DrumBeat: June 16, 2008

Food supply fears mirror oil worries at Saudi summit

DUBAI (Reuters) - Saudi Arabia's emergency energy meeting next week brings together Western consumer countries threatened by soaring oil prices with Arab producers worried about scarce food supplies.

Record oil prices and their impact on the industrialized world will no doubt dominate the agenda, but food security could also feature as arid Middle East states worry about affordably feeding their rapidly growing populations.

Losing their drive

Americans are being driven out of their cars by soaring fuel costs

How badly are consumers getting squeezed?

Is an extra couple of hundred dollars at the gas pump enough to break the budget of the average American? By itself, maybe not. But rising gas prices are just the latest in a series of blows that have consumers tightening their belts.

Gazprom, Shell May Expand Sakhalin-2 to Pump More Gas

(Bloomberg) -- OAO Gazprom, Russia's state-owned natural gas export monopoly, said it's examining plans to increase gas extraction from the Sakhalin-2 fields, being developed with Royal Dutch Shell Plc in the country's Far East.

Toyota's hybrid output can't meet demand

TOKYO - Toyota is struggling to keep up with booming demand for hybrid vehicles because it's unable to make enough batteries that are key parts in the hit "green" cars, a senior executive said Monday.

The crunch on battery production is likely to stay for the rest of the year, as new lines can't be added to boost production until next year, said Toyota Motor Corp. Executive Vice President Takeshi Uchiyamada, who oversees production at Japan's top automaker.

Saudi Arabia's Leverage In Oil Market Is Sapped

Saudi Arabia has now made clear that it may never increase its production capacity beyond 12.5 million barrels a day -- its target for the end of 2009 -- up from its current level of 11.4 million barrels a day. After that, all drilling and exploration could go to maintain that as the country's oil fields age.

With demand still growing strongly in China and other parts of Asia, as well as within the Persian Gulf itself, the market is now digesting the fact that Saudi Arabia -- with nearly a quarter of the world's proven oil reserves -- may provide only a few of the added barrels that countries will need in the future. That has helped deepen the widespread fears over whether other suppliers can keep up with demand in the next decade.

Some analysts have pointed to the country's Khursaniya oil field, which is expected to come onstream next month, as proof that Saudi Arabia can easily bump up its production by 500,000 barrels a day if it wants. But the plan for that field was to ramp up its production slowly, while using the new stream to allow some of the country's older fields to rest.

Vinod Khosla: All Biofuels Are Not The Same

Last month the Wall Street Journal accused me of advocating subsidies for food-based ethanol. I ought to "take a vow of embarrassed silence," it said, for claiming that ethanol's contribution to the food crisis is "overblown." The Journal's claims would be laughable if the stakes were not so high.

China Becomes Net Gasoline Importer for First Time

(Bloomberg) -- China was a net importer of gasoline for the first time in May as rising oil costs discouraged refiners from processing crude into fuels, and in preparation for the August Olympic Games.

Gasoline imports reached 338,572 metric tons in May, the highest in at least 29 months, while exports were 160,000 tons, the Customs General Administration of China in Beijing said in an e-mailed statement today.

Nuclear's changing fortunes: Public's concerns dwindle as energy crisis grows

Along-promised, never-quite-delivered revival of nuclear energy may finally be underway in Canada and one of the key reasons is, at first glance, counterintuitive -- the environment.

Sentiment on drilling changing

Just three years ago, the pollsters at Gallup found 42 percent of Americans supported tapping into the vastly unknown underground oil deposits of Alaska's Arctic National Refuge Area.

With the nationwide price for gas now over $4 a gallon, a recent Gallup poll showed 57 percent of Americans now favor further exploration.

Mexico: Will Gas Subsididies End?

Mexico's costly subsidy for gasoline is becoming even more expensive for the government as global oil prices soar, putting pressure on public finances. What will Mexican President Felipe Calderon do? Will he be forced to curb or eliminate the subsidy? If he does, what would be the economic and political repercussions?

Why Brazil Isn't Ashamed to Exploit Its Oil

It comes down to this: Where government has the property right, restrictions on development tend to be low. But when the private sector is the owner, environmental concerns blossom.

Small firms in warning over impact of rising fuel prices

Rising fuel costs are having a “dramatic” effect on the economy, with most smaller firms warning it will be difficult to recruit staff in the coming year, according to a new report published on Monday.

India - Gas allocation: priority to fertilizer, LPG plants

NEW DELHI: The government has decided to accord top priority to fertilizer and LPG plants for allocation of gas under the new natural gas policy regime. Work would also be initiated to provide connectivity to the five naphtha and fuel oil-based plants and reopen seven closed units.

Australia: Rising fuel prices hit fishermen

The high cost of fuel is only adding to the difficulties of cray fisherment in an already difficult season, according to prominent Torres Strait businessman Peter Ahloy.

"The cost of fuel is having a lot of effect at a time when there’s not many crays about; the fishermen are losing money or not making much at all," Mr Ahloy said.

Researchers at UTA work on turning lignite into oil

Researchers at the University of Texas at Arlington think they can turn the state's 200-year reserves of lignite into a supply of heavy crude that will return Texas to its glory days as one of the oil capitals of the world.

Honda rolls out fuel cell car

TAKANEZAWA, Japan (AP) -- Honda's new zero-emission, hydrogen fuel cell car rolled off a Japanese production line Monday and is headed to southern California, where Hollywood is already abuzz over the latest splash in green motoring.

Peak oil – worry now

A certain columnist for a newspaper conglomerate recently commented that those of us concerned with climate change are "doomsayers." He's wrong.

Doomsayers are those who say there is no point in doing anything, "it's to late," or "we can't help anyway." The environmentalists are actually the most optimistic people on earth. We believe that we can change things. We believe that the world can be a better place if we actually make an effort, and we are happy to tell anyone who will listen that there is still hope for humanity's future, we just need to adjust our thinking and actions.

Saudis May Be Strapped for Oil, Close to Full Capacity

Saudi Arabia's pledge to boost oil production by 500,000 barrels per day may not be achievable, a source close to the Saudi oil industry told CNBC.com.

...The country's ability to produce more than 9.45 million barrels a day of easily refined sweet crude is reliant on the newly-discovered Khursaniyah field, which is of yet not producing to its full capacity, a source close to the industry said.

Will the Saudis Increase Oil Production?

The loss of 1 million barrels per day of Saudi production between 2005 and 2007 was one of the single most important factors in the run-up in world oil prices over the last several years. One theory of the cause behind the earlier drop was that the Saudis' magnificent Ghawar oil field had entered into decline, in response to which the Saudis made a big increase in drilling effort to develop alternative sources within the kingdom.

Asian refiners say "no thanks" to more Saudi oil

SINGAPORE (Reuters) - Refiners across Asia said on Monday they were not likely to buy more Saudi crude at current prices, highlighting the kingdom's challenge in attempting to contain soaring markets by promising extra barrels.

Trinidad & Tobago: Our unstable energy economy

My concern is, what should a small energy-exporting economy do in the face of Peak Petroleum? We are already feeling the impact of high imported food prices (reduction in tourist arrivals will follow) which cannot be completely alleviated by planting our own food. We cannot be self-sufficient in food and the contributors to modern farming are also petroleum-based - fertilisers, equipment, pesticides, infrastructure, construction etc.

As we export and deplete our resources we may be able for a time to alleviate the impact of high-priced imports via subsidised prices (TT$6 billion in 2008 for gasolene according to the Minister of Finance). Our savings in the Heritage and Stabilisation Fund etc - the result of high oil prices - are to be invested in the global financial system that depends on cheap energy - quite a conundrum. What this scenario suggests is that rapidly depleting our resources to turn some of it into US dollar savings to be invested in a precarious global financial system, needs re-evaluating.

Saudi Aramco and Total Confirm $10 Billion Refinery Construction Project in Jubail, an Industrial Info News Alert

Saudi Arabia's national oil company, Saudi Aramco, and the French energy company Total S.A. (Paris) have confirmed their investment in a 400,000-barrel-per-day refinery in Jubail, Saudi Arabia. The $10 billion refinery will process heavy crude oil from Saudi Arabia into high-quality oil products that meet stricter environmental standards. The refinery is scheduled to be completed by the end of 2012.

From Flat World To Free World

Considering the many jubilant boasts by "flat world" devotees in recent years, you might have been tempted to regard economic globalization as a juggernaut, powered by inexorable forces of technology and history.

Big mistake. There's no preordained direction for the world economy--only an undetermined future that will take the shape of whatever ideas and policies we choose to uphold. The lack of an intellectual defense of capitalism has left free markets vulnerable. "The power of the state is reasserting itself," said Daniel Yergin, co-author of The Commanding Heights and a free-market optimist, in The Wall Street Journal recently.

Australia: When is a bike not a bike? When it's electric

THEY might look like a solution to the rising oil price and global warming, but a court ruling has found some motorised bicycles cannot be legally used on NSW roads - even though the Roads and Traffic Authority previously advised owners they could.

The oil era reaches its desperate endgame

An increase in Saudi oil pumping might well have the desired effect of bringing down the price somewhat. But what if it does not fall low enough to ease the pain of the world economy? How long before our political leaders return to Saudi and its Opec allies to plead for more? And what will be the political price extracted for this? What we are seeing in this desperate horse-trading is the endgame of the oil age. Even if we have not yet reached the inevitable moment of "peak oil", when production begins its inexorable decline, it is abundantly clear that the age of cheap fuel is over. The economic leaps forward by China and India represent a step-change in energy demand. The rate of discovery of new oilfields has failed to keep pace with the speed at which nations are joining the global economy. That means the price of oil will remain considerably above the level to which we have historically been accustomed.

Saudis to pump oil at fastest rate in decades

DUBAI (Reuters) - The world's top oil exporter Saudi Arabia will boost output next month to the fastest rate in decades to help keep pace with demand and tame what it sees as unacceptably high fuel prices.

Riyadh plans to lift output to 9.7 million barrels per day (bpd) in July, United Nations chief Ban Ki-moon said on Sunday after meeting Saudi Oil Minister Ali al-Naimi.

Quest for Oil: Where to Look Is the Question

Industry supporters say they can’t be sure how much oil exists in areas they haven’t explored. But they say there are good reasons to think large reserves exist in areas now closed to drilling. Closed areas in the Gulf of Mexico and off the coast of California, for example, abut areas that have been drilled successfully for years.

News reports: Japan, China agree on gas deal

TOKYO - Japan and China have agreed on a gas exploration deal in the East China Sea, striking a compromise in the long dispute, news reports said Monday.

Gazprom Seeks Gas Swaps With Sonatrach to `Optimize' Supply

(Bloomberg) -- OAO Gazprom, Russia's state-owned gas-export monopoly, plans to swap gas supply volumes with Sonatrach, Africa's largest natural-gas producer, to ``optimize'' fuel deliveries to Europe and beyond.

Gazprom, which opened its first African office today in Algeria, may swap gas in pipelines for liquefied natural gas cargoes from Sonatrach. It may also offer LNG from the Sakhalin-2 project in Russia's Far East for Sonatrach LNG swaps.

Fire shuts Norwegian oil platform in North Sea

OSLO, Norway (AP) -- Norwegian oil company StatoilHydro ASA says it has halted oil and gas production on a North Sea platform after a fire broke out.

Fridman Says TNK-BP Relations Broke Down on Its Performance

(Bloomberg) -- Russian billionaire Mikhail Fridman said relations with BP Plc have broken down over what he called the poor performance of their venture TNK-BP.

Shareholder returns at TNK-BP have been worse than at other Russia oil companies, Fridman told a press conference in Moscow today as he and his fellow billionaire shareholders battle for control of the venture with BP.

Gazprom CEO's $250 Oil Forecast Deals Doom Options Traders Love

``It would be a disaster for all the oil-importing countries, all the democracies and China,'' says James Woolsey, vice president of consultant Booz Allen & Hamilton Inc. in McLean, Virginia, and a former Central Intelligence Agency director. ``And it would be hugely beneficial for the many monarchies and dictatorships that are the main suppliers.''

Some investors are already betting on Miller's forecast. At least 3,008 options contracts have been purchased giving holders the right to buy oil at $250 a barrel in December, data compiled by Bloomberg show. The options closed at 64 cents on June 13.

China puts lid on soaring oil prices

Even though the price of crude oil has ballooned to record highs on international markets, China has remained curiously insulated from the global fuel crisis. Thanks to generous government subsidies and rigorous prices controls, pump prices across China have barely moved in months.

Analyst: Air fares could double if oil prices keep rising

Airlines may have to double fares this year if crude oil prices rise above $150, industry analyst Michael Boyd warned Friday. Ticket prices will need to jump 80 percent to 100 percent to cover the airlines' jet fuel if oil prices go that high, he said.

"As of June 2008, the entire U.S. air transportation system is operating on borrowed time. Between January and today, the situation has degenerated from a crisis to a survival situation," the president of the Boyd Group said in a report.

Hong Kong aims to create oil futures market: financial secretary

HONG KONG (AFP) -- Hong Kong is looking at developing its own oil futures market as China tries to counter the effect of the commodity's rocketing price, the city's financial secretary said on Monday.

The new market would help fix the disparities that Asian buyers face when purchasing oil, which is priced in Dubai, London and New York and does not take into account local conditions, John Tsang said.

A post-petroleum world

With gas at $4 per gallon, most people in New Hampshire can feel their wallets draining along with their car tanks. Not Nelson Lebo. He doesn't have a car. He's not worried about the cost of home heating oil either. And soaring food prices? Not much of a problem.

Lebo, 40, lives in a 1782 farmhouse in the woods of Andover that he has dubbed Pedal Power Farm. He heats it with wood cut from the property. He gets around on a bicycle. He grows much of his own food and buys locally otherwise. He gets his electricity from solar panels.

What's in your future as oil prices rise?

The ancient city of Pompeii was destroyed by the volcano Vesuvius in 79 AD and the majority escaped. But 3,300 people died during the 24-hour eruption, even though there was ample time to flee. Similarly, we see people staying in the path of hurricanes and dying. Humans often fail to appreciate a dangerous situation, make a poor decision and perish. Explaining some of the dangers that exist in our energy supply may help people make better decisions on their future.

Price jolt: Electricity bills going up, up, up

Utilities across the USA are raising power prices up to 29%, mostly to pay for soaring fuel costs, but also to build new plants and refurbish an aging power grid.

Even more dramatic rate increases are ahead. The mounting electric bills will further squeeze households struggling with spiraling gasoline prices.

Floods push U.S. corn prices to records

Rain in the Midwestern United States has damaged crops and delayed plantings, heightening fears that there might not be enough corn to meet global demand for food, feed and biofuel. The fears drove the grain to a record high for the eighth trading day in a row.

Greenpeace declares war on coal

Greenpeace has called for all Australian coal-fired power stations to be shut down by 2030 as part of a radical energy plan.

The group wants an immediate ban on new coal-fired power stations - and extensions to existing plants - and for the Rudd government to plan to close their doors for good.

Climate change threatens reef fish

SYDNEY (AFP) - Climate change threatens to devastate coral reef fish populations and increase the likelihood of fishery collapses, Australian researchers warned Monday.

The Auto Efficiency Wedge
Posted by Stuart Staniford on February 11, 2007 - 10:28am


Keeping in mind the "Auto Efficiency Wedge" by Stuart Staniford, and assuming for the moment that personal transportation must continue into future to facilitate the transition to another way of life...

In the coming years with the combined effects of peak oil, credit crises, material constraints, and overall downturns in the economy there are going to be a large number of people facing a transportation crisis. SUV's and non-work trucks are likely to become as desirable as chicken pox as the cost of operating them becomes prohibitive to the owners and their resale value plummets. This will leave vast numbers of people with no means to purchase another vehicle. Rather than being able to go through a complete cycle of new car owner, to second owner and beyond - the SUV's and non-work trucks may very well hit a dead end. So at the same time that the primary market of new buyers gets squeezed because the resale value of their vehicle has gone in the toilet, the secondary market of used car buyers will be faced with a shortage of viable and desirable used cars.

So what do you do when you're faced with a shortage of transportation, soaring oil costs, a shortage of raw and finished (batteries, etc) materials to build new vehicles with, and a weakened economy? Some will try to adapt through the increased use public transportation where it exists, bicycling, walking. Carpooling may be viable for many, extending the usefulness of lower mpg vehicles and perhaps stretching the usefulness of higher mpg vehicles. Unfortunately, though these strategies should help many people, this will still leave a large gap in personal transportation. I think a look back at a time which will likely present some similarities to future conditions - post WWII Europe - could reveal a strategy for the future. A blend between a car and a motorcycle, the KabinenRoellers (Cabin Scooters) filled the gap between being exposed to the elements on a scooter or motorcycle, and the expensive larger cars that only the rich could afford. One of the quickest micros ever made, the Messerschmitt KR200 with its tandem seats and aerodynamic tapered body could reach speeds of 60mph and get 80mpg with a 191cc two-stroke single cylinder engine. A modern cabin scooter with a nice aerodynamic shape, and more efficient four-stroke engine (or diesel) should be capable of similar or better numbers with increased comfort and crash protection. An electric cabin scooter would be capable of going quite far using far fewer batteries than a full size car (see Corbin Sparrow/Myers Motors NMG). Built as simple transportation and produced in mass quantities, these simple(r) vehicles could potentially sell for around the price of a motorcycle/scooter + a premium, and be much more practical because of the fully enclosed structure.


Some examples of older Cabin Scooter vehicles:

Microcar Museum: http://www.microcarmuseum.com/

Messerschmitt KR200: http://en.wikipedia.org/wiki/Messerschmitt_KR200

Replicar Cursor: http://www.roldroyd.karoo.net/cursor/cursor.htm

HMV Freeway: http://en.wikipedia.org/wiki/HMV_Freeway

HMV Freeway video: http://www.youtube.com/watch?v=kHkNvrcFaq0&feature=related

(100mpg @ 40mph, 80mpg avg, top speed 65mph-ish), 1 passenger


Some examples of modern cabin-scooter type vehicles and very small cars

VW 1 liter: http://www.seriouswheels.com/cars/top-vw-1-liter-car.htm
0.99 litre per 100 kilometres. (~235mpg), 2 passenger.

VW Lupo 3L: http://en.wikipedia.org/wiki/Volkswagen_Lupo
3L per 100 km (~78mpg), 4 passenger

Loremo: http://evolution.loremo.com/index.php?lang=en

(~120mpg), 2+2 passenger

MM NMG: http://www.myersmotors.com/

(electric, ~200Wh/mi), 1 passenger. There’s a video on MM’s homepage (that auto starts – grr!) that is pretty interesting and shows a few of them mixing with traffic. They look oddly large.

Aptera: http://www.aptera.com/
(electric, hybrid - 200+mpg), 2 passenger

Commuter Cars Tango: http://www.commutercars.com/
(electric 80mi range), 2 passenger

Venture One: http://www.flytheroad.com/
(electric, hybrid), 2 passenger

Some semi-faired scooter based trikes:

(The other) Tango: http://www.gekgo.com/3-wheel_rtm-tango_scooter_%20trikes.html

Suntrike: http://www.gekgo.com/suntrike_gas_scooter_trikes.html

Scootcoupe: http://www.gekgo.com/scooter_coupe_gas_scooter_trikes.html

There are lots of possibilities for high mpg vehicles using aerodynamics. There's also the man powered vehicles, which are bicycles (or trikes) with aerodynamic shells. I built a shell around a small 100cc motorcycle and managed to do 235 mpg on the freeway at 55 mph. And in that effort, I never got around to optimizing the engine. Other similar efforts produced over 400 mpg running on a closed track.



Of course, these bikes aren't going to pass crash tests and the typical SUV driver isn't going to be happy riding on one. But, for the lunatic fringe, there's always a way...

E. Swanson

The typical SUV driver faced with the choice of one of these, a bicycle, or the bus - will likely grumble and curse under their breath, then quickly accept them if they're the only option. As far as crash worthiness - if the SUV cold war is over perhaps it won't matter as much, and they (should and/or could) be much safer than motorcycles.

I don't know why I'm even wasting my time posting this. It's late and there are already an unreadable 300+ posts.

A lot of boondocks people like me will switch to wood gas/biogas. It is a cheap and proven technology. With appropriate pretreatment of the "gas", the engine will last a long time and not varnish out.

This was discussed on TOD, what, 3 years ago?


Hi Todd--Seems to me we discussed constructing the fermenter, collector and processor all that while back--a different kind of still. I'm glad you decided to post because it spurs the little grey cells, yes!

Most compacts and subcompacts could and probably evntually will be converted to EVs. Most owners won't be able to afford many batteries, so their range may be limited to only a few miles per day. Even that might be enough to continue to provide a lot of people with at least a little bit of mobility - enough to get to the grocery store or nearest mass transit node and back in bad weather, at least. These will have to do for a lot of people until enough affordable NEVs and other small vehicles per above become available.

Sounds like you think we are going to get through this. What about other such problems like spare parts, lubrication, no job to go to, no food at said grocery store etc.

No. It sounds like he thinks there are some possibilities out there. BB's remember?

"We'll get through this.." accuses him of concluding that 'Everyone' will, and perhaps that it should be relatively easy or painless. But he never said any of that. Some will, some won't, your mileage and your luck may certainly vary. He did say 'most', but cut him some slack, eh? Hyperbolic assumptions turns so many of these threads into wide-eyed "oh yah?"-fests.

If I can pull off an EV conversion, it probably won't serve just as a typical private car or van/pickup truck (one of my hopes..), but will be in service more likely as a taxicab, shared use for the extended family, or as a rental/delivery vehicle.

As far as parts and lubrication, EV's are reputed to have much lower maintenance needs, and as they will probably travel far fewer miles, the tires and grease and such needs will likely be lowered as well.


(Responding also to WNC Observer)

The problem with electrifying a normal car, even a subcompact, in the future years is going to be battery supply. It takes A LOT of batteries to get a fairly meager range. A retrofitted civic using lead-acid will have much of its cargo space devoured by batteries, and only have maybe a 50 mile range. The Sparrow/NMG can get that kind of range from 13 PbA's (and they're not really high Amp-hour either). Super390 did some calculations on what it would take to equip the VW 1 liter with batteries for a decent range and the result was pretty low. The more efficient the vehicle the fewer batteries are necessary. This has double impact in not only reducing initial cost, but operating costs (fewer batteries to replace, less electricity needed)...but perhaps the greatest effect is by using fewer, there are more to go around - 'cause you know there are going to be shortages.

As an aside, I think one of of the biggest things that killed the Corbin Sparrow was that it only had one seat - not room for even a single passenger. Gas being dirt cheap was probably not good for it either. Initial pricing was about $14,000. It's now, under Myers Motors, something incomprehensible (like $30,000 or such).

The shops are a mile from where I live, and the town centre two.

I figure a 6 mile range ought to be possible on my VW Polo.

Most of the conversions will be for very, very local use.

If they bring out decent electric trike I will use that instead.

Any purpose-built NEV is likely to outperform any conversion car in terms of range per battery. The problem is, though, that new purpose-built NEVs are likely to be unaffordable for much of the lower tier of the population. If they have or can acquire that old civic, round up a few batteries, and can afford the conversion kit, they might just have enough battery capacity to make short trips. Yes, they could walk or bike, but when they are trying to make it back and forth to the nearest mass transit station or to the store in a driving rain or snowstorm, that is expecting a lot of them. Even if it takes two or three days to recharge on a trickle charger, and even if it can only creep along at 10-15mph for a few miles, any motorized wheels at all would be a considerable advantage over none at all.

I'm reasonably confident that battery technology will take off pretty well, with the huge impetus given by expensive oil. Toyota and their excellent production engineering will likely take a lot of cost out of lithium batteries with full, multi million mass-production, whereas the addition of super capacitors to humble lead-acid batteries by avoiding deep discharge should massively increase their lives.
Probably the way to go will be some sort of purpose built EV, bike, trike or whatever, but for very low mileage drivers a conversion may be the best option if they don't fancy getting wet in the rain.

Even if it takes two or three days to recharge on a trickle charger, and even if it can only creep along at 10-15mph for a few miles, any motorized wheels at all would be a considerable advantage over none at all.

I don't think I buy that, except for those who are physically incapable of walking or biking.

The way I see it...the benefit of having a car will be falling, while the cost increases. Eventually, it will reach the point where ordinary people won't want to spend the money on a car, even if they can afford it.

Assuming that one is serviced by a robust and frequent mass transit system consisting of buses, street cars, trollies, etc., and assuming that no transit stop is more than ten minutes from where people live, I think we should move to banning all private autos, NEVs or not, unless the person is certified to be handicapped. Even in this case, pick up services could be available, which already exist in many locations.

From personal experience, it is generally not worth messing with a car, even if electric, if one has access to an excellent transit system. And also from personal experience, when I did not have a car, it made it very easy to lose weight and to improve my health in general. The Dutch recognize this.

My mom is disabled, works harder than most people without a disability, and has had to use public transportation before. It's more than a hassle when you are disabled. Often you have to wait for hours to be picked up. Sometimes people get stuck at locations because the drivers go to the wrong entrances of buildings and quickly leave when they don't find the person waiting. Handicapped equipped taxis are often used for spare capacity and they often don't carry the additional insurance required beyond the initial vetting that they must go through to become authorized. The drivers frequently drive too quickly over bumpy roads which causes things like bumped heads, muscle strains, or worse. Sadly there is often little recourse for those who depend most upon these services.

She has a handicapped equipped vehicle which the state paid to retrofit. With the cost of filling up the tank rising from $50 to $70, it's enticing for her to use public transportation, but the damage and inconvenience caused far outweighs the benefits. I fear that at some point it will become the only available option. Reform of the system isn't easy in a market ruled by a public transportation cartel whom the public officials will bow to. Really the only hope is lawsuits or undercover news investigations, but what level of suffering will be inflicted upon the people who depend on these programs to try to lead a productive life?

My sympathy and empathy.

More later.


Other than the Aptera my favorite is ...


Both are side by side tadpole trikes (motorcycles)

My goal is to get this in a pedal hybrid and registered as a bicycle

I like the Aptera too. But as someone pointed out, avoiding potholes may be a bit difficult, what with the triangular design.

And consider the new Tata Nano as well. Who knows - it might get exported to the US :-)

My Zap Xebra PK might qualify as one of the most efficient vehicles on the streetsof Minneapolis, MN, today.

My little truck is electric and is very useful for short urban trips. I can go up to 40 MPH and so can comfortably drive the city streets and carry tools and supplies for my work.

Zap makes a little electric car as well.

If we replaced millions of ICE vehicles with these much more efficient little electric vehicles in cities, we would save energy and money and also make less pollution.

The key seems to be that the electric motor is far more efficient with energy than the ICE. It also helps to keep vehicle size, weight and speed down, of course.

Here's a page with pictures of the Zap Xebra PK and SD:


I really think that we have the technology to make electric transit and electric utility vehicles and station cars work right now. We need the vision and commitment to implement public policy that makes use of the available technology.

Looking further out, this Swedish research into cellulose nanofibers that could help create reinforced plastic composites cheaper than those reinforced by carbon fibers. This kind of technology could help to reduce the weight of vehicles, without reducing their structural integrity and there there should be no difficulty scaling up production of cellulose. I have a post further down the page talking about my frustration with the dearth of components to build AC electric drive systems that include regenerative braking. There's lots of exciting work being done in the field of batteries, (can I say EEstor?) some of which may actually make it to market. Lighter, more efficient, more powerful electric motors are also being researched.

It is my hope that as automakers ramp up their electric drive efforts, we will see more AC motors designed for automobile traction applications available. New battery technology will allow extended range, lighter weight and hopefully, lower cost. It would be nice to be able to get something like the AC-150 EV Power System designed specifically for automotive applications, from an industrial electronics manufacturer like Honywell or Siemens, at a price closer to the DC drive electronics currently available. Note that the more popular DC controllers used by EV enthusiasts are not exactly mass produced either.

There sre an increasing number of incredibly interesting DIY/home brew/after market EV conversions out there including this Dodge Ram pluf-in hybrid that the creator wants to offer to the public! IMHO it would be great f there was a boom in this kind of activity, as it could provide a bright spot in an otherwise very gloomy economy and provide some real demand destruction fairly quickly. This could extend the useful life of fairly new ICE powered cars and transition to an electric based transport sector in a lot less time than it would take to replace the entire fleet of ICE powered vehicles with all new electric ones. While converted ICE powered vehicles will mot be as efficient as vehicles designed as EVs from the ground up, they will still be a damned sight more efficient than their ICE powered equivalents.

Things like Hemmers and light to medium duty trucks bought for recreational purposes would be best recycled to provide copper for all the electric motors that are going to be needed and glass, metals and plastics for the massive build out of commuter rail.

Alan from the islands

This brings to mind the question,

'Between the Alternator, Starter Motor and Inition cabling, etc, how much of the copper needed for winding and cabling an EV is available in a scrapped SUV, or other vehicles?'

Lead will likely become the new pricey commodity, as was implied above..


A million acres of corn under water and that's just in Iowa. Corn prices at record highs. Ethanol production (supposedly) ramping up to higher levels. It's going to be an interesting year.

In Midwest Floods, a Broad Threat to Crops

E. Swanson

All the problems of this time last year except we have no grain stockpile now.

Here's a few updates on the UK fuel strike

More drivers join tanker strike

Workers from other companies have walked out and joined Shell drivers on the picket line at Grangemouth's fuel depot.

The action came after 11 drivers employed by Scottish Fuels were reportedly suspended for refusing to cross the picket line.

The four-day strike by Shell tanker drivers has disrupted fuel supplies at 15% of Scotland's forecourts.

The Scottish Motor Trade Association warned that figure would increase.

Up to 1 in 4 garages could run dry today as petrol drought worsens

Up to 1 in 4 petrol stations are expected to run dry as the four-day pay strike by tanker drivers enters its final 24 hours.

But there are hopes of an end to the dispute after union leaders announced that fresh talks will take place today.

The negotiations were welcomed by employers, ministers and the oil company Shell. However, fuel shortages will continue until supplies resume tomorrow.

Fuel shortages spread as tanker drivers' strike enters fourth day

Motorists are facing increasing fuel shortages with queuing spreading to several parts of the country as the strike by Shell's tanker drivers entered its fourth day.
Shell tankers stand idle at the petrol tanker depot in Coryton

Fuel rationing was imposed by some garages in the South West, while drivers were facing difficulties filling up in parts of Wales, Worcestershire and in the South East.

Alarmingly Shell was not the only retailer to see its pumps running dry. Esso's garage in Barry, south Wales, was completely out of fuel.

Hopefully this will go some way to educating drivers of the benefits of electictrified transport. At least the power lines can't go on strike.

No but the power lines can be stolen or fail because there is no fuel for the repair trucks.

For those of you following the petrol strikes, the BBC has an online map here where users can log locations where they're having difficulty buying fuel.

It's a world map but if you click on the white arrows you can get a closer look at smaller areas (mostly UK).

New record - $139.89


A new record?!?! How can that be?


Come tomorrow, 6/16, you are going to see the price of a barrel of oil take a nose dive like no one ever thought possible.

(Unless nose dive means 'Oh Noes! I shall collapse and cry!')

But the 16th is not done - so perhaps my mocking is too soon?

Well not all comments from yesterday got it so wrong.


The real problem is this makes it even more obvious to all concerned that the cupboard is bare. That brings the reaction to peak forward, which includes price take off and holding back of supplies by exporters.

SA would have done better to hold to their "nobody needs more oil" line. It wasn't believable, but it didn't give the game away so obviously.

Todd Benjamin of CNN was saying this morning that if the market did not like the news from Saudi then there was nothing to stop a rise to $150-200.
He does not buy the speculation idea as he argues that you would not have a large price difference for light crude if that were the cause.
If you wish to comment on his views he has a blog here:

How can I get to the referenced comments from yesterday's drumbeat. I don't see any comment numbers in the thread?

Right click on the permalink button in the top line of a post and choose "Save Target As..." I think.

Edit: Actually I might have misunderstood what you're asking here

If you want to refer to an individual comment, right-click on the and select Copy Link Location. Then in where you are writing your comment, Paste it.

Time is the premium factor now.

Today's break out should carry crude to $160 using the
flagpole of $120-$140 (roughly) as the measure.

Energy Bubble Will Burn Bulls Just Like Tech Did, Says Top Investor Herro


It's not a bubble, but the current oil price has created a situation where lots of activities (like long distance tourism) are not viable but continuing on momentum and hope and existing contracts. As those die, with associated ripple effects on supplying activities, then the current price will prove to be an overshoot. Of course if net exports drop as fast as some fear then the correction might never come...

I can see a lot of discontinuities and bubbles coming up.
For instance, the aeroplane and long-distance tourist industry should hit the buffers a lot quicker than the trucking industry, as the first is largely discretionary, the second essential to survival.

What will that do to the prices of the different fractions of a barrel of oil?
Kerosene might not be in high demand, and so should sink in price, giving some sort of dead-cat bounce to the airline industry, but is it realistic to think that this will happen, as it is closely associated with the other fractions in a barrel of oil, like diesel, still in high demand?

It seems to me that oil will not go over $200 in the present run-up, as the economy of the world will be devastated first, but the fall back will still be to high enough levels to give the coup de grace to many present systems, and the effects will be patchy and hard to predict.

With respect to "electricity bills going up, up, up", Nova Scotia Power has applied for a 12.1 per cent rate increase effective January 1st. If approved, it will be the fifth rate increase in the past seven years, with residential customers paying $0.1196 per kWh, up from $0.1067. Even so, electric resistance heat will remain 20 to 30 per cent below that of fuel oil, which now retails between $1.25 and $1.30 per litre ($4.90 per U.S. gallon).

As many of you know, I'm a strong advocate of ductless heat pumps and even in our cold Canadian climate, a model such as the Fujitsu 12RLQ provides an average of 3.1 kWh of heat for every one kWh consumed. At $0.1196 per kWh, that drops the effective cost of electric heat to just $0.0386, or the equivalent of 33.8 cents per litre, assuming an AFUE of 82 per cent ($1.28 per U.S. gallon).


The thing I like about electric heat is that it can be localized easily. I live in a condo building (69 units) with centralized gas heat. I pushed for greater reliance on electric heaters to make one room comfortable in a colder unit rather than turning up the heat for the whole building and having the warmer units opening their windows. This was several years ago after the big run-up in NG prices. I'll make another push soon, and succeed this time I believe.

Hi Dave,

I believe the opening and closing of apartment windows in an effort to regulate temperature is referred to as the "New York City thermostat", where I take it this is common practice. Sometimes there's little choice. As you can appreciate, the south and west sides of a building can be uncomfortably warm on a sunny winter's day whereas occupants on the north and east sides who may be exposed to strong prevailing winds can be downright chilled; without individual controls, it's hard to keep everyone happy.

In an ideal world, each suite would have its own heat pump tied to a common supply line. This would allow heat to be pulled from or, alternatively, dumped to the water that is circulated through this feed, with any excess heat stored in basement holding tanks for later use. This approach is sometimes used in office buildings where the inner core and server rooms are often significantly warmer than the outside parameter -- instead of simultaneously heating and cooling different parts of the building (or heating and cooling the same area, but at different times of the day) you simply transfer heat to specific areas where and when required. [In some buildings, all air is cooled by central chillers and electric coils in the ducts reheat this air to the desired temperature, which is a horrific waste of energy.]

Hopefully, rising energy prices will lead to more intelligent building design and better operating practices.


For those of you who remember Mad Max: Beyond Thunderdome, the following...

(And for those who don't, rent it. The movie is basically a post-apocalypse flick that shows a possible future without fossil fuels. The following scene takes place in Bartertown, an outpost run on methane from pig manure. Master Blaster runs the pig farm (Master is the brains, Blaster is the brawn- two people, one entity), and Aunty Entity (Tina Turner) runs Bartertown)

[the Blaster has reduced Bartertown's power supply]
Auntie Entity: For God's sake, what now?
The Master: Who run Bartertown?
Auntie Entity: Dammit, I told you, no more embargos.
The Master: More, Blaster.
[the Blaster puts all power out]
The Master: Who run Bartertown? Who... run... Bartertown?
Auntie Entity: ...You know who.
The Master: Say.
Auntie Entity: Master Blaster.
The Master: Say loud!
[the Master turns on the town loudspeakers]
Auntie Entity: Master Blaster.
The Master: Master Blaster... what?
Auntie Entity: Master Blaster runs Bartertown.
The Master: Louder!
Auntie Entity: Master Blaster runs Bartertown!
The Master: Lift embargo.
[the Blaster turns power back on]

One way to handle gas prices: Move - More people are looking to live closer to work and shopping, and find relocating saves them hundreds of dollars a month in gas.

"I'm doing it all for economic reasons," said Stevens, who figures she'll save enough in gas to pay off the $2,400 scooter in under 7 months. "I loved [the farmhouse], but I do feel like I'm doing the right thing."

Stevens is part of a national trend of high gas prices playing a major role in where people choose to live. Factors like distance from work, access to public transportation, and proximity to shopping are gaining ground on square footage and whether or not the home has a yard and pushing people into more densely packed areas.

"The high cost of gas is cited as a driving factor in increased interest in urban living," said Jim Gillespie, chief executive of Coldwell Banker, a national realty franchise. "Over the past several years we've seen a boom in downtown living all over the country."

I think this is a trend that we will see accelerate in many areas, but there is an important catch:

Houses are durable assets. If there is enough of a trend to move from Distant Suburb A to a Close-to-Work Neighborhood B, this will have an effect on housing prices in both. Housing prices in Close-to-Work Neighborhood B will go up (increasing demand), and housing prices in Distant Suburb A will go down (more houses on the market than people interested in moving there). Let's say it's $200/month cheaper for the average commute from B to A. As soon as the cost of home ownership or renting in B increase $200/month compared to A, we've reached a new equilibrium and there is no longer an incentive to move (considering only commute cost/housing cost in isolation).

Bottom line, the suburbs won't empty out, the cost of living there (e.g. home prices) will just decline relative to close-to-work neighborhoods to the point where it still makes sense to commute. Until, of course, gas prices get so high that even nearly-free houses can't offset the cost of commuting, or there are actual shortages/rationing. This is one factor (the existence of a large, durable inventory of suburban homes) that really buoys demand for gasoline in America. Also worth noting that improved mass transit to the suburbs, where it comes to pass, will slow the transition, as will the value-added of the greater ability to raise food (at least in theory) in larger suburban lots, or re-zoning/re-distribution of office locations/telecommuting...

There is also another issue, it assumes that you will stay at that job and that jobs location will not change. I tend to switch jobs, either by force or choice, every 2-3 years. I've also had happen three times now, where the office I worked in moved, and with a significant change to my commute. So in an time when companies will be losing money, what is to say the person who just moved doesn't get laid off only to find a job with a commute, or the company downsizes, moves locations and then the employee is faced with a commute again?

That situation could suggest a future for all of those RVs. Park them close to this year's/month's/week's/day's workplace, and then move on to the next workplace when a job change is needed. Mount PV panels on the roof for a little electric power, rig up a rain barel system to harvest rainwater (break it down and carry it inside when relocating), have a bike with a rack to carry it. Heating in cold weather, and sewage disposal, would be your biggest problems. Make yourself a portable anaerobic digester, and you might be able to produce enough methane to fuel a small gas heater - but you'll probably still need to supplement that with some bought fuel. A really good down sleeping bag would be a good thing to have.

There will probably be people living nomadic lives like this.

I wondered about this, if it would make sense for a single person to go nomadic. It might actually be cheaper to live out of an SUV than worry about maintaining a place to live and a car. Between my two jobs now (one paid and one volunteer in EMS), I can spend several days away from home.

Jeffvail - As far as housing trends in America go we are at a major crossroads. If you look at the current recession not as merely the growth economy taking a time-out but a major adjustment then demographics are going to change substantially.

One of the changes in housing will be the average persons per household. If you go from an average density of 2.4 per household to lets say 3.1 that is a sea change. Also people will not necesarrily buy - renting is making a big comeback. Gen-Xers, raised on sitcoms of Seinfeld and Friends hanging out in urban lofts meeting friends on the street, don't want the white-picket fence with the mortgage and a commute. Urban living is the new standard.

Also as the baby-boomers grey they will gladly trade in the suburban ranch-home for a small condo in the city. (If you worry that you might miss yardwork, trust me you won't.) Suburbia isn't dead yet, but it's ultimate demise may be lack of interest...

No argument with you about people's preferences, but these preferences will reflect exactly why prices will go up (or go down less) in these urban areas and go down in suburbia--this will make living in suburbia comparatively cheaper, to the point where it stays competitive even with the higher cost/time of commute. Lots of people would love to live in a loft downtown, but select to live in suburbia because they can get a 3 bedroom home for half the price of a studio loft...

I just got back from the suburbs this weekend. A friend of mine lives in Redlands, a susburb of Los Angeles. The couples home was a large 3 bedroom McMansion with a pool/spa. I complemented them on their home and although they enjoyed it they were both involved in signifigant commutes. They have reached what we call: "commute-itis"; when you get so worn out with sitting in traffic that you consider renting out the McMansion and getting an apartment in the city.

What is quality of life worth? Would you sacrifice a bedroom and a pool for reducing your stress? It's a question of priorities...

A suburb of LA? Different county and 70 miles away? Redlands is considered part of the San Bernardino/Riverside Metropolitan Area, a.k.a. the Inland Empire and was founded in the 1800's, I believe. Heck, there might still be some open land along the I-15 corridor..!

How far are we stretching this concept?



The Inland Empire suffers from the same problem as the OC - no compelling civic - office- industrial - cultural center in one place

"There is no there there"

Gertrude Stein, 1937

I think you'll find that quote was about Oakland, not LA :-).

Look it up...

FYI I was always a SoCal hater myself...until I moved here by accident in 2001 (I was accepted to grad school here). Los Angeles is not all sprawl and freeways, there is a real city here too.

I've been in LA since 1991. I agree that there is a real city here too, contrary to popular belief. I'd place it's boundaries as basically from E LA on the East to Universal City/Studio City on the North to South Central and Marina del Rey to the South and the corridor running to the West including Hollywood, Century City and all the way to Santa Monica.

You've just described the entire United States. Those places used to be called "neighborhood" and "community." That we've come to think the town is its buildings and/or entertainment areas is exactly the problem.


Haven't you heard? "L.A. is a great big freeway...put a hundred down and buy a car..." B.B.

Actually San Bernardino and Riverside are, by default, suburbs of LA as they have both grown into each other. In fact, everything within a 50 mile radius of central LA is LA's suburb.

I live in a small town about 100km from downtown Toronto. This is genuine exburbia with most people commuting somewhere between 25 to 100 km. This year there are over twice as many re-sale houses on the market as last year I am sure due to both the high fuel costs (gas at 1.36/L) and the fact we had an "old fashioned" winter with many road closures. The council has madly approved about another 500 new houses with another big bunch of unsold lots in already started new sub-divisions. We have overbuilt our infrastructure with a desperate flim flam already going on over the sewage treatment plant and a noticible drop in town water pressure. So far I can't get any town official to confirm it but it appears they have balanced the outflow from the water tower to match the licenced capacity of the treatment plant. My point, relative to what you are saying, is that people are already choosing to exit this town. If they are to be replaced at all I think it will more likely be with non-commuters such as retirees. I am sure there are many examples of this but here in Ontario we have Elliot Lake, at least for now an ex-uranium mining town, who successfully converted their housing into cheap retirement living. I think exburbia will try a similar business plan. As with everywhere in the rich part of North america we have a lot of people living far from town along every sideroad and concession. Those who work in town and many on fixed incomes may opt to move into town in order to avoid the 10km bag of milk. Even tho their present places may be unsellable or crashing in price, declining prices in town might balance that. I would not be surprised to see plans to relocate welfare and other supported people and families to towns such as this once things get bad enough. In part this would free up cheap housing in the GTA for the poorer members of the working class necessary for the cities to function. I think tho, especially if the present crazy growth plans actually go ahead, we will see abandoned and deteriorating housing in all of exburbia.

I agree... I think exurbia will be hit first by abandonment. However, I think this is still a result of the economic balancing test I mentioned: exurbia will be the first place where cost of commute becomes so high that it cannot be countered by declining cost of living in exurbia. This won't be a smooth process, because many people think gas prices/home prices will soon return to normal, and many people cannot currently sell at lower prices because they'd be upside down on their mortgage obligations. But, eventually, housing prices in exurbia will decline to reflect the added cost of commute. If the cost of renting/owning in exurbia can't decline enough to make up for the added cost of commute, THEN we'll see abandonment. Of course, other factors of value--sense of community, desire to be in the city, etc. will also enter into this balance, but they don't necessarily dictate that exurbia will be abandoned--these communities could re-tool to localized economies, but I doubt that will actually happen in most places...

Jeffvail - "...these communities could re-tool to localized economies"

Thanks for bringing up the topic of suburbia, it's an important one. Reagardless of peak oil and climate change we will all have to live someplace.

The problem with exurbia is that as the economic displacement plays out exurban dwellers will be lower on the economic spectrum and this will hasten the decay and create suburban slums alomost overnight. In Las Vegas there are already large areas of relatively new housing tracts located in North Las Vegas that already look abandoned, with foreclosure signs, dead grass, peeling stucco...Pretty pathetic.

In CA there is already a declaration of drought conditions and as the cities swell, water shortages are even more frightening than skyrocketing oil prices. So CA is recieving 30% less water this year. All they have told us to do so far is take shorter showers. When I see suburban yards green from copious amounts of miracle-grow and water and swimming pools languishing in the hot sun it makes me resent the idea of having to take a short shower.

Also farmers growing rice in the desert...WTF!

Show me one example of farmers growing rice in the desert. Just about all of the rice farming in California takes place north of the Sacramento river where the problem is too much water, not too little. You are more credible if when you complain about agricultural water use you do so accurately. There are plenty of crops of questionable value grown in the desert parts of California, but rice isn't one of them (Cotton and alfalfa, for example, are).

Actually, rice culture in California occurs west of the Sacramento River. The cotton is grown for export, as I recall. How to Create a Water Crisis was published in response to the planned Central Arizona Project (CAP), in the mid-1980s, and is still quite relevant to both AZ and CA as its documentation is very good.

As I said below, the politics of water in CA is long and contentious, as is that of agribusiness, as they are tied at the hip. Add the developers, and you have one viscious Iron Triangle, one the people of California have tried to defeat, or at least exert some control over, (whether they knew it or not) for more than 100 years.

I should have said north of the confluence of the Sacramento and American rivers. Regardless, my point is that it is far north of Los Angeles.

I was referring generally to the Central Valley where rice is grown. The specific location is not the point. The point I'm making is this area without massive quantities of irrigated water goes broke.

"Historian Kevin Starr has referred to the San Joaquin Valley as "the most productive unnatural environment on Earth."[citation needed] By some estimates, fully 25% of the United States' agricultural production (as measured by dollar value) comes from California, and the vast majority of that is in the San Joaquin Valley"

When I lived in LA back in the eighties the LA times ran a series of articles about the massive amounts of water that are sucked from the Sacremento River (as well as any other natural aquifier) for irrigation. With persistent droughts year after year this is a major disaster waiting to happen in Americas most populous state.

Is Cascadia, and other Northern areas, ready for the massive multi-million people influx? I have posted much before on how I think this will go down.

The rice is grown in the northern half of the Central Valley where the problem is too much water rather than too little. There are periodic plans to build a (fairly short) canal to divert lots of this water south to serve the San Joaquin Valley (which is dry and suffers from overdrawn aquifers) and L.A. but little comes of them:

Nope... No water here.

It is also true, but absurd that water for Southern California comes from the Northern Sierra, while water for the Bay area comes from the central Sierra. The water to these two destinations crosses over/under each other. Add in the fact that the water for southern Cal goes through the Delta (Sacramento plus San Jaoquin) area, which is highly vulnerable to earthquake induced levy flooding. There is great fear that a single event could cut most of the supply to S Cal. Incidentally most of these levies are over a hundred years old, built largely by hand, in order to create mostly below sea level farming land.

Most irrigation water for the San Joaquin Valley comes from the Sierra Nevada runoff, not the Sacramento River. In that sense, I would disagree with Kevin Starr that it's an "unnatural environment" as the water runoff from the Sierra is a natural occurrence.

Hi Jeffvail,
You can see this trend very clearly in Sydney, but I think the main thing influencing prices is travel time, not fuel costs. At lease it doesn't make economic sense to spend an extra $200,000 on a house to reduce work travel distances by 50km per day( round trip); this would be a saving of 10,000 km/year and assuming a rather poor 10L/100km a saving of 1000 L or $1600 in Australia. The extra cost of owing an extra $200,000 on a mortgage would be $18-20,000pa perhaps less in US, but fuel prices are lower.
Contrast this with spending an extra $20,000 to buy a new fuel efficient car, getting twice the fuel efficiency and assuming total driving is 20,000km, would save $1600 pa, not a bad investment.
Conclusion, every one may complain, but until gasoline prices go up 5-10 times in price($20-40 a gallon) its going to be better(economically) to stay in cheaper suburbs. However, as you suggested, driving time plus high fuel prices could have an impact in increasing the difference in house prices( city/suburbs)

You have missed a key variable in housing costs, expected appreciation (or the reverse). I believe that two factors are dramatically reducing the expected future value of Exurban/Far Suburban houses.

One is future fuel costs, not for you but by whoever buys it from you. Given recent fuel price increases, that will be a larger but very uncertain #.

And the future time costs of commuting for the next buyer. The market did not discount this adequately when these houses where built, as momentum (and less traffic congestion back then) and herd behavior lead to greater sprawl.

In addition, real estate runs in herds. One home out of 200 on the market is a sellers market, with rising prices. One home out of 20 is a buyers market, with falling prices. One home out of 8, or 6, or 4 is a crash.

Best Hopes for Falling Suburban Housing Prices,


I have never lived more than 5 miles from work and I paid extra for the privilege. My time and the pain of commuting was the deciding factor, not the total costs. Commuting is a monumental waste of time and probably takes some time off your life to boot. I could have paid less for more square footage that I didn't need but what would be the point. If you love to spend time in your car and in traffic jams, then by all means move to the 'burbs.

Mike 'Mish' Shedlock Talks About Peak Oil:

Mish's blog has a large audience and he is telling it like he sees it. If you visit his site (link below scroll down) and wish to view the booming 'tent cities' in California there are some sad videos, it's like rereading 'Grapes of Wrath' without the Okies driving across the desert in jalopies. The new jalopies are old and barely running motor homes for the lucky, tents for the rest.

'Concerns about tight credit have in some quarters been replaced by worries about the soaring price of oil, which recently peaked at just below $140 a barrel. The Bulletin acknowledged that the activities of hedge funds and other investors may have pushed it a little higher, saying: "Speculative activity was not widely thought by contacts to have been the primary cause of upward price pressures in energy markets, although it is possible that it played some role in the short run."
My Comment: CONCERNS ABOUT THE PRICE OF OIL ARE MISGUIDED. CENTRAL BANKERS CANNOT DO MUCH ABOUT PEAK OIL. And when it comes to wanting the price of oil come down, this may be a case of "be careful what you ask for".

Falling oil prices will indeed happen if the world economy slows enough. The US is in recession and the UK and Eurozone are headed there. A nice rate hike or two should push both over the edge. It would be a good thing too, even though central bankers are foolishly attempting to prevent that from happening.

If there's one thing this global economic mess needs, it's a good flush. Rate hikes would probably do it.'


[...] it's like rereading 'Grapes of Wrath' without the Okies driving across the desert in jalopies.

I envision more of a 'Grapes of Wrath' in reverse, with Southern California folks (SoCals) migrating to the Midwest in search of a more sustainable way of living. I think water will play a huge role.

Don't imagine they'll be moving to Iowa any time soon. But yeh, if you want plenty of water, Iowa is the place to be about now.

Don't move to a floodplain, simple as that. When I looked for my property a couple of years ago I had a choice of a few properties in the county I live now. Two were very nice, the one I have now, and the other four hundred yards from the Embarras River. Last weekend anything within a half mile of the river, including the whole Cumberland County fairgrounds, was under four feet of water. A highly unlikely flood, but with some foresight, seeing the possibility of a an historical flood, an avoidable outcome. I often made sure to look at properties right after a heavy thunderstorms went through. Amazing how people will proclaim, “I remember the great flood of XXXX, but that will never happen again in my lifetime!”.

The planning regulations never cease to amaze me.
What is so hard, or costly, about specifying that houses should be built above their garages/aboveground basement-type area?
In earthquake-prone areas proofing is taken as a matter of choice, but nothing gets done about construction on floodplains.

One good effect of Katrina out here in California is that it caused the state to take a look at its flood-prone cities. The result was a ban on development in locations with less than 200 year flood protection starting in 2015 and the state deciding to spend lots of money upgrading its levees around Sacramento which had flood protection that was rated as likely to fail as the was New Orleans' system. Hopefully we get through another 7 or so years before we get another really wet year.

many red neck homes in des moines were built in the 15 yr floodplain (2008-1993=15, by red neck math). but really, many dont understand what a 100 yr or 500 yr or whateveryear flood means.

a 100 yr flood means that the theoretical probability of a flood of that magnitude in any year is 1/100 or 0.01(1%). so a 100 yr flood could occur 3 yrs in a row and the probability of that ocurrance is still 0.01 for each year. maybe if more people understood this, i mean really understood it, they would not build in the damn floodplain.

personally, i would prefer to live in the 1,000,000,000 (one billion) year floodplain, then i would feel relatively safe. biblical stories notwithstanding.

and i wonder if some iowa farmers wish they had planted rice instead of corn.

It will - I think the outer layers will peel off first but the core of the city will stay

EM, I started to mention the water problems facing the SW but didn't want to cram too much in one comment. You are absolutely right about the increasing water shortages there.

I believe that Leanan has the right idea...Retain the ability to move as changing weather patterns, economic conditions and political conditions warrant. Putting all one's eggs in one basket, like buying a farm and associated trappings, might not be the solution for survival.

I have always admired the birds. They are seemingly fragile creatures but have survived many catastrophies by their mobility.

This is a doomerish post but from my point of view there are few things happening today that leave me with much hope for the future. If a world-wide deflationary depression is in the cards there will be little capital to work with but an over abundance of labor. Little food but lots of mouths to feed. Little stability anywhere except countries that produce enough oil and food for their own use. Lots of refugees and wars for resources.

reminds me of my readings of mass migrations from northern Eruope end of roman times due to end of "roman optimum" weather pattern from 400 b.c. to 400 a.d. The Danes and Germans had trouble growing stuff so just started moving. It might take a thousand years till the waether(C02 settling out) and the population movements settle out again.

So maybe the key is to have an electric powered RV that recharges via solar panels on the roof? You might be able to only go one hundred miles in one charge, and take 2 days to recharge, but it sure beats paying gas for the thing once gas gets REALLY expensive...

Wait until the depression cuts the legs from their price, then get a large sailboat. The scope to really move is much greater, and the threats far less.

I believe that Leanan has the right idea...Retain the ability to move as changing weather patterns, economic conditions and political conditions warrant.

So in other words, wait to act until the collapse is obvious to everyone, even to Time magazine and Jay Leno in his monologue? I guess being on the road with the hoards of migrants - some who will use any means to gain advantage, - seeking a safe haven will be much more secure than taking a risk to moving to a small stable rural community now.

Bruce, I didn't mention roads. If you look at some of my old posts you will see that I intend to rely on life afloat. I have several large sailboats picked out, am a good sailor, crews lined up, have provisions set aside, and intend to conduct trade, offer transit service, fish, and generally do whatever it takes to survive. The St Johns River in Florida was the highway prior to major road construction here and it will be the major highway post peak. Coasting schooners were the lifeblood of trade along the US East Coast for a very long time. They hauled deminsional lumber, guano, oranges, molasses, rum, produce (short haul), provided transit for passangers, transported salt fish, barrels of iced oysters, iced ducks, live farm animals, and did many things that were not quite legal. There will be a need for coastal trade and coastal transportation. Asea will be safer and cheaper than transportation on land. Piracy on land will be a much larger problem than piracy asea. One must be prepared for whatever life offers up. Think out of the box, iow.

Best Hopes For Varied Survival Schemes

A good plan, as sailboat will get you just about anywhere on the planet, and weather permitting, at a moments notice. When I lived in Chicago I had a few friends that sailed on Lake Michigan, a couple who sailed the Mac regularly. Always wanted to get into it but never got around to it. Now I sail a tractor. Who knows what preparation or plan will work, it’s all a crapshoot. But any well conceived plan based on self reliance is better than sitting on your duff and hoping other people will come up with a solution.


"Piracy on land will be a much larger problem than piracy asea."

not my first inclination [unless an army was approaching].

what is u'r thinking here?

btw i spent a few months in the heart of the glades & keys in a motorized canoe & enjoyed the taste of waterway life. ran into 3 instances of major drug running though.

I believe that Leanan has the right idea...Retain the ability to move as changing weather patterns, economic conditions and political conditions warrant. Putting all one's eggs in one basket, like buying a farm and associated trappings, might not be the solution for survival.

I understand her logic and don’t necessarily disagree that, ideally, this might be the best approach. But how would that work in practice? It seems to me that this plan discounts the value of personal relationships. Let’s assume (and it’s a big assumption) that my husband and I were successful in selling our home in a poor market, renting, and weighing foreseen and unforeseen factors to determine the next best place to run. We’d lose proximity to our son and his family, other extended family, neighbors and friends.

Four years ago, we relocated to a city near where we grew up, after moving around the country for years due to employment. We live in Madison, Wisconsin, a mid-sized city, with plenty of water, on a bus line (never drive to work, and could do all our shopping by bus or biking if we had to – the gas prices haven’t really affected us much at all.)

Our son and his family are a short trip down the interstate. Some of our siblings and their families also live nearby. Some of our relatives are marginally employed, and may need help and place to stay as times get tough. Alternatively, what if we need them? I had a serious health problem a year ago – it was wonderful having my family around to help out. We also know and trust our neighbors. There’s a wonderful spirit of cooperation and mutual assistance here. We would lose all of this if we went running around, trying to find the next best place to survive.

I have always admired the birds. They are seemingly fragile creatures but have survived many catastrophies by their mobility.

I admire native people, who had the sense to move around as a community, to find better hunting grounds and climate for the season. :) If I could take my whole “tribe” with me, I’d be more partial to the “stay mobile” strategy.

I admire native people, who had the sense to move around as a community, to find better hunting grounds and climate for the season. :) If I could take my whole “tribe” with me, I’d be more partial to the “stay mobile” strategy.

I think you have answered your own question here. (And I think it is absolutely the best possible answer). The notion of permanence, especially with regards to location and housing, is a product of intensified agriculture (though it exists prior to the advent of civilization in the significant towns of Anatolia, e.g., Catal Huyuk).
or some special resource circumstance, e.g., Jericho (pre-walls). For the vast majority of human history and geography, group movement was the norm (and I don't mean nomadic life, that is something different).

lilith, please see my post above. We, the family, are going to start a life asea. The members that do not want this life will attempt to continue life ashore.

The future is going to force us all to make some very hard choices. I have many life experiences that will help but there is no guarantee that I, or my family, or anyone, will succeed. We will give it our best shot.

Good luck to you and yours, whatever you decide to do.

I am still wondering how this will play out as far as the water, I don't think it will happen like most people imagine.

SoCal could survive and prosper with a small fraction of the water we use now, most of the water is wasted on lawns, washing cars, swimming pools, long showers, etc. Further, much of the water in Cali is used to irrigate water-intensive crops in the Central Valley, this is another vast waste. If the situation gets serious, we will be able to make choices and adapt. Contrary to myth, Southern California is a Mediterranean climate, not a desert like Phoenix. The city does extend eastward INTO the desert, but the main LA basin is not a desert.

So I'm thinking that most of our economy out here could survive and thrive even in a water-constricted future, I don't find that to be a huge concern. We will need to make some adjustments and economic reallocations, but there will still remain so many other pluses to living here that I don't see an exodus happening anytime soon.

As I have pointed out before, SoCal offers us the post-peak advantage of not needing any extra heating or cooling to live, even fairly comfortably. This climate also means that you can grow enough food in your front yard to feed your family and more, you can plant and harvest year-round because of the mild climate. I have an ever-expanding garden of raised beds and containers around our house in Hollywood growing all kinds of vegetables, fruits, and herbs, and I don't have a 'winter' dormant season to worry about. I think this is an important factor; Los Angeles is one urban conglomeration that could certainly grow all of its own fruits and vegetables at least, this area was originally settled for agriculture after all, and even though so much has been paved over its still a great area for growing things.

Some of you may have seen the Dervaes family of Pasadena on CNN this past weekend, they grow several TONS of food a year on a small suburban lot using biointensive agriculture techniques:


Here's a great book about self-reliant living in the urban environment written by two LA residents who have a small farm in Echo Park:


My whole family is seriously concerned about peak oil and we have a working farm in the Midwest that we are preparing for our post-Peak retreat. If things get really bad in the city then I will move back to the farm and try growing my tangerine trees and vegetables in a greenhouse or something, but I don't see LA going down so fast as some of you doomers.

We sold my fiancee's condo last year and are renting now in central Hollywood as we watch property prices implode, next year we are probably going to move to the Valley and make a try at establishing a largely self-sufficient base there. We should be able to grow most of our own food (excluding grains) if we get a decent-sized lot there, install some next-gen solar cells and we'll do OK if the grid starts to suffer from intermittent failures. We're looking at places near walkable retail and mass transit (Orange Line Busway/Red Line Subway go up there) so we won't need to drive much/at all, a couple of those electric bikes would go a long way...

While you're correct about LA's climate type (currently, and certain to change), the Inland Empire becomes far more desert-like, with much of the most recent sprawl reaching into the desert in San Bernadino County. Water for the region has always been a source of political controversy within the state and the other users of the Colorado River. As I see it, the main point is without cheap trasnport fuels, the region's food costs will soar, and the whole complex of sprawl and sprawl-malls will collapse when gas gets to $8. The cracks are already visible.

While the Los Angeles Basin is classified as "Mediterranean" climatically, as is much of CA, annual evaporation totals appear to exceed annual rainfall totals for much of the basin. Therefore, much of the LA Basin can be considered an evaporation desert. Also, rainfall tends to be highly variable at many time-scales (annual, monthly, daily--save the dry, dry summers where zero precipitation can be expected with a high degree of confidence). In some years, annual totals have been down around 4" (think Las Vegas), whereas in other years, annual totals have been around 40" (something akin to Seattle). Often, much of the precipitation falls in short-lived but intense storms which can easily contribute 15-30% of the average annual total (12" to 15") in a few days. This high degree of variance and tendency for much of the precipitation to fall in extreme events adds to the water-management challenges of the region.

The mountains that rim the LA Basin have much higher annual average precipitation amounts some of which accumulates as snowpack, a much-needed contribution to the water resources, but these regions suffer the same degree of variance.

Further south, the San Deigo region, with an annual average rainfall around 8" to 10" depending on the reference station, can be considered a desert simply by precipitation totals.


Wolf in YVR BC

I think that large parts of the Inland Empire are probably/certainly unsustainable, and ppl are already abandoning some of it (check the property market). It's too hot, too dry, and too far away to be viable.

This is not the entire region though, I am talking about the CITY of LA specifically and the other more urbanized areas in the region. I think we will see a major reconfiguration of urban space here in the near future (i.e. starting now). This is not the end of the city though, simply the next factor in its evolution.

Water is definitely a major issue, no question, what I am saying is that we could get by here with MUCH MUCH less than we use now, most of the water we use now is wasted on lawns and car washes. Personally I have been studying low-water agriculture techniques, here's an article the LA Times ran recently about no-dig gardening to save water:


The article is interesting as we have an economist doing something useful, but the growing technique still requires outside inputs, and I doubt he could feed "3 people daily" year-round from a 10x30 plot.

As for the morphing of Los Angeles, the city destroyed one large ubran garden last year, and in general doesn't seem inclined to do anything useful. My family started as citrus ranchers and vineyard operators in the 1910s in Upland and Cucamonga, and I watched the expansion of the Inland Empire over the decades. Most of us have all left for places north. A lot of morphing will need to occur for the SoCal region to be self-reliant--probably 15 million people will need to leave and the population level of the 1930s will return. Do you remember Watts in 1965? I do. I see a repeat performance sometime soon, if for different reasons, and in a different place(s).

Sounds good - if it weren't for a gazillion other people being there, you'd have it made.

Everything depends on the speed of collapse.

If we get a fast crash/collapse then all bets are off and I will probably have to evacuate back to the farm.

However personally I am expecting a slow crash/ratcheting down scenario/'Long Emergency' as John Michael Greer and others have described. In this scenario, cities may remain better places to live than the countryside for a long time as scarce resources are routed to population centers. We have discussed this many times on TOD and I think it is the most likely outcome.

Some parts of the city will do far better than others though, this is one of the questions that occupies me the most. Obviously the far-out extreme commuting places like Redlands will be the first to die, but I think this will lead to greater centralization and density in Los Angeles proper in the short/medium term. In fact we are already seeing this happen.

My goal is to establish a relatively self-reliant urban retreat where I will be able to live comfortably and grow food even if there are shortages of everything and the power grid is unreliable. We are also planning carefully how to live in the city without spending much money on monthly expenses...

An interesting aside - the local water and power is city owned and operated. When the power outages hit during the Enron debacle the city kept humming along.

City's may have access to resources for trade and wealth that other place my not have - the ablity to survive the transition is dependent upon the social capital a place has build up.

I live in Echo Park ! No land for farming :(

This is a blog about a couple who have an urban homestead in Echo Park:


Prof. G.

Any idea when some of us can stop using Anonmouse portal to view TheOilDrum? It's weird, I can access it from Work fine, but not home. There I have to go thru the portal. Going thru the portal, I am not allowed to sign in.


You are still having that problem? It's supposed to be fixed. Please e-mail SuperG if it's not.

I am still having problems as I cannot access TOD from my home computer unless I use a proxy server. I am on the verge of replacing my cable modem/router to see if that helps.

Does anyone think the US political system will ever be smart enough to allow US citizens to import used, high mileage autos from Europe or Japan on a major scale?? Most are now shut out on phoney safety and emisions regulations that detroit cooked up with the best Congress money can buy.

Never happen unless big business recognizes an opportunity to make some money at it and utilizes their lobbyists to get congress to change the laws.


Fascinating article about hitchhiking across Siberia on the new trans-Siberian highway. Describes the robust system of Muscovites taking the train to Vladivostok, buying (or stealing) Japanese used cars coming off transport ships, and then driving them 6,000 miles back to Moscow in caravans to double their money on resale.

Upshot: used Eurpoean and Asian cars will find plenty of takers in Russia and need not come to the U.S.

Americans don't need to import cars in order to cut their fuel consumption.

The plan to cut fuel use is simple:
0. Drive less
1. If one really has to buy a new car - buy the smallest/most efficient (Japanese) car for sale in the US
2. Just drive at 40mph and you will save over 30% of fuel
3. Learn economic driving. Save another 20% or so

Only if people want to keep driving fast, stupidly and wasting fuel, will they benefit from European ultra-efficients. And even those cars are not easy to find anymore in Europe (e.g. Audi A2 1.2 which could go for 100km on 3 liters, manufacturing ended 2005 - too much ahead of its time). Only the 2007 model Fortwo Micro-hybrid goes to 2.9L/100km. Most beyond that are concept cars or self-mods. In real world use Prius 1.5 HSD takes 6.6L/100km. Not good.

Europeans are almost as screwed and no amount of model tweaking is going to help for very long, unless one drives a Hummer, in which case a change to anything is probably for good.

Drive less, drive slower, drive wiser. Much better option than dreaming about cars that will fix the issue. IHMO, of course.

PS As for the answer to your question: no.

"Drive less, drive slower, drive wiser."

And, uh, drive with a least one passenger seat occupied?


A point from the crowded UK. Peak oil is one reason I think car culture is unsustainable. The other reason is that for about ten years I've been walking into work in various urban centres, and in each place there've been several roads with very slow moving traffic jams for the extended rush hours (about 7.45 to 9.15 in the morning, similar thing in the afternoon). I remember walking past the Bristol Royal Infirmary hospital and realising I was moving faster than an ambulance (which didn't have its siren on, but still) due to the traffic jam. So consider if you spend a large amount of your commute sitting in your car in traffic jams that it might be suggesting you should use something other than a car for that journey.

Do you think we will see people advertise for liftshares? Perhaps in future driving with your destination and a price in the window would make it easier for people to flag you down and match lifts on a rolling basis. With mobile communication, sat nav technology and social networking groups a smart lift matching system cannot be that difficult to implement. Developments like bittorent and wikipedia are the new way any major changes will happen, sites like this are a key part of sharing information and ideas. Keep up the good work all.

I like the idea of a small natural gas rotary engine which can be used as a CHP unit when not in use as a range extender running on CNG. I think we should leave bio liquid fuels and hydrogen well alone and concentrate on using natgas more efficiently as well as using bio-digestion. Bio-gas is a controllable form of renewable energy, which has a large variety of feedstocks, returns nutrients to the soil, can make use of existing infrastructure and IMO can be used to smooth the variations in output from wind and solar along with realtime pricing and distributed storage (NaS batteries)

Just drive at 40mph and you will save over 30% of fuel.

Unfortunately, you risk a ticket or worse trying this on an interstate or other highway. The "rushing to the treadmill, rushing to get off" mentality must change, but it's been entrenched over the course of 100+ years, and is probably the biggest psychological barrier to substantive change.

We could all drive 5mph under the speed limit.

I have been trying 5-10 mph under. Suprising how many settle in behind me


I'm glad you mentioned that. Of late I've been using some of the hypermilers' techniques (far right lane on Miami major roads, slowing to 15 mph approaching red lights in effort to not stop, slow acceleration, etc). It seems that most days I end up with someone who stays behind me instead of impatiently zooming around me. I think some people already know how to be miserly with gas but are waiting for social approval to do so.

Be a leader; drive rationally!

Errol in Miami

I can remember parking in the middle of a very large empty parking lot on a Sunday once (I think I was looking at some tourist attraction nearby). When I returned to my car sometime later, there was one other car in the lot with mine. You guessed it - it was parked right next to my car.

People are sheep.

I know exactly where my engine's horsepower and torque peaks are, and I hate having to drive around anyone else. The chances are very low that I will be able to drive it for maximum fuel economy if I'm behind someone else. Most often they'll be driving just a bit slower than I can pull top gear, which forces me to drop to 4th at a major penalty in mileage.

Well, I've been driving the speed limit and am constantly passed by the lunatics who absolutely must get to the next stoplight as fast as possible, so no, I don't think people here have quite figured it out yet. Of course, when you have garbage like this appearing in the local fishwrap, it's not really surprising, is it?

Yeah, when Texans start carpooling and buying hybrids will be a welcome time. I drove my Prius to Houston for the last ASPO-USA convention and don't think I saw another except for the "display" Prius PEHV inside the hotel but outside the convention halls. In fact, I saw very few south of Kansas City to New Orleans.

In real world use Prius 1.5 HSD takes 6.6L/100km.

I just rented one in the Bay Area, drove it badly like a rental car with a lead foot up and down mountains and on suboptimal highways, and got 51 mpg (~4.6L/100km) over a week.

You are off by a significant margin.

Otherwise general agreement of principles. Except your #1 is in direct contravention to the lead sentence.

The United States has the lowest average fuel economy among first world nations; the European Union and Japan have fuel economy standards about twice as high as the United States

Source: Comparison of Passenger Vehicle Fuel Economy and Greenhouse Gas Emission Standards Around the World via Wikipedia:Corporate Average Fuel Economy

I have always thought it strange that Americans have never seemed the slightest bit concerned by this fact. This is in spite of the fact that two large auto makers in Europe are American (Ford and GM-Opel/Vauxhall). At the same time, US citizens have been buying huge numbers of more efficient foreign imports and the consensus from Detroit was, "Americans don't like small cars". It is this belief that has put Detroit in deep shit every time there's been an oil shock. With rising prices Americans always have very limited options when looking for a domestic, fuel efficient vehicle. Now GM is touting best in class fuel efficiency but AFAIK they don't even make/sell their most fuel efficient vehicles in the US.

If the world automobile industry had spent the decades since the first oil crisis developing alternatives, instead of being oil industry puppets the situation would have been quite different. That said some of what Detroit needs to do they know fully well. GM has considerable experience with electric drive from their EV1 and electric S10 programs. So much time and resources has been wasted. The US auto industry should be ashamed of themselves. It would have been really nice if the auto industry had wasted some more of the resources on batteries and electric drives instead of H2 fuel cells. I just don't get it! I guess I'm a dreamer. Time to go and find a nice wall to bang my head on.

Alan from the Islands

From the top story, Saudis May Be Strapped for Oil, Close to Full Capacity

Saudi Arabia's pledge to boost oil production by 500,000 barrels per day may not be achievable, a source close to the Saudi oil industry told CNBC.com.

Notice the bit in italics...since when have we ever had a "source close to the Saudi oil industry" talking to the MSM. This is a new development and newsworthy within itself.

Cracks in the veneer?

Peaks happen, even in Saudi Arabia

The ExxonMobil story will be that if they were in charge, they could keep Saudi production rising for decades.

Here is my succinct argument against the Exxon/Mobil & CERA assertion that major oil companies, by using the best available technology, with virtually unlimited access to drillsites worldwide, can increase conventional production for decades to come:


This is the Texas and North Sea peaks lined up with each other. These two regions were developed by private companies,using the best available technology, with virtually on restrictions on drilling. Note that the North Sea peaked when it was about 50% depleted, based on the logistic (HL) model.

Regarding Saudi Arabia, their continuing "voluntary" reduction in production story, relative to 2005, is getting increasingly hard to believe. Even with the predicted increase in production--which has to be taken with a large grain of salt given their history of overpromising and underdelivering---there is almost no chance that their average 2008 production will match their average 2005 rate of 9.6 mbpd (crude + condensate).

This would mean three straight years of lower production, relative to the Saudi's 2005 rate, at about the same stage of depletion at which the prior swing producer, Texas, started declining (based on the HL models).

Jason Bradford told me he was gonna interview you on his radio show. Is today the day?


Yes, I believe at 9:00 A.M. Pacific time.

Cool; I'll try and catch it.

I think one can listen live to the webcast, which begins in 10 minutes. Here's a link.


E. Swanson

Jason did a great job, as usual. One of the callers asked a two part question: (1) Will offshore California be opened up for drilling; (2) Are there any effective ways to protest higher fuel prices.

Regarding #1, I said that it was probably inevitable, and that it would help, but it would probably not make a material difference (also most oil spills are transportation related, not drilling & production, with Santa Barbara of course being a notable exception).

Regarding, #2, I said that protests would do nothing to address the problems with finite oil reservoirs and the market challenges that the export model represents. My advice was to implement ELP, and minimize your use of fossil fuels.

I also asked why there were not wind generators up and down the Coastal Range of California.


Is the export model published in a peer-reviewed source? While I have read the write-up that you usually reference on your website, I think I could get more traction with the idea among colleagues if it were published in a journal. If it isn't, do you anticipate that it would be difficult to do so?

Also, I am curious also what you think some of the weaknesses of the model are? Are there other shortcomings that should be considered, especially if someone wanted to extend your model?

Note that these are not criticisms, just an attempt to foster the building of the most sound model possible so it will withstand common criticisms as Peak Oil becomes more salient in the public.


I think that Nate found a peer reviewed article from a few years ago that discussed the net export situation, although I think that their time frame was pretty broad.

I'm tentatively scheduled to give a talk at Sandia Labs in New Mexico this summer. One of the things that I may propose is that they/we do a paper on net oil exports--as a reason to launch an emergency electrification of transportation program and windpower program.

Frankly, I'm afraid that our fate, as a high per capita consumer of oil--on our way to a low per capita consumer of oil--is probably sealed. One variable that is now different from some of our case histories like the UK and Indonesia is the high price of oil, but that may in many cases work to make things worse, by increasing the cash flow from export sales, even as export volumes decline (at least initially).

And I might add, so did you do a great job. First time I have heard your voice. Your just about the only person talking about the ELM. Spreading this to the consciousness of the mainstream should have a dramatic impact. Good that you stressed that this inside baseball debate about when exactly the peak was, is, or will be, is beside the point. Exports, or the lack thereof, will be thing that really causes the crash in our way of life.

Good show.
Have you talked about the quintiles of demand destruction here? Good concept.

"I also asked why there were not wind generators up and down the Coastal Range of California."
Don't think I get enuf wind; I'd be better with in-stream micro-hydro for my 6-8 month seasonal creek. However, there is no incentive for me to do that; I already put more into the grid (as a gift to PGE) than I take out. Pay me and I will do it.

"Pay me and I will do it."

The net metering situation seems ripe for an initiative to force payment. As I recall, it's not been tried yet.

We have net metering, but
Treatment of Net Excess: Credited to customer's next bill; granted to utility at end of 12-month billing cycle

There is also time of use metering, giving 3x the credit for energy created ( or used) during peak hours, but that is more bookkeeping than anything; let's you use a lot more energy off-peak without a charge, but still doesn't pay you.

Hopefully, this will happen...
Under the German program, renewable energy producers are paid a fixed-price for feeding their electricity into the grid. This has led to a boom in the construction of wind turbines, rooftop solar systems, and on-farm biogas plants.


I just noticed that you and Chris Skrebowski are interviewed for an article on the skyrocketing price of diesel, oil, steel and inflation in general in the latest Engineering News Review. June 16th, 'Fuel Frenzy' article...

Sounds like they are trying to reinforce the message to contractors and engineers that the price (of oil, anyway) isn't going down.

The writer is a pretty sharp guy, a former US Submarine Service officer--one of a small, but growing, number of peak oil aware journalists who are both willing and able to write about Peak Oil/Peak Exports.

It was a good article. Interesting to see the price of steel mirrored against oil also.

"....since when have we ever had a "source close to the Saudi oil industry" talking to the MSM."

Your VPOTUS. ;}

...well, I meant when have we ever had a "source close to the Saudi oil industry" talking HONESTLY to the MSM.

Where did the "500 000 b/d boost" come from? Yesterday everybody including the UN was talking a "200 0000 b/d" boost in production.

From the news here in OZ it was 500000 then it dropped to 200000.

Saudi had already committed to a 300k b/d increase starting a while back (Apr? May?) - the 500k is the sum of that increase, and the rumor of an additional 200k starting in July.

UPDATE 1-US's Bodman welcomes talk of Saudi oil output rise

Bodman has not been officially informed of any KSA increase either, leading me to wonder if this is just "jawboning" to try to lower crude prices?

I have the gut feeling that a major part of the current oil price run-up is due to lack of refining capacity to process the heavy and sour crude. There are indications that Iran and Saudi Arabia for example don't have what to do with their lower quality stuff and keep it on storage or in the ground.

On the other hand there seems to be a major investment activity in the refining sector to add capacity which can handle the lower oil grades. If this is true, this means we are taking the first step down the energy ladder and are starting to use more and more expensive and harder to process energy stuff. The next ones to follow - tar sands, oil shale, possibly CTL. This also means that within several years there will be relief from these unbearably high oil prices. That actually will be a good thing, as we need much more time to develop oil alternatives - and the speed this thing got unfolding much outpaced the ability of our society to adapt. Fast crash or a gigantic boom and bust are the last thing we need if we are going to get out of this mess.

I think there may be some minor relief in late '08 and '09 as the new refinery projects come online. However, I don't think the relief will last, as net energy/net export declines will overwhelm the additional capacity beyond then (disclaimer: war or economic collapse will modify that significantly, and both are distinctly possible). Basically, I think we'll see the price differential between heavy & light crude disappear as heavy gets more expensive and light (slightly) cheaper.

Also, I don't think it would be a good thing for oil prices to dip very much from where they are now. If prices aren't high enough to hurt, we will do nothing to address the energy crisis. $3.50 at the pump wasn't doing it. $4.00 is starting to have an effect.

I agree, and actually think that much lower prices will be disastrous for just about everything. Fortunately I don't see them coming - there is enough vested demand in the expanding economies of China and India to withstand even a serious recession in the West. These economies are also starting to decouple themselves from western markets, so IMO a worldwide recession is highly unlikely.

These economies are also starting to decouple themselves from western markets.

Care to elaborate? I'm not sure what evidence there is that this is happening.

Sorry, no time for extensive research, I just encountered several articles recently that SE Asian economies are expanding their links, for example this one:


IMO this has been the plan all along, particularly for the Chinese leaderships. They emulated Japan in that they needed foreign investment to industrialize and acquire the know-how, but once they have developed their own industrial infrastructure they will turn inward - towards their growing middle class, their neighbors, and in general towards their more natural markets. This will be a very bad turning point for the Western economies - no more Chinese labor on the cheap to support Western lifestyle. We may have to learn what is it to work once again.

Thanks LevinK. Not much more in that article than what I would have expected. What has happened in both the Japanese and Korean examples, and is likely to follow in China and India as well, is not that they have decoupled from western markets, but that they have become more completely integrated into the global economy. The shape of the interaction with western nation (sub) markets changes (e.g., from low cost manufacture to specialized manufacture to finance). But I believe it is a mistake to see this as a "decoupling." To truly understand the modern economic system we must stop thinking about it as a collection of national economies, those simply don't exist as more than two bit players any longer.

It is decoupling in the sense that China no longer will be dependent on globalisation and outsourcing to provide it with a constant influx of capital and know-how. They are working to the goal of being able to shut out the West without wrecking their own economies. This is a strategic goal, it could take many years even decades to achieve it. Do you think Chinese leadership is happy that their well-being is dependent on the state of the highly unstable US economy?

It is true that globalisation is bringing them a load of benefits, but they also become dependent on it. I think they know very well it won't last in a truly global sense and are preparing their exit strategies. Right now for example, everyone - from the Chinese to the Saudi king are pissed off because US is obviously determined to muddle through PO simply by increasing its money supply and outbidding other countries - thus exporting rampant inflation to all of its suppliers. This won't last and if we do not show will to acknowledge their interest, at some point they will shut us off. I think they can very well see the writing on the wall.

It is decoupling in the sense that China no longer will be dependent on globalisation and outsourcing to provide it with a constant influx of capital and know-how.

LevinK - thanks for the comment. I think I'm done, now. This response evidences some pretty basic lack of understanding about how our economic system works and an even deeper lack of understanding of international politics. Not that I'm any genius, but I'd encourage you to be less dogmatic in your "analysis."

Actually I think you are dogmatic with your uncritical belief in that whole new globalization type economy. Much like the promised .com economy it looks and sounds totally different but in the end it turns out just more of the same.

What you fail to understand is that multinational corporations don't own states, they use states. But states do not exist for the benefit of the multicorps too. They use them for they own good and for the good of their citizens (if we are talking about good states).

Just like with the .com bubble when the times are good and there is enough for everyone it looks and works ok. What works ok is basically the appearance that the world is just a playground for a few private enterprises to make some profits. What happens behind the scenes is that there is fierce competition between nation states how these benefits (and costs associated with them) will be shared between them.

And despite what many may think of the world will never turn into one gargantuan monolithic state owned by the multinational corporations. If it does I hope I won't be alive by then - monolithic empires don't have external competition and are bound to violently fail, when conditions change.

China doesn't owe us anything. In fact we owe them more than we can repay, unless you count diluted USD and TBills. However, it's sad that TPTB and our government have sold off our industries, our technology, and our future. I don't agree with globalization for a variety of reasons. Our capitalist system will prove just as inadequate as communism did for Russia. This will happen as the economists go down with the ship shouting about free markets, no doubt.

I know a lot of Chinese people and have had some interesting discussions lately about how oil shortages are affecting manufacturing in China. I don't harbor any xenophobia regarding the Chinese people though. I can hardly blame them for exploiting the stupidity of the western world. They are busy trying to feed their people and provide a better future. Some of their politics (Tibet, Taiwan) I don't agree with, but I hold the US government in greater contempt.

Fast crash or a gigantic boom and bust are the last thing we need if we are going to get out of this mess.

Seems to me that this point of view really depends on what you consider "this mess" to be. Personally, I can imagine no worse scenario than continued production of fossil fuels that allows for some sort of continuation of our modern economic system.

If we get a fast crash, (by fast I mean say only 20 years to develop alternatives), governments are most likely to resort to the fastest and easiest solution to the energy crisis - go fight for that oil. Not good to anyone.

It's not at all clear to me that BAU style mediation would do anything but postpone resource wars. Maybe good for those of us who don't expect to be living at mid-century, but not so good for our children, grandchildren, great grandchildren.

On the other hand, a fast enough crash might just make it impossible for the resource wars to have less impact. Would the wars continue or spread if the only one's gaining anything were the militaries involved? If governments can provoke nationalist sentiments, populations will support wars, but if that nationalism fails, it will be that much harder for governments to sustain their "adventurism."

This is the fundament of the doomer argument - better bring it all down to the ground now, so that the future generations won't suffer. How do you know that the future generations won't suffer more in a world plagued by anarchy?

Here is the news: lack of energy will not cause the collapse of the industrial civilization. There is enough solar or nuclear energy out there to power hundreds of civilizations like ours. The end of the oil age will cause incredible amounts of suffering by poor nations, and even worse environmental degradation if we turn to coal for example - these are the issues we have to address now, there is no real danger that industrial civilization will run out of fuel.

This is the fundament of the doomer argument

Correction - it is the fundament of your version of the doomer argument. There may be some real doomers out there that believe as you suggest, but it certainly is not a significant number, much less enough to be considered a fundamental aspect of the viewpoint. And just an observation - I am not a doomer, by definition, because I see no "doom and gloom" in our current circumstance. Where I see doom is in the continuation of "industrial civilization."

How do you know that the future generations won't suffer more in a world plagued by anarchy?

Because ANYTHING is better than any version of continuing BAU. I am not concerned with deprivation of material wants (nor am I an ascetic), but I am concerned with the meaninglessness of our present economic values and the results thereof.

Here's the real news. Industrial civilization created the institutionalized suffering of poor nations and environmental degradation. Even if (and that's a big if) industrial civilization could be maintained by use of solar or nuclear, that does not mean that it will or should be maintained.

As for there being "no real danger that industrial civilization will run out of fuel" - believe as you will.

Strangely, those same poor nations are doing all that they possibly could to achieve that same industrial civilization you think is so bad, making an absolute mess with the environment along the way.

The problems you are talking about are not problems of the industrial civilization or of technology per se. These are societal and political problems we need to solve by societal and political means. It is not the hummer who is at fault, it is the monkey that holds the hummer.

Those "poor nations" - just like "poor people" in "rich nations" - are no less subject to the totalizing cultural values of the modern global economic system.

Your apparent belief that societal and political problems are divorced from the social and economic systems in which they reside is amusing.

"Your apparent belief that societal and political problems are divorced from the social and economic systems in which they reside is amusing."

I think you don't read me correctly. I am saying exactly the same thing you claim I don't believe in. You seem to equate "industrial civilization" with "capitalism" or "market economy". I don't. I think that we can maintain industry and technology, we can also address poverty and environmental degradation by simply "fixing" capitalism with better public policies. There are number of systems this works just fine.

Can I have some of that Kool-Aid you're drinking? Let me ask you a couple of questions, How long has industrialized society existed, and how long has this technology provided for the needs of a few billion-plus people? Not a very long track record, so why such faith in it? That is exactly what it is FAITH. Poor nations will only suffer? Amazing the hubris of the inhabitants of Western society.

I don't completely rule out a collapse.

You on the other hand seem to completely write off the entire industrial civ, and the notion that technology can be maintained.

In my view whether it will be one or the other depends on what we do now and in the years to come. Your decision not to believe so is your personal choice.

There will be advanced technology, but I am fairly certain it will be enjoyed and used by a select few in the future. What WE do, depends on which WE, we are talking about. WE, the masses of people who are not elites, neither have little say in the matter of our future because of limited political influence, nor give a rats ass about the future unless it concerns who the next American Idol contestant or story about Paris Hilton. The power elite is a different story (I use this in the C. Wright Mills context). If they decide to get their act together then maybe, there is a ray of hope that continuing our technological society is possible. I am extremely skeptical in that regard, as continuing our technological society will probably require sacrifices and change that the elites are unwilling to make. Business as usual is hard to shake, especially if it might involve a more equitable economy; most of the advances made in the last century were during the period of a vibrant growing middle class . Who willingly gives up a regime even at the last resort? History says not many.

Collapse is not an inevitable thing. As Tainter notes, when facing a crisis that impacts the underlying rationale for the existence of the civilization, such civilizations do one of three things:
1. Voluntarily reduce complexity - rare, but it has happened.
2. Find a way to reorganize on an even higher level of complexity. Has happened often.
3. Fail to find a way to reorganize higher and thus be forced (involuntarily) lower on the complexity ladder.

So yeah, it's possible to reorganize upwards again here but this is not just an energy crisis. This is a whole set of crises which are but symptoms of a larger underlying issue. And no one is paying attention to that elephant in the living room at all.

LevinK, I agree with you except 'the speed this thing got unfolding much outpaced the abilty of our socity to adapt.'

Had we listened to Jimmy Carter in 1979 we would not be in such a tough situation today. We would be facing PO but we would be better prepared had we the national will to build out rail and stick with fuel effecient vehicles and more light rail. We would have been better off had we only built out in the rail freight sector. Now we are stuck with lots of expensive diesel rigs moving needed goods at great expense.

Airlines are saying they cannot stay in biz with oil at $150-200 per barrel. If airlines and freight haulers cannot stay in biz what is left? Banana boats under sail = brown banana pudding.

The 'unseen hand' better start moving a bit faster and in the right direction if runaway inflation is to be avoided in the consumer sector, especially in food prices.

People have short attention spans, that's why we are supposed to have leadership to take care of the long-term common interest. No need to argue that we don't have one. Inflation is the biggest threat in the medium term; in the longer term they will be no longer able to ignore it and will significantly raise interest rates to counter it, thus crushing the economy. It's as inevitable as taxes. Had there be a moderately conservative monetary policy in the past 10 years, we wouldn't be in such situation, but this is another example of the lack of leadership we are experiencing.

Airlines are saying they cannot stay in biz with oil at $150-200 per barrel.

Airlines will still stay in business, just not all of them. The ones that are left will fly a smaller number of people who can afford it.

If airlines and freight haulers cannot stay in biz what is left? Banana boats under sail = brown banana pudding.

Again, it will still be available, just very expensive. Some of the more exotic fruits may end up being luxury items, along with most fruit/vegetables out of season.

Get used to flash frozen perishables shipped by rail. CIP, my wife loves berries. Our grocery store is well stocked with them. Out of season this past winter, a container of fresh blueberries roughly the amount of a small handful - $5.00. Expensive, but still remarkable considering the distance to get to our market. So, she went to Costco. A much larger bag of frozen berries for the same price. Not quite as tasty, but much better equipped for a slower trip.

Dust off those old timey skills. Mason jars may be making a comeback.

"Airlines will still stay in business, just not all of them. The ones that are left will fly a smaller number of people who can afford it."

You have to give consideration to the 'break even point' of the supporting infrastructure. At what point in the airline industry contraction will the myriad of underpinnings, both human and hardware, such as the air traffic control system, weather satellites, repair and maintenance companies, airports, etc. no longer be able to viability support the few left flying?

damfino - What people don't realize is that the massive infrastructure is dependent on the current numbers of flyers continuing to fly. Every time we fly on an airline we pay a tax which is a landing fee. That tax pays for the infrastructure. If the numbers of flyers fall by even 10% it could be devastating...

"At what point in the airline industry contraction will the myriad of underpinnings, both human and hardware, such as the air traffic control system, weather satellites, repair and maintenance companies, airports, etc. no longer be able to viability support the few left flying?"

My point exactly; tax revenues or other income streams.

With greatly reduced traffic you don't need as much infrastructure anyway. At major airports some of the terminals can close.
Europe also has massive opportunities to rationalise it's present crazy structure of national control of airspace.
I doubt the infrastructure will break.

The world-wide air traffic control system is incredibly complex and expensive to operate. If the number of planes contracts by 25-35% or more, the costs of operation and resultant fees will increase, resulting in higher airs fares, resulting in reduced traffic, resulting in a repeat cycle until it all falls below the cost break-even point.

One of the fallacious understandings of lay people is that a company goes out of business when it's sales stop. The truth is you can go bankrupt with considerable sales. It's all about your costs, and it's no different in this case.

There are also support systems in the airline industry which are only sustainable and viable on a sizable scale. ROI and EROEI apply.

Fair enough. So suppose that flights are down 50%. What could be done?
Or to put it another way, at some low level of use, and at some lower level of safety, flights could take place, mostly not using present equipment.
Any idea what that level would be?
30%? 10%? 5%?

I have no doubt that it would be a collapse of the present system, and am aware that you don't need sales to stop to drop out of business as a company, but I somehow doubt that that would be the end of all air travel.

At 50% of current operations I don't see the system as sustainable in any incarnation. I believe the mandate for human interaction in this complex system is such that a techno-fix in the form an automated process to handle a even a light flight load is highly doubtful, especially in consideration of the financial restraints we are up against.

This is uncharted territory, isn't it?

I don't understand this. Didn't the system work fine at some point in the past with half as many people flying?

Yes, and since then billions of dollars have been spent building up a more expensive to maintain infrastructure to support a steadily growing number of passengers.

Terminals and runways will have to be closed, whole airports will be shutdown as has already started, and the closed facilities will probably end up rotting in place.

True, but not uniformly. What you are more likely to see is a concentration of service at the major hubs, with most of the spokes being abandoned. There might still be flights between NYC and LA; there probably won't be flights between NYC and Albany or between LA and San Diego, you'll travel NYC/Albany or LA/San Diego by rail. The abandoned airports will indeed go bankrupt and deteriorate; actually, I am thinking they would be good locations for CSP or PV solar, or wind farms. I am also thinking that ATC will probably be folded into the military. Passenger jets will have designated corridors to fly between the few remaining hubs, and takeoffs will be infrequent enough that keeping planes separated will be a snap; ATC will mainly be focused on keeping the few passenger jets in the air on course and out of military airspace.

Without a doubt. I would expect all regional airports to close - just near me there is the wonderfully named Goblin Combe, a wooded valley (originally Eagle Combe, until Victorian romantics got at it)and the planes were coming in every few minutes, one after the other, to land at Bristol airport, and it occurred to me that this is probably the last year that will be possible.

This will be true of all regional airports - London to New York may still be possible, but perhaps only the Charles De Gaulle airport will take transatlantic flights, as it is on the TGV and central for travellers to Europe, and is likely to have power whereas the London airports may not.

Back to the 50's for air travel, I think.

Precicely. I live in northern Delaware. We have a county airport that handles some commercial traffic, but mostly it's corporate jets for the major banks located here. This airport is also shared by the National Guard. In a cutback, I'd expect that the small amount of commercial traffic and private jets to be moved to Philadelphia International, only 20 miles up the road.
Air National Guard would be consolidated down at the (very large) Dover AFB 60 miles south.

People are rather good at rigging up an emergency system.
What they are less good at, unfortunately, is predicting what will cause the breakdown of a structure, like the present rise in the price of oil.

Cargo ships can switch to Nuclear power, like aircraft carriers. Or they could go back to coal, and we would see the return of the age of the steamship.

Cargo ships can switch to Nuclear power, like aircraft carriers.

Um... No. The last thing you want to see is a nuclear cargo ship. Have you seen a cargo ship lately...? And you want nuclear material being hauled around the world by THAT?

And who would run and maintain it...? I mean, jeez, if something goes out on a oil fired ship just take it to the dock, but if a reactor goes out, that's a bit more complicated. Not to mention that you would need highly trained personnel for this kind of thing...

Also, this would be a huge target for terrorists.

And as for accidents (which happen all of the time)... Remember the Exxon Valdez? Now, instead of oil all over the coastline, imagine that being nuclear waste...

Here is a link with shipping incidents for 2006:



If that is the only way to move cargo, that is the way it will be done.
I would imagine that a combination of whatever oil is left, solar and kites will probably usually be used:

It is highly doubtful that the US govt would allow such an outcome as nuclear fuel traversing the globe in civilian ships would be a nightmare to keep track of.

Much of the technology behind the Navy's nuclear propulsion is classified, R and D for a civilian program would have to start from scratch. The cost to construct a nuclear powered civilian ship would be cost prohibitive. The skill set needed to run the ships would mean that there would have to be a civilian nuclear power "A" school constructed at a cost of millions. The school would need expert trainers and equipment that would mean training each student would be very expensive, and the skill set would be hard to come by (current USNR or former USN personnel would be barred from any training or use of skills that would divulge classified information).

The cost and availability of fuel for the reactors would be a major problem.

If all of these problems could be overcome the shipping companies would have to charge enormous rates for cargo.

It is highly doubtful that the US govt would allow such an outcome as nuclear fuel traversing the globe in civilian ships would be a nightmare to keep track of.

Why not continue with the present goverment-corporate ties and just have government ships move commerical cargo?

So steam ships it is.

No, respectfully I don't think we'll be limited to steam ships... Sorry if I came across as anti-nuke (I'm actually not anti-nuke, just anti-nuke-cargo-ship). Now, here are some options:

-Sail (via post earlier)
-Steam (via coal)
-Solar (I'll throw it out there, but think there's an energy density issue)
-Ocean current (The gulf stream moves at 5mph, but this is 5 mph of FREE ENERGY... Just like the jet stream that planes use to shorten their travel times and save fuel, this could be used in the same manner)
-Battery (might just work... juice it up at the dock while unloading. Just would be pretty expensive up-front costs)

-A nice combo of the above, plus others.

"The mind, like a parachute, functions only when open..."

Another one: hydrogen.

I have always wondered why they are trying to put super expensive fuel cells in cars, with all those problems with H2 storage etc., when the most logical place to use it first would be in very large vessels like ships and aircrafts. H2 has an excellent energy density per kg, and can greatly work in conjunction with solar or sail.

Actually, the predominant trade routes during the Age of Sail utilized ocean current and solar as it is solar that drives the wind. If folks get a chance, visit a maritime museum in person or online, and bone-up on a part of our future.

It hasn't really. The Savannah and Otto Hahn were showboat demonstrators that were simply the wrong ship with the wrong reactor in the wrong time frame. First oil was dirt cheap. Second Savannah was break bulk cargo when everyone was switching to containerized shipping. Third, its cargo volume was far too low to be competitive even with break bulk cargo.

There are real advantages to civilian nuclear powered ships, particularly where speed is reqired. For a cargo ship you're getting double your capital value because you can go twice as fast. For a cruise liner one might imagine that to be fairly valuable.

The time might not be right for nuclear shipping but its premature to write it off.

Russian fleets include nuclear powered ice-breakers, some of which are also freighters.


The post-2014 Panamax ships (about 2.5x today's Panamax) will be just barely big enough to justify a 1 nuke reactor (with fuel oil or av fuel backup) container ship.

No other ship type, expect perhaps a specialty auto carrier, can, IMO justify a nuke in the near future.

I could see two types deep post-Peak Oil, 5 masted schooners of 4,000 to 5,000 tonnes and Panamax nuke ships of 160,000 tonnes and some bigger (SuezMax).

Several dozen to a hundred nuke ships (including oil tankers) and thousands of schooners. LNG ships will still run off of evaporating LNG most of the way I suspect.

Nuke Cruise ships (Here are your 5 free drink tickets, here are your cabin keys and here is your dosimeter, please keep it on you at all times, no matter how drunk, and we will read it at the end of the cruise. Happy Sailing on Carnival Cruise Lines :-) are a no go.


Nuke Cruise ships (Here are your 5 free drink tickets, here are your cabin keys and here is your dosimeter, please keep it on you at all times, no matter how drunk, and we will read it at the end of the cruise. Happy Sailing on Carnival Cruise Lines :-) are a no go.

I really don't thats necissary for a nuclear powered cruise ship. Could you expand on why you're dismissive of nuclear cruise? One might guess it would be a reasonable alternative to airlines when petroleum prices them out of the range of the average traveller.

Given that one is quite close to an operating nuclear reactor, and since radiation exposure levels are critical medical information if an incident occurs, dosimeters seem to be essential.

And *MANY* members of the public are not interested in being THAT close to a nuke for a week.

Nuke cruise ships are a fantasy. Take a few weeks and sail there or pay a good price and fly on bio-av fuel.


Concentrating solar steam ships could work, they wouldn't be fast but might be possible to use such a ship as a mobile desalination unit. Cruise around the equator in the sun filling up with water and salt then dock at the place offering the highest price.

If molten salt storage takes off there will be an increased demand for salt, also can preserve meats as alternative to freezing.

Roger Bezdek seems to agree w/ you:

However, the current estimates for airline industry growth seem greatly exaggerated.

The investment bankers are foretelling a great wave of bankruptcies for 2009-2010, if oil doesn't fall to c. $80 and kerosene crack spread down to $5.

As that is unlikely to happen, even the airline industry is saying that there will be a fall out.

However, unlike so many others, they believe the current run up in prices is mostly speculation. They are joined by a group of analysts and bankers:

"What has driven the market so far, so far, in our view, is that such a high percentage of the speculative trade has become aligned in one direction.” - Tim Evans, PM Energy News

"The increasing prevalence of futures contracts has transformed the nature of oil markets. It is no longer only about the value of oil as an energy commodity, but also… oil as a financial asset." - Goldman Sachs

"Our study indicated that for every $100 million in new inflows, WTI prices increase by 1.6%... Our conclusion from this study is that we are seeing the classic ingredients of an asset bubble." - Lehman Brothers

"“There may now be upwards of $25-$30 of speculation in the price of crude." - MF Global Energy Risk Management

"So, is this a bubble? The answer is that the bubble is super-imposed on an upward trend in oil prices that has a strong foundation in reality." - George Soros

"Demand and supply fundamentals argue for oil priced well below $100 per barrel." - Mark Zandi

Now each one of us is free to believe individually what one wants, but I'm not betting on the majority of airline industry to fair well, speculative bubble or not.

There is too much overcapacity, the prices will rise on the long term and CTL FT is no panacea for the airline industry.

Those 'pessimistic' numbers aren't nearly pessimistic enough. Not only are there the simple impacts of prices tripling; there are the impacts of economies of scale unravelling, of loss of confidence by investors, of airport scale factors and costs, of fragmentation of networks.

A pessimistic case for 2026 would be something like 95% reduction in numbers, not 40%.

The unseen hand has been preparing for this for a long time my friend.

I wouldn't be too optimistic about ramping up oil sands production that quickly, environmental issues apart.
New technology like nuclear or microwave might allow high production eventually, but new tech is never fast to introduce.

I think once we get into a crisis mode, all bets and projections under BAU assumptions are off.

It is very likely that tar sands will be ramped up as fast as possible even if this means diverting the whole Athabasca river and building nukes by the dozen.

This is my biggest problem with environmentalists objecting practically every energy project out there - they can't (or they don't want to?) see how things will develop let's say 10 years out.

If they went with the CANDU option for a nuclear build the fastest ever civil nuclear construction was around 4 years.
The location is remote and very inhospitable.
Forgetting about any environmental constraints, and assuming no legislative delays at all, considering that lots of other equipment, roads etc would be needed, what would be a reasonable estimate for the earliest possible substantial output by this means? Ten years, surely?
Of the other alternatives, the Hyperion nuclear battery is not fully proven yet or the production lines set up, and likewise microwave technology.
I can see oil sands as a very substantial resource for needs where liquids are vital, but it doesn't seem likely to me that it will cushion the fall much.

Dave, for about 15 years - from mid 70s to the end of the 80s France built 59 reactors and went from virtually 0 to 80% nuclear powered. This, without hardly anyone noticing. Another example - the CTL industry in Germany during WWII took 2 years to develop.

So, you are correct that in 5 years we will not see CANDUs popping out by the dozen, but what about in 10-15 years? True, there are other limiting factors like water, but these could be overcome by piping it from remote distances for example. Similar timeframe could be developed for oil shale, maybe with a 5-10 years time difference, because it is behind the curve.

Note, I am not endorsing either one of these energy source - I only think this is a possible and as time goes by very likely way to go. Personally I would prefer if we could go to entirely electric transportation, but for number of reasons I think this is less likely, and with time passing by it's getting worse. We simply don't have the technology to make competitive electric vehicles and I don't think it is likely to appear in the next few years... Crash programs are good to scale up "more of what we can do", but not so good to introduce radically new solutions.

Your time frame seems reasonable. The point is that it is not going to kick in in time to soften the transition.
It seems to me that it is not either EV's or this kind of technology - with a whole world of demand out there and not everyone having oil sands the personal transport transition will be to EV's and electric bikes.
Remaining oil from sands etc will be invaluable for agricultural machinery etc.

I think it all depends on how long before the crisis is acknowledged. Institutions and huge corporations suffer tremendous inertia so I don't dare to give any predictions regarding this. Under BAU, moving away from oil will not be possible; it will require a full-scale government backed and financed program.

Power cuts in the UK are likely to start kicking in by 2010, so I would have thought not even the governing classes can be dumb enough to miss it by 2011, say.
They will probably take mainly counterproductive measures, subsidies for airlines etc, but they are likely to be too far into bankruptcy to do as much damage as they otherwise would.

The US has fundamentally better energy resources than Western Europe, and I would expect a large build of wind shortly, as it has a short lead time and does not involve using political capital as nuclear would.

Crunch point for the US is likely to be transport.
By next summer that is likely to be causing real hardship with the fall-out from the gangster financial economy, housing etc.

I don't think that some realisation that things have changed can be delayed beyond 2012.
Appropriate action may be another thing.

"Appropriate action may be another thing."

That sums it all. By realization I mean absolute realization - people to acknowledge and address the root of the problem. And it is not even in oil depletion, it's more in the unsustainable/unplanned growth paradigm.

I think it will take years of "cascading" realizations... and the actions will follow suit. First of all every possible thing will be done to avert physical shortages, and the public may not be even aware of that. In UK prices will rise even more (and they will give some explanations), imports will be brought upon from every place possible, the old nukes will not be closed. Think you will muddle through a few more years without shortages. Then there maybe possible recession, rationing to industries etc. These will all be masking the real problem, and governments will be busy putting up the current fire just to go into the next. I'm not an optimist, I think it will take at least a decade (from now) before the problem is recognized in its entirety and the appropriate actions will be taken.

Define "competitive electric vehicle".

If you mean a 6000 pound SUV capable of 350 mile trips consuming 50 gallons of fuel, well no, we're not going to produce those any time soon.

But if you mean a 4 door sedan capable of reasonable highway speeds with a 70-100 mile trip range, then those are being built in small numbers already.

Actually, they can and have build very acceptable SUV hybrids, which get good economy providing that you don't try to go to far when they become a straight petrol car - check out the video:

YouTube - XH-150 Extreme Hybrid - Track Tests & Interviews

This is a pretty cool technology, the idea of ultra-capacitors with lead acid works well at good cost.
For uses where you need a heavy duty, short range vehicle this could prove useful, and of course the battery technology everywhere.

EVs are bound to suffer in acceptance as long as they need to be recharged for hours. It significantly hinders convenience and usability. An infrastructure of recharging stations could help a bit, but how long until we have that? We also don't have yet a battery that does not cost fortunes and could reliably bring the vehicle 200,000 miles or more as the ICE can.

Plug-ins are a good interim solution, but they also suffer the worst of both worlds - they need to be recharged to make sense, and they need expensive battery.

The golden graal of EVs: a 200 mile range, 80mph top speed, 10 min. to recharge. Put an "and" between them.

Then we have the problem with all those trucks, heavy machinery etc... as seen in Europe the first to protest are not auto drivers, but truckers and farmers. It's kind of hard to think of solutions for them too.

As long as you can fill up the tank of an ICE car for double digit dollars, of course any EV is going to look undesirable in comparison. On the other hand, once the ICE car is sitting in the driveway with a permanently empty tank because the owner can't afford the triple or quadruple digit dollar refills, then any EV is going to start to look a lot better compared to no motorized personal transport at all.

The golden grail of EVs

Tesla Roadster - 2 out of 3 and 109k is not bad compared to a similar performing exotic
Phoenix Motorcars SUT - 2 out of 3 if they could just starting making thees 10 min recharge trucks

EEstor power storage systems?
Firefly's Oasis Group 31 batteries getting some EV fans excited

It looks like we might be within striking distance of the golden grail!

There are two companies in the UK manufacturing commercial EVs, Modec and Smith Electric. Future os short Haul transport?

Alan from the islands

This is my biggest problem with environmentalists objecting practically every energy project out there - they can't (or they don't want to?) see how things will develop let's say 10 years out.

Have you ever considered that these "environmentalists" you are talking about might not be as stupid as you are assuming? Perhaps they actually are looking 10 (or more) years out. Perhaps they simply have different values than you. Perhaps they would rather have less energy and a better environment, whereas you are implicitly making the opposite valuation.

"Perhaps they would rather have less energy and a better environment"

I explicitly showed why they are wrong if they want just that. In the longer term the public will demand it's quick fix and in most cases this means fast, cheap and dirty fix. If you have any arguments to counter that I'll be happy to discuss, but I didn't see any.

Sometimes I think that environmentalists think they could "teach" the public not to "want so much energy". I think there will be some crude awakening re this point once the going gets tough.

You explicitly showed no such thing. In fact, you explicitly showed nothing. You simply gave us all your opinion and then went on to presume that it was fact. Your conflation of attitudes / values (both yours and societally) with truth is where your arguments fail.

You two did not present any arguments. Is this your idea of discussion?

Go look at my previous post to you just above (as well as some of the others in the other threads). I'm asking you questions. I'm trying to get you to think through some of your assumptions. If you don't understand what form of discourse that is, I'm not sure I can help you.

shaman I am not a mind reader. And I am not going to argue with myself like an idiot just because you are asking questions unbacked with any arguments worth mentioning. Of course I am considering the fact I might be wrong. But in the absence of anything to convince me in the opposite, I consider myself right. Or you suggest I do something else?

LevinK - YES! I suggest you do something else - question your own assumptions - critically examine your own statements - do not accept beliefs as fact. That is all I've been trying to get you to do all day.

Thank you

Sometimes I think that environmentalists think they could "teach" the public not to "want so much energy". I think there will be some crude awakening re this point once the going gets tough.

It won't be the environmentalists doing the teaching... It'll be Geology (Peak Oil) and Economics (Demand destruction via high prices). And the lessons will be learned HARD.

If this is true, this means we are taking the first step down the energy ladder and are starting to use more and more expensive and harder to process energy stuff.

OK, so... here's the $140 question... How much of the 'harder to process energy stuff' is out there? Is there a lot, some, not much? In other words, if 70% of all world OOIP was light sweet, and now we're going after heavy and/or sour crude, that means we don't have a whole lot left. However, if light sweet only was 10% of all world OOIP, and now we've pumped the 'easy' stuff and are dealing with the 'hard' stuff, then I'm a bit more comfortable. (Granted, it postpones the inevitable production peak anyway, but at least it postpones it for a bit.)

Read a bit about what can happen if we release the methane locked under the seas in the arctic. I know this keeps me from being too comfortable with continued use (and growth in use) of fossil fuel.

The quantity does not matter much. Flow rate does. Evidence exhibit A:

That is a fairly optimistic geological scenario for unconventionals, I believe and does not take into account major geo-political or market risks.

The quantity does not matter much. Flow rate does.

Excellent point. Heck, we might have enough oil to last 10,000 years, but if we can only support 1 Billion people with the flow rate over the long term, then we're toast.

BTW, saw your image got clipped... Here's what I think is the point you were trying to make.


JHK's post this week ties corn floods in Iowa to Peak Oil:

In the Iowa floods, we'll see more evidence of how the problems of weird weather (climate change) combine and ramify the problems associated with peak oil.


Thus cheered, I sally forth to challenge the day.

Well well...I wonder where JHK got this notion ;-)

On the oil scene, the next event on the horizon is not just higher prices but shortages. Chances are, they will occur first in the Southeast states because oil exports from Mexico and Venezuela feeding the Gulf of Mexico refineries are down more than 30 percent over 2007.

Not to take anything away from WT but JHK talks about the increasing consumption of the Oil Exporters and thus decreasing exports fairly early and openly in the Long Emergency. I think the publishing of The Long Emergency predates the Oil Drum

I think that Jim was probably Peak Oil aware before yours truly.

Any transcripts available of your radio interview?
How did it go?

I posted a note up the thread. As usual, Jason did a great job. I think that it will be uplinked on Global Public Media.

Here is a headline I read in the guardian newspaper about sanctions on Iran. It was buried a bit deep on their website


It is this bit i wanted to draw attention to

the US may seek to assemble a "coalition of the willing" for direct action, possibly including a naval blockade of Iranian shipping in the Persian Gulf,

I presume they would let through the tankers? Sure the US cannot be this stupid? $200 dollar oil might not be that far off.


If this were true, they could always blame it on the Iranians. Do not underestimate the power of repeatedly blasted lies through CNN/FOX/whatnot.

And IF the above were true, it would beg the question: why would they want to have the oil price shoot through $200?

I have seen such arguments before (US trying to increase the price of oil), but never an explanation as to why it would make sense.

do these words from the uk prime minister sound like the words of someone concerned with the high price of oil?

“Today, Britain will urge Europe and — Europe will agree — to take further sanctions against Iran,” Mr. Brown said.

“We will take action today that will freeze the overseas assets of the biggest bank in Iran, the Melli bank, and secondly, action will start today for a new phase of sanctions on oil and gas,” he said, without elaborating.

stop the war and allow iran to modernize its oil industry and the oil price falls.

but perhaps that isnt what cetain factions want despite words to the contrary.

There is absolutely no chance of such a blockade happening given the current state of the global oil markets, and, more broadly, the state of the global economy.

Whilst some elements in Washington ( and Tel Aviv ) might be enthusiastic about this, there would be no "coalition" without the explicit legal standing of a UNSC resolution to do so, and this is unachievable. Anyone actually trying to mount a blockade of Iran at present is going to be in breach of a wide variety of international legal standards which are actionable in numerous jurisdictions - and Iran has far too much strategic heft to be messed with in this way ( which is why there is always an excess of chatter ( lots ) to action ( somewhere between trivial and none ) when the Iran issue is raised. )

The blockade "option" ( it doesn't really deserve to be taken seriously ) has been floating around for a while now - but it's really part of the propaganda campaign/psychological warfare that is aimed at trying to get the Iranians to be more compliant.

A naval blockade is every bit as much an act of war as bombing nuclear processing facilities. It would be naive to think the Iranians will just sit back, say "oops", and install a pro-American regime in response (which may be the only thing that will satisfy the neocons). Most likely they would retaliate by sabotaging oil production & distribution facilities in the region.

In addition, blockading a supplier of China could be construed as an act of war against China. I think it likely the Chinese would try to continue getting oil out of Iran, which could create some tense situations. Of course, China is the neocons' enemy #2 after the scary Mooooslims.

The EU is going to wish it didn't join Bush's dirty work against Iran, as they are now freezing bank accounts. That term freezing is what will be instore for the EU. I'm not Iranian, but I can certainly undertsnd them not supplying/selling natgas/oil/refined products to the EU after the economic war waged against them. You folks in the UK better prepare to bundle up even more with the natgas shortages sure to come this winter and the next, and next, and next...

I guess the EU is hoping that Iran will be invaded like Iraq and the oil and gas will come its way. There is no other logic that makes any sense in explaining EU policy. All the bluster about reducing dependence on Russia for gas and oil looks comic when they are harassing the country with the second biggest gas reserves.

I don't think I'd use the word "comic." Good thing the Irish Constitution says they must have a citizens vote about EU-related treaties. Once upon a time in the USA, such a vote was called Popular Sovereignty.

Half the World's navies are stuck in port because they can't afford the fuel to get out. The only blockade they'll be doing is in the harbour, much to the annoyance of the fishermen.

What did bush do to brown over the weekend BTW? Watching brown's about-face regarding troop withdrawals, one may think it was a touch of water-boarding. Or maybe bush showed brown some compromising photos or something.

I know everybody has one eye on the oil price today, but I would like to beg for a new collaborative effort from the TOD gang. The post over the weekend that showed a map of the USA with percentage of income spent on gas got me thinking. Could we make a list of the top industries that will soon have problems and show a map where this is a problem. The list would have to be ranked by timing of disaster. I will start with the obvious:

1. Airline industry (Show hubs on the map)
2. Trucking (Show major transfer stations, bottlenecks for cross country fueling, etc.)
3. Detroit (Need I say more?)

According to Cambridge systematics:

Future_Rutter.pdf (SECURED)

the train chokepoints will be:

Jacksonville, Houston S, KC W, Chicago W, Memphis E, Vicksburg E.,
just outside LA, to Tucson, and to SF.

I was just thinking of this. I think you can safely say tourism/hotel will be pretty much obliterated.

Good call.

So, Florida (beaches) and Colorado (skiing) are gone.

Seems the tourism industry is not reading TOD or other news about the oil situation:


Global Insight, the world's leading company for economic and financial analysis and forecasting, today released the second quarter 2008 update of U.S. Travel Insights, predicting a slight year-over-year increase in the total number of domestic Person-Trips, and a higher spike in international arrivals.

Airlines still have not passed on their increased costs, and they bought ahead for a lot of oil so not all the effect has hit them.
If oil prices stay high, then OK there might still be relatively cheap flights for 2008, but just watch prices for flights rise and airline dependent tourism tank in 2009.

This is the view their forecasts are based on:

"Virtually every cost component of the TPI will begin to moderate over the next two years, including fuel costs," said Jennifer Fuller, Director at Global Insight and principal author of U.S. Travel Insights. "Slowing demand and rising supplies will take some of the heat off of hotel rates, gasoline prices, and other trip costs."

Keep whistling, guys!

dave, totally agree but I think the crunch will start September/October. At the moment the airlines are hoping the tide will turn during the summer season. In a lot of cases hedges will start to expire in this time frame as I think you will find the airlines do their calculations and hedging around the timetables of summer and winter capacity.

If you want to find how bad things are google 'airline fuel costs' a few times a day. Typical of stories today: All Indian airlines losing money, QANTAS possible credit downgrade from moody's just when they are planning to replace whole fleet with 380's and 787's value of company now matches total value of new aircraft required. Ryanair/Aer Lingus shares marked down to sell status by Goldman.

Its an industry that is in real trouble.

Your time frame is totally correct.
Crunch for the airlines, or many of them, should be by Sept-Oct.
Some of them are better hedged and can keep going to the New Year.
It was cheap (relatively) flights that I said should remain for the year, as the old system plays out.
They should simply not exist at all by next year.
As someone pointed out downthread, keeping the air-traffic control system and essential services going will not be easy with a lighter traffic load either, but for 2009 I expect Government to step in, whilst it still can.
By 2010 or 2011 other strains on the economy may mean that is no longer possible, and it will have to decay to whatever level is sustainable.

But Blackpool here in Lancashire (UK) may benefit. It was once the major working class resort for the North West of England and Glasgow, but with the advent of cheap airline flights Blackpool has declined. It may see good times (relatively speaking) once more. Other similar resorts near urban centres may similarly benefit (again relatively speaking).

OIL DRUM (EnergyWatch and ASPO as well).
I just wanted to say thanks for letting people know what's really going on with the price of oil. In a break from my other studies I've been reading up on this, you make a persuasive case. The UK media, except notably The Independent (Kudos due), seem to have missed this issue and it's importance. At present our governments seem to be in quite genuine denial. I can't even see moves in the background that betray any hidden awareness of the threat. If people don't accept that the idea we're at peak now is at least a very real possibility, we'll be doomed by our inability to respond appropriately and timeously.



PS From the article above "Peak Oil - Worry Now."

Of course there are also the overly optimistic oil experts such as Chevron engineer Jeff Hatlen, who says, "Yes, there are finite resources in the ground, but you never get to that point."

You never reach a finite point?

I must have missed that lesson in math class.

Rather than missing a maths lesson it may be because Zeno's paradox of Achilles and the Tortoise was covered in philosophy. ;)

The tourism industry would not suffer everywhere to an equal extent.
The more dependent it is on long distant flights, the quicker it goes.
Until meltdown, people would just stick closer to home rather than forgo a holiday, or at least some of them will.
So Hawaii goes first, and Las Vegas pretty quickly.
Florida though has a fairly good hinterland in Texas and nearby states, and should do rather better.
Where to invest in tourism?
Try Cony Island.

Seems the industry analysts agree with you DaveMart. From the same link I posted above

Travel spending growth will begin to slow in 2008, down from the inflation-fueled rates of 2006 and 2007. Total domestic visitor spending will rise by 3.6% this year, followed by an increase of only 0.9% in 2009. Changing trip behavior such as substituting domestic for international trips, trading down in hotel quality, foregoing in-trip shopping or entertainment spending, shorter stays, and visiting destinations closer to home have all helped to maintain the travelers ability to go while coping with rising travel costs and economic woes.

"Rising hotel rates, gasoline prices, and air fares have thus far been met by changing trip behaviour rather than a decision to stay home. This is strong evidence of the surprising resiliency of travel, particularly leisure trips,"

I think that's what we're seeing here - people who used to fly abroad are seeing the USA instead, replacing people who used to vacation here and can no longer afford to. This type of thing can't go on for long, of course.

If the producer prices for agri commodities do not increase and fertilizer/pesticide/herbicide prices keep on increaing, then probably:

X. Farmers not growing bio-ethanol feedstock.

As Mexico becomes more unstable over the next few years, will the produce trucks from there stop all together?

Professional, Collegiate, and Highschool Sports. All utilize either airlines/ air charters and team busses. The clientele buys tickets with ever dwindling discretionary income. School districts are already confronted with fuel bills busting their budgets. Which teachers/programs will be axed in Texas to keep football, basketball in Indiana, and elsewhere? I believe it was DaveMart who referred to the 2012 London Olympics as the Poverty Games, akin to those in 1956.

I believe we will see some serious changes made shortly; for highschools and some colleges, by the Fall semester.

I have an observation and a question for the smart folks on theoildrum.

I heard that Saudi Arabia, United Arab Emirates, Iran, Kuwait, Iraq and Qatar curbed their output by 544,000 barrels a day last year. At the same time, their domestic demand increased by 318,000 barrels a day. So, their net exports dropped by 862,000 barrels.

It would seem that the proposed rise in Saudi production of 200,000 barrels from June to July, on top of the 300,000 bpd rise in May, is not enough to even make up for last year's cut in OPEC exports.

My question is, do you have a link to a website showing net OPEC and world crude oil exports, month to month? I'm looking for exports, not just production. I've looked on the EIA website, but if it's there, I haven't found it yet.

I have found netoilexports.blogspot.com, which is a nice site, but I was looking for something more official.

". . . curbed their output by 544,000 barrels"

A more accurate statement would be that production fell.


I knew you would take offense to "curbed" before I even scrolled down.

Okay, pardon my unfortunate phrasing. Can you answer the question?

Rembrandt posts a monthly updaate of net oil exports. I believe that he shows total world. I assume that he uses estimated consumption, since I believe that the EIA and BP release their consumption data on an annual basis.

"Curbed" suggests that the decline was all voluntary. All we can say with certainty is that their combined production fell. The "why" is the 64 trillion dollar question, especially for Saudi Arabia. But peaks do happen, e.g. Texas & the North Sea, even with the best technology and virtually no impediments to drilling, so I don't think that the laws of nature have been repealed in Arabia.

Please don't misunderstand, all comments are welcome here. It just hurts to see the propaganda take hold in the Consciousness of even the informed (like you). I am no expert on the current export stats, but my opinion is that with the U.S. election only months away and the constant "revising" of the official numbers, we may not know for a while still.

The website netoilexports.blogspot.com draws his data from EIA and IEA sources. If you search the site, I believe he has stated where he gets his data, allowing you to get the same data yourself.

next best guess would be IEA:


unless you've subscribed you will have to do it on a counrty by country basis. Click which country you want (OPEC or NON OPEC on the 2 drop down boxes). now go to the RHS of the page and click oil market report. Problem is net exports are only shown some some countries.

Quick addition. If you click "balances" in the middle as opposed to oil market report you get a better breakdown.


Thanks very much! The two drop-down boxes are actually broken into OECD and non-OECD, not OPEC and non-OPEC, but it seems like a good place to start.

It appears the horse that's drawing the world economy is approaching her limits. The reaction of the public has been ugly: denial, anger, demogoguery, search for scapegoats and desire for retaliation against the oil producers--the very horse that pulls the world's economy. It is this antipathy towards the horse that worries me the most. I found an apt metaphor in Dostoevsky's "Crime and Punishment:"

"A peculiar circumstance attracted his attention: there seemed to be some kind of festivity going on, there were crowds of gaily dressed townspeople, peasant women, their husbands, and riff-raff of all sorts, all singing and all more or less drunk. Near the entrance of the tavern stood a cart, but a strange cart. It was one of those big carts usually drawn by heavy cart-horses and laden with casks of wine or other heavy goods. He always liked looking at those great cart-horses, with their long manes, thick legs, and slow even pace, drawing along a perfect mountain with no appearance of effort, as though it were easier going with a load than without it. But now, strange to say, in the shafts of such a cart he saw a thin little sorrel beast, one of those peasants' nags which he had often seen straining their utmost under a heavy load of wood or hay, especially when the wheels were stuck in the mud or in a rut. And the peasants would beat them so cruelly, sometimes even about the nose and eyes, and he felt so sorry, so sorry for them that he almost cried, and his mother always used to take him away from the window. All of a sudden there was a great uproar of shouting, singing and the balalaida, and from the tavern a number of big and very drunken peasants came out, wearing red and blue shirts and coats thrown over their shoulders.

" 'Get it, get in!' shouted one of them, a young thick-necked peasant with a fleshy face red as a carrot. 'I'll take you all, get in.' "

"But at once there was an outbreak of laughter and exclamations in the crowd."

" 'Take us all with a beast like that!' "

" 'Why, Mikolka, are you crazy to put a nag like that in such a cart?' "

" 'And this mare is twenty if she is a day, mates!' "

" 'Get in, I'll take you all,' Mikolka shouted again, leping first into the cart, seizing the reins and standing straight up in front. 'The bay has gone with Matvey,' he shouted from the cart--'and this brute, mates, is just breaking my heart, I feel as if I could kill her. She's just eating her head off. Get in, I tell you! I'll make her gallop! She'll gallop!' and he picked up the whip, preparing himself with relish to flog the little mare."

" 'Get in! Come along!' The crowd laughed. " 'D'you hear, she'll gallop!' "

" 'Gallop indeed! She has not had a gallop i her for the last ten years!' "

" 'She'll jog along!' "

" 'Don't you mind her, mates, bring a whip each of you, get ready.' "

" 'All right! Give it to her!' "

"They all clmbered into Mikolka's cart, laughing and making jokes. Six men got in and there was still room for more. They hauled in a fat, rosy-cheeked woman. She was dressed in red cotton, in a pointed, beaded headdress and thick leather shoes; she was cracking nuts and laughing. The crowd round them was laughing too and indeed, how could they help laughing? That wretched nag was to drag all the cartload of them at a gallop! Two young fellows in the cart were just getting whips ready to help Mikolka. With the cry of 'now,' the mare tugged with all her might, but far from galloping, could scarcely move forward; she struggled with her legs, gasping and shrinking from the blows of the three whips which were showered upon her like hail. The laughter in the cart and in the crowd was redoubled, but Mikolka flew into a rage and furiously thrashed the mare, as though he supposed she really could gallop."

" 'Let me get in, too, mates," shouted a young man in the crowd whose appetite was arroused.' "

" 'Get in, all get in,' cried Mikolka, 'she will draw you all. I'll beat her to death!' And he thrashed and thrashed at the mare, beside himself with fury."

(Dostoevsky, "Crime and Punishment," Part One, Chapter 5)

The episode continues. The mare of course cannot draw the cart. She protests, kicking up her heels.

" 'I'll teach you to kick,' Mikolka shouted ferociously. He threw down the whip, bent forward and picked up from the bottom of the cart a long, thick shaft, he took hold of one end with both hands and with an effort brandished it over the mare."

The episode ends with Mikolka killing the mare.

This is my fear--that when the horse can no longer pull the world economy, irrational rage, mob rule, will result in the horse being killed.

No need to worry - once the mare died, they all piled into their Apteras and sped off down their perfectly paved roads to their solar and wind powered homes. All business as usual, just with brand new shiny energy sources. No problem at all.

Is this just hype or something really useful?

Honda rolls out new zero-emission car

"The FCX Clarity, which runs on hydrogen and electricity, emits only water and none of the noxious fumes believed to induce global warming. It is also two times more energy efficient than a gas-electric hybrid and three times that of a standard gasoline-powered car, the company says."

Hydrogen powered cars are currently a sad joke and likely to remain so. Some problems with hydrogen are supply, storage, and infrastructure.

AFAIK, this car is going to be leased since the cost of the fuel cell is insane. It's probably just a PR stunt for Honda and while their heart is in the right place, I think the resources currently geing expende on H2 research would be better spent on batteries and weight reducing technologies such as composites.

It is fairly easy to do a homebrew/DIY DC electric conversion. I saw several at Battery Beach Burnout which I attended this last January. What drives me nuts is the huge difference in cost if you try to go AC electric. There was one guy at BBB with an AC Propulsion EBox (Tom Hanks also owns one). Nice car but, 55k to convert a 13-18k pre 2008 (not the latest model) Scion XB to all electric? AC propulsion also sells the heart of the system the AC-150 EV Power System fo 25k.

If two guys in a facility in San Dimas, California, can cook up this high efficiency, high performance AC electric drive technology, imagine what the likes of the major Japanese, European and US auto makers combined with the worlds major suppliers of electric motors, industrial electronics and batteries, could do.(Edit: It is actually AC Propulsion's technology that is licensed and used by Tesla Motors in their Roadster) Imagine the cost reductions that would come from spreading the cost of the R&D and manufacturing over thousands of units instead of AC Propulsions tens(?). Remember these little guys can give you a 100+ mile range fully electric vehicle with regenerative braking for under 70k and the major part of that cost is the electronics and the batteries!

Alan from the islands

Hype. You could go back and read the 2+ years of TOD to understand.

The podcast the watt points out how the fuel cell symposium won't consider H2 based cells w/o storage/generation breakthroughs.

Don Lancaster has a series of web pages H2 is a gas. Go read that for further understanding.

Read the article - this is "feel good" marketing. Honda plans to "lease out" about "200" of these vehicles over three years!!!!!

Can we say irrelevant?

The real problem with fuel cells is the cost of platinum, currently the only effective element that we've found able to make a fuel cell work viably. The world's total platinum supply is not all that large and the demand for automobiles seems endless at the moment and is huge regardless.

Fuel cell cars are a marketing ploy to get people to think they are "working" on the problem. The real problem is how to we reorganize our lives so that we demand less energy and have a smaller ecological footprint?

Forget warnings of panic at the pumps. Britain is set to lose nearly half its electricity in six years


Yet all this pales into insignificance compared with the real energy crisis roaring down on Britain with the speed of a bullet train as, within six or seven years, we stand to lose 40 per cent of all our existing electricity-generating capacity.

No, no - in six years they will all be driving PHEV's.

No, no, no

In six years everybody will believe in the solar gospel according to St Jeremy Leggett and will have plastered their roofs with PV panels:

“even in the cloudy UK, more electricity than the nation currently uses could be generated by putting PV roof tiles on all suitable roofs.”

[Half Gone, page 201]

See also:


To build refineries for heavy crude, requires new machinery such as compressors, gas turbines, etc. The shops now are full because everyone is building. The lead time is reaching out to 1.5 to 2.0 years on large equipment. So this not going happen overnight and I think the disaster will engulf us before we can get the refineries built.

I agree,

If they steal the experienced workers (welders, etc.) from the drilling sector, you will be "robbing Peter to pay Paul".

Forget about buying a plug-in hybrid, bicycle, or using public transportation. Don't waste your time with solar energy or wind power. Here is the solution to all our problems:

Go to http://www.americansolutions.com/ and sign the petition. Then go out and buy a new 8mpg motorhome. There is nothing to worry about.

(/sarcasm off...)

The scary thing is, most of the people I know have signed this petition.

well I didn't expect any more from the average american to begin with... the bumper sticker society is going to pull the rest of us down with them it seems

If they changed it to "Drill Here, Drill Now, Pay More" I might sign it.

Although I never have had a bumper sticker...I think I will go for this one:

Drill here, Drill now, Die soon.

Next comes "Shoot Here. Shoot Now. Pay Less."

As I've said before, I think it's a foregone conclusion that this will happen. What really matters is that this effort plays the last card as there is nothing to do after. Plus, as most of us know, new hydrocarbons brought forth by this effort will not hit the market for 5-20 years and will do nothing to increase supply as they will only serve to mitigate depletion. Personally, I think we should encourage this, afterall, as it's going to happen because it's a political winner.
What we must also encourage at the same time is the massive build-out of alt-transport and electricity generation.

So I say, Drill Now, But Prepare for the Inevitible.

So per your acquaintances, when in a hole, drill faster?

I picture the bumper sticker on a car with a drilled out and drained gas tank. With a note written with a marker on the bumper sticker, "thanks", and an arrow pointing to the gas tank.

LOL - Now that's funny.

The first time I saw one of these stickers I thought of the poor saps that still have "Bush/Cheney '04" stickers on their cars (inevitably a Lexus or an SUV)... They're just too stoo-pid to be embarrased.

Honda rolls out new hydrogen car

just was sent this by a coworker.

Last week I was told the hydrogen car was a no-go, because of poor energy conversion in powering the cell i believe...

this is of particular interest...

The FCX Clarity, which runs on hydrogen and electricity, emits only water and none of the gases believed to induce global warming. It is also two times more energy efficient than a gas-electric hybrid and three times that of a standard gasoline-powered car, the company says.

any thoughts?

Which precious metal are they using for the fuel cell? This will be the problem when scaling. Not enough of the material to make it en masse.

"Which precious metal are they using for the fuel cell? This will be the problem when scaling...."

Exactly. How come so many people just don't get it?

What part of the word 'scale' is it that they don't understand?

It's not rocket science. It's, like, when you build ten times as many Xs that contain component Y you will need ten times as many components Y, etc. Four-function math.

Not to mention Liebig minima, non-fungibility of certain components, and so forth.

But you might as well be talking to the wall.

Sigh ...

Cut them some slack. They only need to build about 600,000,000 cars and 2980 nuclear power stations, 16,784 iron mines, 34,789 copper mines, 4783 cargo ships, and some other bits and pieces.


This isn't that tall of an order over fifty years.

Um, couldn't they just recycle much of what's out there today?

600,000,000 cars - Yep. Just recycle all the SUV's, Trucks, Hummers, etc...

16,784 iron mines, 34,789 copper mines, 4783 cargo ships - see above

2980 nuclear power stations - Recycle the fuel (Little known fact: There is acutally very little fuel burned up in the first pass of the nuclear fuel cycle. One just needs to reprocess the fuel. Not to mention the fuel tied up in nukes nowadays.)

OK, there's more to it than that. But, if done RIGHT, the ashes of today become the foundation for tomorrow.

2980 nuclear power stations - Recycle the fuel (Little known fact: There is acutally very little fuel burned up in the first pass of the nuclear fuel cycle. One just needs to reprocess the fuel. Not to mention the fuel tied up in nukes nowadays.)

Well, little problem is uranium is far to cheap still to make reprocessing worthwhile except in the context of waste management. Still, if you actually are interested in seriously reducing fuel consumption and waste, liquid halide fuel reactors are the way to go; Particularly the liquid fluoride thorium reactor.

You use 1/200th the fuel and yield 1/1000th the waste that has only a 30 year half life. After 300 years its less radioactive than dirt.



Thanks for the link --- I've added it to my favourites

This car was mentioned further up the page and I have already put my thoughts there. As I said in that post, because of the cost of the fuel cell, that car is WAY too expensive to sell so Honda is leasing it only, just like GM did with the EV1. A technological solution that is going to have a useful impact, this is ...NOT!

Of course, there's always the possibility that we can genetically engineer a microbe that excretes H2 and then develop a fuel cell that's made from silicon and cellulose. Then we'd be rockin' 8-)

Alan from the Islands

It's not rocket science. It's, like, when you build ten times as many Xs that contain component Y you will need ten times as many components Y, etc. Four-function math.

you assume though that you have to mind ten times as many y components. you can get more from demand destruction, conservation or from recycling. shortages also aren't forever.

Not enough of the material to make it en masse.

how do you know that?

It uses precious metals specifically, platinum, which, by it's very definition as "precious", is not abundant. If you've seen Dr. Alfred Bartlett's talk on Arithmetic, Population and Energy, you would realize that exponential growth that relies on any finite resource, is going to bang up against resource limits after a certain amount of doublings. Unless you know of any secret, abundant supplies of platinum, I'd say he's in safe territory

Alan from the very finite islands.

It uses precious metals specifically, platinum, which, by it's very definition as "precious", is not abundant.

the market is self-correcting. if there isn't enough platinum it will be uneconomic to make the cars as long as people don't want to pay for them. on the other hand, higher prices bring conservation, demand destruction and recycling.

everything is finite. it wasn't too long ago that we were running out of land and we all know how that turned out...

There are many ways to burn hydrogen, that is not really a challenge. Rather, there isn't much free (as in not already bonded with other elements) hydrogen on Earth. To get it, just use energy to separate it from the molecular structure in which it presently exists (net negative energy). So this may be a very nice vehicle - all designed and ready to burn a fuel which does not exist.

Hydrogen is not a fuel, it is an energy storage media.

My impression was that a natural gas fuel cell was doable. You're basically getting hydrogen from metane, yielding water and leaving elemental carbon as a residue. The problem is that it requires an infrastructure that doesn't exist, and that isn't worth building because natgas will peak and decline before it is complete.

It is still burning fossil fuel. It would help with global warming, but doesn't really do much for the energy crisis.

They have also developed some fuel cells which use a lot less precious metals, but the whole hydrogen economy thing to me sounds like a non-starter, whether from natural gas or not.
At some stage if it is developed way more fuel cells could be useful for light aircraft, if we still have an aircraft industry.

I think theres definately a future for the hydrogen economy, just not for fuel cells (not noticably better in performance than an ICE, certainly not better for airplanes in the power to weight ratio)

But for hydrogen itself certainly. Just bind it with carbon to make diesel fuel, and synthesize this fuel from CO and H derived from whatever sources you want (coal first, then nuclear thermochemical hydrogen plants and cement plants)

However there may be a future for hydrogen fueled planes and spacecraft:


I've been having considerations on the same line. However, wouldn't it be better not using Carbon in the equation?

Ammonia (NH3) could be used in ICEs but only has half the power of gasoline. Hydrazine (N2H4) could be mixed in, more pure versions used for flight. Lot's of power there and a lot easier to handle than hydrogen.

"Burning" was probably a bad choice of terms, but it does not really change the main issue, in that one must input energy to get the hydrogen regardless of how one uses that hydrogen afterwards.

any thoughts?

Yes. Read upthread.

This should answer the question of where will we get the money?

Utilities across the USA are raising power prices up to 29%, mostly to pay for soaring fuel costs, but also to build new plants and refurbish an aging power grid.


It's a good thing everyone's wages rose to pay for that 29% rise in electrical rates along with food and fuel!

Woohoo! A 29% pay raise? Thanks Bruce. That will be in my next paycheck, right?

The check's in the mail!

regardless of wage raises or not that's how more generation and the upgrade of the grid will happen.

So if people cannot afford rate increases, or cut back enough to an affordable level even with enacting new efficiencies, how is this going to pay for anything? There are people in Illinois who have Ameren as their provider who still haven’t been able to pay their bill from last’s years large rate increase. A successful parasite doe not kill it’s host. But I suppose it is more important to pay dividends to investors.

So if people cannot afford rate increases, or cut back enough to an affordable level even with enacting new efficiencies, how is this going to pay for anything? There are people in Illinois who have Ameren as their provider who still haven’t been able to pay their bill from last’s years large rate increase. A successful parasite doe not kill it’s host. But I suppose it is more important to pay dividends to investors.

well if people can't pay all or some of their electricity bill they aren't going to need electricity will they? so demand falls and the price will eventually come back so they can afford it and the power company doesn't have to expand. that's how it works. there is no killing the host. it is important to pay dividends because they invest the money to actually have a power company. the fact that you think a company that provides power is a parasite is appalling anti-capitalist.

would you rather electricity rates stay the same and we have a South Africa on our hands?

You're a real humanitarian john15. Have you ever considered applying for a job at Stalag Guantanamo?

I suspect John15 calls people found dead in their homes after their utilities are disconnected "market adjustments".

I suspect John15 calls people found dead in their homes after their utilities are disconnected "market adjustments".

oh god no, I'm a democrat so you assumed very very wrong. I was just explaining economic reality to those who said where will we get the money and don't understand economics. I'll give a little more context. people said they were sure the grid was going to do down. this is why it won't. they'll get the money from raising rates.

was just explaining economic reality to those who said where will we get the money and don't understand economics.

Oh give me a break! What do you think were all uneducated teenagers on this site? I don't consider myself very knowledgeable in economics and I was reading Hayek, Heilbroner, Freidman, and Smith before you were probably born. My guess is you read a couple of primers by Thomas Sowell or whomever. When it comes to a discussion on this board of technical issues in economics you‘re always silent. You’re a parrot. It is a shame that Lou Grinzo or Don Sailorman, real economists don’t participate on this site anymore. Democrat? Being a former member of the Federalist Society and ex-conservative I recognize all of the right wing talking points. Fortunately, (or unfortunately looking from the point of view that if I had been far more cynical I could have landed a nice juicy job in a Republican Justice Department) I woke up and found that theory doesn’t always jive with reality, . Also, your writing reflects your age and inexperience. If you are not younger than seventeen than you are carrying water for a class you will never be a member and would view you with contempt. If you are younger you maybe should be off this site and experiencing life.

My guess is you read a couple of primers by Thomas Sowell or whomever.

I don't even know who that is. I read the Austrian school of economics.

Democrat? Being a former member of the Federalist Society and ex-conservative I recognize all of the right wing talking points.

do right wingers vote for barack obama beause that's who I'm voting for?

If you are not younger than seventeen than you are carrying water for a class you will never be a member and would view you with contempt.

sorry, I just explain the oil and energy world using Austrian economics, supply and demand and etc.

My guess is you read a couple of primers by Thomas Sowell or whomever. When it comes to a discussion on this board of technical issues in economics you‘re always silent. You’re a parrot.... Also, your writing reflects your age and inexperience. If you are not younger than seventeen than you are carrying water for a class you will never be a member and would view you with contempt. If you are younger you maybe should be off this site and experiencing life.

LOL. Exactly. A parrot. john15's one-liners are cut-and-pasted from economic primers.

He is shaken at how fast things are unraveling. Instead of responding to reality, he's latched on to the dominant religion. Just like a scared child latches onto his or her security blanket.

The tragic upshot is that he is probably not preparing for the initial food/fuel shortages. Sad, because it is his family that will suffer.

You're a real humanitarian john15. Have you ever considered applying for a job at Stalag Guantanamo?

am I going to get blamed for explaining the laws of gravity next?

Why do you remind me of an updated Eliza with comments like that?

Time for John 2.0 :)

No, people who cannot afford electricity still need it, they just cannot have it.

OK - then we have people freezing in the northern states for the want of some electricity

Lovely - can I point to you when the backlash hits?


You seemed to have missed this yesterday John15. So I'm bringing it up again.
Now lets see what John15 has to say on actual privatized water.


I loved this bit from a post in today's Drumbeat:

Indeed, there is a consensus among economists that food self sufficiency is folly, leading to wasteful use of resources.


So really all those Arab countries which are mainly desert should stop worrying - when the oil runs out they can feed themselves on all the wise investments their leaders have made in American securities and the dollar.

Also the leadin for that line:

"Food security no longer equates to self-sufficiency as population growth and the natural limits of the land -- due partially to drought, disease and conflicts -- have in many cases been surpassed."

Stockpiles are not completely used up, but it looks like another year of major withdrawal without much replenishment. In spite of greatly increased wheat plantings worldwide this year, the price has shot up $1.50 in the last several days on corn's woes.

It is getting awful tight, in spite or perhaps because of the economists.

I have been wondering for several months the extent of the interplay between World Bank and IMF policies and our present shortage of food, but it is hard to find good numbers. In short, through direct and indirect effects, subtle to coercive, moderately self sufficient people have fled the country in looking for urban work. So we not only have an ever expanding population to feed, it is greatly magnified by the addition of people who used to feed themselves. A double/triple whammy.

Gardens seem the best means to fight this at present, but we've yet to hear the call internationally or at home for increased gardening. Yet each calorie we produce ourselves is one less we ask of others to produce for us.

Under the sophistry of 'aid' programs dictatorships throughout the world have been propped up and food dumped, ruining the third world farmer.
One of the biggest losses of all will be in the middle east, where population has exceeded food supply, and once the oil is gone and the strategic significance of the middle east is gone with it, they will be left to die or be destroyed by Israel, just as Zimbabwe is left to starve.

It's not the Middle East-they have enough oil, peak not withstanding, to weather it better than most of the world. And strong central govs, comparatively, to export excess workers, among other measures.

It's Asia, Africa, Central and South America where the recent exodus has been strongest. Where we find the economists at play. Shaping a new world order, or if you're a fan of Naomi Klein's Disaster Capitalism, a more ignoble end.

With these farmers go their considerable local knowledge and techniques, and often local varieties. I more or less expect a second "green revolution" of new and improved varieties to fight drought, etc, but the loss of local knowledge looms large, and the fact that new varieties are often quite site specific anymore, read also large market share. Can we develop both broad environment and disease or drought tolerant in the same bag? With the constraints of a peak oil society? I look at the new wheat and barley strains released this year or in trial, and think not.

South Californian median house price falls 27% year on year


It's starting to look a bit desperate in the media.

foxnews: Seeds of Hope

AMERICA'S FUTURE: Can a non-indigenous tropical fruit be the answer to rising fuel costs? We explore in the latest of a FOX News series on alternative energy.

Every time I look at their front page, they are throwing something else up there to see if it sticks.

Oops. No need to panic:

Oil sharply retreats after surging to record


We're saved. I can fire ahead and order my new Mercedes CLK after all.

Can I have your old Honda?

Farms take root in Detroit's foreclosures:
Looks like someone gets it. I had been thinking recently of what to do with the acres and acres of parking lots in this country once the age of cheap oil goes kaput. I was thinking one idea might be using a plant we think of as noxious right now to help turn them over into something more productive. Up here in WI I was thinking of Japanese Knotweed. It is a horrible, horrible weed. It has deep roots and is incredible hard to kill, however it is also good for fodder for animals (goats, cows, etc) and bees like their flowers. And the best part is the roots are known to grow through asphalt. Any thoughts?

Looks like someone gets it. I had been thinking recently of what to do with the acres and acres of parking lots in this country once the age of cheap oil goes kaput. .......

And the best part is the roots are known to grow through asphalt. Any thoughts?

Don't plant thru them with plants, They will be dug up and mined for the asphalt value. THEN AFTER the asphalt is removed start with the reclaimation part.

I predict in the colder parts of the country/world asphalt will be dug and burned like Peat. Toxic fumes be damned when people are freezing.

Agree however, we will still be left with the problem of hardpan soil which would be helped by the strength of the roots. Kudzu could be used further south.

Grow fuel crops (short rotation coppice or grasses) with local composted humanure, gassify the crops for a nearby CHP system and use the charcoal to build soil quality (along with vermicomposting of food waste) for growing food. Vent the CO2 into greenhouses growing food or algae.

Use of aquaculture (hydroponics and fish farming) for intensive food production with efficient use of water.

Farming meal worms, cheap easy protein.


I understand that there is now a small commercial market for Japanese Knotweed; it seem their roots are the lowest cost source of resveratrol (the beneficial stuff in red wine, now sold as a dietary supplement).

Errol in Miami

Hello TODers,

This is temporary good news for China until depletion decline makes the future even worse:

Dazhou to be sulfur producing base

Dazhou, a city in the easternmost part of Sichuan province, will make full use of its natural gas reserves to build itself into Asia's largest sulfur producing base by the year 2010. That's when its annual sulfur output is expected to surpass 4 million tons, according to Dazhou Mayor Luo Qiang.

China's annual sulfur output is 1 million tons, while its domestic consumption exceeds 10 million tons. Each year, the country has to import about 9 million tons from abroad.

Sulfur is indispensable to production of phosphate fertilizer, rubber, pesticides, medicine, food additives and lubricating oil.
Let's hope they practice good safety as they have previously killed hundreds from accidental sulfur-compound gas releases.

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

Here's a two tiered viewpoint of Peak Oil:

Scenario A: Given enough time, 10-25 years, the economists are correct, that economic pressures will bring foward the necessary new energy systems to avert disaster, and the world economy will make the adjustments as needed to move forward in a viable manner.

Scenario B: Without enough time, 5-10 years, the price of oil rises so fast, economic pressures shrink manufacturing to such a low level, that alternative energy systems cannot be brought on line in time to maintain the world economy in a viable manner, and it collapses.

Let's presume that both scenarios are accurate for the purposes of conjecture regarding how fast oil prices will rise. If the past is any indication, it would seem that prices are rising too fast for scenario A, and therefore scenario B is the more likely outcome.

I raise this question because it does seem that TIME is the number one factor when speculating as to various possible outcomes regarding adjustments to a dwindling oil supply. It's similar to a potential head on collision, with the only question being is there enough time to make the necessary adjustments to avoid the collision.

So do we have the time to make those adjustments? Is there enough spare capacity to support a concerted effort to bring enough energy systems online? Is there enough investment to bring new fields into production? Is there enough oil to be discovered to buy enough time?

alternative energy systems cannot be brought on line in time to maintain the world economy in a viable manner, and it collapses.

the world economy could collapse but that wouldn't mean it would forever. the housing market is collapsed but it will come back some day and people are still buildings homes and adding on to existing homes.

Cslater8 said,
"I raise this question because it does seem that TIME is the number one factor when speculating as to various possible outcomes regarding adjustments to a dwindling oil supply. It's similar to a potential head on collision, with the only question being is there enough time to make the necessary adjustments to avoid the collision."


On today's DrumBeat we have seen stories pointing out that Toyata can sell all of the hybrids it can build, but is not able to expand production due to battery shortages. The General Motors Chevy Volt project is well underway with road testing of "mules". This project is running at an astounding pace given the complexities involved, almost "Manhattan Project" in the pacing and stresses of development.
Walmart is still moving on it's project to implement new haulage trucks that are claimed to reduce Diesel consumption by half, and will certainly put pressure on all Walmart suppliers to move in the same direction. Johnson Controls, Ford, UPS, and FedEx are well underway in the development of hybrid delivery vehicles, with some already on the road in full testing. All these developments are only the tip of the iceberg as many companies are working quietly on even more radical energy conserving measures such as solar, geothermal and distributed generation for facilities.

In the U.S., one can project that within 3 years, fossil fuel consumption (crude oil in particular) should begin to drop substantially. In the Europ zone, France and Germany have been down for the last couple of years anyway, and in Japan, crude oil consumption has been dropping for several years.

The question becomes whether China and India will begin similiar modernization methods to reduce fossil fuel consumption. If they do, they can bring huge economies of scale to bear in the manufacture of batteries, motors, solar cells and other components into the game. Time is indeed the deciding factor. The techology is there, it is scalable, but it takes time to implement.

One last point I have to mention to be completely honest about my views: I think the U.S., my home country, has gone completely hysterical. Europe and Japan have paid prices for fuel FAR ABOVE what we in the U.S. are paying to this day for years. They have NOT collapsed, starved to death, stopped driving, fell into social chaos, or engaged in wars of theft and conquest (funny, it's the U.S. with the cheap gas (compared to world prices) who have been more prone to go to war). Much of what is being said in the press (sadly, including TOD) seems to be an attempt to create fear to push forward agendas that have NOTHING to do with oil or energy. I know I will take some heat for saying that, but it is my honest take on the current coverage of events by the so called "media" who love sensationalism no matter who suffers because of it.


I have thought of this as a math expression of a social reaction

The faster the peak (the faster the price increases and the more constricted the supply is) the more unstable the transition will be to a post peak society

At some point if the speed is too much we will not have the energy to even start the conversion to a new low power future

I just want to know what the break point is - a doubling of price within six months?

Your post Redcoltken matches my viewpoint from the original post precisely. Thanks for your input.

At least five small to midsize ethanol plants have shut down recently, according to David Driscoll at Citigroup, who declined to disclose the names of the plants. He warned that these closures are the "tip of the iceberg."

The Iowa Renewable Fuels Association said Friday the flood has caused 300 million gallons of ethanol production, on an annual basis, to be forced off line and that could quickly grow to 400 million gallons.


There may be a problem as some states have been passing mandatory 10% ethanol blending requirements to replace MTBE. MTBE was shown to be a carcinogen in rats. Have not seen any proof that it is a carcinogen in the background levels found in the environment after gas station tank or gasoline pipeline leaks. Ethanol combustion is known to produce toxic gases including eye irritants and chemicals suspected of causing cancer. One of the chemicals formaldehyde was also found in cigarrete smoke. Acetylaldehyde was a second toxic chemical released into city air when gas/ethanol was burned. One of the reasons they switched to MBTE is that it did not emit some of the toxic vapors emitted by other compounds including ethanol. Alkylates were octane boosting hydrocarbons that boosted performance and gas mileage, they eliminated ozone also. Have not seen engineering studies as to the viability of switching to alkylates. They are already used in some formulations. They are not suspected of being cancer causing.

To produce 15 billion gallons of ethanol might be the equivalent of 10 billion gallons of gasoline in terms of BTU's. The nation used approx. 140 billion gallons of gasoline annually. You get little more than 7& of your gasoline BTU needs met if you max out grain ethanol production by 2015, on the way you get your air polluted, and by some estimates 40-50% of your corn harvest destroyed in a good year. In a catastrophic year things might be much worse. The press was optimistic about crop harvest forecasts in January. Army Corp of Engineers: "The entire state of Iowa is experiencing flood conditions."

It is a flood worse than the 1993 Mississippi Valley flood. Near record low corn stocks combined with a surging thirst for ethanol driven transport and a major agricultural disaster with hurricane season approaching. Is that not a perfect storm. One hundred million more people malnourished with threats of shortened life expectancy and risk of worse famine because ethanol advocates did not understand the math.

So what was today about Moe?

Oil prices are world's biggest worry, Gordon Brown warns

Gordon Brown has warned that the sharply rising oil price is "the most worrying situation in the world" after it hit a new record high.
Gordon Brown and George Bush met in London

Following talks with President Bush, Gordon Brown has said he wants to travel to Saudi Arabia to talk with the King about the oil crisis

As the oil price reached almost $140 a barrel, motorists across Britain faced growing fuel shortages caused by the weekend's fuel-tanker drivers' strike.

Hundreds of garages ran out of petrol and some were accused of cashing in on the growing fuel shortage by charging up to £1.99 per litre or £9 a gallon.

Gee, if the bolded text is true, then why escalate the economic war against Iraq?

Hello TODers,

Fertilizer crisis set to worsen; production cuts may be culprit

Food price inflation is already high and any decline in agricultural production will result in a further spike in food prices.
Have you hugged your bag of NPK today?

I sure hope the next President announces plans to move 60-75% of the US labor force into RR & TODevelopment, permaculture, and O-NPK recycling plans. It takes years [decades?] for this proficiency to develop, but every possible mitigative step [behind a wheelbarrow?] is better than a single swing in an angry machete' moshpit.

Are any engineers investigating SpiderWebRiding so we are not immediately forced back to Nuahtl Tlameme backpacking? Recall that the Chinese considered wheelbarrows and rickshaws as secret weapons--I am hoping that pedaled-railbikes will be a non-FF, more energy-efficent method to move supplies from the endpoints of Alan Drake's RR & TOD ideas. Then, the last distance [hopefully very short] can be covered by bicycle and wheelbarrow. Time will tell.

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

I can offer some insight on the technical side of the question: Are there off limit areas (ANWR/Offshore) capable of deterring the short time frame scenario? I work in the Gulf of Mexico and have seen every major potential area drilled in the shallow offshore arena. The Deep Water plays (and the unexplored continental shelf outside the Gulf of Mexico) along with the North Slope, are areas with significant potential. Consider Thunderhorse coming on production this month at 250,000 bopd. The question is how many prospects of significant size are there in the off limit areas? I expect the oil industry doesn't have well defined idea. Technology has greatly improved exploration especially offshore. But it's very expensive. The industry did not employ this technology in areas that were not leaseable. If all the unavailable areas were opened up tomorrow it would take many years before industry could even identify potential drilling opportunites. The equipment and personnel needed to undertake this effort are both in short supply. And then any significant amount of exploration drilling would take many years. All offshore rigs (including ones under construction) are already under long term lease. There are only 21 rigs capable of drilling in water depths greater than 3000 m and Petrobras (Brazil) has 80% of those leased. And then many more years after that before actual production of significant size would began. The shipyards where such production facilites are built currently have one to two years of projects already in line.

This effort wouldn't change peak oil's short term arrival hypothesis. It may only effect the long term theory to just a small degree. BUT IT WOULD HELP THE ECONOMY. The new production could represent trillions of dollars staying within the US instead of shiiping them overseas. Again the big "what if" -- if we had begun this ramp up 10 to 15 years ago we might have decreased the impact. But it would have just been a delaying action. Peak oil would still have been in the future...just a little farther out. But even then would we have taken that extra time to make the adjustments needed to eventually deal with PO? A truly pointless question IMHO.

There has been much discussion on this point I think that I have read here on TOD. I don't really care to rehash it. I think the consensus is that opening up drilling will not help much. The conservatives and others say we can drill our way out this mess. after all there are 100s of billions of barrels of oil right here in our backyard. I watched an exxonmobile commercial over the weekend that says there is "plenty of oil" and they have just the technology to find it quickly.

...you did remind me however...I believe there is a huge oil rig heading towards the GOM. It was described as bigger than the eiffel tower. I was curious if anyone knew the status of it's arrival?


That's the Troll Platform. Its in the North Sea.


IMHO, our whole focus should be on navigating a soft-landing decline to a permanently lower and sustainable economic level, thus avoiding the worst case doomer collapse scenario. Yes, we are going to need that offshore and arctic oil to help make that depletion curve a little less steep, thus helping us to achieve that soft landing. Sustaining the unsustainable - BAU - is not feasible, and we're just fooling ourselves to think that it is. Just achieving a soft landing will be hard enough, and it will be a close run thing even under the best of circumstances.



Buy commodities, sell stocks

A multi billon dollar rotational shift from “risky” listed stocks, to malleable, saleable commodities, is well underway.
I sure hope this leads to more biosolar mission-critical investors, investing at every scale, so that we have strategic reserves of bicycles & wheelbarrows, plus a multi-year safety stockpile of seeds and NPK. Recall my earlier postings on these topics.

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

Hello TODers,

These Stocks Beat Petroleum Stocks
Makes common sense if you realize that we are evolved to sit in the dark, but we have to have sulfur & NPK if we want food.

Think back to my posting with the photos of the huge sulfur and I-NPK warehouses. I am sure there are people, much smarter than me, who saw this trend earlier. Imagine owning a huge building full of sulfur that you filled for less than $50/ton a few years ago, but are now selling it for a thirteenfold to sixteenfold gain. Yikes!

That is why I hope we can really ramp O-NPK recycling soon, as we have simply got to start enriching degraded topsoil everywhere with manures, mulches, composts, etc. This greatly helps in water usage efficiency by improved water-retention, too. We all know how likely future Water Wars are likely to occur--we should be doing our best to prepare for optimal decline, not the worst decline imaginable where untold numbers of species and habitats are totally decimated. My feeble two cents.

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

Hello TODers,

Rain, wet soils and plant nutrients
Interesting article on N, nitrates, de-nitrification, and leaching.

Makes me wonder if the soils in hot climates are losing excessive amounts of N, if not protected by plentiful mulches for heat-protection. Thus, as natgas depletes, further reducing Haber-Bosch N, eventually the rising price for urea and ammonia becomes non-profitable as the de-nitrification rate becomes too high for industrialized farming [as compared to a cooler farming area].

I am not a farmer, so I maybe totally wrong, but it agains seems to point out the need for thick O-NPK mulches and crop rotation to be heavily used in hot agricultural areas, such as in the American Southwest. Protecting soil & plants from the suburban and urban heat-island effect maybe especially important for future city permaculture plots to get the best bang for your buck from the N in I/O-NPK fertilizers.

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

Losing their drive
or, The Gas Guzzler as Status Symbol

There was a very interesting letter in response to the Economist article. The comments in the letter reflect a lot of my driving/peak oil experiences in the Pacific Northwest. One important observation: several of us have noticed people buying and driving larger and larger vehicles, and my daughter in Ellensburg (the center of the state) noticed a large number of SUVs and giant pickups being driven from Seattle, where they had apparently just been purchased. Our conclusion was the same as the writer of the letter, namely that buying and driving a new gas guzzler is now a status symbol.

See the letter at: http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=11...

The writer's name is Ashish...

I just checked and the last time Stuart Staniford made a comment on this site was March 20th 2008.

That is a long time ago. I found this site by way of his analysis of the Ghawar linux cluster images.

Will the real Stuart Staniford please stand up and weigh in on the lastest KSA manoeuvre?

Is there a reason I am unaware of that he is no longer posting?

I think he is working on peer reviewed white papers

Stuart is taking a break to do some work elsewhere on some things. He will be back when and if he's ready to come back.

Wonder just where all that rainfall in Iowa came from?

Truly extraordinary flooding has hit the Cedar River in the town of Cedar Rapids, Iowa. Rainfall amounts in excess of 12 inches have fallen in the past ten days over the Cedar River watershed, which extends to the northwest of Cedar Rapids into southern Minnesota. The rains that fell during the weekend of June 7-8 were fueled in part by moisture from Tropical Storm Alma/Arthur, which affected Central America May 29 - June 2.

From Jeff Master's Wunderground blog.

Hello TODers,

I don't have the econ-expertise to analyze this, but I must admit it is intriguing and at the same time potentially horrifying:

Speculators Making Killer Profits Off Midwest Flooding While Farmers Can't Sell Grain

...At the same time, prices are falling for the farmer trying to forward-sell his corn or soybeans to his local buyer. There has been a 12 cent drop in the prices offered to farmers for their corn over the past 24 hours! This comes on top of an average 4 cent a bushel drop in prices to the farmer last week in the Cornbelt, according to a spot check of local grain buyers, by Dow Jones.

This farmer price disparity with the exchange prices, reflects not only the physical destruction of shipping and processing infrastructure, but also the fact that whenever prices spike on the Chicago Board of Trade, the local grain elevator or buyer is hit with a margin call, that he now cannot meet. So he is not offering farmers forward-contracts. Many local terminals, strapped for cash, have gone bankrupt, or sold out to the wave of hedge and index funds now on a buying spree for hard infrastructure, with which to further hold and hoard grain. E.g. WhiteBox, based in Minneapolis.

The cartel terminals, dominated by Cargill and ADM, started denying forward contacts to purchase farmers' grain months ago, under the principle: protect yourself, screw the farmer. The cartel firms offer the farmer take-it-or-leave-it prices, and terms of delivery.

On top of this, key grain and meat processing facilities are shut down by the flood all over the Midwest, for example, a huge ADM corn-processing plant in Cedar Rapids.

After the Flood

...Just how bad have things gotten? The price per bushel has gone from about $4 last year to around $7 now - and traders are talking about the possibility of it hitting $10. If you think you're paying a lot at the supermarket now, just wait...

...The market has reached a tipping point and now is in full panic. The weather has remained too bad for too long and now a smaller than expected crop is inevitable. We are just starting the growing season, but the market needs to anticipate the worst. We could see the market continue to rally heading into the pollination window and see where to go for there.

It feels however, like the market is going to factor in the worst-case scenario before we get too much further into the growing season. We could continue to see massive short covering take us to the highs by mid-summer. What price is anyone's guess!
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

posting early on 6/17.
interesting take on cognitive dissonance.