DrumBeat: June 8, 2008

Iran sees oil price at $150 per barrel by end-summer

TEHRAN (Reuters) - World crude prices are expected to reach $150 per barrel by the end of summer, Iran's representative to the Organisation of the Petroleum Exporting Countries (OPEC) was quoted as saying on Sunday.

"I forecast that by the end of summer the price of oil will reach $150 per barrel," Mohammad Ali Khatibi was quoted as saying by Iran's state broadcaster, referring to the summer in the northern hemisphere.

As reasons for this, he cited a weak U.S. dollar as well as the situation in the Middle East, without elaborating.

New Zealand: 'Big Dry' cranks out C02

Greenhouse gas emissions are soaring as coal and gas-fired generators run flat out, day and night, to compensate for fast-emptying hydro storage lakes.

Estimated carbon dioxide equivalent emissions from the thermal generators have risen to around 230,000 tonnes a week, 50% higher than this time last year, according to energy market consultancy Energy Link.

Nigeria demands $2bn oil arrears

PRESIDENT Umaru Yar'Adua has ordered Nigeria's state-run oil company to demand nearly $2bn in arrears from two major oil companies.

The government says Royal Dutch Shell and ExxonMobil have not paid taxes and production sharing costs they owe on two offshore oil fields.

Diesel thieves wreak havoc on California farmers

BAKERSFIELD, California (CNN) -- Standing in a field of organic tomatoes, farmer Pete Belluomini says the ground-cracking drought and unrelenting insects make it difficult enough to make a living on the land.

But they are the least of his concern these days as a new menace haunts farmers in Bakersfield, California: diesel thieves.

High cost and demand for fertilizer scares farmers

In part because of a global surge in demand, the price of fertilizer has skyrocketed 228 percent since 2000, forcing U.S. farmers to switch crops, cut back on fertilizer or search for manure as a substitute.

Wholesalers and retailers are scrambling to find and buy fertilizer and juggle what supplies they have to meet customers' needs. Between 2001 and 2006, global demand jumped 14 percent, an amount equivalent to the entire U.S. market, according to The Fertilizer Institute, a Washington D.C.-based trade group.

Job Losses and Oil Surge Spread Economic Gloom

Investors’ recent hopes that the United States might yet skirt a recession sank swiftly in the face of gloomy indications that the economy is gripped by a slowdown and pressured by record fuel prices.

For tens of millions of Americans struggling to pay bills, the jobs report added an official stamp of authority to a dispiriting reality they already know: A deteriorating labor market is eliminating paychecks just as they are needed to compensate for the soaring cost of food and fuel, and as the fall in house prices hacks away at household wealth and access to credit.

Gas set to take on coal

ARROW Energy says the Queensland coal seam gas industry will rival the coal sector in terms of value creation for the Australian economy within the next five years.

Water-Starved California Slows Development

PERRIS, Calif. — As California faces one of its worst droughts in two decades, building projects are being curtailed for the first time under state law by the inability of developers to find long-term water supplies.

Guerrilla Gardening

Reynolds defines guerrilla gardening as “the cultivation of someone else’s land without permission.” He didn’t invent the term or the tactic but has become, as he puts it, “a self-appointed publicist for the movement” and the breadth of impulses and ideologies behind it.

Oil price puts squeeze on Indonesia

For the fishing boats of Indonesia, going to sea has become an expensive business.

As global oil prices surge, fishermen are paying more to run their boats, but the fish they catch still sells for the same price.

"I don't know what to do if the price keeps going up like this," says Sunada, a fisherman who makes his living in the waters off Java.

"If we stop working we can't eat at all, but if we go on like this we don't make any profit."

'Guns, Germs, and Steel' Author Discusses Costly Crude and the Future of Oil (transcript and podcast)

In another of the NewsHour's ongoing 'Costly Crude' series, geography professor and famed author Jared Diamond discusses the future of oil in view of current high prices.
Streaming video is here.

Food producers, stores, consumers all feeling pinched

"We are hearing from people throughout the Gulf Coast of Louisiana about how hard they are struggling to pay for food and fuel," said Natalie Jayroe, president and CEO of Second Harvest Food Bank of Greater New Orleans and Acadiana. "The timing could not be worse as so many of our people are working hard to rebuild their lives and are dealing with the already increased cost of living."

Second Harvest expects to distribute more than 17 million pounds of food this year, "but the need is for at least three times that amount," Jayroe said.

Many people who are contacting the food bank have never asked for help before, Jayroe said. "This shows how our economy is affecting working people."

Zimbabwe: Dairy Farming facing collapse

THE lucrative dairy farming in the Midlands province is facing collapse owing to unscheduled power cuts that have seen farmers milking cows by hands, while erratic stockfeed supply has resulted in serious reduction of milk production, Governor and Resident Minister for the Midlands province, Cde Cephas Msipa said on Wednesday.

Global food supply is a growing problem

Food riots. Scores of panicked people protesting, burning effigies and chanting. Shops being ransacked, supplies running out as soon as they come in, and stricken communities stockpiling rice, bread and water for fear of going without. These have happened in Haiti and Egypt in recent months as the price of scarce food has soared.

But what if they happened on the streets of Bromley? Or Newcastle? Or Bath? As bizarre as this might seem, the prospect of UK food shortages has started to be taken seriously by food manufacturers and retailers.

Obama, Clinton should get real about oil

"These are the ways we will answer the challenge that arrived on our shores that September morning more than five years ago," Obama said. "A 21st century military to stay on the offense, from Djibouti to Kandahar. Global efforts to keep the world’s deadliest weapons out of the world’s most dangerous hands. Stronger alliances to share information, pool resources, and break up terrorist networks that operate in more than eighty countries. And a stronger push to defeat the terrorists’ message of hate with an agenda for hope around the world."

It appears from those words that Obama will continue with the Carter Doctrine.

That was declaration by then-president Jimmy Carter in 1980: "Any attempt by any outside force to gain control of the Persian Gulf region would be regarded as an assault on the vital interests of the United States....[that would] be repelled by any means necessary, including military force."

Kurdish security forces order out Iraq oil workers

BAGHDAD (Agencies): A drilling team exploring in an Iraqi oilfield briefly withdrew this week after being warned off by Kurdish security forces, oil industry sources said on Friday. Engineers familiar with the incident said it had no impact on production. But it underlines rivalries between Baghdad and the Kurdish regional government over territory and rights to Iraq’s huge oil reserves, which lie mostly in the Kurdish north or the Shiite south of the country. An Iraqi government oil official, who declined to be identified, said members of the Kurdish Peshmerga security force had taken over the Khurmala oil field on Thursday and sent away employees working there.

A century of oil in Iran: a bounty and a curse

Oil exports, worth 65 billion dollars last year, count for 80 percent of Iran's foreign currency earnings, essentially propping up the entire economy.

But the country is still far from realising the potential of either its oil riches or its gas reserves, again the second-largest in the world.

Billions of dollars in revenues that could be ploughed back into the industry each year are being thrown away on massive subsidies to keep petrol and energy cheap for ordinary Iranians.

What Can Possibly Explain the Price of Oil?

What can possibly explain the behavior of the price of oil? The Senate committee has heard testimony from a variety of sources and a variety of viewpoints ranging from accusing the regulators to be tacit participants in market manipulation to “Peak Oil”.

This same sort of back and forth happens whenever we have bubbles forming. There are always those who argue that it is simply a speculative mania, and then there are the true “believers” who bring arguments and evidence why things have changed.

Do Gas Prices Mean Business Bets Are Off?

AFTER THE STATE LEGISLATURE recently approved “An Act Concerning Energy Scarcity and Security,” its chief supporter, Rep. Terry Backer, warned that the United States is “standing at the doorstep of a sea change in energy and our consumption of it.”

”Everything changes from here on out and we must be prepared,” said the Stratford Democrat.

Backer is among a group of “peak oil” advocates that contend oil production has or soon will peak while demand globally continues to rise. The result is the high oil and gas prices we have all seen, with outright shortages likely to follow, according to the peak-oil crowd.

Panel discussion: James Howard Kunstler and Nikos Salingaros

A few months ago, I conducted a panel discussion with urban theorists James Howard Kunstler and Nikos Salingaros for the magazine Next American City. Because of space limitations, the magazine was unable to publish the full interview. Since some very interesting portions of the discussion were cut, I thought it would be worthwhile to present the unexcerpted piece here.
Part II is here.

Turkey fishes for offshore reserves

Turkey does not figure prominently on any list of oil-rich countries, yet it hopes to surprise the world with big deepwater oil discoveries in the next few years, as its existing land-based wells begin to run dry.

Crude, alternatives and cycles

Outside Iran-Iraq, production may be very close to peak. Bush has himself speculated (January 2008) that the Saudi refusal to raise production is actually due to its inability to produce more oil.

So uncertainty about Iran-Iraq supplies could be a detonator triggering peak-oil-style scenarios of rising prices (visible) and demand outrunning supply, which hasn't happened yet.

World Bank to scan national oil companies

With petroleum prices reaching record levels, the Oil and Gas Mining Policy Division of the World Bank has initiated a study on the state of government-owned or national oil companies (NOCs) to ascertain their efficiency and competitiveness vis-à-vis private ones.

The study will cover the corporate governance and value creation efficiency of leading state-owned oil companies, which are estimated to control approximately 90 per cent of the world's oil reserves and 75 per cent of production. In the light of increased global oil prices, the World Bank has already advised all governments to open up their petroleum sectors for foreign and private investment.

Connecticut: Gas, airfare costs don't slow travel plans for lawmakers

High fuel prices and airline fares have many residents curtailing their summer vacations, but some part-time state lawmakers are still making plans for taxpayer-funded travels.

According to the state Office of Legislative Management, nearly two-dozen legislators and their staffs have signed up to attend professional development conferences in New Orleans; Napa, Calif.; and other out-of-state locations.

Carlos Ghosn: Powering ahead regardless

Brazilian super-boss Carlos Ghosn has a plan to beat the energy crisis — he’s pushing both Renault and Nissan into making electric cars. But isn’t his initiative too little, too late?

Fuel costs keep historic military planes from flying

The mission of the Commemorative Air Force is to restore and fly military aircraft. But high fuel costs, a shortage of income and a doubling of insurance costs for the aircraft this year have forced the wing to say no to families who call asking for a flyover at veterans' funerals, Duncan said.

A grease shortage worries biodiesel makers

There's a shortage of fryer grease in America.

Thieves pilfer it by the gallon. Investors wage a bidding war for every golden drop. Add to that the soaring price of soy and canola seed, and you can understand why 26-year-old Libby Rodgers, who hopes to launch a biodiesel company, won't reveal the sources of her blend.

"I don't want to shoot my mouth off," says Rodgers, who collects grease from places around Prineville that she won't name. "I can't say too much about my feedstock. It is just so competitive."

Not long ago, restaurants might have paid Rodgers to haul away their oily dribbles. But with a runaway commodity market and growing friction in the food vs. fuel conflict, secondhand grease has become the diamond of gemstones to biodiesel brewers.

Tire shortage a big problem for companies that use heavy equipment

"You know, you've got all these emerging nations … that are all growing like crazy, and they're developing infrastructure," he said. "And so those tires are being demanded like never before all over the world. So it keeps the supply short for tires that aren't made in big quantity, and also it keeps the price high across the board."

Clean energy plant may boost oil recovery

Oil giant BP and Rio Tinto, one the world’s largest mining companies, plan to spend nearly $2 billion to build a clean energy plant in Kern County that will bury greenhouse gas emissions in nearby oilfields.

Iraq talks with Kuwait, Iran on shared oil - report

DUBAI (Reuters) - Iraq, home to the world's third largest proven oil reserves, is in talks with neighbouring Iran and Kuwait to reach a deal to pool shared oilfields, the London-based Asharq al-Awsat reported on Sunday.

"Iraq has entered negotiations with Kuwait and Iran," it quoted Iraqi Oil Minister Hussain al-Shahristani as saying.

"We have informed them of the necessity of signing an agreement to unify the oil fields and to move away from a situation where each side has control from its side as that will bleed these fields in an uneconomical way."

Jonathon Porritt: Britain should have 'zero net immigration' policy

Britain should set an example to the world by reversing its steeply-rising population growth and allowing no more people into the country than leave, the Government's chief "green" adviser has said.

Jonathon Porritt, chairman of the Sustainable Development Commission, said it was entirely possible to be "very progressive" on immigration while still having a policy of "zero net immigration" and no further population growth.

Surge in oil prices leaves economy facing stagflationary shock

Sushil Wadhwani, a former member of the Bank of England’s monetary policy committee who now runs Wadhwani Asset Management, said he was very gloomy about the economic outlook.

“We have the classic problem of a stagflationary shock,” he said. “We have a slowing economy, the European Central Bank telling us it is going to put interest rates up and now this. The world has become a very unfavourable place. Muddling through this is going to become very difficult.”

Canada Oil Minister: US Willing To Resolve Anti-Emission Law Impact

AOMORI, Japan -(Dow Jones)- Canada has received "very positive feedback" from Washington that new U.S. energy laws targeting high-emission unconventional fuels won't impact its oil sands exports, the country's minister of natural resources said Sunday.

In an interview during the Group of Eight Energy Ministers meeting in Japan, Gary Lunn said Washington has signaled to Canada that issues arising from the U.S. Energy Independence and Security Act will be "addressed and resolved."

The Case for Flexible Fuel Vehicles

Bud McFarlane served in the Marines and, years later, as President Reagan's national security adviser. So I listened up when, at a Foundation for Defense of Democracies workshop on energy security, he said of Saudi Arabia's oil facilities: ``Any self-respecting suicide-bomber could take them out. Any artillery man could do it, too."

Oil: Open Up Federal Lands

The more we look for oil and natural gas in the United States, the more we find. If only we were allowed to go and get it.

According to the Department of the Interior (DOI), huge onshore deposits of energy can be found on federal lands. Yet much of this energy is either explicitly off-limits or hampered by regulatory constraints that effectively make it so. Part of the solution to high oil and natural gas prices lies right under our feet, but Congress won't change the laws that keep this domestic energy locked up.

Scarcity in an age of plenty

The world needs to rethink the sources of growth. If the foundations of economic growth lie in advances in science and technology, not in speculation in real estate or financial markets, then tax systems must be realigned. Why should those who make their income by gambling in Wall Street’s casinos be taxed at a lower rate than those who earn their money in other ways. Capital gains should be taxed at least at as high a rate as ordinary income. (Such returns will, in any case, get a substantial benefit because the tax is not imposed until the gain is realized.) In addition, there should be a windfall profits tax on oil and gas companies.

Gas price record reaches $4 a gallon

NEW YORK (CNNMoney.com) -- Gasoline rose to a milestone mark Sunday as the national average compiled by motorist group AAA reached $4 a gallon for the first time.

The national average for regular unleaded rose 1.7 cents to $4.005, according the daily measure on the group's Web site. That surpassed the previous record of $3.989 set Thursday.

Exxon Mobil CEO: energy nationalism to blame for high prices

ST. PETERSBURG, Russia (MarketWatch) -- The increasing role of governments in the world's oil industry is partly to blame for higher prices, ExxonMobil's Chief Executive Rex Tillerson said Saturday.

"Energy independence have become other words for isolationalism and protectionalism," he told an economic forum in St. Petersburg.

OPEC needs real supply threat to meet: source

DUBAI (Reuters) - OPEC has no plans to meet to discuss oil's surge to a fresh record, and would need to see a real supply threat to gather before the next scheduled meeting in September, an OPEC source said on Sunday.

G8 energy ministers look inward on oil

AOMORI, Japan (Reuters) - Group of Eight energy ministers looked inward for solutions to record oil prices on Sunday, touting the need for domestic efficiency rather than piling pressure on a resistant OPEC to pump more crude.

Total: World oil output to reach 95 million b/d by 2020

PARIS -- Worldwide oil production will stabilize at about 95 million b/d before 2020, including extra heavy crude from Venezuela and Canada, said Total SA Chief Executive Officer Christophe de Margerie based on a long-term, internal company oil study, just released.

Energy savings and efficiency are therefore "absolutely necessary" to limit an ever-increasing demand pulled along by emerging countries and transport with an ever stronger focus on light products, the study said.

Rudd calls on G8 to pressure OPEC

Leading nations should apply a blowtorch to the crude oil cartel OPEC, Prime Minister Kevin Rudd says.

Mr Rudd admitted the only way petrol prices could be cut significantly was for OPEC - the Organisation of Petroleum Exporting Countries - to up supply.

Iran luxury cars to be barred from cheap fuel: report

TEHRAN (Reuters) - Drivers of luxury cars in Iran will no longer be able to buy heavily subsidized gasoline from June 21, official Iranian media reported on Sunday.

It is the latest change of a rationing system launched a year ago under which motorists can buy 120 liters per month at the price of 1,000 rials per liter (around 11 U.S. cents), some of the cheapest fuel in the world.

Iran is the world's fourth-largest oil producer but lacks enough refining capacity for domestic needs, forcing it to import large amounts of gasoline and burdening its finances.

Boom times wane even in oil-rich Venezuela

Stanford University political scientist Terry Karl says oil booms always send growth soaring — until an economy reaches what she calls an "absorption crunch."

"You just can't absorb that huge influx of money properly," Karl said. "You get problems with your prices, you get problems of supply. ... All those bottlenecks slow down growth and eventually create inflation."

Oil supply adequate, no calls for OPEC meet

Oil was becoming more difficult and costly to produce, and global supplies were nearing their peak, Ghanem said.

"The easy, cheap oil is over, peak oil is looming," Ghanem said.

Ghanem said last year that it may not be possible to boost global supply beyond 100 million barrels, from about 87 million bpd now.

Economy casts shadow over summer camp

To keep up with record breaking gas prices, many sleep-away camps have had to cut back on field trips or choose destinations closer to home base. Some day camps stopped providing door-to-door transportation and are implementing drop off points.

Other creative solutions include using golf carts and scooters instead of cars for driving around camp, promoting self-propelled sports, such as canoeing and kayaking over speed boats, and cutting back on water skiing, according to the ACA.

Gulf inflation threat mounts as oil hurdles to $150

DUBAI (Reuters) - Oil's rapid acceleration toward $150 a barrel threatens to spur Gulf Arab inflation to new records as currency pegs to the ailing U.S. dollar prevent the oil producers from mopping up excess liquidity.

As Gulf central bankers prepare for a key meeting in Doha on Monday, the oil price surge places more pressure on Gulf states preparing for monetary union to follow Kuwait's lead and revalue their currencies to fight inflation.

Running in Circles Over Carbon

Supplying electricity is not like most other businesses. Unlike the companies that make microchips, clothing for teenagers or snack foods, the companies that make electricity can see no advantage in going first. This is true for the traditionally regulated utilities that can charge everything to a captive class of customers (if regulators approve), and it is also true for the “merchant generators,” who build power plants and sell their output on the open market.

Report from Mongolia

Last night we had a freak thunderstorm in Ulaanbaatar, which turned into a sandstorm in some places and a mudstorm (!) in others. I assume the lightning started forest fires around the city, as today the whole city has been full of smoke and visibility is very poor. To make things worse, I don’t think Mongolia has the capacity to put out the fires, so they will probably go on until it rains, destroying more and more of the already rather desolate environment around UB. Everybody is praying for rain.

And just two weeks ago we had a freak snowstorm, which killed more than 50 people.

Mongolia observed a day of mourning on Saturday (May 31) for the 52 people killed in a heavy snowstorm that devastated seven provinces last week.
The storm hit the Tov, Gobisumber, Dornogobi, Dundgobi, Khentii, Dornod and Sukhbaatar aimags suddenly on May 26-27, leaving hundreds of gers destroyed and thousands of livestock dead in its wake.
Flags were lowered to half-mast and all entertainment events were stopped on Saturday.
Of the 52 people killed during the storm, 14 were children, according to the National Emergency Management Agency (NEMA).
“During the storm, a total of 254 people went missing. After the immediate rescue operation, 202 people were found alive and 52 people were found frozen to death, 14 of them were children,” a NEMA press official said.


This country has been hit very hard by climate change, and the traditional nomadic culture and lifestyle, which was ecologically sustainable for hundreds if not thousands of years, is becoming harder and harder to keep up, with livestock starving and herders moving to cities. NatGeo has a good report here:


More info can be found here:


This is a wonderful country with friendly and incredibly hospitable people, but the future looks bleak. Mongolia depends on Russia for practically all her fuel imports and on the other side on China for food and other consumer goods as well as trained labour. Those two countries (and many western companies) also covet the considerable mineral resources of Mongolia. Some formerly pristine areas have been turned hellish by mining, and the trend seems to be accelerating. Mongolians have traditionally – and very sensibly, if you ask me – refrained from disturbing the land by digging holes in it, and now that foreigners are doing that and getting very rich, there is understandably a lot of resentment, especially among poor people. From what my expat friends have told me, Ulaanbaatar has become considerably less safe for westerners in recent years, and I for instance regularly get people spitting in my direction when walking in the street.

As for oil, I believe there is plenty of it, but it hasn’t been developed and is usually found in inaccessible areas. I somehow don’t believe much of the stuff will ever be extracted, especially if the s**t is about to hit the fan.

Food prices have gone up a lot recently:

"We demand that the government of Mongolia take concrete action to stop the rising consumer prices which enrich a few companies and make lives of thousands of Mongolians unbearable," said S. Ganbaatar, president of the Mongolian Confederation of Trade Unions, which organized the protest.
He said the price of a 25-kilogram, or 55-pound, bag of flour rose to $21.40 from $7.70 four months ago. He said the confederation would organize a nationwide strike if the government did not act to lower prices. The higher wheat prices were passed on to consumers a week ago when the price of a loaf of bread increased by about 50 percent.


This is really serious: I often see dignified old ladies in supermarkets buying nothing but bread (obviously the cheapest kind) and tea. It makes me feel guilty, when my basket has Finnish cheese, Hungarian bacon and Czech beer in it…

What makes me very sad is that young middle-class Mongolians, many of whom speak good English and love to come and talk to me, think that things are looking up and in a few years Mongolia will be a rich and powerful nation. Do you think I should tell them my doomer views?

If people are interested, I can write more reports from Mongolia in the future. And should you have any questions, I can try to answer them.

Thanks for the report. I would very much like to hear more from on the ground in Mongolia, a place I have always been fascinated by.
It seems like changing and challenging conditions are developing.

Do ordinary people connect the changing climate with pollution from wealthier nations? That is, do they blame us? Or are they so eager to join us they don't care what happens to their traditional way of life?

Mostly the latter, at least the middle-class people. I haven't really talked to poor people, as they don't speak any language other than Mongolian, and I haven't quite mastered that yet. And people are not well informed: of all the people I have talked to, only a US-educated banker was knowledgeable and duly worried about climate change. Generally people just don't know why the climate is changing.

Hi Jussi--As with everyone else reporting from elsewhere on the planet, I very much value yours, too, as we all need as much intell on events as possible to supplement what isn't provided by the corporate propaganda system.

Leanan, did you mean "do ordinary people blame every weather event on galactic climate change?"

I think the answer depends on if the "ordinary people" are ignorant, and watch too much television. Most "non-ordinary people" would recognize the silliness of trying to blame climate change for any single storm event.

The Galactic Climate Changers are very much like our ancestors who blamed their angry godz for unwelcome weather. I wonder which group was more ignorant - our ancestors or the ALGorians of today?

Eh? She specifically asked if the Mongolians blamed climate change on 1st world polluters. Since 1st world polluters are the main cause of climate change, that is a sensible question. There was nothing in her post about any "single storm event".

I would expect that the Mongolians don't watch a lot of American TV, so they are spared silly commentators blaming every heat wave on global warming. They are also spared silly commentators archly asking, "if there is global warming, why is it so cold today?" (wink, wink, nudge, nudge). And they are spared the endless parade of AGW deniers that are trotted out to provide "balance". In short, they are probably ideally situated to understand the real causes of climate change.

You're right shargash, Leanan was talking about climate change in general, not the specific "freak storm" that the original poster began his post with.

You do understand my point though as you describe it perfectly in your second paragraph. But I disagree with your last sentence. I bet most mongolians do not understand the concept of climate change or connect the vagaries of weather to climate change. They more likely invoke some god.

This is based on....? Their 98.7% literacy rate?


Two posts, two insulting posts.

You most likely invoke some seer to devine your data.


Their literacy rate is not relevant. Look at the rest of the literate world and notice it is just as ignorant when it comes to galactic climate change. And pointing out this ignorance is not an insult. The constant media-hyped idiocy of AGW is the real insult (as well as a horrific distraction from REAL problems like peak oil).

"Global Warming/Climate Change" is just the modern equivalent of "Thor," godz of thunder, for the majority of "literate" but ignorant peoples around the world.

We do not understand the climate system well enough to make short or long term predictions with any confidence. But that doesn't stop the "Literate Public" from blaming weather fluctuations and freak storms on the AGW God.

The scientific conclusions are in.

There is a greater than 90% chance that the observed warming is primarily caused by human activity

That is the CONSERVATIVE and CONSENSUS conclusions of the best scientific societies in the world.

A mere 30% probability will make Climate Change a more important issue for the long term good of humanity than Peak Oil.


Alan, I don't doubt human activity has been and will continue to alter the climate - just as past megafauna altered their climate.

What gets tiresome is the blaming any current weather events or weather patterns on AGW, as well as the assinine predictions made for future changes in climate - we do not understand the climate system well enough to make any reliable predictions.

Good examples of assinine predictions would include "a mere 30% probabilility will make climate change a more important issue for the long term..." Why did you pick "30%" as your "probability" ??? As long as you are pulling numbers out of a hat, why not pick 26.5%% or 92% for something you cannot possibly measure anyway (the same for your "90% chance" in the bold sentence)?

As for the long term, I suspect that the survivors of our Oil-induced population overshoot will adjust to the climate they encounter - just like our ancestors did for the past 100,000+ years.

I really look forward to seeing how concerned people are about climate change over the next decade as oil depletion really starts kicking our ass. Climate change is a worry for the luxuriously wealthy . And that is going to be a fast-dying breed. Lets ask the masses how much they care about climate change when they are freezing or starving because of the collapse of our oil-based civilization.

You are the one with the asinine analysis, not I.

The "more than 90%" not "90%" (it was dropped from a higher % to get a consensus of all responsible scientific societies).

The 30% figure is a reasonable judgment call based upon the precautionary principal. If there is a 30% chance that I will develop a certain type of cancer, it is valid to get screened for that cancer every 4 to 6 months. The same may be true if there is only a 20% chance etc.

Climate Change = Famine and MASSIVE population movements. Since it is human caused it will happen MUCH faster (decades instead of millennium perhaps). What we can adapt to in 1,000 years is more difficult to adapt to in 80 years.

Peak Oil is primarily a worry for Suburban Americans and poor Third Worlders. Most other societies can adapt more easily to reduced oil use. Not so for Climate Change.


So your "more than 90%" estimate was based on political consenses of "responsible" scientific societies - and how exactly did they pretend to derive such a precise number about a system they understand so poorly?

And the "30% is a reasonable judgment call" ... based on what? "Reasonable" to whom - those who want to invoke an imaginary "precautionary principle" based on some imaginary probability?

Peak oil is a worry for the entire civilization - rich and poor and all those in the middle. Your opinion that we can "adapt more easily to reduced oil use" is an opinion you may hold dearly (and may repeat over and over in your prayers) but is certainly not based on any reality.

As for your "cc =Famine and MASSIVE population movements" - famine, yes, for some in some places at some unknown point in the future over some time frame we could only make wild guesses at. Peak oil will have the same effect starting now.

And to say "since CC is human caused it will happen MUCH faster"... again, pulling numbers out of a hat (although here you at least stuck with "MUCH faster" and avoided pulling some actual, funny number out of a hat).

Thor or Algorian Hansen, pick your god and shake your fist at his next thunderstorm. Enjoy.

As bad as Peak oil is, Climate Change is the more important, the longer lasting and more intractable issue. You only focus on the immediacy, which is profoundly wrong. And I can see that you have drunk the neo-con/Exxon-Mobil Kool-aid.

*ANY* steps towards Peak Oil mitigation should also help, and not hurt, Climate Change. Bicycling helps both, walkable neighborhoods help both, Urban Rail helps both, electrified railroads help both, wind Farms coupled with HV DC lines and pumped storage help both.

Our children and grandchildren will be better off if we did without CTL, tar sands and oil shale. Even if we have to eat tortillas with 42 F heat in the winter instead of making the corn into ethanol, that is the BETTER choice for those that look beyond the fiscal year.


The "more than 90%" not "90%" (it was dropped from a higher % to get a consensus of all responsible scientific societies).

I believe this is incorrect. It was dropped due to political interference, not scientific uncertainty or argument. It was news at the time that the final report had, yet again, been watered down once it went to the broader commitee... where the politicos held sway.

Here's one: Scientists, governments clash over warming report

More interference



Mongolians are going to be more in tune with climate change because of their traditional lifestyles.
In a nomadic herding culture climate is literally a matter of life and death, and oral traditions will have been handed down for generations about hard times which caused great suffering.
In fact at some times in the past drought is supposed to have differentially killed those cultures heavily dependent on the horse, whilst favouring those who were more orientated to cattle as they have more efficient digestive systems.
Since the horse is good for warfare, it was usually the dominant culture that missed out, leading to change in the rulership of the steppes and the famous mass migrations and invasions.
Just as traditional cultures in the Indian ocean knew exactly what to do when the Tsunami came, and ran to high ground, the Mongolian herdsman will be in tune with his environment to an extent we can barely imagine.
Even his urban compatriot came from the land recently enough to understand these things.

I hear and agree with what you are saying here davemart.

The keys in your post, in my mind at least, are your references to "hard times which caused great suffering" in the past, the "past droughts," and the resulting changes in the human societies that occurred then.

These climate phenomena have been with us forever. Why now blame every "freak storm" on AlGorian Hansen, the two-headed God of Climate ???

Climate change is interesting and we should continue to monitor and study it for as long as we can afford to do so.

But don't be surprized if in the near future people ignore the blather about climate change, and instead resort to using nuclear, COAL and <*>gasp<*> plain old dirty, carbon-spewing fire pits and places to keep warm and eat, etc.

Change in climate will always have it's most profound effects on marginal environments like the Mongolian steppe or the Australian outback.
Although it is true that individual weather events should not be directly attributed to Global warming as the popular press is fond of doing, this in no way affects the basic arguments and the fact that this is popularly misrepresented will not stop climate change.
With growing shortages the emphasis is indeed likely to shift, but it is entirely possible that this may have grave consequences.

You seem to think that I was mainly talking about "freak storms". Have a look at the links I posted. This country is so fu**ed because of climate change, I would find it offensive for you to deny this if I didn't know your other rather unsophisticated views.

We might not understand the climate sstem well enough to make long term predictions with any confidence but I see no lack of confidence by or in tv weather forecasts. As a matter of fact, here in the Caribbean we rather depend on them to let us know when hurricanes are coming, Added to that, fairly detailed recording of rainfall, wind and temperature data has been going on in the US for over a century and less structured but nonetheless reliable records of weather data are available for some locations going much further back in time. It would seem to me that we are witnessing the beginnings of a change in weather patterns that is unprecedented in human history.

Why does that matter? We are the only species on the planet with the amount of data that we have (recorded history). We are the only species that can analyze this data and come up with formulas that give us some ability to predict what will happen in certain situations, with some amount of accuracy. We are probably the species with the greatest ability to determine our future. (I'd bet we are the only species that makes 5 year, 10 year and lifetime plans!)

So, if you want to continue living like the less intelligent species on the planet and ignore the warning signs that the climate is sending us, go right ahead. I guess the question asked by Bob Shaw in his signature is relevant.

Are humans smarter than yeast?

Alan from the islands

Peak oil is here and now. We understand it's ramifications and our very few options of dealing with it Now. We do not have the time, resources or public attention span to waste on WAGs about future climate conditions.

Climate Change is an amorphous bogeyman that built on WAGs. It is more akin to the fairy tales our ancestors told their children to keep them out of harms way.

Galactic Climate Change is a HORRIBLE distraction for the public at this point in time that breeds complacency. The public, like the Fraud Al Gore, does nothing more than make a few cosmetic changes (e.g. light bulbs) for appearences sake and go to a few "protests" because some celebrity fraud will be there. They might vote for "green" politicians, but that is nothing more than a token and causes nothing but more political boondoggles (please spare us the "protocols" that all the nations ignore anyway).

Climate change Politics interfere with Peak Oil preparation.
Many of the "coping mechanisms" for peak oil (coal, nuclear, wood etc) will conflict with the wishes of the Algorian Hansen worshipers, causing us to waste more precious time and resources. Too bad.

The fact is eating and staying warm during the Energy Descent will take precidence over some imaginary projections about future climate change. Worrying about AGW/CC is a luxury we can no longer afford.

I honestly don't understand where you are coming from. I suppose you just don't understand science anymore, or alternatively you just choose to ignore it. Well, have a great time!

Friend, I am not going to get into this with you beyond this post. Even the people who created the "view" you hold have backed off of it.

FACT: Virtually all of the "science" for anti-AGW was funded and supported by Exxon witha plan taken from the Big Tobacco playbook. (This is fact, not heresay.) Period.

FACT: Almost none of the "science" was actually science. Virtually all of it was review of others' research with a bent towards interpreting to fit their agenda. What little true science has been undertaken has been refuted by additional science.

FACT: The other great scumbag in this is the Bush Administration, which knowingly and intentionally gutted, suppressed and misrepresented it's own research findings.

FACT: There is virtually no other source for the anti-AGW stance than Exxon and the Dumbya administration and BOTH have (mostly) disavowed that stance. The Dumbya administration has 100%.

FACT: You are either a shill, brainwashed by the above, or just not able to understand basic science.

Consider yourself lucky I am not an admin on this site, for I would ban you faster than you could read this sentence. To stifle free speech? No. Lines must be drawn. You cannot support your stance with science, so you should not be allowed to post. I believe that fits within the guidelines of the site. And, because you are dangerous to the continued existence of mankind on this planet.


Their literacy is not important? That's an ignorant statement. You are aware that global surveys on the issue found only two places in the world where the majority of citizens doubted AGW? Guess where.

Did you say the US and Britain?


So the "superstitious" Mongolians can't think, but only two of the supposedly most advanced nations on Earth allow themselves to be brainwashed by PROVEN liars...


How do you find personally, strength to continue and hope for the future, when you have now seen the reality out there? Do you feel you should or could help these people?

I had a similar experience while making a trip to the Atlas of Morocco to see the ingenious peoples there. Ecological devastation was everywhere - reducing water tables, soil depletion, pollution and dumping of rubbish and toxic waste. Expanding populations, adopting an unsustainable way of life - even in the mountains – plastic bags with shopping from the supermarket, a car to commute to town, sprawling suburbs. All supported by infrastructure so cheaply and poorly constructed that it is already falling apart. And all running on heavily subsidized oil.

The population uneducated and unaware of all this - making the wrong conclusions and the wrong choices, wanting more development, more infrastructure, more consumption - becoming even more dependent on imported resources – destroying their simple and sustainable nomadic and agricultural life-styles - to be replaced by monocultures of orange trees and oil palms, consuming the water resources, depleting the soil: salination by irrigation, oil based fertilizers, insecticides...

I made good friends there, whole families who offered their hospitality and friendship, all hopeful of the future. We made arrangement for lids for their wells so that animals and dirt wont fall into them, a school for a village and planting of trees around it. Yet people there were still asking for the cornucopian dream that I as a westerner represented to them – drinking water piped and pumped to every village, to every house, toilets, roads, electricity for their TV. And finally I got wholly disillusioned by the way the local people did not have any initiative themselves, and no leadership among them to have begun to achieve any of these things themselves. They had already been trained like house pets to expect the government or some outside do-gooder to come and fix it for them.

So I guess I just wanted to warn you, not to make the same mistakes that I did – thinking I could do some good somewhere – committing to things beyond my control and strength...

Thanks for your reply.

I think I feel exactly the way you did. I honestly don't think there is anything I can do to help them, and it breaks my heart. Mongolian children, in particular, are lovely, always cheerful and helpful, they give me gifts and it would be terribly rude of me to decline them. What the future holds for them is something I try not to think about, just to stay sane. I don't even want to tell Mongolians about climate change, or indeed peak oil, there is absolutely nothing they could do about it anyway.

It is very hard, but somehow you just have to learn to deal with it, or at least not to get too depressed.

Jussi - Thank you for your post. It is so easy to forget that there are real innocents in the mix of peak oil and climate change who will suffer for the sins of the rich. I'm touched!

"Mongolian children, in particular, are lovely, always cheerful and helpful, they give me gifts and it would be terribly rude of me to decline them. What the future holds for them is something I try not to think about"

Thanks Jussi for bringing local perspective on what our resource consumption is doing to real people. I have a comment about this phrase:

was ecologically sustainable for hundreds if not thousands of years

I don't know for sure, but I suspect Genghis Khan's imperial expansion was driven at least in part by resource constraints in the Mongolian steppes.

Thank you, Jussi,

It's always good to hear firsthand reports. It's awful about the deaths.

How long have you been there? I'm just curious.

About three months now, and I've got a contract to stay until June 2009.

I'd like to add my thanks as well, Jussi. It's always illuminating and touching to receive reporting like this, bringing the focus down to the local level in areas far different from my own.

Rudd wants the G8 to pressure OPEC
Mr Rudd admitted the only way petrol prices could be cut significantly was for OPEC - the Organisation of Petroleum Exporting Countries - to up supply.
After Friday all national governments are at the blame stage of peak oil although this has been the main response for a long time. It seems Australia did no better by electing this government.
But at least he is making statements.
I expect our Canadian PM to make a wonderful statement something along the lines of: "Ya!! What you guys said! Especially Mr. Bush."
When the governments get to the anger stage it will be even more scary.

"The _____ way of life is non-negotiable"

Rudd and Cheney share a similar philosophy.

Aus has one of the most inefficient personal transport fleets in the world, sucking down over 11 l/100km on average.

It appears that telling yobbos to give up their Kingswoods is out of the question.


Yeah, I wonder where Big Gav would place Mr Rudd's "blowtorch?"

There're far more barrels of oil to be found in conservation than in any rise in supply. And based upon dirver's behavior I saw yesterday in my trip to and from Portland on I-5, there's quite a long row to hoe.

"There're far more barrels of oil to be found in conservation than in any rise in supply."

This statement is getting tired.

The only way that conservation works is if it is top down.

Conservation is just glossy way of saying someone too poor to pay for energy doesn't get any.

As long as you have the money you will continue to drive to and from Portland when ever you damn well please.

A bit hippo-critical?

"Conservation is just glossy way of saying someone too poor to pay for energy doesn't get any."

i'm not too poor to pay for energy and i try to conserve when i can.

"The only way that conservation works is if it is top down."

what a crock! one doesnt have to take on the whole world's problems to make a difference. take a look at what happened to energy consumption in the late '70's.

elwood - "one doesn't have to take on the whole world's problems to make a difference"

My sister uses reusable bags for grocery shopping and she tries to recycle. However she eats meat, drives an SUV, travels via jet 1/2 doxen times a year and she is planning a huge wedding for her daughter in Vegas. She sees her conservation efforts as heroic.

Truth is she is delusional as are a lot of other first world consumers. Most of the readers on TOD can see the Apocolypse coming and many have struggled to try and change course in time but in the end we are probably just spitting into the wind.

Perhaps it is time "...to take on the whole world's problems..."

".....she is delusional....."

reminds me of an aquaintence who insists that the bathtub cools before draining(heating season) and then jumps in his car and commutes 45 miles.

imo, recycling removes some of the guilt associated with consumption and therefore doesnt necessarily result an any net energy saving. imo, recycling is a feel good issue, politically correct.
reuse it, wear it out or do without is more my style.

and as stated, i try to conserve when i can. i can probably do more.

imo, recycling removes some of the guilt associated with consumption and therefore doesnt necessarily result an any net energy saving. imo, recycling is a feel good issue, politically correct.

recycling saves a ton of energy and pollution, especially for aluminum.


Recycling is quite usefull for keeping the garbage flow well controlled. It has for some time made economical sense for newspaper, aluminium and other metals and the glass is a nuicence in the incinerators that produce electricity, district heating and district cooling. The plastic fractions has started to be valuble and large scale biogas manufacturing of the organic parts is the next garbage buisiness.

Most of the readers on TOD can see the Apocolypse coming and many have struggled to try and change course in time but in the end we are probably just spitting into the wind.

oh yes, the coming apocalypse of not being able to drive an SUV and instead getting a Geo Metro, riding a bike or even taking a bus!

will Copploa make a sequel?

i think the comment refers to the coming apocolypse of mass starvation and people dying in vast numbers around the world as we scrabble to create localized lifestyles that ensure we and our loved ones make it through the bottleneck

... we are probably just spitting into the wind.

Yes -- when I observe my friends' and acquaintances' reactions to any attempt to draw attention to fossil fuel depletion, I have the same feeling. The natural reaction is to shoot the messenger rather than to listen to the message.

Today I read reports in Germany about natural gas prices expected to skyrocket by 40% this Autumn. Still no mention of peak oil, peak gas, peak anything --- all political parties, including Greens, avidly seeking scapegoats (too little regulation, too much regulation etc.).

Should we throw in the towel? Let the lambs gambol on rather than spoil their day by mentioning that their future is somewhere at the end of Abattoir Avenue? And coming soon.

Most of the readers on TOD can see the Apocolypse coming and many have struggled to try and change course in time but in the end we are probably just spitting into the wind.

we can use less energy and still have a good economy. the EU uses 1/2 the energy we do and they have the same size GDP. is it really a disaster that people can't ride around in an SUV anymore and instead have to get a Geo Metro? why does it have to be the apocalypse? you can still fit giant speakers in a metro.

"we can use less energy and still have a good economy"

like the one we have now? - using a totally delusional birth/death model, not counting those who have fallen off the unemployment rolls - the market tanked largely on the news that unemployment has climbed to 5.5% - this is likely to continue as Ford and GM close plants (and all the supporting factories do the same) - as construction starts and commercial real estate falls apart - as consumer spending contracts and as banks fall and lay off employees

and where are the new jobs supposed to come from? you always talk like "oh, they'll just spend less $" - we're talking about people who aren't EARNING ANY money any more - and aren't likely to for some time (and if energy continues to decline maybe never) - this snowballs until it is an avalanche

as for the comparison to the EU - we aren't set up like the EU - we don't have (remotely) the same infrastructure - so we are unlikely to have the same solutions to the upcoming problems

the way exports are declining - that Geo Metro is probably a poor investment and will be sitting abandoned before too long

we can use less energy and still have a good economy

like the one we have now?

Unless you see substantial differences between the fundamental structure of the US and EU economies, yes.

Like he said, the EU uses half the energy and oil per capita that the US uses, but has a similar level of economic activity and, by most measures, a better quality of life.

And the EU hardly represents any kind of minimum - there's plenty of wasted energy and oil there, too. Energy and oil consumption can fall a long, long way before people in the West will be anything more than inconvenienced.

and where are the new jobs supposed to come from?

Where are the old jobs going to go?

Jobs building gas-powered cars are likely to go down; jobs building electric-powered ones are likely to go up. Jobs building airplanes are likely to go down; jobs building wind turbines are likely to go up. Jobs building freeways are likely to go down; jobs building pumped storage are likely to go up.

High oil prices haven't dumped vast numbers of people out of work in the rest of the world, so there's no reason to assume they'll do so in America. Petrol and diesel are already effectively $300/bbl in Europe, but it doesn't seem to have harmed anything except their oil consumption.

as for the comparison to the EU - we aren't set up like the EU - we don't have (remotely) the same infrastructure

I bet there'd be a lot of jobs in building that kind of infrastructure, no?

the way exports are declining - that Geo Metro is probably a poor investment and will be sitting abandoned before too long

The US and Canada together produced 11Mb/d last year (not including refinery gains), or about 1bbl/day per 30 people.

In that same year, the UK consumed 1.8Mb/d for 60M people, or about 1bbl/day per 33 people.

The difference? When gas was $1.50/gal in the US in 2000, it was $4.50 in the UK. Their oil consumption has been falling for a decade.

North America's own production is plenty for the Metro, just provided he's sensible with it. Hummers and hundred-mile commutes may be on their way out, but as far as I'm concerned that's good news.

How much has the UK consumption fallen during the last decade ?

** EDIT NEXT DAY : I understand Pitt , you just threw out some private thoughts .......

Pitt, I'd agree with you if:

A) we hadn't had a housing bubble and weren't stuck with millions of people living in homes they are upside down in.
B) we didn't have such enormous debt at every level of life - federal, state, local, corporate, and individual.

Your idea that jobs will come from trading in our inefficient lifestyle for an efficient one would be great except we can't afford to buy a new set of life tools (cars, houses mainly), and building them all will require a lot of the energy that we're currently finding so expensive.

The infrastructure we might build tomorrow depends on the infrastructure we have today.

The infrastructure we might build next year depends on following that process forward through 365 nonlinear iterations. It isn't a linear jump from now to a year from now.

And the infrastructure we have today is highly petroleum dependent, whether we build airplanes, ICEs, and paved roads, or turbines, batteries, and pumped storage.

As far as whether or not the people in the West are "inconvenienced", let's have everyone in the West take a week off from their antidepressants and televisions and see how much inconvenience they are willing to tolerate.

The only energy wasted in the world today is thermodynamic, the heat we can't capture and use. The rest of the energy in our complex system is being used to feed, clothe, shelter, manufacture, transport, support infrastructure, reinforce and defend social systems and hierarchy (church, government, the wealthy, the media, corporations, law enforcement), and provide substitutes for unfulfilled human needs (alcohol, drugs, salvationist religion, television, porn, workaholism, profiteering, exploitation).

Every bit of "waste" is someone's livelihood. And with 6.7 billion people on the planet, nearly every bit of "waste" will have members of its infrastructure that will rise to defend threats against its collective livelihood.

And the comparison of prices at the pump between countries is getting tiresome, because it always conveniently ignores that the market price is the same worldwide. Then it's either subsidized or taxed, and where the subsidies come from or where the taxes go are also ignored.

Comparing only the pump price of gas in the US vs. the UK is like comparing hunting for 1,000 calories' worth of deer meat to driving to a restaurant for 1,000 calories' worth of venison. The only thing that's the same in both comparisons is the energy content of either food or gasoline, while the surrounding contexts and environments are vastly different.

High oil prices haven't dumped vast numbers of people out of work in the rest of the world, so there's no reason to assume they'll do so in America.

And hitting the brake pedal in my car doesn't immediately stop the car, so there's no reason to assume that my car will ever stop. And while I've been told all my life that I'm mortal, my mortality has not yet resulted in my death, so there's no reason to assume I'll ever die.

I'm sure there's a name for the fallacy that suggests, "it hasn't happened yet, so there's no reason to assume it will ever happen", but I don't know what it is.

- we're talking about people who aren't EARNING ANY money any more - and aren't likely to for some time (and if energy continues to decline maybe never) - this snowballs until it is an avalanche

jobs in the inflating part of the economy- rails, oil mining and etc - are booming. bus companies are making more buses and so are scooter companies. the Doomers/Linearists spend too much time on the negatives of peak oil.

energy is not declining right now.

the Geo is a great investment, I read of one that had a mini biding war for it.

I generally agree with you. However, using 1/2 the energy is still way too much. IMO, Europe needs to halve its energy use, and then have it again, by somewhere between 2020 and 2030. And make no mistake: they WILL halve it, one way or another.

Where that leaves America is anyone's guess. My guess is that it isn't in a very happy place.

Energy resources in America are far superior to in Europe, if you cope with your financial problems both their energy and strategic position are better.

If you import your oil rising prices cause money to leave your economy.
Tax money is just redistributed within the same economy.
High prices due to taxation in the UK does not have an equivalent effect to the basic price of oil rising to $300/barrel.
Some is counteracted by increased exports to oil exporters, but in general the costs imposed on the oil importing country is much higher.

IIRC, you just took a similar drive. Folks were quite content to speed alnog through Corvallis. And actually, I don't care to drive to Portland.

Hi souperman,

This is interesting.

re: "The only way that conservation works is if it is top down."

Not to ignore the many aspects of this statement, but I wonder if there's some way to look at this in an analytical sense. In several respects...

Define the "top"; see if there's any meaningful way to look at the energy use there - (can it be isolated?)

And what about the role of multinationals (corporate entities) - can they conserve? Or, is it in a sense legally "wrong"? (Not ethically, of course) - if the duty is to maximize profits? Hence the specter someone presented a while back about an even further push to outsourcing in an attempt to cut costs - (more cliff, then more crash, so to speak).

In this case, the case of corporate actors w/out national loyalties (so to speak), how do we define the "top"? Directors? Employees? Customers? Clients?

Is there any way to either encourage or to mandate conservation that is really "top down"?

Remember Westexas' statement about "moving up the food chain" to find a price at which Bill Gates would be forced to conserve.

I wonder about this...

It seems like this is worth exploring.

Thanks for responding Aniya.

Yes I too believe this is worth exploring, in fact it is key if we really want to talk about conservation and demand destruction.

Otherwise all we are talking about is pain and suffering from the bottom up.

BTW this is touched on in Jerome's post re "Anglo disease".

RE: "Scarcity in an Age of Plenty" article.

Short term capital gains were taxed the same as income. The "gamblers" of Wall Street were more likely those who held NYSE stocks less than a year, less than a day. Those who were holding stocks for dividends or long term capital gains more than a year were more likely to be liable for long term capital gains taxes. People who invested in real estate that they lived in were exempt from taxes on the first 250,000 dollars of capital gains. This made real estate investments more likely to form a bubble. The exemptions on interest paid on owner occupied real estate mortgages further compounded the problem of massive debts incurred in order to create a really bad real estate bubble. The Federal real estate taxation system favored investments in real estate over investments in start up companies looking for new energy resources. Thus we live in a society full of empty houses lacking the energy to cheaply heat and cool them, with people more likley to run out of gas as they feared stopping at the gas station.


like all high-level pictures it's both THE explanation and part of an overlapping network of causes that are the explanation... but framing like this is right and like so many other frames SHOULD make it simple for any idiot to GET IT - but sadly this doesn't appear to be the case with far too many people one talks to don't seem to get it however simply it's spelt out


THE first case of murder and suicide caused by North Korea’s new food crisis has emerged with the account of a man who killed his hungry wife and children and then took his own life in despair.

PO isn't just a curve on a graph.

You are right on the money...reminds me of the couple who stored gasoline tanks in their apartment and then they caught fire in the US somewhere.

In the coming months/years , just watch the suicide rate .

Dmitri Orlov - In his book "Reinventing Collapse" said specifically that persons who are depressed and drug-dependent will be some of the first casualties.

or unforcently people like me.
i have been on zoloft for most of my life. i tried getting off of it so i could lower my expenses my body almost literally fell apart..

"PO isn't just a curve on a graph."

it's north korea.

I get your point, but DPRK(sic) is not the most apt example.

According to UNICEF several million people starved there during the 1990's while oil was $12-$20/bbl.

Sure, and it was a oil prices that caused that famine too.


This autarkic urban, industrial society had achieved food self-sufficiency in prior decades through a massive industrialization of agriculture. However, the economic system relied on massive concessionary inputs of fossil fuels, primarily from the Soviet Union and the People's Republic of China. When the Soviet collapse and China's marketization switched trade to a hard currency, full price basis, North Korea's economy collapsed. The vulnerable agricultural sector experienced a massive failure in 1995–96, expanding to full-fledged famine by 1996–99.

This autarkic [my emphasis] urban, industrial society had achieved food self-sufficiency in prior decades through a massive industrialization of agriculture. However, the economic system relied on massive concessionary inputs [my emphasis] of fossil fuels, primarily from the Soviet Union and the People's Republic of China.

The bolded word/phrase contradict each other, thus the entry in nonsenseical.

Not really. Outside of fossil fuels N Korea was largely self sufficient and traded little with the outside world.


"An autarky is an economy that is self-sufficient and does not take part in international trade, or severely limits trade with the outside world."
"Today, complete economic autarkies (or autarchies) are rare. An example of a current autarky is North Korea, based on the government ideology of Juche (self-sufficiency). However, even North Korea has a small amount of trade with the People's Republic of China and Japan."

North Korea has problems during any price on oil and fossil fuels since the country is an extremely brutal dictatorship where the leaders litterally can decimate the population by starving people to death or worse.

I am curious about the reaction of TOD'ers about the last sentence presented in the link up top, SCARCITY IN AN AGE OF PLENTY, reading "In addition, there should be a windfall profits tax on oil and gas companies."

The author has no other comments with respect to his tax proposal in his article. I would appreciate comments on why we shouldn't also then have a WPT, as it was last referred to, on producers of other commodities (such as potash) if we are to have one on oil and gas production. Also, how should such a tax be formulated?

As I totally oppose such a tax, I won't provide such analysis, but will comment that it will keep more of our domestic resources in the ground. On leases which already have production, and would share infrastructure, further development would require new lines, tanks, separators, treaters, and the associated place to put them, limiting further development, even if new production were exempted from such a tax. Also, such a tax could only be imposed on domestic production, now in the range of 28-30% of our domestic demand, rendering domestic production subject to an unfair portion of the burden.

Government deficit spending marches on. The debt level has risen to in excess of 9 trillion dollars.


Problems may have occured when FED interest rates were lowered below interest rates paid by foreign banks and the FED had to find ways to borrow money to fund the current federal deficit plus pay the holders of maturing treasury bills deciding not to reinvest in new treasury bills the face value of their notes. Bernanke has warned about rising inflation. The current U.S. inflation excluding food and energy prices was reportidely about three percent and no where near the 100% annual rise in wholesale oil prices. This type of growth rate of oil prices is not sustainable and is attributed to a 2007 decline in the amount of seaborne petroleum available for purchase on the world markets, inflexibility in consumer demand, and constant speculative expectation of higher prices.

A decrease in government spending may be needed to balance the budget. Tax breaks for the wealthiest Americans while assuming the costs of militarily aggressive ventures is failed policy.

"Tax breaks for the wealthiest Americans while assuming the costs of militarily aggressive ventures is failed policy."

it wasnt just the wealthy who got unjustifiable tax breaks. look at the reproduction tax credit that helped so much in getting el'befuddleoso re-elected. and how 'bout that reproduction "rebate" (economic stimulus).

if that war in iraq was actually paid for with hard earned tax dollars, it wouldnt be nearly so popular. fdr is rolling in his grave.

The US (and Britain) needs to sort out it's financial position, but fiscal rectitude in a recession isn't easy or popular. In 1929 at least the US entered the depression in a strong financial position. In both the US and Britain the governments failed to fix the roof while the sun was shining. A new deal now would send the public finances in to meltdown.

Did someone say:'Obama?'

i doubt it considering his advisor's.

Taxes? The problem is we live in a world that is totally reliant on Oil for survival. Oil isn't a commodity like soybeans or lettuce that has lots of substitutes.

Capitalism in a post-peak world will go away.(fighting tooth and nail of course) Future societies will tend toward Fuedalism which will control the commoditities in their local economies.

Trusting the market to provide for your needs is akin to trusting a used car salesman not to lie to you or a rattlesnake not to bite you.

The problem is we live in a world that is totally reliant on Oil for survival.

oil is only 30% of our energy use and there are so many ways to use less oil.

and what % of our agriculture and transportation does oil represent again?

agriculture and transportation can go hybrid or electric, nevermind just regular old conservation.

Hello John15,

How about this agriculture solution?

Karnataka farmers demand poison or fertilisers

..In Hassan, thousands of farmers marched on Friday with poison bottles in their hands to the deputy commissioner's office...
Makes 'demand destruction' pretty obvious, eh?

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

Those two statements are not mutually exclusive, allowing for some hyperbole in being "toally reliant on Oil for survival" (some of us will not survive if the oil goes away, but some of us will).

Blood occupies roughly only 5% of your body volume. I'm sure there are so many ways you could use less blood. Wasting away is one. Chopping off some limbs is one. Dying is one.

RE; OPEC needs real supply threat to meet supply;

When are the press going to satnd up and say "that is a crock of shit". No one is saying it. It is obvious there are supply shortages in over 25+ countries. All the press has to do is list them countires x,y,z have these problems. It is so infuriating when they keep coming up with the same old "the market is well supplied" nonsense, like we have no news from other countires and could not possibly know this!


The US has a long record of taking the best from the nation last defeated.

Thus we have Pravda.

The MSM's job is to keep people doing nothing, not to inform.

Watch our allies/colonies, like the UK and Israel.

Those are the pressure points.

"Try this for sense of humor:

From the PO Forum:

"New postPosted: Sun Jun 08, 2008 8:06 pm Post subject: Re: I´m freaking out now Add User to Ignore List Reply with quote

"Give me three months, I'll buy your kids. $1000 apiece, paid in silver or gold, your choice. They'll be well-treated. They'll be WAY better off. My girl could use some help around the doomstead, and we're going to have our own kids soon. I know we'll need a nanny, so if you have a girl that would be perfect. I could use a couple boys in the field.

PM me for further negotiations."


And next post:


You are really not making the new members feel welcome here.

Please treat them like you would like to be treated.

Thanks."-PO Forum


Case in point:

"US Air Force leaders purged in 'hastily arranged' meetings

One of the Most important stories you will never hear the truth about through the media."

Air Force Chief of Staff General T Michael Moseley and Secretary Michael W Wynne were forced to resign Thursday.
Defense Secretary Gates claims the reason was the August incident, but not for the real reason.

Air Force Chief of Staff Gen. T. Michael Moseley and Secretary Michael W. Wynne were forced to resign Thursday during hastily arranged meetings with their Pentagon bosses.
Moseley was summoned from the Corona leadership summit at Wright-Patterson Air Force Base, Ohio, to an early morning meeting at the Pentagon with Adm. Mike Mullen, chairman of the Joint Chiefs of Staff.
Moseley resigned.

Later in the morning, Deputy Defense Secretary Gordon England was dispatched to Wright-Patterson to ask for Wynne’s resignation, sources said. Wynne resigned during the meeting.

Why "hastily arranged"?"


Panic at the top. Watch the 1974 BBC series "Fall of Eagles" http://en.wikipedia.org/wiki/Fall_of_Eagles.

The current system is crashing faster than the last one.

Nice. I am a WWI historian.

I feel that (almost) everything traces from the Panic of 1907
and WWI and the Truman Doctrine.

Both histories that we have definitely not learned from
and so doomed to "no escape from."

"To have the potential future President and Vice-President of America attend a conference that debunkers have dismissed as a mere talking shop for old white men once again underscores the real influence that Bilderberg enjoys.

Not one U.S. corporate media outlet has made the connection between the location of the Bilderberg Group conference this year and Obama and Hillary's decision to venture out to Chantilly for their confidential "tet a tet".

Not one U.S. corporate media outlet has yet uttered one word about 125 of the world's most influential power brokers meeting behind closed doors to discuss the future of the planet on U.S. soil - while being met by the probable future President of the United States."


Well, it's covered by the Turkish Daily news. What more do you want?

The US has a long record of taking the best from the nation last defeated.

Thus we have Pravda.

The MSM's job is to keep people doing nothing, not to inform.

Of course, as an historian you know we've had Pravda for as long as the USSR did, longer now since USSR's demise.

Personally, I expect the prevailing economic conditions by November to be the most chaotic ever for a presidential election, with real unemployment and inflation close to 20%.

karlof "real unemployment and inflation close to 20%"

If we reach those kind of numbers a Presidential election will be a foot-note. I don't see any scenario that would break down our economy that quickly. IMO Economies are much like eco-systems, they take a long time to break down but once they get nearer the bottom they break down rapidly.

Looking at current numbers I would guess that we are now at the middle of the beginning. When you see inflation at 20% with 20% unemployment we will be at the beginning of the end.

But noone can be sure until we look at this historically.

Hi Joe--"Real" figures are hard to get, although shadowstats is good for inflation. Unemployment is likely already over 13% as many people who want to work are totally marginalized from the labor market and never counted as part of it for the USG metric, where if you worked just one hour during the reporting period you're counted as being employed as opposed to not. In particular, there are a great many students and disabled who would like to be employed but aren't, have ceased "actively looking for work," and are thus drummed out of the total Labor Force from which the unemployment number is derived. Many retirees are in the same situation of wanting to work to supplement their fixed income. So, reaching 20% is, IMO, not as unlikely as it seems at first glance. Hell, for USG purposes, I'm unemployed, although I'm sure they'd try to stretch their metric and call me selfemployed.

My basic contention is that by November economic chaos will be en vogue with both Obama and McCain trying to exploit it with neither providing the truth behind the trouble.

Karlof - So let me ask you, do you think we are at the beginning, middle or the end of this process?

my 2c - but aren't we obviously still just at the beginning of this process as we still have so very very very far to fall

Beginning. As I have said before, we are now somewhat eqivalent to 1921-22 when compared to the events causing the Great Depression. But events happen much faster today than then due to the higher complexity of our system, which allows me to say that our year is equal to three during the '20s (and here I'm being conservative; predictions are fraught with the problem of having too many variables, as I have also said before). Thus we are 3 years away (see previous aside) from our eqivalent of the 1929 events. It is for this reason and others that I highly suggest the presidential candidates come clean with rergard to the likely events to come. In my book, that's called preventative action and can make smart politics.

that sounds plausible until you get to asking politicians to talk straight.

Casandras don't get elected!

Casandras don't get elected!

In the 1960 election, JFK argued we faced a missile gap versus the USSR, a very Cassandra-like warning, even if it was false as it was. Truman's 1948 War Scare arguably got him re-elected. FDR didn't need to say much about the hard times in 1932, and his Innagural Address--"We have nothing to fear but fear itself"--was a combination of Cassandra and pep-talk. I could dredge up other examples, which is why I said "preventative action ... can make smart politics."

Think about it. Are you going to listen to someone who preaches about a non-existent reality, one that doesn't acknowledge the chaotic economic reality hurting so many, or someone who readily admits the reality, provides an explanation for it, and offers a plan to mitigate its effects? Despite our Age of Cynicism, I think straight talk can still be a winner, especially when it speaks to reality and offers a workable solution.

Very good analysis,especially as I agree with it. ;}

Except I think we're in the Florida Land Crash (1928) now.

Start thinking power laws and fat tails and non linear movements.

And I believe we're at 17% unemployed now. You left out military and prisons.

And yes, Goebbels did fashion his Agit/Prop after Madison Ave.


Hi karlof1,

re: "provides an explanation for it, and offers a plan to mitigate its effects?"

This is an excellent point, given (of course) the explanation is one we here consider to be based on "reality" (the word you use).

Many people want to do something positive, think they are doing something positive, don't know what the problem really is.

And, the "plan"(s) needs to be at the community, region, state, national and international level.

People are not aware of what those good plans might be. Nor that their voice counts - or at least, a lack of hearing that voice is the rationale for inaction used by political leaders who actually do understand the situation a bit better.

So, what are your ideas for a "plan"?

Why "hastily arranged"?

Because employees have radar... because the rumor mill works fast.

When the BIG GUY is at the copier doing his own stuff, the word goes around... it's got nothing to do with war and everything to do with the way firings always work.

The 'corporate" explanation of the haste of the firings (below) doesnt hold water. These two seemed to be at the Con not the copier when they were summoned. I think the world is now primed for an Israeli attack on Iran, probibly with US forces followup. There are probably suficient forces in place to make the powers that be confident that they can accomplish the mission and keep the oil flowing. We all know how realistic the planning for the Iraq adventure was. I believe the debate has been one of timing. Do they go before the election in the USA or in the lame duck period after. The question is, do they want candidate A more than B elected or does it matter and will an attack help them achieve this goal or not. I have been convinced that the time period for a pre-election hit is closing fast. If they depend upon a conventional attack then it must be either this week, the last week of June or towards the last part of July in order to eliminate the moon from the equation while they take on the anti-air craft defences. This was the way it worked in the first gulf war and I am not sure they followed it so closely in 2003 but they had already spent several months attriting Iraqi AA defences anyway. The last part of July would be the latest so that they could spin out any negative consequences before the election and re-open the straights if necessary. However, if nuclear weapons are to be used then the timing could be in any of the next eight weeks as the most likely scenerio is Israel using nukes on their IRBMs. The Israelis are desperate to kill Iran as a potential threat and they probably see this year as the last time the USA might allow them to do that. The wild card is how the rest of the world will react to the use of nuclear weapons but having Israel take the heat for that would be perfect. Surly all these world leaders know that oil is peaking and the time is short for Israel to continue to be a supported colony of the USA. In any event, destroying Iran is the last thing the USA and the Saudi royal family need from Israel. Once this is done with perhaps a little for Lebanon and Syria Israel will not be an important factor in the greater purpose and will become more of a danger. Sadly for the Israeli people this act will be the one that seals their fate. If they aren't destroyed from without their economy will weaken to the point that most just get out.
The timeline may look like this: Isreal attacks Iran (conventional or nuclear), Iran retaliates against US forces in the gulf and Saudi and other gulf oil producers and will try to close the straights. The US forces will retaliate massivly designed to destroy the Iranian econmomy. The price of oil goes over $200 per barrel and the world economy collapses. But as the man said, we can plan everything until the shooting starts, after that who knows.

So Gates was in charge of nuke security early in career and is looking to fire a lot more of thoese guys. Are they all christian fundies for whom the constituion is just a piece of toilet paper like GW Bush and who support Israel to the Armageddon end (with the hope of bringing the rapture on sooner)? The military needs a purge of fundies who are absolutely not true American patriots but have created a state in a state. TEOTWAWKI would suit them fine as they think like OSAMA BIN LADEN, death brings you a harem of beautiful women in paradise. Kunstler's blog this last week was rational and moderate in comparison to these nut cases and the very worrying total fools at the head of Israeli government who are just plain stupid and nervous idiots with A-bombs at the ready. Last week lots of action. Senate committtee condemned all the lies made to get into Irak and all the US generals purged and Israel says attack Iran and Obama takes Liebermann aside into the woodshed for a talking to after he gives resounding support speech for Mccain before AIPAC. So the lines are getting drawn after the nomination for next Prez has been cleared and it is clear that The fundies, The Bushies adn the Israelis and their lobby are scared that OBama won't tow the line and protect Israela against Iran or whoever. I think in 5-10 years Israel will have to be evacuated to avoid a serious nuclear conflict. 6 million Jews could be spread around Europe and America. The whole area there is just not safe and protecting them is making the whole world a lot less safe for all the rest of us, long-term, period. I try to be a realist and "unbiased". I hope this shit does not offend anybody way too much. I think it is what is really happening and like PO, triage is necessary and the christian state in state and Israel could be just the trigger for WWIII which could end earth as we know it. Remember the study on a limited nuclear exchange between PAkistan and India ending life on earth?

Adults like Gate And Bush Sr. gotta keep an eye on this. AS for Bilderberger downthread and the link up top about OBama supporting the Carter docrine, disillusions somewhat but I think Bilderberger's are sane people(old money/Realpolitik) and Obama is also sane (not a religious fanatic or full idiot or both see current prez). Bush and Cheney, I just don't know, they can't learn anything new.

Good article on the subject by Robert Fisk in today's Independent:


umm see this which dispite the imagry points out who is surrounding obama and if the public chooses the the barak obama paint job for this country, the engine underneath will still run the same.


The market will always be well supplied when gas reaches $10 per gallon. The statement is irrefutable. There are no shortages for those who have the ability to pay.

This is a good point and one i've thought about. The point is, your statement[ie logic behind OPEC statemnt] puts full faith in the ability of market forces to sort the problem out. I realise you don't think this but surely the public are not so feckless that they can't think it through to conclusion?.


OPEC's position is that Saudi Arabia can increase production, and it's almost certainly true that they can increase production of heavy crude. Also, Khursaniyah is going to come online sometime, with light crude, probably this year.

The problem with the heavy crude is that no one has been able to use it, but there are a bunch of new refineries coming online that have been built specifically to process this heavy crude. For example, Qingdao just started up a couple of weeks ago, with a capacity to process 200,000 barrels of heavy crude per day, and get roughly 1.5x the diesel per barrel out of it compared to most existing refineries.

India's Reliance refinery is coming online in September, will be state-of-the-art, and will have the capacity to process 580,000 barrels per day. These two plants alone will add significantly to diesel supply, and it's diesel shortages that are driving oil prices.

In addition, we have other new refineries coming online, reportedly in late 2008/early 2009 (which probably means spring 2009 and mid-to-late 2009 after delays): Rabigh (425,000 b/d), Dung Quat (125,000 b/d), Fujian (160,000 b/d), and Huizhou (roughly 140,000 b/d)--and all set up to get that higher amount of diesel out of heavy crude.

So, all this new refining capacity, which allows us to take advantage of Saudi production capacity of heavy crude, would be expected to bring prices down, especially when we see seasonal demand lighten up in the fall, and the Olympics are over, allowing China to raise gasoline and diesel prices (presumably triggering a response in demand).

All this capacity for heavy crude processing would essentially make up for the current decline rate in Russia, VenMex, etc. And the let-up in seasonal demand would return us to spring prices after this summer price spike.

The problem offsetting this scenario is the power shortages all over the world. When the Saudis are putting out an order for 160,000 tonnes a month of fuel oil through the end of the year, on top of the shortages everywhere else, I don't see how you get prices returning to the spring level, even with all the new refining capacity. Then, add in the almost certain delays in the opening of all these refineries, which means you begin any price relief from a higher starting point...

When you read the analyses of the oil price bears (see Lehman's recent analysis, for example: http://www.bi-me.com/main.php?id=20916&t=1&c=34&cg=4&mset=1011), you can see that they're very close to being correct. It's not like these guys are totally clueless, even though lately they've been consistently wrong. But they just keep being too optimistic about new production and refining capacity coming online exactly on time, and they just aren't keeping adequate track of things like the decline rate, and new demand in countries like Saudi Arabia, etc. And it takes only a very little amount of supply and demand imbalance to produce a big price rise.

..."especially when we see seasonal demand lighten up in the fall, and the Olympics are over, allowing China to raise gasoline and diesel prices (presumably triggering a response in demand)."

So are you saying that demand will fall after the Olympics in China? I thought I read where demand in China would actually increase when rebuilding after the quake kicks into high gear.

I thought I read where demand in China would actually increase when rebuilding after the quake kicks into high gear.

There are so many factors, it's really hard to get this exactly right. I agree that rebuilding will contribute to demand. And some smart person around here (I wish I could remember who, to give him or her credit) pointed out the other day that China may subsidize demand by aiming for a further rise in the RMB.

But China was starting to have lines at gas stations again even before the earthquake and the extra buying for the Olympics, and someone high up gave a speech recently that sounded to me like the gov't was starting to soften up the populace for a price increase. Plus, reportedly China is switching to diesel from coal in areas near the Olympics, in advance of the Olympics, to deal with air pollution problems. They'll switch back to coal after the Olympics.

My best guess is that the factors limiting demand will outweigh factors contributing to demand for at least a few months starting in early fall. Over the past year or so, we just see China going on these periodic buying strikes. A similar one happened early last fall and led to major shortages in China by October.

I agree that it's a tough one to call. On the plus consumption side, Chinese auto sales are up 17%.

The strengthening of the RMB coupled with their huge SWF gives China a lot of flexibility in how to deal with rising oil prices. And I think #1 on China's list will be political stability. They'll try their best to prevent food or fuel riots, even after the Olympics. They could certainly continue to subsidize both food & fuel, if that's what they felt was necessary for political stability, probably for years. 1.5 trillion buys a lot of oil, and with a strenghtening RMB, it will go even farther.

The US has zero flexibility in dealing with high oil prices. Instead of a SWF, we have the largest public debt in the history of the world and the largest trade deficit in the world. The private credit bubble bursting is going to kill the dollar, and the Fed has only bad alternatives. If accelerating net export declines continue to drive up oil prices, then I think the US will gradually be backed into a corner. I'm very worried about what happens after that.

Oh, and I think Japan has big troubles. A strong Yen kills their export business. A weak Yen kills their economy through oil imports. Japan does have a big FOREX reserve, though, which gives them some options.

Well done.

There is a problem here though - won't this additional refinery demand increase oil demand anyway?

Granted, since only about 50% of some crude oil can be made into diesel, there is some extra incremental demand for oil just to get enough diesel. The new refineries will reduce that problem, but it also seems possible that incremental new refinery demand would increase demand for oil - since this creates new demand that isn't here now.

Plus we have the additional problem of degrading worldwide quality of oil over time (with maybe the lone exception of that new SA field), so new refineries are not just a luxary but a necessity. Without new refineries, I would guess that light sweet crude would be bid up to an even higher premium to low grades.

Hmmmmm. Right now, diesel prices are high because we can't refine enough diesel, because of a shortage of refinery capacity. High diesel prices result in some demand destruction. When the extra refineries come online, the price of diesel goes down, demand destruction is reversed, so oil demand goes up. Interesting comment, CM.

Demand for light oil is very high because of diesel, demand for heavy oil not so high because of a lack of refinery capacity. Is that what Iran is waiting for with it's tankers? A sudden surge in demand for heavy crude, which they conveniently can meet almost immediately, because it is already loaded and ready to sail?

So what happens to light oil? Demand probably falls, so light comes down in price. I'm guessing we see some averaging across oil prices, because heavy will be in more demand. We may see a little new supply come online, because there are doubtless people not pumping heavy because the demand is weaker. We also may see demand for oil products go up a bit, if diesel comes down.

All this is against the backdrop of relentless depletion and decline in net exports. It will be interesting to see how it plays out.

Shargash, I don't see demand for light oil dropping (except maybe briefly, for seasonal factors, or because of the exact timing of new capacity coming online, if something somehow comes on early) because I don't think we're bringing enough new refining capacity online fast enough to deal with increasing demand in the exporting countries and the decline rate.

I think you're probably right. I was "thinking out loud".

There is probably some pent up demand for diesel that will be released when the extra refinery capacity comes online. If that's true, then the extra refinery capacity could put upwards pressure on oil prices. If there is no pent up demand for diesel, then the heavy oil refiners will take some business away from light oil refiners.

However, according to the EIA, diesel demand in the US is UP 1.6% Y-O-Y in the 4 weeks that just ended. People talk a lot about demand destruction in the US, but there is no demand destruction going on in diesel. And since diesel is driving oil prices, it is causing a lot of bad analysis.

Currently diesel seems to be in relatively high demand. What are the relative trajectories for gasoline, diesel, and kerosene demand? It seems like a lot of demand detruction in happening for the later two. We see that airplanes are being grounded, likewise we will likely see fishing fleets staying in port. Commercial corporations, which are largely run by bean counters, are more likely to take fuel saving measures, such as slowing down ground and water transport machines, tha consumers -who largely remain clueless.

Also if one of these fuel types is in relative scarcity wrt the others, is that enough incentive for refiners to buy more oil to supply that subcomponent of the market? If they do so, does that not mean the other fuel types are in surplus, to be sold at a loss? I'm not convinced that diesel demand is sufficient to be driving oil demand. More probably the market will dictate that the extra relative demand is only partially satisfied, with the remainder made up by high prices.

From the most recent TWIP:

Over the last four weeks, motor gasoline demand has averaged 9.3 million
barrels per day, down by 1.4 percent from the same period last year. Distillate
fuel demand has averaged 4.1 million barrels per day over the last four weeks,
up 1.6 percent from the same period last year. Jet fuel demand is 0.3 percent
over the last four weeks compared to the same four-week period last year.

I think US demand destruction is more imagined than real. So far it appears to be restricted to gasoline and gasoline only. As I've argued elsewhere, I don't think that is the "sweet spot" for oil prices, so I don't expect that it will have much impact on oil prices, at least not yet.

IMO, later in the year, it will be a different story.

Charles, it's true that the new refineries will increase oil demand, but it will be demand for a kind of oil that currently is not being used. So, it doesn't increase demand on existing supply--instead, it in effect creates new supply.

Also, take a look at this: http://www.cheaperpetrolparty.com/Oil_Price.php

About halfway down they provide some charts that show how much extra diesel you can get per barrel of heavy crude if you have the right kind of refinery. So, we're not only going to see, in effect, new oil supply, we're also going to see more efficient use of that supply.

About halfway down they provide some charts that show how much extra diesel you can get per barrel of heavy crude if you have the right kind of refinery. So, we're not only going to see, in effect, new oil supply, we're also going to see more efficient use of that supply.

One has to wonder how this will affect U.S. imports of finished gasoline. If more of the barrel is going to diesel, then less is turned into gasoline, no?

And it takes only a very little amount of supply and demand imbalance to produce a big price rise.

I expect to see wild swings in prices as long as we are on the peak plateau. IMO, this is something that many people just don't get. They see sudden price movement and figure it must be speculators.

When you are balanced on the knife edge of supply & demand, very small changes in either will produce big swings in prices, and the swings won't always be up (just mostly).

It reminds me of the effect one gets when looking at the difference between two very large AC signals - just a tiny phase shift produces a very large difference signal. The odds of everything lining up just so are small. It is exactly the kind of real-world naivety that I have grown to expect from the high paid big suits. They are all plumage.

Interesting about the AC signals.

I think they're afraid of crashing prices with expensive new projects that depend on a high price. I think the constant forecasts of big price crashes are helping to make the industry too conservative, and in effect are creating a faster rate of increase in prices than we would otherwise have seen at this point.

Hi Moe--Thanks for that list of new refineries coming online that are made to handle heavy. I get 1.630Mbbls/day as a total and assume that all will be online by the end of 2009. My assessment is this will mitigate diesel demand but only somewhat, not totally. My WAG is 4+Mbpd in dedicated heavy cude refining capacity is needed to keep up with demand and cover some of the global decline in light-sweet. The bottom line is the decline in light-sweet was not anticipated early enough to build up heavy and heavy-sour refining capacity to alleviate the rise in price we've seen; there was only one opportunity to get ahead of the curve, and that was missed bigtime.

The future of light-sweet refineries is a massive retooling program to enable processing of the abundant supply of heavy and heavy sour that exists globally. That will take time and money. It is my opinion that with the large quantity of heavy and heavy sour to be extracted the downslope of Hubbert's Curve needn't be too steep. Unfortunately, the countries with very large amounts of heavy and heavy sour--Iran and Venezuela--are being destabilized by the US and its allies, which is contributing to the global price rise as these countries aren't being allowed to service the market in a normal fashion.

Thus, I attribute global oil price rise to US Imperial and Domestic policy. Any hope for the price rise to stall depends on radical alterations of those policies.

One point to remember is that we are in the process of losing a big chunk of heavy/sour production--from the crashing Cantarell Field.

Hi Westexas--I agree this crash is very big as it helps to accelearate net import/export decline. I'm thinking there needs to be two sets of graphics: one displaying historic light-sweet extraction, and the second heavy and heavy-sour. Additionally, I think it helpful to breakout the oil discovery chart in the same manner. This might be problematic as many oil fields contain both light-sweet, which is extracted first, and degrade to heavy and heavy-sour--the dregs, so-to-speak. But I do think such a visual can help explain the current supply dilemma as it seems clear that light-sweet has peaked, thus its price's upward bidding.

Westexas, you're right, and I didn't think to take Cantarell into account.

Related side note, significant or not. In my area, attempts are being made to shutdown upgrades to Chevron's refinery so that it can process the heavier stuff:


One commissioner expressed interest in restricting the sulfur content to 1.5 percent, a major change from what Chevron has pitched. Chevron wants to replace its hydrogen plant, power plant and reformer to refine a wider range of crude that includes increasing the sulfur content from around 1.5 percent to a maximum of 3 percent.

"The whole point of the project was to enable Chevron to respond to the change in the global crude market," refinery spokesman Dean O'Hair said. The company expects sulfur content in the light to intermediate crudes it handles to go up.

Peak_a_Boo--Thanks for that intell. It becomes difficult to accuse Chevron of raping customers when it's denied the ability to retool its works in a fashion that will mitigate the price rise.

Peak_a_Boo, that info is helpful. Thanks.

Given the global sulfur shortage, and the fact that the main source is IIRC from extracting it from high sulfur feedstocks, I would think allowing this to go ahead would be important for both the oil, and sulfur markets. I don't know if the processing of higher sulfur inputs produces more pollution, since the sulfur is extracted and sold. But I do live about 30miles downwind of it.

Hi karlof1, your WAG is close to mine for the short- to intermediate-term. Regarding the missed opportunity to get ahead of the curve, I agree about that too. If you poke around the Internet, you can see that there were all kinds of projections of diesel shortages at this point. And the new refineries for heavy crude were the response, but nobody seemed to allow for any delays in their plans. Looking ahead, they still don't. There're more refineries and expansions scheduled for 2010--Motiva (325,000 b/d), for example--but there have also been a lot of postponements of planned projects, and I wonder about those.

Moe, you say that prices may come down once we get the heavy crude refiners online, but remember, it is much more expensive and complicated to run a refinery that processes heavier crudes and they will require more maintenance over their lifespan. I don't think they will lower prices by a lot especially if they have to be shut down more often than the conventional refineries. This has be factored into future condsiderations of petroleum product prices.

Interesting...Yesterday I had to drive to Temcula CA for business and I had to stop for gas. The stations I passed were Advertising Regular unleaded as high as $4.65 a gallon. Finally I spotted an Arco station advertising $4.25. I stopped there to fill up and there was a 20 minute wait to fill up. The Shell station across the street was advertising $4.39. ($.14 more)It was empty. What was surprising is there were Mercedes, Chevy Tahoes and Caddilac Escalades waiting in line like everyone else to save a couple of dollars. Also everyone was filling up. I didn't see anybody putting in just $10.00 worth.

While I was waiting there I began to imagine what this might look like the day they start rationing...not a pretty picture.

It sounds a little nutty until you start thinking about things like that, but one of the top reasons I've been considering building an EV is to avoid the gas stations when things get a little tighter.

[edit] It makes sense to tank up if they believe the price will be increasing soon.

Two things:


from drhousingbubble-

And now we enter the next stage of the housing crisis when folks that were supposedly prime realize that they weren’t. Not sure if anyone caught the piece on NPR yesterday about folks cutting back on their groceries. They interviewed a couple of families about the rising cost of food. One family with a lower income was struggling simply to make ends meet and was even buying old boxes of cereal for $1 which at times, wasn’t exactly edible. The other case which ties into today’s article, was an affluent woman and what she said simply struck me. She was talking about how she only buys organic and spends about $300 per week on groceries. However, she was now having a hard time paying that bill. She went on and to paraphrase said something to the effect of, “well we have a home on the lake, a vacation home in another state, and live in a relatively affluent neighborhood so I guess we are upper-middle class?” Yes, the inflexion at the end isn’t necessary. But you better hope that your household income can support all that is going out to maintain that image.

2-from calculatedRisk:

Friday, June 06, 2008
Temecula: 15% of homes REO or in Foreclosure

by CalculatedRisk

From the LA Times: Housing downturn is a jolt to upscale Temecula

So it is no surprise that the housing bust is hitting Temecula hard.

But look at Temecula on this map. San Diego is far to the south - living in Escondido is a tough enough commute to work in San Diego. And Orange County is an even more difficult drive to the west. Imagine what $5 gasoline will do."

Good luck.

Mac, we might as well make it three things...or more...

3) 'Sunday, June 08, 2008
Option ARMs: Moving from NegAm to Fully Amortizing'

'From BusinessWeek: The Next Real Estate Crisis

[T]he next wave of foreclosures will begin accelerating in April, 2009. ... hundreds of thousands of borrowers who took out so-called option adjustable-rate mortgages (ARMs) will begin to see their monthly payments skyrocket as they reset.
According to Credit Suisse, monthly option recasts are expected to accelerate starting in April, 2009, from $5 billion to a peak of about $10 billion in January, 2010.'

and here is how it works for those that purchased with an option-arm

'The percent of original balance limitation, in other words, marks the day that neg am (negative amortization) is no longer an option for the borrower, and the loan has to start paying down principal from here on out—the borrower is “caught up,” and never again allowed to “get behind.”'

and the net result is...

'Therefore, with falling house prices, most of these homeowners are underwater (owe more than their homes are worth), and selling or refinancing will not be a viable alternatives.'

By the time the resets happen home prices will have fallen more. Do you think some or most of these 'home owners' will walk?

So, let me get this straight. Treasury is predicting the US economy is going to rebound in the second half of 08. But what about contraction in commercial real estate? A possible blow up in credit derative swaps? Oil in most currencies up, world aggregate demand for energy up, dollar down, unemployment up, wages stagnant, consumer prices up, consumer confidence down, consumer credit tightening on main street, credit lines being pulled by Wall st. Explain to me again how a consumer economy with few consumers left with money or credit is going to end this train wreck. Lots more to come folks...We are discussing just the events that we know about, some I left out, and there is always the possibility of black swans in the economic deck.

Treasury is predicting the US economy is going to rebound in the second half of 08. But what about contraction in commercial real estate? A possible blow up in credit derative swaps? Oil in most currencies up, world aggregate demand for energy up, dollar down, unemployment up, wages stagnant, consumer prices up, consumer confidence down, consumer credit tightening on main street, credit lines being pulled by Wall st. Explain to me again how a consumer economy with few consumers left with money or credit is going to end this train wreck. Lots more to come folks...We are discussing just the events that we know about, some I left out, and there is always the possibility of black swans in the economic deck.

Thus my prediction upthread of economic chaos by election time.

Someone asked me yesterday why Arco was able to offer gas so much cheaper than other stations. Does anyone know the answer?

I am seeing this .10 difference too here in Cali. Shell, which usually is the expensive station is lower than Valero, which usually is the cheaper station. I suspect something to do with where (refiner) they are getting their gasoline.

How you ask? Random electronic calibration settings for gas pumps tilting toward the vendor...virtually undetectable...yet somehow sinister...Ha! with this technology we can control ze vuld!

"...why Arco was able to offer gas so much cheaper than other stations."

From the ARCO web site under "Some notable dates":

"1982: ARCO ends credit card sales."


ARCO is now a part of BP - and in situations were they can delay a raise in pricing they do it.

Two reasons. The first is they have control of the Alaska pipeline and the local so cal refinery. The other major reason is most of Arcos profits are based upon the snack sales - the parent company is more then happy to delay any price up ticks so the stations can sell more hot dogs and nachos for a week or so - durning the last gulf war it gained the company a lot of local goodwill.

And its all cash baby!

ARCO does, however take ATM cards and they will get a couple of dollars from you for using them. If I get 10 gallons, that adds 20 cents per gallon that they get. They are always cheaper in my area (if you ignore this charge) and I always figured they had enough people using ATM instead of cash to make this scheme work out fine for them.

RE why Arco is always cheaper: It has been part of my admittedly shaky "knowledge" base that Arco gas is 10% alcohol, so the cheaper price was a function of the alcohol component having 60% of the energy of regular gasoline, so Arco's gas would have 96% of the energy Chevron's or Shell's. To finish the logic then, their product should cost no more than 96% of BigOil's product, and it usually does fall into that range (today the Mill Valley Arco was up to 4.36 and the Chevron(s) at Seminary are at 4.49, that's only 2.9% cheaper, Ha! all those people lining up for a 1/2 hour just to get ripped off, apparently there's more than one born every minute). However researching a wee bit before posting has caused me to question this. The links confirming the Arco has more alcohol claim were in car enthusiast forums, and they're full of all kinds of contradictory claims and beliefs. You would think that this would be easy info to find out, but after a quick spin through Google I couldn't confirm it.

If you were heading toward Los Angeles, at least, you got an impressively good price. I haven't seen much below $4.41 lately.

There's a gas station in Hollywood, near Griffith Observatory, that has two prices posted - one for credit, one for cash. Cash is a few cents cheaper.

It's hard for me to understand why everyone is so worried about a small and temporary shortage of crude oil. After all, George W Bush, our current president assured us long ago that he can use the sheer will of his personality to convince OPEC to supply the US with all the oil that is needed. If we are patient and give GWB just a little more time he will come through for us.

'Dateline June 28th 2000 - The 2000 presidential campaign
Bush Would Use Power of Persuasion to Raise Oil Supply

Gov. George W. Bush of Texas said today that IF HE WAS PRESIDENT, HE WOULD BRING DOWN GASOLINE PRICES THROUGH SHEER FORCE OF PERSONALITY, by creating enough political good will with oil-producing nations that they would increase their supply of crude.

"I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply," Mr. Bush, the presumptive Republican candidate for president, told reporters here today. "Use the capital that my administration will earn, with the Kuwaitis or the Saudis, and convince them to open up the spigot."

Asked why the Clinton administration had not been able to use the power of personal persuasion, Mr. Bush said: "The fundamental question is, 'WILL I BE A SUCCESSFUL PRESIDENT WHEN IT COMES TO FOREIGN POLICY?'

You're doing a heck of a job Georgie!


I think it's very important for the American president to mean what he says. That's why I understand that the enemy could misread what I say. That's why I try to be as clearly as I can.

I'm a uniter, not a divider.

I don't know of anybody in my administration who leaked classified information. If somebody did leak classified information, I'd like to know it.

The best way to get the news is from objective sources, and the most objective sources I have are people on my staff who tell me what's happening in the world.

I just want you to know that, when we talk about war, we're really talking about peace.

Sometimes things aren't exactly black and white when it comes to accounting procedures.

I'm the master of low expectations... I'm also not very analytical. You know I don't spend a lot of time thinking about myself, about why I do things.

i think he also said: "trial lawyers are preventing gynocologist from performing their love with their patients"

and a friend insists that he said: "after all, it's not rocket surgury"

Right, the ones that do rocket surgery are called "urologists". :)

I very rarely laugh out loud, but that was freaking funny.

it was 'their love of woman' not 'patients'

Peak Oil + Peak Food + Peak Water = Peak Population

The question is when, not if.

There will not be a storybook ending.

Be prepared or be a Darwin non-selectee.

Hi Roysyl,

Sorry I didn't see your comment before. I received an email from you with no way to reply. If you'd like a reply, I'd be happy to write back (given a way to do so).

I hope you're still thinking about or working on writing up the article.

Does anyone know when we'll see a Skrebowski mega-projects update?

I was about to ask the same question.

CS' bottom-up approach is one of the most convincing of all -- no need for familiarity with basic calculus a la Deffeyes, can be explained to Joe and Jill Public that we know how much more oil can be produced in five years even if a trillion new barrels are discovered next week (at a depth of 2o km under the sea?).

Yes, can somebody come up with an answer?

At the Tupi deepwater oil field in Brazil, it cost a reported $240 million dollars to drill one well about 20,000-24,000 ft. First production from Tupi might be as early as 2012 at 100,000 barrels a day. In the meantime the world might use about 125 billion barrels of oil. Already Brazil was considering raising taxes on new E&P contracts in order to get more funds. This might significantly slow the rate of future project development there. Brazil's Petrobras has more prospects than money to develop them at this point. They canceled the sale of new deepwater leases in light of recent developments. They have asked their ship builders to build more rigs than can be built in the time allowed.

Expect Brazil might not reach peak oil for decades.

I suppose that GWB, when he spoke of 'the sheer will of his personality' is displaying the disallusion seen in many underachieving, IQ challenged people. Interestingly some serial killers likewise hold themselves in very high regard for no apparent reasons. I am not suggesting that GWB is a serial killer...but all manner of people have perished on his watch.

'Where did the personality go?

Oil went from $30 to $140
Gold went from $280 to $1000+
The US$ Index fell from 110 to 73
If Bush has no "personality" neither does Paulson, or for that matter, Bernanke. Paulson's strong dollar policy yapping makes him the laughingstock of the world.

And, in a move that that had everyone excited this week, Bernanke started yapping about the dollar, breaking tradition with a long standing policy that only allowed the Treasury department to yap about the dollar. Of course this had everyone, everywhere yapping about the significance of this event. If this all seems counterproductive to you, it's because it is.'


I think what you are seeing is a deep belief in the power of the Will. This is a common trait of fascists and proto-fascists. See the Naze belief in the Will (Leni Riefenstahl's great documentary "The Triump of the Will" is a good example). Also see the Ron Suskind quote about the Bush administration:

The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do.

A combination of action and willpower can accomplish anything. It is a fundamental world view of people like Bush, and it can be contrasted with the reality-based world view of most people on this site.

Shargash...You are certainly right about the Nazi fixation on 'will' and I have seen Riefenstahl's 'Triumph of the Will'. IIRC Leni was still denying that she was ever a Nazi at a very advanced age. I don't know if she is still alive. Leni claims that she was simply a movie director doing as she was told...and, she was an innovative director. I know from watching US films made prior and after WW2 that the US and Hollywood learned a great deal about how to use propaganda via film and radio that the Nazis innovated. After WW2 many Nazis that worked in intelligence were brought to the US and employed by the US. The reason usually given is that the Nazi spooks knew more about the Russian intelligence organizations than anyone.

At the same time that we were conducting the war tribunals in Germany and making Hollywood movies about tracking down Nazis that had sneaked into the US under false identities the US was importing Nazis and employing them as spooks and rocket scientists. I don't know if any other Nazi specialists were brought to our shores...possibly.

I have followed the neo-cons and have read their documents and statements like the one you quoted above, project for a new American century, etc. Like all idealoges the neo-cons seem bereft of any skeptics in their ranks and they underestimate (or disregard) the impact of chance and at times seem to overestimate cause and effect...if indeed, they even consider cause and effect. I doubt there are any chess grand masters among them...maybe they do well at liar's poker? Sometimes I believe that the neo-cons rely totally on faith and don't bother with reason. Then again, from what I have observed, neo-cons are such outlandish liars it is difficult to tell what they believe. Maybe lying is the neo-con god and their only strategy? The Nazis certainly employed the 'big lie' effectively. I do not approve in any way of the Nazis or what they did but in the run up to WW2 they were a damn sight better at organizing than the neo-cons have been at any time.

There is at least one chess grand master among them, his name is Kasparov. He is trying to export their stellar success in democracy to Russia. The common trait between Bolsheviks, Nazis and the neocons is their unbounded arrogance and complete disregard for any sort of rules. It is external circumstances that gave them the chance to take over rather then any sort of talent or worthy ideology. The ideology gets propagandized into the media-trusting lemmings at later stages.

It is the absence of ideology, or rules, or any moral lower limit that makes them so hard to fight. Anyone who goes against them with some predetermined limits as to how far down in the mud they are willing to go has lost before they've begun. The scum will find those limits and go below them. And if you give up your limits, you become them.

that in most Herds there was a sort of ruling Yahoo (as among us there is generally some leading or principal Stag in a park), who was always more deformed in Body and mischievous in Disposition, than any of the rest. That this Leader had usually a Favourite as like himself as he could get, whose Employment was to lick his Master's Feet and Posteriors, and drive the Female Yahoos to his Kennel; for which he was now and then rewarded with a piece of Ass's Flesh. This Favourite is hated by the whole Herd, and therefore to protect himself, keeps always near the Person of his Leader. He usually continues in Office till worse can be found; but the very Moment he is discarded, his Successor at the Head of all the Yahoos in that District, Young and Old, Male and Female, come in a Body, and discharge their Excrements upon him from Head to Foot.

Gulliver's Travels.


Hi Twilight,

"if you give up your limits, you become them."

I appreciate the reminder.

It's especially difficult when what is at stake is one's life, literally.

in the run up to WW2 they were a damn sight better at organizing than the neo-cons have been at any time

And for that I give thanks every day to my non-existent deity. :)

I think what you are seeing is a deep belief in the power of the Will. This is a common trait of fascists and proto-fascists.

Shargash -- no need for the ad Hitlerum! In French it's called voluntarisme and is a trait shared among socialists of all hues and colours. Just wish and wish and keep on wishing and your dreams will come true.

Common also among 8-year old children. Another term is 'infantilism'.

And given the last 8 years, you think "infantilism" is somehow associated with socialists? Maybe I have it confused with "imbecilism".

Actually, I would agree with Carolus, at least up to a point. The disconnect from reality is characteristic of political religions in general, of which socialism and fascism are certainly examples.

I do think there is a difference between the leftist & fascist versions, however. Leftists wish for a particular outcome. Fascists believe that the act of Will brings about the desired outcome. It is the difference between Wishing and Willing, and it is a significant one.

I can buy that.

Well,they have certainly created their own reality and it is a freaking nightmare for the rest of us. Live in the bubble. Die by the bubble.

I would certainly suggest GWB is a serial killer. His behavior speaks volumes, as does Cheney's.

Karloff - If you accept the theory of the dominant culture, i.e. the most ruthless in a society overwhelm the less agressive then you accept that societies are run by and for psycopaths.

In that case GWB would most certainly be the psycopaths' psycopath. But I don't wholly accept that.

Usually our leadeership (in a democracy) is a pretty good reflection of the society. Unless you've been living in a tree eating berries you're complicit and as the fallout progresses there will be plenty of blame to go aound.

Actually, we have been ruled by a:
kakistocracy (kăk'ĭ-stŏk'rə-sē, kä'kĭ-)
n., pl. -cies.
Government by the least qualified or most unprincipled citizens.

[Greek kakistos, worst, superlative of kakos, bad; see caco– + –CRACY.]

Usually our leadeership (in a democracy)

Problem is Joe that we aren't a democracy. Bush lost in 2000. He was selected after Brown Shirt Bolton physically and illegally stopped the Florida recount and the subsequent USSC decision decried by many as outside its perview.

You give GWB far too much credit. He is a puppet. His puppeteers are so masterful that he does not even realize that he is a puppet. They flatter him into thinking that he is "the decider", all the while manipulating him into doing exactly what they want him to do.

The part about GW not realizing he is being manipulated strikes me as true.

Who are the puppeteers? Seriously. What is going on with them?

What I mean is - if any one of them dies or retires (or whatever), he/(she) is replaced?

1. Thank you for adding to this community. You folks are amazing.

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Thanks a lot!

Containerized Horror


The Mogambo Guru speaks about container shipping costs. Apparently they've gone from $3000/container to $8000/container since 2000. Once oil reaches $200, container shipping will reach $15000/container, equivalent to a 15% tariff on all Asian imports.

I wonder what this would do to the profit structure of consumer goods? Suppose the breakdown was previously 20% materials, 30% labor, 5% shipping, 35% store overhead and 10% profit [just making things up here]. Now Asian product cost 115% as much as before: 20/30/20/35/5 [lower profits]. This might mean you could pay American labor 50% more than Asian labor to get the same goods (20/45/5/35/5). Joy! Why this means that if Chinese laborers make $2/day manufacturing Tickle-me-Elmo, we can afford to pay a US worker 3 dollars per day and still break even!

And if oil reaches $400/barrel it'll be even better! We'll be able to pay a US worker TWICE as much as an Asian worker and still make a profit!

OK, I'm being a little sarcastic. Even ridiculous costs do not bode well for American manufacturing.

The American "economic miracle" was built on cheap labor. African, Irish, Polish, Italian, Chinese -- whatever.

I suppose the industrial class is just trying to get us back to the good old days when working people just shut up and worked.

You will also need to live within cycling distance of your sweat-shop

Not just cheap labor, but cheap energy and abundant, cheap resources and raw material. I'm sure the cheap labor will come back, but it will not be enough without the other parts.

" but cheap energy and abundant, cheap resources and raw material."

why does everyone think resources were cheap until about 2-3 years ago? they weren't. many commodities still aren't anywhere near their highs reached in the late 1970s.

Like they won't break those.....

I'd argue that the high oil prices will cause such a deep depression that prices of most commodities will fall, but still be high relative to the new reduced incomes.

The 1970s? That's as far back as you go? The veritable dawn of time, that is.

How about an entire continent full of wood, water, good soil, iron, coal, and then oil - and not too many natives to be gotten rid of. How do you fail?

From the article posted in the Drum Beat:


... "Such lands, DOI estimates, 'contain 31 billion barrels of oil and 231 trillion cubic feet of natural gas.' Thirty-one billion barrels of oil represents 50 years of current imports from Saudi Arabia and 231 trillion cubic feet of natural gas is enough to supply all of America's households for 46 years."...

Is this kind of writing intentionally misleading? 31 billion barrels (at current US consumption rates) would be about 4.25 years worth of oil. How is this a comforting # when we tout energy independence into the future? If we were truly independent, can we only expect 4 years of oil?

The article then goes on to state, "Some 86 billion barrels of oil and 420 trillion cubic feet of natural gas are beneath America's waters..."

Where are these #'s coming from , EIA?

"If we were truly independent, can we only expect 4 years of oil?"

It would be more like 8.5 years if you divided the reserve number by US crude imports. Edited to add: According to the Post article's author, you might be among the "many anti-energy activists" if you think that's a drop in the bucket.

"Where are these #'s coming from , EIA?"

I believe the 86 billion barrels of offshore oil comes from DOI's MMS.


And the 31 billion barrels of onshore oil comes from the Bureau of Land Management (apparently EIA was a co-author/contributor/reviewer).


Yikes! China's car sales up 17.41% for the year.

US demand down - China demand up, up, and away.

That's a helpful statistic.

And the analysts claimed the rise in imports this year was due to China stockpiling.

Yes, and while still a staggering amount of growth, it is the second consecutive month of a decline in the growth of car sales.

US demand down

Us gasoline demand down. US diesel demand up.

Chinese demand just up.

As mentioned in an earlier Drumbeat, my firm won the tender for a utility demand side management initiative geared to helping small businesses improve their lighting systems. I've been busy ramping up our operations but I wanted to share the results of our first audit.

This particular business sells windows and doors and their showroom and offices are currently illuminated by conventional 2x4 T12 troffers and their warehouse is equipped with 400-watt metal halide steelers. Last year, they used a total of 50,220 kWh and their average kW demand was 14.9. Our guys will be relamping and reballasting their 2x4 troffers with high efficiency T8s and replacing their metal halides with 6-tube T8 high bays. Combined with various other upgrades (e.g., converting their incandescent exit lights to LEDs), we expect to cut their kWh consumption and kW demand by 47 and 48 per cent respectively.

The cost of this work is just under $5,500.00 and the customer's portion is a little less than $1,100.00. The first-year savings are estimated to be a little over $2,400.00. If the customer elects to finance their portion of the cost over a two-year term, interest-free, their monthly repayment is about $46.00, so their net monthly savings are $154.00, increasing to $200.00 upon completion of the repayment. At current rates, the five-year accumulated cash savings are almost $11,000.00. However, electricity rates are expected to increase by 12.1 per cent this coming January and there most certainly will be continued upward pressure on rates in each of the following years, so the actual savings will be much higher.

From the utility's standpoint, the cost of this new peak capacity is effectively $600.00 per kW and their average cost per kWh over the 10-year economic life of this investment is less than $0.02; in addition, unlike other forms of "generation", it won't be affected by any rise in fuel costs or other O&M related expenses and we can expect the physical life of these assets to exceed ten years. All-in-all, it's a great deal for the customer and for ratepayers alike. Also bear in mind this business operates roughly 3,200 hours per year, so for a facility that operates 8,760 hours/year the results would be even more attractive.


Are the light bays reflective or white paint? 4-3-2 bulb? Is there a cooling load on the building?

Hi Substrate,

The troffers are powder coat white and are in good shape. They're 4-tube 4,100K F34s with 0.77 standard magnetic ballasts and we'll be replacing them with 2-tube 5,000K Sylvania XPS lamps driven by a 1.20 BF Quicktronic. Wattage drops from 164-watts to 78-watts and gross lumens from 9,500 to something in the range of 7,400 or 7,500 as I recall. But given the greater lumen depreciation of a F34 towards EOL, the high scotopic performance of the new 5,000K lamps, more optimized lamp placement for slightly higher fixture efficiency and a cleaning of the fixture and lens itself, foot candles and perceived brightness should remain about the same; effectively, we'll be able to provide the same amount of light for less than half the watts.

The 400-watt metal halides are cranking out perhaps 60% of their original output with very obvious EOL colour shift. The new high bay T8 fixtures draw just 217-watts versus 455-watts and light levels will go up rather dramatically (I think the IES fixture efficiency is 0.94 compared to a standard steeler at about 0.70). The warehouse ceiling is white and these fixtures have a small amount of uplight, so there won't be that dreaded cave effect you sometimes get from high bay fluorescents.

The showroom and offices are air conditioned but our cooling demands are relatively modest and so there's minimal gain in terms of reduced a/c. Normally, every watt of lighting removed saves another 0.30 watts in a/c load, but in our climate it's not a significant factor.


Those white coated fixtures soak up an inordinate amount of light, it's surprising. If the fixtures have a cover over them (bulbs not exposed) then you can improve them a good bit without altering aesthetics by cemeting or double-sided taping aluminum foil to the fixture (shiny side out, of course) to create a good mirror-reflective surface. This was done to a school around here a couple of years back by one of the environmental studies classes at the local university. They were also 4 bulb units, but the paint had degraded to slightly off-white. It was an El-Cheapo modification with Reynolds wrap and double sticky tape, the whole unit was aluminum foil backed, and one of the bulbs was twisted to the off position. You couldn't tell that there was a reduction in light from the one bulb being off once it had been foiled. So for a couple hundred bucks in supplies, the light electricity bill was about 3/4ths the original, and it also cut the cost of replacing bulbs a similar amount. Obviously the modification could also just be used to get better light, rather than disabling a bulb for a reduction.

I figured there might not be a great gain in cooling expenses in that climate...too bad, compounding cost reductions make for an easy sell.

There was a guy here that was trying to gain support with local lenders to get energy efficiency loans to companies by calculating the companies reduced cost and gearing the loan so that the loan companies would get the difference (usually a pretty good return) of the old electricity bill vs. the retrofit electricity bill. Thereby making it a zero cost proposition for the company doing the retrofit, but after say 5 years when the retrofit reached payback - the loan would be paid off, and the company would get all of the benefit. In the meantime the loan would have generated around a 7 - 10% return on investment for the loaning company.

Hi Substrate,

Thanks for your recommendation regarding the low-cost reflectors. Our local utility requires any fixture modifications and/or enhancements be CSA/UL approved, so I'm afraid we can't get too creative. There are commercial reflector kits that have been approved under this programme, but they sometimes do funny things to the fixture's optics and add significant cost to the conversion. We're very cost conscious in everything we do because we want to provide the customer with good value and we need to ensure NSP and Conserve Nova Scotia obtain maximum return from every dollar spent. A reflector kit might allow us to lower the BF somewhat and thereby save a few extra watts per fixture, but the economic return would be relatively poor compared to say replacing a 455-watt metal halide steeler with a hi-bay T8 fluorescent.

Just as a side note, the luminaire efficacy of a Cooper 2x4 3-tube prismatic-lensed, powder coated troffer is a fairly respectable 86.1% and going to just 2-tubes will bump that up slightly; we may not achieve that level of performance in the field, but we hope cleaning the fixture will restore much of its original performance.

Note that probe-start metal halide lamps typically produce less than half their original light output at EOL. Pulse start lamps offer somewhat better lumen maintenance and ceramic metal halide are a notable jump up from there, but the dollar-for-dollar, replacing those MH steelers with T8 or T5 high bays generate the greatest economic return by far. The PDF below shows untouched photos of a warehouse we converted from MH to T8; we dropped the lighting load by almost two-thirds and the place was still notably brighter; the employees were positively giddy with the results and treated us like gods.

See: http://www.datafilehost.com/download-b9c6c047.html


I, OTOH, have had great success with reflectors from Metal optics. 95% reflective and computer focused (quite a range of patterns to pick from).

One example is hallways with one F32 tube in a low ballast factor ballast (low BF improves bulb life I understand) every 8' (4' fixture, 4' gap). Lighting above Illuminating Engineers Standards FOR HALLWAYS (not a good place to read a newspaper though).

Best Hopes,


Thanks, Alan; much appreciated. I took a look at the data sheet for this product and noticed the reflectance of the aluminum version is listed as 95% and that of the powder coat white as 93%. In terms of fixture efficiency, the stated performance is 85.4 and 82.4 per cent respectively, so the overall gain relative to powder coat appears to be about 3 per cent.

Source: http://www.acuitybrandslighting.com/library/Specification_Sheets/MO/Core...

Interestingly, the aforementioned 3-lamp Cooper fixture with a standard powder coat body is rated at 86.1 per cent and at 2-lamps it presumably would be even higher.

In any event, the theoretical savings if we could find a ballast with a slightly lower BF to account for the gain in fixture efficiency would be approximately 2.3 watts. In this particular case, the client would save about 7.5 kWh per year (0.078 kW x 0.03 savings x 3,200 hours/year = 7.488 kWh) and at an average cost of $0.112 per kWh that's about $0.84 per fixture. For a commercial business that operates 24x7, the savings would be approximately 20.5 kWh/year or about $2.30/year at current rates, and if we also assume this environment is air conditioned 24x7, the savings might be closer to $3.00. A savings of $1.00 to $3.00 per year would make this a bit of a tough sell given the material and labour costs.

With respect to lamp longevity, to get down to just two lamps and still maintain adequate foot candles we must use a 1.20 BF. I'm not sure how much we sacrifice in terms of lamp life, but Sylvania's XPS lamps are nominally rated at 24,000 hours at 3-hours per start on instant start ballasts and 36,000 hours at 12-hours per start, the latter being a more appropriate number for this type of application. That's roughly 10 years service from a $2.00 lamp which, when you stop and think about it, is quite remarkable.


The latest Fed H3 data (Reserves of depository institutions):


Non-borrowed reserves are at a record -$130 billion, and banking stocks got hammered Friday.
Wonder how this will play out - a wave of bank failures soon perhaps.

Tar sands to the rescue?

Oil sands output to nearly triple by 2017

Production from Alberta's oil sands climbed to an average 1.32 million barrels a day last year, a 5 percent rise over 2006 and could get to 3.2 million per day by 2017, the province's energy regulator said on Thursday.

Hope springs eternal, but the 5% increase in unconventional production, combined with a decline in conventional production and some increase in consumption resulted in a 2007 net export decline rate of -1.3%/year.

They expect to be able to triple their water use by 2017 (or even increase it significantly)? Delusional.

You must also keep in mind that there is a big EROI gap between the new tar sand barrel and the conventional barrel it is replacing. Many estimates put tar sand production at about EROI of 3-4 compared to the traditional 10-15 we have enjoyed from the conventional reservoirs now in decline. This means that the tar sands must produce 3 barrels to replace 1 barrel of conventional decline.

This pretty much applies to all the big new deepwater finds that economists say will return oil to reasonable levels. They have EROI estimates in about the same range. If you take the projected new project additions and look at the tar sand ramp up along with deepwater, which together is roughly half of what is to be added the next 3 years or so, and consider this EROI factor, you have this:

This is why you can't just sum up project barrels and say energy demand is being met by so many production barrels. A net energy curve would explain why energy demand isn't being met by new production according to the barrel-to-barrel arithmetic that everybody goes by.

I would disagree with your math. If you have a barrel of ocean floor oil that requires a 10 percent BOE investment, then the produced barrel is worth 9/10 of a barrel.

If you have a barrel of tar sands mined and turned into syncrude you have to put one barrel in to get four barrels out. That is an EROEI of 4. That syncrude equals 75/100 of a barrel.

3 barrels of ocean crude equals about 2.7 BOE net.
3 barrels of tar sands crude equals about 2.25 BOE net.

A barrel of ethanol might have an EROEI of 1.3 or less. If it does have an EROEI of 1.3 then you spend a barrel of oil to get 1.3 barrels of oil returned. Your net return is about .3 barrel of oil equivalent. Three barrels of oil invested in ethanol will give you about 9/10 of a BOE net profit. If you consume three bushels of corn to get almost four bushels of corn worth of energy, and you lose your grain stock piles in the process, the process is not efficient. If the ethanol production method includes all the energy costs associated with it imaginable and the process has an EROEI of .8 then you have net energy losses to make an energy product that has too many natural gas, diesel, and electric inputs. It could not have lowered the cost of gasoline by 15% when the cost of gasoline just jumped about a dollar a barrel in a year.

Some of the predicted crop harvest increases published on the internet were probably bogus too.

Don't believe in tar sands. Do believe in math.

This means that the tar sands must produce 3 barrels to replace 1 barrel of conventional decline.

Using your worst case numbers.
Conventional EROI = 15.
Tar sand EROI = 3.

And a simple example.
Gross conventional oil = 15 barrels
Net conventional oil = 14 barrels

Gross tar sand oil = 21 barrels
Net tar sand oil = 14 barrels

So it took 21 barrels of tar sand oil to replace the the 15 barrels of conventional.

This means that the tar sands must produce 1.4 barrels to replace 1 barrel of conventional decline.

As you go down the EROI scale, there is a nonlinear effect on how much of a lower EROI fuel you need to replace a higher EROI fuel such that the amount is more than just a ratio comparison of the two EROIs. When a planet goes from say an EROI 8 (oil) to an EROI 1.5 (corn ethanol), it's much worse than just having to make 8/1.5 or 5.3 times as much of the EROI 1.5 stuff.

more than just a ratio comparison of the two EROIs

No, it is less than just a ratio comparison.

Let's say one source has EROI of 100.
Then this runs out and is replaced by a source that has EROI of 50.

So one source is 99% efficient.
Then next source is 98% efficient.

We don't need twice as much of the latter to replace the former.

Is that all you got? 3.2 million by 2017? Try this from the June 2 2008 TIME magazine:

From http://www.time.com/time/magazine/article/0,9171,1808610,00.html

But it pales by comparison with what's just around the corner. Canada is poised to become Venezuela north--without the loopy President and the deadweight national oil company as unwanted partners--as the biggest oil boom in North American history hits terminal velocity. An estimated $124 billion will be invested from 2007 to 2012, according to the Athabasca Regional Issues Working Group, an industry association. Production in Alberta's oil sands will more than quadruple, to about 5 million bbl. daily, by 2015; Canada currently exports an average of 1.9 million bbl. daily (from all sources) to the U.S., more than any country, including Saudi Arabia. That's about 20% of total U.S. imports. "Canada has emerged as an energy superpower," says economist Peter Tertzakian of Calgary-based ARC Financial Corp., an energy-investment firm with a nearly $1.9 billion asset portfolio. He adds that going forward, 10% to 15% of the world's incremental oil production will come from Canada's oil sands.

Yes that's their forecast: Production in Alberta's oil sands will more than quadruple, to about 5 million bbl. daily, by 2015

Now THAT's some happy horseshit! :)

havent seen this posted, so here goes:

"western australia miners brace of productivity drop"


the fire and explosion at apache's island gas plant has australia scrambling for diesel supply.

hadn't heard this used as a reason for the friday spike in crude oil, could be a factor.

Mud is building material of the future

The Scottish executive commissioned a report in 2000 on the possible reintroduction of mud as a fabrication component, and scientists at the Centre for Alternative Technology in Wales have been assessing its benefits for the past 30 years, with positive reactions.

this part of the same article was also telling:

One of the advantages Anderson points to is energy efficiency. Mud buildings have high thermal mass and can store heat and release it slowly to balance indoor climate. In Germany, builders are being taught to work with mud again. The UK’s housing stock uses up three-and-a-half times the energy of homes in Germany and Denmark.


At last - a real use for Heathrow

Following the collapse of the airline industry, it's about time someone came up with a handy guide to what to do with all the empty airports that are going to start cluttering up the world's outskirts.


EDF edges closer to nuclear deal

A £10bn French takeover of British Energy (BE), which owns most of the UK's nuclear sites, could be completed within the next couple of weeks.


After ten years the euro is facing up to its first serious test

A decade on, the single currency area is still enduring the co-ordination problems that have bedevilled it from the outset. And, such are the difficulties in running a huge currency bloc, now with 15 member states, that Trichet's attempts to temper inflationary expectations last week simply made price pressures much worse.


Banks are only as safe as houses

House prices are already falling by more than 25 per cent a year. That is the figure the experts at M&G have come up with by extrapolating the last three-monthly house price statistics from the Halifax. The fund manager also warns that 'UK house prices are set to fall a lot further'.


Surge in oil prices leaves economy facing stagflationary shock

THE surge in oil prices to a record level of more than $139 a barrel on Friday has left the economy facing a severe “stagflationary” shock, economists say, with a rising risk of recession alongside high inflation.

Under the new rules, foreign lorry drivers who pay much less for fuel, because of different tax rates, will be able to do three jobs a week in Britain from 2011, and will be free to compete openly from 2014. Hauliers in the UK pay 50.35p in tax per litre of diesel, compared with a continental average of 25p.



Good catch Dave...That one sentence pretty much sums up in which direction we are going.

The arrow of time <-

I thought you would be more into '10 things to do with a disused airport' I linked to! :-)
How did you get on with the efficiency of solar power in cloudy weather links I gave you?
I am curious to know if you manage to find out anything about some of the thin film technologies like those from First Solar - I haven't come across much yet, but it is a bit newer and proprietary technology, plus I haven't looked very hard.

Egyptians and Mesopotamians learned to build houses out of mudbrick more than 5000 years b.p. That was before they learned how to read and write. I suppose someone might invent the indoor-outdoor wood/grass fueled oven next.

British builders should be a perfect workforce for making mud huts, as most of them can't read or write either, and wouldn't look out of place in 3,000 BC.
I think we should look into building mud aeroplanes.

Fortunately, an eagle-eyed neighbour with a knowledge of building heritage realised the error before the demolition team was called in.

Bet that demolition team was overjoyed. £400,000 for the reno on a one bedroom? Must be really great mud!

Years ago I stayed in an adobe motel in Mexico after spending the previous night in an American style air conditioned Mexican motel and there was no comparison in comfort, naturally cool all day and just right at night. Also rented, 100 peso's the month, a mud hut on the beach at Punta de Mita outside of Puerto Vallarta, but that was long ago and now the place has been bought up and modern uncomfortable buildings built. Love mud buildings, I think because they are so homely comforting and go with my muddy thoughts.

Mud buildings are often associated with dry, or at least arid climates. At least the traditional method without a special experior coating, tend to slowly wash away over time. Presumably some sort of coating or outer layer could be applied. Otherwise the style would only be economic in dry climates.

In some areas of Britain there is a long tradition of building houses with mud. Off-hand I can't remember the local names for the different styles, but unfortunately insurance on them in the modern world is difficult - the insurance industry is very conservative.
I don't know the building techniques, although it involves mixing in straw, but since many of them have been there for hundreds of years it is obviously pretty rain resistant.
I remembered the term - cob houses.
Here is how they are built:

The traditional material for English cob was soil (clay-based) mixed with water and straw, sometimes with crushed flint or sand added. People shovelled or stamped the mixture together, after which a cob fork was used to ladle it onto a stone foundation, before workmen on the walls trod it into place. It was quite possible to lay a course or "lift" of cob between 150mm and 900mm high (but usually averaging 450 mm) in a single day. After it had dried - which could take up to a fortnight - the next lift would be added. The walls would be trimmed to plumb and straight as they rose and made between 500mm and 900mm thick. The builders would either leave openings for windows and doors, adding stone lintels as they went, or carve them out later. It was a community effort, with men working one day a week to build a house in a season.

And here is a rather flash modern example:

Pipeline Alternatives to the Straits of Hormuz

A comprehensive list. 5 million crude and half million NGL to Saudi Red Sea (over 1 million b/day for domestic West Coast consumption) that could be expanded with larger pumps.

I question all others. And if local Shia population in Saudi East Coast sabotages ...



Saudi Railroad Plans



Future plans reach every population center AFAIK,


good for them. now, for the rest of us!

Alan Drake as a Mass Transit Rhett Butler?

I am reminded of Rhett Butler, at the end of the Civil War, electing to help a lost cause--the Confederate forces in 1865.

With a sense of fatalism, tinged with hope, I suggest that we all try to book Alan Drake for a nationwide series of talks on Electrification Of Transportation (EOT). I am walking the walk,--having set the ball in motion for planning for a fall EOT conference in Dallas, put together by the same group that sponsored a joint presentation by Matt Simmons and Jim Kunstler (historical footnote, Matt and Jim had never met until that night, November 1, 2005). I also continue to encourage the folks at UCSB to have Alan speak in the fall.

IMO, politicians of all types are soon going to be focused on one four letter word--J-O-B-S.

If nothing else, we can present Alan Drake has the man who has the plan--for jobs.

Probably the best approach is to hook up with a local college or university. They have the facilities and it gives you instant credibility.

Electrification of Transportation

Streetcars 100 Years Ago

Cities Rediscover Streetcars

ELP Plan (April, 2007)

And to keep the gamblers coming, Levitating train from L.A. to Las Vegas gets boost

Interesting, especially the Makkah Madinah Rail Link from Jeddah to Mecca and Medina. These routes currently are used by 20 million travelers per year, expected to grow to 30 million by 2020. Fifty percent of travelers -- 15 million annually -- are likely to use the high speed rail service.

Electric high speed rail
Gradient: up to 3.5%
Five minutes headway during peak hours between Jeddah & Mecca
Consulting with SNCF International (French railway)

Routes and times:
Jeddah – Mecca 80 km in 30 minutes
Jeddah – Medina 420 km in 2.5 hours

With respect to the future of Saudi oil production, this says more than any number of OPEC or IEA press releases.

Lorry convoy to Holyrood set to cause chaos on M8

SCOTLAND'S busiest motorway could grind to a standstill this week as truckers protest against crippling fuel prices.

Up to 100 lorry drivers will form a convoy on the M8 on Tuesday to highlight sky-high fuel duty.

They warned the protest could be one of many throughout the summer unless Westminster offers a tax rebate to drivers and brings down the cost of fuel.

In another protest, hundreds of Shell drivers will walk out from 111 stations across Scotland in a pay dispute.

Their action threatens to push the price of diesel past the £6 a gallon (£1.32 a litre) mark, say experts

I told you guys they'd put solar panels on the tops of cars. the frisker car, the aptera and now some new car.

happy motoring.


50,000Euro. 62mi range.

62 mile electric range. It's a hybrid so you can travel as far as you like on the petrol engine.

62 miles is about perfect for me. That will comfortably cover the round-trip to work, plus errands on the way home. And if I'm going farther, the hybrid kicks in (assuming I can find gasoline).

If 80-100mile range and $17k sounds better, although you would have to hire an ICE for longer journeys, the Mitsubishi may be good:
They'd have to redesign for the US market though, as the side impact standards are stricter, so don't hold your breath.

50,000Euro. 62mi range

The car will have a range of 100km (62 miles) on one charge of its lithium ion batteries and up to 800km with the two-cylinder petrol motor acting as a generator when necessary.

You're right. Still left with 50,000Euros. Nice toy for bankers.

Neatly put, Twilight -- still, fascinating stuff.

I wonder what proportion of the car's energy consumption can be generated by the solar panels. Isn't the maximum for photovoltaics something like 100 Wh per square meter? How far can you drive with that?

"You're right. Still left with 50,000Euros. Nice toy for bankers."

we are just getting warmed up.

Not sure if you interpreted that the way I meant it - it was intended to mean that a $80,000 series hybrid is not going to be a significant solution to anything.

I'd buy an Aptera right now, if I could get one. But I live on the East coast, so I'd be dependent on some kind of sales & service arrangements in this area. I don't expect it will happen soon enough.

You'd also be dependent on the maintenance of good road surfaces, lest the wheels get ripped off that thing. There is a down side to optimization toward lightest weight and minimum drag. Plus, with 3 wheel tracks you'll have a fun time avoiding any potholes.

I'd take an electric train right now, if there was one.

Wheat Crop Diverted to Ethanol Production in Canada

Suppose there is a country that uses 10 billion gallons of gasoline per year and they want a 5% ethanol/gasoline blend product in 2010, except one province that wants 7.5% ethanol blending.

They are a leading world exporter of grain, but produced a little more than 415 million bushels of corn per year. They have close to 1 billion liters of ethanol production capacity scheduled by the end of 2008. Roughly half the ethanol capacity is corn and half wheat. They will need roughly 2 billion liters of ethanol by 2010 in order to realize their plans. This might take all their corn, and a large measure of their wheat. The ethanol yield of wheat is similar to that of corn, described as about 10 liters per bushel by one. Another published that the ethanol yield of corn was less than the yield of wheat, but there was more wheat byproduct leftover after the distilling.

The country described is Canada:

Canadian Ethanol Article:


What happened to the wheat stockpiles?

Canada passed a law requiring 5% ethanol use with gasoline, and 2% biodiesel with diesel.


Greenpeace was greatly upset with England for using biodiesel that is the result of intensive deforestation of the rainforests of Indonesia.

The Phillipines have a law on the books requiring 5% ethanol blended gasoline and 1% biodiesel. A Nobel Prize winning chemist criticized the ethanol law as an unwise investment in an energy estimated to be less productive than wind power.


These are pretty unexciting numbers; and I don't know anything about wheat/ethanol, but we'll just assume it's similar.

So, they want 500 milion gallons of ethanol, 250 from corn/250 from wheat.

Corn 250/2.8 = 89.2 million bushels of corn - Now, keep in mind that they use there field corn for the same thing that we (and, the rest of the world) do, to feed livestock, primarily cattle. They'll get back approx. 40% of their cattle feeding ability in the form of distillers grains. This means they will use, in essence, .60 X 89.2 or 53.5 million bushels of corn. or 12.9% of their corn crop/cattle feeding potential.

It looks like the percent of wheat, excluding durum, would be about half that.

Look for Canada's big contribution will be in cellulosic from forestry waste.

For crying out loud!!

Feeding DDGs to cattle does not increase ethanol yield!

How many times are you going to post this garbage?!?

Why do you keep insisting that we're using the whole bushel of corn when we're only using starch?

If you get x gallons of ethanol from 1 bushel of corn. Then it makes no difference what you do with the DDGs. You still only get x gallons of ethanol from that 1 bushel. You could feed the DDGs to unicorns and harvest their farts, but you still only get that x gallons of ethanol.

You keep (intentionally) confusing EROEI with yield. Feeding the DDGs to cattle improves EROEI because you are extracting some energy that otherwise would not be counted. But it does not improve the yield.

Nobody could be as stupid as you pretend to be. Knock it off.

Wow, I just about lost it. I was watching C-Span and Senator Olympia Snow R-Maine, Said when referring to rising oil prices that it is "not supply and demand." When our nation goes Fubar, I'm gonna remember the people that so graciously facilitated it..

The reason I am a doomer is not that I believe there are no technological solutions to at least mitigate the effects of oil depletion. I'm a doomer because the people and the governments of the world are almost guaranteed to react to the crisis in ways that make the crisis ever so much worse.

I have made attempts to convince people that we have an oil supply problem, and I have had zero success. They'll listen politely to my arguments, and then opine that without speculators, oil would be $60/bbl.

It's like they really don't want to believe in depletion. So they don't.

I am also a doomer and see the situation about the same. One of the problems is that many people feel helpless and an easier road to follow is to remain in denial of depletion. If depletion is acknowledged then the former denier might feel compelled to take some action. No, better to blame someone else and watch NASCAR. Some of this herd mentality is hard wired, some is learned behavior. We that believe in PO represent the minority opinion.

Our so called leadership is barking loudly but as time passes the remainder of the world is seeing the US as just another of histories many paper tigers. Instead of our leaders actually leading they head for the links or the campaign trough...and they make comments like this one...'of course the entire government is going to crash but in the meantime it's still possible to live well.' America is, literally, being run one day at a time with no regard for what happens after the current election term expires. Our leaders are clueless and very few of them even show an ernest interest in the problems faced by America unless the tv camera is turned in thier direction...When that happens they make some stupid comments that many people take seriously. I don't bother to listen or watch the 'leaders' any longer for I know I am involved in a train wreck and that those azz hats can do nothing to stop it. As Greenspan admitted while speaking to a gathering of economists in France 'we have lost control of the budget.' That says it all.


Agreed. The politicians have figured out how to be elected, but none have figured out how to fix anything. As I heard on the radio the other day, "the gov't got us in this oil mess, and you expect the gov't to get us out of it? Gov't should step aside and let the free market run it's course."

In the post about New Zealand, it talks about the evil carbon from a coal fired power plant. My question is, what is the CO2 output of a coal fired plant compared to the output from the same size plant using natural gas? Is it really other pollutants that are such a problem with coal? With coal gassification I understand that the CO2 is higher yet, but the powerpant itself is similar to a natural gas plant in being low in pollution output.

I don't know the exact numbers, but I seem to recall the NG versus coal emmissions pewr unit of electrity to be roughly a factor of two. The NG gains from the hydrogen (methane is CH4), and the higher thermal efficiency of NG turbines. IGCC is more amenable to carbon capture and sequestration, as the exhaust gas is supposedly nearly pure CO2. Question for the chemists, what happened to the nitrogen?

My heart bleeds for the Indonesian fishermen who are complaining about the price of fuel.These people have been carrying on unsustainable fishing practices in the waters North of Australia for years.This in spite of being detained by Australian patrols,having their boats burnt and having a little holiday in custody.From the environmental viewpoint what is happening worldwide in the fishing industry because of the oil crisis is a good thing.We will also see how the vaunted culural addiction to whale meat of the Japanese survives the cost of obtaining it.

Re the story about Australian PM Rudd carrying on about pressuring OPEC to pump more oil.
In the sense of having any real understanding of where the world is headed Rudd is a fool just as his predecessor,Howard,is a fool.Significantly,Rudd saw fit to honour Howard in the Queen's Birthday list.

It's time for the Bargaining phase

I know people have discussed this before:

The Kübler-Ross model describes, in five discrete stages, the process by which people deal with grief and tragedy, especially when diagnosed with a terminal illness. The model was introduced by Elisabeth Kübler-Ross in her 1969 book "On Death and Dying". The stages are known as the "Five Stages of Grief".

Our civilization has a 'terminal illness'. It is called peak oil. It is going to transform every single society in the world. The mainstream is now starting to move out of the Denial phase, and into the Bargaining phase, where all manner of solutions are being discussed. Solutions that will preserve Business As Usual. There is bargaining in virtually every article mentioning oil. At this time the bargaining is still optimistic, but I suspect it will soon become much more desperate, when it will then morph into the next phases.

They are Anger and Depression, and if the fast crash doomers are wrong and we make it through those two without a nuclear WWIII breaking out and destroying everything, there may one day hopefully be Acceptance. And if that day ever comes, I suspect it is many years away from us yet.

"I’m sure everyone here has heard you can’t store electricity. That’s not true," said Brian Beck, of VRB Power Systems in Richmond, B.C.

The cutting-edge technology company uses a battery that looks like a small "chemical plant" to store electricity produced by renewable energy and it can store up to 10 megawatts.

The advantage of using the battery is to "smooth out generation" for intermittent power produced by wind turbines, tidal and solar, said Mr. Beck, adding the company has six projects underway around the world.


I recall a story of an Irish windfarm using batteries to help level their output. Anybody know more about these guys?

Not apologizing for the mistaken use of units above, however. Did they mean they can store 10mw/hrs, or that they can supply current at a 10Mw rate? Or did I just get myself turned around??


It uses a Vanadium Redox Battery:

Some other installations use sodium batteries.

Remember Google is your friend!

Hello TODers,

Spring often is a stressful time for growers, but this planting season has been especially trying because of spiking costs.

“Fertilizer and fuel — we call those the f-words,” quipped Gary Blocker, owner of Zim Sod Co.

The cost of fertilizer has risen even more dramatically than fuel prices...
Have you hugged your bag of NPK today?

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

Yes, actually, I have.


And the prize for adding more to the population? A NEW SUV!!!