DrumBeat: June 1, 2008

Ending dollar peg won't solve Gulf inflation - Paulson

ABU DHABI, June 1 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Sunday leaders of Gulf oil producing states had told him that abandoning their currency pegs to the dollar will not solve their inflation problems.

Paulson, two-thirds of the way through a four-day trip to Saudi Arabia, Qatar and the United Arab Emirates, said leaders in the region have "quite an awareness that the peg does not influence inflation to a significant degree.

"They recognize that inflation is the overriding issue ... Ending the peg is not the solution to the inflation problem."

Indonesia says cannot rule out more fuel price hikes

JAKARTA (Reuters) - The Indonesian government cannot guarantee that there will be no further fuel price hikes before the 2009 presidential election, Energy Minister Purnomo Yusgiantoro said on Sunday.

Indonesia raised fuel prices by almost 30 percent last month, sparking protests in a country where millions are already suffering from rising energy and food costs.

Iraq oil exports hit post-war highs - minister

BAGHDAD (Reuters) - Iraq has raised oil output and exports to their highest levels since the 2003 U.S. invasion, its oil minister said on Sunday.

"The export figures for May were more than 2 million barrels per day and we have exceeded our previous export and production figures," Hussein al-Shahristani told Reuters in an interview.

China Orders Sinopec, Cnooc to Ensure Oil Supply to Quake Areas

(Bloomberg) -- China has ordered China National Petroleum Corp., China Petroleum & Chemical Corp. and China National Offshore Oil Corp. to ensure oil supply after the nation's most powerful earthquake since 1950, the cabinet said.

The speculation on oil prices is beating up supply-demand issues

Oil price boom is getting dangerous. Now the economies and consumers are seriously at risk. It is not only developing countries, but major economies are hit by this monstrous trend.

Climate Enters Debate Over Nuclear Power

BRATTLEBORO, Vt. — After part of a cooling tower collapsed last August at Vermont’s only nuclear power plant, the company that runs it blamed rotting wooden timbers that it had failed to inspect properly. The uproar that followed rekindled environmental groups’ hopes of shutting down the aging plant.

The proposed closing, albeit a long shot, has gained some support this year among Vermont politicians. The discussion is bringing into sharp relief a conflict between two objectives long held by environmental advocates: combating nuclear power and stopping global warming.

No more cheap shots for gun users

EDMONTON - The price of ammo is shooting up faster than a speeding bullet.

Metal supplies are diminishing due to industrialization in China. On top of that, ammunition supplies have been depleted by wars in Iraq and Afghanistan and by consumers who hoard what they can for fear of higher prices.

Prices are also skyrocketing because fuel prices have meant a doubling of shipping costs in three years.

Tropical Storm Arthur Moves Across Mexico's Yucatan

(Bloomberg) -- Arthur, the first tropical storm of the Atlantic hurricane season, is expected to dump as much as 10 inches (25 centimeters) of rain on Mexico, Belize and Guatemala as it spins slowly west across Mexico's Yucatan Peninsula.

...State-owned Petroleos Mexicanos pumps 1.07 million barrels a day from the Cantarell field in the Bay of Campeche. The company had no immediate comment yesterday on whether operations would be affected, spokesman Carlos Ramirez said in a telephone interview.

A Tough Road for Truckers

Rising fuel costs are the single issue to blame and worse yet, it doesn’t look likely to dissipate anytime soon.

“It’s creating an incredible impact on customers’ transportation budgets,” says John Hickerson, Senior Vice President & Chief Marketing Office, FFE Transportation Services and President, American Eagle Lines and FFE Logistics (www.ffex.net). “There’s no denying it’s real. Our customers stop at the fuel pump on their way home and they experience it.”

Food and fuel crisis must be solved: MP

Food crops must be kept separate from crops used for biofuels in order to put a stop to global food shortages, a Rudd government minister has warned.

Agriculture Minister Tony Burke says the challenge for countries around the world, as they face an increasing shortages in food, is to balance the harnessing of biofuel with global food demands.

NAFTA hurts Mexico, too

Mexico has tripled its imports of grain since 1994 and now depends on them for 40 percent of its food needs. "Today Mexico has to rely on imports for basic foodstuffs, whatever the market price," said Armando Nartra, director of the Institute for Rural Development Studies.

An unexpected consequence of the invasion of Mexico by basic and processed U.S. foods is a dramatic increase in obesity. Almost 33 percent of adults are obese; another 40 percent are overweight. The side effects absorb 21 percent of the public health budget.

A free oil market would lower prices

Gasoline appears headed for $1.50 per litre and oil $150 a barrel. Airlines are the first of many industries to force rising fuel costs onto consumers. High oil prices are driving up food costs worldwide, causing enormous suffering. Flat petroleum supply and relentless increases in demand ensure all but the wealthiest will soon run out of something. Much misery lies ahead.

Asphalt Jungle: The Temple Of Doom - It's the end of the car as we know it. And I feel fine

I don't know whether the future means hybrids, advanced diesels, fuel cells, electrics, a combination of all four, or some other system we haven't even thought of yet-but I don't need to know. All I need to know is this: Cars will continue, and they'll continue to wow us. How can I be so sure? Because mankind has always risen to the challenge. Always. The charts don't lie: The progress wrought by human ingenuity knows no bounds.

Gates Warns China Not to Bully Region on Energy

SINGAPORE — Defense Secretary Robert M. Gates issued a set of thinly veiled warnings to China on Saturday, cautioning that it could risk its share of further gains in Asia’s economic prosperity if it bullied its neighbors over natural resources in contested areas like the South China Sea.

Helping Big Blue go greener

After 25 years of leading development teams in cooling mainframes, servers and processors, Schmidt says the rapid expansion of information technology has created an unprecedented energy crisis for major corporations. He says IBM is "keen on green data centers," and his mission is to help solve that crisis.

"Big Fortune 500 companies are out of power," he said. "If I told you the names of these companies, you would recognize them."

Saudi to double refining despite rising costs

Saudi Arabia is pushing ahead with plans to nearly double its refining capacity despite a sharp increase in investment requirements for such projects due to a surge in construction costs and a shortage in manpower.

After a long delay, the Gulf Kingdom, the world's dominant oil exporter, approved two mega refining ventures with foreign partners this month despite an increase by at least 60 per cent in their costs, according to analysts.

Kazakh Energy Suppliers Warn of Upcoming Power Deficit

Kazakhstan faces an energy crisis. Energy consumption is increasing in the country every year, while the existing power stations are able to satisfy the demand for energy only up to 2009, the country's energy suppliers said at a special meeting in Almaty today.

According to experts' forecasts, if the measures are not taken immediately, Kazakhstan's north and south will be the first to suffer energy shortages, while the west will become more dependent on foreign supplies. Besides, almost all power stations are worn out and the equipment's exploitation period exceeds all acceptable norms.

Energy Crisis in Europe Becomes Worse

The energy crisis in Europe is becoming increasingly worse. More and more people are protesting the high fuel prices; businesses that depend a lot of fuel have had enough. All throughout Europe, fishermen and truck drivers are protesting.

Although it’s reasonably calm in the Netherlands for now, the same cannot be said for the rest of Europe, especially not for Germany (as reported yesterday) and Spain.

‘Oilman’ not a dirty word

Many good and qualified geologists came before and have come after him, but Carter’s assessment of Robert D. “Bob” Gunn in 1979 continues to plague an entire industry. The denial to allow one of the country’s brightest geological minds to serve as a voice of reason on behalf of the nation was because, as Carter put it: Mr. Gunn represented “dirty oil.”

Michigan may raise residents' electric bills to help businesses

LANSING, Mich. - State lawmakers plan to raise residential electric bills by as much as 15 percent so businesses and schools can pay less.

Prices historically have been "skewed" by state regulators so residents pay less than the actual cost of electricity, while businesses pay more.

Probing Oil Prices

The investigation by the Commodity Futures and Trading Commission of possible manipulation of the oil market is welcomed news. But it would be a mistake to blame improper trading behavior alone for the record high oil prices.

New Hampshire: New state DOT commissioner faces fiscal, infrastructure challenges

"It's a challenging time because of the energy crisis, and there's a lack of a strong national transportation policy," Campbell said. "First and foremost, we need a strong approach that includes other modes (of transit.)"

Campbell said freight rail and air transportation are areas in need of more focus, citing rail as a tool for strengthening the economy of the northern portion of New Hampshire, and the recent Skybus closure at Pease.

Tennessee devours energy

TVA, once one of the most conservation-oriented utilities in the country, abandoned its innovative ways in the 1980s and is only now returning to a major focus on energy efficiency.

As a result of the decades-long lag, Tennesseans use more residential electricity per person than any other state except Alabama. In contrast, utilities in several other parts of the country have embraced efforts to reduce electricity use by customers, leapfrogging TVA and offering a wide array of programs designed to save energy.

Diesel deposes road kings

Everybody's taking record oil prices hard, but few are hit harder than the nation's 3.4 million truckers. Unlike most people, truckers can't cut back on their driving to make a living – driving is their living. And the high cost of diesel fuel – which recently broke the $5-per-gallon mark on the West Coast – is driving small trucking companies and independent drivers to the brink of ruin.

Sue, don't drill: It's the American way

If we lived in a country where "capitalism" flourished, the solution to the energy crisis our country is currently facing would look something like this: Investor owned companies would drill more wells to produce more crude to meet demand, federally controlled lands and waters would be open for exploration of its natural resources, consumers would conserve, and researchers and IOCs would diligently work to develop alternative fuels for the future.

U.S. must tap its own oil resources or face even greater energy crisis

My analysis indicated that the company would deplete its reserve production capacity by the early 1970s. Interestingly, the late Dr. M. King Hubbert, perhaps the most knowledgeable production forecaster of his age, developed a model in 1956 that predicted that all U.S. domestic production would peak in the early 1970s. In other words, the nation would begin to become dependent on imported oil in the 1970s. Only oil people and government bureaucrats knew of this disturbing fact at that time.

Bangladesh: Use 2.5b tonne coal for energy security

A UNDP-Bangladesh report recommends increasing the use of coal resources to avert a deep energy crisis that would affect economic growth in near future.

"The estimated resources of 2.5 billion tonnes of coal in Bangladesh are equivalent to 65 trillion cubic feet of gas which could assure energy security in the medium and long-term," says the report titled "Sustainable Energy Development in Bangladesh -- Coal as an alternative energy resource."

How to harvest solar power? Beam it down from space!

By 2030, India's Planning Commission estimates that the country will have to generate at least 700,000 megawatts of additional power to meet the demands of its expanding economy and growing population.

Much of that electricity will come from coal-fired power plants, like the $4 billion so-called ultra mega complex scheduled to be built south of Tunda Wand, a tiny village near the Gulf of Kutch, an inlet of the Arabian Sea on India's west coast. Dozens of other such projects are already or soon will be under way.

Yet Mehta has another solution for India's chronic electricity shortage, one that does not involve power plants on the ground but instead massive sun-gathering satellites in geosynchronous orbits 22,000 miles in the sky.

A rural pain: Gas prices impact West Virginians' long commutes

The state ranks 13th in the percentage of workers who work outside their county of residence, according to the 2006 American Community Survey by the U.S. Census Bureau. With an average travel time of 25.6 minutes, the state ranks 11th in work commute time.

And as a largely rural state, mass transit isn't available to most people. Only 1 percent of workers used public transportation to get to work in 2006, compared to a national average of 4.8 percent.

Cutting back on miles traveled isn't enough

The bad news is that the Highway Trust Fund, which was created in 1956 to finance the national road system, is losing a lot of money because it depends on the federal gasoline tax. Fewer miles driven mean fewer dollars going to the fund.

Energy policy doesn't attack root of problem

Virtually every individual, family, business and institution in the United States is grappling with the destructive consequences of our national failure to devise a responsible energy policy.

The price of oil has risen 85 percent in the past two years. Because of our extreme dependence on fossil fuel, that price increase is causing a shock to our economic system that is apparent in higher gas and food prices, rising costs for manufactured goods, damaged corporate profits and painfully stretched household budgets.

With gas at $4, a few strive for 55

Jon Zehnder, 54, knows he’s a curiosity because, as his bumper sticker says, “I drive 55.”

“I like to drive fast, but I’m old enough to remember the energy crisis in the 1970s,” said the Lindsborg, Kan., social worker. “And,” he added with a laugh, “I’m saving a butt load on gas.”

But even in a time of $4-a-gallon gas, the slow lane is lonely these days.

What happens when oil runs out?

GRAND RAPIDS -- The collapse of cities, a return to rail transportation, famine and a worldwide depression are but a few outcomes predicted by energy industry insiders and believers in the peak oil theory who gathered this weekend at Calvin College.

"We will have a different civilization, to be sure," said David Goodstein, a vice provost and professor of physics at the California Institute of Technology (Caltech).

Algeria riots pose risk of wider unrest

ALGIERS, June 1 (Reuters) - Sporadic riots in OPEC member Algeria this year risk triggering wider protests against a political elite slow to turn unprecedented oil wealth into jobs and homes.

Street clashes are a prickly issue in Algeria, a major gas exporter to Europe with a record of rebellion and where youth riots in 1988 forced the authorities to abandon one-party rule.

Fuel subsidies hurting Indonesia: Pertamina executive

SINGAPORE (AFP) -- Fuel subsidies in Indonesia are hurting the economy, sucking away precious funds which could have been better used in other areas such as health and economic development, an Indonesian oil executive said Sunday.

The country cannot go on indefinitely subsidising fuel and bold decisions are needed from the government to address the situation, said Widhyawan Prawiraatmadja, a senior vice president with state-owned Pertamina.

So long to cheap oil

Several ominous transportation issues recently converged that foreshadow a major problem. It began with truckers grinding large sections of our national highways to a halt in protest of rising fuel prices. These same fuel increases forced several airlines to close or cut operations. Meanwhile, car manufacturers were reporting some of their worst numbers in a generation-again, with much of the blame focused on rising gas costs.

Saudi Jizan oil refinery hits new delay - report

RIYADH, June 1 (Reuters) - Saudi Arabia has for a third time delayed a tender for bids for a 200,000 barrels-per-day oil refinery in the southern province of Jizan, al-Watan newspaper reported on Sunday.

...Spiralling costs have cast doubt over the viability of new oil refineries worldwide and industry observers have been sceptical over the Jizan plan as it is a long distance from crude production facilities.

U.S. lawmakers scramble to close energy 'loopholes'

With gasoline prices in the United States perhaps bubbling up toward a once-unthinkable $5 a gallon, lawmakers in Washington are running frantically to do something - anything - to halt the parabolic rise in the price of oil.

Russia raises oil export duty to record $398.1 per ton from June

MOSCOW (RIA Novosti) - Russia's oil export duty will rise to a record $398.1 per metric ton from June 1, 2008, in line with global market trends.

"The average [crude] price was $102.8 per barrel for the March-April monitoring period, which puts the maximum duty rate at $398.1 per metric ton. Therefore we will reach a record export duty on Russian oil that will be fixed at $398.1 per metric ton from June 1," Alexander Sakovich, deputy head of the customs payment department at Russia's Finance Ministry earlier said.

US envoy talks of 'apocalypse' in Sudan town

Burned and looted huts stretch as far as the eye can see in Sudan's oil-rich town of Abyei, now empty of civilians, the United States special envoy to Sudan, Richard Williamson, said on Saturday.

Williamson, who toured Abyei on Friday, said he saw "scorched earth" devastation in the town where heavy fighting last month between northern and southern Sudanese troops sent tens of thousands of civilians fleeing.

Vladimir Putin weighs into TNK-BP Russia row

Vladimir Putin has waded into the shareholder row at BP's Russian joint venture, TNK-BP, saying that he warned the British company years ago about the risks of setting up the partnership with a group of Russian billionaires.

"Several years ago they [BP] created a joint venture splitting the firm 50-50. When they did it, and I was present at the signing ceremony, I told them: 'Don't do it. Agree to one of you having a controlling stake'", the Russian Prime Minister told French newspaper Le Monde on Saturday.

Russia to increase oil output after tax cuts

PARIS - Russia, the world's second-largest oil exporter, will raise its oil output in the next few years as new tax cuts will allow oil firms to invest more in exploration and production, Prime Minister Vladimir Putin said.

Russia imposed heavy taxes on the oil industry, stashing away the proceeds in two oil wealth funds. Oil companies have complained about the excessive tax burden, which they say has led to underinvestment and stagnation.

Ex-official: Enron probably a focus of oil inquiry

(CNN) -- Federal regulators investigating possible price manipulation of crude oil are probably looking at what role collapsed energy giant Enron may have played, a former government official said Friday.

Forecasting inflation is now harder: Bank of Canada

OTTAWA (Reuters) - Rising gas prices are making it increasingly hard for the Bank of Canada to forecast inflation, central bank Governor Mark Carney said in an interview published on Saturday.

Power struggle: demand for oil is rising far quicker than production

Rising prices at the petrol pumps are a direct result of a lack of oil supply. When there's not enough to go around, the sellers can name their price. The result is that oil prices have almost doubled, rising from less than $70 a barrel this time last year to around $130 a barrel today.

Separating the myths from the facts about North Sea oil

Gordon Brown’s announcement in Banchory last week that he plans to increase North Sea oil production by up to 70,000 barrels a day was confirmation, if any were needed, that the country is in the grip of a fuel crisis.

French threat to North Sea oil reserves

A consortium of foreign oil companies led by French giant Total is threatening to block government plans to fully develop the North Sea's last frontier, which contains over a fifth of Britain's flagging oil and gas reserves.

David Strahan: Sorry Gordon, but geology has us over a barrel

Even by the low standards of his Government, Gordon Brown's recent pronouncements on oil have been surprising. Writing in a national newspaper on Wednesday, he argued that the price of a barrel had soared to $135 because of barriers to production that are "technical, financial and political".

There are problems here, sure enough, but the word he left out was "geological", and the omission is crucial. It means he really doesn't understand the profundity of the current crisis, and explains why panicky initiatives are bound to fail.

America's suburbs: An age of transformation

Valencia was designed by Victor Gruen, an architect who did as much to shape American suburbia in the 1960s as William Levitt had done in the 1950s. Gruen was an idealist: his most enduring invention, the two-storey enclosed shopping mall, was supposed to evoke a European city centre. For Valencia he devised a dense urban core and a series of neighbourhoods connected to each other and downtown via walkways known as paseos. The settlement was supposed to be orderly and self-contained, unlike the chaotic San Fernando valley just to the south. As one of the town's early planners explained, it would be “an island of reason in the path of metropolitan sprawl”.

It didn't quite work out that way. Valencia contains no building taller than six storeys and few taller than three storeys. These days the paseos are used mostly for walking dogs, and by children. Everybody else drives. Nor did Valencia prove to be economically self-contained. Each morning about half of its residents leave for jobs in Los Angeles. Roughly the same number make the reverse trip over the Santa Monica mountains to toil in Valencia's offices, sound stages and warehouses.

Australia: Govt 'backing down on renewable energy'

The Rudd government has been accused of neglecting to set aside money for renewable energy.

Treasurer Wayne Swan has been criticised for a budget decision to means test the $8,000 rebate for installing solar energy panels.

But that's just one of several blows to the renewable energy sector, University of New South Wales (UNSW) senior lecturer Mark Diesendorf says.

Oil drilling plan outrages green groups

An Australian joint venture is planning to drill off the NSW coast in search of oil and gas in a move that has outraged green groups.

The venture says the skyrocketing world oil price has made it feasible to establish a drilling rig 22km offshore between the Central Coast and Newcastle, The Sunday Telegraph newspaper reports.

Michael T. Klare: How Scarce Energy Resources Can Quickly Lead to Deadly Wars

Shows of force by nations competing to control dwindling energy supplies could trigger conflict in hot spots across the globe.

US Regulators Crude Probe Sparks Jitters Across Atlantic

"No doubt speculation is boosting the oil price, and perhaps oil markets are also being manipulated," said David Strahan, a trustee for the Oil Depletion Analysis Centre, a U.K.-based charity. "But the reason the oil price continues to soar, and why investors apparently see crude as a one-way bet, is a growing physical shortage of supply."

"Even if the CFTC investigation does uncover market manipulation it is unlikely to moderate the oil price, since the fundamental cause is geological constraint and the approaching global oil production peak," Strahan said.

The decline of oil’s empire

If the soaring crude price has shown anything, it is that a paradigm shift is under way in the global oil industry: the Western world can no longer take for granted the abundant supply of affordable energy that has sustained its economy and living standards in the past.

Oil shock brings cheer at last to EU's carbon market

PARIS (AFP) - After slumping to prices that had made it a near-laughing stock, the European Union's carbon market, the Emissions Trading System (ETS), has been given a useful boost by, of all things, oil.

Economic cost drives Senate climate debate

WASHINGTON - The possible economic cost of confronting global warming — from higher electricity bills to more expensive gasoline — is driving the debate as climate change takes center stage in Congress.

The Senate will begin considering legislation Monday that would mandate a reduction in carbon dioxide and other greenhouse gases from power plants, refineries, factories and transportation, cutting heat-trapping pollution by two-thirds by mid-century.

Pethokoukis (USNews): Do We Need an Energy "Manhattan Project"?

Can Big Government really solve the energy crisis? It would be nice to believe that. While America has a much-deserved reputation as the land of free-market-loving entrepreneurs, that doesn't mean Uncle Sam can't occasionally take the lead and achieve some pretty impressive results. Two that quickly come to mind are the Manhattan Project ($20 billion in today's dollars), which developed the atomic bomb, and the Apollo space program ($100 billion in today's dollars), which eventually put 12 men on the surface of the moon. And it's those two examples of successful collective action that many people think should serve as the models for how we deal with our current power problems, whether it's slowing climate change or achieving energy security.

Efforts underway to cap corn to ethanol production:


All city "think tankers" should be watching the morning farm reports that are broadcast weekly (usually on Saturday mornings). The excitement is almst palpable as the agriculture industry tries to figure out what to do with all of it's new found wealth and power.

The reporting is that the corn crop will not yield nearly as much corn as is needed to supply the ethanol industry, the animal feed industry and the food industry all at the same time. This means that the prospect of "cheap corn" in the near future is unlikely. Combine that with the staggering cost of natural gas, the fuel that really powers the ethanol industry (ethanol is essentially a gas to liquids industry, using solar power stored in food as the tool of conversion) and the raw materials cost to produce ethanol continues to skyrocket. The U.S. government has essentially subsidized this cost and mandated a market for ethanol, but if the corn cannot be delivered, the mandates become purely theoretical.

Sorghum to ethanol
The "ag industry" is now abuzz with the idea of substitution. Put the words "Sorghum to ethanol" into the google search bar and you will see what they mean. Sorghum or milo is now seen as the next potential source for raw material to produce ethanol. Agriculture departments at almost every major university are toying with programs to use sorghum as a source for bio-fuel. And as you would expect, projections of price increases for sorghum are pouring in. The problem is that sorghum is a major source of feed for animals, and thus we can assume that meat prices will be forced higher. And sorghum does not get us out of the continuing thirst by the ethanol industry for natural gas.

The U.S. Department of Agriculture and the Congress seem to see what is happening, and are now freeing up huge chunks of land held in "conservation trusts" (what used to be called "set aside") and allowing it to be used as pasture. The land that will go to sorghum and corn production is already displacing land recently used for pasture, wheat, soybean, barley, and hops (look out beer prices!)and with sorghmum soon to go into cars, it will reduce the amount that can go into cows.

Note that all of this is happening at the very front end of the ethanol mandates. If we stay to the fully implemented mandates, it will require a 5 fold increase in ethanol production by 2020!
this would still produce only a tiny fraction of the liquid fuel the U.S. consumes. It is almost impossible to project the potential dislocation to food markets, grain markets, and natural gas prices such a program portends.

To all the mathamatical whiz kids at TOD who have written on the subject of EROEI, take heart in your vindication (most of all the dean of the school of ethanol debunkers, Robert Rapier), the marketplace is bearing your theories out.

The farmers, however are having a "field" day (agricultural pun intended) as the wave of increasing farm produce prices from the ethanal plan expand outward in all directions.

At the grocery store and in the food poor nations of the world, however, it is not such a pretty picture.

Soon, the ethanol program will collapse in it's own misguided math (my guess is that ethanol will "peak" long before crude oil does) as more and more people realize there are easier ways to get energy from the sun than using our food and natural gas supply to do it.


Isn't the ethanol subsidy a fixed amount per gallon?

Seems like as the price of natural gas (for fertilizer) and diesel (for tractors and transportation) go up, the relative advantage of a fixed subsidy goes down. And politically, it's going to be hard to increase that subsidy in the face of rising food costs.

Sorry for re-posting this from yesterday's DrumBeat, but it seems appropriate:

Meanwhile, though numerous green technologies hold plenty of promise, none of them are going to save the day any time soon. "It's a false god," says Robin West, chairman of PFC Energy. "There will be step changes in technology, but people forget the scale of the oil business. Ethanol production was 5 billion gallons last year, with huge subsidies to farmers and rising food prices. But that's the size of one production platform off the coast of West Africa."

The US produces a load of ethanol now -- 550,000 barrels per day (EIA figures)which is up 160,000 barrels per day from a year ago. A five fold increase would result in 2.75 million barrels per day -- in volume terms equal to more than 50% of current domestic US supply, in energy terms worth about 40%. So,if possible, this would be a substantial fraction not the minuscule fraction you posit. Add this volume of ethanol to an ANWAR, an equal volume of biofuels, a traditional US production of around 3 million barrels per day, and massive efficiency increases due to more fuel efficient cars, hybrids and V2G construction and it's possible we could be in a lot better shape dependence-wise come 2020.

Now there are serious problems with ethanol production. But they are not so dark or dire as you paint them. First, not all ethanol production uses natural gas to provide heat for fermentation. So your statement about ethanol essentially being a liquification program is a little off. Sure, you convert some energy into more of another, but the imputs are direct solar, diesel, fertilizer, electric from natural gas, coal, nuclear, wind, etc.

The impacts on food are definitely negative and so the industry is now scrambling to diversify even as it tries to grow the ethanol base. We'll probably see less corn and more other things to include sorghum but also a growing base of cellulosic. A number of cellulosic refining operations are springing up this year as well -- enough to total more than 50,000 barrels per day in new production.

So the ethanol picture is more complex and we are likely to continue to see growth -- albeit struggling. I don't know if we'll reach the fivefold increase in ethanol by 2020 or if we can produce that total. Nor do I know if other biofuels will reach parity volumes. But we will likely see increases even as we make a step shift away from corn to diverse sources.

Ethanol was never a panacea. But it will continue to provide mitigation and, perhaps, power the farm equipment when we need it most. In the end, I think V2G with renewable/nuclear power is the preferred option. So let's hope that begins to pick up steam pretty rapidly as well.

If I understand it correctly you are saying:

Ethanol 2.75mbd (allowing for 5 fold increase)
Biofuels 2.75mbd (err! from somewhere)
ANWR 0.75mbd (if it ever happens/if they can achieve that flowrate)
Existing US production 3mbd (assuming no production declines)

Total 9.25mbd by 2020

Don't you think you're being just a little over optimistic?

Actually, 3 mbd is counting in the decline rate. We produce 5.5 mbpd now.

And yes, those figures were overly optimistic. But I'm quoting figures from optimistic sources. The original statement was an 'if even.' So I was covering that statement.

In my opinion, we're more likely to get this by 2020:

Ethanol: 1 mbpd (constrained by land, food and water issues)
Other Biofuels: .5 mbpd (see above statement)
ANWR: .5 mbpd (if opened)
New off shore: .25 mbpd (if opened)
US production after decline rate + enhanced recovery: 3 mbpd (actually, this figure is a bit pessimistic, but we have some really old wells and lots of off-shore sources that don't have a very long lifetime)

Total: 5.25 mbpd by 2020

Net loss -.25 million barrels per day plus loss in efficiency in ethanol.

I received a letter from a govt. official that the United States is expected to produce 7.5 bilion gallons of grain ethanol in 2008. The 2015 grain ethanol cap is for 15 billion gallons/yr. The total requirement for grain & cellulosic ethanol is 36 billion gallons by 2022. Since there is no large scale cellulosic ethanol due for some time, it is likely that the 15 billion gallon limit to corn ethanol production might be mandatory under strictest penalty of the law unless the law is amended.

This year the farmers planted 6% fewer acres of corn as they needed to try to fill a growing demand for soybeans and other crops. The early proponents of grain ethanol had argued that higher prices for corn could only bring more corn acreage planted. This myth is already debunked. The amount of new acreage being cleared is negligible compared to mandatory requirements for biofuels around the world.

An article published in the Boston Herald website today indicates that the ethanol margins after subsidies are currently so poor it is not economical to build new ethanol refineries. If the government had not meddled in the energy markets by requiring mandatory fuel blending the market could correct itself. With mandatory blending the situation might cause a huge blow to motorists who might be required to pay higher costs at the pump for inefficient ethanol and higher food prices at the same time. The United States as the world's largest corn exporter is in serious danger of becoming a corn importer at a time when grain stockpiles are low.


Legal remedy is needed and there are people in government working to try to end the ethanol trap.

It's a tough spot. If you kill corn ethanol you lose 550,000+ barrels per day in domestic production so you get a knock-on effect to liquids supply. Then there's the food issue.

I expect this to be a bitter fight for all sides and lose-lose all around. That said, there is significant, though not extraordinary, new supply of cellulosic ethanol coming online.

But those .55Mbpd are somewhat illusory. First you have to subtract the fuel used to grow the additional crops, and transport and process it. Given the poor energy return on energy invested that correction is likely to be substantial. Then if you consider the largest damage to the US is due to the effect on our balance of payments, ethanol has left us with less food for export. If you properly account for all the effects, I don't think you will conclude that the ethanol program has been a net win.

Of course the quality of our political/policy debate within the US is so poor, that we can hardly expect that any honest attempt to access the true impact of a program will be made, or listened to.

Oh brother, here we go again...

1. Though some diesel inputs are used it is not more than a small fraction of the volume of ethanol produced.
2. Though natural gas is used in some inputs as well, it is not all of the net energy involved.
3. You can't run cars on natural gas at the moment so this energy input does not directly compete with transportation fuel.
4. So you still have a net volume and energy gain to transport.
5. Ethanol detractors overstate EROEI loss.
6. Ethanol proponents overstate EROEI gains.
7. Likely EROEI is slightly positive.
8. Increased ethanol production is reducing US oil imports.

Simply put, you can't remove the ethanol and not expect it to have a negative effect to transportation supply. What's most annoying to me is each side of the issue claims to have all the answers. It's either a panacea or it's the end of the world. The debate, in my opinion, has become silly.

You know, there are actual scientists, including Dr. Ted Patzek, doing actual science, making actual measurements and their findings indicate that ethanol is a net energy loser. This is simple to determine actually and Patzek and et al have done so. Please look up their research and quit foisting this science-illiterate nonsense on the gullible here.

For those of you who wish to invest in the ethanol future, I have a perpetual motion machine out in the garage.

Yes, the same 'actual scientist' who found that gasoline was also a net energy loser.

"Calls for the removal of ethanol from the marketplace would do precious little to reduce the price of food, but would send prices at the pump even higher by more than $1 per gallon. Ultimately, this deliberate smear campaign is aimed at destroying the base upon which the next generation of biofuels will be built. If this country were to jettison the starch-based ethanol industry, the development of cellulosic ethanol technologies and other biofuel advancements would be set back by decades, something those in OPEC and the oil industry would clearly welcome."


...the development of cellulosic ethanol technologies and other biofuel advancements would be set back by decades...

Oh, please. Really?

From everything I've ever seen on TOD, the cellulosic process, if it is ever made to work in practice on a large scale (and hopefully without releasing a bug that multiplies until it has liquefied all the world's plant life...), is very, very different in numerous respects from the far simpler starch process. Which is, after all, why we only have the starch process so far.

So what is the point of mucking up the world's food supply something fierce, by way of the many adverse primary and higher-order side effects of shifting too much land and too many resources into corn to support the starch process? That process is essentially unrelated to a cellulosic process that doesn't even exist yet. Just because the starch hypesters at your link, with their infinite thirst for taxpayer dollars, assert that it saves a buck on gasoline, that makes it a good idea? Give me a break!

I realize it's a lovely boondoggle for those on the receiving end of quasi-infinite wads of taxpayer cash. I realize as well that farmers deeply love to swim in taxpayer cash - though they have dwindled in numbers, we seem somehow to still have such a vast surplus (because the lifestyle attraction of be-your-own-boss-out-in-the-"country" trumps not only economics but just plain good sense?) that swimming in subsidy cash often seems far and away what many of them do best, and who wouldn't love it? On the other hand, I find government boondoggles to be very tiresome; on a bad day, I can almost get to thinking the whole government to be nothing more than a bunch of corrupt thieving crooks. If we really want to do coal-to-liquids, or we think we have so much natural gas that ought to do gas-to-liquids, there are reasonable and straightforward chemical processes for those operations, leaving absolutely no need to muck up the food supply.

100 million gallon cellulosic plant


1.4 million gallon cellulosic plant


Three other cellulosic biorefineries


This in addition to a number of other second-gen biofuels projects.

As for starch hypesters, as you call them (what is that, some kind of term the oil industry dreamed up?), I posted their links to match the starch hate burning a big red hole through this forum. If they're going to cite one extreme, it does well enough to hear the other side of the argument. Often, you'll find truth lies somewhere between the two.

If you need 21 billion gallons of cellulosic ethanol by 2022 and you have little more than 101 million gallons planed you fall short of your requirements more than 200 times. The loblolly pine plantations of Georgia were planted as these trees were preferred for pulp and construction timber. Thus you compete for valuable resources. The EROIE for cellulosic ethanol was stated as below 1.

If you have an EROIE of 1, then for every btu of energy you spend you get one back.

If you have an EROIE of 1.3 for grain ethanol, and you spend one gallon of ethanol to grow, harvest, transport, mill, ferment, and put ethanol back in the rack, then you only get 1/3 of a gallon in energy produced from the corn. If you use a bushel of corn to make ethanol you only get a third of the energy out of it as you had to use the other parts of it to get the corn and process it.

You decry hatred, but were sly in dishing it out. Contempt of a theory without investigation is dangerous. Your theories lead to a tripling of the price of grain and millions starving. Your continued dishonesty is irreprehensible. To slander someone by saying the person claimed there was a negative EROIE of gasoline is hype of the worse type. Some oil fields yield EROIE's in excess of ten. You cannot duplicate that in your overpriced cellulosic frauds.

Will try to clarify the situation:



Ethanol yield of corn = 2.7 gallons per bushel

Grain ethanol cap limit (2015 USA) = 15 billion gallons

15 billion gallons of ethanol/2.7 gallons/bu= 5.6 billion bushels of corn required for ethanol production.

That might put you in the red (losses) and wanting over 3 billion bushels of corn for import. The energy policy acts passed in 2005 and 2007 were produced without contingencies to mitigate these problems.

Canada is requiring 10 percent ethanol blending by 2010.

There is biofuels production in Europe and Asia that may require corn and vegetable oil. Some of it is mandatory, thus the markets might not function efficiently, and the impact on grain stocks will be devastating.


Previously I used out of date harvest data and did not differentiate between winter and spring wheat to arrive at my assumptions.

The EROIE of ethanol is alleged to be in the negative territory. I can neither confirm nor deny those claims, but those who compared ethanol to gasoline did not always realize that ethanol gives you fewer miles per gasoline.

"a 2003 Ford Ranger FFV 2WD was tested running straight gasoline as opposed to running E-85 (85% ethanol/15% gasoline). On pure gasoline it got 19 mpg, and on E-85 it got 14 mpg" That is 26% fewer mpg. There are figures to the left and to the right of this all over the internet. Most of them show you lower mpg's with ethanol and/or ethanol blended gasoline.

VonHeltzen: http://www.vonheltzen.com/Information.html

I know about lower efficiencies of pure ethanol/E85. If had you read my post you would have noticed that I mentioned lower pure ethanol net energy.

As for total volumes, it's not quite so simple. Much of the ethanol used also produces distillers grains which are used to feed livestock. So if you use 10% of the corn crop for ethanol, you still get a certain volume back in distillers grains.

As for EROEI, I've seen reliable figures ranging from 1.2 to 2.0. It's certainly not that great on EROEI, but it's not negative.

Cellulosic ethanol is moving apace, so any attempts to kill off ethanol based on corn alone will have to succeed in the next couple of years. Circa 2010, we have a valid diversification.

The dredges of the corn mash were devoid of sugar calories. Most of the corn energy content was from the sugars. If you get 30% of the corn mass leftover after distilling how many cows can you feed compared to whole corn? Cows were fattened quickly on corn sugar that is why it was used as a feed instead of using switch grass that grew very quickly. I read of a debate in Canada that the bioengineered corn for ethanol is not approved for human consumption and they were not certain it was fit for animal consumption either.

David Pimental of Cornell published a study that there is negative EROIE with corn ethanol. He was interviewed and pointed out flaws in the theory that corn ethanol has a modestly positive EROIE.


The United States 2007 gasoline consumption was 142 billion gallons or about 9.25 million barrels per day.

According to the Clean Air Trust ethanol only gets "34% less gas mileage" when compared to gasoline and diesel. http://www.cleanairtrust.org/E85-Gas-Mileage-Consumption.html This is much worse than earlier reports stating ethanol provided 80% of gasoline delivered energy content.

Thus your 15 billion gallons of corn ethanol that may be required by 2022, capped in 2015, times 34% equals 9.9 billion gallons of gasoline equivalent. Then you might wipe out almost 40% of your corn crop, all your corn exports, and need to line up more than 3 billion bushels of corn in a world full of grain shortages. Then you get less than 7% of your gasoline needs with a process that has a negative EROIE and then you end up with less energy than you started. If you did have as high as a 1.3 EROIE then you might take 30% of the energy from 9.9 million gallons of gasoline and you get 3% of your gasoline energy needs after subtracting energy inputs, Washington running up record deficits, trade imbalances, and a falling dollar. If in fact you have a negative EROIE for the process as an engineer has reported, then you made a worse deal for the United States than the Indians who sold Manhattan for some glass beads, grain alcohol, and smallpox infected blankets. Forty percent of the corn for 3% of our gasoline that could have easily been won by mandating a three perccent improvement in fuel mileage economy per vehicle is bad business.

I should with gladness like to cancel mandatory cellulosic ethanol production as well. It EROIE was reportedly lower that is why other nations did not beat you to it.

And Dr. Pimental includes calories burned by people doing farmwork in his EROEI equations...

"Looking more in-depth into Dr. Pimentel’s response, he is very detailed, maybe even too detailed. He includes in his results the “calories burned by the people doing the farm work. He not only calculates the energy needed to heat the water to ferment the grain, but also the energy needed to build the plant and all its parts – steel girders, concrete, and stainless steel.” Pimentel, when applying this equation to other energy sources, surprisingly considers gasoline to be a net energy loser “If you include the pumping and processing and so forth, it runs a little over 10 percent.” Skeptics of his results say he is not to include the energy cost of making the machinery, neither include the energy cost for feeding the people that work the machinery."


It's very clear some people are happy to scream and scream about ethanol. The truth is not nearly so bad as the picture you paint. Given, it is not ideal and I hope we don't have to use it for very long. But here we are with ethanol as one of the viable alternatives available to us.

Hopefully, we'll fast track V2G so that we can have more options as well.

I did not use a paint brush, but the text was a bit off at one point. The EROIE of 1.3 at the high end with 15 billion gallons of corn ethanol production would have provided closer to 2% of our gasoline energy needs while taking about 5.5 billion bushels of corn from a 12-13 billion bushel capacity. That is about 44% of our corn harvcest at 12.5 billion bushels/yr. One researcher was using an EROIE of .8 for corn ethanol and that would definately make for total wasted effort of building those stainless steel distillery drums to make too much alcohol. A scenario of no energy returned and 44% of the corn gone, with not so much as a food coupon in return.

Maybe the ethanol people may not talk so loud. Pride goes before a fall.

good points rainsong ! ethanol is a scam !

This one is for you Robert
... how low would you approve EROEI for ethanol to go, before you Robert would disapprove the very idea ?

Well, currently, we supply 550,000 barrels per day of ethanol by volume. That volume represents almost 5% current gasoline consumption and we do it with around 20-25% of the corn crop. Since the energy for ethanol doesn't come from gasoline your EROEI comparison doesn't make sense.

Now the US isn't going to allocate the entire corn crop to ethanol. It's switching to other feedstocks including those for cellulosic which, according to numerous sources have an EROEI of 2-36 depending on feedstock and method.

You keep quoting Pimentel's figures. Pimentel also found a negative EROEI for gasoline. So, according to your argument, cited researchers, and figures, there's no energy gain in gasoline, either.

Finally, distiller's grains have been used as cattle feed for some time with success. So, since ethanol production doesn't consume the entire product the total volume isn't consumed as fuel.

Oh, and in my experience, idiots spouting propaganda often scream the loudest. Farewell, and good luck with the screaming.

Jezz where do you get them numbers from, you are getting better by the minute :

......... cellulosic which, according to numerous sources have an EROEI of 2-36 depending on feedstock and method

Is this cellulosic ethanol or cellulosic magic fluids? EROEI of 36 ! It is better than all ready-made-crude-oil in the world today

I have heard enough let's wistle off this energy crisis today !
Just bye-bye Robert

No Paal, there are no magic 'fluids.'

The figures come from a number of places. Wiki references most:


It's cellulosic magic fluids. Dammit, the process doesn't even exist yet. It's still a science project. (For the uninitiated, in these contexts, I use "science project" as in government-project bureaucratese. There, it denotes a cash cow that might work someday, but doesn't work now, and is almost certain to require lots and lots and lots of research grants before it ever works, preferably enough grants over enough time to carry the research team through to retirement, should it ever work at all. Unfortunately, the primary goal of too many research teams - ITER being a fine example - is to collect research grants and produce not just mountains, but entire mountain ranges, of bumf; getting a result may be a goal too, but a rather secondary one at best.)

100 million gallon cellulosic plant


1.4 million gallon cellulosic plant


Three other cellulosic biorefineries


These are small and medium scale production facilities. Not researchers in the mountains.

Who are you? The same person who has logged in under five separate names?

Your ethanol gallons have been found by some to be only about 2/3 of the gas mileage equivalent of gasoline, thus you have overstated the value of ethanol repeatidely. Nor do you satisfy complaints about damage done by associated rising food costs due to large scale destruction of foodstocks and grain inventory.

Well ethanol production hasn't stopped US food exports from making a banner year:


"May 30, 2008 – U.S. Agriculture Secretary Ed Schafer today announced an updated quarterly forecast for U.S. agricultural exports – expected to reach a record $108.5 billion for fiscal year 2008. Today's upward revision is a $7.5 billion increase from February's previous record forecast and $26.5 billion above the final 2007 exports. Grains and animal products account for two-thirds of the export gains."


was that an attempt at answering my question ?

BTW the US imported oil in the vicinity of 665 BILLION DOLLARS OVER THE SAME PERIOD !

That is 6 imported oil monies per 1 exported food money. Or 6 monies out per 1 in , if you like.
Look at this when you are bored Robert

You had mentioned an impact on net food exports. It hasn't materialized.

As for oil, absolutely. It's obvious we import far too much at a dear cost.

sorry , my bad I thought you had an attemt at this one (from upthread), I cross eyed.

This one is for you Robert
... how low would you approve EROEI for ethanol to go, before you Robert would disapprove the very idea ?

Since the very low figures are mostly manufactured, I don't have to approve of them.

A new book, called “Energy Victory”, debunks a number of ethanol myths and makes a strong scientific case in favor of ethanol. I suggest you look at it. It's written by scientist/engineer Dr. Robert Zubrin, who's a NASA consultant and researcher in Colorado. The book analyzes the energy input myth, citing the most recent and authoritative study, in Science Vol. 311 in January 2006: ethanol production requires one-tenth the amount of energy inputs as does gasoline production. (Sugar cane is a more efficient feedstock than corn used in North America, but corn is still dramatically more beneficial than crude-oil fuels.)

Sorghum, on the other hand, debunked in a number of posts above, has an energy density that's much closer to sugar cane. And if you produce ethanol directly from sorghum, without producing the sugar first, then you don't run into the ridiculous obstacle of artificially high sugar prices.

With regards to fuel imports, I think it's also worthwhile to add that the current US ethanol production reduces our import cost by approx $35 billion per year. Certainly not chump change.

Is that a tough spot ? At an eroei of 1,3 (ethanol : input energy) you only remove

Let's see (550 000 / 1.3 = 423 076 =>> 550 000 - 423 076 = 126 942 b/day

You remove the equal to 126 842 b/ day, but these very barrels drive the food prices through the roof .... with dire consequences Mr Marston . Just wait till TSHTF

If all the energy you plug into this equation were oil, then your comparison would have some intellectual value. As it stands, since most of the inputs come from things other than oil, it's pretty worthless.

You may also want to wipe that drool off your chin. I think you slavered when you typed 'TSHTF.'

Anyone else here get the impression some people want terrible things to happen?

oh yeah ?
Well I guess it is all about which foot you stand on and which side of your mouth you are talking with (IMO)

The lessons we've learned already is : The internal combustion engine must go , the sooner the better. B/c eventually IT WILL disappear.... for obvious reasons.

Use whatever energy put into the bio-stunts to produce electrisity - and get almost an order of magnitude more milage ..... and all this can be done with running standards of technology. What a win-win situation and what are "we" waiting for ? !

you say :

Anyone else here get the impression some people want terrible things to happen?

I say; What is so bad in using a small electric car and go 5-10 times as far for the same energy/effort/money ?

You seem paralyzed by the ICE Robert, there are other ways available

Actually, I couldn't agree with you more when it comes to electric cars. Will you please show me where I can buy one within my current budget of around $15,000 at a stretch?

From where I'm standing, it's use the ICE, my electric scooter, walk, bike or take public transport. The scooter is great for around town and groceries -- I use it out to about 10 miles. It's not a tough scooter and can make about 15 mph. But it doesn't use gas or ethanol. The bike is great for exercise and I use it out to about 5 miles. Sometimes when I'm feeling energetic and adventurous I'll take it further. And I really enjoy metro or rail services when I can access them. But if I want to sell books or get paid for presentations, I often need to use my car to drive to most events. Or worse, sometimes I need to fly.

So as a concept, I love the electric car. I want one. I hope to God we get them soon and I do think V2G is the way to go. But being an aware person, I understand that right now there are no viable plug in electric vehicles in the US market, that we're 1-5 years away from the first set of models, and that a full conversion will take between 10 years (crash conversion) and 35 years (slow market adoption). In the meantime, we must preserve infrastructure, and that may mean doing things imperfectly to keep things functioning.

Ethanol is an imperfect and obviously flawed mitigation. But right now, it's buying us a little time and pushing back the liquids decline curve. I hope that come 2020, we have a lot more in the way of electric vehicles to choose from so that we don't have to use corn for ethanol. I hope that well before 2040 we don't have to use liquids for fuel at all. And I hope that TS doesn't HTF so hard that everything comes flying to pieces.

A lot, I know, but as long as I'm breathing there's still reason to hope.

man , is this the same Robert? :-)
You seem to have done your part and further more now you come across to me as a resonable man with regards to what should be done -asap. That said - IMO - ethanol is not part of any mitigation necessities ..... it is skewing and blurring the obvious ; electric Now!

IMO the markets(industry/buyers) and/or the governments will grasp this value point much faster, if ethanol wasn't making up their entire field of view.

We'll just have to sit still and wait- and I'm breathing with you..

Well, just because I support both near-term ethanol and sustained development of EVs doesn't mean I'm not the same person. I can after all, support two or more potential mitigations to the same eminent problem. And while one may be more or less ideal than the other, the merit of mitigation is based on the diversity of your options. If you have only one mitigation to a life threatening disaster, if that one doesn't work or you can't use it fast enough, then you're dead.

Or to put it another way, if a storm surge sweeps in and you're caught in it and find yourself clutching a chunk of wood (ethanol) that keeps your head above water while you paddle over to that life-raft (V2G), then you'd be a fool to let go of the wood while you were still scores of feet away from the life-raft.

As many contributors here have noted, there will be no one solution that is likely to handle all of the peak oil problem. For my part, I support most of the mitigations, so long as the aim is not to exclude the others.

If we don't have enough time to manufacture them and if most don't have enough purchasing power to afford new electric cars, then perhaps some could attempt kit conversions of existing lightweight subcompacts already out there: VW beetles and Mini's converted to electric, would that use up less energy?

Of course that's assuming we'd still have power grid to manufacture and recharge the battery, still have the tires intact, the passable asphalt and the road security to operate them. And any decent place to drive to.

Well it would be nice if some kind of infrastructure to do this were put in place.

It costs $1.29 to make one $1 of ethanol.-Pimentel
Cornell U.

Yes, the same Pimentel who counts how much food machine operators eat as a part of EROEI. The same Pimentel who found gasoline to have a negative EROEI.

Just because you have a Cornell and a U at the end of your name doesn't mean you're infallible and that, suddenly, all other research is invalid.

"The Coalition finds much recent work, such as the U.S. Department of Agriculture study by Hosein Shapouri (indicating that corn ethanol has an energy output/input ratio of 1.67) supports a positive energy yield conclusion. The Coalition furthermore finds that the main work arguing that ethanol has a negative net energy yield, produced by Cornell University’s David Pimentel, relies heavily on flawed and out-of-date data (from the 1970’s through early 1990s) and does not take into account energy costs associated with other co-products such as dried distillers grains (DDGs). At a basic level, critics of corn ethanol seem unaware that the production of ethanol from corn starch leaves essentially all the proteins and various other elements available for livestock feed and other purposes, and they are content to base their criticism on data that is so old that it is entirely unrelated to current farm practices."


The same Pimentel who found gasoline to have a negative EROEI.

As I scroll down, I saw you make this claim 3 times. I have read lots of Pimentel, and frankly have never seen this claim. Please reference.

The Coalition finds much recent work, such as the U.S. Department of Agriculture study by Hosein Shapouri (indicating that corn ethanol has an energy output/input ratio of 1.67

Are you familiar with Shapouri's work? Do you know how he got 1.67? He took some of the energy inputs, and assigned a disproportionate amount to the DDGS. For instance, if it takes 2 BTUs to make 2 BTUs of ethanol and 0.5 BTUs of DDGS, I could assume 1 of my input BTU goes entirely to DDGS. Instant EROEI of 2.0 for ethanol (but then let's ignore the 0.5 EROEI for DDGS). You get the picture. You can make the EROEI anything you want by doing it this way. But you can't actually separate the two, so it is not an honest way to do it. You have to include all energy inputs and all energy outputs, and Shapouri did not do this. His actions are not those of an impartial scientist; they are the actions of a politically-driven agency.

Further, he admittedly didn't count all of the energy inputs (saying that there were not good numbers for some of them).

Soon, the ethanol program will collapse in it's own misguided math

The two basic concepts to keep in mind here are 'price arbitrage' and 'energy fungibility'.

Farm commodity prices went up after most of the 2007 crop was sold right after harvest, the price increase reflects world grain supplies. The cost of production, especially for input intensive crops like corn have farmers planting more wheat and soybeans this year which take far less fertilizer. Farming is a bigger gamble today than ever before, a real crapshoot.

All city "think tankers" should be watching the morning farm reports that are broadcast weekly (usually on Saturday mornings).

Can you reccomend a site for these farm reports?

I'm not a farmer and I don't even live in the US so I don't have the foggiest clue where to start here.

Delta Farm Press.

Progressive Farmer


Not as sexy as solar panels and wind turbines but:
Here are some links to help with the future decline in sewage infrastructure.
All human bodily excretions and a lot more:

Two cheers for the blessing of high oil prices

Previous increases took the price of oil, and most especially of petrol, to levels that were merely annoying. Anyhow, they proved to be temporary, as modest adjustments in fuel use and advances in technology combined with new supplies to ease price pressures. The current price spurt, which has taken petrol to over $4 a gallon (53p a litre) — still half the level in Britain and other parts of the world, but previously unheard of in the US — is different.

Stelzer is a very mainstream economist.

Fuel bills will be hit by lower gas imports

Imports of liquefied natural gas - hailed as an answer to Britain's energy problems - have fallen by 60pc so far this year, adding to the pressure on household bills.
Hundreds of millions of pounds worth of investment is being spent on preparing new LNG storage facilities for this winter, but the signs are that much of the infrastructure could be idle.


Banks' credit crisis solutions have echoes of 1929 Depression

As banks look to shore up their balance sheets in the wake of the credit squeeze, Philip Aldrick asks whether it is all short-term trickery


US staring at double-dip recession as calls for higher interest rates grow

By slashing interest rates in the face of rising price pressures, has the world's most important central bank sowed the seeds of a new inflationary era? It's an alarming idea, but one gaining currency all the time.


'Water poverty' is just a meter away

The (UK) Government is under pressure over the drip-drip effect of higher prices - and water bills are set to be the next problem, as plugging leaks is driving up costs


When covenants kick in, we'll see a squeeze

Last week, it emerged that spreads across debt markets are back to near record levels. But the reality is that these prices have neither properly hit companies nor benefited the banks - yet.


House prices: Judgment Day or Apocalypse Now?

"Any suggestion that Britain's overblown, over-hyped and over-valued property market is set fair for a gentle soft landing after the excesses of recent years have just been exploded. We've had the boom: welcome to the bust,"


Negative equity hits 250,000 - and there is worse to come

After months of gloomy forecasts, analysts have finally confirmed the news that homeowners had been dreading for months: that large numbers of British householders have slipped into negative equity.


The Trouble in Housing Trickles Up

To make matters worse, these outlying suburbs were built on the premise of cheap gasoline, says Keith G. Debbage, a geography professor at the University of North Carolina at Greensboro who tracks the local economy. With gas at $4 a gallon, he says, “travel costs are now a serious consideration.” Oak Ridge and Summerfield are bedroom communities, he notes, and many commuters drive 30 to 45 minutes each way to jobs in Greensboro and Winston-Salem. “People are doing a serious rethinking of where they live,” he adds.

So, what happens at $8 to $16 gasoline?

Jeff I think we have passed "peak Yerganites" and their production is crashing. Sadly we can no longer supply enough believers in the magic kingdom to sustain the prices of suburban clap trap. Soon the suburban assets will be, like American industrial assets were previously, sold at ten cents on the dollar to the rag and bone men.
At $8 a gallon gasoline will still be affordable as an accelerant to convert real estate to an insurance claim.

There are still some Yerginites out there, but I agree that the species is in decline:

Steve Chapman: We may soon be awash in cheap oil again

Back in the 1970s, everyone thought the world was running out of petroleum. But spurred by huge price increases, production rose even as demand was falling. Before long, the world was awash in cheap oil. Don't be surprised if it happens again.

I love the "Back in the 1970's" recurring theme. Funny how they never look at what Hubbert said from the mid-Fifties to the Seventies:

Published on 5 Mar 2006 by GraphOilogy. Archived on 7 Mar 2006.
M. King Hubbert's Lower 48 Prediction Revisited
by Jeffrey J. Brown & "Khebab"

Fifty years ago this week, on March 8, 1956, at a meeting of the American Petroleum Institute in San Antonio, Texas, M. King Hubbert, in the preprinted version of his prepared remarks, had the following statement, "According to the best currently available information, the production of petroleum and natural gas on a world scale will probably pass its climax within the order of a half century (i.e., by 2006), while for both the United States and for Texas, the peaks of production may be expected to occur with the next 10 or 15 years (i.e., 1966 to 1971)."

As more and more people are learning, Lower 48 oil production, as predicted by Dr. Hubbert, peaked in 1970, and it has fallen fairly steadily since 1970.

Here's an idea. What happens when the world is at the same stage of depletion at which the Lower 48 peaked? I wonder if Steve Chapman ever considered that possibility.

Wow, I never thought it would happen. The possibility we will address peak oil in some way (no choice) is infinitely higher than the chance that effective public policy would have addressed global warming. I am literally questioning my agnosticism. It seems like a test or a joke. Ha ha, I gave you just enough oil and natural gas to get in trouble but not enough to kill yourselves. But there is still that coal......

Ah, well...but either there's been some Yerginflation:

"We sailed through $80 a barrel," notes energy authority Daniel Yergin, author of "The Prize: The Epic Quest for Oil, Money and Power" and chairman of Cambridge Energy Research Associates. "But that doesn't mean we'll sail through $200 a barrel. That sort of price would have enormous global consequences."

or else he's at least entertaining doubts, by even mentioning $200. That's a tad more than $38.

Gotta love the way you guys sock it to Yergin :). What's the going rate on Yergflation these days? 700% over the course of one month? Wow! I bet speculators wish they could buy into that!

Given the massive harm that has been done by our (in this case most of the world) lack of preparedness for PO, there is a lot of blame to go around. Just looking at the major transportation industries ( my place of work supplies them with engineering software ) it is painfully obvious that both the ground transport, and air transport manufacturers have been designing the wrong products for the near peak or post peak world. Literally trillions of dollars of mis-spent capital goods spending has resulted from the widespread view that PO has decades away. The combination of CERA, IEA, EIA, US GS, has to bear a significant amount of responsibilty for our sorry state of preparedness.

Well, I agree that, intellectually, they were wrong. But I think it would be pretty hard extracting the trillions of dollars you mention. It would be better if we could convince them of the errors and at least get them all moving in the right direction. Assigning blame can be very destructive and in a time of crisis you just want to get people working productively and moving in the same direction.

Now don't get me wrong, I think Yergin should not have taken credit for predicting high oil prices. I also think Yergin should receive full dues for being wrong, and the much needed ribbing -- especially if he won't 'fess up. But I'd avoid the witch hunt. We've already got enough trouble without going for each other's throats.

Why is Yergin always quoted as an "authority" or "noted authority" in the MSM and anyone who talks about peak oil is a "theorist"?


because the system of talking heads pervades financial and network television. you are an expert if you have academic cred like being affiliated with Harvard (as he is).

I don't think he's intentionally evil, mind you. And, to be fair, he nailed oil earlier in his career. He just listened to the wrong folks and analysed the wrong data here towards the end of it.

You see, no one fact checks him/CERA, save us and a few others. And those folks are starting to be listened to--likely too late to mitigate the damage he has done to the US and the world.

They can change their position on a dime, and everyone would say "oh, isn't that interesting." That is what credibility allows.

and as to your "theorist" point...that is why we have pushed so hard to keep this site empirical. The reason we will be listened to is hard facts and numbers (and price signals) that edify the idea.

Of course, if people actually understood what "theory" meant, they wouldn't use the word. In it's simplest form, peak oil is a univariate hypothesis. However, "energy" is so complex that theory often seems the right word to apply to it.

Deffeyes is affiliated with Princeton, but he still gets lumped in with the rest of us merry peak oil pranksters.

a fair point (and my reasoning probably demonstrates a bias of mine), but was/is he viewed with the same "respect" *cough* as Danny? I would guess that he is only just now coming off the kooky list.

Gotta agree. I think it's more based on the human factor. People inherently don't like Cassandras. It's more knee jerk than anything else. And it's even worse if you end up being right. Then you get blamed for the problem you tried to warn people about.

The Perils of the Cassandra.

That should be the title of the next big peak oil book.

Oh yeah, Robert, you should see some of the emails we get. We're the problem, we're spreading instability, we're "Satan."

Yep, reality; it is a bitch. I'd rather be logical and empirical than wrong. Call me biased.

Cassandra's choice


"Consider Cassandra. She knows that almost everything about the way we live is incapable of being sustained. She knows that this civilization must be radically changed, and soon, if it is to continue. The problematique was what Aurelio Peccei called the set of problems that inform her unwelcome knowledge."

EDIT: Most on this board probably know Aurelio Peccei was a founder of the Club of Rome

Believing Cassandra - An Optimist Looks at a Pessimist's World
author: Alan Atkisson

A very good book with a perspective that TOD readers will find valuable. Here are some snippets about it and a link to the book...


...But stop the hand wringing and let's get to work, says AtKisson. One way or another, by choice or catastrophe, our civilization will discover a sustainable way of life. We can either shape the future with our own creativity and innovation, or let "nature's strong hand" bring on the consequences...

...And in the chapter "Longing for the End of the World," AtKisson brings us into direct confrontation with TEOTWAWKI (The End of the World as We Know It), and shows why it might not be so bad after all. This startling appraisal provides a lead-in to an entertaining, inspiring discussion of the possibilities for a sustainable future. AtKisson explains the real potential for sustainability in a way that will silence critics who have assailed the fundamental concept of limits to growth since the warning was raised back in 1972...

...The book ends with some rousingly optimistic scenarios for global transformation. AtKisson, who is a musician, knows that his audience ought to leave the theater humming a tune, and he gives them three to choose from. This is more than lip service. This is genuine imagination and hope....

You do fantastic work. And you're a bunch of Cassandras, the whole lot of you. Because of you, many people are now far more aware than they would be otherwise and are, therefore, empowered to act if they choose to. I know I've learned quite a bit by coming to this site, now, almost daily. I sincerely hope my small contributions in the way of comments has helped in some way.

As for the b*tards, don't let 'em get you down. If it makes you feel any better, my fantasy series has been banned in three school districts so far and the name of the main character -- Luthiel -- has been equated to Lucifer. So you're not safe even if you write what would, otherwise, seem to be an innocuous fantasy story.

What you're doing has consequence in the real world, not just in people's imaginations. So I'm certain the resistance to it would be far stronger.

For a guy like Yergin to take the credit for what the Cassandras have been saying all along is even worse. It should be you guys, Deffreyes, Simmons, Campbell, Hirsch, Heinburg, Jeffrey Brown, and a number of others I'm sure I've overlooked due to absentmindedness. But you guys and gals are the real experts. Why? Well because you honestly and intellectually seek the truth. You are not standing there on TV to represent a position. You're the engineers plumbing the limits to this massive machine that is our civilization. A system that, just like any other, requires energy to survive and function.

As for your reality bias... well that's what makes what you do most important. Even fantasy stories fail if the experience described doesn't ring true in some way. My favorite writing professor in college once told our class -- "many people will tell you that writing stories is telling lies. I am going to tell you that if you tell lies, your stories will never ring true and, in the end, they will fail. To tell a good story, you must tell the truth."

Yergin failed when he started towing the party line on oil. You guys create real value by sticking to the hard reality.

*raises glass to all the Cassandras in the room*

Here's to you! Peak Oil!

I'll drink to that!
[UG raises late-night cup of tea with milk and sugar in it]

I'll drink to that too.

Thank you for the very kind words Robert. The bias of seeking truth in reality...it is not the easiest thing I have ever done.

And it is people like you (and for that matter many of our readers) who make this worth doing.

Cassandra v. Pollyanna. Title Fight! Round 21!

(with apologies to the writers of The Devil's Advocate...the line from the movie goes like this:

MILTON: Free will - it is a bitch. Kevin, I need a family. I need help. I'm busy. Millennium's coming. Title-fight. Round 20!)

This reminds me of a favorite quote from Philip K. Dick:

"Reality is that which, when you stop believing in it, doesn't go away." - Philip K. Dick

But us humans were built to systemically bias towards optimism.

Well, seriously, Yergin has a "track record" and a Pulitzer Prize; he's done some things right. As with so many other occupations, a "track record" makes for a brand name. People go by brand name, not case-by-case. They'll go on watching a TV show that stinks, at least for a while, simply because it was good in the past. They'll go to a concert by a "national brand" band or even chorus, but refuse to attend a local one even if it happens to be just about as good.

I'd say it's a cognitive shortcut and in the case of oil and energy (and leaving aside conspiracy angles exhaustively and exhaustingly explored elsewhere) it's needed:

Life is short and complex, too short to shop intensively for everything, or to question everything and listen to the multitude of answers.

People have been thoroughly trained by the "consumer" movement to be risk-averse to the point of ultimate absurdity. Few will risk wasting even 10 seconds on a non-brand-name information source (or consumer product, for that matter.) Why take chances?

By the same token, people trained that way will be averse to the social risk of differing from their neighbors. If everyone takes the same shortcut, there will be no differences, hence no risk. And in modern America, avoiding even the most immeasurably small risk at immeasurably large cost is always the thing to do. (The European version is called the "Precautionary Principle.") Again, why take chances?

As with the locally produced concert, there is another social risk. Others will ask why I'm going, and expect me to explain myself (usually not that baldly, but you get the idea.) But if I go for the "brand name", irrespective of its actual quality, no explanation is required, as the matter is obvious, and, furthermore, it's not my own darned fault if the affair turns out not so well. As in the earlier days of personal computers: "Nobody ever got fired for buying IBM."

Reporters are not always the sharpest tacks in the box - the best are really good, but too many got into it because they could make it into a ridiculously easy slide through college.

The business models of the mainstream media are going pear-shaped, even while overhead, such as multimllionaire executives and expensive buildings, is only going up. So even the few good reporters may be left with little backing.

Well said, Paul. It is an uphill climb.

Yergin is a "respected authority", it says so on the CERA website. Peak Oil is a theory, it says so on Wikipedia. See, journalists do their research. ;)

there are a lot of people out in those suburbs -- and they aren't all going to die at once or move to the city at once.

Short term fix would be lots of mini-buses for commuting. I'm surprised that hasn't already happened, but I suppose there are Public Utility Commission regulations and liability issues in the way that will have to be resolved first.

There is plenty of room left for squabbling, but eventually things will have to look like much of the rest of the world -- people will be living in villages (previously suburbs) outside the major towns-- each of which will be relatively cut off from all the rest. And eventually we can expect to see chickens and goats and sacks of grain in the buses that connect the villages with the market towns.

Short term cycle of disintegration as the economy unwinds in the long emergency:
There will be many local variations of the following with some phases skipped, modified or extended depending upon circumstance. Some of about everything is happening somewhere in the world in 2008.
- Individuals and families will suffer depression and despair that will isolate and paralyze them. There will be some horrible family tragedies because of this. A slow rate of collapse will deepen and extend this effect. At the same time governments and bureaucracies will attempt to maintain business as usual and personal entitlements.
- Non-paralyzed individuals and families become activated. Some will work on various life-boat solutions but many more will begin to demonstrate. These will change into mobs and rioting will break out as people demand the restoration of cheaply available needs and wants
- Leaders will emerge from the rioting including self-serving opportunists and agents planted as leaders. Gradually this will change into rebellion mostly with the short term objective of restoring business as usual. These rebellious groups will be relatively disconnected in space and outlook representing various regional, ethnic, religious and class interests. Many of these may resemble ETA in Spain or the Sinn Fein/IRA structure of political and paramilitary branches.
- This phase will evolve into the populist fascist phase and this may be a relatively long period. The fascist leaders will either emerge from existing government structures co-opting and uniting compatible rebellious groups (the most likely) or arise from a rebellious overthrow of the existing elite. Quite likely a lot of “life boats” will be sunk or confiscated and the risk of global war using nuclear arms is the greatest.
End of my lifetime will be somewhere here (within the next twenty years)
- As long as large scale catastrophe and nuclear war are avoided the regional fascist regimes and their alliances will weaken through exhausting in-fighting, minor wars and declining capital and resources. Control will break down and the vacuum will be filled by some combination of warrior led empires, organised revolution or perhaps a quieter devolved locally focused system with weak federations.

Yes, fascism is usually a reactionary response from the business elite as a means of maintaining profitability during tough times. And usually supported by a deposed and angry middle-class who want their former status returned to them.

I think it is a given that those countries that flirted with or were fascist in the past, will fall to it again. The US, UK, Spain, Italy (not sure about Germany) and no doubt others too.

The economic crises that could come as a result of P.O. and the total lack of government action to prepare for a world with less energy and higher across the board prices will /would come as a shock to many in America.

The outcome that results from P.O. is still far from certain IMO. However the longer people like Yergin and publications like the Investors Business Daily tout that there is no P.O. problem, that there is just a current short term problem, the longer the country will wait to address the problem, and the longer that it takes to address the problem the worse the outcome will be.

After decades of gutting American industry and exporting jobs and manufacturing overseas the US has borrowed to maintain its lifestyle becoming a debtor nation. With limited production of industrial and consumer goods left and with our nations credit card about to be maxed out, and with high oil prices about to cause shipping goods from overseas to be cost prohibitive the US will be hard pressed to produce or acquire enough finished products to supply our economy.

The worse the economic crises gets the more people will accept formerly unacceptable methods and means to attempt to repair the economy. Whatever political party is in power when/if THSTF will be crushed in the elections that would follow such a collapse. People will vote for who ever will promise the most radical remedies to repair the economy.

One party may come to dominate the government. That is where a fascist state could bubble up from, a democracy once lost will be hard to restore especially as such a government would make the economy worse, and because such a government would cause such consternation and fear in Russia and China that they would in all likelihood stop trading with the US, stop buying T-Bills and sell the ones they had, on the other hand they would become much more aggressive militarily towards the US causing a ramp up of military spending on the part of the US. This would destroy what would be left of the economy, bringing on TEOTWAWKI.

I doubt that a Fascist US would survive long as a cohesive entity because there would not be enough economic activity to support the military and without a strong military there would not be enough central government control to hold it all together. Adding to this collapse would be infrastructure degradation, further reducing central government authority. Much like the collapse of the Roman empire only quicker. (The Romans world of limited technology did not depend upon such things as an electrical grid or motorized transportation, as ours does, like the Romans we live in a complex society but we also live in a world of complex technology.)

forced consumption of Zyprexa may take care of all that. It will be a required food additive.

I agree with your mini-bus suggestion. I think it is the natural extension of increased car-pooling, which I am seeing already. Many more vehicles with two people rather than one on the rush hour commutes. They look like husband and wife tandems who ride together. This would be the first stage because you don't have to admit to your neighbor that you are struggling. Different house car-pooling means fessing up.


Short term fix would be lots of mini-buses for commuting.

Mini-buses (or shared taxis) are common in a lot of other countries. I spent two years in Ankara, Turkey during the mid-1980's. They had, and still have, something called a dolmus (dohl-moosh) that runs along fixed routes, but unlike buses one can get on or off at any point. I never rode them, because as an American at that time, the dollar went a long way, and private taxis seemed dirt cheap.

Here's what they look like:


"Short term fix would be lots of mini-buses for commuting."

I'm surprised something like this hasn't been implemented somewhere:


It seems like a practical solution.


"It seems like a practical solution."

No. It seems like 100% computer-model hype. Maybe it would work or maybe it would get snarled up in its own complexity.

These are practical as evidenced by their heavy use where I live in Bangkok, Thailand. Around here they are very common, popular and quite cheap. There must be many thousands of them here. But things are different here of course. For one thing they don't micro-manage everything to death here and these services sprout up and run as needed by small operators. They also don't have nearly the mania for swank clean vehicles and super scrutinized safety standards - just about any van will do, it seems. With petrol prices a bit higher than USA and wages much, much lower these are common. As are a variety of lower cost alternatives based upon open air pick-up trucks with two rows of seats.

People in developed countries are accustomed to a very high standard of comfort but I suspect in the future we will start to see their un-development.

City buses here cost between 7 baht (25 cents US) and 20 baht (66 cents US) for trips running from one stop to over an hour long. That price represents a doubling in the last couple years as well. Low maintenance (and safety) standards and very low wages seem to be how this is managed.

Seems like the peak oil denialists aren't content just to blame speculators. Now they're going after them with Congressional probes and media witch hunting. Public burnings to start next?


"Goldman Sachs oil company analyst Arjun N. Murti and commodity analyst Jeffrey Currie are rattling the oil markets -- again.
Earlier this month, Murti, 39, and Currie, 41, raised their forecast for crude oil to $141 a barrel for the second half of this year and reiterated their prediction that oil would have a "super-spike" to $150 to $200 a barrel."

What struck me most about the article is that Murti and Currie are quite mild in their analysis. They blame political factors, demand increases, and seem to think that off-shore oil development can increase production. Meanwhile, they downplay supply concerns. They're not peak oilers themselves but they seem to come to similar conclusions with regards to price.

But the real weirdness is that this Washington Post article seems to blame Goldman for the price spike. Sure, speculators profit from scarcity and increase prices at the margins when markets get tight. But isn't that their job? Identify scarcity and make a profit from it?

Looks like the free market is starting to unravel a little bit. And to what benefit? A despeculated market? A temporary $20 dollar drop in oil prices? Less of a down-stream incentive to conserve and transform technology? Hmm. Is this Washington's answer to oil subsidies in the developing world? And is there any chance Goldman engineered the most massive price run-up since the 70s all on speculation?

Sounds like a conspiracy theory to me. Seems people are desperate to place blame.

Oh, and if I missed this article in a previous Drum-Beat please kindly overlook my shortsightedness.

The government will continue its attempt to maintain some illusion of economic growth. In the process the government is promoting higher energy prices.

Why promote ownership of housing nobody can afford to buy or maintain?

The government will continue run huge deficits which will cause the dollar to keep sinking. If they were concerned about prices they would balance the budget and end the two fruitless wars.

In a more balanced article on the subject posted above:

"No doubt speculation is boosting the oil price, and perhaps oil markets are also being manipulated," said David Strahan, a trustee for the Oil Depletion Analysis Centre, a U.K.-based charity. "But the reason the oil price continues to soar, and why investors apparently see crude as a one-way bet, is a growing physical shortage of supply."

Stelzer reckoned oil would stay at $10 / bbl back in the early noughties. (Thats how good he is).

You missed these:

Pigs with snouts in the trough to avoid the pain felt by the hoi polloi:


MPs use expenses to avoid petrol pinch

Isabel Oakeshott and Robert Watts

>>Members of parliament are demanding extra allowances to pay for record petrol prices and rising road taxes, while voters struggle to meet the rising costs of motoring.
The parliamentary panel reviewing MPs’ expenses has received a barrage of complaints that the allowance for using their cars on constituency duty is “ridiculous”. <<

The pompous can more easily pontificate if immune to real life in the UK.

Remember: Don’t DO AS I DO, DO AS I SAY!

Also, this silly b*tch:


>>Environmentalists and some oil experts have been predicting the demise of oil since the 1950s. A few believe that global oil production is perilously close to peaking and from then on, supplies will dwindle away to nothing.

In time-honoured tradition, however, no two experts agree about the life expectancy of the reserves off Scotland’s shores. Jeremy Leggett, chairman of Solarcentury, an energy consultancy, predicts the crunch will come as soon as 2010. Others, including Professor Peter O’Dell of Erasmus University in the Netherlands, dismiss such ominous predictions and claim that supplies of oil will flow for decades to come.

O’Dell estimates that only about half of the available oil from the North Sea has been extracted so far and he holds out the prospect of new finds in parts of the UK continental shelf that have never been examined in any depth.<<

That’s right ‘Professor’ Odell gets a mention. But this author reckons he is Irish – at least from the apostrophe. Lazy , stupid journalism from a lazy , stupid journalist.

She states that Apache are revitalising Forties. (true – at least slightly true)

At its peak, Forties pumped 500 000 bbls / day.
Apache have got it back from about 30 000 bbls / day to about 50 000 bbls / day.

Expect more greed and stupidity from Politicans and Journos and so called Economics 'Professors' as we pass over peak.

When Stelzer starts to talk about oil remaining expensive, you know even the slowest kids in the class are starting to get it!

As for MP's, now they are down to only getting £23k per year for expenses, instead of having pretty unlimited and unaccounted expenses, you have to start weeping for them and agree that the least we should do is subsidise their petrol - after all, many have no hope of employment after 2010, save for the 'friends' they have made in industry giving them nice little earners.

Yes, that is a worry.

Stelzer finally finding his own ass with a mirror , torch and fingers.

We are toast...

I missed this bit (the black swan man). Worth a read.


Nassim Nicholas Taleb: the prophet of boom and doom

When this man said the world’s economy was heading for disaster, he was scorned. Now traders, economists, even Nasa, are clamouring to hear him speak
A noisy cafe in Newport Beach, California. Nassim Nicholas Taleb is eating three successive salads, carefully picking out anything with a high carbohydrate content.

He is telling me how to live. “The only way you can say ‘F*** you’ to fate is by saying it’s not going to affect how I live. So if somebody puts you to death, make sure you shave.”

I particularly liked his comment that the future is essentially unknowable, on both the upside and the down.
This holds open the real possibility that there may be a 'black swan' in energy supply, so that something, perhaps high latitude wind, rides to the rescue.
I'm not counting on it though.

Like the man say:

It's about probabilities...

I'd call that a "white swan", continuing the (silly) tradition that white means good, and black bad. There are of course several, my other favorite is concentrating solar, such as by CoolEarthSolar. But only time will tell, if -and with what caveats any of these long shot technologies will deliver. If to believe in the precautionary principle you wouldn't bank on any of these.

I was compressing the argument somewhat, such that the 'black swan' of energy shortage due to lack of fossil fuels mutates into twin white swans of releases of CO2 being insufficient to cause substantial global warming, and cheap renewable or nuclear energy taking over.

Surely part of Taleb's point is that the precautionary principle does not work?

Taleb's metaphor implies white swan is predictable and black is unimagined. He's not making value judgements of good (white) and bad (black).

I think I may actually buy one of his books!
His thought is both subtle and profound, and I must study it further.

I like his books too. He has a great sense of humor. But you could summarize the blackswan hypothesis into the words...

Shit happens...

At its peak, Forties pumped 500 000 bbls / day.
Apache have got it back from about 30 000 bbls / day to about 50 000 bbls / day.

And even that is just looking like a short term blip, as Forties is now declining again:


Energetica vision to be unveiled

Aberdeen hopes to create a hub for energy-related firms that will make it a global player - and attract £750million of investment


John Hutton unveils nuclear agenda

GORDON BROWN and John Hutton, the business secretary, are to woo international investors and power groups at a special summit in London on June 12 to drum up interest in Britain’s multi-billion-pound plans for new nuclear power stations.


Greener power to the people: the real energy alternative?

Ministers could avoid building nuclear reactors by encouraging families to fit solar panels and other renewable energy equipment to their homes, a startling official report concludes.

The government-backed report, to be published tomorrow, says that, with changed policies, the number of British homes producing their own clean energy could multiply to one million – about one in every three – within 12 years.

The official report should be interesting. I can't make out what the journalist is talking about - the numbers make no sense.

Germany's cities show Britain how to do green

After a week in green Germany, returning to Britain brings more than the usual end-of-holiday bump. It feels like leaving a society humanely and intelligently engaged with the 21st century to one still groping its way through the last one.


Could US scientist's 'CO2 catcher' help to slow warming?

It has long been the holy grail for those who believe that technology can save us from catastrophic climate change: a device that can "suck" carbon dioxide (CO2) from the air, reducing the warming effect of the billions of tonnes of greenhouse gas produced each year.


Greener and leaner - how the west could stave off disaster

The world food crisis is a tragedy frequently and passionately foretold. For years, food experts warned that chronic under-investment in agriculture in developing countries, by governments and donors alike, would one day spell disaster.

That day has dawned, and in the run-up to next week's food summit in Rome, the international community is talking hopefully of a "second green revolution" and rushing to reverse two decades of neglect.


ELM slowly infiltrates the MSM. Yesterday on CNN they had a segment where Neil King Jr. (the WSJ reporter who participated in writing the ELM story the other day) was one of the talking heads. He stated that rising demand from countries like India were less of a factor for oil prices as rising demand from exporters. At one point King used the phrase, "America is facing a day of reckoning..."

I emailed Neil and told him that, IMO, his two minutes made more sense than the rest of the program put together (but of course, what would you expect me to say?).

Well I hope to see him spread the gospel on some other news programs. Give us a heads up if you find out that he's going to be on any other shows.

Was this the "4 Bucks! What's Next?" hour long segment hosted by Rick Sanchez?


A direct URL does not seem available.

I know King was in a segment as one of three interviewees by - Rick can't help myself Sanchez - who only gave him a short time, but he made the best of it. The only good part of the hour.


Yeah that was it exactly. This still cracks me up

Rick Sanchez - Overboard

Some time ago there was a story about Iran having lots of tankers filled with crude lying idle in the gulf. Is there any news on this? Are they still renting these tankers? What can they do with the stuff if they don't manage to sell it?

Iran has roughly 30 million barrels of heavy oil in storage in tankers in the Gulf: http://english.farsnews.com/newstext.php?nn=8702251438

Since they have rented another tanker for delivery to the Gulf around June 3 (http://en.portnews.ru/news/10482/), they probably anticipate more of their oil going into storage. Iran's talking about cutting production. Eventually, if they slow down production, the existing stuff will get used up by the refineries set up to process it.

The reason all this stored heavy oil isn't bringing down prices is because oil prices are being driven by diesel shortages all over the world (see www.energyshortage.org for info on diesel shortages) and heavy oil isn't in demand for making diesel: http://www.bi-me.com/main.php?id=19968&t=1&c=33&cg=4 and http://www.energybulletin.net/44432.html

The problem is a growing mismatch between the proportion of heavy sour crudes available for sale on world markets and the capability of refineries to turn this crude into profitable products... When refineries install processing units called “cokers,” which cost hundreds of millions of dollars, they are able to take asphalt-like “residuals” and break them down into valuable products. While light oils may contain only 5 percent residuals, heavy oils may approach 30 percent, thus light crudes tend to sell for less than heavy oils...

With Cantarell (heavy, sour oil) showing a production crash, heavy/sour may be in more demand in the near future--especially in the Gulf Coast area.

"heavy" means lng hydrocarbon chains and less hydrogen per molecule -- is that correct?

"sour" means full of sulfur?

Refining the stuff means some source of hydrogen in the "cracking" process -- probably natural gas?

And getting rid of the sulfur causes some potential environmental problems?

While light oils may contain only 5 percent residuals, heavy oils may approach 30 percent, thus light crudes tend to sell for less than heavy oils...

Isn't it the other way around? Please correct me if I'm wrong.

You are correct Cowpoke, light sells for more than the heavy stuff, not less. The light has more shorter hydrocarbon strings, gasoline and such. The ultimate heavy oil is the Orinoco Bitumen. Very heavy and sells at a deep discount.

Ron Patterson

The Iranian use of commercial tankers to store their heavy crude makes me wonder. Don't the Iranians own some tankers? Why are they willing to pay for the use of others? Why not buy some older tankers that are at the end of their life and save the leasing costs? Are they thinking of some other situation besides storage?

We've seen many suggestions over the past months that the Iranians might find themselves involved in somewhat more "heated" disagreement with the U.S. That might include direct military attacks by the U.S. against Iranian assets. Were this to happen, it's likely that the mess could migrate into the Persian Gulf, specifically, the Strait of Hormuz. During previous events which threatened conflict, the ability to move oil thru the Strait was limited not by military constriction but by the fact that the insurance rates per tanker became prohibitively high. Recall the tanker war back in the 1980's as an example. It's likely that those tankers could not be moved thru the Strait afterwards until the tension subsided. The lease rates might drop to nearly zero. With those tankers taken out of the loop, the "tanker pipeline" from the Gulf would be reduced in size, thus cutting the rate of exports from the Gulf or from other exporting areas. This situation would be further exacerbated as the Iranians could order their tankers to cease deliveries (or worse).

But, then, I'm not what one might call a "strategic thinker"...

E. Swanson

I'd be asking why it wasn't left in the ground!

I second that, but since it's already up, maybe they could make some oilonade from it (add water) so it becomes lighter (an easier sell?)

in their case it's a liability to keep it in the ground, untapped reserves fuels talk of 'regime change' in the name of multi-national oil companies.
i really doubt iran would be in the news so much if they were doing what they are doing now while /not/ having a decent amount of oil and natural gas.

There is good reason to panic. We are now on the other side of the peak and no serious attempt at mitigation has been made. The majority don't even seem to understand why prices are going up. The blind are leading the blind to the worst case scenario.

Unless I am mistaken the problem is far worse than Hubbert's curve would lead us to believe. Oil available for export will drop much faster than production.

Why are we doing nothing? The catastrophic failure of the oil men in the White House should not be forgotten.

Regarding Neil King's appearance on CNN (just up the thread), I noticed that Neil offered a brief, but cogent, explanation of why oil prices are going up (i.e., basically the ELM), but the host showed zero interest in exploring the topic and ended the segment pretty quickly.

I just sent an email to C-Span's morning call-in show pimping Mr. King.

Neil King Jr. from the WSJ recently wrote an article about declining net exports from oil producing countries due to increased internal consumption. This decrease in exports is an important factor in determining how much supply is available for oil importers like the US. Most media pundits blame speculation, the declining dollar or geopolitical instability for higher oil prices and ignore the decline in exports from oil producers. Mr. King was on CNN recently and I think he would make an excellent guest to provide an alternative explanation for higher oil prices.

It's a pretty good forum because the interviewers are dead neutral and don't bring any of their own prejudices into the discussion. Of course the viewers (I lovingly refer to them as the "cranks") can be a handful, but if he does get scheduled, we could get a bunch of PO people to call in. We should try to get this guy onto as many different shows as possible.

Yes - as responded up thread that host would be Rick Sanchez. All to familair with Sanchez as a local anchor the the Channel 7 news oriented station - senstional news station - here in Southeast Florida.

This was many years ago and he eventually went to Houston (I think), came back, and somehow ended up on CNN.

His interviews are all about him.


My fear is that at some point in the near future we'll see shortages. This will induce action from the public and legislators, but I'm afraid actions taken at that point may prove to be more harmful than positive. I've already seen grumbling from Congress-critters for "protecting" the trucking and farming industries by providing subsidies or guaranteeing that they have the first shot at diesel.



Two major blunders so far.

Add to that government investigation of markets pointing the blame at speculators.

And one hopes for rational leadership in times like these, not scape-goating.

It's not a major blunder. It is more like doing nothing.

Nothing but make a lot of noise, blow a lot of smoke, and flash a lot of lights around.

Monty Python for President!

Camelot's such a silly place...

Welcome back Leanan, we missed you, though Gail did a really good job of filling in. Hope you had a good vacation. In case you missed it, peak oil of some sort (actual, lite, plateau, stage one, ELM) is probably here.

Really? I hadn't noticed. The roads seemed as crowded as ever. And though people complained about $4.10/gallon gasoline, they still drove their SUVs...at 85mph.

Did you find any new reserves? Surely you were prospectin'


I've seen a lot more news stories on conserving gas in the last couple of weeks. That hypermiling guy was on the Today show and on CNN. That said, I still think gas is too cheap to change people's behavior much. There are five Starbuck's within a two mile radius of my house. The first one to go out of business was the only one that doesn't have a drive-thru.

Yeah, the average driver apparently doesn't understand that the faster they go, the more gasoline it takes to get there, especially in a vehicle with high aerodynamic drag, which is typical of an SUV.

E. Swanson

Yeah, the average driver apparently doesn't understand that the faster they go, the more gasoline it takes to get there, especially in a vehicle with high aerodynamic drag, which is typical of an SUV.

Or more likely doesn't care.

I think they know, and they care. They just value their time more than the extra gas...for now.

I suspect the thought process goes along the lines of:

Gas = $4 / gallon

I earn $10 / hour.

So, I won't slow down until gas is > $10 / gallon.

Totally incorrect, in mathematical terms, but it is yet another common misunderstanding. (It's up there with misunderstanding how percentages work)


Actually, I think it probably makes sense for people to speed. Gas isn't yet so expensive that the loss of mileage offsets the time cost. It's not just how much an hour you make. A lot of daycare places charge "overtime" if you're late picking up your kids. You may get fired if you're late for work, no matter what the reason. Etc.

I was thinking about this while I drove to Florida last March. It took two days, driving 10 hours each day. I started out with the best of intentions, but "speed creep" soon took over, and I probably drove 70mph or faster for most of the trip. The speed limit is 70 mph on much of I-95, and going 55 mph means driving almost 13 hours a day to make it to Florida in two days, instead of only 10. That is a serious hardship; regardless of how much money I make an hour, I don't want to spend three extra hours a day behind the wheel if I don't have to. And if I shorten the time per day I'm driving, that means paying for a hotel, and two less days spent at my destination. Gas would have to be a lot more expensive than it is before that calculus changes.

I live in a rural 'development' of sorts, up a gravel road and next to BLM land. Used to be lot's of 'yahoos' running up and down in their pickups, often tossing out beercans and other trash. Lately, things are very quiet. Little traffic. It's nice. I suppose the 'yahoos' drink their beer at home in front of the TV and take the cans to recycle now :)

In the MSM today they are attempting to promote a new 5500 pound SUV hybrid GM has -it is great because it gets 20 mpg instead of 14.

That's almost a 50% improvement! Can't beat the numbers.

GM is acting more and more like a dinosaur each day. They just keep clinging to tweaks to old models/chassis. Pretty pathetic really.

Why not roll out a plug in SUV hybrid if you want to try to save the SUV?

GM, we've go news for you, 20 mpg today is equal to 7 mpg at 2002 gas prices.

Lately I've noticed speeds are down, both on the highway and on secondary roads. Well, not everyone of course, but I do sense that traffic is in general moving slower, and see more who are blocking up the works trying to conserve.

The problem is that a lot of people obviously have no idea how to drive for fuel efficiency - braking down the hill only to accelerate up the other side, etc.

Just trying to go slow under all circumstances won't do it. It's about conservation of momentum, anticipation, and not moving the throttle any more than you have to. That, and understanding where your engine is operating most efficiently.

Of course, now that I write that all down it sounds an awful lot like paying attention, so I suppose it is hopeless.

I think a big problem is that driving for efficiency is often at odds with driving for safety. You don't want to be driving at a significantly different speed than the rest of traffic, for safety reasons. And you don't want to be driving at a constantly varying speed. That's why people brake down the hills and speed up on the other side. They're trying to maintain a constant speed. Which is what you are supposed to do.

This is where electric vehicles would shine. There's a Cooper Mini conversion in the news that uses an electric motor on each wheel. It doesn't have any mechanical (friction) brakes. Regeneration does all the braking which is reportedly as powerful or more-so than the previous brakes. Imagine the efficiency of capturing all that braking energy!

It doesn't have any mechanical (friction) brakes.

Regenerative braking does not work like that. 100% at higher speeds, but the braking power declines as speed decreases.

The new New Orleans streetcars have friction (disc) brakes that start at 5 mph and are most of the braking power at 2.5 mph.

Secondary emergency brakes are four 1 meter long magnetic rods coated with higher friction material. They clamp onto the rails with electromagnetic force in an emergency.

Best Hopes for Realistic Engineering,


Obviously you never reach 100% efficiency with regenerative braking, but my understanding is that the addition of capacitors into battery packs greatly increases it's efficiency:

* No (mechanical) brakes means returned energy!
All braking is performed by the wheel motors acting as very efficient electrical generators which return almost all of the energy back to the battery system. The beauty of this dual-circuit, ultra safe system is that your green conscience can be quite content even when accelerating hard, since you are assured of collecting most of the expended energy when it is time to slow down rapidly.


The engineering is here, right now.
We need large cost reductions though.

"The engineering is here, right now."
As an engineer, I would say the science is here now. The engineering involves detailed design, integration and testing in a product, and consumes a great deal of time (say 3-10 years). Then the estimated lifetime savings of the innovation have to be greater than the costs. Until recently the estimated fuel cost was pretty low.

I defer to your expertise, and will seek to re-formulate what I was saying.
The point I was trying to make was that we have not just got a theory of how to build working EV's, but can actually do it, and at costs which are not totally absurd as are fuel cell cars.
So the remaining challenges are production engineering and cost reduction, rather than breakthrough stuff.

The point that I was making is that regenerative braking cannot work by itself (despite the false claim quoted). At low speeds, the braking force declines below what is acceptable (think rolling stop at a stop sign rather than a full stop; regenerative braking can get one close to a rolling stop, but not a full stop). Absent friction brakes, road/wheel/bearing friction will eventually bring one to a stop.

Anytime I see such a gross exaggeration, I doubt the rest.


Any idea how the Mini does it, Alan?
I am not sure that I understand the argument that you are seeking to make - the Mini has no friction brakes, and guys who have driven it lived long enough to write the reviews!

Oh, dear.

The Mini has no friction brakes at all? Really? Yikes, then the fact that someone lived long enough to review it means absolutely nothing, because I'd like to go on living more than just the few days it takes to complete a review - and so would most of us. So are you sure? What's the backup system, and how does the driver know it has engaged, which would mean repair of the main system is urgently needed, like yesterday? And how does the driver know the backup is still in any condition to engage if it's needed?

Look, electronic controls these days are mind-numbingly complicated. There are hundreds if not thousands of opportunities for single-point failure in even a "simple" motor control of the sort required to run an EV-wheel motor. Every single active solder ball on every single "BGA" package and every connection between any package and the chip inside, for starters. Thermal cycling and metal fatigue make it certain that there will be failures eventually. In addition, the standard means of protecting electronic controls from catching fire on failure is to use a circuit breaker/interrupter of some sort, ensuring that the failure seen by the driver will occur instantaneously and catastrophically at the instant the interrupter cuts the power.

This all means that when electronics fails, it often, even usually, goes totally kaput suddenly, completely, and with absolutely no warning. That would be life-threatening on the highway. During winter with ice and snow, it might well be life threatening if it happened in just one wheel - the car might already be wrapped around a telephone pole before the driver ever became fully conscious something was wrong.

Oh, and those sophisticated - i.e. mind-numbingly complicated - algorithms run in software. Like sausages and the law, you don't want to see software being made.

So I would not recommend using any life-critical electronic gizmo, such as a steering or braking system, without an integral backup. And if the backup(s) are fully electronic I'd really prefer to have two, not just one, to reduce the chances that a single backup that is supposedly functional has failed while falsely signalling that it is still in working order. So I'd really like to have friction brakes at least at low speed or for unusually hard braking. The little bit of energy retrieved by regeneration in the last few mph will be more than made up for by the energy that has to be dumped in to reverse the motor torque strongly enough to get good braking, anyhow. So why compromise safety in order to expend extra energy?

Sometimes the best way to do something is to throw in a bit of old technology, rather than do it some complicated and therefore unsafe and failure-prone utopian-fashionista way. Really.

A couple of things need to be made clear here.
Firstly, I am not an engineer, so the concerns you engineer types raise are a bit above my level - I just have to let you guys fight it out with your peers - I just used to do a bit of cost and work accounting, so was the guy who had to remind you that you were working to a budget, and sniff out when a projected solution sounded expensive.
It also appears that this is a demonstrator they built, rather than a fully optimised version for mass-production, and so if an addition of friction brakes looked like a better practical route for production use doubtless that is the way they would go.
Why they did it is probably to simplify the engineering as they have the motors in the wheel hubs, so by not bothering with friction brakes at the expense of a wee bit of extra energy - not important for this sort of demonstrator.
I was not aware of this issue, so again am indebted to people like Alan and the other engineers here for pointing this kind of thing out.
The information I have on the mini is also just the result of googling, so it is limited, and AFAIK they have not released full specifications.

OK, if it's a concept demonstrator not taken out into any kind of traffic, it might be a different story. Even then, maybe it has an emergency hand or foot brake.

Does driving in New York City count as taking it out in the traffic?
They've certainly done that, here's the video:

Electric Mini Cooper: Test Drive - Popular Mechanics

Apparently they also feel the vehicle is street legal:

On the whole, though, it’s as valid a vehicle as any other Mini, and Griffiths says the company is negotiating with several automakers to potentially make their lithium-ion powered motor just another powertrain option available through the dealer. Right now, Hybrid also creates electric versions of the Smart Car, Chrysler Crossfire and an assortment of scooters.

They also clearly have no conventional disc brakes:

“Working in partnership with our customer, Synergy Innovations, we set out to demonstrate what our electric wheel technology is capable of. We simply took a standard BMW Mini One, discarded the engine, the disc brakes, the wheels, and the gearbox. These components were replaced by four of our electric wheels, a lithium polymer battery, a large ultra capacitor, a very small ICE with generator (so small it almost fits alongside the spare wheel), an energy management system and a sexy in-car display module.”


So how they are working things in the light of your and Alan's strictures I just don't know - perhaps they feel that the cost of electricity is so low that the extra cost of feeding in energy to brake to a stop is not important.
How they have addressed the safety concerns I also don't know - in Europe to drive it on the road at all they would have to have a completely independent braking system in addition to the main one, but perhaps that is why they drove it in America.

I have a GEM car and when regen. is engaged, it is very difficult to move it from a dead stop and all it has is a sepex DC motor which is not the worlds best for regen. anyway so I can believe it about the Mini conversion which probably has A/C motors or possibly brushless DC units.

I imagine the Mini is reversing the current through the motor windings instead of relying on a diminishing regenerative current. That could slow it all the way down to a dead stop (or even reverse it), and with clever engineering they could recover much of the kinetic energy from the wheel motors. This car is apparently being controlled mostly by software. Hopefully they have a parking brake for when the electronics is switched off.

Your street cars are likely to employ less sophisticated algorithms; the technology of 100 years ago is pretty efficient in streetcars and there isn't such a pressing need to improve it.

Why would street cars use less sophisticated algorithms? Once written, assuming you have the computing power they don't cost extra.
A bigger obstacle would appear to be the cost of the capacitors, as that is how they pump out enough energy quickly enough to bring the car to a stop.
However, recent advances have been pretty good at incorporating capacitors even in the humble lead-acid battery:
Next Big Future: UltraBattery combines a supercapacitor and a lead acid battery

"as that is how they pump out enough energy quickly enough to bring the car to a stop."

I think that answers your own question. At low speeds, you have to expend energy to reverse the motor torque robustly enough. At some point that costs more energy than you can retrieve from regeneration, so you might as well use a disc brake.

"Why would street cars use less sophisticated algorithms?"

That would be as compared to the Mini, I suppose. New streetcars probably use very good algorithms. But, again, as I said above, you need mechanical brakes anyhow for safety - sometimes the best way to do something is to use a bit of old technology, rather than do it some complicated and therefore unsafe and failure-prone utopian-fashionista way. And if you have to carry $200,000,000 of liability insurance or whatever it has gone up to for passenger rail these days, then your insurance company is going to have bigger concerns than saving the last micro-fraction of a cent in electrical energy. Life is about much more than just absolutely super-idealized energy efficiency.

Oh, the penny drops, I missed the bit about the capacitors. The very name "nextbigfuture.com" gives the show away by unmistakably shouting "press-release hype" at top volume before one even troubles to open the link. It's an instant red flag, now doesn't it?

There is an interval between the time something is hyped as one of the bazillion Next Big Futures that have come and gone without result, and the time it is demonstrated to be safe and useful. Then there is a further interval until it is demonstrated to be suitable for use in a specialty prototype. Then there is another until it actually comes into widespread use. These intervals are normally quite long. Indeed, at least one usually turns out to be quasi-infinite.

So however interesting those capacitors might or might not be as a prototyping exercise, I think it would be very premature to expect to see them in an already-built streetcar - if I ever see them in any streetcar at all.

The reason I often use links to the nextbigfuture is because they are usually well written and concise, and invariably contain links to more original sources for those who wish to look at the issues in more depth.
What the configuration is for streetcars we don't yet know, but it is clear that supercapacitors can be usefully linked to batteries, and also that they are useful for storing more of the energy for regenerative braking and also for avoiding deep discharge on batteries thus extending their working life.
I take your point that friction brakes will also be used in street cars.

Yes, you can drive the motors in reverse to brake all the way to 0, and then you can throw out the friction brakes. Umm - I don't want to drive one.

If they have done this to street legal standards for Europe, it will have some sort of secondary braking system entirely independent of the main one.

Even though my name was on Drumbeat, I only did part of the work. Some of the TOD editors were also putting up articles.

Wasted Energy

The laws of thermodynamics dictate that conversion efficiency will never be 100 percent, because heat is lost at every step of the conversion process. But new technologies may be able to greatly increase conversion efficiency, moving from an overall rate of 36 percent to closer to 50 percent.

Wasted Words--

I wonder how much energy could be saved if everyone just stopped talking -- if only just about things they know nothing about?

The technology is already here!
Problem is the Bush Administration decided to cancel the planned construction of "Futuregen", the new design power plant that would have an efficiency of 60% in converting the coal energy to electric power.
Reason for cancelling: construction costs were increasing to fast and final cost had risen after Bush's delays to determining site location.

Great going Bush! Let's keep the status quo which keeps those electric rates and CO2 rates rising!

I like the sound of this guy, must get his book - Nassim Nicholas Taleb: the prophet of boom and doom

Last May, Taleb published The Black Swan: The Impact of the Highly Improbable. It said, among many other things, that most economists, and almost all bankers, are subhuman and very, very dangerous. They live in a fantasy world in which the future can be controlled by sophisticated mathematical models and elaborate risk-management systems. Bankers and economists scorned and raged at Taleb. He didn’t understand, they said. A few months later, the full global implications of the sub-prime-driven credit crunch became clear. The world banking system still teeters on the edge of meltdown. Taleb had been vindicated. “It was my greatest vindication. But to me that wasn’t a black swan; it was a white swan. I knew it would happen and I said so. It was a black swan to Ben Bernanke [the chairman of the Federal Reserve]. I wouldn’t use him to drive my car. These guys are dangerous. They’re not qualified in their own field.”

Pethokoukis (USNews): Do We Need an Energy "Manhattan Project"?

Can Big Government really solve the energy crisis? It would be nice to believe that. While America has a much-deserved reputation as the land of free-market-loving entrepreneurs, that doesn't mean Uncle Sam can't occasionally take the lead and achieve some pretty impressive results. Two that quickly come to mind are the Manhattan Project ($20 billion in today's dollars), which developed the atomic bomb, and the Apollo space program ($100 billion in today's dollars), which eventually put 12 men on the surface of the moon. And it's those two examples of successful collective action that many people think should serve as the models for how we deal with our current power problems, whether it's slowing climate change or achieving energy security.

What sterling examples of successful collective action!

Now we have the Bomb and some trash on the moon to show for it.

Still, maybe it's a start -- If we can organize to kill, just maybe we can organize to live.

My primary thought is what I left on James' blog--history shows us that every time a crisis comes where people get worried/hungry/threatened, they place demands on government, and government responds in kind with a centralization of power and resources. The Great Depression begat The New Deal, 9-11 begat DHS and an expansion of the military-industrial complex; history shows a pattern.

To expand on the idea, in those times, "government" has done good and bad things, just as the article points out, it can be wasteful and boondoggle-laden, but it can do "good" things when the cause is clear and the effort has a purpose, such as the Manhattan Project itself yielded. But sure, these expansions can also yield drastic policy changes that can mold and reshape a society (see my two examples above, an example of two very different kinds of changes all due to increasing size and power of government).

As James notes in his article though, "You say "Manhattan Project" or "Apollo," I say "Project Independence" or "synfuel"—two failed 1970s attempts to break us from our "addiction to foreign oil," the latter of which blew $60 billion in four years (in today's dollars) with nothing to show for the effort." It's a fair point, sometimes it works (what's the key determinant variable of success? leadership? purpose?) and sometimes it doesn't.

However, private solutions are no panacea either--in a pure setting, they depend on market forces and individual/corp innovation without coordination by the central authority. That means it can find solutions efficiently IF THE PROBLEM CAN BE DEFINED BY extant ind/corporate powers effectively and efficiently. Many of the ind/corporate powers have been trusting and continue to trust governments' estimates of resources and their availability--but that's changing with the price signal now isn't it?

In other words, the standard complaint applies: we have to wait for a price signal to tell us that there is a problem to address, which means corporate response will only respond to the price signal and not to the benefit of people or their hunger or their __________--whereas policy changes to fill the gaps left by corporate interests will make their way through the slow meat-grinder of American government just in time to adapt too late to the problem.

So, that means early response to this inefficiency is a better path doesn't it? It seems to me that we may need much more central coordination of resources and purpose in order to address our problems--once the problem is even defined accurately and precisely.

To this point, as far as I can tell, there is absolutely no consensus of the scope and parameters of the myriad problems we face.

At the end of the day, the question here is what is the most efficient mechanism to get us through this problem...and my point is and always has been is that we have to focus efforts in the most efficient way if this really is a problem--and that requires acceptance and recognition of the problem...and that is just now starting to occur.

Once we agree on the integrated scope and substance of the problems (which I am not sure that we can), then we can start discussing how to solve the problems we face.

But that is an effort of problem and scope definition...which is a time-taking and often generational endeavor.

I have little doubt that different countries will try different methods--and here in the US we will likely try to continue our amalgam of public/private partnership, with mostly private effort running the show.

Some countries will centralize in response, some will decentralize, based on their economic/debt situation and extant energy resources--which I would argue are inherently tied together. Because the US is where it is on those two dimensions, it seems to me that it will be the one to centralize further, especially with current political trends. Europe may continue its recent trend of decentralization, but without energy wealth, can it do so? Brazil's newfound energy wealth will likely lead to decentralization I am guessing.

Either way, it will be an interesting component of how this all goes down.

To that, as one of my colleagues said eloquently,

Political and social changes are perhaps harder. Back then, we had the Nazi/Japan threat (and even then there were still calls from Congress to cut the spending) and later the Soviet Sputnik motivator. This time, the scapegoats will be too many and too diffuse. The problem, though, is really us.

I did the same analysis several years ago.

I went through a series of "what If" scenarios. and formulated my strategy.

Not to focus on creating more liquid transportation fuels to replace those derived from black gooey oil, or to use oil more efficiently (both are "Races with the Red Queen" that we will likely lose).

But to focus on a strategy with multiple strengths and redundancy. Delays and failures in one area will not negate "too late, too little, but something" in another area.

Elasticity of Supply, the worse things get, the more transportation society can extract.

Lower marginal Costs, the extra supply has a lower cost/unit than the previous average cost, resulting in lower average costs the more society uses it (the exact opposite of our highways).

This increased economic efficiency will help offset some of the economic drag from post-Peak Oil.

Diverse build-out (none of the problems of Fort McMoney of concentrating too much on one small part of our infrastructure).

Mature Technology without unexpected "game stoppers" discovered only with wide spread implementation.

Long lived infrastructure. Once built, it will be many decades before substantial repair/maintenance/replacement will be needed. One wants societies diminishing resources to be devoted to further mitigation and not to replacing previous mitigation.

Not Low oil, but *NO OIL*.
A 2008 Prius may be seen as a gas guzzler in one decade, before we have even replaced the current fleet. New Urban Rail will still be useful a century from now (the Green Line to the Boston ASPO conference opened in 1897).

More later.

Best Hopes for Robust Mitigation Strategies, that can survive slow, fragmented and incomplete implementation,


My main strategy figured out after finding the oil drum if I were energy tzar were to do more of what we have done earlier locally and more of what already were being done. Its kind of cheating since it is both trivial and what a market based system would do anyway and helping it along a little gives a boost to the governments efforts.

The ongoing work to limit CO2 emissions and adapt to more expensive energy seems to give annual change at a few percent all over the field.

I do not have the impression that we are doing "maixmum commercial urgency" investments, there is slack to do more. But it seems like industries selling "post peak oil" equipment will have very nice times during the next recession.

The next local change I hope for is a strong revival of the nuclear industry and that the engineering, efficiency and investment trends will become a little stronger and get a generation or two in the sun. Then I will feel confident that this will be a good century, at least locally, where we will have enough of a surplus to continue environmental work, take care of the elderly etc and do a lot that will be usefull for the rest of the world.

I never aimed for no oil and I don not see the reason for such an aim, what is needed is to produce stuff that is valuble enough to trade for oil even when oil is realy expensive.


Good work!

I see that more and more people are seeing the light. I've figured out that all one has to do is wait for reality to impinge on the wishful and we all come to the same result.



One thing about the Manhattan project and NASA were that only the people working on them had to use the technology. What if, as seems likely to me, a project comes up with a technological innovation that requires large scale personal change/acceptance. For instance, for years there have been building control systems to turn on and off heating/lighting/etc in response to detections of when people are around, but the sensing mechanisms have been too intrusive. Suppose we solved that and could get 20 percent less energy use with differences only noticeable for the first ten minutes when you enter an area using say IR cameras (as one of the few reliable indicators). Would people be happy with that? Would you accept the data wasn't also being used to analyse your productivity? Would you be happy with a computer predicting your behaviour to, eg, turn off air-con ten minutes before you leave your desk? What if the computer asked you when working after hours to move to a single room that had all the after-hours workers in it? Etc. The problem I see is that even if intelligence is genuinely being used only for power management (and I think it would get abused), people wouldn't be happy about it. Likewise for many other things I can imagine might be successfully developed in the near term (as opposed to discovering some too-cheap-to-meter new energy supply), but I'm not sure society at large, or I for that matter, want them. So unless you think physics/technology can come up with something that enables BAU without societal change I don't see a Manhattan project type thing being cost effective.

Just in case you missed it yesterday...really scary piece for Newsweek actually.

Newsweek: The Coming Energy Wars: 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.

I'm sure this was posted before, but Maclean's (the Canadian version of Time/Newsweek) cover story this week was on peak oil and its consequences too. Even closed with some pith remarks by Chimp.


Thanks for posting that article, somehow I missed it. I know quite a few people who subscribe to (and respect) MacLean's so maybe now's a good time to strike up the conversation again.

Will she break $4 or not?


I can't help thinking, based on last years peak time, and the fact oil has come off recent highs
and also slowing down demand - that may may be seeing it top out now. I'll take a cream pie in the face on this one!!! Do we need a poll?


Well it really all depends on how local of a peak you are talking about. We might be seeing a 1 or 2 month peak, however in the next 6 months I don't see anything that will keep oil from returning to 135, and then making the headlines all over again with $140.

A few hundred thousand barrels coming online here and there may delay a further large advance in price till 2009-2010. But I don't think crude nor gas prices have seen an all time-high for 2008.


Sorry, I wasn't clear. I meant short term ie for this year peak season.

I say we see shortages / rationing before we see $6 gas.

Especially if Obama get in and the Senate becomes filibuster proof. It will be Jimmy Carter all over again. Finally they will be able to use all those gas rationing coupons stored in the salt mines in Kansas all these years.

Gasoline is now around $6.50/gal (170 to 180 yen a liter) here in the Tokyo area. And I'm seeing significantly less car traffic. The buses and trains are getting more riders. Big headlines in Asahi Shinbun today "The Era of 170yen Gas!". People pretty much don't want to talk about it though if you bring it up. They kind of get a puzzled panicky expression for a fleeting moment..........then the topic is changed.

Clean Machine

Instead of a gasoline engine and a fuel tank, it has an ac electric motor and lithium-ion battery. It will be perhaps the most affordable among the electric vehicles due out in the next few years. Rubin aims to sell 30,000 XS500s in 2010 to two-car families that are willing to ditch one gas-powered car or hybrid for an electric vehicle. Its 120-mile range (on normal terrain) might be enough for commuters.

I have my doubts it will be viable


For those who are affected by the ammo shortage, the biggest cost increase seems to be because of the brass. The boy scouts recently picked up a local range, filling a 55gal drum and raised $1500. Alot more money than they could have made any other way. The local indoor range doesn't allow you to pick up extra brass either, it seems they are making too much money on recycling it.

Here's a suggestion about rolling your own. This kit hasn't gone up very much in the last 3-4years. It was $280 when I bought it 4 years ago. Don't bother with the Lee kit, friend of mine did and spent tons of money getting needed "accessories" and its not half the press. This "investment" has paid for itself many times over.

Recycling at its finest.


Do the official organizations calculate net exports for the world? I can't find it

This attempt used AnalyzeFirst's list of countries and then I found a couple more exporters... East Timor & Tunisia

The Energy Information Administration defines net exports as production minus consumption.

Thus it can be calculated for the world quite easily by subtracting the eia consumption spreadsheet from the production one. These are thoughtfully set up so that individual cells correspond. For instance.... the stat for Nigeria production 1991 is in the same cell (different spreadsheet) as Nigerian 1991 consumption. Excel takes care of the rest (with twiddling)

The two spreadsheets are..
Total Oil Supply: All Countries, Most Recent Annual Estimates, 1980-2007
found here


Total Petroleum Consumption: All Countries, Total OECD, and World Total, Most Recent Annual Estimates, 1980-2007

found here


But data for 2007 is not complete and must be tracked down for individual countries here.. http://tonto.eia.doe.gov/country/index.cfm
Many of the stats for 2007 are just eia forecasts.

If you find errors/omissions, please mention

Very nice data crunch!

Thanks for compiling this. Several points.

Note the slow, but accelerating, decline rate in net oil exports.

The top five account for about half of net oil exports by volume.

We have seen a top five decline of 1.7 mbpd from 2005, but an overall total decline of 1.5 mbpd. So the bottom half by volume (39 net oil exporters) offset part of the decline from the top half. However, many bottom half net exporters are showing pretty sharp declines, e.g., Venezuela & Mexico.

Again, our middle case is that the top five approach zero around 2031. My guess is that total world net oil exports in 2031 will have dropped by at least 75% from the 2005 peak.

And again, IMO this is the explanation for increasing oil prices, i.e, an accelerating net export decline rate requires an accelerating rate of increase in oil prices, in order to balance supply & demand. As they say, this is not exactly rocket science.

BTW, it looks like Saudi Arabia, in 2008, will exceed their 2007 net export level, but remain below their 2005 rate. However, it's also likely that any 2008 increase in Saudi net oil exports will be offset by Russian declines. Our middle case is that Russia approaches zero net oil exports in about 16 years.

westexas, does your model take account of the impact on net exporters of a general recognition of peak oil, coupled with a global depression?

My analysis suggests that these two effects will dominate the exports race to the bottom. When the fragile nature of oil production is generally known I expect a national push to conserve production to meet only internal demand - "keep our oil for our children".

At the same time I expect a dramatic swing into depression, which will impact non-oil exports from those countries, the economies, and thus the desire to earn some foreign currency to keep the economy afloat. Depression should also cut demand, potentially depressing prices (temporarily).

The interplay of those forces seems to be the main determining factor for future exports curve shape and thus the path the world takes. Wish I could determine which force will win with any certainty.

Scenario Conserve suggests production will be in general cut back to cut exports to zero much faster than algebra would suggest.

Scenario BAU suggests exports are kept high to keep economies healthy, against the wishes of large parts of the population.

Scenario Power Block suggests oil exports will be used to cement new power blocks, both to put oil producers in charge and to protect their assets. Oil is no longer freely traded.

Your thoughts?

You've got to be very careful if you don't know where you're going, because you might not get there.
Yogi Berra

From our top five paper:

Declining net oil exports will inevitably result, absent a severe decline in demand in importing countries, in continued rapid increases in oil prices, as oil importing countries furiously bid against each other for declining oil exports.

In simplest terms, we are concerned that the very lifeblood of the world industrial economy—net oil export capacity—is draining away in front of our very eyes, and we believe that it is imperative that major oil importing countries like the United States launch an emergency Electrification of Transportation program--electric light rail and streetcars--combined with a crash wind power program.


So, the only real question seems to be how soon we see a severe economic contraction.

We're in the demand destruction phase right now. Historically, once demand is destroyed -- not just constrained -- it takes a while to bounce back. US demand, year on year, in April was down 900,000 barrels per day. That's a pretty steep decline.

Once US consumption is squashed by harder times, you end up with knock-ons to India and China which would, likely, reduce oil demand there. That leaves oil producing countries to take up the demand slack. Brazil, Russia, and the Middle East, mainly.

So, IMO, looks like we're in a race between depletion plus your own export decline model and demand destruction which seems to be a growing force in the world.

I wouldn't bet on rapidly falling prices, though. The supply situation looks pretty bad with world consumption beating production in 16 out of the last 18 months (EIA figures). So, on a darker note, demand destruction also races depletion + ELM to beat shortages which, looking at the current, situation seem a possibility within 2 years.

Per the latest weekly EIA report, year to date products demanded is down 450,000 bpd. This figure does include some revisions.


How do you get a 900,000 bpd drop?

My apologies, looking over my notes and back to sources, I made a mistake and would like to post a retraction. Thanks for pointing this out.

According to EIA figures, year on year IMPORTS were down 780,000 barrels per day in April.

The import figures were:

Jan 07 Jan 08
12.14mbpd 11.87 mbpd (- .27 mbpd)

Feb 07 Feb 08
10.79 10.53 (- .26 mbpd)

Mar 07 Mar 08
12.63 11.36 (- 1.27 mbpd)

Apr 07 Apr 08
12.58 11.76 (- .78 mbpd)

Still represents a massive decline and, according to the EIA, ethanol production is displacing a decent volume of imports which probably accounts for some portion of the difference.


So now it becomes a curiosity. We've seen demand destruction over 450,000 bpd year on year. Increased ethanol production and it looks like we take the difference in oil stocks -- which have been inching down. Not pretty and a much worse demand picture than I realized, even on the US side. Damn, what a little error in notes can do!

I dunno- US year on year demand down 450 000 b/day ? or 780 000 b/day ? ..... anyways down it is !

frankly spoken Robert, your celebrated "ethanol-amount"....energywise, was just viped away in the span of one year only !

Actually 3 to 5 years of added "ethanol energy" was viped away during last year, as your 550 000 ethanol barrels are in real terms just some 125 000 added.

Ethanol is a scam ! Adding nothing of real value to the greater society .
It is blurring things though...

Imports are down 780,000 bpd. Demand is down 450,000 bpd. So the difference was supplied domestically or taken in stock draws. With demand falling and ethanol stocks increasing, we supply more of our liquid fuel, by percent, domestically.

So given these facts your point is, well, pointless. And why are you shouting? Is this any way to hold a rational discussion?

(Furthermore, does anyone know this guy and why does he have a lisp?)

The idea that you Robert don't see my point, doesn't make it pointless.
Think of it more like : You don't understand it or it's difficult for you-

I see it as my genetic duty to go after people who spread bad messages - you spread bad messages Robert !

But in reading a reply of yours up-thread, you make me puzzled b/c you are inconsistent in your thinking... . a touch of cognitive dissonance perhaps?

So tell me Robert, are you famous here on TOD with your perfect English and all those splendid thoughts of yours ?

One thing that is key I think is to track our net imports with respect to world net exports

So far this year US net imports are down 5.9% from last year


Perhaps we are ahead of the curve? :)

I have a new term for TOD Land: NOEOCD--Net Oil Export Obsessive Compulsive Disorder. Unfortunately, it's contagious.

My focus du jour is on Venezuela & Mexico (V&M). The most recently monthly data that I have seen, through March, show a six month combined net export annual decline rate to the US of 32%/year. And the most recent weekly crude oil imports into the Gulf Coast (from all sources) look pretty bad.

But if our net imports are falling faster than world net exports I think that is a sign that the US is adjusting.... though painfully

Helps with world prices too

But of course many net importers are not declining yet. Growing in fact still for a while

If each net importer was declining as fast as net exporters (total) were declining, I dont think there would be a price problem

Data: I don't think the "adjusting" term is accurate-USA gasoline expenditures are way up YOY- a true adjustment would imply a real dollar decrease in gas expenditures YOY. What is actually happening, contrary to the MSM spin, is that the USA consumer/suburbanite is going broke.

5.9% yoy decline in net imports is a tough row to hoe for sure . World net exports are declining at only 2% plus

Right now the US is bearing the lion share of the world net export decline

Demand destruction.

The demand is still there-it is the cash that is unavailable. True "adjusting" of the American economy would be gasoline expenditures consuming a declining % of income. The current situation is like describing someone's new healthy diet plan (in reality they don't have the cash for the calorie total anymore).

"The demand is still there-it is the cash that is unavailable."

If some people are unable to afford oil or the services oil provides because it is priced out of their reach, that percentage of demand has been constrained or destroyed by high prices. If the price fell again, some of those people would be able to buy the oil again, but those who have permanently changed their behavior may never consume the same amount of oil again. If, the high price of oil forces people to buy more efficient cars (increased small car and hybrid sales) or not to buy a big car (reduced SUV sales) or not to buy a car at all (reduced car sales), then that is demand destruction.

In essence, the market has been altered by high prices so that, overall, people are forced to consume less. So a part of what people demanded previously is now unattainable. Lower sales in the car market and less airline flights, more expensive groceries, less people eating out, less people taking long trips, are all economic signs of demand destruction.

I don't think that you are grasping the key problem about V&M. Venezuela is showing a long term net export decline. Mexico is on the fast track to zero net oil exports.

In 10/07, they accounted for more than 20% of total US imports, and probably more than 40% of imports into the Gulf Coast. It takes something like five days for oil to get from V&M to the Gulf Coast, versus about 30 days from the Persian Gulf. So, we have to redirect declining net oil exports from other sources to the Gulf Coast (taking as much as six times longer to get the oil to the Gulf Coast).

Meanwhile, the last four weeks of crude oil imports into the Gulf Coast (from all sources) have shown quite a steep drop. Things could get interesting this summer.

I think they get interesting next week if the inventory report shows another drop in crude supplies, thus crushing traders hopes that the 8.8 mb drop this past week was caused by bad weather or something. Oil dropped $4 that day after the report came out - I think it's clear many people are betting on a monster build next week.

Even *IF* replacement crude supplies can be procured from the Persian Gulf, the MOL will take quite a bit of oil.

(30 days -5 days) x replacement crude = XX million barrels in floating "in transit storage".

Just the 300,000 barrels that GWB got by begging from KSA will consume 7,500,000 barrels for additional "in transit storage" if used to replace lost V&M production.

And 300,000 b/day is not the problem, in excess of 1 million b/day is.


change the O and E around, NEO-OCD. That's catchy. :)

I just emailed you Jeff...also Datamunger, we should probably work what you're doing here either in with Jeff's coming post on this or as a post on its own...

Or EO-OCD Exported Oil Obsessive Compulsive Disorder.

We could just show Datamunger's data table as in intro.

don't overestimate the effort required for this...it doesn't take much!

just 2 formulas in Excel...one to subtract consumption from production and one to sum the net exports.

Actually, since looking up individual countries gives you more uptodate data it seems than is in the spreadsheets, you can just do 44 lookups (2 hour's work...if that)

I'm surprised the eia doesn't have this sort of summary. At least I can't find it

Their spreadsheets are set up to make it easy to produce

My cyber sidekick, Khebab, seems to be MIA or on vacation. Would you be interested in generating a chart showing monthly combined net oil exports from Venezuela and Mexico to the US (daily average number) from January, 2005 to March, 2008? BTW, does anyone know if the EIA has more recent data than March for imports by country of origin?


My email: westexas at aol.com

that's not the point. sometimes it takes someone a) putting the effort in and b) looking at something a different way to facilitate a greater understanding.

I hear that Venezuela's leader doesn't like us very much. Could some of that drop in exports be due to Venezuela shifting exports elsewhere?

He has certainly talked about it, but Venezuela showed more than a 7% total net export decline rate last year, which is a continuation of a long term decline. In any case, we are looking at having to replace a huge chunk of the oil imports to the Gulf Coast that used to come from sources less than a week away. Basically, we are going to have to bid the price up enough to draw crude away from other importers and/or reduce our consumption.

My prediction: it's not if, but when, we hear calls to release oil from the SPR this year because of supply problems on the Gulf Coast.

BTW, Europe is facing its own problems with net export declines from two close net oil exporters--Norway & Russia.

NOAA's predicting 12-16 name storms this year. With the first one popping up Saturday, seems the Atlantic's setting the stage for a rough summer. How many days does a hurricane add to the supply chain?

Hurricane seasonal warnings almost useless, experts say

"The hairs on the back of my neck don't stand up," ho-hums Craig Fugate, director of emergency management for Florida, the state that got raked by four hurricanes — three of them "major" — in 2004. When it comes to preparing, he says, these long-range forecasts "are not useful at all."

Um.. The article says the the long range forecasts are not useful for emergency planning.

It doesn't say they aren't useful for predicting the number of storms.

What's your point?

They can pretty accurately predict an above- or below-average season, even predict the likelihood a major storm will hit SOMEWHERE along the U.S. coast. Beyond that, they're not promising anything

Excellent analysis, as usual, WT.

If anyone needed further convincing that's Venezuela' situation is going downhill fast, we saw on Friday that they increased oil, gasoline, and diesel imports in the first quarter. If they are importing oil, it makes you wonder if things haven't gotten worse even faster than we generally thought (excluding WT!).

Shouldn't the negative figures for Tunisia and Mauritania be set to zero. Assuming you can't have negative exports.

Actually the eia defines negative net exports as net imports and expresses it that way in their tables

I suppose it's like negative growth

When net exports are negative, they are not summed in the table.

hmmm... since when did we start using euphemisms as data :)

If a country is a net importer, then exports are surely zero. Just because the eia or whoever have started to believe their own propaganda, no reason we should.

Just a minor point I know. Well done on producing the data BTW, don't take what I say as criticism :)

(edit) Ah! You edited your post. Ok, I now understand the totals are unaffected by the negative figures, so no problem.

Net imports down for the past four weeks YOY 5.9%. Domestic oil/condensate production dropped 1.8%. Natural gas liquids production dropped .2%. There are some large projects in the GOM nearing completion, but the demand for deepwater rigs is overheating. Declines in shallow GOM crude production, lower 48, and Alaskan crude seem relentless over the long term.

Might also add in a 5.1% reduction in total crude stocks (excl. SPR) YOY. Part of the reduction of imports is due to a drawdown in stockpiles.

Drop in products supplied only 2.1%.

In 2007 the United States was feeling the effects of a huge OPEC production cut that caused a drop in world exports. In my opinion the problem is at least in part due to OPEC supply manipulations. Your ELM calculations might consider the OPEC move affected end of 2006 and most of 2007 world production figures. Not sure of the 2008 data yet.

Reductions in miles driven, canceled vacations, and job losses will contribute to a cut in demand in both the United States and abroad. Read that gasoline was over $9.00 a gallon in France. Bottled water was $3.00 a liter at Charles DeGaul airport earlier this year. The dollar does not get you very far in Europe.

Here's one last graphic...

No I'm not that obsessive..

I didn't count them all .... Microsoft Excel did

Course it's the amount exported, not the number of exporters, that really matters

No I'm not that obsessive..

That's what I used to say, and pretty soon people ask you about the weather and you bring up net oil exports.

What I would like to be able to do is to complete the oil supply chain picture. Focusing on the US and where the oil gets recieved in....Gulf Coast, East Coast, West Coast, and how much crude each refinery takes in , then where each refinery is shipping their petroleum product (most specifically gasoline and diesel).

The EIA has data for refinery production from July 2007. The next data is suppose to be made available in July 2008. I don't know if there is any way to better track this information. Seems we (our government) could to a hell of a lot better tracking this. It would be wonderful to see thison a weekly or montly basis. Perhaps they do track as such. I only see this information published on the EIA site:


Datamunger, thanks for collecting and presenting these data. I've wanted to see these kind of numbers for a while but never found them presented in the compact and readable form that you have done here. Please keep it up.

A report that blows a hole in the UK's current approach and clearly points to a decentralized future:


And a table of costs that suggests the consumer will never be able to do it without centralized subsidy:


The government-backed report, to be published tomorrow, says that, with changed policies, the number of British homes producing their own clean energy could multiply to one million – about one in every three – within 12 years.

These would produce enough power to replace five large nuclear power stations, tellingly at about the same time as the first of the much-touted new generation of reactors is likely to come on stream.

It will be interesting to see the actual report, because the Independent's journalist is just babbling.
There are around 24 million homes in the UK, so what in the world he is talking about with his one million homes representing one i n three baffles me.
Five large nuclear stations would produce between 5GW and 7.5GW of power, enough for 5-7.5 million homes even without stretching it through the use of heat pumps, so once again he is making no sense at all.

Independent's Journos , Just like Gruaniad or Beeb Journos will state anything, anything to avoid sensible discussion regarding Nukes.

They can't help themselves. They are just wired that way. Nukes are evil, fairy pumps, hobbit windmills, and sunney panelles are pure natural goodness. And we can all (60million+) live like Bombadil and Goldberry , but in Yurts.

Maybe we can knit our own power stations from grass.

500 000 English got blitzed by power failures last week.

This is just the start.

BTW: My lad just got back from bagging Munros for 3 days in the Cairngorms.

He reckons that the Snow Pack is as high as he has seen it in the last 5 years. (it is now June).

Must be that Global warming / cooling / warming / cooling / thang.

Though as somebody 'explained' to me a couple of weeks ago:

'some times global warming means that it actually gets colder'...

Heh, I love it. Little thatched-roof power station in the Cotswolds. ... run it on horse manure or something.

I must caution you against heresy.
Apparently only the totally uneducated have any reservations about global warming - Dr Mearns for instance.
Wishful thinking is going to keep everyone warm, so we have no need for actual power stations.
I intend to utilise 'The Independent' to provide plenty of hot air and snugness from self-righteousness.

Why are they so dumb? So ignorant? Greater energy in the system means greater swings in temperature and changes in microclimate either positive or negative in temperature. The overall trend is towards destabilization.

People who have no clue about physics should SHUT THE HELL UP!

Like listening to the liar in chief and his incessant frat-boy heh-hehs, and his pathetic attempts at the English language. It is precisely this thuggish disdain for the sciences that makes me realize that all hope for sensible mitigation is for naught.

The truckers may be the canary in the economic mine. In america we are sooooo dependent on cheaply transported goods. Look at the condition of some of the roads and bridges particularly in the rust belt. What is that about?

the $5-per-gallon mark on the West Coast – is driving small trucking companies and independent drivers to the brink of ruin

the fix is in.

in yesterday's drumbeat there's a link to an article in the internation edition of newsweek "the coming energy wars".

no where is there a single sentence, phrase or word pointing out the effect of starting a genocidal war in the heart of the oil producing region.

the war and threats against iran have been completely erased from the discussion of the oil price.

the fix is definately in and its going to be every man for him self from here on out.

RE: 'Ending Dollar Peg Won't Stop Gulf Inflation - Paulson'

Once again Paulson's lips are moving and once again he is a liar. How many times have we heard him say 'we are in favor of a strong dollar'? Obviously as Sec Treasury Paulson knows how to strengthen the dollar. If he wants a strong dollar why doesn't he take the necessary action? That said, back to the 'Gulf Dollar Peg'...

From Wikipedia...from a former governor of the NY Fed...

"Fixing the value of the domestic currency relative to that of a low-inflation country is one approach central banks have used to pursue price stability. The advantage of an exchange rate target is its clarity, which makes it easily understood by the public. In practice, it obliges the central bank to limit money creation to levels comparable to those of the country to whose currency it is pegged. When CREDIBLY MAINTAINED (caps mine), an exchange rate target can lower inflation expectations to the level prevailing in the anchor country. Experiences with fixed exchange rates, however, point to a number of drawbacks. A country that fixes its exchange rate surrenders control of its domestic monetary policy."[1]

What is left out above is that when the 'anchor country' does not credibly maintain its currencies stability that inflation is exported to the countries which have pegged their currencies to the anchor country. In addition to the Gulf States, China is another example.

Now why is Paulson so concerned about the Gulf States depegging (eliminating the fixed exchange rate)? From the article above...

'An economic adviser to Qatar's ruler has said the Gulf state needs to drop its peg to the dollar because its economy is surging while the U.S. economy is slowing, London-based MEED reported on late on Friday. [ID:nL01620066]

"We have to delink," MEED quoted Ibrahim al-Ibrahim as saying. "It does not make sense to stay linked to a currency that is declining while our economy is growing ... at a time when our currency should be going up, it is going down."

At 13.74 percent, Qatar's inflation was the highest recorded among Arab countries in the Gulf last year.

But Paulson, in talks with officials including Saudi Arabia's King Abdullah, Qatar's prime minister and finance ministers from the two states, said earlier in Doha he has yet to hear a leader blame the peg as the chief cause of inflation.'...snip...

Perhaps the forecast of a $150-200 oil spike from GS oil analysists was based not on a bidding war for ever diminishing crude, but on the possibility of the Gulf Oil States depegging their currencies from the dollar? WTs progression, $4-$8-$16 gas per gallon, might need revision if depegging occurs.

Here are a couple of more articles describing the problems a falling dollar is causing in the Gulf States. It isn't all about food prices.

'Falling Dollar, Inflation Feed Dubai Strife

Low-paid foreign workers, vital to construction boom, stage protests as wages lose value'



'Gulf central banks urged to sever links with tumbling US dollar'



Well… this about wraps it up for the ‘councillors’, ‘therapists’ and general ‘psychobabblers’...

Usefull stuff in the years to come. Key phrase: ''Musnt Grumble''.

Dorme Bien…


Stiff upper lip best way to deal with shock
By Richard Alleyne

Last Updated: 2:54PM BST 01/06/2008

>>Britain's traditional stiff upper lip may be a better strategy for dealing with shock than letting your feelings spill out, a new study claims.
The popular assumption is that talking about a terrifying experience, such as a terrorist attack or natural disaster, can be therapeutic and helpful.
But new evidence suggests "getting it off your chest" may not be the right thing to do.
Psychologists in the US used an online survey to test people's responses to the September 11 2001 terrorist attacks on New York and Washington.

Those who chose to express their thoughts and feelings were compared with those who did not over a two-year period.
To their surprise, individuals who bottled up their feelings ended up better off. They suffered fewer negative mental and physical health symptoms than people who were willing to talk.
The results have important implications for expectations about how people should react to collective trauma that affects a whole community or nation, said the researchers<<.

Just have a nice cup of tea.

I assume "Product Supplied" includes Ethanol.

I'm pretty sure ethanol production is up at least 250,000 bbl/day YOY for the first five months.

That would account for most of the discrepancy between a 5% drop in Imports, and a 2% drop in product supplied, Right?

BTW, Jeffrey, I quoted you at some extent over at the Carpe Diem Blog.

It's a High Quality Economics blog that's read by an important group of people, I think. I think a few of these people really are starting to realize that the Yergins of the World have "Missed the Call."

Hello TODers,

Hopefully, I can get this in before my ISP goes down again.

Recall my earlier Morocco postings:

US military head meets officials in Morocco

..Rabat reportedly negotiated with the US the installation of this military structure in Tan-Tan (southern Morocco), according to reliable sources.

Lockheed to build F-16s for Morocco

..The Air Force on Friday awarded Lockheed Martin Aeronautics Co. in Fort Worth a $233.6 million contract to begin production of 24 F-16 fighters for Morocco.

The Bush administration notified Congress in December that it planned to sell the fighter jets, plus engines, associated weapons and equipment in a deal valued at $2.4 billion.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Thanks, Bob,

Nice references in all of your posts.

I'd rephrase it:

The Air Force on Friday awarded Lockheed Martin Aeronautics Co. in Fort Worth a $233.6 million contract to begin production of 24 F-16 fighters for *Lockheed Martin Aeronautics Co.* - (and their allied corporate contractors).

Hello TODers,

NAFTA hurts Mexico, too

...This year, the Mexican congress will discuss a constitutional reform bill allowing the partial privatization of Pemex. Mexican farmers might have some thoughts about how that will enhance the quality of life in North America.

Impact on immigration

95% Increase in emigration from Mexico to the United States between 1980 and 1994

452% Increase between 1994 and 2006.

The trade pact's cost

8,000,000 Mexican farm workers forced to emigrate to the United States

2,000,000 agricultural jobs lost in Mexico

4,940,000 acres left uncultivated.

Source: Victor Suárez, president of the National Association of Rural Producers
PDF warning on next link:


The vast majority of fertilizers used in Mexico are nitrogenous and inorganic. While the use of fertilizers is neither as heavy nor as widespread as in the U.S., demand is increasing at a rapid rate.

Local production is minimal and has not been able to keep up with the growing market. Foreign fertilizers are seen as being higher quality, in particular those from the U.S., and this provides for profitable opportunities for new entrants. However, despite rising demand for fertilizers, the U.S. has been losing market share. While the
market grew 31 percent in 2005, U.S. imports only grew 3 percent.

Much of this may be explained by the high cost of petroleum inputs. Still, imports of U.S. nitrogenous fertilizers have increased, just not in line with market growth.
With Cantarell crashing--Where will Mexico find the funds for I-NPK?
Also, Mexico's Air Force doesn't have any modern fighter aircraft-- just old F-5s:


Gee, what does Morocco have that Mexico doesn't?

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

Latest Bloomberg update on the Mexican storm:

June 1 (Bloomberg) -- Petroleos Mexicanos, the third- largest supplier of crude to the U.S., closed two oil export terminals in the Gulf of Mexico as Tropical Depression Arthur brought heavy winds and rain.

The terminals at the ports of Dos Bocas and Cayo Arcas are closed today, according to a statement on the Web site of Mexico's Merchant Marine.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Just one person's story, but I can believe it. The Cleveland suburbs are basically ground zero of the mortgage crisis.

Things are getting worse in Cleveland....

One of my kid's friends lives in Cleveland and he said that things have gotten so bad in Cleveland as of late, he's afraid to go out after dark. For some time now, people have been going into homes that were "for sale" or abandoned and gutting all of the copper out for scrap. Now, they're hitting the homes that people live in....during the day when most are at work.

One of the amazing statistics about the mortgage meltdown--for every one percentage point increase in the foreclosure rate, the violent crime rate goes up 2.3%. I'm sure that the property crime rate goes up to, but the scary part is the violent crime rate increase.

the scary part is the violent crime rate increase.

Yes, well, not all that shocking. Images every day of violence as a problem solver. A nation that can't figure out its energy problem using violence. Various songs talking about 'poping a cap'.

But what's the downside risk? Applying the ultimate sanction (death) isn't a popular choice - but neither is the high cost of keeping someone locked away in a cell.

Then toss this into the mix:
but D.C.'s highest court exonerated the District and its police, saying that it is a "fundamental principle of American law that a government and its agents are under no general duty to provide public services, such as police protection, to any individual citizen" (Warren v. District of Columbia, 444 A.2d 1 (D.C. Ct. of Ap., 1981)

And to quote outta context:
The word or assurances of a government official, including those of a police officer, mean nothing, because this court has decided that the giving of that word or those assurances in no way obligates a government official to keep his or her word or assurances.

I once again ask - how does this all end well?