DrumBeat: June 30, 2008

US says won’t allow Iran to shut key Gulf oil route

MANAMA - The commander of the US navy’s Fifth Fleet warned on Monday that the United States will not allow Iran to shut the Strait of Hormuz, a key oil supply route in the Gulf.

“They will not close it... They will not be allowed to close it,” Vice-Admiral Kevin J. Cosgriff said at a press conference in Bahrain, where the Fifth Fleet is based.

U.S. helped Iraqis on oil contracts

A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq, U.S. officials say.

The disclosure, on the eve of the contracts' announcement, is the first confirmation of such direct Bush administration involvement and is sure to stoke criticism of the deals. On Monday, Iraq invited bids for the development of its largest oil field. The country has prequalified 41 foreign firms.

High fuel prices reshaping airline industry: Milton

MONTREAL — — Record-high oil prices are hurting travel demand and reshaping the world's airline industry, with discount carriers suffering more than most, says Robert Milton, chief executive officer of Air Canada's parent company.

"This one is a truly global issue, and I think you're going to see a lot of airlines disappear," Mr. Milton said Monday after ACE Aviation Holdings Inc.'s annual meeting in Montreal.

"The ones who are going to really have a problem are the airlines that have been trying to sell a low-fare proposition."

Majors say speculators not to blame for oil price

MADRID (Reuters) - The heads of some of the world's biggest oil companies countered on Monday OPEC claims that speculators were driving high oil prices, blaming instead a dearth of new supplies.

The chief executives of Royal Dutch Shell Plc, BP Plc and Spain's Repsol YPF told the oil industry's biggest gathering in three years that restrictions on where they can invest and high taxes meant they could not help boost supplies as much as they might.

Saudis' Oil Meeting Produces Few Results

A more significant outcome of the meeting was the indication that Saudi Arabia believes oil prices have climbed too far. Yet no indication was given as to how far crude might have to fall for Saudi Arabia to reverse its current accommodating stance. There can be little doubt that Riyadh and OPEC's evaluation of what constitutes a fair price for oil has risen dramatically in line with rising prices.

Corn harvest shortage will hike food prices

DES MOINES, Iowa - Farmers will harvest nearly 9 percent fewer acres of corn this year than last year, in part because of Midwest flooding which has damaged a portion of the crop, the government reported Monday.

The result likely will be continued high corn prices, which likely will drive up some food prices.

The infrastructure crisis - it'll be the survival of the fastest

We are facing an infrastructure crisis. In North America and Europe the bones, muscles and nerves that keep us in motion are not keeping up with the demands we place on them.

The infrastructure crisis is a mega-trend - one that will sweep all of us along in its path. You can either be carried along in its path or take decisive actions for your benefit.

Today's companies built their business models - customers, retail networks, manufacturing, sourcing and logistics - over the past 40 years. When these business models were being built logistics costs steadily declined as transportation efficiencies increased and the cost of fuel declined in real terms. That is why people built big plants and distribution centres in remote locations. It is why China is viable as a sourcing centre for many companies whose markets are in North America and Europe.

Part one: America is falling apart - Growing backlog of repairs to roads, sewers and other basics threatens economy, livability

Remember that bridge that collapsed in Minneapolis last summer? More than one-quarter of U.S. bridges -- including one-quarter of Oregon's -- are structurally deficient or functionally obsolete.

We need to spend $250 billion to fix our aging water pipes. And our telecommunications system is far slower than the rest of the world's lightning-fast broadband.

"We're basically sliding toward Third World status," said Rep. Peter DeFazio, D-Ore. "It's pathetic."

Loans Due — It's time to pay

Kansas Department of Transportation Secretary Deb Miller wants people to call members of the state's congressional delegation and urge them to steer some money into the federal Highway Trust Fund.

No doubt transportation secretaries in 49 other states have made similar pleas to their constituents.

It appears Congress has been playing fast and loose with the fund — borrowing money from it and forgetting to pay it back. The neglected loans include one of $8 billion dollars in 1998 and others for the 9-11 recovery effort in New York City and the Hurricane Katrina recovery effort in New Orleans.

Report: U.S. 'preparing the battlefield' in Iran

WASHINGTON (CNN) -- The Bush administration has launched a "significant escalation" of covert operations in Iran, sending U.S. commandos to spy on the country's nuclear facilities and undermine the Islamic republic's government, journalist Seymour Hersh said Sunday.

Oil disquiet on the Western front

North American media, Andrew Nikiforuk says, take for granted how much oil undermines democracy, powers our food system, feeds our drug-addled medical industry and concentrates our cities like bovine feedlots.

To China, stability may be more valuable than oil profit

BEIJING: The dramatic decision by China to raise fuel prices by more than 15 percent last month might seem to suggest that Beijing is shifting into a higher gear in its drive toward raising the prices of domestic resources to global norms.

Don't be fooled, analysts say. The sudden increase does not mean a sea change in Chinese policy although it might embolden Beijing to take small but more frequent steps in the future, if the fallout from fuel price increases is contained.

Energy's easiest fix: Use less

NEW YORK (CNNMoney.com) -- Want to help the country save a quick million barrels of oil a day? Drive 5% less. Slow down. Inflate your tires.

Those three steps would reduce U.S. oil consumption by 1.3 million barrels a day immediately, according to the Alliance to Save Energy, a conservation group running an efficiency campaign backed not only by environmental groups but also the auto and oil industries.

As Gas Prices Rise, Teenagers’ Cruising Declines

SCHAUMBURG, Ill. — For car-loving American teenagers, this is turning out to be the summer the cruising died.

Kevin Ballschmiede, 16, pined for his 1999 Dodge Ram — “my pride and joy” — the other night as he hung out in a parking lot in this town outside Chicago. Given that filling the 26-gallon tank can now cost more than $100, he had left it at home and caught a ride.

From coast to coast, American teenagers appear to be driving less this summer. Police officers who keep watch on weekend cruising zones say fewer youths are spending their time driving around in circles, with more of them hanging out in parking lots, malls or movie theaters.

Britain goes slow as trains, planes and ships cut fuel costs

The soaring cost of oil has led to the slowing of vehicles of almost every type in Britain, from planes to trains, ferries, merchant vessels, buses and private cars.

Pilots and ships' captains have been ordered to go slow, train drivers have been asked to switch off engines and coast downhill and bus companies are training staff to drive more smoothly in order to cut costs.

Nepal: Transport workers seize, distribute 24,000 liters diesel

KATHMANDU - Transportation workers of Butwal, Rupandehi district seized two tankers from the regional office of Nepal Oil Corporation (NOC) at Bhairahawa and distributed it to entrepreneurs at the existing rate on Sunday.

They resorted to such an action saying that shortage of petroleum goods was creating hand-to-mouth problem.

Bill McKibben: When Words Fail

I ALMOST NEVER write about writing — in my aesthetic, the writing should disappear, the thought linger. But the longer I’ve spent working on global warming—the greatest challenge humans have ever faced—the more I’ve come to see it as essentially a literary problem. A technological and scientific challenge, yes; an economic quandary, yes; a political dilemma, surely. But centrally? A crisis in metaphor, in analogy, in understanding. We haven’t come up with words big enough to communicate the magnitude of what we’re doing. How do you say: the world you know today, the world you were born into, the world that has remained essentially the same for all of human civilization, that has birthed every play and poem and novel and essay, every painting and photograph, every invention and economy, every spiritual system (and every turn of phrase) is about to be . . . something so different? Somehow “global warming” barely hints at it. The same goes for any of the other locutions, including “climate chaos.” And if we do come up with adequate words in one culture, they won’t necessarily translate into all the other languages whose speakers must collaborate to somehow solve this problem.

Cries in the Dark (Roscoe Bartlett, James Woolsey, Andy Karsner, Robert Hirsch)

How serious is America's energy crisis? These four voices want to make sure policymakers don't dismiss it -- again.

The oil shock of 1973 came and went. So did the panic after the Iranian revolution six years later, when oil prices shot to record highs. Gone, too, is the brief flurry of fear that followed Iraq's invasion of Kuwait in 1990.

After each, voices in Washington that cried out for big changes in U.S. energy policy were slowly drowned out. James Schlesinger, the first U.S. energy secretary, has said for decades that when it comes to energy policy, the U.S. toggles between complacency and panic.

Will it be different this time around?

(This is one of many articles in a special Energy Section. There are also articles on nuclear, solar, natural gas, and lots more.)

Alberta oil finds allies in U.S.

Alberta found some friends Sunday at the western U.S. governors' meeting, when a pair of nearby lawmakers defended the oilsands and suggested Canada continue to ramp up its output in the face of environmental concerns.

"We have an energy crisis in this county and maybe the only reliable trading partner we have in this country is my neighbours, my friends in Alberta," said Montana Gov. Brian Schweitzer, a Democrat.

What's after oil?

How did we get into this situation after a 100-year span in which the prevailing economy was cheap energy, slow increases and even steady pricing, with general confidence that it would remain so?

Some experts, like specialized geographer Robert Kaufmann of Boston University, call the past 150 years the "Petroleum Age," and he says it is beginning to draw to a close.

The fuller body of evidence points to a finite supply of oil, declining production and reserves from the traditional and easiest sources in the U.S., and increasingly expensive prices as hard-to-get reserves like deep water, tar sands and oil shale are tapped.

Oily Speculations

If speculators aren’t at fault, why have oil prices spiked so high? Fundamental reasons aren’t hard to find. Between 2000 and 2007, world demand for petroleum rose by nearly nine million barrels a day, but OPEC has been consistently unable, or unwilling, to significantly increase supply, and production by non-OPEC members has risen by just four million barrels a day. The prospect of military action against Iran, which would disrupt global supply, seems greater than it did a few years ago. And the plunging value of the dollar has meant that the cost of oil has jumped more in the U.S. in the past year than it has in countries with healthier currencies.

But there’s also something else at work, which the oil guru Daniel Yergin calls a “shortage psychology.” The price of oil—more than that of many other commodities—isn’t based solely on current supply and demand. It’s also based on people’s expectations about future supply and demand, because those expectations determine whether it makes sense for oil producers to sell their oil now or leave it in the ground and sell it later.

Credit Card Fees at the Pump are a 'Hidden Tax' on Consumers

Consumers are feeling pain at the pump from gas prices topping $4 a gallon but it's not just gas they're paying for. They're dishing out "invisible" extra fees for using a credit or debit card when they gas up.

Interchange fees, the payments credit card companies and banks charge retailers for processing transactions made with plastic, constitute "a $50 billion fee on consumers," said retailer Mitch Goldstone, owner of the 30 Minute Photos photo shop.

New street crime: Thieves lift manhole covers

Cities and counties are battling manhole-cover thefts, a crime spree that police tie to the weak economy.

Hundreds of 200-pound covers have disappeared in three months in California, Michigan, Pennsylvania, Massachusetts and Georgia as scrap metal prices pop up.

"It's a sign of the times," says Sgt. Jay Baker of the Cherokee County Sheriff's Office in Georgia, where 28 manhole covers disappeared in April and May. "When the economy gets bad, people start stealing iron."

New set of Noble prizes for energy in offing

Mumbai, June 30: The descendants of Alfred Noble, are planning to come up with a new set of Noble awards but with a difference.

Dr Michael Noble, the great grand nephew of Alfred Noble, who was here for a conference on "Responsibility To The Future" organised by Strategic Foresight Group, said that Noble Charitable Trust would institute an award for great work done in alternative energy.

Oil prices surge to record heights near $144

LONDON (AFP) - Oil prices hit record high points close to 144 dollars per barrel on Monday as the dollar fell further and amid a conference and protests staged in response to soaring crude, analysts said.

Brent North Sea crude reached a historic peak of 143.91 dollars a barrel and New York light sweet crude struck an all-time high of 143.67 dollars.

"The market remains well supported by the broad weakness in the dollar, ever increasing investor interest in commodities, persistent supply disruptions and geopolitical tensions," Sucden analyst Andrey Kryuchenkov said on Monday.

Former President Bush energy adviser says oil is running out

The era of globalisation is over and rocketing energy prices mean the world is poised for the re-emergence of regional economies based on locally produced goods and services, according to a former energy adviser to President Bush and the pioneer of the “peak oil” theory.

Matt Simmons, chief executive of Simmons & Company, a Houston energy consultancy, said that global oil production had peaked in 2005 and was set for a steep decline from present levels of about 85 million barrels per day. “By 2015, I think we would be lucky to be producing 60 million barrels and we should worry about producing only 40 million,” he told The Times.

Today's suburbs, tomorrow's slums?

According to some doomsday scenarios, spiking gas prices could turn the cul-de-sacs and two-car garages that surround North America's cities - built over the past 60 years and designed for the convenience of people with cars - into tomorrow's slums.

The predictions for the most part come from subscribers to the theory of "peak oil," which holds that crude prices will shoot permanently upward as global demand outstrips dwindling supply, ruining the economy. But their predictions are getting a second look now, as suburbanites, especially in the United States, grumble at the rising price of a fill-up.

Crude today is dirt cheap: Matthew Simmons

There are projections that oil may touch $200 a barrel by year-end. Do you think we are heading towards such a situation?

There are so many whacky theories swirling around the world on why oil prices stunned everyone. Speculators are mostly betting that crude will soon crash, so I suspect this group of investors is net short, and if they are banned from speculating, oil prices will jump higher.

The oddest question is the one seldom asked: why did 99% of the presumptive oil experts have their eyes shut as this earth-shattering event played out, and why the busload of sleepers are still so confused?

Russian oil exports fell 5.3% to 757mln bbl in Jan.-May

MOSCOW (RIA Novosti) - Russia's crude oil exports fell by an estimated 5.3%, year-on-year, in January-May 2008 to 103.3 million metric tons (757 million barrels), the Economic Development Ministry said Monday on its web site.

The decline was due to lower crude output and increased supplies to domestic refiners, the ministry said.

Giant Saudi field is key to boosting oil output

KHURAIS OIL FIELD, Saudi Arabia - This massive oil field surrounded by the desolate sands of Saudi Arabia's vast eastern desert feels like the middle of nowhere.

But what happens over the next year at Khurais, one of Saudi Arabia's last undeveloped giant oil fields, could hold the key to what drivers will pay at the pump for years to come.

Canada Oil Sands Need Minimum Price $70 a Barrel, Statoil Says

June 30 (Bloomberg) -- Canadian oil sand deposits require crude prices of at least $70 a barrel to cover capital and operating expenses and provide an acceptable rate of return, a StatoilHydro ASA executive said.

BP chief blames inadequate supply for soaring oil prices

MADRID (Xinhua) -- The chief executive of the energy giant BP said on Monday that soaring oil prices are a result of an inadequate supply rather than speculation.

"These prices are a signal that is telling us that supply is not responding adequately to rising demand," Tony Hayward told delegates at the 19th World Petroleum Congress (WPC) being held in Madrid.

He suggested politics rather than geology is the reason behind the supply shortage.

"The problems are above ground not below it," Hayward said.

Iraqi notice on oil does not include contracts

BAGHDAD - The Iraqi government opened six oil fields to international bidding Monday as the nation attempts to boost daily production by 60 percent.

Oil a shaky crutch for Iran's Ahmadinejad - While some are prospering, inflation eroding purchasing power of many

TEHRAN - Faced with rapid inflation and growing international concern about his country's nuclear ambitions, Iranian President Mahmoud Ahmadinejad is relying on huge increases in oil and gas revenue to insulate his government from internal and external pressures.

Costs are changing commutes

A couple of months ago, Yoko Olsgaard was weighing offers for two project management positions. One was in Fremont, about 27 miles from her home in Oakland's Redwood Heights neighborhood. The other, which paid 10 percent less, was with Kaiser Permanente in Emeryville, about 7 miles away.

She ended up choosing the lower-paying Kaiser job. The main reason? The high price of putting gas in her 2001 Toyota Camry.

Fuel costs take toll on farmers' bottom lines

Ghiggeri & Stonebarger Farms used to spend $100 to $200 to grow an acre of the Brentwood sweet corn sold throughout Bay Area supermarkets and prized by chefs at some of the Bay Area's top-rated eateries.

But this year's record fuel and fertilizer prices have driven those costs sky-high — up 30 percent to 50 percent from last year — for G&S and other local farmers.

Third Oil Shock

Korea is now mired in a seemingly endless beef brawl, but the rest of the world is wrestling with skyrocketing oil prices. So it is only natural ― if quite belated ― for the government to come up with a contingency conservation program. Its contents and underlying assumptions show, however, that Seoul still doesn't seem to be fully aware of the dire situation facing this country.

What’s Really Fueling Those Sky-High Oil Prices - There are lots of theories; most of them are right

Ask any number of experts about what’s causing the current run-up in oil prices, now around $140 a barrel, and you’re likely to get several different answers.

The positive side of high oil price

Peak oil or freak oil? The current oil shock, with Nymex crude touching $142 on Friday, has as much to do with bad luck as geology. And, as usual with luck, man has largely made his own.

The central theme of this decade's bull market in crude is little different from previous oil shocks: a change in expectations about future supplies. In other words, many think we have enough oil today but might not tomorrow.

U.S. Power Agency Warns High Electricity Prices Could Plague America ‘For Years to Come’

Citing high commodity prices for natural gas and coal, which were the fuel sources for 18% and 50%, respectively, of U.S. electricity generation in 2007, the Federal Energy Regulatory Commission (FERC) said this “may be the beginning of significantly higher power prices that will last for years to come.” The agency didn’t say exactly how high it thinks prices could rise, but EnergyTechStocks.com has learned that one major U.S. electric utility is now assuming in its internal forecasts that power prices in its region will double within five years or less.

Solar and Wind Will Drive Natural Gas Up

A second important market likely to strengthen in near future years is electric power generation. That market is turning strongly away from coal in the U.S. and Europe and toward alternatives like solar and wind which are non-base load sources, meaning they work during some days and some hours a lot better than others. When they don’t work, the generating plants must have “peaking capacity” to bring them quickly up to nameplate capacity. Natural gas is the way to obtain short term bursts of generating capacity.

Four killed in Niger Delta attacks

Lagos - Two unidentified gunmen and two civilians were killed, one of them beheaded, in two separate attacks on Saturday in southern Nigeria's oil-rich Bonny Island, a military spokesperson said on Monday.

Shell says no weekend attack on Nigeria oil sites

ABUJA (Reuters) - Royal Dutch Shell said on Monday there were no attacks on its oil flow stations in Nigeria over the weekend following local media reports of clashes with militants near its facilities at Bonny.

High helium prices limit gas balloons as sport

"Price is just about to drive gas ballooning extinct in this country," said Andy Cayton, an avid gas balloonist and retired army helicopter pilot who runs balloon rides in Georgia.

The price for a full tank of gasoline for cars might be exorbitant these days, but filling up a helium-filled gas balloon could cost over $12,000. And that's just the gas; buying a gas balloon itself can cost about $30,000.

Two to three years ago, the cost to fill a helium balloon of the same size was about $3,000.

Why the sudden food crisis?

Few are ready to talk about the carrying capacity of Earth and whether we are exceeding it. Perhaps the time has come to realize that Earth is close to being stressed beyond its ability to support the people inhabiting it. It is not just the food we grow, but the damage we are causing to the land by over-farming, the addition of pollutants to the atmosphere bringing on rapid climate change, and the now-generation approach that we must have it all. We have not grasped the concept of sustainability.

Moving beyond oil

Imagine the day when your vehicle’s odometer becomes a tax meter — the more you drive, the more you pay in taxes.

When you do drive, you’ll be greeted by more toll stations. And when you stop, you’ll be greeted by more parking meters. Along the way you’ll notice roofs with solar panels, yards with vegetable gardens, construction crews building bike paths instead of roads, and perhaps even large warehouses stuffed with massive amounts of food to deal with an energy emergency that hovers on the horizon.

Speculation and the Price of Oil

The main problem is that the market for oil has been distorted by very deep interventions. The cure for the high price of oil is to liberate the market. Here is what is needed:

1. Install toll charges on all crowded streets and highways just high enough to eliminate the traffic congestion. The tolls would be payable with electronic devices in cars, and only apply to places and times that would otherwise be congested.

2. Taxes on fuel would be replaced with pollution charges. That would require the economy-wide installation of remote sensors that measure the pollution as cars drive by.

Australia: Will smaller lot sizes have a renaissance?

Could this mean that smaller holdings might have a renaissance as increasing energy costs force a return towards a way of life that we once knew? Will the era of cheap energy be just a ‘blip’ in history?

China's Hu says 'time is limited' in curbing climate change

BEIJING (AFP) - Chinese President Hu Jintao urged renewed efforts to curb global warming on Saturday, stressing "time is limited" in finding efficient solutions to the problem, state media reported.

"How we cope with climate change is related to the country's economic development and people's practical benefits. It's in line with the country's basic interests," Hu said according to the official Xinhua news agency.

Eco progress to continue despite economic woes: IPCC chief

LONDON (AFP) - Progress in the battle against climate change will continue despite economic woes around the world, the head of the United Nation's Nobel Prize-winning scientific panel wrote on Monday.

Railways handle 32% of Swiss freight traffic and 16% of passenger traffic, but they use only 3% of the total energy required for all transportation.”
- SBB (SwissRail) Environmental Report

89% of the electricity came from SBB owned hydroelectric plants and the rest from the Swiss grid (60% hydro, 40% nuclear).

Best Hopes for Electrified Rail,


Alan Drake is the man with a plan--to "Make things not as bad as they would otherwise have been." How's that for a winning campaign slogan? All we can do is to be ready with a credible plan when the rest of the country realizes what Alan realized a long time ago, that the path to the future is on an electrified rail system.

I suggest that you work toward setting up speaking engagements for Alan in your local community (I am doing precisely that Dallas). If nothing else, stress a four letter word, J-O-B-S.

What I would be interested in is some type of rail connecting small rural farming communities. At one time all of these small towns had a rail trunk; the old rail station in my town is used as a Kiwanis meeting center. Many of these rail lines were removed when the interstates came. My thinking is that these rail systems could be connected to local hubs which would be then tied to the main system. Should be a lot more efficient than trucking and personal transportation, and it might revitalize these small towns for futre centers of locally produced agriculture. Any one have any plans for something like this?

Hello Bruce from Chicago,

My proposal if we can't expand Alan Drake's ideas as fast as FF-energy depletes:


Another consideration posted yesterday:

Hello TODers,

I was just watching the 'Cambodian Bamboo Train' video again, then I started wondering:
Is this country now so poor from ELM and rising I-NPK prices that possibly many, or most of these rudimentary trains are now just rotting away in the jungle weeds?
Yikes!! :(

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

Reddy Kilowatt to the rescue!

Question -- why haven't electrical utilities gotten politically behind Alan's plan? Or have they, and I missed it??

Hi NeverLNG,

I kinda miss 'ole Reddy...




For those served by the U.K.'s electricity boards...



Therein lies the problem; pitting the campaign slogan "Make things not as bad as they would otherwise have been" vs. "You can have it all just the way it was before," guess which one will win.

Unfortunately, truth doesn't get you elected. Doesn't get your project selected either.

He could always go with Jimmy Carter's "Eat Your Broccoli, America!" speech. Though it didn't seem to work too well for Mr. Carter.

But yeah, "Making things not as bad" could include lots of things, in no particular order:

  • Ending foreign occupation(s)
  • Electrifying transportation
  • Deploying rooftop PV solar
  • Relocalizing agriculture
    • etc. ...

The 31 billion Swiss franc TransAlp and related projects should increase passenger modal share for rail (240 kph trains) but the Swiss are planning on an 80% modal share for rail freight vs. heavy trucking.

Much of the portion of the 31 billion that was borrowed (much was "pay as you go" with taxes) will be repaid with new tolls on trucks after two major new rail tunnels are opened.

One tunnel will provide a level, straight rail path from Zurich to Milan using 58 km, 20 km and 10 km tunnels (from memory) for up to 300 trains/day and trains up to 1.5 km long and at speeds to 240 kph (150 mph).

SBB uses 16.7 Hz electricity (1/3rd of 50 Hz so they can convert from grid if need be, but they prefer making their own power in their own hydroelectric plants).

Best Hopes for SBB,


What's the advantage of using a different frequency?

It allows you to use motors with fewer poles (or get greater torque from a given AC motor) AFAIK. I would like to know more.

Also some long distance transmission advantages.

Amtrak's NorthEast Corridor operates at 25 Hz south of New York City to Washington DC. With modern electric locos, Hz is no longer an issue. They convert single phase AC from wire to DC and then 3 phase AC

Hopes that helps,


The speed of the AC motor is determined primarily by the frequency of the AC supply and the number of poles in the stator winding, according to the relation:

Ns = 120F / p


Ns = Synchronous speed, in revolutions per minute
F = AC power frequency
p = Number of poles per phase winding

(from Wikipedia)

The lower the frequency the lower the motor speed, and the higher the torque available. Also easier gearing and better power factor in both the motor and the transformers.

Also, in general (with lots of exceptions):

DC motors > AC motors in cost
Synchronous AC motors > Induction AC motors in cost
Cheapest motors in big sizes around are squirrel cage induction motors. Three phase types are self-starting and can act as generators, for regenerative braking.

AFAIK, most traction motors used to be series wound DC, but now tend to be wound-rotor induction. Wikipedia notes the TGV is a synchronous AC, though.

Simple schematic diagram of a modern electric locomotive


FYI for those curious,


Neat !

One time you mentioned a 40 pole motor was the most you knew of in locomotive applications.

I told one of my HVAC/R instructors about that (he's a retired nuke engineer) and he expressed an interest in seeing a schematic of that.

Have you come across such a thing ?

I poked around google a bit.

I think it was hydroelectric. Matches optimum RPM for the turbine with the generator by increasing the # of poles.

2 pole 50 Hz = 3000 rpm

2 pole 60 Hz = 3600 rpm

40 pole 60 Hz = 180 rpm

40 pole 50 Hz = 150 rpm

1.3 Mb pdf

40 pole is not the limit of those in use, I think I once heard of a 62 rpm 116 pole hydroelectric generator. Not economic today (and rewinding it would be "problematic").


PDF document (in English) here - but it is from 2002/2003.

We need rail, but we also need restructured cities which make it possible to largely minimize the use of any transportation system, except bicycles and walking.

Best Hopes for more pedestraian zones, more compact cities, more localized goods and services, and more people who live closer to where they shop,work, and recreate.

Denver is overlaying an extensive rail and bus system on their existing sprawlapolitan area, but I fear that this will be a very inefficient approach as people will still be commuting long distances. If they don't rein in exurbia, people will be able to move even further out and still take advantage of the new rail systems.

True, but the "old Boston suburb" model (up to @ 1950) is also viable, if not perfect.

Small towns of, say, 5,000 to 20,000 population, with downtown within walking distance for healthy people. Downtown rail station that takes a certain % of the labor force to Boston every morning. Local services (plumbers, grocery stores, doctors, schoolteachers, etc.) provide employment for a majority that can walk to work near downtown. The rest commute via train and bring back the $.

In an area with more fertile soil than Massachusetts, local farmers need only take their produce a couple of miles to the local Suburban grocer or for transport to Boston via train.

Not Utopia, but sustainable IMO.

Just electrify the "T" (MBTA) !

Best Hopes for Transit Suburbia,


That's very similar to most of Nassau County (county on long island closest to NYC). A good number of people work in NYC (mostly in Manhatten), I've heard about 25% take the Long Island Rail Road, which averages 200k passengers (I'm pretty sure making it the largest commuter rail system in the country), both commuters and a great deal of recreational NYC travelers. While most towns' buisness districts aren't within walking distance, they're mostly a short drive away, many of which are clustered around the major Long Island Rail Road stations. There's also a significant pressence of inter-town busses, although I think it mostly serves low-income workers that work in nearby towns.

Here, the railroad to an extent encourages sprawl, but at the same time the NYC metropolitan area would but untenable without (not enough room for new roads, not enough area to park cars, etc) the Long Island Rail Road, Metro North, and PATH systems, and allows to be probably the densest buisness center in the world which relies moreso on public transit than driving intra city movement, and significantly relies on public transit for suburb to downtown commuting and recreation travel.

Hi, tstreet.

The Oakland task force report talks about restructuring Oakland into small neighborhoods called Urban Villages.

The report, however, is short on details on how to execute that vision in a world of high energy prices.


That is the most encouraging thing that I have seen in a long time. Thanks for the post.

This is very similiar to the settlement pattern called "Penturbia" in the (so far) amazingly accurate predictions by Professor Jack Lessinger.

I don't have time to write much today, but you can read about Penturbia at
http://www.predicting2020.com/road.html (especially at the bottom of the page)

and if you prefer pictures and maps and the "quick overview" just flip through the pages beginning at http://www.predicting2020.com/insights.html

Anybody else out there beeen following Lessinger's work, especially the Schizomania theory?

Greg in MO

Hmm, Andre, the neighborhood names from Rockridge down to 98th and International seem to be closely aligned to the Hayward fault line.

(laughing) Hey, Dennis, I hadn't thought of that! (wink)

I know, that's why in my conversations with Jeanne Rosenmeier I encourage her Task Force to take a really hard look at disaster cleanup in a post peak world. (Jeanne saw it right away, btw; I simply had to mention it.)

The Oakland Peak Oil Report does not discuss disaster cleanup and rebuilding in a post peak world at all, which I think is a major omission. I suspect that after The Big One, we may be forced to abandon large swaths of city throughout California because we won't have the energy to rebuild.

It's also one of the reasons I am recommending that each of our counties have their own Strategic Petroleum Reserve, some portion of which would be allocated for disaster cleanup (and maybe some rebuilding but I doubt we'll have that much). In Marin County, our next job is to have peak oil fall under the disaster prep ordinances so that the disaster planners have the latitude to address peak oil. Our disaster guys are excellent; they get peak oil completely.


I suspect that after The Big One, we may be forced to abandon large swaths of city throughout California because we won't have the energy to rebuild.

where will the gasoline come from? it'll come from all those cars and trucks that aren't on the road because of The Big One.

Railways handle 32% of Swiss freight traffic and 16% of passenger traffic, but they use only 3% of the total energy required for all transportation.

Hi Alan,

I went and had a look at the document you referenced...


...and found it disappointingly lightweight. All ratios, very few hard numbers. At one point the author confuses terajoules and petajoules (Page 26), at another point he confuses energy consumption and efficiency (Page 27 commentary on freight traffic trends).

Nevertheless, 3% of total transportation energy for 16% of passenger traffic (more damn ratios) looks impressive. What doesn't look impressive, oddly, is their claimed passenger transport energy consumption of about 9 kWh/100 passenger km - at least in comparison with the numbers given by David McKay in his analysis of energy needs in the UK. This study is a huge PDF, but probably worth the time needed to download it from here...

http://withouthotair.com/ look at pp. 135-140

...where he quotes a best in class for rail of 3 kWh/100 passenger km - the SBB claimed number is more like what McKay quotes for a tram system.

I'd be genuinely interested in your critical review of McKay's statistics. I'm sure he would be grateful for your feedback as well, given your more specialized sector knowledge. That PDF is a draft and he explicitly invites public input.

Returning to SBB, I'm wondering about that huge discrepancy between 3% energy usage and 16% passenger traffic/32% freight traffic, especially given their apparently low energy efficiency. I'm wondering if there might be something about the Swiss economy that distorts transport useage patterns. Export of financial services, drugs and tourism balanced by imports of food and finished goods? Unusually high per-caput air mileage? Double or null accounting for freight-miles in neighbouring countries and tourist air-miles? Unfortunately that ratio-ridden PDF doesn't have enough raw data to let me decide.

Best Hopes for Accurate Statistics,

The Plucky Underdog

I went looking for more "meat" and, after the original quote, it was not what I was looking for.

Shipments between Germany and Italy are a very high % of Swiss freight (a majority ? looked at a table years ago ...).

The Swiss want this freight to be 1) on SBB or 2) go through Austria (or France) and NOT on Swiss roads anymore.

I have a very high priority task at hand, but after that I will look at the report.

Best Hopes,


Hoarding Nations Drive Food Costs Ever Higher

BANGKOK — At least 29 countries have sharply curbed food exports in recent months, to ensure that their own people have enough to eat, at affordable prices. . .

Japan and Switzerland are leading a group of food-importing nations so alarmed by restrictions that they are seeking an international agreement preventing countries from unilaterally limiting food exports. The agreement would be part of the current, already-rocky Doha round of trade talks, named for the city in Qatar where negotiations began. But the proposal ran into a procedural snag right off: food export restrictions are such a new issue that they are only tangentially mentioned as part of the Doha round agenda, which is not easily modified.

This is the same phenomenon that we (Khebab/Brown) have been writing about regarding energy, the Export Land Model (ELM), which is the tendency for oil exporters to only export oil after domestic consumption is satisfied. It is discussed in the following paper.

For food, we could call it FELM--Food Export Land Model. I suspect that in future years a lot of world trade will consist of trade between food and energy exporters. It is decidedly not a good time to be both a net food and net energy importer. In effect, food and energy prices are being set at the margin, as food and energy importers bid for the declining volume of food and energy supplies that make it into the export market.

A quantitative assessment of future net oil exports by the top five net oil exporters
(January, 2008)

Food consumption increases with increased posperity in the sense that more grain is channeled through meat. But, whereas is seems unlikely that conventional oil will see a large increase in production, high food prices spur both greater land use and further yield increases so that food supply can be responsive to price.

The current tightness in carryover stocks in grains can be remedied by dropping ethanol mandates or (more immediately) putting feedlots out of business, cutting meat production. This is kind of different from oil where substitution takes more time. Rebuilding carryover stocks of grain should be the main objective in food policy.


Meat from pig and chicken "factories" (odd use of the term, the establishments are more like concentration camps, since no one can really "make" a pig) is still incredibly cheap. There is a lot of subsidy, and a lot of elasticity remaining in our food system.

As I see it, there is no need for food shortages in the forseeable future. There is so much waste in the system, that it seems to me that the earth can feed 7 billion people without too much trouble. There is a lot of good land that is not being farmed, there is a lot of water that could be tapped if needed, etc.

I think, though, that there will be hunger problems, as there were in the past and are in the present, because of above ground factors. It is simply not the world leader's priority to keep everyone fed.

"There is a lot of good land that is not being farmed, there is a lot of water that could be tapped if needed, etc."

??? Where? Water shortages are already a problem in many parts of the world, both from chronic drought and depleting aquifers. Arable land is being lost to erosion at an accelerating rate.

I don't think you quite understand.

1. Land that is not being farmed - suburbs, exurbs, northern forests, rainforest...

2. Water - this is harder. Mostly I mean increased efficiency of use - grey water tanks, waterless landscaping etc. Another big source could be solar powered desal. Theoretically, you could also have water export markets, but this will run up against transportation costs in a post-peak future.

My point is that there is so much waste in the worldwide system, that if everyone used resources efficiently, there would be enough for everyone. Of course, that is a huge if. History teaches us that some will prosper, and some will starve.

If you think that rainforests are a good source of farming land, then the planet has a serious problem.

I don't think you realise just how inequitable life is for the other 70% of the world's population. History teaches that a very few will prosper, and the overwhelming majority will suffer.

And for that matter suburbs and exurbs have poor soil as well. Developers scrape off the good soil and sell it. What is typically left when the homeowner gets there is crappy subsoil. In our area, typically clay.

And for that matter suburbs and exurbs have poor soil as well. Developers scrape off the good soil and sell it. What is typically left when the homeowner gets there is crappy subsoil. In our area, typically clay.

the suburbs aren't some monolithic block. some older suburbs may have more good soil than others. even if you live in a new suburb you can always buy good soil and there is always hydroponics.

the ironic thing if you live in the suburbs is you may be buying the same soil that was literally scraped off of your lawn.

When they developed my suburb in the 1830s and 1840s they left the topsoil in place and many people planted gardens, hence the name "Lower Garden District".

That new streetcar line in 1834 made living 1.3 miles from the Vieux Carre (French Quarter) and commutating in every day possible. Early Urban Sprawl :-)


Small gardens can be very productve. I live in the South East of the UK and have utiised about half my garden space (50m2) to produce a significant portion of my summer veg.

Aggregate sacks or 240 litre food containers can be bought for a few pounds and used to grow a variety of crops. I have sourced free horse manure locally, utilised home compost, and gone skip diving for free topsoil. I have also experimented uing the tyre stack system to grow potatoes. Last year I produced 17lb of potatoes from a stack of 5 tyres. I have heard of some people producing yields of 35-40lb from this syste. Add to this maize, courgetes, large quantities of legumes, beetroot, tomatoes, apples, and grapes and this small garden provides about 6-8 of the households calorific needs. If i wer to utilise all my lawn space I could increase output to 15-20%.

Fertilisers - well I use my own liquid. Havent got round to solids recycling but its always an option.

True enough, but building good soils is fast and easy, at least at the scale of a household garden. A chicken tractor on deep mulch and humanure composting. I no longer till but build soils up instead. Permaculture principles at work!

I don't think the lack of topsoil is such a big problem really. I live in the middle of Hollywood (just a few blocks from subway station) in a 1916 bungalow. Unfortunately it had its front yard entirely paved over for parking (room for 7 cars!) a few years ago before I got the place. However I am still able to grow all kinds of vegetables and herbs here, on top of the concrete in raised beds and planters filled with potting soil full of rich organic materials and topped with woody mulch. In fact I'm sitting here in the garden right now typing this and keeping an eye on the tomatoes...

Small-scale raised bed gardening is one of the most productive methods of growing food and you can do it anywhere really as long as you are getting plenty of sunlight and you can get water. All you need is a large wooden box full of dirt.

Los Angeles was a prime agricultural region in the not so distant past because of its favorable climate, and probably will be again quite soon out of necessity. Southern California has plenty of open space to plant in: yards and lawns.

I could grow most of my own vegetables right here in my driveway if I just expanded what I'm doing now a bit more...and I seem to be constructing more and more planters these days after reading these depressing DrumBeats.

OK, rainforests were a bad example, the soil is fairly thin, but I do think they could feed more people than they do currently.

I think we basically agree. I'm a techno-cornucopian, and a political doomer. I believe that most of man's suffering is caused by man. If we placed the same value on human life that we do on material gain, there wouldn't be a problem. Unfortunately, people are selfish a-holes, so this won't happen. Not that this switch would be easy - I firmly count myself among the selfish. I'm trying to work on this, but it is very ingrained in our culture, and it takes a lot to think of others before yourself.

I'm basically postulating the opposite of the Ghandi quote on this site. If the top 20% learned to live like the middle 20%, there would be enough to go around. I think in the long run, this could make everyone better off, as it would open up new markets and increase productivity.

The problem with agriculturizing the rain forests is not a question of how good the soil is, it is about maintaining what is left of the rain forests. They provide "services" that are totally irreplaceable.

Techno-cornucopians tend to either forget that or be ignorant of it or, worst of all, assume that technology can replace the entire freaking rain forest, evolved over hundreds of millions of years. I've met techno-cornucopians who want to pave over everything and only use hydroponics, and not even allow pollen in the general atmosphere.

Insane, every last one of them.

Water shortages are already a problem in many parts of the world, both from chronic drought and depleting aquifers. Arable land is being lost to erosion at an accelerating rate.

I wish people would realize that shortages aren't forever.

and about waste.

Solution, or Mess? A Milk Jug for a Green Earth

But with the new jugs, the milk crates are gone. Instead, a machine stacks the jugs, with cardboard sheets between layers. Then the entire pallet, four layers high, is shrink-wrapped and moved with a forklift.

The company estimates this kind of shipping has cut labor by half and water use by 60 to 70 percent. More gallons fit on a truck and in Sam’s Club coolers, and no empty crates need to be picked up, reducing trips to each Sam’s Club store to two a week, from five — a big fuel savings. Also, Sam’s Club can now store 224 gallons of milk in its coolers, in the same space that used to hold 80.


Who knew that even today there were big efficiencies in shipping plain milk? all of this due to peak oil and climate change. as we go forward who knows where we will find more efficiences?

what about hybrid trucks to drive the milk? what about electric trucks? what about if the company charges the trucks from it's solar panels or micro wind turbine?

They have these at Costco, too, and so far I've made a nice spill on the first pour from each. They give "instructions" on how not to spill in the article, which I'll have to try, but I'm a bit suspicious of the usability of any milk bottle that requires instructions...

I wish people would realize that shortages aren't forever.

Any guidance on when I might expect the shortage of Dodos to ease up?

What are you talking about? We read their posts daily.

Any guidance on when I might expect the shortage of Dodos to ease up?

any body know when we'll have an end to this shortage of whale oil? it's dark in here...

Depleting aquifers (fossil water) are forever. Dwindling glaciers that feed major rivers are (in human terms) forever. Chronic drought that seems to be part of the new climate pattern is not something to be cheerily glossed over.

Hurrah! More efficient milk jugs! We're saved!

Hurrah! More efficient milk jugs! We're saved!

with all the straw men we've constructed here it's a wonder we don't have a shortage of straw. anyone who actually thought rationally about this would see this is a good development. I did not say it would save the world but however you want to play it is fine with me.

A Clarifying point

The concept of depleting aquifers is not entirely accurate and could be misleading. Even the most famous depleting aquifer in the US (the Ogallala Aquifer) DOES have recharge points.The strata above most of the ‘non replenishable’ aquifers are non-porous or impermeable (also known as aquitard). What this does is limit the recharge rate of the saturated zone(s) as the recharge point for these types of aquifers are typically distant areas where these impermeable layers are not present, OR these depleting aquifers reside either wholly or mainly within arid regions so that the recharge rate is naturally low due to limited rainfall.
For the Ogallala these one of the most permeable recharge areas is the *ed* Playa lakes

The concept here (which should not be foreign to TOD readers) is about RATES. All aquifers have a yield which they can sustain. The question is whether the use is within these yield limits. Recent studies have estimated an average recharge rate for the entire High Plains region of approximately

0.5 of an inch per year
, While the current pumping is causing a decline rate (estimated from graphs within
this report) of somewhere in the neighborhood of 1 foot per year.
If I pour a Chocolate Milkshake in a 10L bucket at a rate of 1L/minute my 10 friends can drink all the chocolate milkshake they want forever (at a rate of 0.1L/min each). However, if word gets out that I’m giving away Chocolate milkshake and 10 more people show up with their straws they have to make a choice.  They can choose to either a)compete for the Milkshake and drink as fast as they can and eventually reach the
point they are fighting over the 1L/minute that I am pouring as soon as it hits the bucket, OR b)they can choose to reduce the rate at which they suck back the
Delicious Shake

Some further comments by the USGS:
“Withdrawals greatly exceeded recharge in many areas, causing large water-level declines.”

“Agriculture is the dominant land use (54 percent) and is responsible for the widespread development of the High Plains aquifer. Major agricultural activities in the High Plains include dryland and irrigated agriculture, predominantly wheat, cotton, and corn. Of the total crop production in the United States, the High Plains aquifer area accounts for about 19 percent of the wheat, 19 percent of the cotton, 15 percent of the corn, and 3 percent of the sorghum. In addition, the region accounts for nearly 18 percent of the cattle in the United States and is rapidly becoming a center for swine production.”


Water tables and freshwater availability are yet another
Canary in the Coal Mine, indicating that BAU is unsustainable on so many levels.

Other sources:



(sorry for the poor spacing... for some unknown reason I decided to write this in Frontpage and copy it in... I will never make that mistake again)

So we are currently using water from this aquifer at double the rate we are replenishing it (or it is replenishing itself, more accurately). Even if this were o.k., I can assume from personal experience that runoff from newly developed areas will be more toxic and will require more treatment than the water generally in the aquifer now. After all, the shorter the distance between the aquifer and the surface the greater the chance that contamination will occur.

This does not sound sustainable.

Unfortunately Enviro stated the consumption as 1 ft/yr, and replensihment as 0.5 in/yr (1/24 ft/yr). so it isn't double the rate of replenishment, but 24X. To modify his example, instead of 10 extra friends showing up for milkshake, its more like an extra 230 showing up. To me it seems like a textbook definition of unsustainable use of a resource



Thanks for the edit on that example, thats exactly what I had intended to get across. I know better than to write too late at night. Getting up early for work and staying up late at night to read/work on P-O related issues - that my own personal unsustainable BAU problem...

Fertilizers, fertilizers, fertilizers. Assume they're extinct, and re-calculate.

Fertilizers, fertilizers, fertilizers. Assume they're extinct, and re-calculate.

why would they be extinct?

Hello John15,

For realistic purposes, fertilizers will be extinct if you cannot afford them whether I-NPK or O-NPK. Perhaps you forgot the early model of agriculture: slash, burn, farm, then move on when the soil became exhausted. Rinse and Repeat.

Please buy some far-inland acreages, far from seaports and railtrack, in the fast-expanding Sahara Desert, Gobi Desert, Mojave Desert, Sonorran Desert, etc, then get back to us with a full report on how you found extremely cheap water and fertilizer supplies to grow abundant crops.

Have you already decided which of your family members are going to backpack a 40 lb potash boulder laboriously hand-extracted from a mile underground in Saskatchewan to your blazing, lethally overheated, sand dune outside Yuma?

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

Okay, lets work on that.
One, the sylvite is less than a mile underground, two, it's a chunk of salt, three, it's going to move on ethanol or horseback (ethanol is cheaper, energetically), four, it's not going to be anywhere that's water limited like the desert, because rain's not going to be recharging the Colorado under our global warming models.
Way things are going, the Salton Sea is going to turn back into the Salton Sink and we are going to be producing solar salt on all that Imperial Valley irrigate farmland that used to grow lettuce all year round.

I agree,mdsolar.In Australia there are many cattle feedlots fattening grass fed animals for export,mainly to Japan and the US.There is apparently a market for marbled(fatty)beef in those countries.Because it is a lucrative market it will continue unless sanity prevails in the government.Pigs might fly.
Apart from the waste of valuable grain which could more efficiently feed humans the whole factory farming industry,cattle,pigs and chickens,quite literally stinks.I am no Animal Liberationist but I don't like seeing animals mistreated.

It is decidedly not a good time to be both a net food and net energy importer.

If we've got an exponentially increasing current account deficit as well (ie: a net money importer), do we get a bonus for having the 'full monty'? :-(

I assume you're referring to the U.S. I would think we are one of the worlds highest net food exporters. Is my perception incorrect here?

In terms of sheer tonnage, yes. In dollar terms, no. See U.S. to Become Net Food Importer.

I'm pretty sure that it is dollar terms, only. We export grain and import chocolate, fresh out-of-season produce from Chile, Danish ham, French cheeses, etc. I would be very surprised if the US were a net exporter of calories.

I would expect even the dollar situation to turn around as families see their food budgets squeezed. Fewer fancy imports. A weak dollar will make imported foods even more of a luxury. At the same time, grain prices are climbing.

I assume you're referring to the U.S

No, sorry, I'm British and I fear we're deeper in doo-doo than most people in the UK realise (including the Government). We import 40% of our food and the balance of payments deficit looks like it can only get much worse.

A large part of our current energy sources will be finished by ~2020 - it's now clear that the UK is in energy overshoot and due to a world lack of capacity can't build enough windmills to even replace the nuclear we are planned lose by 2020, let alone reduce the CO2 by the legally binding 15% amount. (For Europe as a whole the target is 20% reduction, so at 15% we aren't even meeting our fair share of the pain.)

Even if we could ramp up the windmills at the required super-exponential rate, because CO2 is produced during the escalating pre-startup phase by 2020 the net energy would likely be less than zero and the CO2 goes up not down. The same is true if we are to decommission and rebuild the nuclear in the timescale required. We need to consume more FF, not the promised less, for the next twelve years at least! Sigh!

Sounds like what you need are some colonies to exploit....
What's nearby - and relatively easy pickins...?


A food production system which is highly mechanised and thus totally reliant on imported oil.......

And globalists will refer to it as "Food Nationalism".

Right. What sense does it make to feed your hungry when you can make a bigger profit by feeding fat people on the other side of the globe?

Come on, Tarzan. That seems overly cynical. We all know that the goal of life is profit, and there is just no profit to be made from hungry people.

Across the globe, hundreds of millions of acres of once-productive agricultural land lie abandoned, according to a new report from researchers at Stanford University and the Carnegie Institution for Science. If this land was used to grow crops for conversion into biofuel, it could help ease the energy crunch without worsening the world food shortage or contributing to global warming.


They figure there is about 1.0 to 1.2 Billion Acres of "Abandoned, Productive" Farmland lying "Fallow" around the world. They're, mostly, looking at "Energy;" but my feeling is that if we figured a "middle case" we could produce about 17 Billion Barrels of biofuels/yr.

High Case - 1.2 Billion X 840 gal (20 barrels) = 24 Billion Barrels/Yr.

Low Case - 1.0 Billion X 420 gal (10 barrels) = 10 Billion Barrels/Yr.

Yeah, yeah, I know I'm doin some extrapolatin, and reachifyin, here; but it's something to think about. The most interesting part, I thought, was the Number of Acres of Abandoned Land.

Hog factories, which I hate because I have to live with the stench of 6 of them within 3 miles of my place, are largely the result of cheap subsidized corn over past decades.

The world has changed. Corn prices are far above the subsidy rates and oil is becoming increasingly expensive. Feeding it to animals or exporting it is not the most efficient or profitable use of the crop.

It may become so again in the future if meat/egg/milk prices rise enough, but for now feeding corn to animals or exporting it is a waste of energy that can be made into a liquid fuel for transport.

When corn is fed to animals or exported the lost energy must be replaced with imported oil which is more expensive than corn at $7 even. Imported oil has a EROEI of minus 1 from the point of view of the oil importer while nearly everyone agrees that ethanol has a EROEI greater than one.

This makes no sense. We are wasting a resource that we happen to have the best infrastructure in the world to produce by feeding/exporting rather than convert it to liquid fuel for transport.

We pay high oil prices so that energy can be wasted on animals and exported corn.

Cheap food does not guarantee its supply in a Post Peak Oil world. Food prices will have to rise along with oil. Reduced oil consumption will have to occur in non food related areas like airlines, recreational travel and military adventures.

The USA has to export something besides Boeing a/c, Microsoft, and Hollywood. Ag is one of our big exports.


I thought our main exports were Treasury Bonds...

"nearly everyone agrees that ethanol has a EROEI greater than one."

check your sources

Best use of corn is for Human Food without transporting it. Along with beans , greens , squash

It has a proven record in American History

I'd say that ethanol from corn has a track record of being a success for around 230 years in the United states. In the late 1700's most of the corn exports from the midwest were in the form of whiskey since it was far more economical to transport than unprocessed corn. Now this leaves open the question of whether burning it is a good idea.

while nearly everyone agrees that ethanol has a EROEI greater than one.

HUh? Sugar cane/beet ethanol yes, cellulosic ethanol probably, corn ethanol hell no!

I saw an article in Nat Geo last year that put sugar based etanol EROEI at >1 and corn ethanol at <1 and I've seen those kind of numbers bandied about all over the place. Wishing it were true don't make it so.

Alan from the islands

In my own neck of the woods this is certainly the case. Local farmers have been marginalized by cheap, industrially farmed, imported produce. Poor agricultural practices by small farmers, like clearing land using fire, lead to poor crop yields forcing the farmers to move on to the next available plot of land. Diseases wiped out entire areas of mono culture, like coconut plantations formerly used to produce coconut oil. A dying sugar industry has left acres of sugar lands converted to bananas that, are very vulnerable to hurricanes and anyway, can't compete with the Latin American mega farms. Other former sugar lands have been converted to citrus or pasture or in rare cases left idle.

Driving through the countryside I have often noticed lots of potentially productive land seemingly lying idle. A drought resistant crop like jatropha curcas could probably do well on some of these idle lands without impacting local water supplies. Palms for palm oil could be planted where old coconut plantations once stood avoiding the environmental concerns that plague Malaysia and the Philippines. So, yes I can identify with the above study since, the local conditions are probably repeated on an even larger scale all over the developing world.

Alan from the islands

I skimmed your link , but I'm pussled by the number !
Sometimes universities overdo themselves (I'd say)

Let's see .... 1.2 billion acres .... hmmmm earlier cultivated ... now abandoned ... hmmm ?

1 200 000 000 * 4046 m2 = 4 855 200 000 000 m2 = 4 855 200 km²

Total area of entire USA/ Alaska = 9,826,630 km² (wikipedia)

Total Area of India = 3,287,590 km² (wikipeadia) ...

Available abandoned farmland HALF that of US or more than all of India !

Can you give a clue as to where this land is kdolliso- when did they leave this land and keep in mind that in the 1930's the world population broke through the 2 billion inhabitants barrier ... 3 billion in the 1960's?

And now in 2008 at almost 7 billion people we manage without this area? (I don't buy into this claim!!!)

Anyways , IF that area was to be used for Rapeseed-cropping yielding some 1,2 dl / m2 and with a perfect growth season all over that place you would be able to squeese out 3,6 billion barrels of bio-diesel ... ONLY kdolliso !

Paal, rapeseed really isn't the best choice for a biofuels crop. In fact, it's, actually, pretty far down the list. Oil Palm, or Jatropha is, in most areas, probably 5, or 6 times more efficient. Switchgrass, sweet sorghum, tropical maize, and, of course, sugar cane would all be preferable.

As for the numbers 1.0 to 1.2 Billion Acres: well, those numbers come from the learned Scientists; but, my gut says they're probably about right. Paal, yields have been doubling about every 20 years. The combination of "efficiency" of OECD farmers, coupled with Government Subsidies have literally put 3rd world farmers out of business. Even in the U.S. we have an incredible amount of cultivatable land lying fallow. 1.2 Billion Acres are considered Arable (non-forested - suitable for agriculture.) Approx 400, Million of those acres, as best I remember, are "loosely" used for some sort of grazing; and, of the 400 Million Acres that were at one time used for rowcropping, only 250 Million are used that way at present. The Ag Minister of Brazil has stated that they have 350 Million Acres lying fallow ready to be put to use.

I know some here are deeply convinced of the inevitable "dieoff;" but, I really can't see where it has to be the least bit necessary.

Now we'll sit back and await the deluge of little green "arrow-clickers." Ready? Go!

this reached my eyes from your post :
"1.2 Billion Acres of "Abandoned, Productive" Farmland lying "Fallow" around the world." When I read such I read just that "Abandoned, Productive" . USA is a really big place, and so is HALF OF IT ! That 4 855 200 km² has to be somewhere ........ fly across Europe "its all used" there are people everywhere. Brazil is still chopping jungel to create farmland, so why is that? given your 350 Million Acres fallowland down there, are they completely stupid ?

Obviously there is such an area world wide, but i'd assume it would have to be turned into "arable" ... anyways.

Now you'er cheerleading palm oil and jatropa as being better than rapeseed .. ok!?! The thing is those will not scale (much), these fruits are hand-picked at harvest - HAND PICKED - kdolliso, is that a clue to you as to where that will end ?

Rapeseeds are cropped with the magic help from modern machines, making it scalable per definition, handpicked stuffs are just a joke IMO. Rapeseeds have a multiple times better eroei as compared to ethanol, they dont have to brew it, those are just squeezed ....
Actually rapeseed-diesel is sligthly better than crude-oil per volume energywise.

Anyways I am against all sorts of bio-fuels in the first place, so what ever you say kdolliso (you will be proven wrong one day in a not so distant future, you know it and I know it)

And by "proven wrong" I mean it will be banned (my private guess)

Paal, they "LOG" the Rain Forests to get "LOGS!"

Anything a human can pick a machine can pick. We Pick TOMATOES by hand, for crissakes.

About the best you can get with rapeseed is around 100 Gallons/acre. It's Only saving grace is that it can be grown in "Northern" Countries.

Should'a read: We pick Tomatoes by "Machine."

Jatropha and palm oil IS PICKED BY HAND (!) KDOLLISO. Say after me : HAND ! Google and learn.There is NO pattern as to how these stuffs grow , it's pure random and I'd like to see the cost for such a machine.Both the palm and jatropha plant shall stay untouched after harvest, in order to produce more next year. The tomato-plant is something completely different, it's like a weed ..... Those plants are ruined after harvest and that tomato is mostly for ketchup.

Further more :

You don't understand the idea of scaling biofuels kdolliso , and you have NO idea of how much oil we use per day ...... about 40 of the largest VLCC's in the world taking 2 million barrels - A DAY -
Today we are able to tap, transport, process and distribute that amount - in the shape and form of READYMADE fossils, say after me : Readymade !

Where do you start and how do you fill (just an mental experiment for crissakes) 50 of these 2 million barrels VLCC's EVERY DAY with say ............ ehhhhh ...... Jatropha ?

Keep in mind ! What we aim for today, should also work in the future , no? ...

I don't know much; but, I Know 2 Things, Bubba.

1) Gasoline is $4.08/gal

2) 1.2 Billion is a Lot of Acres.

Oh, and one other thing: We have over a Billion Impoverished Subsistence Farmers that are, literally, close to starving.

But, I'm just a "Dummy;" I don't know anything.

you are driven around switching subject along your way.

If there are starving farmers around THEY SHOUD MAKE FOOD for themselves...........
....... NOT BIO FUEL for You ...

That "DUMMY" name you called yourself. Keep that in mind! All the best.

Dummy I y'am. But, I'm smart enough to know that a man with zero money will "starve to death," land, or no land.

If, however, he can "Make a Buck" by selling biofuels to me he might be able to afford the tools, seeds, fertilizers, insecticides, herbicides, etc. to be able to "feed himself."

I'm not sure how Fred Flintstone made his ends meet, but I'm quite sure he did not switch stuffs for dollars or vice a verca. Farming as a way of surviving is going a loooooong way back at least some 10.000 years. You disappoint me time and time again with your utter lack of philosophical horizon.

Paal, it pains me to inform you that "Fred Flintstone" was a cartoon character.

As for 10,000 years of subsistence farming: it kind of went along with 10,000 years of people "starving to death."

Look at it this way, Paal: People once hunted Wooly Mammoths for a "Living" (using stone tools;) but I doubt that You could.

On the other hand, the Mesopotamians pretty much invented "modern" agriculture (5,500) years, ago; and they "specialized" like crazy.

Anyway, gotta go; Take it up with Stanford.

Yes,hundreds of millions of acres of once productive land do lie abandoned.Some reasons - salinity,erosion and loss of fertility due to destructive farming practices.This is nothing new,it has been happening ever since humans invented agriculture.In the last century it has accelerated due to technology.

The first truly rational nationalism. Sign me up.

Not only is Export Land happening in food it's also happening for French Cognac.

Sat down with two liquor distributors last week and both admitted that there's Zero stocks (except for pre-contracted airport duty free shops) of French Cognac in Asia from Indonesia all the way to China for the past three months. Prices have tripled in the past year alone. Principles in France can't give a definitive answer when they can supply again.

More interestingly, buyer's from the region have been going to Europe to buy direct from local European distributors to ship back to Asia and offering prices at 30% over market. Principles hears about it and clamps on practice ! Export land in action.

Thats it.

This Peak thing is no longer funny.


Did they say anything about Peak Armagnac?


I believe you're in the UK, right? Now's the time to plant rye & barley, take advantage of the French brandy shortage, and quench Asia's thirst with a concentrated, high-energy grain export. Peat is too valuable to burn for mere energy - it's a flavoring agent!

- Bro K

IMO attributing a part of the price of crude oil to a risk premium is incorrect. A risk premium can exist as a transient phenomenon. If the premium is sustained, then that implies that prices are higher than supply/demand fundamentals, therefore inventories should build.

As we know inventories are falling indicating that there is no risk premium in the price of crude. It is pure supply and demand.

It is true that OECD inventories have been falling recently. But we really don't know what is the situation of the global inventories.

There are indications oil producers are storing crude which they can not sell. Refiners are refraining from purchases at these record high prices and this might explain why inventories in consuming nations are falling - this does not mean there isn't a build somewhere else. Overall I think oil is up for a correction later this year, I would just hate to see it falling way too much.

The only sign of crude building up is in Iran, and every last participant in the oil markets has heard about those tankers in the Gulf umpteen times.

Sinopec officially refuted Lehman's claim that increased demand in China was due to inventory building.

The CFTC said that commercial users like refiners had been increasing their price hedges--which means they've been adding to their longs in the futures markets. Meanwhile, speculators and investors are increasingly short, so speculator flight from the markets is more likely to cause a price rise than a correction.

Oil is unlikely to correct later this year (other than the standard dips that lead into a short-term trading range) unless by some miracle all scheduled projects come online at full force exactly on schedule, and we already know that the new 580,000 b/d Reliance refinery in India is likely to be later than the September opening expected as recently as April. Iraq is trying to crank up production 500k b/d by the end of the year, but even the IEA expects these projects to be late.

I agree with chemE that "risk premiums" can't last very long. A risk premium is the kind of thing that happens going into a long weekend, when nobody wants to be short out of fear that bombing in Iran might start before the markets reopen. If high prices were due to a long-term risk premium, inventories would be building up, just as chemE suggests.

I do think that shortage psychology is playing into the current price, but I think that's because of a realistic assessment by people with a clue that it's going to be increasingly difficult to increase (or even maintain) supply.

There's a front-page story on the main US Yahoo news page from the AP that describes the hardships facing Americans. Some poor woman in Texas has had to endure this awful calamity

She says switching to bar soap from a favored lotion is one of many "little small luxuries" she has given up, along with fewer restaurant meals and new clothes. She also has talked with her husband, a flooring contractor, about finding a job involving less long-distance driving with his heavy van.

"It's depressing and it makes you nervous," she said.

Those poor people. It also goes on about how those better off are also being hit by rising gas prices. It defines that group as those earning between 50,000 and 100,000 USD. I know cost of living varies by geography but I also know that in the greater New York City region 100K doesn't exactly put you on Easy Street. The article, branded as a political piece, seems to go out of its way to preemptively stifle any notion that the rich aren't feeling the sting as much as the hoi polloi. Yeah, right.

They ain't seen nothin' yet.

Here's a link:

AP-Yahoo News poll: 9 in 10 hit hard by gas prices

There also is a strong sense of powerlessness. One-third do not think either candidate can deal with the problem. That includes half of independents, one-third of Republicans and one-quarter of Democrats.

Quite curious that the second paragraph attempts to defuse the class issue:

Like a plague that does not discriminate by economic class, race or age, soaring gas prices are inflicting pain throughout the U.S. Nine in 10 are expecting the ballooning costs to squeeze them financially over the next half year, an Associated Press-Yahoo! News poll said Monday.

Further down the article, the "Nine in 10" noted above is shown to be spin by the caption in the bottom graph, to "expect" is not the same as experience as I can "expect that high gas prices will cause financial hardship without experiencing hardship personally.

Everybody in the MSM knows that poverty hurts the rich just as must as the poor-it doesn't discriminate.

So, at the moment Democrats are the most clueless....

About a year ago I voluntarily switched to bar soap.. so far I've used up about three bars over the course of one year. $1.50. For all my hygiene needs. Unbeatable! Somebody should tell that Texan woman it's going to be all right :)

That's pretty amazing. What brand? Our soap bars do not seem to last that long...

Maybe he bathes once a month, whether he needs it or not. ;-)

Seriously, it wasn't that long ago that bathing once a week was the norm. Saturday night, so you'd be clean for church on Sunday.

Use real soap - not the commercial brands that have had the glycerin removed or are actually detergents and not soaps. I've found that a regular bar of REAL soap lasts a month or more in the shower (two people @ one shower each per day) - six months in the hand soap dish.

Shaman, this is not a sarcastic question -- what the heck is "real soap". I always thought "real" soap was lye (i.e. dilute NaOH), which is pretty nasty stuff.

Real soap is most typically lye saponified with an oil to make a fat salt/glycerin mixture. There are other reactants that can be used, I believe the "original" was wood ash (sorry, can't think of the chemical component off the top of my head) and rendered animal fats.

Some commercial soap "manufacturers" will tell you that the soap is only the fat salt portion, they separate the glycerin and then sell it as "glycerin soap." Most of what we call "soap" today are really detergents, made from (wait for it)... petrochemicals.

Thanks for the reply. Thanks to your suggestion, I'm going to try to find some real soap to check it out.

One of my more interesting summer jobs involved working with large quantities of fairly strong concentrations of NaOH. I remember quite clearly what it does to skin. I also have vague recollections of using lye soap as a child and having my skin seriously irritated by it. After that, I haven't wanted to have anything to do with lye. However, ericy's link suggests the irritation is a result of residual lye in the soap and higher quality soap shouldn't have the problem. Anyway, it is worth a try.

I'm replying to this post just since it seems about the right place in the comments to interject...

When oil spiked near $140, I decided to order stuff I'd want in the coming 5 years. As it turned out, I decided that one of the luxuries I wanted to maintain for awhile on this warm tropical island was Dr. Bronner's Peppermint Castile Soap; a peppermint shower is addictive. A gallon lasts my family a year, and I located the cheapest place I could find and ordered 6 gallons.

I'm really not materialistic, but I value my peppermint showers. According to the container, it can also be used for everything from bug repellent to birth control. Recommended for fastidious doomers everywhere...

Birth control? Does it smell that bad?

Shargash - look into making your own soap. It's really not very difficult and is actually fun to do. Also, as Greenish suggests, look into Dr. Bronner's - good stuff. (I used to read the bottle in the shower, but my eyes have dimmed over the years.)

The best soap is made with lye (Sodium Hydroxide), seaweed and certain coastal shrubs were the traditional source. I use Red Devil brand when I make soap. Blended oils give the best results, stay away from corn oil though. I've had really good results with a blend of vegetable shortening, coconut oil and palm oil.

Wood ash gets you Potassium Hydroxide which gives you a softer soap. Haven't tried it myself yet but it might be a good source for liquid hand soaps, since it would need less dilution for consistency.

Well, in the old days they used lye to make soap, but lye itself isn't soap. The basic process involved using something like animal fat or vegetable oil together with lye. The process is called saponification. It bears some similarities to the procedure used to make biodiesel.

Is that two people and one shower?


two people and one shower each?

I've cut down on showering the last year, only taking a shower once in every three or four days. That's why the soap lasts so long..
Hot water is free here, so I'm only doing this to learn to live with less. I'm thinking - one day I might have to chop my own wood and make hot water myself, so better not get used to having a 15 minute shower every day. Friends think I'm nuts for not using my "free" luxuries, but at least so far none have complained of odors.
The soap is of "Lux" brand, made by Unilever. Contains glycerine. Packaging promises all kinds of luxuries for my skin, sadly it doesn't promise decreased suffering for people or increased oil production.. Guess that's too much to ask from a 50 cent soap bar :)

About a year ago I voluntarily switched to bar soap..
I used to do this too...ended up married with 3 children...I quit using bar soap

Where I live, 95% of traffic is discretionary and there has been very little let up as we approach July 4th. Happy motoring is alive and well. Guess they are all giving up their expensive lotions to drive.

Someone asked this in the Talk section of the Wiki Megaprojects page:

How are the production numbers in the summary derived? They often don't match with those I get by adding up the numbers in the detailed tables. e.g.: Brazil 2011, Two projects: 180 kbd + 100 kbd = 280 kbd. Summary says 780 kbd. Iraq 2010, Three projects: 90+100+250=440; Summary says 340.(Lord Gøn (talk) 19:03, 24 June 2008 (UTC))

I notice the KSA numbers for 2009 are off as well - summary page says 1645 kb/d but 2009 page only shows 3 projects totaling 575 kb/d. Wuzzup? Does this include holdover from 2008 projects?

Check now. It has been fixed. It is Khebab who handles this.

The problem is that a perl script needs to be run to recalculate the values. It hadn't been done for a while, so was out of date.

Revised figures for megaprojects, previous numbers on top:

2008 2009 2010 2011 2012
6912 6146 3770 4563 5111
5559 4636 5330 3500 3476

2013 2014 2015 2016
1237 0680 0672 0030
1365 1080 0807 0895

2017 2018 2019 2020
0162 0130 0050
0162 0180 0050

Three related BBC stories

The Bulb Hoarders

Are they not concerned about the environmental impact of incandescent bulbs? "I do my bit," says Bradley. "Recycling and all that. But at the end of the day, if they want us to use those bulbs they'll have to make them better."

Green target 'to hike fuel bills'

Half of those polled said they would not be prepared to cut energy consumption, even if they faced higher bills. "There seems to be a worrying degree of apathy among consumers to reduce energy consumption," he added.

Eco-town protesters holding demo

The schemes risk being car-dependent housing estates

People still don't seem to have a consistent view of what needs to be done.

Hi garyp,

I dislike the light provided by CFLs -- GE/Thorn's 2D lamp being the one, notable exception -- but the other advantages in terms of longer life, cooler operation and much lower operating costs are pretty compelling. Incandescents in their current incarnation may be the SUVs of the lighting world, but the next generation of HEI lamps due to arrive in 2010/2011 will be four times more efficient, putting their energy performance on par with today's CFLs (ah, the luxury of incandescent lighting with none of the guilt). I suspect those bulb hoarders busy stocking their cupboards full of incandescents are going to feel a tad foolish.


I'm holding out for LEDs. I turned two outlet-mounted LED nightlights into a table lamp by buying one of those AC outlets that screws into a light socket. It puts out enough light to get around with late at night, but no more. It was only cost-effective because the lamp was $3 at a thrift shop and the nightlights were bought at a Dollar Store, which probably won't exist in two years.

I did buy a single example of a brighter LED nightlight, and a string of those could light a room, but I can't find that model now. I would also need an extension cord studded with outlets every couple of feet.

http://www.superbrightleds.com/led_prods.htm is a good source for USA, (car bulbs too !) but shipping raises the cost.

I like the 0.7 watt E27-x8-G, they last years with stable output (my experience), red for night vision bathroom runs, white otherwise.


In UK,


Best Hopes for Energy Efficiency,


LED Christmas lights. There's your string.

Hi super390,

As mentioned in a previous Drumbeat, if you require/desire a relatively inexpensive, low-wattage lamp with good efficacy and long life, I might be inclined to go with a cold cathode CFL. That said, when you can buy a six pack of good quality, name brand CFLs for $10.00 or less at a big box retailer, a standard, low-wattage CFL offers exceptional value. Plus, all Energy Star CFLs come with a minimum 2-year warranty, some manufacturers such as Philips offer 7-year warranties and I believe one home improvement store provides their own nine-year warranty.


From the middle article; "UK households could see their annual energy bill rise 20% to pay for the cost of meeting the EU's 2020 emissions target, Ernst & Young has predicted."

The article seems to be scare-mongering about a big 20% increase that people won't accept.

However Gas & Electric charges are up 15% already this year and there were warnings of maybe a 40% rise to come in the next few months.

A one off rise of 20% to increase renewables looks like a bargain.

I pointed up the survey of what people would do for a reason. The price environment is such that they won't accept this increase on top of the other increases - it will get canned.

People won't actually accept ANY increase, but if truly forced they will moan and pay rather than change behaviours.

The overall question is how you change thought patterns to support more strategic visions. When people won't go CF, forever waiting for something they consider 'acceptable', what chance is there for the harder changes?

There is a need for a meme that can infect people with an understanding and desire for change, now.

Re the article at the top about the alleged 115bn barrels of oil in Iraq and plans to increase the flow rates - is this fully discounted in ELM projections, or felt to be unrealistic?

Three answers.

First, Iraqi recoverable reserves are probably overestimated.

Second, let's assume that Iraq has about 100 Gb of oil that is not reflected in Deffeyes' HL estimate of 2,000 Gb for conventional crude oil reserves worldwide. 100 Gb would be a 5% increase in worldwide reserves. When Hubbert did his initial Lower 48 work in 1956, he found that a one third increase in URR only postponed the projected peak by five years.

Third, an excerpt from our top five paper:

Extrapolating from year to date 2007 data, it appears likely that the top five will show an average aggregate net export decline of about one mbpd per year in both 2006 and 2007, putting them on track to go from about 23 mbpd in net exports in 2005 to close to zero in the 2030 time frame.

Smaller oil exporters like Angola can and will increase their net exports, but smaller exporters, just like smaller oil fields, tend to have sharper production peaks and more rapid net export declines than do the larger net exporters. And offsetting many of the gains by some smaller exporters will be sharp declines in net exports from other smaller exporters like Mexico, the #2 source of imported crude oil into the US, which will probably approach zero net oil exports by 2014.

The article says:

al-Shahristani said the new contracts would raise Iraq's production by 1.5 million barrels per day. Iraq currently produces 2.5 million barrels per day and hopes to raise that to 4.5 million by 2013.

Are these in reasonably close agreement with your short term figures?
What I am wondering about is not really any great discrepancy in the longer term, but if a short term increase due to some success for the troop surge could rather reduce, or more correctly stabilise a little, prices over the next 3-4 years.

We haven't tried to model Iraqi production.

I don't see how you could even fit a Hubbert Linearization to this:

With Saudi Arabia and Russia, we have probably pushed the HL method as far as we can. With Saudi Arabia, we had solid post-1983 linear trend, and Russia has a solid pre-1990 linear trend.

Try matching it up to an ER Cardiograph.. might be a more apt comparison.

to me it resembles a nervous breakdown ... btw the worst I've ever seen

And there is probably no point in trying. There may not be anywhere else on Earth where above-ground factors play a greater role, and without being able to model that anything else is futile.

Not just the obvious above ground factors, but those related to just getting rigs and other physical components like the steel pipe as all those components already have a rather lengthy backorder time. The fastest way to increase oil flows and reduce price is for the US military to exit the whole of the Middle East and to stop the talk of war and end the sanctions against Iran. To not do these three things is to prove through actions that US and other Western leaders do NOT care about high oil price, thus all their words of concern are lies.

First, Iraqi recoverable reserves are probably overestimated.

I've been wondering that myself, along with, "what shape are the iraqi reservoirs in?" On one hand, you've got the fact that production was low during the embargo and before the oil for food program, and during the Iran-Iraq war. So this would tend to leave them in a good position to have a peak that is delayed relative to the rest of the world. I suppose it depends on how well the Iraqis took care of their fields. Judging by the amount they released into the Persian Gulf during the first gulf war (it was the 3rd largest oil spill on record) and the amount they set on fire in Kuwait as they were retreating makes me think perhaps the most level-headed people were not in charge however and maybe they were not careful stewards and over produced.

Finally, it wouldn't surprise me if the reserves were overestimated in the first place. After all, every country in OPEC has a motive to exaggerate, since their production quota is tied to their reserve estimates. As far as I know they don't have any sort of independent verification of estimates, do they?

The MSM tells americans that no way can we get out of Iraq (our Prize)if you want lower gas prices.

Given the choice of higher prices or leaving Iraq , what do you think the vote would/will be ?

Yes, thank God the war is free. We've could have bought a lot of gas for 3 trillion dollars. But the war was supposed to be free.

I've been wondering that myself, along with, "what shape are the iraqi reservoirs in?"

ASPO reported on this years ago. Immediately after the invasion (when it was still relatively safe), the US did a survey of Iraqi oil reserves. It was supposed to be made public by the end of 2004. So far as I know, it is still classified.

But geologists talk, and rumor is that Iraq has half the oil reserves Saddam claimed. And that they damaged their best fields with their production practices during the embargo. For example, by pumping crude oil back into the fields to force out natural gas. (They could not sell the oil because of the embargo, and they needed the natural gas for domestic consumption.)

People should also know there is another point of view:

An oil saviour?

Wow. 1/2, that's staggering but not surprising. Antidoomer, no offense, but I believe rumors from geologists more than I believe an article in the Economist.

Just for kicks, here's a fun calculation. The U.S. armed forces used 1.1 billion gallons of fuel in Iraq in 2007. (source). A barrel of crude oil produces about 4.1 gallons of jet fuel, which is similar to the JP-8 that the army uses (source). So that's about 0.73 million barrels of crude oil per day. Compare that to U.S. usage: 20 million bpd. Of course, one barrel of crude produces much more than just the jet fuel, it produces gasoline and diesel too, so this is comparison is deceptive.

But, let's use that 2007 number as an average amount and extrapolate it to the amount used in total in the war if the war were to stop tomorrow. Five years of war = 5.5 billion gallons of fuel. The current production rates in Iraq are 2.5 million barrels of crude oil per day, which is 0.61 million gallons of jet fuel per day. That means it will take about 24.6 years for Iraq to produce as much jet fuel as has been consumed thus far.

This seems high, did I do this right? Does somebody have a better way to compare jet fuel production to oil production besides how much jet fuel you get out of a barrel of oil directly?

The thing is...the "half the official number" ties into what Iraq's reserves used to be until all the OPEC countries bumped up their reserves so they increase their quotas in the '80s. Deffeyes has long been skeptical about those "political barrels."

The rumors coming out of Kuwait are also that they actually have half what is claimed. Kinda makes you wonder if they all have half what they claim.

Half the reserves minus production since the mid-1980s when they were inflated, plus any subsequent discoveries and new enhanced recovery technology.

In other words, simply taking half of OPEC 2008 reserves is likely to overstate actual reserves.


Please don't say things like this. You are frightening me. This would mean that there are closer to 800 Gb (or less) remaining, rather than the 1237.9 stated by BP. I find this unacceptable. World reserves have doubled since 1980; why can't you accept this?


Edit: I just did an interesting exercise. I took the world reserves, and divided them by cumulative production to get the ratio. What I found is a remarkably steady reduction in this ratio from 2.2 in 1980 to 1.3 in 2007, despite the "doubling" of reserves. This would mean that even using BP's data, which most on this site think is very optimistic, we would hit peak (50% of URR or ratio of 1.0) within 5 years (another 150 Gb of cumulative production) if reserves don't go up too much.


There are so many question marks on Iraq, I don't think that we have enough information to even speculate.

I have heard 400 billion in reserves. I obviously don't think this is the case but we have no data--- Or does someone have credible data?

Remaining recovery, or reserves, for the Iraqi giant fields is estimated to be 41 BOE (Horn, 2003), or approximately one-half of the ultimate recovery.


This is similar to Jean Laherrere's estimate that I have somewhere but can't find right now.

Not too long ago, I went looking for how much oil the US military uses annually. There is a good TOD item on the subject, but I didn't save the link. However, this very large pdf is the EIA's Annual Energy Review for 2007, and stats for "defense" useage can be found by using defense as the search term. In the TOD item, Stuart used some energy conversion tables to arrive at a figure of 300Kbd, an amount roughly equal to that of Sweden's daily usage. I suspect that some usage is hidden, especially combat useage, and some use by other departments should also be factored in to arrive at a true figure.

Thanks for the link! I'm skeptical of that pdf too because it shows the DoD usage having only a slight increase during the war years 2003-2007 over the peace-time before that.

If we believe them about their usage, we can do the calculation another way. One barrel of oil is 5.8 million btu (source). Thus, from 2003-2007 DoD used 4.5 quadrillion btu, or the energy equivalent of 777 million barrels of oil. If we assume Iraq production stays at 2.5 million bpd, it would take about 10 months for them to produce the energy equivalent. That's much shorter, but just as deceptive as my last calculation because not all 5.8 million btu in one barrel of oil are created equal.

This may only be military use within the USA. Use in Iraq would be domestic Iraqi consumption (ELM of the worst type :-( That would explain stable consumption.

Not Much Hope,


I went back and looked and they claim in a footnote:

Data include energy consumed at foreign installations and in foreign operations, including aviation and ocean bunkering, primarily by the U.S. Department of Defense. U.S. Government energy usefor electricity generation and uranium enrichment is excluded.

So they say it includes foreign operations. There's still something fishy here though. They claim in figure 1.13 DoD used about 455.6 trillion btu of jet fuel in 2007 and they assume 5,460 million btu/barrel. So that's 83k barrels. Assuming a 42 gallon barrel gives 3.5 million gallons. That site I quoted in the original-post indicated that they used 1.1 billion gallons of JP-8, or 26 million barrels. Here's yet another quote from the csmonitor:

[In 2005] the Defense Energy Support Center reported the US military used about 128 million barrels of fuel, costing about $8 billion, compared with about 145 million barrels in 2004 that cost $7 billion.

So I give up. These numbers are all over the map.

OOPS! I misread 5.460 million btu/barrel as 5,460 million btu/barrel. I corrected this below.

So they say it includes foreign operations. There's still something fishy here though. They claim in figure 1.13 DoD used about 455.6 trillion btu of jet fuel in 2007 and they assume 5.46 million btu/barrel. So that's 83 million barrels. Assuming a 42 gallon barrel gives 3.5 billion gallons. That site I quoted in the original-post indicated that they used 1.1 billion gallons of JP-8, or 26 million barrels. Here's yet another quote from the csmonitor:

[In 2005] the Defense Energy Support Center reported the US military used about 128 million barrels of fuel, costing about $8 billion, compared with about 145 million barrels in 2004 that cost $7 billion.

I hunted around some more on that site karlof1 linked to and found the fact book for 2007 from the Defense Energy Support Center, which I guess is the organization within DoD that "sells" the fuel, or at least keeps track of it. They say in 2007 they sold a total of 133.5 million barrels of petroleum, of which 82 million is JP-8. Let's take that one, it's reasonably close to the csmonitor estimate and the DESC one using just the btus.

82 million barrels of JP-8 = 3.4 billion gallons, let's use the 4.1 gallons jet fuel per barrel of crude oil / 2.5 million bpd = just about 11 months of full time Iraqi oil production to pay back what the U.S. military used in 2007.

Or... (82 million barrels) * (5.46 million btu/barrel jet fuel) / (5.8 million btu/barrel crude oil) = 77 million barrels of oil energy equivalent. At its current production rate of 2.5 million bpd, Iraq needs to produce 31 days to produce the energy equivalent in crude oil of that fuel.

My conclusion is that at best, the energy being used in Iraq by the military is fairly small fraction of Iraqi oil production. In the worst case scenario, it's a nearly one for one, i.e. that every year we spend in Iraq, 11 months of that year will be spent using all the jet fuel produced from oil in Iraq.

BBC News just had a report on Iraqi oil from Baghdad. One thing they pointed out is that filling stations are currently closed all over Iraq due to worsening petrol and diesel shortage, and that's stoking even more anger over access for western oil companies.

Hi Leanan,

pumping crude oil back into the fields to force out natural gas

Interesting. The point here would not be to force out the gas; it's simply a means of disposing of the unmarketable crude. If they were operating the fields to optimize gas production they would be producing the highest GOR wells, and in that case liquids might represent less than 10% of reservoir-conditions production (I pulled that percentage out of the air, but it's not completely unguided by experience). So reinjecting oil would make little difference to the reservoir energy balance.

The way this would "damage" the reservoir is that you would end up with a zone of "dead" oil (gas-free, also more viscous than normal reservoir oil) around the injection wells. When you tried to backflow them they might not flow to surface; most oil wells rely on dissolved gas coming out of solution in the tubing to lift the liquids. It's quite possible that those wells will be forever unusable as producers. They may have been injecting into what were previously water injectors of course, but the injected oil might well be lost forever.



not a very effective eor method. but is it any worse than flaring gas to allow crude oil production due to a lack of pipeline infastructure ?

Europe: BIS slams central banks

European banks have suffered worse losses on US property than American banks. Their net dollar liabilities are $900bn, mostly short-term loans that have to be rolled over, a costly business with spreads still near panic levels. Mortgage and consumer credit has "demonstrably worsened".


OTOH, another article argues:
The ECB's eurobankers are beating the Fed at their own game

It was striking, though, that when the eurocrats weighed this inflation-growth policy dilemma last week, they came out firmly in favour of tackling inflation. The ECB remains on "a heightened state of alertness", said its President, Jean-Claude Trichet. And because he has held rates at 4 per cent throughout the sub-prime crisis, his words rang true.

And also:

Trichet also made intelligent noises about oil last week. As crude soared once more - touching $142 on Friday - he rejected notions that sky-high prices are being driven by speculators. "The major issues," he said, "are associated with supply and demand" - which shows the ECB gets it. High oil is here to stay.


So it looks like a tougher line on inflation from Europe, but our genius bankers have thrown away a fortune again, and it will hit the economy hard.

A couple of other banks also announced doom and gloom predictions last week.

Oh well, I suppose that's one way to cure the world of high oil prices. If we have a world-wide depression, that just might destroy enough oil demand to do the trick.

Of course the cure would be much worse than the disease.

But for the oil price bubble theorists, I suppose that's OK. The main thing is being right, even if it means being dead right.

But for the oil price bubble theorists, I suppose that's OK. The main thing is being right, even if it means being dead right

Hey, one person dying is a tragedy, millions dying is demand destruction.

bruce from chicago -

Aha, some timely paraphrasing of that great humanitarian, Joseph Stalin!

Sadly, Uncle Joe was right. A child gets trapped down a well, and there's intense media coverage 24/7. But when over 500,000 innocent people are horribly slaughtered in Rawanda, it's a page 5 story that is soon forgotten.

For all the cheap talk about saving humanity I think that when we arrive at crunch time, many people in the West will be quite comfortable with sitting back and watching millions of Third-World people die because they cannot buy fuel and/or food.

IMO the way things are proceeding it looks like maybe 50% of Americans are going to be too stressed out to worry about the Third World (rather than sitting comfortably).

But for the oil price bubble theorists, I suppose that's OK. The main thing is being right, even if it means being dead right.

I don't think there is going to be a world depression and I certainly wouldn't want one. oil is a price bubble simply because it is.

Contrarian investor Marc Faber said he could see oil rocket to $300 a barrel if the U.S. attacks Iran, but he prefers gold to oil in normal circumstances because of the U.S. government's potential curbing of speculative trading.
"I personally would rather buy gold at this stage than oil," said Faber, a famous contrarian and publisher of "The Gloom, Boom and Doom Report" during a conference call Friday hosted by U.S. Global Investors.

"I think we could have a serious correction -- to $100 or below," he said. "To curtail speculators in commodities in the U.S. could drive people like the pension funds ... to go and buy gold."

Faber also mentioned that gold is "very, very cheap" compared with oil now and that the oil-to-gold ratio is at its highest level ever.


The gold nuts are a strange group. They really have a unique psychological make-up.

I don't think there is going to be a world depression and I certainly wouldn't want one. oil is a price bubble simply because it is.

Ye gads, what blind faith! If you are going to make a bubble argument here, at least attempt to make some semblance of a logical argument rather than "it is because it is" as your motto.

Don't feed the troll - he never demonstrates that what he advocates will be adequate/workable/affordable/logical/correct/sensible/available even in the short term.

I've noticed that john15 sounds off authoritatively on subjects he clearly knows nothing about. It's all chipper optimism - it has to work out, so it will!

Oh well.

I've noticed that john15 sounds off authoritatively on subjects he clearly knows nothing about. It's all chipper optimism - it has to work out, so it will!

explain to me what I don't know. I've been reading TOD same as you guys and I've been reading about peak oil since 2004.

Don't feed the troll - he never demonstrates that what he advocates will be adequate/workable/affordable/logical/correct/sensible/available even in the short term.

what examples do you have?

Again and again and again, since the Japanese got conned 20 years ago, a central bank makes superior policy to America on one hand, but invests in its faith in America's infallibility on the other, then gets burned by the investment while America lives off the proceeds despite its stupid policies.

Faith-based economics places America as the pope, and thus infallible. Or is this a hidden tribute to the empire?

U.S. Power Agency Warns High Electricity Prices Could Plague America ‘For Years to Come’

In a prime example of lazy and ultimately harmful reporting, the person who wrote that article couldn't be bothered to try and find out why coal and gas prices are going up, or even just tell us that it isn't known. (Although I think we here can guess about the gas.) Is the price to mine coal tied to oil, is it tied to some other commodity, is it transportation costs, is it remaining reserves? What? Useless. This is the reason why people with atrocious prediction accuracies like Daniel Yergin are referred to as "oil gurus" by the MSM, they are too lazy to verify their sources.

Cries in the Dark

Will it be different this time around?


(I think that just about sums it up. :)

"In this increasingly competitive, often hostile and rapidly changing world, Americans seem to have only one real choice. Clearly our national well-being cannot be based on unlimited raw materials or on unlimited manpower and cheap labor. Rather it must be based on our ability to multiply and enhance the limited natural and human resources we do have. Technology thus appears to offer us our place in the sun--the means to insure our security and economic vitality."--Dr. Malcolm Currie

Unfortunately, the United States chose not to follow Dr. Currie's advice, instead embarking on a disastrous resource war in Iraq.

Other countries, however, have pursued Currie's vision, as these videos from a wonderfully informative CNN series on energy illustrate:




Geezzzzuu leanan. I used to think you had it tough trying to dig up on topic links every day.

Now I think you have it even harder as every news server I go to has TONS of stories.

Keep up the good work and thanks for culling.

By the By, somewhat on topic. Its a year old but its very good;

"The Past, Present, and Future of Food"


"Michael Pollan, author of The Omnivore's Dilemma, and John Mackey, CEO of Whole Foods, continue their year-long public conversation about the future of organic food and agricultural sustainability. In front of a sold-out crowd at UC Berkeley on February 27, 2007, they cover some of the inconvenient truths about the world's food systems."

Steve Levine's blog at oilandglory.com has a book note.


His book is "Putin's Labyrinth". He also has some tour dates mentioned at the comments of the above link.

Canada Oil Sands Need Minimum Price $70 a Barrel, Statoil Says

Can somebody tell me where they get these low prices?

Suncor's 1Q08 financial statements indicate a production cost of $56 per barrel for its oil sands segment.

Its board of directors also approved a $24 billion, 200,000 BOPD expansion to be completed in 2012. That works out to a $120,000 investment for each additional BOPD of capacity.

If you figure a 15% ROI on that investment, the price to produce a barrel of oil is $105.

So where does the $70 come from?

hi DS
statoil will use a different technique than Suncor et al.
Here is a link to a nice animation explaining it ....

It's probably more costly and more remote ?!?!

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I posted this comment late on Friday, but I don't think most saw it. To me this smells funny, and thought it might be important enough to warrant reposting. I would really like input veterans like Moe G. Also, any discussion on recourse I can take (other than the obvious get a new broker) would be welcome. I would greatly appreciate if people, especially those whose only commodities experience comes from listening to Rush, would not hijack my thread with arguments about whether or not speculators are the root of all evil, are destroying the planet,are eating small children in satanic rituals, etc. Here is my post from Friday:

I got an interesting call from my commodity house today, MF Global. I currently hold 10 out dated natural gas contracts that I bought about 6 wks ago after I rotated out of oil contracts that I had held for about a year. I have not bought or sold since the initial purchase. My initial margin is about 70k, but I usually keep double in the account as T-bills to protect against getting called. As it happens, because NG is up, I have closer to 170k because I haven't bothered to sweep it out to a money market for a week or two. Today a rep calls, and says the risk dept. has been monitoring my acct for several weeks and noted that I have a large concentrated long position in energy, and they want me to either sell half the positions or post even more money than is already in the account (currently ~2 1/2 times NYMEX's initial margin req). When I asked how much more he said "2 or 3 hundred thousand more". This, with the money already in, works out to be as much as 6 times the NYMEX requirement, and close to half the nominal value of the contracts. When I started pressing him, the guy said he would get back to me this afternoon with exact numbers, and then never called. Anyone else ever had an experience like this. I am not normally a conspiracy nut, but this really reeks of something foul. I know last year MF Global had a "rogue trader" go short wheat and lost like a hundred mil. Could they be short NG now and getting squeezed? Either that, or are they trying to get essentially a free capital infusion, since it's so much more than they would post to NYMEX? Is it government pressure? My own theory is that maybe they thought they could scare me into liquidating into a large bid/ask spread market, with the intention to buy the contracts at a cut rate price to cover their own shorts--I just don't know. It's not that I couldn't cover it, but who wants to tie that kind of money up in 6 month T-bills at roughly one and a half percent, pre-tax, unnecessarily. If they can do this unilaterally, what is the point of the published NYMEX reg's. Is this legal? My understanding is that commodities contracts are not like shorting stock, where you may actually be borrowing money from the broker to buy and then short a stock. It's supposed to be more like earnest money in a contract negotiation. How is it that they allowed me to buy the contracts, never said anything, the value is up and the equity in the contracts has increased, but suddenly it is deemed too risky for me. Who regulates these guys governmentally? Could I file a complaint? Thanks for any insights.

johno, I absolutely hate MF Global. I have experience with them, and I will not trade through them. I don't know if what they did is legal--I think it is. I think they can require extra money on hand beyond margin requirements. But why would you put up with that, since other brokers aren't requiring that? Your action doesn't sound like it merits that kind of requirement.

I won't go into details, but I am suspicious of this kind of behavior from them too. Their policies are never spelled out--they always seem to get set on the fly and you get weird calls of exactly the type you describe from their salespeople. I suspect they need cash. Maybe their credit line got cut, or some bets went against them, but I'll bet they need a cash infusion and that's why you got that call. If I were you, I'd get out of there and put on your positions at another broker.

I have been trading at optionsxpress.com, and I like them. The money in your account that is not actually being held for margins gets automatically swept into an FDIC-insured interest-earning account. The interest sucks, but it's still interest, and your money is safe. Their margin requirements are posted, and they adhere to their posted policies. If there is going to be a change in policy, it gets posted in writing. None of this policy-on-the-fly stuff.

They had some problems with their software about six months ago that drove me crazy, but they seem to have resolved them, because there have been no problems whatsoever now in months, even when the markets are trading very heavily. You can call in your orders, or place them easily online. They've got good charting capability too, and it's free.

I have no financial interest in them, and I am sure there are other good brokers, but MF Global, in my opinion, is not a good broker.

Thanks for the info., I'll look into them. I called the CFTC today, and they basically said the NYMEX requiremnets are the minimum, and houses are given wide latitude to go above them if they want. I talked to the manager at MSGF, and he explained that they are asking for margin based on a 3 sd event, which was about 50 g per contract, but wouldn't tell me how they arrived at any of these numbers or give me anything in writing. He also said they would waive that amount, if you have a quarter mil of excess equity in the account, and so I'd "only" have to put in 15ok to get to that level instead of the full 300k the 3sd calc. would demand. What was weird was they seemed only to be concerned about NG. I still have one oil and 3 gasoline contracts, and they were never even mentioned, which seemed weird if the were really concerned about "energy" volatility. I agree that it seems they either need capital, or they were short NG. My main reason for posting was to see if other people who use other trading houses were suddenly getting these calls, which would have made me suspicious of some clandestine government activity to shake out longs and manipulate the market.

I haven't gotten any calls like this at all.

I don't think it's the gov't, I think these guys need dough.

And with the amount of money you've got in this account, you deserve better treatment. 3 sd's my 2ss!!

And I just called two different friends who are traders. They didn't get any calls like this either.

I use MF global for the few buys I have done. How hard is it to have your holdings transferred to another broker without being sold? Anything to watch out for? Thanks.


That's a very scary story and I don't know what it means. Since 2004 I've been long some out dated crude contracts. As the talk about "speculators" heated up I started to think that the one easy, bold step that regulators could take would be to increase the margin requirement to a large percentage, causing a massive required liquidation. The open interest in the crude contract has been steadily decreasing since last year (not nat gas though). I started to wonder whether big players are getting warnings from Washington that a big move is coming, allowing time for those with inside info to liquidate their positions. In February I switched all my long contracts to Dec09 130 calls and Dec10 150 calls, thinking that if they nuke the NYMEX with some move against speculators at least my risk is limited. I have been resting much easier since.

For what it's worth.

I see MF Global is a publicly quoted company.


Next time you get a call like this, maybe you should ask the broker about setting up a short position in MF Global stock.

The Wall Street Journal article.....

Cries in the Dark

....points out that Robert Hirsch no longer believes in a sharp peak in oil production but instead thinks a plateau more likely.

Mr. Hirsch says he has learned a few things since the report came out.

For one, he has revamped his view that the world would hit a sharp peak in production, followed by rapid output declines. Instead, like many in the industry itself, he says world-wide oil production will stick to a sustained plateau -- driving up prices as demand continues to rise. "We have already been on a plateau for sometime," he says.

Hirsch is hedgeing. it's like a weatherman saying it's going to be rainy because it rained all of last week!

Even if it plateaus for 10 years i'm sure a 150 year graph of oil production will still look like a hill! You take a bunch oil production graphs - say a few thousand and mix them up in a big pot - it's pretty clear from a statistical viewpoint that you are not going to get a sharply defined peak.

But no Peak? infinite oil! - simple as that.


Three points: (1) Hirsch is also talking about the possibility of $500 oil in not too many years; (2) Even if world oil exporters, in aggregate, show flat production, this means declining net oil exports, because of overall rising domestic consumption; (3) The Lower 48, which benefited from a very intensive drilling program and secondary/tertiary recovery programs, showed basically flat production for two years (down -0.8%/year), after peaking in 1970, versus the observed -0.3%/year that we have seen for the world, through 2007, relative to 2005 (EIA, C+C).

Bad luck the WSJ online edition ran out of column inches and didn't have room to post the URL to the
Hirsch Report or link to Roscoe Bartlett's Special Order Speeches on Energy.

Classic MSM-the article gives the reader the impression Hirsch is forecasting a permanent plateau in supply, which is a lie. It takes pains not to mention the length of the plateau (in Hirsch's opinion) or what lies beyond.

I think that it is a little unfair. The totality of Neil King's work needs to be put in context. My take is that he is gradually building a case for Peak Oil/Peak Exports, within the context of an overall economic system that is still operating based on the premise that high oil prices are temporary and that we can have an infinite rate of increase in our consumption of a finite energy supply (e.g., Larry Kudlow in early 2008: SELL OIL! BUY FINANCIALS!). And BTW, Neil wrote that piece last week about the two Saudis that disagreed with each other regarding Peak Oil

IMO, that is significant. Remember this article?

Shaping the peak of world oil production

The bell curve has a sharp crest, and you can't see it coming.

I guess he's changed his mind about the sharp crest.

Even a ten or 15 year wide plateau on a 200-300 year production cycle would still look like a fairly sharp peak. I guess the problem comes in defining "sharp peak" which I never saw him clearly explain. I still view a plateau of anything less than about 30 years (10%) as a fairly clear peak on the overall historic graph of oil production.

Yes, this does appear to be a change on his part but he has still not quantified the expected duration of the plateau, just as he never (to my knowledge) quantified the expected duration of the sharp peak.

forget peak supply we should also pay attention to peak demand.


petroleum consumption peak in Germany, Japan and Israel years ago yet the doomer scenario hasn't panned out there. what happened?

I like his comments about Italy who uses 14% less oil since 1995 yet they managed to win the world cup in 20061

Savinar says a 10-15% drop will put your economy in the hospital -- shatter the economy and reduce the population to poverty. Apparently Italy didn't get the memo.

Usually JD's rebuttals aren't this stupid. Every one of these examples is spending a record amount on oil as a % of the total economy of the country. You are coming off like a zealot-you note that Italy uses 14% less oil since 1995-and how much did this oil cost in 1995 and 2008? You should publish a book-call it THE ETHIOPIAN DIET PLAN-many countries have a limited amount of wealth to spend on oil products-your insight that they can't keep consumption up at dramatically increased prices is amazing.

Every one of these examples is spending a record amount on oil as a % of the total economy of the country.

now you mention that? I've talked about energy spending as a % of income with TOD and gotten nowhere. the simple fact is people here have said repeatedly we need more oil each year to grow and etc. TODers have said that declining oil production will hamper the growth of renewables. however, denmark's wind power has grown to about 20% of electricity.

so we've found out that the economy can grow after peak demand AND renewables can grow.

And what are your insights re energy spending as a % of income?

Regarding Japan, their natural gas and coal consumption are both up significantly, leading to a small increase of about 5% in total energy consumption through 2005, relative to 1997:


Regarding Germany, they had a large increase in natural gas consumption and a small reduction in coal consumption, leading to basically flat total energy consumption.

Total Energy Consumption Japan:

Total Energy Consumption Italy:

Total Energy Consumption Germany:

Using BP data, Energy consumption (MTOE) from all sources, 2007 vs. 1997:

Germany: Down 8%
Japan: Up 2%

other notables:

USA: Up 7%
Denmark : Down 16%
China: Up 94%
Turkmenistan: Up 101.5%
India: Up 55%

westexas- we're talking about oil not total energy.

True, as long as we have infinite supplies of natural gas and coal, we should be fine.

True, as long as we have infinite supplies of natural gas and coal, we should be fine.

wait a minute, wasn't declining oil supposed to make the growth of renewables impossible? what about nat gas and coal? how could denmark possibly increase their total energy? you have to have oil to build the coal plants. you need oil to get the coal to the plants and you need oil to get the workers to the plants how did the wind farms get built during declining oil consumption?

20% of denmark's energy generation is wind power and at a point this year it produced 40% of it's power from wind.

Wow! at a point this year wind went from 0.064% of world energy to what 0.0645%?

"Wow! at a point this year wind went from 0.064% of world energy to what 0.0645%?"

well we were talking about Denmark but if you want to bring the whole world into this that's fine.

Denmark seems to be at a forward edge of change here, and one of the few to have already altered course. Some of the larger more critical countries are still sitting on their thumbs. We're still at the early stages of decline and people are talking about problems building renewables not now or in the past but in the future. If we were significantly into decline now then you may have a point but otherwise, well, just what is your point?

petroleum consumption peak in Germany, Japan and Israel years ago yet the doomer scenario hasn't panned out there. what happened?

Umm...maybe it is because peak consumption doesn't have any doomer scenarios associated with it. It is peak supply, or rather the decline in supply that follows the peak, that has doomerish scenarios.

Umm...maybe it is because peak consumption doesn't have any doomer scenarios associated with it. It is peak supply, or rather the decline in supply that follows the peak, that has doomerish scenarios.

prices will rise and demand will fall in line with supply.

It depends on whether the 14% drop in oil consumption is due to efficiency or a decline in economic activity due to high prices or to a shifting of production (and consumption) to someplace like China, while maintaining the marketing people, corporate honchos, etc. as part of your economy.

Peak demand won't bring down oil prices or resolve the problem of high oil prices for the economy in and of itself.

This Peak Demand thing is nonsense. The idea is that people are adopting alternatives to oil because the alternatives are much better/cheaper than oil - "the Stone Age did not end for lack of stones" idea. But people are being forced to adopt alternatives to oil because oil price is so high, they are not rushing out to buy electric cars because they are so much better then ICE.

There is still plenty of demand out there, it is just not being satisfied by low oil prices.

they are not rushing out to buy electric cars because they are so much better then ICE.

well...the electric car is faster, has less parts, consumes no oil, costs less to operate, is quieter and doesn't produce pollution at the tail pipe so I would say that it is better.

Which exactly WASN'T his point. His point was that people that are buying them are buying them for reasons OTHER then they are 'better'.

And at current prices over a 7 year span including all costs Corolla outdoes the Volt and Yaris outdoes the THINK electric car.

http://www.theoildrum.com/node/4213 (Search for my two posts about this)

According to your all powerful god 'The Market' ICE is still the winner, even though electric is 'better'

And at current prices over a 7 year span including all costs Corolla outdoes the Volt and Yaris outdoes the THINK electric car.

so what?

According to your all powerful god 'The Market' ICE is still the winner, even though electric is 'better'

that's changing quickly. hybrids are soaring and every car manufacturer is designing a hyrbrid or an electric car.

Look at this bell curve.
See a plateau at the top of it, where the rate of change is tiny?
In the real world case of oil, this model suggests a level of production lasting 5 or 6 years. Say 73-75 mbpd of C+C.

I don't think of Peak Oil as a year, more a peak plateau from 2005 - 2008/9, with noticeable declines appearing 2009/10.

No argument from me with your numbers...

Personally I think of Peak Oil as some form of mass recognition event like a UN report on an energy crisis...

Look around you at the shopping Malls and behaviour of people -does it say: "Hey we got real problems here, better do something about it ASAP"? No, it says "What's Peak Oil?" -in 98%+ of cases...

Think how long Global Warming has taken to gain traction. The upshot of this is that it probably won't be until we get on the serious part of the downslope (when declines are 1-2%+ / year) that people will realise what's going on. Just make sure you got yourself a wood burning well insulated little house with 12 months food at this point! :o)


Larry King is going to have the CEO of Chevron on his shown tonight (CNN) - he's "going straight to the top for the answer..." as to how high gas prices will go.

I think Larry has a pretty tough time following along even when the subject is Britney et al. so I'm a little bit worried what will happen if the CEO starts bringing up any science type stuff.

Larry seems to have lost quite a few brain cells over the last 10 years, for whatever reason.

A tough interview from Larry king is like being mauled by a soggy muppet.

I'm watching this now, and the Chevron CEO doesn't come off as being quite capable of dressing himself in the morning...

Peak gravestones:


but it's above ground factors causing it;-)


-30 09:23: By David Bird

NEW YORK -(Dow Jones)- U.S. oil demand fell 3.9%, or 811,000 barrels a day,
to 19.768 million barrels a day in April - the lowest level in the month since
2002 - data released Monday by the Energy Information Administration show.

Preliminary data had shown a modest 52,000 barrels a day year-on-year rise
for the month, putting demand at a record for the month, at above 20.6 million
barrels a day, or more than 860,000 barrels a day greater than the revised

The shape of things to come? Ships this year. Apparently government regulations class it as a motorcycle.


By the end of this year, entrepreneur Steve Fambro plans to begin selling the Aptera. That means "wingless flight" in Greek, but don't think this car won't fly. It's a sleek two-seat, three-wheel electric vehicle with a top speed of 95 miles an hour. It comes in two versions - all-electric and hybrid - and should sell for around $30,000. (Only the electric is due in '08; the hybrid doesn't have a street date yet.)

Made of a Space Age composite material, the hybrid gets 300 miles per gallon, while the electric can travel 120 miles on a two- to four-hour charge.

The Aptera has been mentioned in a few drumbeats now, aswell as the loremo LS,GT and EV.

I find this design beutiful to look at!

36 wheel juggernaughts will be pulling these things of their wheels like gum off shoes! luckily where I live in the UK we love to cycle and these things would also be great on the road.


It will be sold only in California, at least initially. They are starting from ground zero in terms of dealers. If you bought one and brought it to the East Coast, where would you go to get it serviced? Although I suspect that the electric-only version is likely to be a lot more troublefree than a hybrid version.

As for me, I am just going to keep riding my bicycle. That's technology that is here and now, and widely available.

Bucky lives....see his Dymaxion Car below....designed in 1933


Looks like an Airstream:


Except it has 3 wheels (2 up front) and is teardrop shaped (fish body design is more aerodynamic).

That means "wingless flight" in Greek, but don't think this car won't fly.

Maybe they should call it the Opus, in honor of everyone's favorite flightless waterfowl.

(I wonder if it floats...)

From Rasevskii, Europe.

For AlanFromBigEasy...

Regarding the 16,7 HZ system used in Switzerland, Germany and Austria for main line railway electrification, this system was developed around 1915-1920 by the then Oerlikon Company of Zurich (later BBC and ABB) to allow the use of series traction motors (as were the de-facto standared for DC traction, such as tramways metros and local railways) -, on an AC supply. Using the lowfrequency rather than the industrial frequency (50HZ) greatly reduced the inductive effects (arcing at the commutators).

This allowed the advantage of high voltage AC catenary (15kV) supplying a transformer with a tap changer, on the locomotive, which supplied the series motors.

In fact, the first major rail electrification, in Switzerland, the Gotthard railway, was carried out in the 1920's using this system,eventually followed by other railways throughout Switzerland and Europe, using the same system.

The entire system is single-phase, from the generators, converters, etc all the way through the transmission and substations.

The frequency was chosen originally to be 16and 2/3 HZ (50/3) to allow economic motor-generator type converters running at 500 RPM. Later asynchronous converters (allowing a frequency slip) were developed as well as today static converter stations.

The single phase railway power systems in the abovementioned countries today run as a synchronous network, comprising many hydro and thermal power stations.

I have to mention also Sweden and Norway using the same technology, but here there is no integrated power system, instead individual (today static) converters are used along the lines.

rasevskii, Europe

Thanks !

I understand that they switched from 16.666... Hz to 16.7 Hz a few years ago. I would guess that Later asynchronous converters (allowing a frequency slip) were developed and made a slight Hz+ a positive.


Mt. Washington Road Rage Suspect In Court

A Pittsburgh woman was annoyed by someone in front of her driving too slow. So she pulled out a pellet gun and opened fire.

As I said the other day, my operating assumption is that all drivers (and especially pickup drivers) have the following characteristics: (1) They have a loaded gun on the seat next to them; (2) They just lost their job; (3) Their wife just filed for divorce: (4) Their dog just died; (5) Their mother got run over by a train (in the rain), in her pickup truck and (6) They are looking for someone to take it out on.

I was drunk the night my Mom got out of prison, and I went to pick her up in the rain;

but before I could get to the station in my pickup truck, she got runned over by a danged old train...

"The perfect country & western song"

Johnny Cash lives.

errr, if that was a snark of some sort ignore the following, otherwise the source:

"You Never Even Called Me By My Name"
Singer - David Allan Coe
Songwriter - Steve Goodman

...my operating assumption is that all drivers (and especially pickup drivers) have the following characteristics:...

That's a good assumption to have, especially in Texas. When I lived in Dallas in 1978, there was a news story about someone getting shot over a friggin' parking spot.


10 Reasons Why Oil Bubble Set to Burst
Posted Jun 30, 2008 01:03pm EDT by Aaron Task

says Liz Ann Sonders, chief investment strategist at Charles Schwab, who lists 10 reasons why "signs of bubble-like conditions are growing [and] increasing the odds of a major crack in oil prices":

* Congressional hearings on oil speculation.
* Bernanke's comments on the dollar.
* Airlines and autos getting crushed.
* Nonstop media coverage of the "energy crisis."
* Gasoline subsidies being lifted or limited in Asia and India.
* U.S. Strategic Petroleum Reserve additions being halted.
* Wall Street analysts' aggressive upside oil price targets.
* Record decline in vehicle miles driven while SUV sales implode.
* U.S. consumption of oil and oil products down nearly 4% in the first quarter.
* Iranian [tankers] with 28 million barrels of oil sitting in the Persian Gulf betting on higher prices (and/or because of no buyers).

Maybe I don't understand what a financial bubble is, but the only one that looks to me to even be connected to bubbles is the wall street analysts line. Am I missing something?

As usual, I recommend the following as a standard response to oil price predictions:

Predictions about oil bubbles, or rapid oil price increases, should be given roughly zero credibility unless the author is willing to certify that they are personally and substantially invested in that position, or explain otherwise. If Ms. Sonders isn't confident enough to put her own money behind it, why should anyone listen?

This is one of those ludicrous ideas that is often advanced.

The willingness to back an argument with money doesn't in any way indicate how correct the argument is. It only demonstrates a) how much money they have b) how much risk they are willing to take.

Even if a guy said he was willing to jump out of plane with no parachute, I still wouldn't believe him.

Willingness to back a prediction with a personally significant amount of money doesn't indicate that it's "correct," but it does indicate confidence in the prediction, which is useful for discriminating between those who are trying to mislead you, and those who genuinely believe what they're saying.

Additionally, putting one's money where one's mouth is tends to weed out the field, and would effectively eliminate the likes of Yergin, Lynch, etc. It's a bit like your example of the guy with the parachute (let's assume you made a relevant comparison, and discussed a guy who predicted that he would be able to survive the jump without a parachute--"willingness" is irrelevant here): I wouldn't believe him the first time, either, but if he survived several such prediction backed with his own action, that tends to support his credibility.

Contrary to your suggestion, this neither tells us how much money you have, nor how much risk you're willing to take. It doesn't tell us how much money you have because it is only relevant in the context of putting a personally significant amount of money behind your prediction--this could be $5 or $5 million. It does the exact opposite of tell us how much risk they are willing to take--if a predictor is confident in their prediction, then backing that prediction with money is, by definition, low risk within their world view. I also don't think this idea is "often advanced," though I could be wrong--can you point to any other example of this idea being advanced?

Jeff: I basically agree with you, but what you didn't mention is that dishonesty is rampant on Wall Street-just because Sonyers says something one cannot conclude this is what she actually believes-in fact, one can assume that she would have never arrived at her current position and status if she had always publicly announced her investment beliefs-many top notch equity analysts have been terminated for speaking their beliefs.

By the way, a few guys have successfully survived the act of jumping out of a plane without a chute.

Regarding congressional hearings, speculators are net short. If they drive out speculators, the price goes up, not down.

Bernanke's comments on the dollar had a little credibility (to the gullible) a few weeks ago. They have zero credibility now.

Airlines and autos getting crushed is what frees up supply for demand growth in China.

The media just keeps blaming speculators, which is partly why speculators are now net short.

The lifting of gasoline subsidies in Asia and India is, in effect, a discontinuation of a de facto rationing policy. Now people with the dough will be able to buy as much as they want. Goldman feels that this will increase demand.

Additions to the U.S. Strategic Petroleum Reserve are continuing into July. They are worth about $1.50 of the current price.

Goldman and Morgan Stanley gave some upside oil price projections. Lehman and a bunch of other incompetents have been predicting a price crash. The bulk of predictions are for a price crash, which is why index funds, investors and speculators have already pulled out of the oil market, or gone short.

Record decline in vehicle miles driven is, again, what frees up supply for China and India.

Iran's stored heavy oil is not in much demand by refineries because it's not good for making diesel, which is what is driving world prices. When the Reliance refinery opens, that type of oil will be in more demand. However, we have an ongoing production decline rate, so that by the time Reliance opens, and this heavy oil starts getting used, it will just be making up for a lot of lost existing production.

In January 2005 the commercial long position in NYMEX crude was 479K contracts. Now it's 808K. When the CFTC started publishing the supplemental report on the agriculturals a few months ago, lo and behold, the commercial long category contains a very large percentage of index fund longs that get perpetually rolled over. Presumably this may explain an otherwise inexplicable rise in what appears to be commercial long hedging in the oil market. It's the forced liquidation of these positions that might make the market fall precipitously; index fund investors are also getting blamed for the "oil bubble" on capital hill. What do you think?

Why would an index fund be classified as a commercial trader? Here is the definition from the CFTC web site (emphasis mine):

Commercial and Non-commercial Traders. When an individual reportable trader is identified to the Commission, the trader is classified either as "commercial" or "non-commercial." All of a trader's reported futures positions in a commodity are classified as commercial if the trader uses futures contracts in that particular commodity for hedging as defined in CFTC Regulation 1.3(z), 17 CFR 1.3(z). A trading entity generally gets classified as a "commercial" trader by filing a statement with the Commission, on CFTC Form 40: Statement of Reporting Trader, that it is commercially "...engaged in business activities hedged by the use of the futures or option markets." To ensure that traders are classified with accuracy and consistency, Commission staff may exercise judgment in re-classifying a trader if it has additional information about the trader’s use of the markets.

A trader may be classified as a commercial trader in some commodities and as a non-commercial trader in other commodities. A single trading entity cannot be classified as both a commercial and non-commercial trader in the same commodity. Nonetheless, a multi-functional organization that has more than one trading entity may have each trading entity classified separately in a commodity. For example, a financial organization trading in financial futures may have a banking entity whose positions are classified as commercial and have a separate money-management entity whose positions are classified as non-commercial.

I wouldn't think an index fund could hedge oil.

Well, that's exactly the point. Somewhere along the way the CFTC apparently decided to put index funds in the commercial category. If you look at the latest committment of traders report from June 24 for Chicago Wheat for example, you will see that the total commercial long position is 191K contracts. If you then look at the supplemental report you will see that the commercial long position is actually only 32K and the Index trader long position is 211K! (The discrepency is because the latter report also includes call options.) The CFTC proposed doing away with the committment of traders report last year and I understand that part of the reason was that they didn't think the categories were reflecting reality anymore. They didn't discontinue the COT report but started publishing this supplemental for the agriculturals. We can only speculate that the similar phenomenon is occurring in the crude oil commercial long category; it almost certainly is given the huge increase in that category over 3 years.

Anyhow, since these index fund are passive, buy-and-hold style investments, they just roll their massive postition over to the next month as the front month expires. This is one reason I think too many people on this board are wedded to the idea that investors/speculators cannot affect the price of crude oil. All super bull markets eventually get overbid no matter what the fundamentals and this recent flow of global money into commodity index funds is a powerful support to the bid, in my estimation.

global money into commodity index funds is a powerful support to the bid, in my estimation

Neither you nor anyone else has proposed a mechanism as to how that is possible[1]. Index funds do not buy oil. They buy paper. As Krugman pointed out in his article, a futures contract is just a bet. I bet you that oil is going to $150. You bet it is not. How does that bet cause oil prices to go up?

As long as the spot market is adequately supplied with oil, futures prices cannot and will not outrun the spot market. It doesn't matter how much money hedge funds, sovereign wealth funds, or any other funds put in the futures market. Sellers on the spot market will lower prices to attract sales. And if the spot market is not adequately supplied, then it was supply that drove the price up, not money inflows.

I will also add that at $140/bbl, the annual world oil market is $3.8 trillion dollars. Well under 10% of the world's oil is traded via futures markets. The amount of money index funds are putting into futures markets is peanuts. It really seems implausible that such a small amount of money affecting such a small amount of oil can have any significant impact on global oil prices, even if a mechanism for transmitting price hikes from paper to liquid existed.

This all strikes me as a manifestation of Amero-centrism. All we hear in the US news is Nymex prices. We hear about US index funds. But the Nymex futures market really is something of a backwater of world oil trading. TAPIS has substantially higher prices than Nymex these days. What are the index fund flows into TAPIS? And I don't think China and Qatar pay much attention to Nymex when they sign a private contract for oil. There are lots of oil pricing mechanisms out there, and most of them are at least as expensive as Nymex futures.

[1]If futures prices are higher than spot prices, a producer may elect to withhold oil from the market and write a contract for it instead. This can affect prices, as it pulls oil off the market. However, it puts the oil back on the market in the not-too-distant future, so over any length of time, it is relatively neutral. In any case, as Krugman also pointed out, spot prices have been higher than futures prices for months, so there is no incentive for producers to do this. That spot prices have outrun futures prices also pretty much proves that futures are not leading prices higher; just the opposite in fact.

It will be interesting to see what 2nd quarter gasoline consumption is in the US. The government rebate checks that were handed out recently amount to a subsidy for gasoline consumption, since much of that money went into peoples' gas tanks.

I find the "strong dollar" talk to be hilarious. Paulson has been doing that song and dance for months. The fact of the matter is that as long as the US economy is weak, government spending is out of control, and interest rates are low, the dollar isn't going anywhere but lower. And I don't expect any of those factors to get better any time soon.

The "sentiment indicators" (the market is going to crash because everyone thinks it is going up) are based on the assumption that all markets are cyclical and that extreme bullish sentiment marks cyclical tops. Well, if the current oil market was cyclical, oil would never have got about $70, and we'd be looking at $30-$40 dollar oil now.

When I was in Australia, I was told that wombats will always follow the same trail. If you block the trail with a fence, they'll just bang their head against the fence till they break through. Mainstream oil analysts remind me of wombats.

Up-top article also has the following

Russian oil exports fell 5.3% to 757mln bbl in Jan.-May

Russia's oil exports to the Commonwealth of Independent States (CIS), a loose association of former Soviet republics except the Baltic States, grew 2.6% in January-May 2008 compared with the same period last year

Exports to non-CIS countries fell 6.6% in the reporting period to 87.8 million metric tons (643 million barrels), the ministry said.

That's got to hurt.

Four Examples of 4P's--Problems with Proximal Petroleum Producers

Russia & Norway for Europe
Venezuela & Mexico for the US

Newspapers are the newest casualty in the economic decline due to rapidly shrinking ad revenues. This was predictible, and I expect TV ad revenues to decline and cause problems too. I expect to see futher evidence that the US economy cannot withstand high energy prices even close to current EU rates. Too many people were too close to the edge to weather the credit/housing squeeze and rapidly increasing energy and food prices, which has caused a big drop in discretionary spending.

Newspapers have been in a decline for a decade. The decline in ad revenue reflects reduced readership. Quality aside, I think people who read newspapers are less likely to be zombified than those who get all their information from television. Many who used to read newspapers extensively (like me) now get the same kind of information they're looking for from diverse sources on the internet. I submit the average television addict isn't really looking for information at all.

I think, however, in a down economy television and cable business will thrive. People need their entertainment, and even during the Great Depression IIRC the motion picture industry thrived. When disposable income drops and entertainment choices become more limited people will gravitate to the lowest common denominator: their televisions. If television or cable ad revenue declines it won't be due to declining viewership. Assuming, of course, that the grid retains the ability to keep them running.

TV is a dying medium. Just the other day, the average age of a TV viewer (of the major newtworks) in the USA passed 50, now outside of the prized 18-49 demographic for advertisers. Some shows literally have dying viewers-60 Minutes has an average age of 60 years-probably as many viewers over 70 as under 50.

I receive four "free" newspapers a week. The local papers stopped charging subscriptions 15 years ago.

All are packed with advertising, which pays the staff salaries and, I assume, entirely determines what the reporters are allowed to write about. The ad inches are allocated, in order, to autos, suburban real estate, and (mostly imported) groceries.

I am looking forward to fewer, thinner papers in future, but you are probably right. No one will want to go back to paying to read what they were getting for free.

What would objective journalism be like for people if it happened, though? Like waking from a dream I expect.

Best hopes for a sustainable Hawaii

Solar Water Heater Mandate for New Hawaiian Homes

Given the current price of oil, and the fact that over 90% of its energy is imported from outside the island chain, it’s not surprising that Hawaii would want to take action to diversify its energy supply and reduce demand. To that end, with the signature of Governor Linda Lingle on Friday, Hawaii has become the first state in the US to mandate the installation of solar water heaters in new residential construction.

The legislation, Act 204, mandates that new single-family homes built after January 1, 2010 will have to install solar waters to receive a building permit.


Not to be missed tonight at 7pm ET. (I posted this on Gail's OCS article as well)

Larry Kudlow interviews GWB where they crow King Dollar and chant Drill Drill Drill together.

Apparently Bush is considering using his powers to remove the executive decision that placed a moratorium on the NO areas in the US for drilling.

Personally, this is fantastic news and I hope it occurs. We can all grow gray hairs and wrinkles waiting for the oil to come in. Hopefully, our kids and grandkids will use it wisely.


From Rasevskii

For AlanFromBigEasy

On the 16.7 hZ, the change was in fact done to prevent overheating of the rotors of the asynchronous machines (an induction motor with slip rings) which drive the massive single-phase generators, so that there was always a frequency slip rather than an exact synchrounous operation, otherwise uneven heating of the rotor windings would occur,

There are several such converter stations running in parallel to allow interchange of power between the railway and public grid, throughout the region.

The rating of these machines is in the order of 25...30MW each (from memory).

It was originally allowed for the railway network frequency to vary by a much wider percentage than the public grid, therefore the frequency slip operation.
This is due to the large load variations of the railway system.

The first ever such flexible interconection was a converter station at Seebach just outside Zurich sometime around 1930 (?). I believe this unit is no longer in operation.

Do a Google on "Bahnstromumformerstation" if you can do German...

Rasevskii, Europe

Click on "reply" or "reply in new window" not on "start new thread".

EE Times uses "Peak Oil" in headline.

Electronic Engineering Times is a rather conservative industry rag. So I was electrically shocked, if not surprised, to see them nonchalantly dropping the phrase "Peak Oil" into one of their headlines today:

Peak oil profits ARM


The straightforward argument is that the more expensive oil becomes the more expensive is power in all its forms. And that is as true for notebook computers as it is for mobile phones and basestations.

So power, green and recycling conscious have we become, there is even the prospect that Intel processors could become first unfashionable and then within an Orwellian European Union, illegal.

BTW, ARM is a company that designs low power computer parts

Hello TODers,

Iran: 220,000 tons of sulfur exported in three months
I know very little about refinery operations: Is it possible for a refinery to cheaply and quickly extract the sulfur without doing the other processing and separation steps? Can R-squared reply please?

Is it possible the Iranian VLCC-logjam is now sweetened crude, and Iran is earning income from selling the extracted sulfur while they wait for crude prices to go even higher? Thxs for any replies.

Posts upthread would not be consistent with waiting for crude prices to go even higher. If Iran is having some level of unrest due to economic hardship among its population, it would most likely be selling those cargoes if they were marketable, and if they in fact belonged to the Iranian government, unless they had some sinister reason for keeping them where they are.

And, generally, sweetening is done at the refinery which will process the oil. Remember, this is rumored to be heavy, sour crude and not just sour and so it would still be low gravity. Sour gas is generally processed the same way.

Peak Miley Cyrus:
Entertainment Scientists Warn Miley Cyrus Will Be Depleted by 2013

I am sure that someone with a better grasp of Peak Oil in the MSM could find a lot of fun with this:


Hello TODers,

U.S. Refineries Budget $215 Million Over Next 18 Months for Maintenance Shutdowns on Gasoline and Diesel Hydrotreating Units, an Industrial Info News Alert

...One of the key units used in the production process is the hydrotreating unit, which generally operates on a continual basis, with the main objective being the removal of sulfur and other compounds for purification of the refinery process stream.
Sorry, I don't know if this helps or detracts from getting a correct answer for my post above.

Hello TODers,

Interesting read on potential market manipulation:

Farmers suffer fertiliser drought in wake of mergers

...Bill Heffernan, the senator chairing the committee, makes at least one warning worth listening to: "You cannot eat Incitec Pivot shares; you can eat bread."
Have you hugged your bag of NPK today?

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

I'm glad I bought 3 large bags of Peters water soluble fertilizer at a local store last March at last year’s prices! Nothing like it to get trees, bushes, and transplants on a fast start. Wish they had more when I found them.

I hug those bags every day!

Some Fear Atom Smasher May Swallow Earth

I post this not because I worry much that the earth will, in fact, be swallowed. I doubt it; and it is in fact being swallowed piecemeal by plague ape "Business as usual" in any case.

No, I post it because of the 'grabber' headline. This is an art form if you want to manipulate...err, convince... humans to think about something. Even the file name in the link - "doomsdaycollider" - is a masterpiece of memespeak. Most people will know how they feel about it without even reading the story. They will froth at the mouth about the irresponsibility of a 1-in-100-million risk while ignoring the fact that the planet we evolved on is being destroyed already.

Why isn't anybody screaming about this?

U.S. helped Iraqis On Oil Contracts: At a time of rising oil prices, the no-bid contracts, which were expected to be awarded Monday to Exxon Mobil, Shell, BP, Total and Chevron as well as several smaller oil companies, are coming as a rare prize to the industry in a country with some of the world's largest untapped fields and potential for vast profits.

For the past 7 plus years this brazen Administration, presided over by a tool of a President lovingly referred to as "W", has lied and cheated to manipulate events and give their cronies advantage and now we have the smoking gun and not an f##kin' whimper!

The American Heartland: Overnourished, distracted and complacent. Where is Harry Reid, Nancy Pelosi or the hero of the underdog, Barrack Obama?

Let's see now, what was that line in that speech in "3 Days of the Condor" by Cliff Robertson‘s character? "Ask them when they have no gas to fill the tanks to their SUV's…", or something like that. So what politician is going to tell the Merkin people that after all that blood and money they shouldn’t get their cheap oil?

The old standby-the trickle down theory-sure I will share my beer with you, right after I run it through my kidneys.

LOL! I love your way with words. I could never understand how people have fallen for the myth that giving to the rich enhances the possibility of a better life for them. WTF!?!? Bill Gates (insert name of billionaire here) screws us over for a few billion dollars in establishing a monopoly, gives a few million “back“ by his foundation, and were supposed to be grateful?

The Merkin people? Hmmm...rather odd...

Are you sure it isn't a maricon.

[please, in reality no offense intended, just a stupid pun]

I'm trying to make a graph to help explain supply and demand. So this picture shows 46 barrels produced in your typical 1/20th sec, plus 4 more barrels that could be produced at a higher price. Does anyone have a good idea what this curve really looks like?

The Texas & North Sea initial declines corresponded to much higher oil prices, about ten-fold for Texas, through 1980, four-fold for the North Sea, through 2007.


To explain my graph a bit better: The bottom line is created by taking a snapshot of production in (say) 1/20th of a sec. Each bar is a separate barrel of oil produced. The blue part is the cost of production of that barrel, so the Y axis is in $s. The orange bit above that is profit at $140/barrel. However that current price is irrelevant for my question, which is: what does the blue bit look like? I.e. what is the distribution of production costs of oil being produced now? In my picture I assume that half the oil would still be produced profitably at $20/barrel. When you get near the current price the curve is steep, which is why small increases in demand lead to high price rises (in fact high enough to quickly bring demand back down). I realise this static picture is not too meaningful at the moment: the following part of my planned talk will be about how the curve is changing and what that means.

Marginal cost or capital cost?
Marginal cost is power for the sucker pumps or whatever you call them for the stripper wells. Most oil comes from free flowing oil wells where you just open a valve, or from oil that is being pushed up from below by the water injection wells around the oil field that are putting in water to water drive the oil wells.
But that's not counting the cost of drilling/fracturing/completing, or the cost of drilling the wells that don't strike oil, or the cost of doing seismic surveys to find a likely place to drill.
Your graphic is probably as good a guess as mine. I can just ask you to phrase your question to marginal (today's cost to run the pump for the oil or the pump for the water injection) to full cost (counting drilling/fracturing/completing and exploring). I assume that you aren't going to get into the byproduct gas production and sales as an offset to the cost of the oil well?

I assume that the cost of production includes the interest cost on loans used to build the infrastructure (at its current replacement cost, or some such). The crucial distinction is not between marginal and capital, it is between costs which will be sustained whether pumping or not, and costs which are only sustained when pumping. On that basis it is not unlikely that pumping will occur that makes a negative profit. Indeed that is what Matt Simmons says was happening, so that the infrastructure was not maintained. However my plan is to oversimplify: that will be hard enough for the envisaged non-expert audiences.


Your effort is a noble exercise but really impossible. It's difficult for a compnay to do the same calculation on it's own reserves. Many wells that have been drilled and completed don't ever recover the cost to drill them. But enough reserves were there to justify the additional monies needed to complete it. As other have stated it might only cost $10/bbl to "lift" a well. Selling the oil for $140/bbl would be a great deal then. But the well may have cost $3 million and might produce only $2 million before it depletes. But you wouldn't stop producing it if you're making $130/bbl by the effort.

And then when you try to figure the overall profitability of a company it's gets even worse. My company is making a great rate of return on some tight gas sand wells in east Texas. Individually a well might deliver a 30% rate of return. But then again, last fall I drilled a Deep Water well that cost us $148 million and it found nothing. Those tight gas sand wells might make $5 million profit each but it's going to take a lot of them to make up for the loss of that one offshore well. So unless you have the details of a company's expenses and income over a long period (at least 15 years) it really difficult to tell if they've been profitable at all let alone what the profit might have been.