Why oil costs over $140 per barrel: the failure of leadership

Bush, Harper, Fukada, Brown, Merkel, Sarkozy and Berlusconi. The leaders of the G7 (+Russia) will meet this week in Japan. Their collective failure to reduce demand for oil, natural gas and coal within their respective economies is one of the main reasons energy prices are spiraling upwards out of control.

High oil prices

The leaders of the G7 have been howling about high oil prices. They have been to Jeddah to beg OPEC to produce more oil. They have tried to blame speculators for bidding the price up. They do seem to understand that prices are high owing to a growing imbalance between supply and demand at the price they would like to pay. But they have done nothing to try and solve this unfolding crisis apart from fiddle while Rome burns.

The only part of this equation they can control is demand. It is therefore imperative that action is taken to curb demand for oil within the G7 - now!

But no. Rather than show any form of leadership the favored course of action by all is to allow the market, via price, to ration oil supplies between countries and within countries - and then quite amazingly to complain about the high price their common policy has produced.

The G7 policy of allowing the market and high oil prices to ration supplies is working. G7 oil consumption appears to have peaked at 1681 million tonnes in 2005. It is unlikely this figure will ever be surpassed (though it was exceeded in the 1970s and 1980s).

It is therefore the conscious decision of the G7 leaders to progressively deny poor people access to oil and to energy in general. The creation of a new impoverished underclass within and without the G7 / OECD will have dire consequences for our society. This is the outcome of G7 policy and the leaders must bear responsibility for these consequences as they unfold.

More equitable means of rationing oil supplies are available, but these options have thus far been spurned by the leaders of the G7.

Energy poverty

Many who have followed this debate for a number of years have wondered how the peak oil story may unfold. The early chapters are now written as electricity bills, natural gas bills, heating oil bills, gasoline bills and food bills all rise, the disposable income of lower income groups is being squeezed. For many I imagine this may already mean selling that car, turning down the heating, eating less meat. All this of course is sensible and good conservation.

But we are likely already in sight of many going cold and hungry in winter time. And we are already witnessing rioting by groups who's livelihood is threatened by rising fuel prices. I fully expect to see widespread strike action within the public service workers in Europe this year or next, where strong and reasoned Trade's Unions still exist. With the squeeze on discretionary spending comes pain for a number of business sectors - leisure, airlines, airports, pubs, restaurants and retail to name but a few. Unemployment will inevitably start to rise - and how will the newly unemployed cope with those rising energy bills?

This is just the beginning of a Long Emergency that the G7 leaders meeting this week in Hokkaido fail to understand and are doing absolutely nothing to prevent.

Starving millions

There are a number of different reasons for food prices escalating around the world. But two of the most important ones are converting food to liquid fuel and high energy input prices to farming. The G7 leaders, the OECD and their affiliates are to blame for this. They alone have the power to change the policies that have led to this point.

The G7 (8) summit

The summit has three main themes:

The World economy
Environment and Climate Change
Development and Africa

Reading the Japanese guidance on how to solve these issues leaves me with a sense of despair.

Discussion will include the sustainable growth of world economy, trade and investment, protection of intellectual property rights and energy and natural resources. Japan aims to bring a specific outcome including the measures regarding rising oil prices and toward further liberalization of trade and investment.

It seems thinking is still very much focussed on growth and liberal markets. These objectives may well help Japan continue to secure their share of global resources but they certainly will not reduce energy prices and work towards a more equitable distribution of resources.


There are no simple and painless solutions to the greatest crisis ever faced by industrial civilisation. The road to sustainability must start somewhere but I very much doubt that the path will start in Hokkaido. Here are a few pointers as to what I see as the urgent actions required to address the early years of this crisis:

  • Recognise and publish the enormous problems associated with the future decline of fossil fuel production so that the population understands the reasons behind actions being taken (immediate)
  • Introduce and enforce lower speed limits, uniform throughout the OECD (immediate)
  • Introduce regulations on vehicle engine size and efficiency, uniform throughout the OECD (phased introduction from 2009)
  • Ban the inefficient production of liquid fuel from food throughout the temperate latitudes of the OECD (effective 2009)
  • Introduce regulations on the efficiency of electrical power generating plant (phased introduction from 2009)
  • Abandon plans for carbon capture and storage unless this is in context of miscible gas flooding of old oil fields leading to enhanced oil recovery (EOR)
  • Abandon all plans for expansion of fossil fuel based transportation and power generation.

This is a list of emergency actions required to reduce demand for oil and energy immediately. The voluntary reduction in demand should lower prices, reduce inflationary pressures and provide a few years breathing space. This must then give way to a structured long term plan for reconstruction of power generation systems and transportation networks built upon sustainable electricity.

In the series

Why oil costs over $120 per barrel

Why oil costs over $130 per barrel: the decline of North Sea Oil

A State of Emergency

And by Jerome a Paris:

Countdown to $200 oil meets Anglo Disease

Countdown to $200 oil: $140 oil and speculation

Countdown to $200 oil: International Energy Agency says current prices justified...

And a few more charts

G7 natural gas consumption ticked up in 2007, perhaps reflecting a relatively cold N hemisphere winter. It also indicates greater elasticity of supply for gas than oil. Gas production has not yet peaked and expansion of LNG provides that elasticity. This will not last much longer.

G7 coal consumption continues to rise demonstrating the political imperative of providing heat and power above concerns for CO2 emissions.

The US consumes more fossil fuel than the combined remainder of G7. There are definite signs that fossil fuel consumption in the G7 is flattening out, the decline in oil consumption being compensated by rising gas and coal. I think it is fair to say that all of this flattening is caused by high price leading to conservation and demand destruction. The total failure of climate orientated energy policy is amply demonstrated by these data.

Oil makes up almost half of G7 fossil fuel consumption. As global oil exports continue to fall so it is highly likely that G7 oil imports and consumption will fall. The question is for how long can rising coal and gas compensate for declining oil?

On the subject of natural gas, when are we likely to experience winter shortages? This year? Next?

That will likely be weather dependent. First hard winter we get in W Europe and Russia I'd guess we are in deep trouble. Failing that, we will likely continue to scrape through winter with Norwegian gas and LNG until about 2015 - if we can afford some how to pay for it.


I am not convinced that we will get the Norwegian gas supplies we need. About 3-4 months ago someone either from the Norwegian govt, or one of the oil/gas companies, announced that they could no longer guarantee gas exports to the UK since continental Europe was their top priority. A source told me that what it boils down to is the Norwegians have contracted all their available gas to continental Europe, and if the Europeans take all the gas available under contract there will be little or none left for the UK. Unfortunately I cannot find the original article in the media, I think it must have been from one of the several newsletters I get. And nothing comes up on Google now. But you have to wonder why this was not on the front page of every British newspaper?

On the other hand, ExxonMobil/Qatar have said that they are ready to send 15 million tonnes per annum of LNG to the UK, starting I believe some time this year. This is just over 20 bcm/year natural gas, so could make up for any Norwegian shortfall. I don't know of anyone who has actually seen or is aware of the contractual details, but my guess is that the UK will be offered delivery first, as long as they are willing to pay more than anyone else. Given that Japan in particular has been paying over $20 per million btu for LNG over the last winter, it means that UK gas prices will have to rise quite a bit more than 40% to guarantee delivery. Doubling would be more like it, especially if the USA gets desperate for supplies this autumn/winter, which is looking increasingly likely. My best guess is that we will get some of the 15 M tonnes, but not all of it.

Our new (rented) flat incidentally has a useable fire place in the lounge, a feature I think is about to become very important in the UK. We will be well stocked up with smokeless coal this winter, and candles. I think the gas central heating system will not work when there is no electricity.

Hello Doug

below is a link to an article in the Guardian form 20. April 2008 about said subject;


Last week senior Norwegian energy executives also warned government officials and regulator Ofgem that they do not see the UK as a priority for exporting gas. Norway supplies about one-fifth of the gas consumed in this country. With North Sea reserves dwindling, the UK is facing having to import about half of its gas from countries such as Norway and Russia by 2010.

At the Energy Markets Outlook seminar hosted by Ofgem and the Department of Business, Enterprise and Regulatory Reform (Berr), executive vice president Thor Otto Lohne of Norwegian pipeline company Gassco said that long-term contracts to supply mainland Europe meant the UK could not always rely on Norwegian gas exports, regardless of the price we were prepared to pay. 'The UK is a secondary priority. Like it or not, that is a fact,' he said.

The company Gassco does not sell gas, but operates all Norwegian transport systems and receiving facilities.

. . . about half of its gas from countries such as Norway and Russia . . .

Our middle case has net oil exports from Norway and Russia approaching zero in the 2025 time frame.

Hmm, well far be it from me to point up, but the pipelines exporting gas towards europe could easily suffer 'an accident' if the gas going towards the UK weren't maintained.

Thus Gassco might find their priorities rearranged, like it or not, that is a possibility.

Normally the operator of a LNG plant will try to run it at a year around optimum, which could be 90 % of nameplate capacity. This would for 20 Bcm/a turn into 1,5 - 1,8 Bcm/month or 50 - 60 Mcm/d as a continuos flow.

This is the difficult part with LNG, it is hard to adjust the process to the seasonal swings in demand.

Another way to do this is to let LNG constitute part of the base load and then let the domestic gas fields handle the huge swings in seasonal and daily demands. I don’t know if this is happening?

In a world of logic, the LNG in-port would be owned by UK gov plc and would be the supplier of last resort for domestic/essential methane only. Presumably the liquified product can be stored, at high energy density, 'indefinitely' as required, with evaporation pressure vented into the gas grid. Makes a lot more sense than pressurising room temp gas elsewhere.

[OK, on second thoughts, I have lost confidence in any gov management ability..]

They can't get more storage facilities for Natural gas through the planning system - so are totally exposed to a cold snap in the winter.

We now have a yahoo group for UK TOD'ers - 10 members at the moment- if anyone else wants to be on the list to check out comments please e-mail me from my profile - unless you choose it no mail will be delivered to your personal e-mail box, but it should be handy for specific discussion of UK issues where there is not an appropriate thread on TOD, and any suggested measures.


Any update on following from Guardian June 11 ...?
best, PhilH

Italian energy group Eni is paying £210m to take control of a North Sea field which it plans to turn into Britain's biggest gas storage facility.

That's interesting, but they still need to source gas in summer for storage for use in winter.

I don't know how that application is progressing, but here is an overview of the lack of storage in the UK:

If nat gas was to be sold on parity with oil (using an oil price of US$144/bbl) based on energy content it would cost US$24 MMBtu or approximately 120 p/therm at the trading point or the beach.

Nat gas contracts (futures) for December 2008 in UK recently obtained 108,96 p/therm.


In addition to Peak Oil, the world is also faced with changes in climate due to the increase in CO2 and other GHG which result. Last summer's exceptional melt of sea-ice over the Arctic Ocean also resulted in an outpouring of sea-ice and fresher waters from the Arctic into the Greenland Sea and this flow continued into the Labrador Sea. One result of this process might be a reduction in the Thermohaline Circulation (aka: THC), which could bring colder weather to Europe in winter.

As I have watched the sea-ice cycle in satellite data over the years, I noticed that this year, the Odden Ice Tongue did not form in the stream of sea-ice to the east of Greenland. This feature has been associated with THC sinking in the Greenland Sea, thus it's reasonable to conclude that the THC may not have happened in that location this year. The impact of this flow on the Labrador Sea could also be significant. Recall the European experience after "the Great Salinity Anomaly" of the 1970's. One can't be sure without making proper measurements of conditions in the ocean, but I wouldn't be surprised if Europe experiences colder weather next few winters...

E. Swanson

Euan I don't know how much of the refining capacity of England is complex with its higher NG usage or much about it at all. But even within normal limits if England suffers a shortage of NG I'm pretty sure it will be crippling for its refineries. Probably forcing them to shut down. This would be for both direct use of NG and for indirect uses such as electricity. Refineries are pretty sensitive to problems in the network if you will.

Not only would this cause problems with petrol delievers in the UK but worse since I'm and American shortage of gasoline exports to the US in fact the UK would become a net importer until it solved its NG problem.

Given this would be happening at the same time US NG demand is high and US refineries would be having there own problems getting NG and probably likely to try and get unseasonaly high imports would face a bit of a double whammy.

Yet again it seems the secondary effects of peak oil will means we probably won't make it far down these nice pretty post peak curves.

To answer my own question, this is from Reuters today:

"Europe faces fresh New Year Russian gas crisis"


But we are likely already in sight of many going cold and hungry in winter time.....With the squeeze on discretionary spending comes pain for a number of business sectors - leisure, airlines, airports, pubs, restaurants and retail to name but a few. Unemployment will inevitably start to rise - and how will the newly unemployed cope with those rising energy bills?

UK gas bills are already projected to rise by 40% later this year; electricity by 30%. Such rises, affecting every household, will in turn lead to further reductions in discretionary spending.

Unemployment, already rising, will see a sharper uptrend as businesses who hoped (believed the MSM?) that energy price hikes will be temporary have been reportedly holding off workforce reduction programs. The worsening credit and household spending situations will shortly force their hand. Already this past week housebuilders have been shedding labour in a big way; Barratt for example is laying off 1000 after their share price fell 96% in just 12 months. Taylor Wimpey is also laying off after failing to secure £500bn of 'emergency funding'.

GB doubtless already regrets not calling the 'snap election' a few months ago - he's going to regret it more this next winter.

Consider UK oil situation against the latest official Norwegian Petroleum production estimate:

That is the most optimistic scenario :)

As for natural gas from Norway, the only thing I can find that is current and official is the Wood Mackenzie assessment from July 2008 for Norway's Ministry of Petroleum.

However, I have hard time deciphering this graph. The accompanying text reads:

"Charts 9 and 10 show the estimated future liquid and gas production profiles for the start and end year datasets.

The liquids profile for the near term is significantly lower during 2008, 2009 and 2010. Beyond this point, there is an increase in liquids production averaging at approximately 18% higher from 2012 to 2025. The lower estimation in the near term reflects the increased competition for resources, particularly drilling. The medium term recovery reflects improved oil recovery from existing reservoirs as shown by the increased
number of enhanced oil recovery projects being undertaken.

The main difference in the gas production profiles between the two datasets is because of the postponement of the Troll Future Development project. However, the near term fall in gas production is offset from around 2025 when the gas reserves in the Troll Oil area are developed"

I know Euan, Campbell and others have already assessed the more realistic scenarios, but it would be interesting to find what the official Norwegian models predict.

Even against these types of optimistic data sets, the leadership is indeed lacking.

Is it just the classic case of Cassandra not being a good role model for a politician?


The charts (charts 9 and 10) you refer to was developed by Wood Mackenzie.
There is something that does not add up with regard to the scaling, the shape of the production profiles looks to be in line with other forecasts though there may be some deviations on actual numbers.

The best thing would to have available resourcedriven forecasts based upon latest available NPD data.

Thanks, I had an uneasy feeling about the levels as well, which is why I asked. I can't find more recent NPD data on natgas forecasts.


The diagrams below is lifted out of the Norwegian Ministry of Oil and Energy (MOE)Factsheets for 2008.

The diagram below shows total petroleum production from NCS

The other shows historical and forecast nat gas production from NCS.
Now compare the shapes of WOODMAC and MOE forecasts.


So the greeny blue colour is discovered developed declining at what is likely a too optimistic rate that already has enhanced oil recovery (EOR) embedded in it. But then the orange is more oil to be produced via EOR reducing the already too low decline rate even more. The green is discovered undeveloped - maybe possible maybe not, I thought virtually all the big oil and gas fields were now "on". And the red is yet to find.

So in summary this is fantasy land. Norway needs to understand the harm that may be done to W European clients for nat gas by promising more than may be delivered.

Time you did a hatchet job Rune on your fellow countrymen.


Sorry I should have translated the legend and the diagram you refer to is total Norwegian petroleum production as forecast by NPD;

The greeney blue color; fields in production or sanctioned for production (proven)
Orange color; possible increases from EOR (Possible)

Light green; Discoveries considered for development (Possible), some of this will become economical when oil prices hit US$1 000/bbl
Red color; Yet to find

The attached figure (at the bottom) shows actual NCS production against a prediction with Hubbert's based upon actual NPS production data as of 1999. THIS IS FOR CRUDE OIL (C only).

Then is the annual 5 year production forecasts as of 2006 - 2008 from NPD shown and lastly yours truly forecast based upon a field by field forecast (as of 2007).

Note that NPD revised down their forecast with 20 % (or 0,5 Mb/d) from 2006 to 2008.

My forecast LIKVERN 1 towards 2012 is still below Hubbert's and I have been 2-3 % within actual figures in my forecasts through the recent years. Note the difference between LIKVERN 1 and the most recent from NPD, it is close to 0,8 Mb/d by 2012, and it is not my field by field resource driven forecast that EIA or IEA use in their models.

I may come back later with my resource driven forecast for nat gas from NCS,.... but don't expect any good news.

I may (as part of writing a post about future Norwegian petroelum production with the preliminary working title "Lies, damned lies and governmental forecasts" the Norwegian story.

€, are you still optimistic? You want me to tell you more or.......do you prefer water boarding? ;-)

Nice chart Rune - I think we need to have a campaign on NPD forecasts.

We can maybe use the discussion session at Sparks and Flames to flesh out the vital realities of the future of Norwegian oil and Gas production - these parallel shifting forecasts look like sh*t to me.

I presume official representatives from Norway will be present and will want to ask questions.

Should be blame the government or blame ourselves? No one held a gun to our heads to buy that SUV, use plastic water bottles, buy products from overseas, etc.

The government has more immediate priorities viz;

Sex education for 4 year olds
Equal rights and oportunities for all people who are not and never will be equal.
Infinite health care for which there is no prospect of the country affording it, sorry we have PFI to save us.

We now have the private equity bubble comming home to roost. I wonder how loud a pop that will make when the debts are called in with no prospect of them being able to to be paid off. The list of large (ex) uk firms with private equity debt around the neck cannot be ignored. Wimpey, Boots, BAA, INEOS etc etc. I don't know who said it but "We are Living in Interesting Times"!

Common sense initiatives such as reducing speed limit from 70mph to sy 55mph, that would cost nothing except lost revenue to the government, sorry, we were not long back talking about lifting it to 80mph.

Common sense initiatives such as reducing speed limit from 70mph to sy 55mph, that would cost nothing except lost revenue to the government

and lost votes

"and lost votes"

Well pointed out! All parties would have to agree, oh dear.

There are two costs to lower driving speeds.

1. Whilst driving one is not being productively employed (unless you are a bus driver). More time spent on the road is a waste of time.

2. Slower speeds mean a greater number of vehicles on the road at any one time, causing congestion. This feeds positively back to #1.

Nevertheless, the party that introduced lower speed limits would gain my vote.

Slower speeds mean a greater number of vehicles on the road at any one time, causing congestion. This feeds positively back to #1.

I saw an equation once for maximum road utilisation. Since total braking distance is a function of a term proportional to speed (thinking distance) and a term proportional to the square of the speed (braking distance), as you increase speed you need a disproportionate distance between vehicles, so the road density has to be reduced. There is an optimum speed at which the road can carry maximum vehicles per unit of time and it was quite low, something like 30 mph. Unfortunately I cannot locate the equation, but it was derived from an argument that took plce in the letters section of the IMechE journal, Professional Engineer. Nothing in life is as simple as it first appears!

As your point #1 there is no argument with that one. We will just have to change our mindset and realise energy conservation is more important than human life. I get paid per mile and don't get overtime so I have to judge myself which is most important, my time or a reduced fuel bill. Since my decision varies with my mood on the day (had a bad day want to get home or take a nice drive through the country) its not a very reliable measure

You're correct. As I recall from my traffic engineering courses... the most effecient speed for processind vehicles past a point is around 43-45 mph.

This is why part time speed limits work on congested motorways like the M25. They smooth out the bottlenecks and increase overall speed through the congested sections. Regular drivers recognise the advantage and don't exceed speed through the limits.

Let's not forget a likely premium from fewer and less serious road accidents. Reduction of G7 / OECD energy trade deficit that will strengthen our currencies and reduce inflationary pressures. Improved air quality. And for those who care, reduced CO2 emissions.

Lost tax revenue from lower gasoline prices could be recouped by slapping 10% tax on jet fuel and increasing that at 10% per annum. That should sort out the men from the boys in the airlines and the transport sector in general.

As for lost votes. Labour are struggling to find a candidate to stand in the upcoming Glasgow East bye election - a rock solid safe Labour seat. It is not possible for things to get substantially worse for Gordon Brown. So he could make his name by introducing a raft of the most unpopular measures imaginable, safe in the knowledge that these will unlikely have a negative impact upon his or his party's future.

Unfortunately Gordon Brown and his bunch of sycophants have no leadership skills whatsoever.

Couple that with their inability to see what's right in front of their eyes, and there's little hope for any sane action from them.

But, the UK isn't the only G8 nation, and we can naively hope that another nation takes the lead.

The treasury minister (Angela Eagle I think) was being interviewed the other day on the "Today Programme" about the economy and she stated nobody could have predicted the current oil price. I have been following the energy debate for several years now and a number of people have been suggesting oil prices would rise significantly in the near future. That near future that they were referring to happens to be now. The most prominent is obviously Matthew Simmons, but there are others for example the late Ali Samsam Bakhtiari . 2007/2008/2009 have been predicted as the crunch time from at least 2004, its worrying that is so close to being true.

If you consider the growth in China has averaged about 10% over the last 25 years, thats a doubling every 7 years. Assuming their energy consumption tracks gdp, they will require more energy in the next 7 years than the total sum of what they have consumed in all the time before. This is why Hubbert and co are fairly close to the mark in time, even if not the ultimate volume. In China's case 7 years of wrong prediction could be a 100% error in volume consumed. I would imagine Hubbert knew this fact when he gave a range of a few years. He would have been aware that he could be way out on volumetric predictions and still close to the mark timewise. Sooner or later the effect of that simple function e^x will need to be grasped otherwise its curtains.

See Albert Barlett!

I wish we could describe stuff w/ only e^x, outside of the trivial case of constructing any function out of a piecewise set of exponential functions of course, but unfortunately social activity isn't very easy to predict precisely regardless of what people claim.

The point about the exponential function relating to economic / population / resource consumption growth is not that the curve will be inexorably followed, but that it cannot be.

Doesn't that imply the individual making the claim is assuming that others believe it can be followed? I've never met anyone who believes in an infinite Earth. Hell, it also can't be discontinuous, and I don't see many warning about that danger. ;)

Oh, the followers of the cult of perpetual economic growth spout such nonsense all the time.

I guess you've been turning a blind eye to politicians and "economists".

Keeping in mind of course that growth during their term certainly isn't perpetual... Politicians and the like can promise a solid gold Humvee and supermodel husband/wife to everyone and anyone, but that doesn't mean people actually believe what they spout, even if they do vote for them.

Not to worry, the UK government is on the case!

Stansted given permission to increase passengers numbers to 40m

BAA's controversial plans for a second runway at Stansted will be sent to a public inquiry by ministers this week - but the company will at the same time be given permission for a big increase in passenger numbers at the Essex airport.

Numbers could rise from the present 23.5m to as many as 40m following ministers' decision to scrap current restrictions and allow an increase in flights.

The move to a public inquiry on the £2.3 billion second runway means a final decision on whether it can go ahead is now not likely before 2011 at the earliest. Ruth Kelly, the transport secretary, is expected to announce the two Stansted decisions this week.

Brown hints at fuel duty freeze

Gordon Brown has said the delayed 2p rise in fuel duty was something that will be looked at "very, very carefully" over the next few weeks.

He refused to say it would not go ahead but told MPs: "I think you will find that in most years since 2000 that the duty has actually been frozen."

There has been speculation that the government is to shelve the rise in this autumn's Pre-Budget Report.

Chancellor Alistair Darling also said he was "very focused" on fuel duty.

On Wednesday, lorry drivers held a second demonstration in London demanding cheaper diesel.

UK Government's long term infrastructure planning forecast of $65/bbl in 2006 falling to $53/bbl in 2020 should see them through, especially when there's another 25Gbbls headed our way from UK NS!

People don't change. If they run into difficulties they usually just keep doing what they've always done, but twice as hard. Add in greed and the stratified class system we've got and it's not surprising.

George Osborne, Conservative Shadow Chancellor would reduce fuel duty to compensate for petrol prices
UK transport fuel duty is a fixed sum currently GBP£0.5035 per litre of ultra low sulphur fuel paid as it leaves the refinery. Other fuels vary.
Aviation gasoline is lower.
Heating oil is a much lower duty GBP 0.0966 per litre.
(My kerosene heating oil for winter (rural area - no natural gas)tracks doubling of oil price; petrol/gasoline price of course responds well below in percentage terms.)
Obvious political opportunism aside, this could be a dangerously damaging ploy if it makes explanation of reality a political impossibility.

The Tories haven't been in opposition for 12 or so years for nothing. I really begin to struggle to find words to challenge the shear ignorance and stupidity.

The price of oil is high because demand is in excess of supply. Any move to support or increase demand is the move of a total moron.

I imagine we can look forward to a bidding war between Darling and Osborne to see who can bid down the tax on oil products the most.

After that we might subsidise the retail price etc etc..

Corporate nirvana is to be a near monopoly; to have unsatisfied demand so you have pricing power. What TPTB are doing isn't moronic, it's actually a reasonable strategy if most of your concern is with the top 1% of your society. Bad luck for the peons, of course, but as Jerome à Paris is wont to say, starvation and freezing to death are very efficient market clearing mechanisms.

Just remember the guys currently running the planet had no trouble running Argentina into 50% unemployment and a ruined economy to get their money a few years ago. Equity is the least of their concerns.

Blaming politicians feels good because then I don't feel so guilty about my own lack of effort.

My thoughts exactly.

If you want demand to drop, then demand less. You can't blame political leaders for your own greed and wastefulness.

On the subject of waste:

"'Stop wasting food', urges Brown"


"Mr Brown said "unnecessary" purchases were contributing to price hikes, and urged people to plan meals in advance and store food properly."

So, we've suddenly started wasting food whereas we didn't before? We've got it so good under Brown's mismanagement of the economy that we're deliberately purchasing too much food and throwing it away?

I'm not going to hold my breath waiting for his call to stop wasting oil.

We've got it so good under Brown's mismanagement of the economy that we're deliberately purchasing too much food and throwing it away?

About anyone "managing" the economy I am sceptical, it sounds like a Communists' dream. In reality they just fiddle about with the details like interest rates and the occasional subsidy for their mates.

However, it is true that people throwing food away is a sign of relative prosperity. I'm pretty sure there are no half-eaten meals in Darfur, no soggy lettuce at the back of the fridge in Ethiopia, no moldy cheese biffed into the bin in Zimbabwe.

If we are well-off enough to be able to afford to waste stuff, then we are not really in a position to complain about our prosperity, we're doing alright.

My point was quite simple - there's been a rapid increase in food prices which does not correlate with a rapid increase of wasteful consumption of food.

One of my main gripes with food retailing at present is 2 for 1 offers where the price of 1 is ridiculously over-priced and you are placed under severe pressure to buy 2 - and it gets wasted.

There is also widespread evidence of miss pricing where goods are offered at half price - a tray of 6 raspberries being reduced form £4 to £2.

I think there is already legislation in place to prevent this - never enforced. And the supermarkets would howl now if anyone moved to make their trading circumstances more difficult. The UK supermarkets, especially Marks and Spencer are being hit for 6 (cricketing term for N American readers). Higher input food prices, higher electricity bills to keep all cool, higher transportation costs, lower disposable income - big trouble brewing I believe.

The supermarkets might love some sort of semi-nationalised status - the principle being to 'privatise the profits, socialise the losses' as usual.
Tough times, little profit and share price tanking might make developing a social conscience all of a sudden pretty attractive.

Agreed, the blaming is too convenient. We have a cultural, societal failure on a global scale. Putting up some grayed out pictures of current government executives is really bush class and smacks of very unsavory pandering.

Could all these folks have found sudden inspiration and done better in the last few years? Sure. And maybe pigs will sprout wings. Thing is, these "leaders" have been carefully evolved and filtered to be exactly what they are, appeasers, distortionists, middle-splitters, etc. And if they deviated much from that pattern they would soon disappear.

I really think this story angle is a step down from usual TOD approaches.
Especially the claim that the bad leaders are responsible for oil specifically costing $140, etc.

Back to the theme of the article, i.e. the failure of leadership: I saw a debate on TV tonight in which one person was arguing that exact point - failure of leadership by the Bush Admin. in this country to steward deployment of alternative energy. The counterpart was a person arguing that politicians should never interfere with natural market forces, which will take care of the problem without the interference of leadership.

The latter argument means we are all on our own - business simply reacts to market pressures rather than planning ahead. Therein lies the problem - no planning. To my way of thinking, that's how we got into this situation in the first place - by failing to see what was coming (peak oil) and working on solutions well ahead of its arrival.

Leadership at the top political levels must infuse itself into the process to insure the overall direction of energy generation for the economy, to assure there are sustainable sources of energy, non-destructive to our future.

A good start are renewables while we have the energy from fossil fuels to produce them in quantities that the energy from those renewables can be used to make more renewables. Look, I know its a not a complete answer, meaning oil is the energy of most transport, but we must start where we can to ween ourselves off of a resource we all know too well is finite and going up in price at a dangerous pace.

I'll take some really focused, intelligent leadership to steward a new course over the hands off approach the US has received over the last umpteen years.

"If you fail to plan, then you plan to fail"

The USA plans to fail. This probably applies, more or less, to the other 6 members of the G7, and indeed to most other countries as well, but it is the US where the planning failure is most spectacular in its breadth and depth.

You are right, we are indeed all on our own.

I don't follow why this would be a big deal:

"Abandon plans for carbon capture and storage unless this is in context of miscible gas flooding of old oil fields leading to enhanced oil recovery (EOR)"

Please explain.

Is this to make coal electricity plants more attractive suddenly?

Jason, the energy cost of carbon capture and storage is around 25%. The average efficiency of UK coal fired plant is 37%. Retrofitting this with CCS would reduce that efficiency to below 30%.

When you have an energy crisis, the last thing you want is someone dreaming up a scam to consume vast amounts of energy.

My favored route is via the mantra of energy efficiency. When it comes to coal fired plant that means combined heat and power (CHP) which is greater than 90% efficient. That way you extract 2 to 3 times the energy from coal burned, and all things else being equal (especially Jevons) one half to one third of the coal gets burned providing ample energy for society and reducing CO2.

Introduce regulations on the efficiency of electrical power generating plant (phased introduction from 2009)

CCS is incompatible with this goal. I'd be thinking that average power plant efficiency needs to be targeted at over 75% by 2020. Instead of retrofitting CCS you should be thinking about capturing and using the waste heat.


I think it's a great idea to retrofit coal, gas and nuclear plant to convert them to CHP (as long as their remaining life-span justifies the investment). My only questions: who is going to plan and finance the necessary heating infrastructure to take the heat to the residential marketplace, adn who is going to authorise the huge amount of civil works this would entail?


Almost all our gas and coal turbines in Finland are CHP. We have an extensive heat delivery infra that was built underground during decades.

It cannot be planned, legislated, land-owned, designed and built in a few years. It's a mega project or alternatively a series of smaller projects spanned over a longer period of time.

If all the prognosis about EU/UK/North Sea/Russian gas delivery are roughly in the ballpark, and I see no reason currently why they wouldn't be, then only a multitude of actions together may help UK:

- extra insulation
- more coal
- more nuke upgrades
- living with lower temps
- rationing
- LNG scraping
- plant upgrades
- etc

As always, for a risk of this magnitude, there are no single monolithic solutions in this time frame.

The newly formed Department of Energy with the newly created post of Secretary of State for energy who has just been granted special powers by Parliament following the recently declared State of Emergency.

I'm all for the Government providing the strategic plan and regulatory framework. Utilities would be set staged targets for the aggregate efficiency of their power generating plant and within limits it would be up to them to decide how best to deliver.

I suspect the utilities need to work with the central government planners to help form the plan - but with no f*ng around. Its a given that mistakes will be made.

The government needs to provide the framework to enable the plan. This may include emergency powers to enable civil works and an acceptance that power is going to cost a lot more.

The pay back is reduced demand for coal and gas will deliver lower prices than otherwise (though these may be higher than now) but more efficient use means we will pay much less than otherwise - both as individuals and as a country as whole.

A problem is the EU, which is proposing a directive that all new coal fired stations be fitted with carbon capture devices. This will damage our hopes of keeping the lights on unless we ignore it.

I don't think you understand IGCC-CCS.
These new coal systems are +20% more efficient than the old pulverized coal plants and better still can feed hyper-efficent fuel cells. So it basically cancels out the cost of sequestration per kwh. It does cost money though, but it can sequester (almost) all the CO2.

I can't imagine any one who would be so stupid as retrofit a low efficency coal plant with an expensive and high energy sequestration unit; obviously, the energy required for compressing atmospheric CO2 to 1500 psig is much more than for 600 psig to 1500 psig.

CHP is really a lot worse that sequestration because you don't sequester the carbon and the amount of low temperature waste heat produced is much more than is needed for space heating, domestic water heating or absorption chillers.

Burning biomass/coal in the building boiler as the Swedes do would be a nightmare (also can't do fuel cells with biomass) so you are down to natural gas which is very expensive. Also London is larger than Stockholm, so CHP makes even less sense. You might close down a gas turbine electrical generator and send the gas to miniCHP units--you're still burning natural gas.

I looked at CHP and you might save ~20% in carbon by installing it at great expense and complexity. With IGCC you save up to 100% of the carbon.

The mantra of efficiency fails.


If the lights go out, I think you will find the UK public won't give a rats ass about carbon emissions (most don't at the moment).

Expect CCS equipment to be bypassed to get the max power out at peak demand by executive order if CCS is present.

Luckily we don't actually have any power sapping CCS yet and I have a suspicion we won't ever if someone explains the cost to the electorate.....


I read that retrofitting on old power stations would be pointlessly expensive. Somebody likened it to fitting a catalytic converter on an old banger.

Majorian, your comment doesn't make too much sense to me I'm afraid.

Denmark has converted nearly all coal fired generating plant to CHP. They have even fitted CCS to some of these plants.

Finland and Holland are not far behind.

You say CHP produces too much waste heat - well there's a luxury.

The UK government is determined to sponsor a CCS project that as far as I'm aware involves post combustion capture form existing coal plant (I may be wrong here)


And while you extoll the virtue of IGCC-CCS, you tell us nothing about it.

Here's a paper from Princeton which I have no yet had time to read:


(sorry about the screwed url)

The mantra of efficiency fails.

Well I'm afraid if you are trying to convince me that inefficiency is King you just failed miserably.

Looking at the huge number of links to your first reference,
I read about some reference that said that UK coal stations are not meeting EU standards for sulfur or nitrogen (and should be shutdown) and that 37% of UK power generation is from coal and the UK has a scant 200 million tons of coal!

From this is would guess that coal is on its way out regardless and the government is hoping for a CCS miracle to save its coal plants.

Well, the removal of CO2 by amines is technically possible but it would be quite expensive. I would guess the UK public would have to support a 100% increase in electricity rates to pay for it.(The chart on the Princeton reference says that the cost difference between IGCC without CCS and IGCC-CCS is 33%, etc.)

Sorry, UK residents should pay for it!

I haven't heard of CHP plants having CCS. I also don't see much talk about natural gas plants doing CCS. Typically a NG plant will produce
66-75% of the CO2 of a coal plant per kwh. Still even at $100 a ton for coal or ~$5 per MMBH has natural gas beat at $12 per MMBH. Add a $100 per ton CO2 tax(for sequestration) on coal alone you're still less than natural gas. And coal supplies shipped to the UK will certainly long outlive natural gas.

The following paper has info on CCS.

Just look at the energy use in buildings. Suppose you put in
a 33% electrically efficient CHP cogen system that would produce 3 kw of electricity per SF of building.
Space heating is closer to 9 kw per SF in the dead of winter. In a separate gas--electric system (assuming 2/3 of the grid electricity came from fossil fuels), you would burn 15 kw per sq of NG (2kw/.33+9kw=15kw)

A CHP you would burn 3kw/.33 +9kw-3kw(saved)=15kw/sf. No difference.

In the summer when domestic hot water and space heating is minimal there would be no savings with waste heat dumped to atmosphere( less than zero savings with electrical air conditioning running).

I don't think that inefficency is King, but the most efficent(desirable) engine IMO is the one that is never started. Like it or not, we are as addicted to electricity as we are to oil/gas.
All our energy efficent gadgets still require energy and that means CO2.

We will depend on fossil fuels until they are gone, but the environment can't wait that long--learn to sequester CO2 now.

BTW did you know that Sweden is importing its CHP biomass from Latvia? So Latvian soil is exhausted for Swedish CHPs!
Those damned Swedish energy criminals!

You haven't told us what we do with the CO2 that is captured..

and what is an SF?

The North Sea Sleipner platform is currently pumping CO2 into a saline aquifer under the North Sea and there are uneconomical coal beds under the UK, but I'd like to see an experiment bury liquid CO2 in the cold ocean floor(CO2 is a liquid at pressures of 80 atm~ depths of 2500 feet).
SF= square feet.

I don't see how you can get 9kW per sq ft for space heating. You could melt solder with a 15 watt element [at least you could when it had Lead in it..]. 30 watts per sq ft would do for me

Right, 9W/sf not 9kw.

How come that CHP is shrouded in so much mystery and peculiar arithmetic? Perhaps because the term 'cogeneration' is misleading, conveying the notion that the alternative is to generate electric power only.

The simple fact is that any fuel driven power generating unit, be it a conventional Rankine-cycle steam turbine unit, a combined Rankine-Brayton-cycle unit, or an internal combustion engine, must be cooled - it must have an entropy sink.

One can burn the fuels in primitive oil, gas or coal fired boilers with a thermodynamic effiency of less than 10% (entropy generators) to get low-temperature heat. But one cannot generate electric power from fuels without generating low-temperature heat.

Thus 'cogeneration' simply means that instead of rivers, seawater or cooling towers(as entropy sinks), radiators or floor-heating pipes in buildings are used to cool the power generating units.

In the case of mini power units in individual buildings the cooling circuits are the central heating circuits. In the case of collective district heating, the cooling circuits in buildings are connected to larger power generating units by means of district heating pipes.

When the power generating unit is an internal combustion engine (or some day a SOFC fuel cell), the temperature of the cooling water is high enough for ordinary radiators.

When the power generating unit is a steam turbine plant, the condenser temperature must be increased from about 20 C to about 70 C. However, the increase in fuel input to the power station needed to generate the same power at the higher condenser temperature is much less than the fuel used in the individual boilers which are replaced by district heating from the power station.

Thus, as long as the power generated is needed to cover the current electricity demand, the heat supplied to buildings is for free (in the case of internal combustion engines) or very cheap (in the case of steam turbines) as regards fuel consumption.

Hot water buffer tanks are used to regulate the ratio of power output to heat output from a power station on a diurnal basis. Should for a longer period of time the power generation needed to cover the elctricity demand be insufficient for the cooling water output to cover the heat demand (a situation occurring more frequently when wind power plays a significant role in the power supply system), then the power stations should be equipped with heat pumps, which allow the ratio of power output to heat output in a thermodynamically efficient manner.

Thus, in essence it's all about getting rid of the thermodynamically extremely inefficient gas and oil boilers, making use instead of the cooling water from power generating units and/or at times using heat pumps in the power stations to generate low-temperature heat in a much more efficient manner than by means of primitive boilers.

The analysis of the gains obtainable regarding fuel consumption, CO2 emission, and economic costs by using radiators in buildings as cooling circuits for power stations and at times using heat pumps in power stations to generate additional low-temperature heat is not simple arithmetic, in particular not in future energy systems where wind power plays a significant or major role. A comprehensive analysis is presented in the papers "A Viable Energy Strategy for the Nordic Countries 2006 - 2030" (Illum, 2006) and "A SESAM Model of the Nordic Energy System. Methodology and the modelling of the Nordic energy system" (Illum, 2006) on www.klausillum.dk.

The mantra of very long term carbon re-sequestration by charring and shallow burying of charrable feedstocks, from agriculture and fuel-coppicing, into food-growing land doesn't fail though.

And when we do that we start creating terra preta soils, which have the added bonus of remarkable increases in soil fertility and added fecundity, with enhanced ecological health. Bit of a win-win-win and possibly win there, I'd say.

Trouble is, the terra preta mantra is still very little known. But accelerating. It's a remarkably promising idea. Look particularly at Eprida:


And there are plenty of other possibilities, from enhanced peasant subsistence permaculture re-sequestering several billion tons of atmospheric carbon in short order, right up to industrial scale applications -- if you still think that that approach has any credibility left.

Terra preta begins to look to me like a highly promising, and very practical idea, to do something urgent and effective in short order about the climate emergency, especially considering how gratefully it would be received and implemented by several billion struggling peasant farmers worldwide, the moment they were convinced that it was practical as a soil improver and a crop enhancer, with NO huge cash inputs to be found to pay off global gangster capitalism.

It also has the huge advantages, unlike CCS, of being an already proven technology, very lo-tech to apply when necessary, and with a long pedigree -- several thousand years already -- of successful use. I'm astonished that it isn't more widely known and enthusiastically taken up, considering the desperate straits we're in. But I suppose that every new initiative has its inexorable pace of unfolding. And then, even if some intelligent leadership coming from somewhere did get it going as a sort of global-scale new, peaceful Manhattan Project, having first faced down and subdued the gangster capitalists, there's still Jevon's Paradox to screw us up all over again, I suppose, with another burst of population growth......

ARE humans cleverer than yeast, I wonder?

Point of information: is anybody in the British Conservative Party making constructive suggestions as to how to deal with the energy crisis? My knowledge of British politics doesn't extend much beyond watching question time every week, but I haven't heard much from the Tories beyond the usual carping one expects from the opposition. Since the New Labor line seems to be frozen in place, who's addressing the real issues?

See my post higher in thread and
UK Conservatives propose a permanent tax holiday, tracking oil price - as price goes up, tax, fixed rate per litre/gallon leaving the refinery, goes down.

As I have said before, British MPs are well aware of Peak Oil - including the Conservatives - but they don't seem to know what to do about it.

Here is a quote from the Conservative's 'Blueprint for a Green Economy' prepared for the shadow cabinet:


Peak Oil
Oil made up 36% of world energy consumption in 2005
‘Peak oil’ theory refers to the point at which half of the world’s accessible oil reserves have
been extracted. After crossing this threshold oil production starts to decline, with future
demand outstripping supply. The resulting increase in oil prices has vast economic, social
and political implications, with conflict between nations competing for ever-scarcer oil
resources. A number of authorities believe that we will have passed the point of world peak
oil production in 2008.516

Estimates of the time it will take for world oil and gas resources to run out vary
considerably. According to BP data from their 2006 Statistical Review of World Energy,
global oil reserves are enough to last for around 41 years at current levels of production.
More than 60% of remaining global oil endowment is in the Middle East. China has less oil
than the US with around four times the population. At the current rate of growth China will
consume 100% of currently available world exports within ten years.


Reducing our demand for fossil fuels can
only improve our energy security as we move towards being an energy importer in the age of ‘peak

Monday morning call Bodman spokeswomen Angela Hill (202) 5864940. They should be aware of this failure of leadership discussion, http://news.yahoo.com/s/ap/20080703/ap_on_go_co/warner_speed_limit


One option you did not list is regular rationing rather than rationing by price or attempting to curtail speed limits. If we want to see a dramatic drop in the price of oil, that is what we need to do I think. We need to find about 5 million barrels a day of spare capacity and so that is about how much we need to cut consumption. If the US were to do that alone, it would be about a 25% cut in US consumption.


Chris, my list is really meant to capture emergency measures that can be introduced or announced immediately. As you know I see rationing as highly likely / inevitable. But I don't think the leaders of the G7 can emerge with this proposal this year. In an ideal world market regulation would be my favored route - but "we" have left things far too late.

I'd bet that we have speed limits by end 2009 where we may be struggling to get the oil price down from $300 to $200.

At least in the US, I see rationing as a quick response since we already have a contingency plan in place. Thus, the plan could be invoked fairly quickly. I would not be too surprised if such plans also existed in other countries. I am having some difficulty figuring out the name of the administrator who would get the plan rolling but even if the position, which is required in law, has not been filled, the Secretary of Energy could make the call I think. http://www.law.cornell.edu/uscode/42/usc_sec_42_00007136----000-.html

In your case, the person to contact might be Bruce Mann, the director of civil contingencies at the Cabinet Office who is trying to arrange to avoid food shoratges now http://www.timesonline.co.uk/tol/news/politics/article4276490.ece I see from Drum Beat.


We will have rationing in the USA, but the FedGov will be very slow to impose it. The decision will not be driven by prices, but rather as a matter of reserving sufficient supplies for the military. Don't be so naive as to think that they will be doing rationing for YOUR benefit!

I just spoke with Ray Madden at the DOE IGs office and he agrees that the Economic Regulatory Administration seems to have just sort of disappeared even though some active parts of the DOE still consider it part of their duties to interact with it. He is going to look in the library to see if he can find out more.

In any case, the response of the government to, say, a blockade of oil routes would be slow if the authority of that mandated Administration were not placed somewhere. I don't think that the stratigic petroleum reserve can be all that effective without some rationing effort.

One might think that this lack of preparation means that the attitude towards Iran is all hat. But then we remember that there was no plan to prevent looting in Iraq or to head off an insurgency.

In summary, the Administartion within the DOE responsible for creating, maintaining and implementing a gasoline rationing plan should we need it appears not to exist even though the law requires it to exist. We do have a good and innovative plan, including white markets, but it may not be up-to-date and the needed relationships with retailers may not have been maintained.


I think that what's needed will be a rationing system which includes all transportation fuels. That would include diesel (aka: home heating oil) and jet fuel (and possibly LPG), as these products are more-or-less interchangeable with gasoline. And, for the rationing system to work long term, there MUST BE a white market for trading to smooth out the distortions and to damp down any tendency for the formation of a black market.

The big difference would be that this rationing system must not be seen as temporary, but viewed as a long term solution, thus inducing a mindset in the consuming public that it's best to begin making the necessary changes immediately. Other rationing efforts were during wartime and were temporary. As Peak Oil represents a long term problem, one which will worsen with time, the psychological impact on the public must be strong and must convey the sense that tomorrow's situation will not be a return to the experience of previous years with lots of cheap fuel available for endless happy motoring.

E. Swanson

A rationing system that aims at ending the use of oil is also temporary. Once we don't use oil we prohibit rather than ration. It turns out that we can keep the price of oil way down for about 15 years while the G7 gets off oil. http://mdsolar.blogspot.com/2008/06/oil-is-too-expensive.html

Our standby gasoline rationing plan does include a white market in rations: http://www.osti.gov/energycitations/product.biblio.jsp?osti_id=6307185

Perhaps we should think about how to extend these to the rest of refinery outputs?


I think there's a deeper reason for the failure of the leaders to come to grips with the situation. In a recent issue of a newspaper in my local community, the publisher "welcomed" the energy crisis, claiming that it would spur our Presidential candidates to take "energy independence" seriously. (He also characterized the 1973 oil crisis as a purely political matter, caused by the OPEC embargo.) I responded as follows (abridged):

This isn't intended as a rebuttal of your point, since I generally agree with it: I think that exploring the concept of energy independence, and what it might take to achieve it, would be an excellent thing to do, by
Presidential candidates as well as others at all levels. The main point of this contribution is to suggest why both Presidential candidates may be very reluctant to dig into it, or even to touch it.

To begin, a minor correction: the first oil shock in the 1970s was not purely a matter of international politics. In fact, a large part of the US reaction to the OPEC embargo was due to the fact that US petroleum production in the Lower 48 peaked in 1970, and it wasn't until later that decade that Alaskan oil production helped slow the overall decline in production. (You can see this graphically on a page of the Energy Information Administration website: http://www.eia.doe.gov/emeu/aer/eh/frame.html. As that page points out, the US was energy independent until the 1950s, when the rise in consumption overtook the rise in production. If you look at those graphs, focusing on the situation in 1973, you can understand why US leaders were in shock.)

Now, what would be needed to achieve Energy Independence? Clearly, there's a gap between the U.S. demand for energy and our ability to supply it, so either we need to increase supply to meet the demand,
decrease demand to match supply, or some combination.

On the supply side, there's little chance of filling the large gap, one that grows compounded (i.e., X percent per year). Our petroleum production is declining (and the world's production has been flat for the last couple of years), and none of the alternatives offers much hope
to fill such a large gap for several years to come. Over time, energy from new sources will increase, but not nearly enough to catch up to an ever-increasing demand.

On the demand reduction side, things look a little better: there's a lot of "low-hanging fruit" to be picked in the areas of conservation, improved efficiency, and generally wiser use of our precious energy. Once that fruit's all picked, though, further demand reduction will depend increasingly on scaling back our expectations, and doing what American households across the country have learned to do: live within our means.

At some point, we'll be faced with the fact of at best a steady, flat influx of available energy, all from renewable resources. At that point, we'll not only have to live within our means, but live on a fixed energy income, like many American seniors do on dollar incomes. We used to say blithely "well, maybe so, sometime in the distant future!", but it's increasingly likely to happen much sooner than we're ready to deal with.

At this point, we run up against the almost religious mantra of capitalism: "You can't stop growth!" To live on a fixed energy income requires a type of economy that can provide a comfortable quality of life without inherently requiring growth -- can capitalism be
"re-engineered"? Frankly, I can't imagine either Obama or McCain (or politicians at any level) being willing to face that contradiction during an election campaign, unless they were forced to by a persistent and growing dialogue coming from the grass roots. I suspect that this is one of those areas where the people must lead, so that the leaders will follow.

I intentionally didn't mention peak oil explicitly, except for the reference to the US peak, and intentionally kept the point as simple as possible. This will be published in the next issue; it'll be interesting to see what replies I get, if any.

http://www.eia.doe.gov/emeu/aer/eh/petro.html is the page with the consumption vs production vs imports for after 1949.

Re: Solution: Ban the inefficient production of liquid fuel from food throughout the temperate zone of OCED from 2009.

Continuing to treat feed grains and food as the same thing is not helpful. It shows a lack of understanding of meat, poultry and dairy production and the large waste of energy involved.

Banning ethanol means condemning farmers to low prices as feed grain is wasted on low profit energy wasting animals. This means that farmers will not have as much financial wherewithal to pay post peak oil input prices. The result long term will be less grain production.

This short sighted approach is common in the Peak Oil aware community and will discredit it in the long run.

The popularity and profitability of ethanol production is grossly underestimated outside the U.S. Midwest and Brazil. Most of the profit from ethanol currently is not in the plants themselves, but in the jobs and rising farm income related to it. Banning it will be like trying to ban OPEC from producing oil. Corn farmers do not give up easily.

In the end, if a ban is achieved, it may have to be outside ethanol producing areas. Noway are ethanol plants and corn farmers going back to the bad old days of surpluses and begging the government for handouts.

The American Midwest and Brazil will run on ethanol and the rest of the world can fight over and conserve itself to death on the remnants of declining oil production.

X - I'm all in favor of farmers being paid extremely well for their efforts - producing top quality food for me to eat. As I see the problem here is the alliance between multinational supermarket corporations and government that has kept the cost of food and inflation low for 20 years.

But those days are over. The days of the supermarket and Mall are over, and so farming will enter a new era. But I'm not entirely sure what that will look like.

The American Midwest and Brazil will run on ethanol and the rest of the world can fight over and conserve itself to death on the remnants of declining oil production.

Brazil certainly can. But we will sit back and watch with some amusement the American mid west trying to run itself on corn ethanol, where 90% of the energy output goes back into running farms and paying for fertilizer.

In the UK at least, the cost of meat is getting so high that folks will start to eat less of it. In this case I'm likely in favor of letting the market reduce meat consumption in favor of higher cereal production. Much better to have a surplus than a deficit when to comes to food.

Excellent comments Euan.
Just for interest, UK farmers get very much lower taxed diesel for cultivations compared with road vehicles. So-called red (marked) diesel.
See "rebated fuel" at
However, flip side, as for heating kerosene, is that farmers' diesel tracks price of originating oil - and farmers have seen recent dramatic increases in their production costs.
Farmer I know told me last week: "Combine [harvester] arrived today and it's £700 per fillup on red diesel." Same man also said: "costs of production are rising so fast that wheat at £120 would be a loser in uk."
Relative real cost of food historically in UK (relative to average incomes) has been much higher than now. A tumble from our easy-times-zenith however is going to be painful.

Of course we must conserve energy and expand renewable energy sources. However both alternatives are not as cheap as oil is today. So even with $200 oil, alternatives are more expensive. The time of cheap energy is over. There are alternatives to $1000 oil that have to be developped today to be available tomorrow. However there has never been such a thing like an $100 per barrel equivalent alternative energy source.
So it is not very fruitful to blame politicians for $140 oil. We must blame them however, that they did not tax oil to the equivalent to $200 - $300 per barrel to conserve energy and develop alternatives. Given the protests that exist today already at $145 barrel oil - it would have been hard for any politician to remain in office with such a tax. The German Green Party once asked for € 2,60 gas (when gas was € 0,60) - and lost a lot of votes.
So there is nothing that can be done to reduce the price of oil - we can only make the comming increases less steep. $200 oil will be seen as cheap in the not so far future.

Excellent stuff. Where is the Digg box so that I can vote for it?

We urgently need an Export Land Model for natural gas so that the full seriousness of the situation can be explained clearly,


From Hubbert's Prescription for Survival, A Steady State Economy
Robert L. Hickerson
On June 4th, 1974 Hubbert testified before Representative Morris K. Udall's Subcommittee on the Environment.3 In his 21 page written statement he presented his familiar lecture on various growth curves, their equations, curves of world and U.S. production of fossil fuels as well as projections for the future. He next discussed the cultural aspects of the growth problem. He states, "during the last
two centuries of unbroken industrial growth we have evolved what amounts to an exponential-growth culture. Our institutions, our legal system, our financial system, and our most cherished folkways and beliefs are all based upon the premise of continuing growth, Since physical and
biological constraints make it impossible to continue such is obvious--solar power--and he does not feel more technological breakthroughs are needed before it can be made universally available. His faith is not that of a kneejerk trendy but that of a doubter who did much studyingbefore his conversion. "Fifteen years ago I thought solar power was impractical because I thought nuclear power was the answer. But Ispent some time on an advisory committee on waste disposal to the Atomic Energy Commission. After that, I began to be very, very skeptical because of the hazards.
That's when I began to study solar power. I'm convinced we have the technology to handle it right now. We could make the transition in a matter of decades if we begin now.""
On June 4th, 1974 Hubbert testified before Representative Morris K. Udall's Subcommittee on the Environment.3 In his 21 page written statement he presented his familiar lecture on various growth curves, their equations, curves of world and U.S. production of fossil fuels as well as projections for the future. He next discussed the cultural aspects of the growth problem. He states, "during the last
two centuries of unbroken industrial growth we have evolved what amounts to an exponential-growth culture. Our institutions, our legal system, our financial system, and our most cherished folkways and beliefs are all based upon the premise of continuing growth, Since physical and rates of growth indefinitely, it is inevitable that with the slowing down in the rates of physical growth cultural adjustments must be made.
One example of such cultural difficulty is afforded by the fundamental difference between the properties of money and those of matter and energy upon which the operation of the physical world depends. Money, being a system of accounting, is, in effect, paper and so is not constrained by the
laws within which material and energy systems must operate.
In fact money grows exponentially by the rule of compound interest." He next derives the equations for the growth of the stock of money, the rate of industrial growth and the generalized price level. The expression for the generalized price level states that this level "should increase exponentially
at a rate equal to the difference between the rate of growth of money and that of industrial production. In particular, if the industrial growth rate a and the average interest rate i have the same values, then the ratio of money to what money will buy will remain constant and a stable price level should prevail.
Suppose, however, that for physical reasons the industrial growth rate a declines but the interest rate i holds steady. We should then have a situation where i is greater than a with the corresponding price inflation at the rate (i-a). Finally consider a physical growth rate a=0, with the interest rate i greater than zero. In this case, the rate of price inflation should be the same as the average interest rate. Conversely, if prices are to remain stable at reduced rates of industrial growth this would require that the average interest rate should be reduced by the same amount. Finally, the maintenance of a constant price level in a non-growing industrial system implies either an interest rate of zero or continuous inflation.
My personal conclusions and recommendations are:

1. We will never again be able to get sufficient growth of the economy to eliminate or even markedly reduced unemployment. NAFTA, GATT, and Clinton's hope of growing the economy to solve unemployment is doomed to failure.
2. The promise of competing in the global economy is a hoax perpetrated upon the working and unemployed people of this country because over time a nation needs to buy and sell overseas in roughly equivalent amounts.
3. All attempts to reduce the deficit, balance the budget or pay off the national debt are futile. The deficit and the national debt represent the subsidy the government has paid in its attempt to keep growth and unemployment at the level of social tolerance.
4. The steady state economy into which we are being inexorably forced implies an interest rate of zero.
5. An interest rate of zero (as Hubbert explains) means the end of the money system. We are being forced to completely rethink our cultural ideas about how toorganize our economy and distribute purchasing power.
6. Increasingly desperate means will be used by those who think we can continue to have business as usual.
7. The proposals of Negative Population Growth should be implemented immediately.

zeitgeist - your points 1 to 7 are a very good if not very gloomy summing up of the situation we are in. Inflation is clearly running much higher than official stats (in the UK at least) which means that much of what is currently being measured as economic growth is in fact price growth.

Attempts of our economic system to adjust will fail as pensioners and low paid workers find out they can no longer afford to live. The money system, now constrained by the availability of energy must fail. So as I see things some of what you describe is already happening.

Increasingly desperate means will be used by those who think we can continue to have business as usual.

I dare say this will turn out to be very true. Iran springs to mind. Technology does offer a means of producing GDP using less energy. But my feeling is that the train is already running out of control and possible solutions will not be given the opportunity to work owing to the failure of leadership.

Good list, please think about adding, victory gardens.

The BBC's 6pm news on Radio 4 tonight mentioned the wartime "Dig for Victory" campaign in response to Gordon Brown's call to waste less food and grow more.

I found that my efforts to heat my house while growing food in the winter worked for heating and did OK with lettuce and more than OK peas but was not so great with beans and the tomatoes never blossomed. I am getting early tomatos now though from the winter time plants which have grown really quite large now though they were already big in April when I moved them outside.

I used CFLs but if you want more food I think that the UK might invest in mass production of red and blue LEDs which would put more light into growing and less electricity into heat directly. More here: http://mdsolar.blogspot.com/2007/12/jet-fuel.html


I object to the way in which G7 leadership is being blamed for the global situation in this article. Look at your own graph: G7 oil consumption has been all but flat for a decade, during which time oil prices have multiplied about sevenfold. The latest doubling, the one which has finally produced food riots and political turmoil, took just a year. What sort of reduction in G7 demand could have put a dent in a trend like that? For that matter, the G7 leaders are not responsible for there being 800 million more people on Earth every decade.

I don't want to flame you too hard because you're at least proposing some short-term policies, and you've done a zillion times more on this issue than I ever have. But I find this adversarial approach (exemplified in the "wanted" poster) seriously counterproductive. It will only cloud people's minds and pander to the human tendency to seek a villain who is personally responsible for every bad thing that happens. The fact is that it is something of a miracle we have even the degree of multilateralism and foresight that we do have, and it ought to be encouraged and built upon, not scorned for its shortcomings.

The IEA's Energy Technology Perspectives report for 2008 has the makings of a global energy plan. It is framed in terms of mitigating climate change but it also deals with supply and with the demands of development. It is up for discussion in Japan this week. So in fact the road to sustainability does start in Hokkaido, or at least it is another waystation. Everyone who can get a copy of that report should do so and study it very closely. It is the best blueprint we have, and the way forward involves working with it and improving on it.

I am afraid that this IEA report is another extreme case of wishful thinking...

The starting point is the myth of continuing growth:

In all scenarios, world economic growth is a robust 3,3% per year between 2005 and 2050. In all scenarios too, the underlying demand for energy services is the same, i.e. the analysis does not consider scenarios for reducing the demand for energy services.

And from this they elaborate some "wild guesses":

In the baseline scenario, oil prices increase from $62/b in 2030 to $65/b in 2050 (in real present dollar), while lower oil and gas demand in the ACT and BLUE scenarios will result in a price reductions, although the precise impact on prices is uncertain.

Not to worry, oil is going to cost less than half the current price today! But wait, they can be even more optimist:

The ACT and BLUE scenarios contain relatively optimistic assumptions for ALL technology areas. The BLUE scenario assumes technology that is not available today. Without affordable new energy technologies, the objectives of the BLUE scenario will be unachevable.

What is that, a sound basis for future planning or a wish list for Santa? But let's be confident in this BLUE scenario, it seems better than sliced bread!

The BLUE scenarios are consistent with a global rise in temperatures of two or three Cº, but only if the reduction in energy related CO2 emissions is combined with deep cuts of other greenhouse emissions.

So even in the most optimist case we are far from doing something about AGW! But let's see which technologies are going to save us (up to a point!):

End-use energy efficiency accounts for 36 to 44% of the emissions reductions, CCS represents 14-19%, nuclear 6%, and renewables 21%

And for this miserable 6% of emissions reductions they want us to build 3 new nuclear reactors every month to 2050!

My conclussion after reading the report is that it will be impossible to keep growing at a yearly 3,3%, because for this to happen we need too many miracles to happen.

It's past time that we all realised that "economic growth" is one of the problems and not the solution.

Nonetheless, it is the only detailed global plan there is. People ought to be studying it and working out variations on it. What happens if economic growth is 0% in every year after 2020? The "radical" BLUE scenario merely demands that 1% of gross world product be spent every year on extra R&D and infrastructure. What if you took that up to 10% - is it possible, and what would happen to the numbers? What does a different set of assumptions about future oil supply and future oil prices do to everything else?

I see you are associated with a national peak oil association. I would suggest a dual approach: try to understand what a global scheme like this (including its more realistic variants) implies for your own country, and also work on a scheme for national autarky in case the rest of the world goes to hell. I realize that's a lot of work, but keeping both possibilities in mind is the best way: the possibility that the world does come up with a cooperative approach, and the possibility that it doesn't.

from an appendix of an upcoming article:

France – A Comprehensive Non-Oil Transportation System

• High Speed Inter-City Rail
• Inter-City Freight Rail
• Urban Rail
• Bicycles
• Walkable Neighborhoods

President Chirac made it a national goal to electrify “every meter” of the French National railroads (SNCF) and “burn not one drop of oil”. This goal was set on January 1st, 2006 with a twenty year deadline.

France has been building their famous TGV lines for over 30 years, one line at a time. Now that the original Paris-centric system is 100 km from completion, a new network of additions, bypassing Paris, have been announced and, for the first time, three different TGV lines are simultaneously under construction.

France has had an aggressive tram (Light Rail) building program for over fifteen years, with only five French towns of population 100,000 or more without a tram or plans for one. Recently, France has stepped up the pace with plans for 1,500 km of new tram lines (22 billion euros) in the next decade.

And velibs. Rental bicycles scattered all over in almost a dozen French cities, typically with the first half hour free. Many more bicycle paths and lanes have been built in recent years. The stated government objective is to ensure that 10% of in-town journeys are made by bike by 2010, but the results are trailing plans with only 3% in 2007. However, Portland Oregon and Davis California are the only US cities that exceed 3% AFAIK.

Mulhouse France (population 110,900, metro 271,000) illustrates just how comprehensive the French program can be in a best case. This remote town where France, Germany and Switzerland meet, got it’s first tram (Light Rail) line in 2006. By 2012, they will have 58 km (34 miles) of new tram lines (they would also have had a tram line to Basel Switzerland if Franco-Swiss co-operation had been better).

In 2011, Mulhouse will be the temporary terminus of a new TGV line and 200 velibs (rental bicycles with the first half hour free) have recently been installed.

The end result is that by 2012 a resident of Mulhouse can walk out their door, grab a velib rental bicycle, drop it off at the tram station or just walk, take the tram to the TGV station and be in Paris in 4 or so hours, and anywhere in France in a long day, all with a drop or two of lubricating oil and minimal carbon footprint.

In the non-transportation area, France is installing large numbers of solar hot water heaters and geothermal heat pumps.

With significant difficulty and economic loss, France could adapt to a prolonged loss of a fraction of their imported oil.

What more would you have them do ?


Mulhouse already has heavy rail link to Basel with intermediate calling points, just a 20min trip for non-stop services; hence possible lower tram priority for this route.

I travelled on Basel / Paris route a couple of months ago. Timing from Mulhouse to Paris is already down to 3-1/4hr and will fall further when last 100km of TGV route between Paris and Strasbourg is completed.

Despite all these improvements flights between Paris and Strasbourg are still operating...and attracting passengers by undercutting TGV costs. Airport subsidies and untaxed aviation fuel still prevail.

The Swiss Federal Federal Gov't was willing to help build 3 tram routes out from Basel, two to France and one to Germany. The one to Germany is underway, but the French ones died due to lack of interest.

Frequent service by trams, and multiple stations, would make trams attractive for French workers who commute to Basel.

In addition to commuting to the nearby TGV line in Strasbourg (almost open I believe), Mulhouse will be the northern terminus (temporary) of a north-south TGV line in 2011.

I use Mulhouse as example of a small town, in a remote corner of France, that has gone from nothing to a massive Non-Oil Transportation system in less than a decade.

Best Hopes for many more "Mulhouses",


Alan - good points. It was / is a bit unfair lumping all these leaders / countries together because as you point out their performance is very uneven.

France and Germany are setting good examples.

Despite these simple facts, you didn't refrain yourself of another populist and propaganda-style news title. What happened to the "we are not like the MSM" mantra in this site?

The hatred towards governments and the "PTB", or other "they" that one can imagine is getting tiresome and old. Could we please move on and grow up?

politics is the area we are moving on too. which is a childish game.
move on. move on where?

how do we couch this argument?


Euan fully admits here that he's made a slogan that was not accurate, in fact, terribly wrong. Rationally speaking, how can anyone blame Sarkozy for any drop of oil that France spends, if one is to believe that the policies that could mitigate such consumption take decades to fulfill?

It was a propagandish-style cartoon, which does nothing but to spread the word to the internets that TOD has become a blog of inconsequential diatribes. Which is a shame, for the blog post was not as bad as the cartoon and the title.

so a better angle would have been to critise the UK goverment for not being as forward thinking as the French and German?

would a cartoon aimed at conveying that message still have been unreasonable because it is still a cartoon?


Alan, how do you see the ability to keep the roadways maintained to allow getting goods to the doorstep?
Rail can get it to the railhead, but you still have the last few miles to go.
Memmel was arguing that it would not be possible to maintain the road network as well as the rail network.
I would have thought that the substitution of concrete for asphalt and gravel on low0use roads would be possible, more easily in France than the US with less severe freeze/thaw cycles and the availability of energy in nuclear power, if not liquid fuels.
EV's will certainly not be able to make a seamless transition from ICE cars possible to allow presetn patterns of use to continue, but you still need roads for bicycles, electric bikes, trikes and EV delivery vehicles.
What is your take on this issue for France and the US?

Alan, how do you see the ability to keep the roadways maintained to allow getting goods to the doorstep?

Have the unemployed shovel gravel into the potholes in exchange for food ?

Triage for roads may be necessary. Maintain a 3.3 meter wide strip on each road and let the rest go ? Lower volumes and lower speeds could allow two way traffic on such streets. Pull over into the unmaintained strip when another vehicle comes.

"Good Roads" will likely become scarcer. I agree with Merkel on priorities.

Best Hopes for Well Maintained Railroads,


We seem to have duplicate posts on different threads here! - both mine and yours - I thought perhaps my comment hadn't posted.
Anyways, thanks for the reply - my thoughts are similar - the critical point would appear to be bridges, but ferries worked at one time.

Understand that the real problem is not the roads we can convert to gravel etc so areas are passible.

But you don't have a 500k house and 50,000 a acre land down 10 miles of gravel road with a washed out bridge.

Reverting the road system back to what it was before expansion will lower the value of the land and homes on the poorer roads. Not even considering increased gasoline costs.

This land will become agricultural and sell at whatever its agricultural value is not for its views.

This of course drops the tax base leaving even less money for roads etc.

This is the problem with expanding like we did with roads rail is probably 10 times better then roads at creating value for the maintenance costs.

I bet if you look at the value of land and homes back when we used rail and trolleys you will see values and prices where very stable around the infrastructure areas.

I'm still boogled about how badly we have messed up.

I'm old enough to remember as a small child commonly seeing gangs of beefy men with tools that a smith and a carpenter could make, doing things that now one or two men do with machines that only sophisticated factories can make, sustained by high energy, high complexity economies. These machines probably cost several thousand times the total value of all the work-gang's tools, require lots more materials and driving energy, and are costly and difficult to be got to their worksites.

However, in the meantime, here in Britain, re-cycleable tarmac has been distributed, fanatically, almost everywhere. If, as used to happen, twenty men and their hand tools and barrows get into a couple of trucks, it just requires two tanks of fuel -- biodiesel made by the Eprida process from pyrolised char-making feedstocks for example which remains net carbon negative EVEN AFTER IT'S BEEN BURNED -- to move the work gang to a suitable redundant piece of road and to dig it up, or at least to make it much narrower than it used to be when it took the huge traffic flows that have now gone,

I've pick'n'shoveled tarmac occasionally. It's not lolling in a recliner. But it's doable. So there's a raw material, that can be used on the spot to repair the remaining width of road. Or the two trucks can ferry it off to a local destination.

But it has to reheated of course before it can be relaid, again using hand tools and simple muscle powered machines like rollers. Conventionally these days the pre-heating is done by burning fuel. But take a look at this back-yard toy that one enterprising man knocked up:


With a bit of trial and error to get the right simple equipment together, and the right people-management skills, just about any enterprising person could put together an effective road repair and recycling gang, and -- in some future economic arrangement -- get a living for the whole crew.

Just a small thought-experiment about how it might be managed.

Damn French bureaucrats! No wonder Old Europe didn't support the war. They don't need the stinkin' oil.

Germany, -18% from peak oil use (as of 31/12/07), -9% 2006 > 2007.

Best home insulation standards, #1 in wind and solar (despite modest natural resources), Expanding ICE network. Increased use of rail & barge vs. trucking. Likely new coal plants instead of new nukes :-( and increasing gas use to offset reduced oil use.

Other than new nukes, what more should they do ?

Would that the USA & UK did as much,


Alan - ditto above. Here's the oil consumption change from 06 to 07:

usa -0.1%
can +2.7%
fra -1.7%
ger -9%
ita -3.9%
uk -5%
jap - 3.5%

Germany are clearly achieving great savings - I wonder if this has anything to do with € strength. One problem here with German oil consumption down so much over 2 years is to ask for how long they can sustain that - cos once the European consumption stops falling that will put even more pressure on price. I wonder also if an element of German figures includes deindustrialisation. Its the shocking N American figures that must be the greatest source of concern - Canada with all the hall marks of an energy export land.

The G7 need to get involved in an energy efficiency competition with each other where it is recognised that the greatest virtue is derived from using less and not more.

What is most amazing from Germany's story is that they have mitigated that consumption in such a little time, despite the doomer's claim that a 5% drop in consumption would mean death to the economy. Last time I checked, Germany was booming.

So long, Peak Oil doom fest. It has been fun, thought provoking and even frightening at times.

The G8 is an almost purely symbolic entity. Its composition makes it a nice symbol to rally against, especially since the Genoa G8 of 2001. Compliance of its members is very low for an international institution , some good statistics on this can be found at http://www.g8.utoronto.ca/evaluations/index.html .
Real decisions are taken at WTO, IMF/Worldbank, UN and OECD meetings.
As a symbol these summits can be powerful however, for example one of our favorite targets the IEA was inspired by the original G6 meeting in Rambouillet in 1972.

One can hardly blame global leaders for listening to advice from the IEA given their institutional function. It is the IEA itself that is “broken” and full of self-deception. The trouble is that self-deception is an elimination trait in natural selection – we are way too far down this road. The danger is not only in the IEA’s denial of Peak Oil, but also in their demand forecast!

Nel and Cooper present a compelling case to argue that the IEA’s demand forecast for developing countries is flawed - see
“A critical review of the IEA’s oil demand forecast for China”
, Energy Policy, Volume 36, Issue 3, March 2008, Pages 1096-1106. Nel and Cooper point out that the demand forecast for China could be underestimated by 2 million barrels per day (Mbpd) by 2010, 5 Mbpd by 2015, 8 Mbpd by 2020, and so on.

These figures would increase considerably if other developing economies were included in the analysis. Nel and Cooper’s analysis assumes that the IEA’s economic growth outlook for China is plausible. An alternative view is of course that, if the oil demand cannot be met, the economic growth outlook is overstated.

This is just completely naive.

High prices are what reduce demand. Reducing prices will increase demand. Attempting to reduce oil demand in one area of the economy will simply make oil more economic for use in other areas, demand will simply pick up elsewhere and you will be exactly where we are right now.

I am not suggesting to "reduce price" but that pulling certain levers to reduce demand will result in a temporary fall in price.

You're right that demand will then pick up else where - China, India et al and we will quickly be back where we start.

Well not quite - because the reduction in our usage times the same price means we are hemorrhaging less currency spent on energy, we have incremental improvement in our energy efficiency, a more equitable distribution of resources in the short term and we buy a few years breathing space.

The alternative do nothing scenario seems to be leading us to the cliff edge where a huge tranche of society will be priced out of energy and food markets.

Germany is leading the way in energy efficiency but I do imagine they will resist any motor vehicle legislation. But at the end of the day, it is likely the German auto industry that helps save us by producing ultra efficient vehicles.

When you are talking about Germany auto-industry, you are referring to the mantra you yourself criticized, the market. Your overall speech is full of contradictions, though I can agree mildly with some of your proposals. The "I hate TPTB" mantra won't help much though. In a consumer-controlled world, as the one we are living in is turning out to be, it is up to the consumers to make sensible choices and modifications in their lifestyles. Scooters rather than SUV's? What other than pricing out by the market will force people to adapt to the new reality of oil scarcity?

The only thing that governments can pursue is to help locals and cities to modernize their mass-transit and electrified vehicles. As Alan has pointed out, there were some countries doing just that. But to fail to recognize that such modifications on how we move ourselves aren't independent from ideological ideas, I do understand why some countries do not like these kinds of ideas.

The market will solve? Yeah, but not in the nicest of ways.

what about the inequitable distribution issue. Price solutions left to there own devices on a global scale may result in geopolitical instability...WWIII etc?

even if we see rationing in the OECD just leads us to a global Jevons paradox at least it represents a redistribution of resources even if "we" pay more for less?

Hi Euan,

Good post, Your recommendations are of course based on logic, not a good idea.

I think we have reached a point in history which had surpassed politics. Politicians of all persuasions and ideologies are passengers to vested Capital and Business interests. They dare not even pass wind.

The G7 are no longer friends. They are now competing enemies chasing a dwindling resource.

Each of them is meeting and scheming to gain an advantage over the others without being caught. They are in effect in a fight for their lives.

No single policy can ever be implemented in a Democracy because there are always winners and losers. Nothing can be enacted until it is possible to guarantee who the losers will be, and they can't be any of the movers and shakers, but only the prolateriat

Any workable solution will bankrupt half the nation. Any less and it will be a drop in the bucket.

Some instant solutions.

* No car allowed more than a 1 liter engine, All cars must have all seats occupied while driving. No motorbike allowed more than 50 cc engine.

* Any vehicle with an empty sea, must by law, stop and pick up anybody going their way.

* No Flight may leave with an empty seat. Absolutely NO Frills. Bring your own water.

* No flights allowed on any distance less than 500 miles. Fares to be 10X ship or train prices.

* All towns must be connected by an electric train line.

* No cars allowed on distances more than 20 miles, or town to town.

* Disney Land type people carts (Maybe horses again) with hop on and hop off.

* All ships either Nuclear or sailing.

Will it ever happen?? not as long as even one Politician is left standing.


Well, disregarding the fact that you would be a politician, by definition, if you enforced such rules (rendering your anti-politician rant absurd), I'd sure not vote for you if you ever try to enforce those things. Such draconian measures are almost worse than the natural outcome of peak oil by themselves...

Hi Luis,

The Olduvai Theory says if we do not actually do something drastic 4 billion people will die as the outcome of peak oil.

Politics is a complicated subject. We vote for people who promise us what we want, not people who do what has to be done.

This is all going to happen in your lifetime, so you may well remember my opinion one day.


I am well aware of Olduvai's regurgitations. I am afraid though that his projections are already failing to come true. I won't even dwelve about his methodology. Let us just say that he is a crook.

I wouldn't say it's crookedness, but rather just doomerism.

People confuse, "I don't know how I'll live without lots of oil" with "people cannot live at all without lots of oil." And they forget that "how will we live?" does not necessarily mean "will we be able to live at all?" but can also mean "what will our lifestyle be like?" That is, doomers confuse how and whether.

Excellent article as usual !
My writing and prose being somewhat wanting due to
my lack of education, I would still like to suggest
that under the heading "WANTED" for the leaders who's
policies have exacerbated the situation, the word be
changed to "UNWANTED".
Also ,where the article states under .........
(Starving millions).(There are a number of different reasons for food prices escalating around the world. But two of the most important ones are converting food to liquid fuel and high energy input prices to farming.)
I would have made more clear for the uninformed that
first #1 liquid fuel is turned into food and then that
#2 food is turned back into liquid fuel.
I would have beat home the fact of how obviously absurd,
and doomed to failure this plan of attacking the problem really is.
My being a card carrying and dues paying life long member of the guild of the ignorant, gives me
the liberty to speak on behalf of all those to whom
I call a brother and sister in our union.
Many times I have stated that if nominated I would
refuse to run and if elected I would refuse to serve
as the president of my union.
But alas the the rank and file refuse to hear or follow my advisements.

Since you started posting on this site I have noticed a tendency of yours to point out your lack of education. I am curious as to how you learned to read and write and express yourself as well as you do. The fact that you are able to make sense of all the stuff on this site implies that you 1)have a good basic level of literacy and 2)have above average intelligence. The fact that you have not been formally educated cannot change that. I am nowhere near as well qualified as many of the posters and all the contributers on this site yet, I do not see that as detracting from my ability to participate in the discussions.

My being a card carrying and dues paying life long member of the guild of the ignorant, gives me
the liberty to speak on behalf of all those to whom
I call a brother and sister in our union.

You obviously equate the absence of a formal education with ignorance while, it is obvious to me that you are not ignorant and that comprehension of the material on this site and participation in the discussions, will make you even less so. All over the world there are people who have not used their education to good effect, who have allowed the propaganda of mass consumerism to engulf them and blind them from what seems obvious to you and I, that the current state of affairs is unsustainable. It is made painfully obvious by much of what we read on this site that, there are some very educated people who fail to grasp some fairly basic concepts like, how close we are to Peak Oil and that exponential growth cannot be sustained in a finite system (see the video Arithmetic, Population, and Energy - Parts 1 and 2 by Prof Emeritus Albert A. Bartlett).

There's a popular saying that, "common sense is not that common".

Alan from the islands

You indeed are absolutely correct and I will endeavor
to explain.
I have developed a habit of advertising my lack of
education for somewhat nefarious reasons.
In my business dealings with others in a dog eat dog world I have discovered it places me in a severe
advantage as this openly offered knowlege is then
exploited by others to gain what they believe is
leverage of a superior position.
I was in no way going to try and use this tactic here
in this forum and while it is true I have no education, I understand that using this form of venue
is impersonal and you can't actually hear my gruff
voice or course language.
I also google words for correct spelling.
You may recall that I posted how the future will
require and even favor a person or people who are
adaptable and clever....even above those who are
I have "learned" that a large portion of todays
society mistakes guile and duplicity as intellect,
or intellegence with education.
I see a community of people here who are ahead of the curve and a smidgen of actors who wish to....
in a feeble attempt...argue that the status quo will
remain unchanged.
The way I have become self taught is by socialising
with people like YOU and the others on here I hold
in high regards and afford much respect.
The level of knowledge I have gained in a short period of time is only attributable to the minds that
I am gleaning here.
Hopefully this puts to rest any suspicions I raised
with you.

Hi islandboy,

Thanks for your post. I found it comforting.

"All over the world there are people who have not used their education to good effect," -
"...the current state of affairs is unsustainable."

I would have made more clear for the uninformed that first #1 liquid fuel is turned into food and then that #2 food is turned back into liquid fuel.

I would have made more clear for the uninformed that first #1 liquid fuel is turned into food and then that #2 food is turned back into liquid fuel.

I would have made more clear for the uninformed that first #1 liquid fuel is turned into food and then that #2 food is turned back into liquid fuel.

I would have made more clear for the uninformed that first #1 liquid fuel is turned into food and then that #2 food is turned back into liquid fuel.

For the master of satire;-)

Or, how about this? 8 gallons of fuel is turned into 151 bushels of field corn (and cobs, which are then burned) to turn the corn into 435 gallons of fuel plus 2,700 lbs of high protein cattle feed (we just used the starch for the fuel.)

So, 8 gallons of fuel become 435 gallons of fuel. And, a box of corn flakes costs a nickle, more.

Is that better?

Guys, we'll produce enough ethanol This Year to power 18 Million cars @ 500 gallons/yr.

In 2020 we will be able to power 90 Million cars @ 400 gallons/year. And, you say we're not doing anything? Puhleeze.

A rough calculation on you figures suggests eroei around 54 (435/8). If this were true there would be no energy crisis and corn ethanol would need no subsidy.

How have all those smart folks who estimate eroei of around 1.2 for corn ethanol got it so wrong?

Perhaps they're looking out the "rear-view mirror instead of the windshield."

They're looking at natural gas/coal fired ethanol plants instead of bio-mass fired plants. They're not looking at the new microwave technology for drying the ddgs. They're not looking at plants that extract the corn oil. Or, gassify the biomass/syrup, and sell the Ash, and the CO2.

I didn't even look at the fact that by injecting the CO2 into old wells you can get 1.5 gallons of oil for every bushel of corn processed.

18 Million Cars! Think about it.

A rough calculation on you figures suggests eroei around 54 (435/8). If this were true there would be no energy crisis

But that doesn't follow. The maximum possible rate of production could still be too low to prevent the crisis, indeed it fairly certainly would be.

and corn ethanol would need no subsidy.

Again that doesn't necessarily follow. Besides eroei and rate limit, there is also a measure which no-one seems to have considered, which we could call erohi. That's the human input involved. There's the need to pay the people for the hours of work they have to input, which is a cost factor that is independent of eroei.
Mind you, it does not follow that kdolliso's optimism has a sound basis.

We are wasting $4.5 billion this year in subsidies.

We are enriching one group of farmers at the expense of another group of farmers.

We are raising the price of almost every type of food.

We are creating the largest ever "Dead Zone" in the Gulf off Louisiana (corn takes more fertilizer than alternatives). The size of New Jersey is a watery wasteland.

We are doing almost nothing to reduce oil & gas imports.



Check out the high gas price parody "What Goes Up (& Up & Up)" on YouTube at:


Check out more parodies on Parody & Son at:


.......and in the near future you will hear leaders cry out,

"One billion barrels of oil, My Kingdom for one billion barrels of oil!"

and a few years later;

"One million barrels of oil, My Kingdom for one million barrels of oil!"

and some months after that;

"One thousand barrels of oil, My Kingdom for one thousand barrels of oil!"

and so it goes on

Hi drummers,,

I have a 49 cc moped that I like well, but since things have gotten conciderably worse here in the usa I now see that unless we change the source of fuel that we use for transportation we are doomed,,,

Look at it this way, if we pour out a gallon of anything from a container as it becomes almost empty we try and deminish the flow thats already deminishing the total volume comeing out must decline sharply, therefore conservation cannot work.

EVERYBODY has answers but most of the ones I see do not address this problem,

hundreds of millions of people must live where they live becouse there is no housing for them to live anywhere else, thus a simple if unplesant answer is to manufacture gas from human waste, I would guess from a familly of four enough could be made to travil 40 or 50 miles or so a day, the energy needed to do this could come from coal or nuclear electric,,

There are not many options,,,,,and even less time, to me this is a good plan, any one that says no to this will bear the blame of those that died becouse of that vote on the judgment day. no jokes today.

Perhaps oil could have been priced more appropriately if production capacity and other technical details weren't state secrets. Private companies have their fair share of blame too. Who was it that got caught overstating reserves? Exxon-Mobile right?

The market cannot price appropriately with incomplete data to the degree we have in the petroleum industry. Now we know the middle-east has been bluffing, but it appears to be too late to avoid the decimation of the middle-class in Europe and the United States in particular. So sad.


Hear! Hear!

The difference is that ExxonMobil actually gets caught, because its numbers aren't state secrets and thus subject to accounting regulations (which, even if the accountants are often corrupt, sometimes shines a light.)

All the reserves numbers for all the countries in OPEC are pure fabulation. We don't even know if the guys in charge there know what the real situation in their own countries is. (Folks like Saddam don't like the truth if it was discouraging.)


The notion that the G8 has been working as a cabal over the last 30 years with respect to energy policy is naive--and misleading. The pipelines from Russia to feed gas to Europe were done over the objections of Reagan. The US has no formal policy on the Russian pipeline to the Pacific--Japan is willing to subsidize to the tune of $14 billion. Russia will likely stick to China, at the expense of its fellow G8 member. Iran is negotiating a pipeline to the heart of Europe. Even the notion that Canadian and American energy policy is in lockstep is pure nonsense. The interests of the UK haven't even matched the US, given that the North Sea made them exporters. Most of the G8 endorsed Kyoto, but not all.

If you mischaracterize those who you most want to convince, it's possible your arguments won't get much of a hearing.

With some tweaking the oil consumption figure in the top post would make a snappy flag. It would be original - it breaks some of the rules of flag creation. The g7 should adopt it!


Anyone who has worked for a big corporation or state bureaucracy knows how hard procedures, goals, relations, and image are entrenched. Difficulties are sometimes partly solved, often inappropriately, always smoothed over. Many white lies and false signals are sent out and everyone buckles down once more. Dissident voices are silenced, fired, or co-opted (the brilliant new team member, etc.) The top leaders are most often very conservative, or think only in a narrow tunnel, because of their past, because their present position depends on it, because power becomes more important for getting things done than ideas.

New ventures (new technology, markets, products, laws, communication methods, structures, organization, staff turnover, etc.) often have no effect - as they were merely cosmetic - or fail, or succeed only for a moment, partly. Sometimes they make things worse and more scrambling is required. On occasion, fraud is the last resort.

Governments are uniquely well placed for all kinds of shenanigans, as they control information and the media and have a gift that keeps on giving, the taxpayer, as well as the jackboots under their control. Corporations, and bureaucracies (as the admin. arm) don’t have that power. Corporations and businesses tend to dislike the strictures the Gvmt. puts on them, as well as the taxes they have to pay.

Once the two meld or join, with the bureaucrats increasing their power as intermediaries, small time regulators, corridor and paper kings, well you have what *many would call* a fascist state.

Fascist states - and their vestigial, puny brothers, in the shape of today’s populist right wing parties - think Haider, Le Pen, in the purer forms, the UK Gvmt. and Bush in mixed, milder, tutti frutti flavor - move forward, but only forward - never sideways or back. Therefore, they lose, collapse, implode, disappear. As do many corporations ... WW2 (ok it is a desperate topic) and this year’s rout and defeat of the populist Swiss People’s Party (no details as they won’t interest), are both examples of the same type of historical events, watered down with child’s grenadine syrup for the latter.

I am not stating that the g7 or the US, as the superpower, is “fascist” - the term is too loosely used; but that an extremism of the *center*, an offshoot of democracies, can become overriding. (Fascism is not left or right, be it socially or economically.)

Simply, systems or regimes of this type do not backtrack, consider they have made mistakes they can correct, or venture into novelties that might be creative and open ended, or useful and common sensical, sort of tried-and-true stuff. The solutions listed by Euan in the top post, excellent as they are, will never be implemented by heads of state in the West, or the g7(8), except in a symbolic, shoddy, and temporary way - to show they are doing something, are listening, are looking for approval, showing nice, projecting an image. (Going green, etc. See corporations...)

Well, not everybody seems to be convinced that supply vs. demand is driving the oil price up:

"Supply and demand of the physical product, by and large, has remained fairly stable. In 2005, global oil production was 84.6 million barrels per day, and consumption was 83.6 million. Today, those numbers are 86.5 million and 86.4 million. That slight tightening hardly justifies the tripled price. So what does? OPEC? The falling dollar? A conspiracy to manipulate the market by speculators?" - always the same story...



Supply/demand pricing isn't based upon the numbers you offer. Remember: the world has been supplied with the oil it requests for many decades. Ignoring mothly inventory swings the producers have never produced more than they sold. There is no giant tank farm in the desert holding all that excess production from the last decades.

Supply/demand is driven by competition. When Saudi flooded the world with oil in 1986 and prices dropped to $10/bbl it was to take market share away from other OPEC members. That's one side of the supply/demand picture, showing just how ineffective the OPEC cartel really was. Now we're on the other side of the coin. When folks demand that Saudi produce another million bbls of oil that's not what they are really asking. Saudie can't produce another million bbls because there is no one to buy it. The world is buying all the oil they want/can afford right now. What Saudi is really being asked to do is to offer that million bbl for less than the other exporters are charging. Back to taking market share.

But even if Saudi did so it would necessarially start a price war like it did in the 80's. All the exporters (except for Saudi) openly admit they are at PO. They may choose to cut their production back a million bbl per day and save it for down the road. And now you're back to no pressure on Saudi, or any toher producer, to lower prices. Supply/demand is working exactly as it always has: if there is little competition amongst the producers of a commodity for market share then it will be priced high. If you want another example go into a dealership right now and see how far down you can negotiate the price on a new Prius. Let me know if you can get them to sell it to you for just the sticker price.

Supply/demand always works. It just really hurts to be on the bad side of the fence. Ask some older Saudi how it feels....they almost went bankrupt back in the 80's.

Dear Rockman,

thanks.... sounds reasonable. In fact I also think that supply/demand is the main cause for higher prices. I just don't know, why many other people have such difficulties to accept this (quite obvious) fact... cheers,


Leaders aren't elected to provide leadership. When leaders do in fact provide leadership it's an exceptional event, not the rule. As always, it's everyone's fault. The people get the leaders they deserve. People make history, not "leaders." While the current crop of world leaders is truly abysmal, and criticizing them is good sport, and, they are deserving of every bit of castigation heaped upon them--I think we should be equally skeptical of heaping so much responsibility, upon them.

Besides, if one accepts that we have been living in the paradigm of cheap and easy fossil fuels, then by definition it's very hard for anyone intellectually to step outside of that paradigm long enough to see it, and warn about it, and plan for the end of it. Political leaders would typically be among the least likely of personality types to undertake such contrarian thinking, and positioning.


Euan, I agree with all your suggested actions, and also would add banning altogether some high-visibility, conspicuously wasteful uses of fossil fuels, such as car racing.

BTW, I'm e-mailing you a related suggestion.

One aspect of the problem is sprawl. Therefore, part of the solution is to update comprehensive plans and zoning ordinances to severely inhibit sprawl developments away from work centers and mass transit. This subject is one of many details, so I will simply reference Carfree.com.

Why oil costs over $140 per barrel: the failure of leadership...

This is about the most asinine statement I have ever read on the Oil Drum.
Did it fail to cross the mind of the writer of this article that all Western European Nations, and of course - America, are democratic nations, and that 'we the people' are the ones who ultimately make the decisions when it comes to market-economic precedence.It is not the people who give acquiecsence to the governments; but the governments who ultimately give acquiecsence to the will of the people.
We vote our leaders into office, and as much as we bitch about their policies or complain of rigged elections, it is our leadership who indirectly and ultimately directs the responsibility of policy within the hands of the people.
You know, "The Wealth of the Nations" ala Adam Smith.Its what WE wanted - right?
That is how democratic governments work.

We are free to do what we want to do within our giant box of reality, and therefore, we are the ones who choose to be manipulated by corporate advertising and partake in excessive consumption and superfluous activities.Yes, WE were the ones who wanted this, and WE are the ones who are responsible for the current crisis; particularly Americans.I mean WTF do we need with multi-billion dollar casinos like the plethora of eye soars that dot the Southern Nevada Desert where I live? This is madness, and WE wanted it this way.All the majority of individuals are concerned about is having a good time, and Europeans are not immune to this type of selfcenteredness either.
When a rogue independent thinking college professor in America makes a statement of fact concerning our personal responsibility in world events we marginalize him as a communist, a socialist, or terrorist sympathizer and excuse him of his post (what brilliant dialects we us to justify ourselves).
You see, the secular humanists love to have their ears tickled just like the religious.
Did you ever stop and think of what we will do with people who think outside the box tomorrow when things really get out of hand.Do we have a nice little camp for them to attend complete with showers?

We all look back on the pre-war Germans of the 30's and say:What poor miserable bastards they were - ignorant and selfcentered.But we fail to comprehend the fact Hitler was elected in a democatic nation.And we, with our humanistic selfrighteousness and spurious piousness fail to recognize we are following the very same path, only on a global scale.

But hey, if an individual really believes in the Luciferian pecking order, this wouldn't be such a bad idea after all. We can keep on blaming someone else until the end of this age comes.Who gives a rats ass about the commandment to "...do unto others as you would have them do unto you..."

The answers to our problems are not going to be based upon science and or so called 'fair' policies - they are going to be based upon philoalaythia - the love of truth.

The choice is yours.


Why oil costs over $140 per barrel: the failure of leadership...

This is about the most asinine statement I have ever read on the Oil Drum.
Did it fail to cross the mind of the writer of this article that all Western European Nations, and of course - America, are democratic nations, and that 'we the people' are the ones who ultimately make the decisions when it comes to market-economic precedence.It is not the people who give acquiecsence to the governments; but the governments who ultimately give acquiecsence to the will of the people.

So there are a handful of quite critical comments on this thread which is good - cos it does have me thinking.

Would I be correct to presume that you view our leadership has highly successful then in stewardship of the Planet's resources?

OK -so you are actually having a dig at democracy which is very fair. Perhaps what we are seeing is a failure of democracy - and I wouldn't disagree with that. But then I'd point out that our democracy is failing owing to a failure of leadership. It is also failing through the preponderance of lies, spin and distortion. If someone laid the truth on the table the electorate would respond differently to now.

Democracy in my book is rule by the will of the majority. But in fact what happens now is rule by minority public opinion as projected by the media and by commercial interest that buys influence from weak leaders.

But I do agree with the point you are making about the roll and failure of democracy - especially in the USA. The perpetuation of a dream, that turned into a lie that is about to become a nightmare.

There is little difference between the thuggery of a majority or an oligarchy or single dictator. Democracy, hooey! We are supposed to be a republic, but that was overthrown nearly a hundred years ago. Plus, the US constitution is pretty much out the window.

A democracy is nothing more than mob rule; it achieves the least common denominator of human intelligence.


Please do not take my post as an insult to you personally, it is a tirade about society in general and my guilt in the current paradigm is as great as anyone.Im mean, crap, I live in Las Vegas.
I think democracy would be fine if everyone put their neighbor in at least the same measure of importance as an individual puts his or herself.And the reality of that ever coming to pass on a plenary scale is the day abiotic oil is proven to be a scientific fact.It will never happen.
Democracy actually exacerbates the selfishness that is present in all of mankind.
I think what I am trying to say is all of us as individuals must take responsibility for our own actions.
In the final analysis, you really cannot change the mind of your neighbor.I can plead with people on how investment in the stock market is in reality the gain of oppressions because our economy is a war based economy (something that Eisenhower made perfectly clear in his farewell address). Ultimately, however, it is up to the individual to decide - and in that respect democracy fails - for there are no moral absolutes.
In the real world, however, absolutes are the name of the game; we are absolutely in an energy crisis - the law of entropy cannot be broke.At least not now.
I suppose if they want to smash atoms into one another at 99.9% the speed of light in Switzerland they may find somthing just as beneficial to mankind as nuclear fission or fusion.
We all know how safe we have become with this wonderful manipulation of creation.

Do I believe that our leadership is successful in stewartship of resources?

Well , like I was trying to say, we are the ones who allowed ourselves to be manipulated into this crisis.We chose not to be selfsufficient and instead created a system that relies on the energy of a finite resource and the backs of the 3rd world to create a utopia for ourselves.
We believed the prevaricative disquisitions (bullshit) of the cold war and spent 4 trillion dollars to stockpile nuclear weapons and waste incredible amounts of resources to do so (40% of all stainless steel in the USA is devoted to the nuclear industry who's primary goal is the development of weapons for profit).All in the name of democracy.
But hey, at least we had Disneyland on the weekends to keep the endorphin levels high in our brains, and if that didn't work to ease our conscience, well, there's always prozac.

It's time to start asking some serious questions about life.

I think its time we did something


Getting out of London may be one idea.

The wheels are coming off the system in slow motion and all we can do is watch.


I actually do have a bug out plan. can you believe that.. because I can't.

It'll never happen is what I have always kept in the back of my mind.


we are the ones who allowed ourselves to be manipulated into this crisis.

So we have individual responsibility, group responsibility and responsibility of our group leaders, institutions and corporations. Putting all this together we have our Democratic, Capitalist system.

This system has appeared to serve the needs of very many for a long time - whilst resources were being run down and the environment degraded.

And so we reach a point where the system is about to fail owning mainly to the resources required to sustain it going into decline.

Now the vast, vast majority of the individuals are not aware of that fact and so it is impossible for them to make informed decisions when they vote and when they make purchasing choices. For them energy is something that has always been there at a flick of a switch or at the end of a nozzle. Its just like water coming out of a tap.

It's also true that the vast majority of politicians are wholly ignorant about the decline in FF energy that fuels the democratic capitalist system they represent. Now in my opinion it is the responsibility of those who have chosen to be elected as political representatives and leaders to be aware of where the best interests of those they have been chosen to represent actually lies.

I d agree with you though that our leaders do not carry all the blame. Here's what I said:

Their collective failure to reduce demand for oil, natural gas and coal within their respective economies is one of the main reasons energy prices are spiraling upwards out of control.

So this is one reason amongst many - I covered other reasons in earlier posts. And when we hit $150 it may be time to look at the failings of democracy, the media and capitalism.

then why bother with the democracy.. if its down to individual responsibility why do we vote for a leader at all?

it strikes me that yor right in so far its all our own fault for being greedy.. but then it follows that leadership is required to tell everyone what the situation is and we are all going to have to take a huge bite of this massive turd sandwich.

to me the failure of leadership was pandering to this innate human selfishness . it was/is perceived as a short cut to power. there was a time political parties agreed to vacate certain issues as their co-option was universally agreed as damaging to the universal good.

to interrupt this bread and circus political farce requires political leadership.. i think?

and someone will break into the space created by the failure of the political class to address depletion. I can see fascists and all sorts up to no good in the coming economic climate. we need to get in there

people are political, the problem is political. its a messy truth we have to recognize.


What's that old saying about good men doing nothing? That's us, 99.999% of us. We all know what THEY should be doing. But what do WE do? Sit around and complain! Let George do it.

Nations are unweildy, unruly creations that take on lives of their own. Like the 2nd law of thermodynamics, once in motion they can hardly be stopped. Humans are guided by self interest, and that includes YOU! You decry a lack of leadership? Well, where is your courage to do what you accuse others of not having the courage to do?

Don't look in the mirror because then you might recognize what the real problem is. Human beings are very clever creatures, but as for being intelligent . . . I don't think so. And that includes myself.

if I lower my energy consumption any lower I will have to stop typing.

will that work?


Thx fr bng brf.

Hitler was appointed, not elected.

So was Gordon Brown.

And despite Al Gore being elected, George Dubya seized the post :-p

I stand corrected, Germany was none the less ostensibly capitalist-democratic in ideology at the time Hitler came to power, and this is perhaps why it swept so many Germans into a Manichean nationalistic frenzy.They simply did not recognize the evil they were partaking in.

If one finds it hard to believe they had a capitalist mentality, all you have to do is read the definition of Fascism by Benito Mussolini - "...Fascism is the merger of corporations with government..." - enough said.
Should we not find it odd that it becomes harder and harder to differentiate between socialism and capitalism in government today? You know - nationally socialize the bail out of Bear Stearns yet allow the CEO's to capitalize on the profits.
It's all semantics anyway.


This is about the most asinine statement I have ever read on the Oil Drum.

That's weird, because the most asinine one I've ever read came right after those words! Namely:

Did it fail to cross the mind of the writer of this article that all Western European Nations, and of course - America, are democratic nations, and that 'we the people' are the ones who ultimately make the decisions

Dear Expert, thirty-four years ago a book was published with the title "Motorways versus democracy". It documented many years experience of the dominance of bigbusiness against uk democracy. And the subsequent thirty-four years have just continued with more of the same corruption. Right now the government is continuing to impose airport and roads expansion despite the petitions and huge protests being in exactly the opposite direction for years after years.
I beg to suggest you need to stop soaking up the media propaganda and get out more into the real world!

I beg your pardon Mum,but WE-ourselves have been the irresponsible one's who have been consuming at exponentially higher rates every year.I do not know what it is like in the UK, but I live in Las Vegas USA, and the 'reality' here is that people for the most part could care-less about conservation and the contraction of big business; this has got to be the Hummer capitol of the world - among other 'things'.

BTW, I notice alot of European travelers here also and they do not seem to concerned about PO either.

Did it ever cross your mind that if WE stopped consuming so much big business would not have a leg to stand on?

You know, that funny thing called supply and demand.

That IS the real world, and the tele will never tell you that factoid!

£7.5bn black hole in Britain's finances

The figures, given exclusively to The Independent by the National Institute of Economic and Social Research (NIESR), will increase the fears of Labour MPs that they are heading for a general election with the public finances in chaos.
The NIESR predicts that the slowdown in the economy will cut at least £8bn from the tax revenues that Mr Darling predicted in his March Budget while the slump in house sales will halve the Chancellor's stamp duty receipts to £3bn.


The good news just keeps coming....

It should have been saved for a rainy day.;-)

From your post, themes of the summit:
1) The World economy
2) Environment and Climate Change
3) Development and Africa

What no Peak oil?

Why Africa?
People have been starving in Africa for decades why get concerned now?

In the guest post “What is happening with oil prices?”, TOD ANZ, July 7 2008, anawhata shows a table of Net Oil Exporters highlighting those with increasing exports.
[Source: datamunger at http://www.theoildrum.com/node/4082/353705 using EIA data]

This shows that apart from Iraq, Russian, Kazakhstan and Azerbaijan the only other countries with increasing net oil exports are in Africa.

Hence the Bush administrations rediscovery of Africa – must have forgotten about Mogadishu.
So nothing to do with concern for starving Africans.
Could this also be the reason why USA may be getting a Black president?
It is the only region that they can have any influence on now.
Although they may be a little disappointed with the welcome Barack will get. In my time in Nigeria I found that the locals did not take kindly to their long lost black cousins from the USA (Roots, etc.) breezing in and lording it over them. Don’t get me wrong, they will give him a wonderful welcome, big beaming smiles and really strong handshakes, that is, as long as he is giving money out.

Re the subject of your post, see Reuters report on G8
TOYAKO, Japan, Tue Jul 8, 2008 4:53am BST (Reuters) - Group of Eight leaders agreed on Tuesday there was a need for stability in oil and food prices, which have soared in recent months, as well as in financial markets, a Japanese government official said.
Most G8 leaders were positive about the outlook for the global economy, despite the uncertainties, the official told reporters.
So, straight from the horse’s mouth, no problem!
What are we all worrying about?

I think you'll find that Russia has now dropped out of the club of rising exporters. And that China is active in Africa securing influence in a more tangible way that simply throwing $$$$ at corrupt regimes.

The stage is set for Act II of peak oil and gas.

I've been trying to read some of the reports from Hokkaido - simply pap.

Though current back tracking on biofuels is a step in right direction. And Last night Gordon Brown was talking about Hybrids, plug in hybrids and electric cars - signs of slow movement in the right direction.

UK oil and gas production will fall 5pc over the next five years despite fields in the North Sea and along other parts of the coast containing 25bn barrels of recoverable crude, says the industry group Oil and Gas UK (OGUK) in its latest economic report.


Only a 5pc fall over 5 years! Whew! for a minute I thought we were in trouble!
What's more, they seem to have discovered 25bn barrels without even looking!

What planet are they on? Not the same as mine, it seems.


I haven't looked at the details on N Sea decline rates in quit a while but that slow decline may not be too far off. I know production rates have dropped significantly but a lot of the production is water drive. When a field has recovered a large percentage of its reserves declines can drop very low. But that's because prodcution rates have dropped greatly. I'm working with a field that had dropped to about 0.5% decline rate. But here's the details: cum recovery - 33 million bo (over 60 years); max initial flow rate - 20,000 bopd; current flow rate - 240 bopd and 240,000 bbls of water (yep...a 1% oil cut). As far as future recovery it might make another million bbls or two if prices stay high. But that might take another 100 years.

Back to the same problem when folks throw out numbers like the 25 billion bbl recoverable in the N Sea: at what price level to justify the expense (a lot more expensive with the high fixed costs offshore) and, more importantly, how long to recover those reserves. Without those details the 25 billion bbl of oil is, at best, meaningless and , at worst, highly deceptive.

They acknowledge that it will be expensive:

"Plans currently in place should reach about 10bn of those barrels so the challenge in the hands of the Government and industry is how to achieve the remaining 15bn. Whilst realising this goal will require massive further investment from the industry, at $100 per barrel, it is worth $1.5 trillion to the British economy and this is a prize which the country should not contemplate losing.

Euan has very different, much steeper decline rates for the UK North Sea:

How in the world they have got from the historic decline rates to just 5% over 5 years projected I can't imagine, and can only think that they meant 5% a year, which would still take some doing.


If we had the details on each field's water cut/decline rate (as I would hope they are basing their projection) it's actually easy to project decline rates near the end of a field's life. When you plot such numbers on a log-normal scale the decline typically shows a very even downward sloping line. Take a straight edge (yep..very high tech, I know, but it's worked for over 60 years so why change) and lay it on the line and you can project fairly accurately years ahead. This works because the flow dynamics towards the end of a water drive reservoir life is governed by certain physical laws of progression.

If they, or anyone else, can show such a plot it would be very easy to confirm or condemn their estimate. And that may be why they haven't included that info.

Dunno, I leave it to the big brains around the site.
The difference between their estimate an Euan's is 'interesting' though.
So far I have always found the projections here much more accurate than those floated elsewhere, which are subject to all sorts of pressures and have all sorts of agendas.
A 5% fall over 5 years with the possibility of scads more if investment is attracted sounds suspiciously like what the Government would wish though.
Government energy policy so far has consisted of sticking their fingers in their ears and whistling loudly.

As a tidbit, but one I found too depressing to bookmark, the Government is taking action on energy.
It is cutting the budget for many nuclear studies at Universities by half, to complete the destruction of the intellectual capital we once had in the field.

Euan, one important field where action can be taken is monetary policy. You may be interested in this post of mine on the topic in July 9's drumbeat.