. It doesn't necessarily require the addition of water, but apparently does involve quite a lot of "cooking". And of course all that cooking is going to lower the EROEI of your product.
I am not a chemical engineer, but as a mechanical engineer with some background in chemistry I do understand what they are doing with this "HTL" process. The main advantage is the elimination of using natural gas in the ugrading of Bitumen to heavy oil for shipment to a refinery. The energy for the upgrading comes from boiling off the lighter fractions produced by this process and using them for heat source and hydrogen source instead of natural gas.
I see economic advantages to HTL by omitting high priced natural gas from upgrade process. Also the use of sand as a heat transfer media/carbon collection in vacuum process distillation is also beneficial. Main problems I see with this is that EROEI may be no better than current Bitumen upgrade methods using nat. gas. The fact that the residual coke is burned in this HTL process to make heat and clean sand may produce a large amount of CO2. So, in a nutshell the HTL process makes the oil from tar sands cheaper, but not necessaily more energy efficient and likely worse for AGW.
Most of the green house gas CO2 from oil comes from burning fuel in the gas/diesel tank, something most people have no problems with. Al Gore burned more gasoline and jet fuel in a year in his travels than over 90% of the world's population. Other people have justified their use of fuel also. Some have stated that if we were to stop using hydrocarbons at once we could not stop the effects of global warming as it might take decades or longer for the stuff to be removed from the air. Every time there is a flood, hurricane, or drought some blamed it on global warming. Are there any areas that might gain from global warming? A true expert might be able to quote any benefits warming might bring.
I have read of sea level rise of 1.8 mm per year. That means in 100 years the sea level might rise a foot and a half, unless as theorized sea level rise accelerates. Coastal erosion happened without sea level rise and is normal for some coastal areas. Wave erosion removed land mass on a regular basis while at the mouth of the Mississipi River new land mass was created. Other changes in coastal areas are due to the rising and falling of the earth's crust as the land masses and ocean floor are not static, but moving. The movements were not only horizontal but vertical.
People were currently demanding gasoline, not in pleased to be asked to give up its use to prevent global warming. One might not win an election by promising to ban the use of hydrocarbons.
Activists Keep the Faith, if Not Their Money
God may move in mysterious ways, but in this case it is fairly obvious. S/He provided legs for us to move around on. I can only imagine S/He is utterly indifferent to the price of gasoline at the pump.
Either that or it's that God's taste in cars is not SUVs...
I just had a mental image of the Gary Larson version of God, driving a Prius convertible with His long white beard flapping in the wind...
Sustainable Aviation ?
http://www.inhabitat.com/2007/11/06/solar-impulse-solar-powered-plane-is...
Alan
NASA/NOAA had one of those too called Helios, it crashed off Hawaii. It was unmanned though. I can never get it from the press releases, do they have enough power to take off on their own?
The main problem with flight by solar energy is the power output of solar panels versus the power required to maintain flight. Speed equals drag and this plane has a top speed of 40 mph, so to get to 200 mph top speed the power required is 125 times greater because aerodynamic frontal drag goes up at the cube of the speed.
So to be competitive with high speed rail (200mph) the plane would need to have a wing area the size of six US football fields. Or if solar cells could be made three times as efficient, the wing size would need to be the size of two football fields. However, as wing size increases so does drag, thus maybe four football field size wing is required. And this is for only carrying two people on a plane that cost $50 million? The solar powered plane, even battery enhanced, is someones dream that will never transition to practical transporation.
I find a solar and sail powered ship to be more intriguing.
History shows that a 5 mast schooner (say 4,000 tons) to be most efficient.
Add solar PV to the deck, sides and perhaps even the sail (or a couple of sails). Smallish battery serves also as ballast. Powers auxiliary loads (microwave for cooking, refrigeration, lighting, computers, etc.) and a small electric drive. Once batteries are full, divert solar PV to the propeller.
Best Hopes,
Alan
I sailed on a 40' catamaran out of SoCal that two of these for aux. propulsion;
http://www.solomontechnologies.com/wheel.htm
We powered for about 45 min. out of the marina and out the channel.
Sailed for several hours and powered back in.
Battery bank had more power in them than when we left.
Not free energy as we were paying the price of drag while sailing but certainly a workable fishing fleet model.
Best hopes for fisheries recovery.
Energy requirement for flight is drag times speed, times the efficiency of propulsion. These solar planes are supposed to be high altitude communications or surveilence applications. They are supposed to stay up for weeks, i.e. batteries for use at night. The altitude is high enough to avoid most clouds. Unfortunately the arrangement is pretty flimsy and turbulance can be catastrophic.
We could go back to prop planes. The old prop engines use a third of the fuel as jets do. The only problem is no one is manufacturing them anymore.
Bombardier (based in Montreal) is the world's third largest manufacturer of commercial aircraft (after Boeing and Airbus). They make a complete line of turboprops as well as regional jets.
Bombardier Turoprops
It would seem that the decision to make commercial aviation fly as close to the speed of sound a practical is going to have severe drawbacks. This only made sense if the price of fuel does not dominate costs, but it looks like that is rapidly becoming untrue. It looks like aviation, as well as the automobile industry has driven blindly into peak oil. Had we not had the likes of CERA and IEA selling the don't worry be happy story they might have had some designs for the era of expensive fuel ready to trot out.
You are making a false assumption, namely that commercial jets traveling at Mach 0.8 and thereabouts at high altitude are less efficient than turboprops flying at lower altitudes. They aren't. Depending on the service, in fact, jets can be more efficient.
Do the research if you don't believe me. I think you'll find even the most efficient turboprops don't do any better than 70 passenger-mpg-gasoline-equivalent with all seats filled (I know, strange units, as they burn jet fuel, not gasoline, but the units are useful for comparing with cars). The A320 and B737NG do about the same. The big difference is that the turboprop can achieve that sort of efficiency on relatively short flights, whereas the jets, even "short-range" jets, require at least 1000 nm stage lengths.
These efficiencies pale by comparison with high speed rail at 300 km/h, and even maglev at 400 km/h (faster than some turboprops). HSR is typically in the range 400-600 passenger-mpg max (i.e. all seats filled). Some lines do exceedingly well in the real world, as well - TGV Duplex service Paris-Lyon with 3 intermediate stops, averages 80% of seats filled, giving 436 passenger-mpg equivalent. (Assuming 32 MJ/L gasoline energy density).
http://strickland.ca/efficiency.html
I probably don't need to point out the major advantage of rail and maglev: they do not require liquid fuel.
Electric powered airplanes are on the way - At least for sport aviation!
http://www.youngeagles.org/news/archive/2007%20-%2008_02%20-%20Sonex%20R...
A podcast linked here excoriates peak oil apocalypticism.
That the skeptics movement treats peak oil as if it were an end-of-the-world movement is very disappointing. It shows the pernicious effect of certain websites I won't name. My comments are there as "Mike" from Maine.
Write them, if you think it will do any good.
I didn't watch the podcast. Didn't have to. Reading his intro was enough. I've heard the argument. Economists (accountants) think somehow changing the numbers fixes everything. Politicians think changing a law fixes everything (unless you're talking bush and he thinks attacking someone else will do the trick).
Some say the free market is the answer, another says socialism and government control will save us. The preacher says pray (in whatever form that takes).
Someone has to go out and physically remove oil from the ground. Refine it, deliver it to market. Another plants a seed, contests the elements, harvests a crop and delivers it to market, using fossil fuel products every step of the way.
The system we have that does all that is in peril. The human race has outgrown carrying capacity of the planet.
It's not the end of the world. It's worse. We're going to live (and die) through this.
We are not making the necessary changes.
It's worth listening to, if just to hear the commentator make such absurd statements as that the US could recover its 1970 peak rate, if offshore areas are opened to exploration.
Also, it's startling to hear how uncritically these "skeptics" accept free market fundamentalism.
Well with Dunning's extensive education and background in writing how could anyone doubt his conclusions about economics, geology, chemistry, engineering, psychology, medicine, sociology and anthropology.
EDIT: I'm not a scientist, but I write the dialogue for a guy who plays one on TV.
The theology of Infinite Growth is going to be harder to kill than Michael Myers:
http://www.youtube.com/watch?v=l68B0c3Eee4
I think that should be Infinite Growth Theory to keep it parallel with discussions about Peak Oil Theory, Global Warming Theory, Evolutionary Theory, Quantum Theory, Relativity Theory....
Some of the "theories" will be found to be quite robust, others will collapse into absurdity. All should be tested by the same rigorous methods.
People either don't know, or have fogotten that when they speak of "The Infinite", meaning "God", they are not speaking of events on earth, or physical constraints of our particular environment. Maybe heaven is infinite and there is room for all of us. But not here on earth where we can't all eat caviar and drive SUV's and fly to Nepal for the weekend.
Well . . .
I am somewhat hesitant to call the assertion that we can have an infinite rate of increase against a finite resource base a "theory."
I'd call it an economic system based on a fiat money regime that creates money from debt plus interest. If you understand this system, then you know that the economy must grow by the prevailing rate of interest or it will automatically shrink by the rate of interest every year. That's why all fiat money systems ultimately must self destruct.
Y'know, based on the way humans think, this is a good suggestion. I always hate hearing the phrase "peak oil theory" - it isn't a theory that it'll peak sometime.
I think the meme to get out there is "Oil will peak and decline since it's a finite resource. It is as much subject to depletion as is a milkshake. Finding the milkshake gone after drinking it should not cause surprise in a lucid person. Peak Oil is thus not a theory, it is a term used to describe reaching the all-time peak flow rate. Only the date is debatable. The theory that this will never happen could be known as the 'Magic Milkshake Theory', and those seeking to discredit the term 'peak oil' should be identified as believers in the Magic Milkshake Theory."
"The Magic Milkshake is a delusion and not a real theory of course. Geologists don't believe in it. Plan your life accordingly."
Theory is the correct term, however. Gravity is a theory. The idea that the sun is the center of the solar system is a theory. A theory in science means something very different than the colloquial use of the word.
Surely, you mean Hypothesis?
OK, so let's examine the Infinite Growth Hypothesis, then.
Let's see ... for starters, we'll need an exemption from some of the conservation laws (or Theories) ... can Congress please repeal the 2nd Law of Thermodynamics?
We should call it the infinite growth delusion because you can disprove it mathematically...
Oh, I won't debate it (since I know you're correct), but semantically this is often abused, as in "the theory of evolution" versus "creationism". IMO those who don't bother paying attention to the scientific method aren't entitled to use subtle concept definitions. In the common parlance of fools and charlatans, a "theory" is a "feeling, notion, or hunch"; and let's be honest about our target audience here.
So I'll not be referring to peak oil as a theory. And to be contentious, I'd suggest that outside of fundamental questions like "does matter really exist?", "peak oil" is a direct consequence of the laws of mathematics and thus subject to absolute proof. To badly paraphrase an old joke punchline, we're just haggling over "how much".
Since we're debating semantics, learned this in eng school at the painful chagrin of math profs:
Theorem: an idea, belief, method, or statement generally accepted as true or worthwhile without proof.
Theory:
—Synonyms 1. Theory, hypothesis are used in non-technical contexts to mean an untested idea or opinion. A theory in technical use is a more or less verified or established explanation accounting for known facts or phenomena: the theory of relativity. A hypothesis is a conjecture put forth as a possible explanation of phenomena or relations, which serves as a basis of argument or experimentation to reach the truth: This idea is only a hypothesis.
Compliments of Dictionary.com
It could be said peak oil theory is actually peak oil theorem. There is a Theory of Gravity because the fundamental explanation of the phenomena still eludes us, although if one wishes to test whether it is speculative is welcome to fall off a ladder (maybe) any time.
We should probably be working on SMTL (StrawMan To Liquid) technology. I'm sure that the supply of straw men is inexhaustible.
http://money.cnn.com/2008/05/30/news/economy/oil_cftc/index.htm?postvers...
Commodity Futures Trading Commission is wasting time, money and energy trying to find manipulation in oil trading. It amazes me that our congress does not get peak oil!!!!!!! They are looking to blame someone other than themselves for being stupid about oil. If they really cared about America, they would start pursuing alternative energy instead of having hearings with oil companies about why prices are high. Gas is cheaper than milk, bottled water, and other things, but those prices don't matter. We would all like cheap gas, but it is time to move on and quickly too.
We have spent enough on the Iraq war to buy an electic car for every family in America!
We have spent enough on the Iraq war to buy an electic car for every family in America!
U'hmm
The last batch of MY electric cars (24 in 2004) cost $1.5 million a piece (last 19 just over $1 million according to internal analysis).
But, to be honest, I am willing to share. We do NOT need one electric car/family.
Best Hopes for Urban Rail,
Alan
Pacific Electric Railway ... largest electric railway in the world
http://imgzoom.cdlib.org/Fullscreen.ics?ark=ark:/13030/hb638nb72q/z1&&br...
I'm starting to push the meme, that the blame for the oil crunch belongs squarely on the worlds oil consumers. This pretty much means everyone in the modern world economy. Perhaps we can modify that somewhat to those who consume more than their fair share. At least this meme might be conducive to conservation, instead of witch hunts. I suspect t won't be an easy sell however.
"We have spent enough on the Iraq war to buy an electic car for every family in America!"
The flaw in your thinking is that the Iraq war was waged for the American people rather the control for a select few.
Dude, the reason they are looking for manipulation in the energy futures market is because that is what is driving the insane bubble that we are seeing. If you can recall recent events, there were a large number of Wall Street investment houses that lost their shirts on the sub-prime housing debacle, and the US government gave them low interest money to prevent the entire US financial system from falling into a recession. Well, Wall Street has taken the gratis government money and invested it in commodities such as oil, which has driven the price of oil into the stratosphere. Now that Wall Street has regained some of their lost profits from the oil market (on the backs of the middle class around the world, I might add) the US government is going to put out the fire slowly, and let the bubble out of the oil market.
It is a game of short term market manipulation, and peak oil, while it may be a plausable theory, is NOT the reason for the current rise in oil prices. FACT: current supply and demand fundamentals in and of themselves support $60/bbl oil, and NOT $135/bbl oil.
This was posted a couple of times last week but just in case you missed it. CNBC's Rick Santelli on why speculation is not behind higher oil prices.
http://www.cnbc.com/id/15840232?video=753754816&play=1
I keep asking for an explanation of how the manipulation works. Specifically what do the speculators do when the contracts expire?
Be careful not to confuse any alleged price MANIPULATION being investigated by the CFTC, with price increases alleged to be caused through SPECULATION, which has also had some CFTC examination.
These are totally separate issues.
If you mean you want an explanation about how SPECULATION can cause price increases, I suggest that the fact no-one seems able to provide an answer to this question is probably in itself the answer.
'CFTC Investigation of Oil Trading Focuses On Tankers, Storage'
Is it a 'witch hunt' or is there some fire under all that smoke?
'A particular focus is the role of Cushing in the trading of West Texas Intermediate Crude, one of the two most important contracts in oil pricing. As we noted in an earlier post, citing an article by John Dizard in the Financial Times:
'You don't have to buy the evil-specs-caused-all-this argument to believe there are problems with the way parts of the commodities markets work. As Mr [Eugen] Weinberg [at Commerzbank] points out: "The West Texas Intermediate oil contract, based on delivery in Cushing, Oklahoma, is good for 300,000-400,000 barrels per day. The storage capacity in Cushing is about 20.5m barrels. The trading volume on which that is based is between 500m and 600m barrels per day. If you are going to manipulate the price, you would think about doing that in Cushing.'...snip...
Personally, I would like to have the CFTC take a hard look at what is going on before 'quickly moving on'. The Fed has driven $250 Billion plus out of stocks and bonds by lowering interest rates below inflation and some of it has gone into commodities. For money to flow where there is a possibility of a return above inflation is natural. Now, the question is: Is the Fed trying to place heavy restrictions on commodity speculation in an attempt to drive money back into stocks, bonds, etc, or is there some rule bending manipulation going on in commodities trading?...Or, both?
Of course we already know that the Fed has broken laws and committed fraud related to commercial and investment banking, improper manipulation of interest rates beyond its mandates, etc. ...So if the Fed instigated CFTC investigation proves some shady dealings in commodities it would be like the pot discovering that the kettle is black.
Let all the fraud in all the markets be investigated and, where fraud is found, lets put the guilty in the graybar hotel...It's time for a lot more transparency, for without it there is no trust and lacking trust the US economy will never fully recover (if that is even possible at this point).
http://www.nakedcapitalism.com/2008/05/cftc-investigation-of-oil-trading...
Some numbers I ran on two top 10 net oil exporters and two of our three closest major sources of imported oil:
Remember Don Meridith on Monday Night Football, that song he would sing when one team was sure to loose?
What I'd really like to know is that if the storage capacity at Cushing is only 20.5 million barrels, then how come inventory levels there last May were supposedly above 26 million barrels?
The only thing that I don't understand is why delivery to Cushing, for crude that can only be used in the US market, is the putative proxy for world oil prices, as opposed to, say, Brent, Dubai, Rotterdam or Singapore.
Some thoughts...
1) When was it that the Cushing stocks took an absolutely massive nosedive, which pushed prices up even while national stocks were increasing - it was a few months ago, but I thought longer ago than December?
2) Doesn't it freaky that the same day this investigation (into shipping and storage) is announced (when normally such investigations are not announced) is the day we
i) have the monthly report somehow released 20 minutes early and then pulled
ii) have a bizzare and extremely rare side-note, followed by informal stories about 'fog' being widely quoted as fact, even when the shipping folk and LOOP are saying it's bollocks.
iii) have the EIA issue this cryptic and vague side note, with it seems no official follow-up explanation, even while the media runs with a false interpretation.
All too much wierdness at one time for my liking. Probably coincidence.
"Is Water Becoming ‘The New Oil’?"
Population, pollution, and climate put the squeeze on potable supplies – and private companies smell a profit. Others ask: Should water be a human right?
by Marc Clayton
http://www.commondreams.org/archive/2008/05/29/9305/
Oh the insanity... Gee, let's commoditize oxygen. That way only the rich can afford to breathe. We'll have pay as you go breathing. Anyone caught stealing oxygen, simply stick them in jail without any oxygen. That'll teach 'em.
Usual nonsense from the the UK Independant (See: "Shocked!" article, linked above) -- "In Gaza this week, where fuel shortages have long been a major source of seething discontent due to rationing by Israel and Hamas, Palestinians were forced to fill their cars with olive oil instead of diesel." Where is the source for this? There is none. Smells like Pallywood fiction to me. The implication is that Israel is rationing fuel to Gaza. This is untrue. Hamas repeatedly attacks fuel tankers attempting delivery from Israel in an cynical attempt to create a crisis and stoke international anti-Israel animus. But what is more curious is why would anyone use olive oil when that is many times more expensive than petrol - not to mention that it would ruin any conventional engine? But trust the Independent UK to not ask these questions or identify their Arab Palestinian "sources".
Uhh, . . . Actually, Coveredwagon, I suppose Olive Oil will work just fine. It's vegetable oil, right? My daughter pointed out to me, yesterday, that Mercedes, on their website, states that their engines are "Warranteed" for vegetable oil.
As for price: I know absolutely Zip about Mid Easter Olive Oil Markets; but, at $5.00/gal for diesel olive oil might not be that far out of line. Just guessing.
Gaza produces olive oil (from the trees that the Israelis did not chop down as a means of control earlier).
My old Mercedes diesel will run just fine on straight olive oil in warm weather (odd smell). If one has no diesel, the price of diesel does not matter, *IF* there is a critical needs for transportation (to get food, take a sick child to a clinic (hopefully with supplies still in stock), one will burn what one has, in this case, olive oil.
Best Hopes for More Justice,
Alan
why would anyone use olive oil when that is many times more expensive than petrol ... ?
Can you quote some relevant numbers here? I'm guessing you're American or British, from the tone of your message. Well, we're not talking about imported Italian extra-virgin in your local Target (or Waitrose), competing with your local gas (or petrol) station. The situation in Gaza might be a bit different from what you're used to in your own life.
This is the stuff that can't be got to market because the Israelis won't let it through the border crossings, for (arguably good) reasons that are not under your control. Why not use it to eke out the diesel you have to beg or buy from whichever death squad vengeance militia happens to control the fuel racket this week?
Sounds like a pretty good idea, in fact. There must be a million desperate survival strategies at work on the streets of Gaza.
Edited after posting - wow, looks like everyone's piling on here...
Edited again - looks Ha'aretz also disagrees with you about whether or not the Israelis are rationing fuel supply into Gaza http://www.haaretz.com/hasen/spages/988164.html and yes, Hamas are sticking their oar in as well. Sigh.
Hi coveredwagon,
If you go to http://www.energyshortage.org/ and search for Palestine you'll see many stories from both the Israeli and international press about these biodiesel fuel sources. Also there are many stories about the fuel blockade (both the assertions and denials).
The # of rigs drilling for NG in the U.S. has plateaued over the past year:BakerHughes(PDF)
See the chart titled "Total US Gas Rigs". There has been a large increase in the # of rigs drilling and only recently has production started going up. Can the current production levels be maintained if # of drilling rigs has stopped increasing? Alternatively, can the U.S. ramp up its # of rigs operating further?
The eia has data on the total # of drilling rigs (Oil and NG) which shows over 4000 operating in the early '80s, so maybe it can. However, at these higher NG prices, why would the # of rigs operating stopped increasing if there were plenty of rigs out there to use? Too expensive?
New rigs were being built every year. Some rigs were transferred overseas where there were higher day rates. Some rigs were not drilling as they were being moved to other N.A. locations. If there is more wildcat drilling, the distances moved might be farther than if they were doing infill drilling. Where there were numerous leases split up by open parcels of land, then there was more movement of rigs and fewer drilling days. In the Pinedale anticline there were winter drilling restrictions and the rigs were only used part of the year. If the price of natural gas is too low then some drilling companies will not be able to lease their rigs and must park them. After Alberta changed its oil and gas royalty rates; some E&P companies curtailed activities there as the economics of drilling elsewhere seemed more attractive.
I couldn't resist posting this eye-popper here
For the first quarter of this year, we used less oil than in 1979. Less than 1978
I did the chart but the data is from a page at the Energy Information Administration which is part of the Department of Energy
A link to the page used
http://tonto.eia.doe.gov/dnav/pet/hist/mttupus2m.htm
How many years until we hit 15 million again??? Which would be the 3rd time.
Will it fall like in the '80s? Or take longer?
Thoughts anybody??? A poll maybe.
Datamunger
PS the oil drum is a great site
US population, 1981: 230 million.
US population, 2008: 302 million.
Therefore, 15 million barrels a day in the future is bound to be uglier than 15 million barrels a day in 1981.
Good chart-how about one for Chinese oil consumption 78/08?
The US imports much more, from countries like China, than it did in 1980. There is a lot of energy imbedded in the production of those imports.
I would caution against saying that the US is much more energy efficient than in 1980, just more efficient.
How fast the US can become more efficient now in the use of energy is open to debate. Remember in the last oil shock, caused by the Iranian revolution, it was a supply interuption which lead to the forced reduction in the use of oil - which also caused a severe recession.
In each of the past oil shortages/price escalations the economy faltered as well as more energy efficient technologies employed. This caused oil use by the US to drop, then as the economy recovered oil use increased each year except during recessions. Greater world production of lower priced oil allowed the economy to recover and more energy efficient equipment and methods were introduced. These four events occured: Cheap oil = economic recovery = implementing more energy efficient technology = more economic growth.
With the current peaking of net world exports the US will have to adjust to continuing oil price increases as its oil imports decline and domestic production (with expensive alternatives) stagnates. The chain of events above cannot be repeated because the price of oil will never again be so cheap. Economic recovery will be impossible. The Long Emergency will ensue. Our way of life in the developed countries will have changed forever. By the year 2025 we in the US must reduce our per person oil use by half. First priorty for oil will be for production and transportation of food, and last priority will be for plane trips for vacations.
I believe that you have an error in your graph, regarding the 1979 peak. However, this does not take away from your point that US consumption has gone down. As importers bid against each other for declining oil exports, someone has to reduce their consumption.
1979: 18,513 (thousands of bpd, annual rate)
1980: 17,056
1981: 16,058
1982: 15,296
No error, I think
It's just that oil consumption in the USA used to be more heavily skewed to winter
Okay, you are correct about the quarterly data, but as you implied, the way we use oil has changed, e.g., less oil used for heating and electrical generation (and as others have pointed out, we have to look at population changes), but the latest annual data (2007) showed that we exceeded the 1979 rate by more than 2 mbpd.
Also, a lot of the easy structural changes in oil consumption were accomplished in the early Eighties.
Interestingly, USA real wages peaked in 1979.
I guess that you did a study that voided one like this.
http://www.census.gov/prod/2003pubs/p60-221.pdf
You better provide an executive summary-who wants to wade through that pile of Goebbelspeak?
Somehow it skipped my mind to include another surprising fact
The fall in 1st quarter consumption in 2008 was the greatest since 1983
in 2008 it fell 4.6 percent.
the next closest year in decline was 1990 - 3.8 percent
For reference - in 1983, it fell 5.8 percent
Also, from the recent peak in 2005 we are now down 4.9 percent
Datamunger
Interesting. I wonder if this signals a temporary high in prices, given how quickly demand appears to be falling off?
-S5
While the US is the world's largest consumer of oil, it is still a minority consumer. What matters is not whether demand drops in the US, but whether it drops world-wide. At least at this moment, global demand is still rising. I do expect it to plateau soon and decline later in the year, but that hasn't happened yet.
Another important factor is exactly what is responsible for the decline in the US. If it is high gasoline prices, as I suspect, then declining consumption will have little effect on the price of oil.
IMO, oil prices are being driven by global diesel consumption. Gasoline is being produced as a by-product of diesel production, and may even be being sold below cost, subsidized by the high price of diesel. Effectively, there is a (relative) glut of gasoline.
This is why the price gap between diesel & gasoline is so large. This is why the US is importing (excess) gasoline from the rest of the world. It is why US refinery utilization is down. It is why oil prices have gone up, even as US driving has gone down.
Americans' driving less will not reduce the demand for diesel, nor will it increase the amount of oil available for diesel. It will just keep the price of gasoline from rising as fast as diesel.
The price gap may be large in the US ( diesel has gone from a 10% discount to gasoline last year to a near 20% premium this year ), but the differential is much, much lower in Europe and the UK. Given the relative efficiency of diesel to gasoline, the differentials in Europe still make sense, but are completely out of kilter in the US - at present, the US market is "telling" its consumers to use gasoline, as you'll actually get more miles for your buck.
As you suggest, there may be an element of cross-subsidy by US refiners, whereby profits from diesel refining are enabling the current "we don't need no stinking profit" model for gasoline. I dont' know if refiners can make a "real" profit on gasoline at an 8-10% margin, but I'm pretty sure that at a 20% margin for diesel everything is quite comfortable. However, I'd suggest that the political toxicity of high(er) gasoline prices during an election year is a significant contributory factor in the equation.
As regards there being a "glut" of gasoline - this doesn't actually seem to be the case at all. When one unpeels the data, US FINISHED gasoline inventories are at very low levels, with the headline total ( itself declining at a very rapid clip ) reflecting an interesting imbalance in the ratio of finished gasoline to blending components.
I agree the US doesn't have a glut of gasoline. I believe the world does. The US uses more gasoline as a percentage of consumption than the rest of the world. For that reason, the US is importing gasoline rather than refininig it itself, hence refinery utilization down while imports are up. Having US gasoline inventories at relatively low levels is entirely consistent with that.
My hypothesis is that the US would rather buy just what they need from the rest of the world than refine it at very low margins, or at least to refine more than they would get as a byproduct of creating the more profitable distillates. The rest of the world is doing the same. However, since they need proportionately more diesel than gasoline, they have surplus gasoline to sell cheap to the US.
If US gasoline demand declines, the US will simply import less. I don't think refiners will refine less, unless diesel demand drops too. In any case, since most refiners are cranking out diesel as fast as they can, I don't think a drop in gasoline demand is going to influence that very much, unless and until people start converting diesel demand into gasoline demand.
I will also note that home heating oil rose dramatically this past winter along with diesel fuel. This is consistent with a hypothesis of high diesel demand and inconsistent with a hypothesis of political factors influencing the price. Fuel oil is the dominant form of heat in the Northeastern US. Where I live (Pennsylvania), people were more upset about the price of heating oil than they have about the price of gasoline.
Shargash I think your pretty much right on about the current situation.
The problem is this works until the countries we are importing gasoline from start having problems with oil inventories. Eventually these countries will fact a choice of exporting gasoline to the US and facing shortages locally or not exporting.
Diesel seems to be entering this phase now. I suspect if diesel continues to be a problem that in the spring and fall when crops are planted and harvested that we will see many countries limit diesel exports.
No way to know how fast this situation will move on to effect gasoline but I'd expect by next year that gasoline exports/ US imports will begin to be a problem. I think that oil imports into the US will be available as long as we are willing to pay but the extra finished product imports will in my opinion quickly become problematic.
It must, since the USA is the centre of the universe.
While not the centre of the universe, the USA does represent a significant fraction of global demand, and in a supply-constrained market even a small change in demand can yield fairly wide swings in price. While I believe that decreasing demand from the United States will eventually be matched by increasing demand from other portions of the world, in the near term I think a decline of this magnitude will cause oil prices to stagnate or decline (barring, of course, natural disasters and the like).
-S5
IMO, you have it exactly backwards. Decreasing demand is currently being offset by strong demand in the rest of the world. World oil demand is still growing, despite the decline in the US. However, as the economic slowdown in the US (and the UK and Southern Europe) begins to affect the rest of the world, global demand may actually decline later this year.
Shar: Depends on how you measure it-any other product a company sells is measured by revenue, which is more important than volume. In the USA, for all the talk of falling gasoline demand, the money spent on gasoline by the USA consumer is up approx 32% (from memory) YOY. The global amount spent on oil is way up YOY. A true deflationary depression caused crunch (which has been predicted for a while now) would see actual global dollars spent on oil decreasing-can't see it happening. The dollars spent on gasoline haven't even peaked out in the USA.
I've been hearing a lot of anecdotal stories, that hint that demand destruction is occurring in much of the world. even those countries that have been subsidizing fuel are being forced to raise prices to defend the budget. We will have to wait until real numerical data arrives, but it may well be that the current price will be sufficient to dampen worldwide demand.
Are these consumption figures 1st quarter yearly comparisons? If they are, you may want to keep in mind where we were in the 1st quarter of '07. Oil had just come down from $80 to spend the whole 1st quarter at $50. So it took a 150% rise in the price of oil in one year from the no-worries $50 level to kill off that 1 mbpd. You also have to compare that 1 mbpd drop with what's happening to the net oil exports to the U.S. market. Westexas noted upthread that two of the major exporters to the U.S. showed an annual decline rate, since October '07, of 32% compared to the 5% consumption decline rate. So you have the 5% use decline rate, which is probably not sustainable, battling a larger net import decline rate, which accelerates with time post peak. Our conservation efforts are probably a long way behind the 8 ball.
Sorry for all the graphs
This is the last one
The decline is year over year from the previous first quarter.
You may be getting the first whiffs of a significant reduction in USA demand/Demand Destruction/Price Elasticity of Demand/Severe Recession.
I will wait a couple more quarters for confirmation.
Best Hopes for Less Oil Use,
Alan
Yeah, interesting that except arguably 2006 they are all plus or minus one year from recessions, with the bad recessions skewed to the left.
I'm not trying to take anything away from this discussion, but Q1 is the worst quarter for comparison in my opinion because it is so heavily dependant on the Winter Temperature.
Prices were certainly high last year, but it was a very warm winter. If price alone were the issue, would one expect 05, 06, 07, 08 to be neatly lined up next to each other.
Consider that Q1 06 was still suffering the aftermath of Katrina shortages, but it was very warm that winter and 06 barely makes the charts.
I guess we all need a few more data points.
I publish a ton of stuff in a previous thread but the lessing of demand probably has nothing to do with price and matches perfectly with the housing industry tanking this quarter.
So its a effectively a one shot deal we may see further declines as the housing industry worsens but they will have less and less of a impact.
We don't really have another industry that uses a large amount of gasoline/diesel that can contract esp as such and explosive rate.
I believe those numbers do not include oil used by the US Military (Dpt. of Defense)
see:
http://karbuz.blogspot.com/
You Think Flying Is Bad Now...
Southwest Airlines has "remained profitable because of long-term fuel contracts." The article does not mention other airlines who have followed this path. It brings to mind a couple of questions:
1. Are there other airlines that have hedged their fuel prices like Southwest has? If so, who?
2. How far out do the SW hedges go -- in other words, how soon before SW goes into the red?
At these prices, the airline industry is fundamentally non-profitable. So if the prices remain where they are or rise, the industry must change or simply go away. It seems most of TPTB simply do not want to consider the industry going away. But no one seems to be considering just how the industry could change to be profitable at these prices. This is another huge example of denial in action.
Sam Penny
the Prudent RVer
Southwest has pricing power, they can set ticket prices (within a range) as they please.
For the last few years, they have broken even/small profit without their fuel hedges (remember to subtract income taxes to calculate breakeven).
A dated annual report "2008 is 65% hedged at $49/barrel; 2009 is over 50% hedged at $51/barrel; 2010 is over 25% hedged at $63/barrel; 2011 is over 15% hedged at $64/barrel; 2012 is 15% hedged at $63/barrel".
LUV can breakeven (or lose a small amount) in just about every conceivable scenario as long as airports stay open. Superb management, strong financials, efficient operations and every other airline is weak.
Alan
The business publications (Business Week, Forbes) two weeks ago reported that SW Airlines made a $600 million dollar short term loan from a notable bank (forgot which one). Could this be cash for hedging oil or simply money to cover some cash flow problems? My guess is that SW Airlines gets peak net oil exports (has Herb read Jeffery Brown's articles?) and they are preparing for the worst in oil prices. After one or two of the major airlines dissolve in a couple years SWA will be ready to take greater market share of a much smaller pie and increase ticket prices substantially. SWA may lose money for a short term, but in the long run they will drive majors out of certain routes and maybe out of business altogether.
In the long term of fifteen years, even SWA's survival will be questionable.
My GUESS is that SW needs more cash for higher margin requirements (could they have gotten a hint ahead of time as a "good hedger/speculator"?). But they like to have "cash in the bank" in rough times (they pulled several hundred million in on 9/11 or 9/12).
SW has been pushing Boeing for a new 737 replacement based on 787 tech. Boeing says the fuel saving engines are not ready, just an improved airframe would save only 10% on fuel.
Yes, they will HAVE TO adapt to a difficult future, and they have shown an ability to adapt.
I could see a total of 300 797s and less than 100 787s devoted to US domestic flights (almost all 500 miles or longer) in 2020-25. One airport per region with rail connections. Per capita air miles down to 1950s levels.
Or less.
Alan
This from a few days ago:
Airlines Have to Pay Cash in Advance for Jet Fuel, Times Says
In other stories on "Pay before you Pump", they specifically excluded Southwest Airlines.
Alan
On the Aviation theme:
Thousands join Heathrow protest
http://news.bbc.co.uk/1/hi/england/london/7428920.stm
I bet the UK Government collectively sat back today and gave a sigh of relief. Everything is fine in clueless la la land. The collective conscious still believes in the fantasy of never ending growth - just as the airline industry starts violent death rattles.
Any likelyhood of a third runway at Heathrow? By the time they get around to the final decision I thing it will be obvious that the only capacity needed will be for parking redundant aircraft.
Dumb@sses…
http://www.channel3000.com/news/16431040/detail.html
Note, by the way, that the city would and should have been able to get a fixed rate contract because a counterparty - a "speculator", who might be an agent of an actual supplier or of a fund, would have been willing to sign. It follows that if the asinine populists in Congress have their way about "speculators", you'll be reading many more headlines about municipal officials moaning about the spot price of fuel. So it goes.
This is the same reason why major airlines are losing money due to lack of hedging on fuel supply.
Too many of the airline executives listened to people like Daniel Yergin and the EIA and expected prices for oil/jetfuel to drop. Now they are in a lurch and the US gov. is blaming everyone (speculators, environmentalists, OPEC, Hugo Chavez, refinery capacity, the Boogeyman) except themslves.
Railroads on the other hand do hedge some of their fuel by direct contracts with refineries. Most truckers my company deals with have increased prices 100% or more since 2006. Railroads have increased their prices only 25 to 30%, with some going to 40% increase for third quarter 2008 according to ProgressiveRailroading.com
I'm sure the antidoomer will find this interesting. From yesterdays drumbeat, but with newer information:
Cold Fusion a Success!
In addition, the comments section contains pictures taking from the site showing that He4 was produced.
Essentially this means that this is a safe, cheap, unlimited supply of energy for the masses...assuming its real of course! If the D2 - D2 reaction truly produces He4, then there will be no neutron emissions or any hazardous material to deal with. It will need to be verified by dozens of laboratories around the world of course, but some of the energy production estimates have his simple contraption alone producing 30 MJ of energy. What would something like this do to the oil powered world? Is there enough Palladium to allow this fusion reaction to power the world?
This would be an interesting development. Requires palladium, which I understand to be in short supply.
I see the 100 million degrees centigrade to be the prohibitor for fusion tech.The laws of heat convection is here to stay! .........
I also, on a general basis, have troubles to see "the sun" simulated inside a box and in particular the pressures (contained) where/when the fusion is taking place - is beyond my philosophical border (here on earth)
If this is working, i.e. if it can be replicated like any other scientific experiment, then the need for 100,000,000 degrees is being bypassed by quantum mechanics. Quantum mechanics is very, very strange...
Quantum mechanics is strange (a cousin of Newtonian physics IMO ), but as far as "we know" fusion will have to follow basic physics --(!!!?) I reckon the parameters concerning fusion is fairly known (??) .... that said, I struggle with them being able to dupilcate that knowladge here on earth - wishfull thinking with regards to possible materials to use - to have it take place,,, ehhh controlled
Boyle-Mariottes law will govern this fusion-thing, given you have the correct submaterials (deuterium-tritium) B/c at the depth inside the sun where the fusion happens - the temp is "fixed" and so is the "pressure" ....... volume is virtually fixed whithin that "sphere-layer"
BMlaw : p * V = constant (at fixed Temp)
Not really. If this thing is working, Boyle's law need not enter the picture in any straightforward manner as the means of getting the deuterium atoms close enough to have a measurable probability to fuse would clearly not be just simple bulk compression or heating. (In stars, the high temperature serves to get hydrogen atoms close a very tiny fraction of the time (and actually produce helium via a complicated cycle). Very tiny indeed, or stars would go supernova at the outset and we wouldn't be discussing this.)
And by the way, that's much too Newtonian a way of putting it, but it will do intuitively. The cousinship between quantum mechanics and Newtonian mechanics is after all quite distant. A further twist is that fusion involves electric and nuclear forces. Both of those are relativistic from birth. For example, physicists spent decades sorting out nonsense about the "ether" because they were trying to understand Maxwell's equations properly in a Newtonian framework - where in fact they don't quite work.
Now, with all that said, what we've got here is an oversimplified and possibly garbled journalistic account that seems to rest on "excess heat". To me that does raise a cautionary flag. In the past, researchers have gotten into so much trouble measuring "excess heat" in this sort of experiment that I'll remain skeptical until they measure the helium that should be given off. Calorimetry is very old and academically un-sexy almost to the point of being disreputable, so sometimes even very brilliant researchers take it for granted. In practice, it can be very, very tough to do properly.
Oh, yes, I was forgetting. Physics doesn't care about wishful thinking, whether that wishful thinking is unbridled cornucopianism, or it is instead a romantic hankering for a mythical past when life was so effortless, so equitable and fair and politically correct as to give even the dullest simpletons a brilliantly easy time.
No, physics just is. So this item isn't of immediate policy interest. We'll just wait and see whether it works, or whether it is yet another lapse in calorimetric method. And then we'll wait even longer to see whether it can be scaled up enough to matter. If it can only be done in platinum or palladium, then it might well remain just a laboratory curiosity or at best a power source for satellites and the like.
PaulS, excellent couple of comments, thanks. Per your usual high standard.
The interesting thing is that while some kinda easy fusion being discovered soon is unlikely, it isn't impossible. Of course it may be a forlorn hope; and even if some way could be made to work, it would have to have nearly miraculous attributes to be able to prevent us burning coal, etc. It would be quite possible to have someone discover workable fusion and have it NOT immediately universally adopted, our species being what it is, and my discussion of this with Dr. Bussard was one main topic in terms of trying to get him enough support to give it a whirl. On the longshot possibility that it might work.
Still, it's intriguing. Every once in awhile you see something "emergent" which one wouldn't have predicted - here sonoluminescence comes to my mind at the moment as an example. I've often thought how ironic it would be if there IS a relatively simple way to harness fusion, and we simply miss it by giving ourselves too short a research window (due to the yeasty collapse thing).
I actually bought palladium and was looking for some deuterium back in the Pons & Fleishman days; probably just as well for me it didn't work or I might have seriously irradiated myself in the exhuberance of having the neighborhood's first fusion reactor. And yes, even at the time I knew it didn't make sense to try, I just liked the notion of it.
We hairless apes probably first encountered fire by lightning-strike and kept it going; at least that makes a good story. The fact that you could also create a useful fire by rubbing two sticks together, concentrating sunlight, striking spark off rocks, etc is obvious only in retrospect. Though if creating lightning HAD been the only way to start a fire, we might not be in this mess....
Maybe a few palladium coins would be nice to own; they seem to be holding their value pretty well anyhow...
that's exactly my point, physics Is!
I disagree strongly with you PaulS that Boyle Mariott is not part of this - Boyle-Mariott "is everything" in this regard b/c it is part of thermodynamics - or actually it is thermodynamics itself / avatar.
Remember that on top of Mount Everest the pressure is about 260 mbar (26.39 kPa) so the boiling point of water is 69 °C. (156.2 °F)........ just to give you a clue as to what I'm thinking at. Juggling B-M law give you posibilities ....
My point is that I don't think there is play-room here on earth to maintain a solar-simulation controlled over time.
**) In regardes to my vague Newtonian-cousin claim .... I was actually meaning physics understanding in general up till the theory of relativity. My point is that there must be a link between "easy Newtonian" and quantum ..... somewhere.And I guess for a moving/breaking car that is where the tires meet the tarmac on a miniscule level (atoms).
(I reckon I have to steer away from this kind of wording on a forum, b/c its not possible to explain easily what's in my mind in a few short sentences)
The magic pony part of "cold fusion" is you don't need high temperature. Of course that is the main reason for massive (and justified) scientific skepticism about it. If they can even prove that cold fusion is real, that would be Nobel prize material, even if it had no hope as a practical power source.
"Is there enough Palladium to allow this fusion reaction to power the world?"
That will be the $64 quadrillion question. Can it eventually be done in some material at a scale large enough to matter?
I guess that if you mix H or De with O (from zirconium oxide) in presence of palladium (a powerful catalyst) you will get a lot of energy but that energy would not come from cold fusion.
Also a cold fusion reaction is unlikely to stop after just 50 hours.
I've always had a problem with cold fusion in that if I can't boil water at atmospheric pressure how can I convert that energy into mechanical work? I may get more energy out than I put in but it is low grade energy and I can't do anything with it. 158 F would be good to heat my house but not good enough to drive a turbine........Can someone explain to me how cold fusion will be turned into useable energy?
I would like to second your comment. Temperature is not the same as usable heat. Also, is there any temperature dependence in the reaction, such that increasing the temperature reduces the rate of reaction? It the reaction went faster when heated, then things might go unstable.
E. Swanson
There is mass loss in this reaction which comes off as gamma rays. Why is there no measurement of gamma ray emission?
SolarHouse
The referenced (in that Physorg newsblurb) articles in the Journal of the High Temperature Society of Japan are not yet online, that I could find. The Journal homepage is here:
http://www.jstage.jst.go.jp/browse/jhts/-char/en/
An earlier paper written by Prof. Arata shows (alas, in Japanese) that the D locates itself within the lattice of Pd:
http://www.jstage.jst.go.jp/article/jhts/33/3/142/_pdf
A recent overview of "cold fusion" was published in the Indian journal Current Science :
http://www.ias.ac.in/currsci/apr102008/854.pdf
Ever since P&F I have been somewhat skeptical of cold fusion, yet I am quite willing to look at any repeatable experiment. Arata claims to have produced Helium, which itself is an interesting result.
So where do we put in our advance orders for our Mr. Fusions?
Meet Arthur.
http://www.nhc.noaa.gov/refresh/graphics_at1+shtml/165812.shtml?5day?lar...
Seems kinda early doesn't it? Actually I do not know if it is or not - anyone have the history?
No, last week of May and first week June is what I call the "mini season" in which dying frontal boundaries over Gulf and Caribbean develop into weak storms, very rarely hurricanes.
*cringe*
Wow. Arthur formed inland, not over open ocean. That's pretty unusual.
Well, the NHC officially "killed off" Alma (from the Pacific), but some people who were watching the remains move overland disagreed... not saying that Alma was reborn, but just to make you aware that there was a controversy.
Not quite. I've been watching it two days. It had a broad circulation that was half over water. Still, unusual.
This is early, the National Hurricane Center doesn't start its official season until tomorrow. I regularly look at it during season -even though California is not a target of the storms.
Re: As Iowa job surplus grows, workers call the shots. Up top.
Sometimes here is north Iowa, I think I must be living is an alternate reality. The doom and gloom talk and ethanol put downs just do not ring true here. True we are experiencing the same high gas prices, but there are big gains from ethanol, high grain prices and wind energy developments. Farmers are flush with cash to bid up land, machinery and crop inputs.
The housing bubble never got quite so carried away here. There are a lot of old people and few young. The state has one of the lowest population growth rates in the country.
With E85 now priced appropriately due to the run up in gas prices lately, it seems to me that more ethanol will be burnt than ever.
There are large economic benefits to producing your own energy and not shipping so much wealth outside the state to pay for imported oil. Iowa is economizing on transportation costs by using corn locally to produce ethanol (ELP) rather than exporting it which is a waste of energy.
Anti ethanol arguments conveniently ignore these benefits for some reason.
Recent statement from the IEA: BIOFUELS WILL ACCOUNT FOR 63 PERCENT OF OIL SUPPLY GROWTH FROM NON-OPEC COUNTRIES THIS YEAR.
Further it goes:" WHILE IT SEEMS UNLIKELY THAT BIOFUEL TARGETS WILL BE REVERSED IN THE NEAR FUTURE, IT IS SOBERING TO REALIZE THE AMOUNT OF OIL THAT WOULD BE NEEDED TO REPLACE THEM," the IEA said. "JUST OFFSETTING THE BIODIESEL AND ETHANOL ADDED TO THE U.S. AND EUROPEAN MARKETS SINCE 2005 WOULD REQUIRE AROUND 1 MILLION BARRELS A DAY OF ADDITIONAL CRUDE SUPPLIES TO BE PROCESSED."
To the anti ethanol folks: From where should additional this 1 Mio. Barrel come? From Mexico? Maybe from Venezuela?
Where would be oil prices today, if the West could not offer this tiny competition of biofuels? At 200$ or more?
GMO, which launched this dirty and completely misleading anti Ethanol/Biodiesel press campaign knows these figures too well. But its just a (very rich) lobby group.
At 120$ oil, offsetting those 1 Mio. barrel would mean for Europe and the US to export 120 Mio. $ PER DAY of printed money to these yet to be founded oil exporters!!!
hooray for turning tax subsidies, water and natural gas into a fuel that has lower energy density than gasoline!
Huzzah for driving food prices ever-higher, starvation in Haiti be damned! Let them eat dirt cakes! full speed ahead!
fantastic work!
we ARE SAVED!!!
To the anti ethanol folks: From where should additional this 1 Mio. Barrel come? From Mexico? Maybe from Venezuela?
Easy answer: From the natural gas that was used to make the ethanol - eliminating all of the inefficiencies of the convoluted natural gas to ethanol via corn process. If we had a big push for CNG vehicles - especially public transport - we could maybe get into Brazil's league in that area. Brazil, whom we immediately associate with ethanol - has a CNG fleet 8 times larger than that of the U.S. Seems they know better than to use their natural gas to make ethanol.
where does eye-oh-way get the fertilizer, diesel and ng to "produce" ethanol ?
'We're the Saudi Arabia of coal'Obama & Clinton shill for coal in Montana
http://gristmill.grist.org/story/2008/5/30/12163/2183
If this level of unbiased political support for science continues we should have anti-gravity on the table by November....
Ummm...yes...surely our politicians have enough anti-gravitas to rise to the occasion...
Leading article: For all the anger around the world, the era of cheap fuel has ended
http://www.independent.co.uk/opinion/leading-articles/leading-article-fo...
This is significant IMO, since this is one of the British 'heavy' newspapers, and it is not just a columnist, but a lead article, indicating it represents editorial opinion at the paper
I'm not so sure, they seem to putting the blame squarely at the feet of the "Foreigners" from the East rather than failing oil production. They're also saying we can get back to BAU as long as the various proposed technical solutions are adopted.
Trying to adapt to decline without understanding the scale of the adaption necessary will likely lead to it being overwhelmed by an accelerating decline. I guess the unfinished stone head on Easter Island suffered thus :)
MPs get veto on nuclear power, motorway and airport schemes
10 years of indecision are just not enough - who wants electricity anyway?
No one in the Government will risk their job and perks to keep the power on, even though they have stated that it is the only way as far as they know.
Any new nukes are going to be sited next to existing nukes (the first half dozen anyway). New construction means jobs.
How likely is the local MP for, say, Sizewell, to object ?
Or can they just site nukes in Conservative Districts ?
Alan
Yup. Their job as politicians is to hold onto power of the bossing-people-around kind in the short term, not the electrical kind in the longer term. And as any political economist can tell you, each individual power plant, motorway, etc., attracts concentrated opposition, which politicians respond to, but the benefits of any one such project are spread out too widely and thinly to make it worth any individual's while to lend strong support. So when there is such a wretched excess of "democracy" that any petty two-bit NIMBY can veto any project, no matter how vital, look out for big-time trouble in the longer term.
The flip side is the laser like power of the parasitic corporate lobbyists in D.C. that basically own the elected whores. Screw the common good, because the common good doesn't come up with the payola for the scum.
Vote down?
VOTE DOWN?
Do Labour MPs burn ? and if so what is the EROEI?
I should imagine that most of the energy invested is in the rounding up and corralling of the said beasts.
Jesus wept.
From the Tri-Cities (Tenn.) comment box:
I knew there was something bothering me about ethanol. Just didn't realize it was about them darned hybrid vehicles raising the price of gas by converting food to gas! Dang!
We need to stop driving them dangburn hybrids and move to open-pollinated ethanol vehicles!
LOL!
Re: "A drop in oil, and a pall in Germany, give solar stocks a shiver"
(possible subsidy cuts for PV in Germany)
The relative success for renewable energies and environmental technologies in Germany is based on a political consensus that drew the conservatives on board in a process beginning in the 1980s.
The central ideological argument for signing up to this, for the conservatives has been "job creation" "spinoffs" "innovation culture" and "future technology leadership" even if they don't actually believe much or at all in the ecological/renewable/sustainability ideas behind them. Regardless of whether either of those ideas make sense or not.
(This was an interesting process in which some classical conservative arguments where effectively turned upon them in a probably more unconscious reframing of the debate.)
With solar energy, it is however by now demonstrable that the subsidies have created a "suction effect" that is seeing producers outside of Germany profiting hugely from the subsidies. Some Chinese manufacturers are quite candid about this, admitting freely that they'd basically have to shut down entire plants in China if Germany slashed its subsidies. In other words, the job creation is seen to be going overseas, and so the conservative position retracts from the consensus.
Honestly I have to agree that the subsidies should be reduced more aggressively, as PV is just not going to substantially power Germany (however useful and impressive it may be even here in some situations) and at the current size of the market it is definitely beyond "incubation" stage.
Intelligent state intervention into the free market is possible and necessary, and it remains "intelligent" when it is adapted whenever artificial distortions to the market that are dysfunctional in terms of the defined goal become apparent.
(the simple reason why such intervention is necessary is that the market in itself is not structurally suited to deliver on political goals, however if policy, democracy, and a federal government, should have any meaning at all, then it is in defining and following such goals)
If the goal was to actually plaster Germany with as many PV cells as possible, as quickly as possible, then one might continue with the subsidy as it wouldn't matter where the cells come from. But if the goal was establishing a base for a viable industry, then that is largely achieved and that industry will mostly have to look for international markets now.
Defenders of the subsidy should also consider the serious backlash risk when it becomes an increasing, noticeable financial burden (the "solar debt" discussion), and the fact that what means are used to pay the solar debt are not available for other interventions in the future.
Putin Calls U.S. `Frightening Monster,' Urges French Solidarity
http://www.bloomberg.com/apps/news?pid=20601087&sid=adHBA_CS6GHg&refer=w...
As I've said before on here, I believe Europe's future lies with Russia and the East (even if that means breaking ties with the US and UK). Looks like the first tentative steps towards that future.
Although I always thought France would be foremost in seeing the need for Europe and Russia to have a symbiotic relationship. I'm surprised this seems to be happening despite Sarkozy being the French president, perhaps spiralling energy costs and civil unrest have made him more pragmatic. The fact the US won't be shipping cheap oil or natural gas to France anytime soon or helping out when the going gets tough might also be making him wonder who the better friend would be.
France and much of continental Europe have little choice. What is their practical alternative to Russian gas/oil or Iranian gas? The question of a Ukranian NATO alliance is again up in the air. I predict that Georgia and Poland will, in future, again fall under the influence of Russia...simply because of Russias FFs. Putin, the man Bush once berated by calling him Pooty-Poo, is very savy and realizes the opportunity he has to exploit Russias FFs.
While Russia has an improving trade surplus the US is heading in the opposite economic direction.
When the US determined to move from a production oriented economy to a consumer oriented economy the die was cast. The end was inevitable. Now only the timing is in question. When the foreigners stop buying our treasury offerings its all over. Check this out:
'The Fed, along with others, wonders why people might be stashing their money in things like oil, where you know how many gallons of gasoline you can refine from a barrel?
Or shall we talk about the Treasury Auctions the last two days, that could only be considered "horrible" in terms of their subscription rates (bid to cover) and indirect participation? Clearly, foreign governments aren't interested in this debt to any material degree, and neither is anyone else!
Might that have something to do with the fact that Treasuries have been contaminated by that very same Federal Reserve, and people are starting to think that the entire United States might follow California?'
http://market-ticker.denninger.net/
I believe that our middle case has Russia approaching zero net oil exports in about 16 years.
Compared to France approaching zero net oil exports when?
It appears that France has shown net oil imports of around 1.9 mbpd for several years.
http://www.tehrantimes.com/index_View.asp?code=169989
Russian oil output down 0.3% in Jan-Apr 08
Westexas, I agree that if closer European/Russian integration was simply about Europe gaining access to Russian oil exports, it would end badly due to the ELM effect. But its not just about oil exports, for example there is also Russian nuclear power, gas and other resources.
Russia needs Europe as much as Europe needs Russia, hence Putin's advances towards Europe. Russia has long seen itself as a European power, if it wishes to remain so, it needs access to Europe's population and economy. Europe needs security, in terms of resources and defence, both of which Russia can supply.
In a World made up of resource hungry power blocks, willing to use force to maintain their economies; a peaceful, symbiotic, self-sufficient European/Russian partnership would seem to be a good choice.
I've been living in Ulaanbaatar, Mongolia, for a few months now and am planning to stay here as long as it remains relatively safe for westerners (and I feel that might not actually be very long...). The expat community here is quite small, and I've got to know lots of diplomats and mining people. What I find disturbing is that western diplomats, who are probably much smarter than most western politicians, seem to have no idea about PO and energy issues in general. The only ones who truly have a handle on the things that we discuss here are the Russians: they know they've got most of Europe by the barrel, and they're not afraid to say it (off the record, of course). One GRU officer actually told me - after a bit of vodka - that the only thing the Russians don't understand is how Europeans and Americans can be so clueless.
And then, just a couple of days ago, I had a drink with a top US diplomat, and when I mentioned the oil prices going through the roof, he just said "it's all a speculative bubble". I tried to tell him about PO, but he got bored and changed the subject.
I agree...but...Sarkozy is a died in the wool Atlanticist. He is firmly aligned with the US/uk/Israel. (See NATO, European ‘defense’, sending soldiers to Afhganistan, the ‘grave’ threat of Iran, etc.) He doesn’t go out of his way to make that super public and many don’t see it clearly, as his domestic policies (after cutting taxes for the rich) appear simply a mish-mash of populist moves, taken from the xenophobic, anti-crime, right, the traditional center (a strong France, core values, yada yada), the ‘soft’ left (identity politics, neo-colonialism via humanitarian intervention, pro a strong state, subsidies for those who scream, etc.) and the greens (fluff.)
Sarkozy’s politics look horribly confused, and it is often said that they seem to be more personal than strategic. Enough has been said about his Jewish roots; and he is fascinated, thrilled even, by the US, anything glam or glitter.
His approach to important issues such as Education or Immigration are uninformed, slap-dash, simplistic, contradictory. He often just says what ppl want to hear and three days later the papers publish a two line retraction or correction or what not, coming from some appalled minister.
As for energy, he hasn’t a clue, and limits himself to peddling French nuclear stations (Areva) to Lybia, Algeria, UAE, Qatar, Morocco, Jordan, Egypt, KSA, although mostly these are for the moment ‘cooperation accords’ and so on. His gushing over ‘renewables’, his proposals to ‘look for ideas’ (!) are ridiculous. His minister of Energy, Lagarde, has just called for the EU to obtain (!) a rise in production from the producing countries. She said that one couldn’t keep on paying rising prices to benefit only the producers! And Sarko wants the EU to lower the taxes on oil..
The round table (“Grenelle”) that Sarko organised on energy (with civil society, greens, etc.) didn’t even MENTION peak oil (see link in French), it was all about CO2, green housing, etc.
However, he does seem to have warmed to Putin a little.
link
I just watched this round table discussion on BBC World news about population growth and the planet.
This guy writes about the same show in his blog
http://lunartalks.wordpress.com/2008/05/29/newsnight-bloody-fools/
At one point Jonathan Porritt was bringing up the oil situation and what the planet can support and his sound just got cut out. Just as he was about to talk about oil. Bloody hell.
This Caroline Boin rubbed me the wrong way, I have a feeling we'll be seeing more of her.
http://www.criticalopinion.org/authors/36
http://www.policynetwork.net/main/article.php?article_id=776
Yes, when first broadcast on Newsnight, in the introduction to the debate, Paul Mason (Economics Editor) actually used the words "Peak Oil" (with no explanation of what that meant) but the moment Porritt tried to talk about oil he was sharply cut off. He'd just said there was "institutionalised denial" about a critical problem with oil when he was cut off mid-sentence. Shame on you BBC. Notice the BBC had him at the end of a video feed not in the studio like the other guests. It was a live programme so I guess they had to do that to make sure they could shut him up if necessary. Which they did.
What was the point of using the words "Peak Oil" in the intro but not allowing it to be talked about?
Newsnight 29 May 2008. UK only time limited link.
Funny that post about the Quensland sugar cane growers getting out of the business. I would have thought there would be a big market for sugar cane ethonol. a la Brazil.
So these bastards melt the ice in the arctic and then profit from it?
Americans are driving less, using mass transit more, buying fewer gas guzzlers, indeed shopping less wantonly in general, and lowering their previously unshakable confidence as consumers.
Bologna. Whoever wrote that line lives in an anteroom of the lower reaches of some subterranean cavern. Get out and observe what is happening, which is basically nothing! There is currently no change in the buying or traveling habits of most Americans!
(Breath) People will continue to drive because they have to. They have to work; in most places there is inadequate mass transit to get to work without driving. But, more than that, most people don't commute from their homes into a central city; they commute from home to their mall job, or shopping center job, or their own business in a business park. Commuting isn't possible for most of these people.
Eventually, most of us will compensate for higher fuel prices by cutting back severely on other purchases, which will lead to massive job cuts, and that will lead to less driving. We're not there yet, but it is coming at about $8 a gallon (IMHO). We will then see a lot of people starting to live in an older style, including moving in with extended families, including unrelated families (a trend that has already started) and in boarding houses. Families will pool their efforts to survive. Those who still have money, and have good jobs, and can still drive will move into or convert to gated communities, which are common around the world where there is a vast wealth difference between the poor majority and wealthy minority. The wealthy will have extensive security forces guarding them. Government will change, becoming more authoritarian and less representative, run largely by and for the monied.
Later a revolution could occur, but the result of that would depend on the control the government can exert on the masses of poor. By that time, the type of car you drive will be a non sequitur, because most people won't own cars, have jobs, or have much control over their own destiny. Also, cash will be hard to come by, and barter will be the main medium of exchange. Life will be very local.
To illustrate, go to just about any third-world country. Also study the leadership of those countries to discover where our national leadership is headed, and rather rapidly. Engineers and economists are now fighting over peak oil. Wait until reality hits and the politicians take over. That is when we will see the real changes, described above. In most of the world, the wealthy ARE the politicians. The poor aren't.
From the Newsweek article: The Coming Energy Wars
from the article about penn-virginia ng:
"RBC Capital Markets analyst Scott Hanold estimated that, based on results of the Fogle 5-H, Penn Virginia holds 1.5 trillion cubic feet equivalent of "net unrisked upside potential from the Haynesville Shale play."
net unrisked upside potential? what the hell is that?