DrumBeat: July 16, 2008

Oil tumbles again; prices fall over $10 in 2 days

NEW YORK - Oil prices have settled sharply lower for the second straight day, capping a dizzying drop that has left crude more than $10 cheaper in just two days of frenzied trading.

Light, sweet crude for August delivery fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange, after earlier sinking as low as $132.

The drop follows a $6.44 sell-off Tuesday, meaning prices have plummeted over $10 since Monday.

Peak oil at the boardroom table

Some dealmakers will tell you that it's the hardest to agree on price and get a buyout done when any commodity reaches a potential top for precisely that reason. It's much easier to find common ground just before the peak and just after. So with Shell agreeing to pay a hefty 42 per cent premium for Duvernay, the debate is now on: Does that signal that the buyers have come around to the sellers' way of thinking? And if so are we just before the peak or just after?

Independence Hub to temporarily shut down

The Independence Hub natural gas production platform in the Gulf of Mexico is expected to temporarily shutter next week for about four days of planned maintenance, according to a Reuters report.

Philippine Army HQ starts 'carless day' to save fuel

The Philippine Army, in a bid to curb rising fuel expenses, has instituted a carless day rule at its general headquarters (GHQ) in Fort Bonifacio, Makati City.

The Philippine Army's carless day rule is enforced from Tuesday to Thursday every week.

During carless days, all Army personnel residing inside the camp - generals included - are not allowed to use cars inside the camp. They are, instead, advised to walk or ride bicycles.

Mich. cities say hundreds of manhole covers stolen

FLINT, Mich. - Officials in Flint, Mich., say they've had to replace hundreds of manhole covers and grates that were probably stolen and sold for scrap.

The Flint Journal reported Monday that nearly 400 cast iron covers and grates have been taken from streets in the past year. A cover can fetch $20 from a scrap yard but can cost the city more than $200 to replace.

Study: Future snowmelt in West twice as early as expected; threatens ecosystems and water reserves

According to a new study, global warming could lead to larger changes in snowmelt in the western United States than was previously thought, possibly increasing wildfire risk and creating new water management challenges for agriculture, ecosystems and urban populations.

Chesapeake watermen fear blue crab not coming back

The best way to make money on the Chesapeake these days is taking businessmen from Washington and Philadelphia on charter fishing trips. Those who still rely on crabbing are further hurt by a double punch of higher fuel costs and an economic downturn that's meant fewer consumers dropping up to $200 on a bushel of crabs.

"People don't have the disposable income. They're just not buying," says Kellam, who spends up to $150 a day on diesel, which costs about $5 a gallon at a nearby marina.

Cyprus drought

Emergency measures have rationed running water to households, while some boreholes supplying communities have been shut down because they are at risk of seawater contamination.

"We only have (running) water twice a week," said Niki Soteriou, 27. "What is even worse is that they are now saying that our water is not safe for consumption so I am not even giving my dog any tap water to drink in case it harms him."

UK: Merely fuelling our addiction

Delaying the fuel duty rise serves no one. The government must face reality: the sooner we exit the age of oil, the better.

Warehouse getting 33,000 solar panels

The first of 3.5 million solar panels planned for 150 business rooftops were installed Wednesday, utility giant Southern California Edison announced, calling it the start of what it intends to be the world's largest solar panel installation, covering two square miles.

Filling up but going nowhere

This is what Bernanke was talking about Tuesday when he warned lawmakers in Washington that high fuel prices have "sapped household purchasing power" and are creating "significant downside risks to the outlook for growth."

Call it the disappearance of discretionary income. As consumers spend more money on gas -- not to mention food, healthcare and other essentials -- they have less to buy other stuff.

Democrats ask State Dept. to investigate whether employees encouraged oil deals with Iraq

WASHINGTON: Four Democratic senators on Wednesday called on the State Department's inspector general to investigate whether agency employees encouraged lucrative oil deals between Iraq and several Western companies.

Oil Slick: Why Are Crude Prices Falling?

After crude oil’s biggest one-day drop in 18 years, there’s been no bounce—not even a dead-cat bounce. Crude kept falling in early Wednesday trading, even as the dollar rattled around at record lows against the euro.

What’s behind oil’s fall? There are suspects for all tastes—demand, supply, and the market itself. Let’s see.

Indonesia struggles to capitalize on its oil

Jakarta, Indonesia - With crude oil fetching over $140 a barrel, these should be the best of times for resource-rich Indonesia, the only Asian oil producer in the Organization of Petroleum Exporting Countries (OPEC).

Instead, Indonesia is quitting the cartel at the end of the year. Falling output from aging oil fields and a paucity of major new finds has left it unable to meet its OPEC production quota. Since 2004, it has been a net importer of oil.

Gunmen attack naval houseboat in Nigeria; 5 dead

PORT HARCOURT, Nigeria - A band of suspected militants attacked a naval houseboat stationed in Nigeria's restive, oil-rich south Wednesday, sparking a gunbattle that left five people dead, military officials said.

Ecuador, Venezuela to build oil refinery

Venezuelan President Hugo Chavez and his Ecuadorean counterpart signed a contract on Tuesday to jointly build an oil refinery in Ecuador.

Chavez and his close ally, President Rafael Correa, said the 300,000-barrel-a-day refinery on Ecuador's Pacific coast province of Manabi will help the region gain energy independence.

Human consumption: Flying in the face of logic

Forty years on, the message from Ehrlich, now 76 and the Bing professor of population studies in the department of biological sciences at Stanford, has barely mellowed. He and his wife have just published a new book, The Dominant Animal, the central theme of which is how one species, Homo sapiens, has become so powerful that it can significantly undermine the Earth's ability to support much of life.

It is undeniably timely as we lurch from one grim realisation to another: a climate crisis, then an energy crisis, now a food crisis. And underlying them all is the issue of population. When Ehrlich wrote The Population Bomb, there were 3.5 billion people on Earth; there are now 6.7 billion. "The connections are so obvious it's appalling that they're not made," he says. "Each person we add now disproportionately impacts on the environment and life-support systems of the planet."

Summer Natural Gas Costs at Unprecedented Highs, Congressional Action Long Overdue to Address Rising Energy Costs

EVANSVILLE, Ind /PRNewswire-FirstCall via COMTEX/ -- Summer 2008 natural gas commodity costs are now twice as high as the June/July costs in any previous year. The July 2008 price, which recently closed at more than $13 per dekatherm, even eclipses prices from the previous winter heating season, which averaged around $8 per unit, according to the New York Mercantile Exchange monthly settlement prices.

In prior years, the price of gas has dropped significantly in the summer as the use of natural gas for space heating decreased. This pattern afforded utilities the opportunity to refill their storage fields at lower prices, which led to lower prices in the following winter (compared to the daily spot market) when the gas was used by customers. Now that more electric utilities are turning to natural gas to produce electricity, year-round demand for natural gas is more constant, and this increase in demand has led to unprecedented summer costs.

Rising cost of power, plus growing demand, could lead to blackouts

In the last five years, utility bills have risen 30 percent, largely because of the cost of fuel. In California, Florida, Missouri, Oklahoma, Virginia, Texas and elsewhere, consumers are girding for higher electricity rates. The price of coal — the fuel for over half of America's power plants — has doubled since last year while the cost of liquid natural gas — another common fuel and currently the only reasonable alternative — has soared by 50 percent, USA Today reported in June.

At the same time that rates are on the rise, electricity demand is increasing. According to the U.S. Energy Information Administration, demand is projected to grow 1.1 percent annually, or a total of 17 percent by 2020. By 2030, demand is expected to increase by 30 percent from current levels, the equivalent of adding four more California's to the power grid. In some regions, demand will soon outstrip supply.

Xcel set to cut power to 47,000

Xcel Energy estimates that it will shut off 47,000 Colorado customers for delinquent bills during the second and third quarters of this year, a staggering 140 percent increase over the same period in 2005, according to regulatory filings.

With energy costs and customer shutoffs soaring, advocates for the poor are scrambling to find additional funding to assist low-income households with their electricity and heating bills this winter.

Inflation: Price jump worst since '91

NEW YORK (CNNMoney.com) -- Record gas and higher food prices drove inflation to the biggest annual jump since 1991 and fanned fears about growing pressures on consumers.

European Car Sales Fall on Fuel Cost, Spreading Gloom

(Bloomberg) -- European car sales fell 7.9 percent in June on higher fuel prices and a slump in demand spreading north from Spain and Italy. Japanese automakers led the declines.

Marshalls' Are Going Dark As Funds For Fuel Run Low

With no financial reserves and a national fuel bill skyrocketing beyond the financial ability of the country’s only utility provider, the Marshall Islands is in a countdown to power rationing in its two urban centers, Majuro and Ebeye.

President Litokwa Tomeing declared a state of emergency on July 3 with the hope that this will give some additional traction to requests for help from donor nations, as well as cost-cutting measures at home.

Turkey: Minister predicts worst is yet to come in global crisis

The economy minister has said the world economy is passing through a dark tunnel of turbulence, noting that this may be the worst global economic period since the Great Depression and that the worst has yet to be seen.

Strike cuts fish trading by quarter in Japan - industry

TOKYO (Thomson Financial) - Supplies at the world's biggest fish market, in Tokyo, dropped by a quarter Wednesday after a one-day strike by Japan's fishermen to protest against soaring fuel costs.

Mexico City to Consult Public on Calderon Energy Bill

(Bloomberg) -- Mexico City's government will hold a non-binding referendum this month on President Felipe Calderon's plan to give the state oil monopoly more leeway to hire private companies, possibly giving ammunition to opponents of the bill.

Australia considers first new coal port in 25 years

CANBERRA (Reuters) - Australia's Queensland state is considering new coal mines and the country's first new export terminal in 25 years, investments that could increase shipments from the world's largest exporter of the commodity by 40 percent.

But the announcement has drawn fire on the eve of a report on emissions trading as Australia, the world's largest greenhouse gas emitter per person, looks to lead Asia on carbon trading.

Petrobras inks $3 billion in contracts with Transocean

Transocean, the world's largest offshore oil driller, agreed to lease four rigs to Petroleo Brasileiro SA for $3.05 billion as the Brazilian company seeks to tap reserves that include the biggest discovery in the Americas in three decades.

Canadian oil pipeline to extend to Gulf Coast

TransCanada, owner of Canada's largest pipeline system, and ConocoPhillips plan a $7 billion pipeline expansion to provide additional capacity to ship crude from western Canada to U.S. Gulf Coast refiners.

The 500,000-barrel-a-day expansion of the Keystone pipeline is expected to start by 2012, Calgary-based TransCanada said today in a statement. Customers have signed contracts for 300,000 barrels a day.

West Australia Restarts Collie to Ease Gas Shortage

(Bloomberg) -- Western Australia, generator of more than a third of the nation's exports, restarted the state's biggest power station late yesterday, helping to ease a gas shortage that may cost A$6.7 billion ($6.4 billion).

What We Can Do To Reverse the Oil Crisis

Every single day on the NYMEX, 300 Million barrels of oil are ordered and canceled and all I am proposing is that each day the US government stand on that trading floor and buy 1/300th of those contracts and NOT cancel them. Those barrels can be used to fill the SPR next month while oil is released this month. We can even let the President go wild and stuff those last 6M barrels into the reserve.

It’s a revenue neutral strategy that doesn’t cost the taxpayers anything and has a good chance of making a dramatic impact on oil prices - TODAY - not in 2020.

Matt Simmons and the Five Psychological Stage of Grief

What is so fascinating about this clip, is that it is somehow a microcosm of what happens when people in denial and in bargaining meet someone from the acceptance stage.

Carter's oil crisis warning went unheard (audio and transcript)

Twenty-nine years ago today, President Jimmy Carter told Americans that the energy crisis was "a clear and present danger to our nation" and drew out a plan to address it. Sustainability reporter Sam Eaton asks what happened.

Why Oil is Not Trading at $70 per Barrel

What is the inveterate problem as to why oil is pushing $150 per barrel and a gallon of gasoline costs four dollars per gallon? Our government is the problem. Not the Democrats nor the Republicans, but the collective net assembly of congressional and executive leaders since the 1974 oil embargo, and the negative effect it had on our economy is on their hands. There have been 17 Congressional elections and 9 presidential elections since the oil embargo of 1974. There has been energy act after energy act passed with a zero effect on not only oil consumption, but oil prices, and our ability, as a nation, to wean ourselves off fossil fuels. The 1974 oil embargo was a wakeup call to move in a different direction for fuel, but as usual, as the American populace's outrage went dormant, so did the demand for change.

Faulty dilemma

The U.S. needs more offshore drilling and an Apollo-scale program to develop alternative energy sources.

Riders hop Amtrak, dodge gas prices

WASHINGTON -- Julie Jacob was boarding an Amtrak train bound from Milwaukee to Chicago when she realized the last seat had been taken.

The last seat wasn’t an actual seat, however. Those were long gone. Even the luggage racks had been taken over by commuters.

“There was a man in a tie, sitting on the closed toilet seat and he was reading a newspaper. His briefcase was on the floor beside him,” said Jacob, who was left standing.

Consumers want alternative power, says J.D. Power

While most automotive manufacturers have shifted production to smaller vehicles, nearly 70 per cent of consumers say they want automakers to invest more in existing and emerging powertrain technologies, according to a new study by J.D. Power and Associates.

Americans may be losing faith in free markets

WASHINGTON -- For a generation, most people accepted the idea that the core of what makes America tick was an economy governed by free markets. And whatever combination of goods, services and jobs the market cooked up was presumed to be fine for the nation and for its citizens -- certainly better than government meddling.

No longer.

Spurred by the continued housing crisis, turmoil in financial markets, spiking oil prices, disappearing jobs and shrinking retirement savings, the nation and its political leaders have begun to sour on the notion that the current market system is the key to a fair, stable and efficient society.

Energy Woes, Economic Concerns Top of Mind for Financial Advisors in Q2, Brinker Barometer Finds

"The Q2 Barometer has evidenced some notable changes among the concerns of financial advisors in the short period since Q1" noted John Coyne, President of Brinker Capital. "Concerns over 'energy prices' have replaced a 'weakening economy' as advisors' primary worry, which we feel is reflective of the way most Americans feel."

Middle class must push back on energy

Wind energy, solar and hybrid vehicles are great technologies moving us in the right direction. Their advocates correctly think they can change our wasteful energy habits. Unfortunately, that seems to be an elitist "let them eat cake" solution for the short term, offering little hope for most of us who are facing a winter where we will be making decisions about whether to heat or eat. I can’t afford a hybrid car because I haven’t paid last winter’s fuel bill. I’ll be investing in a wood stove; what do you think that’s going to do for global warming?

County to pool resources to purchase fuel, save towns money

Communities everywhere are struggling to find a way to save on their energy budgets. In Hanson, police drive cruisers with six-cylinder engines that only drink fuel instead of gulping it.

Brockton has “bright fields,” an array of solar panels collecting the sun’s energy to supply the ever power-hungry consumer.

The town of Winchester is testing a four-day workweek this summer to save money as energy costs surge to ever-greater heights.

Snowe promotes national energy summit

WASHINGTON (AP) _ Republican Sen. Olympia Snowe of Maine is helping to lead a bipartisan coalition calling for a national energy summit with President Bush to address the nation's energy crisis.

Govt to lose 70 billion pesos if VAT on oil, power is scrapped - Arroyo

MANILA, Philippines - The government stands to lose up to P70 billion in revenues if the value-added tax (VAT) on oil and power is lifted, President Gloria Macapagal Arroyo said Wednesday.

During the launching of the “Palit Bumbilya, Katas ng VAT” program at the PICC, President Arroyo said repealing VAT on oil and power “will strip the vast majority of our people of the means to ride out the world food and energy crisis."

Aussie oil, gas industry 'could suffer'

Investment in Australia's oil and gas industry could decline as companies that provide drilling, engineering and construction services reallocate their skills to work with national oil companies, a survey says.

National oil companies are shifting from allowing foreign ownership of reserves to utilising service contracts, as the price of oil increases, according to a survey by professional services firm KPMG.

New IRS Rule Would Implement Oil Refining Incentive

The Internal Revenue Service (IRS) released a rule last week that could help boost domestic oil refining capacity by as much as 1.5 million barrels daily. The agency has published regulations enabling companies such as Valero Energy, Marathon Oil, and others to take advantage of a 50 percent tax deduction for domestic refineries that increase capacity by 5 percent or more per day.

Farmers fight plans for new oil refinery

The initial secrecy by Hyperion created some of the ill will and raises other questions, said Mitch Pugh, editor of the nearby Sioux City Journal.

"I think there are a lot of unknowns," he said. "Those Hyperion people -- not a lot is known about them. They are not big players in the oil market. ... Where are they going to get the money?"

That's a question that Hyperion officials can't -- or won't -- answer. A request to the U.S. government for a guaranteed loan for the $10 billion in construction costs went nowhere. The company itself has mostly been involved in real estate dealings with oil and gas leases, projects that haven't generated the capital needed for the refinery.

Nothing lasts forever, and nothing we get is free

We, in Canada and the USA, consume 20 barrels of oil per person annually; in Europe they need 10 barrels, while China uses three and India 1.5.

Without adequate supplies we will be in the same position, economically, as Third World countries. Once cheap energy is gone, we are forced to become Homo Naturalis again, reverting back to subsistence farming as is the case in Africa, and to a large extent in China, India and Indonesia.

Abundant petroleum brought us where we are today. That era is now over.

Yucca Mountain stalling only delays inevitable nuclear power push

An emerging political consensus on the need to control greenhouse gas emissions and concern about the nation’s dependence on costly foreign oil have prompted the Bush administration and Congress to give nuclear energy a new look. President Bush made the construction of new nuclear power plants a priority of his second term and, more recently, Congress voted to provide almost $1 billion for various nuclear energy programs.

Gingrich spreads blame on global warming

"It is not possible for high civilization to exist with dramatic reduction in energy" use, he said in an interview.

At the same time, as a "prudent conservative," Gingrich wants to limit carbon emissions, and is frustrated that Republicans are missing the "wonderful opportunity" to offer marketplace solutions to climate change. He singles out Rep. Dave Reichert, R-Wash., as one GOP politician who gets it.

Pine beetle threat grows in the West

The current pine beetle infestation is the worst since 1981, when 4.7 million acres of trees were infected, Mangold said. He blames the outbreak on a perfect storm of drought, large stands of old trees and, possibly, warmer temperatures because of climate change.

"It's shocking," said Jeff Witcosky, an entomologist for the U.S. Forest Service in Lakewood, Colo. "We talk about the grieving process."

GM's product chief: No one was forecasting $140 oil

General Motors' product chief, Robert Lutz, vice chairman in charge of global product development, says he's been peppered with comments that the current sales and financial problems are no more than just deserts for the auto industry's lack of foresight.

Not so, says Lutz.

When today's models of big SUVs and pickups were being developed, Lutz says, "There wasn't a petroleum engineer in the world I know of who came remotely close to forecasting this (high oil and gasoline prices). Petroleum at the time was forecast to be $45 to $60 a barrel and pump prices around $2.15, $2.35.

"What were we supposed to do, just say, 'We don't believe any of that,' and quit building profitable trucks?"

Surburban flight: Commuting to work less attractive as gas prices soar

While real estate insiders say it's dangerous to draw conclusion from just a few months of data -- Verona, Waunakee and Sauk City, for example, have all seen prices climb in 2008 -- there seems a growing realization that gasoline prices are not going down again.

That's left some observers wondering if the drivable suburb -- the model for virtually all post-World War II development in Wisconsin and the U.S. -- has run its course.

Overseas steel companies are snapping up coal interests, retracing a century-old US path

CHARLESTON, West Virginia: It has been more than a century since J.P. Morgan, Andrew Carnegie and other U.S. steel barons built mining empires that dominated life across wide swaths of Central Appalachia's coalfields, securing essential fuel for their mills.

Bits of that history are starting to repeat themselves. Decades after tough economic times forced steel makers to abandon company towns and sell their coal mines, 21st century steelmakers are back in the hunt for coal.

Russia's oil output down 0.6%, gas production up 1.7% in 1H08

MOSCOW (RIA Novosti) - Russia's oil output declined 0.6% year-on-year in January-June 2008 to 242 million metric tons (1.77 billion barrels), while natural gas production grew 1.7% to 339 billion cu m, the country's statistics body said on Wednesday.

Russia's State Statistics Service (Rosstat) said primary crude refining grew 3.9% in the reporting period to 116 million metric tons (850 million barrels), with gasoline output rising only 0.2% to 17.2 million metric tons.

Bankruptcies loom for airlines - report

NEW YORK (CNNMoney.com) -- Thousands of layoffs, hundreds of grounded planes and 21 price increases may not have been enough to save the embattled airline industry from the damaging effects of high fuel prices.

According to a report on the nation's top airlines released by Fitch Ratings Tuesday, record fuel costs and weak cash flow may lead to "multiple bankruptcies and liquidation" for major U.S. airlines in 2009.

EU adopts emergency aid package for fishing sector

BRUSSELS (AFP) — EU fisheries ministers adopted late Tuesday an emergency aid package worth up to two billion euros to help fishermen cope with soaring fuel prices, the EU's French presidency said.

"Political agreement was reached by a qualified majority on urgent measures for the fishing sector," the presidency said, as the ministers met into the evening in Brussels.

The European Commission says that fuel prices for fishing boats have soared 240 percent since 2002, putting severe pressure on a sector already struggling to cope with overcapacity and dwindling fish stocks.

Farmers to consumers: We're affected too

"Corn that costs $7.50 now is not bringing much more profit to farmers then it did when it cost $3 to $4," she said, noting rising gas prices have affected every aspect of farming.

In addition to rising fuel costs, fertilizer, chemicals, nitrogen and phosphorous have all increased in price as well, she said.

A fascinating (if dystopian) future (review of World Made By Hand)

Here in the Bay Area, we're surrounded by clean tech startups that have a relatively upbeat view of how America can respond to climate change and the end of cheap oil.

Maybe it's biofuels, maybe it's solar or wind power. But one way or another, this upbeat view goes, human ingenuity will find alternatives to fossil fuels that will let us keep living our current lifestyles of abundance and convenience.

But what if that's not true?

OPEC's empty toolkit

The leaders of OPEC says its members have plenty of oil to meet demand. So why aren't they putting more on the market?

...The scary thought - held by observers like peak oil guru Matt Simmons and commodities investor Jim Rogers - is that the cartel can't do much more than that because the easy oil is already out of the ground.

"They've been telling us for years that they have between two and three million barrels of [daily] spare capacity," says Gal Luft, the executive director of the Institute for the Analysis of Global Security. "If you have it and you don't use it then you are deliberately denying liquidity to the market when it needs it. If they have it, why don't they use it? And if they don't have it, we need to know that. We need to put more oil in our strategic reserve."

OPEC has apparently given its members the green light to pump all they want, according to a survey released by energy news service Platts last month. The Platts press release about the survey says that "OPEC has a 'tacit' understanding that those members capable of boosting crude production should supply as much oil as world oil markets needed."

Our New Energy Crisis

Almost four years ago, when oil was trading at around $40 a barrel, Paul Roberts wrote a story for Mother Jones on a bleak scenario gaining currency among energy insiders, but not yet in the mainstream consciousness: peak oil, basically the notion that the world's petroleum resources are nearing exhaustion. If the theory held true, Roberts warned, oil prices could soon leap to "perhaps as high as $100 per barrel—a disaster if we don't have a cost-effective alternative fuel or technology in place."

Welcome to the disaster: $100-a-barrel oil is in the rearview mirror, and no cost-effective (or even cost-prohibitive) alternative has emerged. The most dire consequences of this failing—hurricanes, drought, extinction—are occurring far more rapidly than even Slideshow Al could have predicted four years ago. And then there's the war.

Energy tsunami coming, ex-policymakers warn

WASHINGTON (AP) -- A bipartisan group of 27 elder statesmen is sending an open letter to both presidential candidates and every member of Congress saying the country faces "a long-term energy crisis" that threatens the security and prosperity of future generations if swift action isn't taken.

The group includes Henry Kissinger, Colin Powell and six other former secretaries of state or defense, former senators of both parties and a half dozen former senior White House advisers and other Cabinet officers for both Republican and Democratic presidents.

Crude Reporting: If journalists aren't asking the right questions about prices at the pump, then who is?

For my money, a sounder answer as to whom to believe is Don Barlett and Jim Steele, the investigative reporting team that has won two Pulitzers and two National Magazine Awards for exposing government theft and corporate greed. Their 2003 series for Time magazine on oil economics remains required reading for anyone who wants a better understanding of how gas at $4 to $5 a gallon represents a carefully arranged screwing of consumers. “The bottom line for the oil people is, How much can I make while spending the least I can get by with on refineries, synthetic fuels, and for exploration and drilling on the vast, unused acreage in existing oil leases?” Barlett says. He notes that Canada has become the United States’ No. 1 oil supplier by funding joint government-­industry exploration of the tar-sand fields of Alberta. “The most chilling statistic is Exxon Mobil’s. It spent twice as much last year to buy back stock as it did on exploration.”

As for shallow journalism that helps Big Oil, Steele makes the point that the newsrooms that were once staffed by the redistributionist children of the New Deal and the A.F.L.-C.I.O. are now populated with the children of Reaganomics: “Younger reporters come out of a mind-set that the market rules, taxes are evil, and government ought to let these people in the oil industry go about their business.”

Crude Awakening

If this document is accurate, it means that Simmons was right on the money. What's worse, the details are even more discouraging: as the chart on the right shows, what little production increase the Saudis can sustain is all in medium and heavy crudes. Production of light crude, preferred by most refineries, actually decreases by 200,000 barrels per day between now and 2013.

Scraping the Barrel

WHAT KIND of company persuades its customers to consume less of its products; spends great swathes of its money on items unrelated to its core business; doesn't manufacture the products it sells; and at a major triennial convention, does not display any of its products on any of the hundreds of exhibition stands?

Answer: a petroleum company, of which there are three kinds. The first are the super gigantic multinationals like ExxonMobil, Chevron, Shell and BP. The second are the nationally-owned companies (NOCs) such as Qatar Petroleum, Petroecuador and Aramco. The third category includes the independent oil companies (IOCs) such as Broken Hill, Enserch Exploration, Union Pacific and so on.

Mad about gas prices? Get over Gore already

At a recent dinner, a neighbor used the G-word. It was a Miss Manners moment. The ultimate untouchables at social events are religion, politics and Gore.

“The price of gas is Gore’s fault,” she said. “It’s Gore gas.”

“How is that?” I asked.

“He raised it when he put in ethanol. It’s all about global warming.” The tone revealed her opinion of him.

Program Takes Low-Key Look at Peak Oil

GREENSBORO -- Peter Kauber didn't want to frighten anyone on Saturday. Instead, Kauber aimed to get enough of his audience uncomfortable with worldwide oil supply challenges to go home and do their own research.

"I am not hoping that peak oil comes true," Kauber told people gathered in a room at the Kathleen Clay Edwards library. "Nobody in my community hopes it comes true."

Saudi king wants lower oil price

Asked whether Saudi Arabia wanted to "soften the price" of oil, the Saudi monarch was quoted as saying.

"Of course that is the case: we did not want and do not want the price to be this high. It is not in our interest because it is not in the interest of the rest of the world."

Big Chinese Power Firms Suffer Profits Outage

Squeezed between soaring coal costs and government controls on electricity rate charges, two of China's top power producers said Tuesday that they expect to post half-year losses. But scheduled rate hikes for the second half may prevent or stem yearly losses for the firms, analysts say.

Petrobras Workers Call 48-Hour Nationwide Strike Thursday

(Bloomberg) -- Union workers at Petroleo Brasileiro SA, Brazil's state-controlled oil company, called a 48-hour nationwide stoppage starting tomorrow to back their striking colleagues in the Campos Basin.

Section of Central Asian natural gas pipeline to Russia shut down after blast

ALMATY, Kazakhstan: Part of a pipeline carrying natural gas from energy-rich Central Asia to Russia has been shut down after being damaged by an explosion, emergency officials in Kazakhstan said Wednesday.

A 20-mile (39-kilometer) section of the Central Asia-Center pipeline in western Kazakhstan was closed off following the blast late Tuesday, the Emergency Situations Ministry said.

Russia's Caspian Sea oil output could hit 271 mln bbls by 2023

MOSCOW (RIA Novosti) - Annual output in Russia's sector of the Caspian Sea could reach 37 million metric tons (271 million barrels) of oil and 18 billion cubic meters of gas by 2023, a government official said on Wednesday.

Oil and natural gas output in the region has been restricted by the unclear status of the Caspian Sea - a source of long-running disagreements between the five littoral states - Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan - since the collapse of the Soviet Union in 1991.

TNK-BP, Rosneft agree on cost-cutting oil swap deal

MOSCOW (RIA Novosti) - The Russian oil pipeline operator Transneft, the Russian-British joint oil venture TNK-BP, and Russia's largest crude producer Rosneft have signed a swap agreement on oil supplies to cut their costs, Transneft said Wednesday.

Crude realities in a globalised world

If one thought that the credit crunch triggered by subprime market seemed to be passing, an ominous crisis in the escalation of oil prices seems to be looming. As the oil price keeps up its relentless climb, it threatens to be more damaging to the world economy than the credit crisis.

We all have oil villains; choose your own

Some oil industry experts say world oil production will peak in the next few years; some say the peak will come a little later. They all agree that drilling in the wildlife refuge and adding offshore oil leases would have little impact on that inevitable event.

This isn't over-the-top doom and gloom. It's a simple reality that every day there is less oil in the world while consumption increases.

Wind and Natural Gas

When T. Boone Pickens talks about the need to find alternative energy sources, America's addiction to oil really has hit rock bottom.

T-Bone for Him, Slim Pickin’s for Us

I’ve always found it tough to get too mad at T. Boone Pickens. Sure, just a few years ago he warned the world that we are at or close to Peak Oil — while simultaneously making billions of dollars betting on oil futures. Which led some to make specific comments during Congressional testimony, to the effect that his public doomsaying was a posture designed to drive the market for oil — and therefore his personal profits — higher.

Steep tax would curb gas use fast

Bus ridership is up, gasoline sales are down and Honolulu is still trying to decide whether it wants a fixed-rail mass transit system.

A lot of folks have signed a petition saying they don't want rail. But it is now quite obvious that the high price of oil and gasoline is changing habits.

Dilip Hiro: The Energy Reality We Face

When will it end, this crushing rise in the price of gasoline, now averaging $4.10 a gallon at the pump? The question is uppermost in the minds of American motorists as they plan vacations or simply review their daily journeys. The short answer is simple as well: "Not soon."

B.C. coast may have oil, but it's not cheap

The idea that Canada could alleviate the current oil crisis if B.C. started pumping crude along with Alberta must be overly optimistic at best, naive at worst.

Candidates Clash On Impact Of Offshore Drilling

Matthew Simmons is head of Simmons and Company, among the largest banks investing in energy. "We basically wasted away 20 years," he said. "Now, basically, it's a terrific idea, but we ran out the clock. It's really misleading to hold that out as a panacea. It won't work. It might work for our grandchildren." <> Geologists have identified reservoirs or undersea "structures" that might contain oil. But Simmons says that's guesswork. "We don't have any idea whether any of it is there," he said.

Fuelling Oil Fever

The reality is that, in today's oil market, the future is no longer what it used to be. The day-to-day "spot" price of oil is, like never before, under the influence of the futures market.

EPA unveils first rules on carbon dioxide storage

WASHINGTON - The Environmental Protection Agency wants to make sure curbing global warming doesn't contaminate drinking water.

In its first regulations on the burial of carbon dioxide underground, the EPA on Tuesday unveiled measures to protect drinking water from the gas behind the bubbles in carbonated beverages. The fledgling technology, known as carbon sequestration, is critical to reducing carbon dioxide released into the air from coal-fired power plants, one of the country's largest sources of the greenhouse gas.

UK government to spend £6bn to target M-way congestion

Climate campaigner Richard George said: "It's just another plan to increase traffic on our roads, which won't solve congestion and will pump out another 300,000 tonnes of CO2.

Meanwhile the cost of the proposed Severn Barrage, capable of generating 5-8% of UK power, is £15bn. It's still not funded. Anyone else think the money is going in the wrong direction?

Here, too:

Shutdown of 'lifeline' to hit rural police forces hard

A federally funded computer service that has connected thousands of rural police to critical Internet and e-mail access is shutting down at the end of the month, jeopardizing service for 1,500 users in at least 20 states, police officials say.

Police agencies in the most isolated parts of rural America will be hardest hit, says Comanche Nation Police Chief Vernon Griffin. They use the service to solicit help for such basic operations as preparing search warrants and responding to officer fatalities.

some counties in Oregon are talking about dissolving themselves without the "county timber payments" that were paid from the fedgov...same is true with some major county police forces...which instead of a D.A.,and several sheriffs,jail ect...will have a sheriff,and maybe a lockup

It probably is not possible to maintain all the layers of government that developed over the last two centuries. County governments might make sense in an era of poor communications and slow transportation, but it doesn't seem like much more than a place for good ol' boys to gather moss (and money and power) in the current scheme of things. Incorporated municipalities and state governments would seem like enough.

The Oregon counties at risk all have huge federal land holdings that pay no taxes, so Congress agreed to provide payments in lieu of taxes. Now they have decided to renig on the agreement, bizarrely calling it "welfare" (which is available only to investment bankers these days, I guess). Absent the payments and with no way to tax, the county government has no revenue source.

I guess "the market" will decide just how important that bureaucracy is--

It probably is not possible to maintain all the layers of government that developed over the last two centuries.

And yet, they have the 'authority' to set up things like the continuity of government, not to mention the guns and perhaps control enough butter to back up their will.

Few nations shrink their laws and the closest to a shrinkage of law could be considered the IRS paperwork reduction act under Reagan. (one can look to the IRS code to see how that is working out)

"They" can do more or less whatever they want -- the people of the USA have abdicated their responsibility as citizens, and now anesthetize themselves with corporate beer and infotainment from the corporate media. God helps those who help themselves, and if there is not God, there is no help at all.

Even so, it seems doubtful that the corporate overlords have much use for county governments. More likely there will be federal agents, private contractors like Blackwater, and to some extent, viceregal supervision by state governments.

The Oregon counties at risk all have huge federal land holdings that pay no taxes, so Congress agreed to provide payments in lieu of taxes. Now they have decided to renig on the agreement, bizarrely calling it "welfare" (which is available only to investment bankers these days, I guess). Absent the payments and with no way to tax, the county government has no revenue source.

Why do the counties need tax revenue from the federal land. What is the cost to the counties to have federal land in their midst? Do they have actual expenses they are being reimbursed for or is it just that they are forbidden from developing or otherwise utilizing this land.

My understanding is that the counties were used to a certain standard of living from harvesting timber. This extractive industry is declining. The fed govt cushioned this decline by limiting timber harvest and temporarily supplemented county income with these payments. Now the payments are ending. If the counties can not find another means to support themselves other than harvesting public assets from public land, they have to adjust their expectations.

wimsey--I highly suggest you read the items I linked above before you write further, particularly the top two. From the first:

Oregon, the largest recipient nationwide, received about $238 million annually. But the share that has gone to each county depends on the amount of federal land there, so some counties are now suffering much more than others.

The federal money historically has gone to counties of two types — those where timber sales from federal forests have declined, and those that have large tracts of federal land that is exempt from taxation by local governments. Twelve counties — including heavily urbanized Multnomah County, for example — aren’t worrying much because they never received much of the federal money in the first place.

I don't get the exempt from taxation bit. No one lives on this land. There are no schools, utilities or other services that the state or counties must provide for these large areas. In what way are the counties burdened by the presence of federal land? Why would the county need tax revenue from land on which no one lives?

It seems like saying the US is burdened by sharing North America with Canada. There is all this land which is exempt from US taxes.

Yes, but we will need bigger motorways for all the new electric cars we're going to be driving. Besides we will all need to get to the airport on time...

"What we can't do is pander to pressure groups and go back to a time when only rich people traveled," Hutton told reporters at the Farnborough International Air Show outside London. "We need a third runway at Heathrow. We are quite clear about that." 14/ Jul 08


Meanwhile Planes fly empty to keep slots at Heathrow although the Bloomberg article says its at 99% capacity.

"It may not be profitable to slow collapse" - Dimitri Orlov

So, how does this third runway guarantee cheap prices for the middle class? And,I guess, the only way one can possibly travel in Europe is by air.

What do you take us for? We're not FRENCH you know!

Silly, the only way to get around town and avoid traffic (at least in Arizona, according to Cindy McCain) is in a small private plane. Cars are for suckers.

More Homeowners Taking in Boarders

As mortgage foreclosures continue to rise, owners are opening their homes as a way to make ends meet.

As Leanan and others have noted, this trend will contribute to falling demand for housing. And as Sharon Astyk has noted, beware of the Brother In-Law on the Sofa Syndrome, i.e., incoming unemployed in-laws (and adult children). This is a very good reason to have a small organic farm or garden plot, i.e., take an incoming liability and turn it into an asset.

Again, your statement depends on where you live. If you live in the middle of nowhere, or a low density suburb, then yes, you probably have too much space in you house, and their will be falling demand for housing there, and I can see people using their land to grow food. However, in high density areas where people already live in small spaces and are convenient to everything via foot or mass transit, demand for this type of housing is likely to increase.

Demand may increase, but ability to pay won't.

So even in urban areas, I expect an increase in the "brother in law on the couch version of the apocalypse." In many countries, there are 10-25 people crammed into two-room apartments. Even a Manhattan studio apartment is roomy in comparison.

Demand may increase, but ability to pay won't.

Eh disagree, but that just goes back to the root of where some of us disagree on alternative energy and new energy discoveries transitioning from our current fossil fuel usage.

At this point, I don't think alternate energy enters into it. As Bill Schneider (not exactly the alarmist type) said on CNN last night, "The economy is spinning out of control."

Even BusinessWeek is fearing another Great Depression.

A reckoning has begun to unfurl like a dark flower, slowly at first, then gathering urgency and force. This is not a short detour after all, but an untraveled road to an unknown place from which there is no return, no escape…and we are not prepared.

I think a lot of folks have this in the back of their mind...The bad times are coming...now.Whatever plans you had/have get them in place now,cause its showtime..

'Eh, disagree, but that...'

theantidoomer...If you do not understand what is happening to the world economy now and what will probably happen in future then any discussion of 'transitioning' is irrelevant. Unfortunately, the world is stuck with the economic model as it exists today. The model will evolve but slowly. There will be a severe shortage of funding for research and start-ups going forward. Easy credit is dying, and bankers are going to do business as it was practiced in saner times.

Those seeking venture capital will sit down across from a new breed of tough minded bankers. Those without a realistic and convincing biz model will be shown the door quickly.

Perhaps you should pick up an econ 101 book from your library or local used book store and spend a bit of time learning something about how the world of money works prior to making claims that sound rediculous to your fellow posters on TOD. Alternatively, you can remain ignorant and continue to troll.

River--I don't think an Econ101 text is going to be of much help to anyone, other than providing starter fuel for the wood stove. Going forward, I think good accounting skills more helpful as those are needed to actually run a small business.

Karlof, I would be the first to admit that there is a lot of things that economists, in general, simply do not understand, things like "finite supply" and "decline rate". However there are a lot of things they do understand, the laws of supply and demand being one of them. Economists also usually understand things like the importance EROI, which a lot of economic ignoramuses simply cannot get their head around.

There are also things like "transition time" and "transition cost" which most economic ignoramuses think do not exist but is well understood by most economists. That is, how long it would take and what it would cost to transform to "alternative energy" and "new energy discoveries".

In my humble opinion, people who think we can transform to a different kind of society using different kinds of energy....smoothly and with little cost and little pain and suffering...are economic ignoramuses. The transition will be long and hard with great cost to human population numbers. And the world that emerges will bear little resemblance to the world we know today.

Accounting skills are important, very important. But accounting skills give you a view of the trees, economics 101 gives you the view of the forest. That is the difference.

Ron Patterson

There is also the pigeonholing of everyone, including economists, geologists, engineers, and English majors. Somehow, because you majored in some specific thing in college, this means that you are automatically so one dimensional that you are incapable of learning and understanding anything outside your specific area of expertise. I studied environmental economics over 30 years ago. There is nothing here that we did not discuss in that class. One can incorporate all sorts of realities like geology, biology, ecology, EROEI, etc. and still use an economic framework to usefully analyze what is going on in the world.

I am tired of all the generalizations that many people use here. There were many economists over 30 years ago who were railing against those who don't understand externalities and the finiteness of resources. Those economists today who ignore these things are really business economists who are also cheer leaders for the wonders of capitalism and the American way.

Ron--Once upon a time I taught Econ101 and Econ102, macro and micro. The texts were okay as they discussed externalities and the mechanics of global trade, but they were poor on economic history and the immense importance of Politicaleconomics, different ideologies and different economic systems. Good accounting courses incorporate microeconomics and thus provide a view of both forest and trees. Faculty also agreed on the need to include a short segment about the history of commerce and related economic systems since texts lacked such material. We also tried to provide information about the impact of technology on the evolution of economic systems and their underlying components, more info not provided in texts. In short, we found econ texts lacking a great deal of material essential to understanding how we arrived at our current economic system, its plusses and minusses.

I find it quite surreal that historians are to have some understanding of economics, but economists aren't required to now much about history or political- or socioeconomics aside from the basic overview, freshman classes. Post-grads may focus on these areas, but business majors who often dual major in economics generally get zip. Reductionism is a plague in both science and humanities. What we need are holistic scholars, but our universities have primarily produced beancounters and ditto heads because they suffer from the same malaise described by Asimov in Foundation: Promotion of the status quo at the expense of vigorous investigation, thus resulting in stultification and decline.

What happened to Don Sailorman?

His last reply was on March 11, 2008. His No longer posting announcement. A list of his comments.

It's possible that he isn't trolling. There are lots of smart people I know who have no feel for how all these fabulous new technologies require a functioning and reasonably healthy economy to disseminate them. (I live near Silicon Valley. You can guess how many technocornocopians we have here.) They appear to be so fascinated by the technology, or in the least have little or no exposure to economics, that they can't see the whole picture.

Rumsfeld was pilloried for this comment, but there truly is much "that we don't know that we don't know."

The antidoomer literally "can't see" what we can see, and is unwilling to consider that there is something in his blind spot, despite the number of people who point it out to him. Couple that with the natural resistance most people have to being corrected, and his foot remains nailed to the floor.


I disagree. There are so many possibilities. The doomer element here and the cornucopian element are really two sides of the same impulse, which is "the American Way of Life is non-negotiable." The cornucopians spend all their time figuring out ways to keep the cars running because -- that's non-negotiable. The fact that most of the developed world ex-US is perfectly happy today with cities based mostly on trains, buses, etc. is irrelevant. "Oh, but AMERICANS would never live like that!" they claim. (I doubt these people even have passports.)

On the other side, we have the doomer sect, for whom total collapse is guaranteed, and thus it is pointless to offer solutions. For them ALSO, the American Way of Life is non-negotiable. The idea that we could, without really all that much effort, transition to an electric train system powered by windmills (and other such solutions), really no different than the electric train systems that already exist practically everywhere else in the world, gets a reaction like "well, you know NOTHING!! Don't you know that we're all going to be attacking each other with pointy sticks to get the last bag of rice from Costco!!" or something like that. Instead of something other than the American Way of Life, which might be superior to the American Way of Life, they want to knock over the checkerboard like a stupid little brat who is losing the game.

The Europeans don't seem to have these hangups. But then, Europeans are not retarded.

The Europeans don't seem to have these hangups. But then, Europeans are not retarded.

You've just used the same broad brush to condemn two groups while extolling a thrid. Now that's "retarded."

I'm a doomer(realist)but he has a point about europeans.



Sorry to burst your bubble, but yes we are. Retarded. Maybe we just paint with the different colour crayons, but equally retarded are we.

The doomer element here and the cornucopian element are really two sides of the same impulse

There might be a different impulse. How about the impulse to slow the 6th Great Extinction. I'm kind of disgusted with us Humans in general. We are not the most beautiful species.


There's a fundamental distinction between what something is economically "worth" and what I'm able to pay (or more precisely, the level I'm able to pay in the long term, with emergency money in case of illness, getting laid off, etc). I'd love to buy a flat in the city centre of the UK city where I work, but despite the start of dramatic price falls recently there's no way I can afford it. I suspect that shared living is one possibility -- ie, if the JIT-fairy doesn't create the needed technology -- that will happen to a reasonable degrees even in the city centres simply because wages, in general, will be suppressed to the same degree as property prices.

I live with my parents I used to want to own my own home, and even had one I was living in when I lived in Huntsville , Alabama. While In Huntsville, I working in the Defense Industry.

From things I do know but can't talk about, I think everybody should be very afraid of Pakistan falling into chaos.

Obama just talked about Nukes today, Laughs....... he don't know S#$% about the Threat Nukes and the dirty bombs we could face if a nuclear power country were to fail and the nukes got out.

Anyway, about housing, I am effectively Retired, so living with my parents is a good thing. They are up in years, the house is paid for. My dad still is active enough to fix anything that breaks, wants to make improvements but has to fight my growing older and more senile mother about things like that, so there is only what I can do in my own little way.

When I moved, I did give up a Grow Your Own Food yard. I have no hope of getting that one lose back again. But I can survive alone anywhere I want to, so there it that.

The homeless that I work with are the vanguard of the future folks to be homeless because of things Out of their control, Peak Oil and Climate Chaos.

Yes, Yes, still running for President, but knowing I am a voice crying in the wilderness.

The instances in the article you link will indeed lead to reduced demand for housing, but I expect quite a lot of people who can't afford a daily long commute to also get lodgings during the week and return home at weekends, as happened in the seventies.

That works reasonably well providing only one person has a long commute, or there are no children, and obviously means that their own house is still in use - or at least remains occupied for as long as times are good enough so that the extra rent can be afforded.

Many of my coworkers are doing that now.

They stay in motel rooms that rent rooms by the week or month, then go home on weekend to their families.

Tougher times will likely mean that many will move into private homes, as even a few extra dollars will be greatly needed by those letting out, and the overheads of motels are not incurred so reducing costs for those renting.

Could be. This is a college town, and there are already people who rent out rooms to students.

But at the moment, the motel is actually cheaper.

during WWII, practically every medium to large house in Astoria was converted into a duplex or apartments. Often the conversion was very slipshod, but it got the job done, and the population of the town doubled in the same housing stock.

Suspension of building codes will be necessary in the future....

Yeah, shipyard worker population exploded. I consider the many second/vacation homes here on the Oregon coast as housing stock for workers installing the wave and tidal power generating machinery and support industries. The development I live in, for example, has an average of 16 homes vacant the great majority of the year, which could easily accomodate 100 people. The amount of waste produced within the United States, and imported from around the world, in the pursuit of individualism is staggering.

There are a lot of people around the world who now hold dollar-denominated paper who will become owners of American real estate as the economy collapses. They may find that living in a coastal home in Oregon is preferable to the crowded cities of Asia.

Actually, as a defensive planning measure (preparing for incoming unemployed family members), perhaps the best idea is a small organic farm, ideally not far from a mass transit line, with the plan being to move in "tiny houses" for the prospective agricultural workers to live in:


From Tumbleweed:

My decision to inhabit just 96 square feet arose from some concerns I had about the impact a larger house would have on the environment, and because I do not want to maintain a lot of unused or unusable space. My houses have met all of my domestic needs without demanding much in return. The simple, slower lifestyle my homes have afforded is a luxury for which I am continually grateful.

Step one would be to buy the agricultural land. If nothing else, for the time being you could lease it out, preferably to an organic farmer.

IMO, a really good investment idea is to build a network of local biodiesel plants, basically a coop operation, that would permit farmers to make biodeisel for agricultural use using their own crops, and allow them to maintain some degree of mobility, independent of petroleum--which is of course why Rudoplh Diesel designed the diesel engine in the first place.

Non starter.

The fertilizer needed to offset the "waste"
would/will/is too expensive.

The net output on farms is going to shrink.

And getting it out will be slower.

Mules and railroads.

Think somewhere between hunter/gatherer and 1948 output.

Mississippi/E AR:

“Irrigated acres are looking very good, but growers are spending a lot of money because of fuel costs. Growers need the rain, especially on nonirrigated soybeans, but also on irrigated fields to relieve some of the financial pressure,” he said. “The nonirrigated acres are on the fence. We have had spotty rains but need a good uniform rain in the next couple of weeks. Without it, this crop will go the wrong direction.”

Mississippi growers are expected to plant about 2.15 million acres in soybeans, the largest state soybean crop since 1998.

“We may see a few more acres planted, but fields need more moisture for late plantings,” Koger said. “Some beans along the river are yet to be planted after the flood.”


Your crystal ball must be in good nick.
Vast waste in the present system must mean that a lot of economies are easily possible.
For instance the manure from pig farms could be returned to the soil- at the moment most is sluiced away.
Since no attention at all has been paid to the overall system, it is a bit premature to decide that nothing at all can be done, and pretty pointless too.

That is not to go to the other extreme, and say that everything is going to be easily soluble.

"Since no attention at all has been paid to the overall system, it is a bit premature to decide that nothing at all can be done, and pretty pointless too."

Oh yeah,

don't get me wrong. Something is being done.

Almost as if our genes have programmed us to do it. ;}

Everything is being done to keep the status quo going,
which is the worst possible thing we could be doing now.

Ex.-what happens if bush, paulson, bernanke are right?

Then we return to exactly what we've been doing since 1985.

Complexity must yield to simplicity. And yet every fix moves
us further into complexity.

Like this:

Just how exactly is the US going to prevent short selling
on Fannie/Freddie.

And I can tell you right now that farmers are being set up
for next Winter/Spring.

The majority have not captured most of the gains from the last
two years and yet the inputs are soaring.

And yes, manure is the sine quo non, but then Corps like
Smithfield will see their op expense expanding.

Caught between high feed, meat prices that can't adjust
fast enough, and then installing manure-o-ration devices
to loop into someone else's grain farm.

More Complexity.

There is a reason that Corporations don't do grain/fiber ops.

Running the tractors on biodiesel should work out better than going back to horses for one big reason:
The tractors don't need to be fed when they aren't in use.

Small, light EV's and HPV's for the city folk, biodiesel tractors and medium to heavy EV's for agriculture and we have a chance to pull up ahead of the abyss.

I mean really, we only need to cut our oil consumption by 75% to be self sufficient in that area in the US, and a good solid chunk of that can be accomplished with no infrastructure changes. Admittedly, it takes a change in perspective on the part of people that they aren't going to get what they "deserve"(want) no matter how much they wish for it, or how pretty the pictures on TV are. That's the tough part, but bigger changes have happened before.

Running the tractors on biodiesel should work out better than going back to horses for one big reason:
The tractors don't need to be fed when they aren't in use.

That's true. OTOH, tractors also don't make little tractors to replace themselves when they're too old to work any more.

I think this was probably a key element in the reason slavery survived longer in the south. The south's more rural, less industrialized economy needed human labor more, and didn't have the constant influx of immigrants the north had. In the north, many slave owners freed their slaves long before they legally had to. I don't think it was because they were morally superior. The economics were different.

Actually, tractors can and do last a very long time. We have an Allis Chalmers that is 50 years old that still runs and works well. Many of our neighbor farmers also use the old high-clearance tractors for spraying and cultivation. Parts are still available for them and there are mechanics/farmers who know how to fix them. And the tractors really hold their value. You can buy a tractor, use it for 10 years and sell it for about what you paid for it. And what an efficient use of diesel fuel...one gallon can sure accomplish a great deal of cultivation!

They last a long time...but not forever. And they don't reproduce, so you can sell the extras, or give them to your children for their farms.

Yeap! Tractors are great, but if things really go bad, they would be hard to eat... :)

Yeah, but with a little help from my tractor I have so much food coming in that I have more than I can possibly eat...in fact I am giving it away to food pantries and homeless shelters. We harvested 120 pounds of zucchini, 5 pounds of okra, 20 pounds of green beans, 40 pounds of cucumbers and bushels of cabbage and cauliflower. And we're going back tomorrow to harvest onions, leeks, Swiss chard and kale. And spray the acre of sweet corn with BT. I love my tractor. I would give up my car before I would give up my tractor even if I can't eat it.

That's true. OTOH, tractors also don't make little tractors to replace themselves when they're too old to work any more.

Yet draft animals need a stock to work from, just like tractors need, oh say melted down SUV's to work from.

And the amount of draft animals to make enough new draft animals to work all the land in cultivation just ain't there. Just like there lacks farmers who'd be willing to work behind a 40 mule team to bust sod. (And the old seed sells I know talks about the teenage joy he had when his old man decided to rid himself of draft animals so he no longer needed to be behind 'em working the next planting season. 70 years after that event, I can see joy creep into that mans face when he recounts the event.)

Now, sure. If the alternative is starving or pulling the plow himself, I bet that guy would welcome those mules back.

It doesn't take 40 mules to bust sod. Also, not only do draft horses replace themselves but they furnish their own repairs. The chief objection to using draft animals is not that they eat (afterall they can eat what you grow) but the fact that they are labor intensive and slow. As far as there not being enough drafty horses around to provide their services to agriculture, there are more of them than you know. At present there is a surplus of horses and the majority of horses are Quarter Horses which average around 1200 pounds and could serve in a pinch.

It must be the phase of the moon?...or something. I've noticed that some days on this board are...very strange. Hang in there Leanan.

Early industry in the north was dependent, to a large degree, on water power. Anyone that has traveled through the New England states (assuming they are not in a coma) will notice that there are countless fast moving streams and rivers. Great for water power. Great for factories that were running mills, stamping hammers, etc.

Planting and picking cotton does not lend itself to water power. I cannot recall seeing any fast moving streams in the middle of cotton fields. Even if there were fast moving streams in the middle of cotton fields I find it difficult to imagine how they would be harnessed to pick cotton. Cotton gins could use water power, where it was available, to seperate cotton seeds from cotton fibers.

In 1860 the US investment in slaves was the single biggest asset in the US. Did southern plantations want to invest enormous sums of money in slaves that had to be fed, housed, might possibly run away, and could easily catch some disease and perish? I think not. Hand picking was the only way that cotton could be harvested and cotton was a big money crop.

Shortly after the uncivil war, even during the reconstruction period, Jim Crow laws were put into effect that essentially made slaves of the newly freed slaves. Any black person that was found loitering that could not prove employment was sent to county lock up and then rented out to local plantations, or mines for extracting iron ore or coal. Former slaves were charged with any rediculous charge that came to a sheriffs mind and once in the county system other charges were found to keep them there. County records are still readily available, documenting these actions against former slaves. Entire county payrolls were financed by the plantations renting former slaves that were jailed on trumped up charges.

In some areas, usually on marginal farming land, this system of 'jail slavery' was replaced by a share cropping system. Both of these 'economic models' came to an abrupt end when the mechanical cotton picker was introduced in huge quantities after WW2.

The single largest migration of people in American history occured when the mechanical cotton picker was introduced. Otherwise, how would Muddy Waters have landed in Chicago playing and recording great Missippi Delta Blues? Muddy and millions of blacks and whites went to the factories that were really cranking up industrial production after WW2.

There is a lot more to American History than is taught in HS or College...Fortunately, a few good histories have been written about this era in America. Unfortunately, many more histories have been written by people that don't know what they are talking about...Or, more likely, they want to obscure what really happened.

Its important to remember that effective slavery in the US only died out by in the early 1970's.
Before this a large poorly treated working class with few civil rights was common.

In many areas real freedom only became prevalent in the 1980's to the present. Effectively only about 1.5 generations have grown up with reasonable civil right for all. Its very easy for us to lose this new found freedom and revert back to a increasingly large poor class stripped of its basic rights.

Its unfortunate that this freedom seems to have been tightly coupled to the tremendous growth provided by cheap oil in retrospect the potential enslavers where getting so rich converting former slaves to the new debt slave model that they had no problem fostering the illusion of freedom.

I suspect that with the end of the utility of the debt slave we will also see our brief period of equality evaporate and realize that the last 30 years where a illusion caused by our greater utility as debt slaves not by any real fundamental change in our society.

Effective slavery in the U.S. died out just about the time that cheap transportation made it possible to off-shore the slave operations, e.g. to China.

Now, Americans get the benefits of a slave economy without the messy drawbacks. Looks like that is a about to change again. You are certainly correct, in my opinion, that there has been no fundamental change in society. Justice for all is still a distant mirage.

When you examine the conditions of farm laborers and other, mostly immigrant labor, it's quite clear slavery still exists, although not in its initial form.

Exactly :)

I think you set it better than me. But yes its a mirage in as sense the wealthy found cheaper slaves overseas and "freed" most of the people in the US.

Certainly we continue to have slavery in the form of undocumented workers who cannot voice there situation.
So with the end of cheap transportation we probably will revert back to a large oppressed poor class.

From a historical perspective it will be interesting if our master foster racial hatred as part
of reverting us back to slavery. I think this time the targets will be illegal aliens not direct
use of race. Oppression works by having each step of the social ladder oppress those below.
The poor worker oppressed the unemployed the straw boss oppresses the worker etc etc up the pyramid.
At each level the level above is given the right to beat and even kill the level below with impunity.
So a foreman can get away with killing a worker and the factory owner can kill a foreman etc.
Murders of the destitute are not even reported.
Of course all other forms of punishment are tolerated.

The southern racial oppression was broken when the whites became unable to get off in cases they where actually taken to court for attacking blacks. And the reverse that blacks began to receive justice in the courts.

For a modern look at this sort of society you can look at Taleban controlled regions the right to judge and murder is allowed for each level of society on the lower level. India and China actually have similar setups with it rare for the murder of a lower social member by a higher to be punished.

Sorry for the long diatribe but a lot of people don't understand how oppression works the key is that at each level any member of a higher level can act as judge, jury and executioner for those below. Needless to say this power is intoxicating and ensures a stable society of kings and subkings with absolute power over there domain.

Otherwise, how would Muddy Waters have landed in Chicago playing and recording great Missippi Delta Blues?

Amen to that! Not to mention Buddy Guy, Charlie Christain and Freddie Green...

My grandfather farmed with horses in the Northern Plains from 1910 to 1930. He told me many times that for every acre sowed in wheat for sale that almost two acres were needed in pasture, hay and oats to feed the horses. By far the greatest improvement in agricultural productivity occured when tractors replaced horses.

My grandfather also farmed with horses-in northern Minnesota. He bawled when he sold his team in the early fifties and never again farmed. How much acreage is required to feed a team of horses depends upon the fertility and quality of the ground. I am sure it takes more acreage to feed a horse in North Dakota for instance than it does here in west central Missouri. The Amish here seem to do quite well with their horses and farms.

True about EROEI for biodiesel. Methane digestion on the other hand leaves a residue for return. There are a couple of UK projects looking to be funded through community subscription ATM.

A smidgen of cornucopianism here, perhaps? In land use terms, both co-op biofuels and big business biofuels have the same environmental and socioeconomic impact:


Good one westexas, but how about a coop of local bioengines run on locally grown crops. The bioengines (oxen) would be cared for cooperatively and used where and when needed. When not in use they could be stored on pasture land where they could function as mini fertilizer production units. As the investment would be in self replicating units , once the initial unit costs were defrayed every increase in units would be pure bull-ion, or gravy if you prefer:)

"a small organic farm, ideally not far from a mass transit line"



This must be where the "we must go back to medieval times and become peasants" meme finally unites with the "we must go back to medieval times and jam ourselves into medieval cities" meme, to produce one of the most bizarre hybrids yet to emerge from the primordial ooze of planet Earth.

Look, it's called mass transit precisely because its reason to exist is to move masses of people. Tokyo's version is my favorite because it is competently managed and runs ON TIME, unlike the typical American sinecure overstuffed with immovable glassy-eyed jobsworths. Like other mass transit, it serves cities, where the masses are - not farms, where the masses are not.

So unless you're an Olympic athlete, you'll be wanting to drive out to the farm, because even in the Tokyo region the extensive transit lines won't usually take you there. Much the same was also true, say, in industrializing England - even if you took a train somewhere, you drove out to the farm or rural estate by horse and carriage. And where I live, the mass transit, which is bad since North America utterly lacks Tokyo-style masses to support it properly, also ends far short of the farm.

So unless you desire to become a medieval serf chained for life to some particular nondescript patch of dirt, without proper access to medical care and so forth, you're going to be wanting access to a vehicle (which might for now be fueled in a manner Al Gore and Jim Hansen don't like, but that's tough, and maybe you can beseech them for a few drops from the boundless oceans of fuel they and their ilk guzzle as they jet hither and yon to conferences and meetings.) And once you're paying through the nose merely to have access to said vehicle - i.e. insurance, capital, and some maintenance costs are essentially fixed - you might as well drive it for many or even most purposes. Even at $20/gallon (or equivalent in say electricity), the marginal cost of driving would not be that much given the type of small vehicle most people would be driving most of the time at such a price.

So while I suppose that with the aid of Dr. Google we might unearth a few spots where a transit line runs so close to a farm that driving is unnecessary, I hardly imagine that there will ever be enough such spots to underpin broad advice to the general public to abandon everything and move to a small organic farm, ideally not far from a mass transit line.

And then again, why bother? The advice presupposes the existence of sufficient energy supplies to support the continuing or even expanded cities that would in turn be indispensable to support the mass transit it presupposes to be so much more extensive than now as to reach into farm country. If the city will still be there or even expanded, and will remain orderly enough not to wreck the mass transit one would ideally be near, then who in bloody Hades would want to go be a peasant?

Until now, no matter how bad conditions were, nearly anyone who could has moved from farm to city or suburb, not the other way round. Only brute force at the crimes-against-humanity level changes that. And as long as you presuppose the continued orderly existence of the city, these things remains so. It follows that not only does the underlying mental model seem to lack even the tiniest shred of desirability, it also seems woefully short on self-consistency.

I have seen cattle grazing from the windows of Portland's Max Light Rail.

Perhaps a half to 3/4 of a mile to the station. The new commuter rail line that connects "west of the mountain" opens up new possibilities.

The commuter rail lines around Boston go through some rural areas, although the soil is poor.


Greer suggested that a farm close to a city might be a good post-peak plan. He believes the collapse will be catabolic; that is, we aren't all going to be living in caves scrounging for mushrooms tomorrow. But neither are we going to be driving electric SUVs and going on with business as usual. Those of us alive now will be living in a transitional phase, where a small organic farm near a city would make sense.

Perhaps using the term "mass transit" is misleading. For many, it makes them think of suited commuters lugging briefcases. It might make more sense to say rail or rivers, rather than mass transit. That is how the US was settled: along the waterways and the railways.

I think that there are four basic agricultural models that pretty much describe the possibilities in North America, at least:

1. Urban semi-self-reliance: Live in town (which could be anything from a large city down to a very small village), and grow as much of your own food as you can, though probably not 100% of everything. Make the best use that you can of whatever land around your house that you have. You can probably grow most of your vegetables, at least in season, and maybe with some cold frames or even a small greenhouse and various storage strategies you could see yourself through most of the winter. Grow some fruit, though it might be harder to get up to 100% of your needs. Keep a beehive, and maybe some rabbits and/or chickens if you can get away with it. Just maybe keep a dairy goat. That's about as much as you can hope to do on a typical urban lot.

2. Market gardens, orchards, or dairy farms: Live on the periphery of a large town or city, and work a specialty farm producing perishable foodstuffs for sale in the nearby urban market. You might also be able to produce most of your own food using the above strategies, but because the cost of land (including taxes) will be high, you are going to need to produce and sell a lot of food to make this an economically viable strategy. These are the types of farms that just might feasibly located near the outer reaches of some transport links; they will need access to some form of transport in any case to move perishable foodstuffs to market.

3. Large-scale production farming: We are talking here about the amber waves of grain across the fruited plains. This is presently the dominant model of agriculture in North America. As energy prices rise, the economics might change and the optimal scale for these farms might possibly shrink. Nevertheless, for foodstuffs that are relatively less perishable, like grains (or livestock on the hoof), it will always make economic sense to raise these at a distance from the cities on cheap, wide-open spaces.

4. Subsistence homesteads: This is the "Mother Earth News", "Five Acres and Independence" vision. Living on a small holding and being totally self-sufficient. It might be possible, but note that land prices and taxes are critical issues. For this to work for most people, they are going to need land that is CHEAP. That is going to rule out both urban land, land on the periphery of urban areas, and prime large-scale crop and pasture land. That leaves a lot of places tucked in here and there. Many such places will be located not far from small towns in rural North America - towns too small to support a ring of specialty farms per option 2 above. Such towns offer the possibility of marketing opportunities for small surpluses produced by subsistence homesteaders, providing them with a way to earn a little money. Even with that, though, it is likely that the subsistence homesteader will need to find some other trade, craft, or enterprise to earn some money, unless they are very wealthy and are essentially retiring to a hobby farm.

I'm not sure if WT was talking more in terms of #2 or #4.

I would add:

5. Small-scale organic farming, located farther out from a major city (say 50-100 miles) where the land is more affordable. Growing less perishable crops for local distribution such as winter squash, or preserving perishable crops for local distribution (like jam, pickles, or other 'value added' products). These could be brought to market 1-2x per year and distributed through a local organic growers network. Similar distribution networks already exist in some regions.

Perfect scale for SpiderWebRiding Networks. Much more efficient than the Nuahtl Tlameme backpacking scheme. See postings in TOD archives.

It seems kind of quaint to hear people talk about "Urban semi-self reliance" as if it has any resonable chance of success. The current model of "Large Scale Production Farming" is the only model that prevents megalopilis's such as LA and Pheonix, teeming with potentially starving masses, from reverting to Mad Max landscapes.

I graduated from Rancho High School in Las Vegas in 1973. At the time the student body was 30% black 20% hispanic and 50% white. Due to racial violence the last two years I went there the only way they could control the violence was to have the school patrolled by police officers 8 hours per day. When the cops left in the afternoon so did any sense of security. You didn't stay behind to do homework. You got the hell out.

When TSHTF social tensions will rise exponentially in certain cities and so will violence.

What happens when certain municipalities stop paying the police? The notion that as things unwind that people will peacefully devolve into happy farming communes is delusional hippy psycho-babble. Do you think the better off cities are going to welcome these disociated refugees into their bosoms? If the Okie's leaving parched farms in the midwest during the Dustbowl Era into California is any example the answer to that question is not very well. CA had troopers meeting them at the border turning them back.

First, note that my four categories were intended to describe a mix of options, not to suggest that we are going to go to just one of the four exclusively.

Second, yes I am well aware of how bad it is in some cities. In some, not in all. And certainly it is not nearly that bad in most medium and small sized towns.

I don't know what people in the worst, basket case cities are going to do. It is a huge problem. However, they are the ones living there, not I. While I do not want to imply that I don't care, it nevertheless is true that it is pretty much their problem, not mine.

If you think you can put up a fence and keep them out you're dreaming. L.A. County has millions of people who couldn't grow a geranium, much less their own food. When they begin to starve after the social programs fail you will not be able to live peacefully in whatever Hamlet you might have for yourself.

During the Middle Ages in Europe (1300-1700) in the southwest of France alone they recorded over 400 violent uprisings due to starvation and there were tens of thousands violently murdered as a result.

Americans, who have never known hunger, will not deal well with privation. Trust me...overpopulated cities are everyones problem.

How do you account for the fact that during the depression there were millions of desperately poor Americans who did not engage in organized civil insurrection?
Many of the 'Hoovervilles' existed right in the shadow of America's urban centers.
Dorothea Lange's pictures document widespread malnutrition.
Why should we suppose that 21st Century Americans will be getting mobilized, organized, and militant?
I suspect the sad, poignant truth is that American hunger will be, as it always has been, suffered in silence and isolation.
The farmers of the 'farm crisis' of the '80's and '90's committing suicide.
Hell, I bet if you go to a large truck-stop near your home right now you could find a dead-broke trucker waiting for a back-haul who has missed a meal.

"How do you account for the fact that during the depression there were millions of desperately poor Americans who did not engage in organized civil insurrection?"

Gosh we really are on different chapters! The population that exists in America today has little in common with the people that inhabited America during the 30's. Besides the fact that the population of America was a fraction of what it is now, Americans then were mostly hard-working rural people who knew farming and self-reliance. Are you aware that due to Modern Industrial Agriculture we will find that as soon as we stop pumping massive amounts of nitrogen into the soil the harvests will stop. We have denuded the landscape. Add to that the fact that it is a tiny minority of the current population that have any farming or foraging skills.

Therefore: Modern Americans get their food from a grocery store and their water from a tap. Considering the well-armed population with an over-reaching sense of entitlement, it would be presumptous to assume they will be docile when they shut off the food machines.

IMHO we are headed into a zone of history that has no precedent.

Historical comparisons will have very little advice for us after TSHTF.

IMHO we are headed into a zone of history that has no precedent.

Agreed. I used the depression era reference to reinforce my supposition that modern Americans will be so bewildered and depressed by what is about to befall them that they may well seem remarkably 'docile'.
I accept the possibility that marauding bands of super-empowered predators could become a scourge.
But one scourge among many.
It comes down to basic risk assessment.
And I would say that a failed public health system accompanied by rampant poverty, malnutrition and drug-resistant super-bugs probably will result in far higher mortality and risk than that posed by starving criminals.

hi Joe,
your "trust me ..." sent me to

where it says:

There were five main reasons for these mass uprisings including 1) an increasing gap between the wealthy and poor, 2) declining incomes of the wealthy, 3) rising inflation and taxation, 4) the external crises of famine, plague and war, and 5) religious backlashes.

you and others seem to conflate now-USA & then-France based on hunger-&-food-growing alone....

IMHO the social mess we have in USA will sort itself out independently of food-growing possibilities.

"If the Okie's leaving parched farms in the midwest during the Dustbowl Era into California is any example the answer to that question is not very well. CA had troopers meeting them at the border turning them back."

One of the reasons that I moved to Calgary last year was to become "established" in a place with plenty of food and fuel. Once TSHTF, mobility could decrease very quickly.

*Now* is a good time to decide where to ride out the storm - a few years from now could be too late.

'Montreal's Night Of Terror'...

Here is a video/audio of what happened in one day/night in 1969 when the Montreal police went on strike...It wasn't pretty and it was not limited to lots of bank robberies...It took the Canadian Army to restore order.

Broadcast Date: Oct. 8, 1969

Montreal is in a state of shock. A police officer is dead and 108 people have been arrested following 16 hours of chaos during which police and firefighters refused to work. At first, the strike's impact was limited to more bank robberies than normal. But as night fell, a taxi drivers' union seized upon the police absence to violently protest a competitor's exclusive right to airport pickups. The result, according to this CBC Television special, was a "night of terror.'...snip...


I remember it - I was there.

Concerning Montreal's Night of Terror:

"When law enforcement vanishes, all manner of violence breaks out: looting, settling old scores, ethnic cleansing, and petty warfare among gangs, warlords, and mafias. This was obvious in the remnants of Yugoslavia, the Soviet Union, and parts of Africa in the 1990s, but can also happen in countries with long tradition of civility. As young teenager in proudly peaceable Canada during the romantic 1960s, I was a true believer in Bakunin's anarchism. I laughed off my parents' argument that if the government ever laid down its arms all hell would break loose. Our competing predictions were put to the test at 8:00 A.M. on October 17, 1969, when the Montreal police went on strike. By 11:20 A.M. the first bank was robbed. By noon most downtown stores had closed because of looting. Within a few more hours, taxi drivers burned down the garage of a limousine service that had competed with them for airport customers, a rooftop sniper killed a provincial police officer, rioters broke into several hotels and restaurants, and a doctor slew a burglar in his suburban home. By the end of the day, six banks had been robbed, a hundred shops had been looted, twelve fires had been set, forty carloads of storefront glass had been broken, and three million dollars in property damage had been inflicted, before city authorities had to call in the army and, of course, the Mounties to restore order. This decisive empirical test left my politics in tatters (and offered a foretaste of life as a scientist)."
Steven Pinker, "The Blank Slate" page 331.

Ron Patterson

Ron - And let's not forget L.A. after the Rodney King verdict. When the police withdrew from the inner city to protect the upscale Beverly Hills and Westwood areas there were 3 days of looting, rioting, arson and murder. I worked at LAX then and we had to alter the traffic pattern over east L.A. because of rooftop snipers shooting at the planes on final descent for LAX.

When things get out of control it takes very little to spark riots and mayhem. All that trouble was about percieved racial inequities. Imagine what hunger and real want will do...

Given the violemt urban riots in US cities during the sixties, and the Rodney king riots in LA a couple of decades later, this list of criminal activity in Montreal sounds like pretty tame stuff. I remeber the NeWark riots, we lived about fifteen miles away. I remeber one of my coworkers and fellow high school students taking the day off to score some free booty.

My instinctive response to PaulS's characterisation of low-energy localisation as a reversion to the Middle Ages and serfdom was rather less measured than yours.

Let's just say that the organic goodies in my supper were grown and sold locally, on land almost within earshot of the mass transit route from Gloucester to London, by people who work for a prince but who could hardly be called serfs.

100 years ago, the oil age hadn't begun round here. The economy was largely rural; farming was what we now call organic; life for most people was harder and somewhat shorter than it is now but by no means grindingly harsh or constantly deprived.

The Vicar of Clyro in Wales could take lunch in the village and meet friends in London for tea with only a couple of changes of train.

Am I being naively optimistic? Yup. Are there better models for a low energy future than the Middle Ages? Yep

Policies of Enclosure and the like weren't akin to "brute force at the crimes-against-humanity level"? Until modern hygene and sanitation, cities were avoided like the plague by those able. Of course, technological "progress" robbed millions of their livlihoods and forced them into cities. While you are generally correct about moving to a farm near to innercity mass transit, it would behoove you to add some historical perspective and avoid the errors in your reasoning.

There is a good deal of agricultural land not far from the various parts of the mass transit system in the Dallas/Fort Worth area, and don't forget Amtrak and other rail systems. And I do recall a story in the WSJ about a small housing development near Chicago built around a working farm, at the end of one of their rail lines. Apparently, it is and was a "growing" trend so to speak.

This is a link to an article that discusses suburban farming, including the Prairie Crossing development, outside of Chicago, but connected by two commuter rail lines:


And more info on Prairie Crossing:


Prairie Crossing's agricultural heritage is strong, anchored by its 10-acre certified organic farm. The farm is surrounded by another 100 acres of farmland that are currently not certified organic. The organic farm has been in production for over seven years, selling into local and north suburban Chicago markets with a revenue of over $90,000 per year. The farm grows a wide variety of vegetables, fruits, herbs, and flowers, as well as produces free-range eggs. Through celebrations and workshops, the farm encourages community participation, including opportunities for residents to help with the daily work of the farm. Additionally, residents can maintain a community garden plot or "subscribe" to receive a weekly basket of vegetables.

The organic farm emphasizes sustainable agriculture techniques. It composts animal manure and vegetable waste to enrich the soils, maintains a wild prairie around the farm fields to help control insect pests (by fostering an active ecological balance), does not use pesticides or herbicides, rotates crops, covers crops, and sells produce and flowers from its own farm stand and at several local farmer's markets from mid-May through November.

Something tells me PaulS doesn't own a passport.

I live in a small town (pop 1000 and probably never much over that in the last 100 years) in rural upstate New York. It is serious farm country. There's a train station right here in town.

Before there were paved roads, if you wanted to get your crops to your customers in New York City, you had two options:

1) the Hudson River, or
2) the railroad.

Another facet of this phenomenon will be the elderly moving in with their adult children rather than into a retirement community or nursing home. Financially-pressed families will want to capture a part of their parents' retirement income (which itself may be greatly diminished as the financial sector downturn worsens) to stay afloat and pay the mortgage.

I think you hit one here. In Toronto, I have heard of people spending as much as an incredible $9000 a month on a senior's residence ($108000) which IMO is absolutely insane.

It's not so insane once the elderly person's condition reaches the point where professional skills are required to take care of them safely, which is the condition implied by the cost you cite. It's even less insane once the person requires instant 24/7 availability of said professional skills.

The caregiver(s) will generally not have the resources to just pick up and go off to nursing school; nor will they have the time since their jobs (if they haven't lost them) and the care needs will be consuming all of it and then some; nor, in many cases, will they have the required physical stamina, as they may well be approaching old age themselves; nor, for the same reason, will they necessarily be still carrying a mortgage anyhow. So people will do as they must, difficult as it may be, and contrary to your imaginings as it may be.

What they must do will not always coincide with some kind of airy romantic nonsense about singing kumbayah as we cram into multigeneral houses, city apartments, farmettes, or whatever the fashionable vision-du-jour among academics addled out of all contact with reality by the nihilism of postmodernism might happen to be.

Even at a less costly level of care, the use of a residence may not be insane if the caregiver(s) must quit their jobs and start consuming their own retirement funds in order to support themselves and yet still be sufficiently available to get the job done. Or it may not be insane if the caregiver(s) must retain their jobs, in circumstances where that would leave the elderly person with no practicable means of routine social contact (if they need live-in care, they're probably not driving, nor are they likely able to get on the train by themselves), as their quality of life may be much better - whether you wish to believe it or not - in an appropriate residence where routine social contact is feasible.

There is simply no broad-brush, one-size-fits-all solution. Nor is there a whole lot of good advice "out there" yet, because the problem is fairly new (frail elderly people simply did not last very long very often back in the good old days), leaving advisers still working too much from sheer intuition. So what I'm thinking here is that you may have very little idea whereof you speak.

"What they must do will not always coincide with some kind of airy romantic nonsense about singing kumbayah as we cram into multigeneral houses, city apartments, farmettes, or whatever the fashionable vision-du-jour among academics addled out of all contact with reality by the nihilism of postmodernism might happen to be."

I'll tell you who is out of all contact with reality. It's anyone who thinks that the average person can just come up with $9K/month to keep their aging parent in a "nursing home". This is an absurd notion.

Paul: Jeez man, you sound like you are currently running one of these snake pits.

Please try reading the next few posts and learn something, instead of trolling from the hip when you know nothing. Some are snake pits, many more are not. And guess what, you may well find yourself, or your parents, or an aunt or uncle, living in one someday. Yes, it could happen: you simply do not know, which is a quarrel I seem to have around here from time to time.

When the day comes, look for a good one, rather than waste your time at tarring everybody who does the oftentimes hard jobs that must be done there. In the meantime, unless you are a hermit, you probably know someone living in one (who may well not be a relative.) Very likely many of his or her relatives are dead and it is completely unavoidable that life is more lonely than it used to be, even if there are people around. So kindly pay him or her a pleasant visit once in a while. Thank you.

We were fortunate to get my aunt to relocate to Oregon from California. At 82, she's very sharp mentally, but macular degeneration limits her physical abilities and social interactions. The apartment she rents in her assissted living community runs about 2,300/mo, and she's made it quite clear she's happy with the arrangement and would rather not move in with us, primarily because of the community she now feels a member of, not because of the (now very limited) level of care she requires. The cost is tailored to the actual level of care delivered, not charged at some flat rate, which is very fair and a plus over other similar facilities in my POV. Yes, the base cost does rise annually, and the facility is very dependent on liquid transport fuel for personal transportation of workers and deliveries, which of course concerns me as her familial history suggests she could easily live another two decades. My mom is the other elder in my care; she lives with me and has a different set of aging issues.

How we care for our elders has for me been a measure of our civility, and our nation's record is very poor, which I believe explains a great deal. Peak Oil is about the aging and eventual death of a primary enegry source, and might be compared to the lifecycle of a parent. WE MUST do a better job of caring for the "Golden Years" of our energy resources than we've done in caring for those of our elders.

Paul,you are right for many people! this reply is to let you know that many of us out here with elderly parents--like my Mom with alzheimer's--would save money if we had our eldersl live with us BUT and it's a big but for many people, my mom needs 24 hours care. She doesn't sleep much, she'd be waking me up to ask me how old she is all night long--don't laugh she's done it before. and there's zillions of other instances like that throughout her day.

My mom lives in an assited living center, it doesn't cost 9000 K a month but it does cost 5000 K a month--she and my dad had long term care insurance and a lot of money saved. I've used all of it to take of her since dad died, so I might keep on working and being sane. And believe me, Sanity for many would be caretakers is a main issues. Also, My mom is very combative sometimes.

Lots of nursing homes and assisted living places are NOT SNAKE PITS. Many certainly all. and I'm sure Paul is not running one. My mom lives in a very good one and I see her 1-3 times a week.

any case, this post is to let Paul that many of us share his view of this issue. Families must each make up their own minds how to handle this challenge.

and my thanks to the TOD for the good work they have been doing since 2005--

Torion, A Peak Oiler and TOD reader since February 2005

I'm sure Paul is not running one...

I don't own a care home, or run a care home, or even work anywhere near the health field. Nor would I really want to run one, because the conflicting pressures and gov't mandates make it a nightmare!

That idea was just BrianT's willfully ignorant trolling!!!

Torion--You have my empathy. Mom has cognitive issues that are troublesome enough, but her diagnostics don't predict Alzheimers as an outcome (fingers crossed while typing). Oregon was the state that wrote the regulatory bible for assissted living facilities and the Patients Bill of Rights. By way of comparison, your mom's monthly care bill would probably be about 4,000 at my aunt's facility, but might vary as much as 500 either way depending upon the actual level of care provided/needed. That is provided she's not a "wandering" Alzheimer's patient needing special supervision 24/7/365, which seems the case based on your description.

Retirement and elder care are tough issues for most of us here at TOD. Americans are in very poor condition relative to other OECD citizens, even Cubans, in this regard. I see the need for myself to utilize more physical strength to cope with the demands of the future at a time when my aging body's ability to provide that strength is waning as a very major issue. My Spanish anscestors had the gumption to work their gardens and fields into their mid-80s; I hope I'm that fortunate.

Coming up today on c-span3

Ron Paul gets a chance to quiz Ben - always worth watching that!

Then after that on c-span3

Re: "No one was forecasting $140 oil" (linked uptop)

Of course, Matt Simmons literally bet that we would see $200 oil in 2010, in constant dollars. This reminds me of a prior article, where the author asserted that "no one" foresaw problems with Saudi production. I guess Matt is becoming the invisible man.

No one saw OBL coming either. Also, no one saw the subprime crisis coming either. No one saw the Fannie problem coming. Lies, lies, and damn lies.

Nobody forcasting $140 oil...priceless. :)

Let us not laugh at Lutz's (lack of) forecasting comment. For all we know, today's models of big SUVs and pickups were being developed by GM before the Fourth Arab-Israeli War (1973).

Better move that development estimate back a bit: King Hubbert predicted oil would peak in 2000 back in 1956. Of course, the GM guy said that no "petroleum engineer" predicted this. Technically he's right, the most famous people I can think of who predicted this are geologists (Hubbert, Deffeyes) and an investment banker (Simmons). Oh well, this isn't exactly a new development, they didn't listen to the geologists when they told them the earth had to be older than 1 million years either.

*edit* Oh, there was also a physicist (David Goodstein) who published a book called, "Out of Gas" which opens with the lines, "The World will soon start to run out of conventionally produced, cheap oil."

And don't forget the crazy man in the cave too. What was once the largest car manufacturer in the world has made a potentially fatal mistake in prediction of oil prices whereas some guy who lives in a cave and wants to force women not be allowed to show their faces and men to grow beards turned out to be right. This is not western civilization's finest moment.

It may be true that no geologist predicted $140 per barrel oil, but there were several who predicted that the price would increase as a result of Peak Oil. Besides, that $140 per barrel in today's dollars would have been about $100 per barrel in 2000 dollars or even less in terms of the cost in still earlier years. for example, here's Colin Campbell's 1998 article from Scientific American and he wrote a book in 1997 THE COMING OIL CRISIS about the problem. At the time, I thought the Sci Am article was better than the book, but the book had some interesting side lights.

Of course, one would not expect the executives at GM to admit that they ignored the evidence...

E. Swanson

What Lutz's comment brings into sharp focus is the difficulty of changing the course of a hide bound giant corporations. All of the American auto makers have shown their lack of foresight, lack of ability to change direction quickly, lack of ability to listen to new ideas, lack of enough imagination to have a 'plan b' and 'plan c' in place if conditions change and effect their business model.

Is Lutz familiar with the problem that Chrysler had in an earlier oil crisis?...The US Gov stepped in and loaned Chrysler enough money to pull their fat out of the fire, and there lies the problem...'If we get into serious trouble Uncle Sam will help us out.' If these car makers cannot compete with smarter competition they should be allowed to fail. For capitalisim to work failures are as important as successes...In fact, more is learned from failure than success.

I would respond to lutz's comment: Why did you not continue the EV project when so many testers of that vehicle were so happy with it? Why did you not see that Toyota, Honda, et al, were having success with small efficient vehicles and put some vehicles into production to compete with them?...and, when are you going to remove your head from your rectum?

Lutz and his counterparts are being paid big bucks to stay ahead of the game and avoid being reactionary. Lutz and his counterparts are not earning their salaries.

Let's not forget the SuperCar...

Two choice excerpts:

Ever hear of the Prius?

Shortly after the Supercar project was launched in 1993, the Toyota Motor Corp., Japan's biggest automaker, asked the U.S. government if it could join the effort. The United States said no, that Supercar was a project only for GM, Ford and Chrysler. A major goal, the government said, was to improve the competitiveness of the U.S. auto industry. Toyota was one of the companies Supercar was trying to beat.

Some Toyota officials today downplay that rejection, saying Supercar in no way affected company decisions. But others at Toyota say that being excluded clearly motivated the automaker.

You have to read the whole thing to understand the use of CAFE standards by Clinton-Gore to effect begruding pariticpation by the - then - Big Three. None the less, the arrival of Bush-Cheney was all it took.

When Bush took office, one of the first items on his agenda was energy. California was experiencing its worst electricity shortage since World War II. Fears grew as residents experienced blackouts, and power was interrupted to schools, businesses and hospitals.

The new president tapped Cheney to head an energy task force and to quickly devise a long-term national energy policy. Over the next three months, in early 2001, numerous closed-door meetings were held in Washington among administration officials and industry executives, including auto representatives.

One Energy Department document shows that GM sent a position paper on April 2, 2001, to a senior Energy policy adviser, attacking car fuel economy rules and stating that a better approach would be for the government to conduct long-term research. GM's paper didn't mention Supercar, but it did state: "Rather than focusing on the failed policies of the past, a better approach takes a longer-term vision of moving to a hydrogen economy with fuel cells."

A week later, Energy Secretary Spencer Abraham announced to reporters that the agency wanted to cut its budget, including much of Supercar's funding.

He said that after consulting with auto officials, the government decided that a "refocusing" of the Supercar project was needed because it was "inconsistent with where the market is headed."

He told reporters that Supercar had been geared toward building a family-size sedan, but consumers were increasingly interested in buying SUVs.

At the time, it wasn't precisely clear what Abraham meant by "refocusing" Supercar. But it soon became apparent that the defining features of the project -- the 80-m.p.g. goal, the 2004 deadline and the participation by many government agencies -- were being discarded.

While this meant Supercar was essentially dead, there was little public protest.

"Failed policies of the past..." Oh that's just lovely. Clinton and Gore were trying to save GM and the U.S. population from themselves who, spurning them, nearly voted Bush in the first time and decidely reelected him the second. Fast forward to 2008 and the shunned Toyota comes back with its own version of the supercar and now can't make them fast enough to keep in the showroom while we contemplate rumors of bankruptcy for GM.

And here's some icing on that bitter cake: do you know who was the secretary of energy under Bill Clinton? Bill Richardson!

Let us not laugh at Lutz's (lack of) forecasting comment.

As far as I can tell, virtually all industrial planners were using the official energy forecasters (CERA, IEA, EIA and the like). I don't think anyone wanted to ask the $100B question, "Are you producing projections, or propaganda?". IMO too many of those who funded these agencies had short term interests in rosy forecasts. So I think Lutz is in good(?) company. I would include Toyota in the list of those who were unprepared, i.e. they didn't invest in the capability to manufacture several million hybrids per year. They now have to let customers walk out the door for lack of product.

I can bet many of these companies had a few engineers who tried to sell some interesting concepts to management, but were told they had to justify the projects would make a profit using the official oil price predictions.

Now thats not to say that it wouldn't have been wise to have contingency plans in place. But a contingency plan aggressive enough to make a real difference given the actual trajectory of oil prices would have cost many billions. A research project, or even a niche market product (like the Prius prior to the oil price breakout), just wouldn't be a sufficient basis for a rapid enough change of product mix.

2008 is the ten year anniversary of "The End of Cheap Oil", authored by Colin Campbell and Jean Laherrère and published by Scientific American. So they can't say there was no warning...

The more truthful statement would be that no one in GM's top management was paying any attention to anyone that was forecasting $140 oil. They were only paying attention to people who thought like they did and told them what they wanted to hear - people like Daniel Yergin, for example.

The top three GM executives contemplate Peak Oil scenarios:


I find the following quotes fancinating. They are out of a study released
in 2005 titled "In The Tank - How Oil Prices Threaten Automakers Profits and Jobs"
The report is filled with insights foretells a future that nobody in Detroit was
willing to believe could be possible.

The study was conducted by:
Office for the Study of Automotive Transportation
University of Michigan Transportation Research Institute
Natural Resources Defense Council

This report says that sales, profits, and American jobs are
at risk if Detroit automakers continue with their current
business strategy in the face of higher oil prices
and recommends actions that automakers, government,
and investors can take to mitigate the risks.

Automakers should make fuel efficiency job number
one. Fuel efficiency will increasingly be a key determi-
nant of automaker competitiveness in the near future.
Betting on low oil prices might have been a good
strategy a decade ago, but today it’s a gamble that
places companies, workers, investors, and communities
at grave risk. Without a product mix that meets
changing consumer demand in response to high oil
prices, Detroit will pay a heavy toll.

This reports conclusions are the same as those reached during the late 1970s. BIg, Big, Big, wanted Reagan, Reagan, Reagan, and now Big, Big, Big are in a very Deep, Deep, Deep, hole.

The very definition of groupthink.

Groupthink is a type of thought exhibited by group members who try to minimize conflict and reach consensus without critically testing, analyzing, and evaluating ideas. During groupthink, members of the group avoid promoting viewpoints outside the comfort zone of consensus thinking. A variety of motives for this may exist such as a desire to avoid being seen as foolish, or a desire to avoid embarrassing or angering other members of the group. Groupthink may cause groups to make hasty, irrational decisions, where individual doubts are set aside, for fear of upsetting the group’s balance. The term is frequently used pejoratively, with hindsight.

Society as a whole is engaged in groupthink as well. Consider for example the howls of protest anytime anyone suggests that in the future we won't be getting around by car.

Aside from the desire for projections of things like fuel prices to be heavily influenced by marketing, and groupthink, I think another mental block was at work, ideology. National Resource Defense Council, don't all red blooded Republicans regard them as dirty hippies. No matter how well the studies may have been done, it would have been easy to destroy them with strawmen arguments.

Let me say that GM corporate culture embraces the Hear No, See No, Speak No High Oil Prices mantra. (That and any other form of evil.) Bad news is purposefully and systematically ignored at every turn. While I never honestly expected any of the executives to ever read any communications I sent via internal means, I warned of high oil prices in the future and Peak Oil as much as a person could without possibly losing their job.

But again, what did I know, I am just a peon. (Along with all of their engineers they don't listen to. It's the marketing people that run the biz.)

Shell-shocked GM retirees react: 'This is a knife stab in the back'

After years of getting generous coverage, retirees from salaried jobs at General Motors Corp. reacted angrily Tuesday to the announcement that GM was ending their health benefits.

"I'm disappointed in the lifetime promise GM made to us," said John Fleming, 67, of Rochester Hills, a retired information system auditor. "We've been wiped off the books completely."

I think this is just going to be the tip of the iceberg. A lot of people who were depending on pensions, medical benefits, and social security for support in their golden years are in for a rude surprise.

Yes, a lot of people here are pissed, especially the people who are close to retirement. The younger people here had no illusion of ever getting anything out of GM beyond the paycheck... I haven't yet been down to the bar since the local announcement was made to see how everyone's reaction is there. (People are more truthful in a bar than at work.) The night of the announcement, I decided to stay home. I knew there would be a rowdy bunch there that evening, plus I was tired.

Having specialized in employment law in law school, and having taken an ERISA (appeal to authority fallacy, I know) course, you are quite right Leanan that the shit has yet to hit the fan in regards to pensions.. Even though defined benefit plans have declined the last couple of decades there are still enough of them out there to break the Pension Benefit Guaranty Corporation which insures these funds. Enforcement as to proper funding has been lax, and employers have been allowed to wiggle out of obligations through bankruptcy. I don’t expect to see a dollar from my Carpenter’s Union Pension when I can collect in a few years. On the bright side, two small local supermarkets said they would buy as much as they needed in fresh produce. My “retirement”.

having taken an ERISA (appeal to authority fallacy, I know) course,

While appealing to authority can be a fallacy, there are other times when such is just fine.

I have always saved/planned for retirement with the assumption that Social Security will not exist when I turn 65. In fact, It is supposed to run out of money that same year.

It drives me crazy that financial planners these days still include SS in the plans they give their clients. It won't exist in its current form.

Actually, your expectation is wrong. Social Security will nevver run out of money if the current laws stay on the books. They will "only" be paying less than promised, say $800 instead of $1,000, and the inflation adjustment will be tweaked a bit too, producing a $700 value. Something like that.

Yeah, that's my expectation. We'll get the checks that we've been promised, but the inflation indexing will be so diddled (as if that isn't happening already!) that the real worth of such checks will be an ever-decreasing fraction of what we were promised they would be.

The above applies as long as there continues to be a more-or-less functioning US federal government. Whether that's still the case 15 or 20 years from now, who knows? If there isn't, I suspect that missing social security checks won't be the only problem on our plates.

Actually SS can be righted quite easily by raising the minimum age by just a few years.

Some people have said that the problem with SS funding was that they didn't adjust the retirement age to the life expectancy. When the system started, they were about equal, but they have not adjusted the retirement age to keep pace with the life expectancy. You're supposed to die on your way to cash your first check.

Well, assuming that the US economy doesn't get too far off the BAU tracks, that would be true. We have bigger problems ahead of us, though.

Speaking for myself, I plan to work and defer starting SS benefits for as long as I can. Some would argue that I would be better off getting what I can out of SS while the getting is good. Maybe they are right, I don't know. I do know that it seems pretty silly to sit at home when I am perfectly capable of working and would be just as happy to be doing so.

I we assume historical (or a bit less) rates of economic growth, SS is actually in good shape. The problem will come if the current financial meltdown, plus peak oil, means we no longer have a growing economy, then all the assumptions concerning SS, and virtually every other defined benefit plan come unglued. All defined benefit plans assume nominal future returns on the money set aside. If the market suffers severe underperformnace, then virtually all the pension plans will be seriously underwater. The current plan I am in, is in a thing called code red care, which means that virtually all current contributions go toward funding past promises, current workers are accruing very little benefit. If the market really tanks, then I think all bets are off. Of course just the sort of economy that will put these plans in serious jeopardy, would also put most of the employers well beyond the point where they could rescue the plans.

the problem with social security will occur in about 2017, when the "trust" fund is no longer growing(by current projections). the politicians will not only have to deal with not being able to steal, er i mean borrow, that money anymore, but treasury will also have to make up the shortfall.

Where do you store your private funds? Gold under the mattress?

A lot of people are going to find that their banks aren't the answer, either:

Police ordered angry customers lined up outside an IndyMac Bank branch to remain calm or face arrest Tuesday as they tried to pull their money on the second day of the failed institution's federal takeover.

At least three police squad cars showed up early Tuesday as tensions rose outside the San Fernando Valley branch of Pasadena-based IndyMac. Federal regulators seized Pasadena-based IndyMac on Friday and reopened the bank Monday under the control of the Federal Deposit Insurance Corporation. Deposits to $100,000 are fully insured by the FDIC.

Worried customers with deposits in excess of insured limits flooded IndyMac Bank branches on Monday, demanding to withdraw as much money as they could or get answers about the fate of their funds. When it was clear some wouldn't get in before closing, FDIC employees apparently took down names and told them to return Tuesday.

Other customers began lining up at 1:30 a.m. Tuesday, and by dawn, tensions escalated because people on the list were getting priority. By 8 a.m., about 50 people on the list waited in one line and many more waited in another. Five people were allowed in at a time.

Customers became infuriated, and police told them they could be arrested if they didn't remain calm. Police stood by at some other branches around Southern California but there were no other reports of problems.


A lot of people have little choice but to trust social security or some other government welfare program.

To be fair to GM, it is entirely embedded in the US scene, I don't think the people there (despite perhaps having visited other countries) truly appreciated how in America "the image of the automobile is indelibly printed on the national psyche and it will not be easily dislodged. For many, their car is a public extension of their persona, a status symbol and even a symbol of sexual potency, and this makes the automobile, along with the gun, A SACRED NATIONAL FETISH". (Dmitry Orlov, p.25) (but my caps.)

This makes US car makers akin to a national priesthood or sacred order (supplying religious objects and things imbued with sacred value). When you live like that how can you "see beyond it"???

Things are different here in Japan. Many people ditch their cars or stop using them if gas prices go up. They don't see the cars as extensions of themselves, a car is just a tool here.

Well, OK, but after we're done laughing at hapless Mr. Lutz, I still need to haul out the 20/20-hindsight retrospective crystal ball to tell GM in 1990 or 1995 which of a multitude of experts, most predicting no insurmountable problems, to listen to about what global oil might do in 2007/2008. I just don't see how to make the prospective crystal ball do the job.

After all, the relevant question was never the tautological chess-problem of whether a particular consumption pattern can go on forever - there is no need to care as the sun and perhaps even the universe will go out long before then. The relevant question was only whether it could last plenty long enough so that reasonable people working in other fields had little genuine need to fret unduly for the time being about what came next.

If that sort of question were as easy to answer as the tautology, you wouldn't need to write and we wouldn't need to read. It's partly a matter of science, but even science proceeds mainly along the main stream, tending to avoid expending undue resources on whatever is seen as the fringe. Life is simply too short, and time and resources too scarce, for it to be otherwise.

We don't even need to go back to 1990 or 1995, oil prices have been on roughly the same trend for at least five years. This is more than enough time to read which way the wind is blowing. Why hasn't GM had an alternate car ready to go as a hedge, you know, just in case oil prices keep increasing? Why is Toyota and Honda on better shape than GM? They both had cars ready to go for this eventuality. I'm guessing you're calling it dumb luck that they are in better shape, but large numbers of people have been screaming at GM for years now to make some more fuel efficient cars. But they constantly claimed that "people don't want small cars." Well, they want them now.

It sounds like the problem is that it takes GM 18 years to react to anything, which was OK 50 years ago when the Big 3 only competed with each other.

Anyone else feel the GM:USA irony in all these tea leaves?

They might not have known back then about today's oil prices with any certainty, but they could indeed have identified it as one possible contingency that should be planned for. Instead, they just assumed that it was impossible.

They ran one of the largest companies in the US and the world on what was, in essence, a guess - and what has turned out to be a wrong guess. For this they have been getting paid HOW many millions of dollars?

That's what amazes me. The market cap of GM is $6.32 billion and they couldn't find any good reason say, keep an electric vehicle or fuel-efficient hybrid around in an R&D department? I mean, didn't they keep the plans around for the EV-1? Here's what happened to that one, btw:

The end came when GM decided it was cheaper to sue the State of California to roll back clean vehicle regulations than it was to build electric vehicles. GM stated that they spent over US$1 billion developing and marketing the EV1, though a portion of this cost was defrayed by the Clinton Administration's US$1.25 billion Partnership for a New Generation of Vehicles (PNGV) project.


Did they even learn anything from that experience, except that environmental regulations can be removed? I mean jeez guys, as far as I know, the battery packs on the modern hybrids are NiMH batteries, same as the EV-1. What I want to hear from these thick-headed people is not "no one could have anticipated high oil prices" but "we screwed up big-time but we're going to fix it and here's how."

I think the above quote basically shows that GM could have anticipated what's happening now, but chose to drop it for what amounts to a short-term gain (law suit) and long-term loss (possible bankruptcy).

I think this story shows that "free market" corporatism is incapable of effectively dealing with a whole category of issues - anything beyond next year's bottom line.

Now those geniuses at GM have decided not to bring the Beat to the U.S.


So what about the Chevy Beat? The subcompact hatch is slated to arrive in Europe next year as the Spark, replacing the vehicle that shares the same name. However, GM didn't intend for the Beat (or Spark) to be offered in the U.S., so it doesn't meet federal safety and crash standards. It would take too much money and about two years to bring the Beat up to snuff for sales in the U.S., so Lutz conceded that it wouldn't be coming to the U.S. until the next generation arrives... whenever that is.

westexas - Usually I like your posts. But, let's face it, Matt's prediction was an "outlier." For every scenario there you can imagine, someone has predicted it. Dow 30,000 to Dow 1,000, etc. So, people take a little liberty when they speak and say "no one predicted" when they really mean 200 people out of 6 billion predicted. I'll give them the latitude to do that.

RE: Leanan's link above 'Crude Awakening'

The devil is in the details, and a look at the 'Crude Awakening' chart (at link) exposes some of the bad news details. If the chart is truely the real deal, then TOD should have a rational discussion about the ability of the worlds refineries to produce the FF products that the world requires from heavy/sour crude oil...Because, as the chart clearly displays heavy/sour is going to make up more of what crude is available in the very near future. Like, soon if not already.

'What's worse, the details are even more discouraging: as the chart on the right shows, what little production increase the Saudis can sustain is all in medium and heavy crudes.' Matt Simmons...

Meanwhile Saudi Arabia continues to make the claim that they can produce pleanty of oil going forward...But they do not wander into the minefield of 'what kind of oil'...A good question is 'Why is OPEC reluctant to bring up the subject of available oil vs the worlds ability to refine that oil'? If OPEC wants off the hook this would seem a easy way out of the spotlight.

Imo, KSA and OPEC are not responsible for the short sightidness of the worlds oil consuming nations. If sufficient refining capacity is not available for heavy/sour crude is it the fault of OPEC?

What good is a discussion about oil shortages/pump prices without including the problem of inadequate refining capacity? This huge detail is being overlooked by almost everyone. Of all the articles Leanan linked above there is glaring omission of a discussion about what kinds of oil are available and how much refining capacity is available to refine said oil. Only Simmons is on point.


We actually do have a lot of refineries specifically designed to handle heavy sour crude coming online starting late this year and continuing through 2010.

India's Reliance refinery was supposed to come online in September 2008, but will probably be at least a few months late. This refinery will process 580,000 barrels a day of heavy sour. (Assuming there is heavy sour available for it.)

In early 2009 (and you're safe assuming these too will be late) we'll have Rabigh (425,000 b/d) and Fujian (160,000 b/d) and Dung Quat (125,000 b/d). Later in 2009 we'll have Huizhou (140,000 b/d).

In 2010, we'll have Motiva (325,000 b/d). There may be a few other small ones.

And the barrels/day for these projects are somewhat misleading, because product will be extracted from these barrels much more efficiently than in "normal" refineries.

One question I have is whether we're really going to see enough heavy sour for all these refineries, especially by the time the refineries are ready to open, even assuming they're late.

Moe...'One question I have is whether we're really going to see enough heavy sour for all these refineries, especially by the time the refineries are ready to open, even assuming they're late.'

That is the crux of the problem, Moe. We don't know enough about available refining capacity for heavy sour, capacity coming on line and when, and how the mix of light to heavy is going to change, and, how fast will the mix change.

I believe this is the sort of problem that the people that visit and post on TOD can tackle better than any other site or group. Perhaps TOD could not come up with exact numbers for all the variables but they could get closer than CERA or any other organization or group that is/should be looking at the problem.

Saudi Arabia plans huge refinery investments | Saudi Arabia Focus

The scale of Saudi Arabia's commitment to meeting market needs is shown by plans for a new export refinery at Yanbu on the Red Sea to produce 400,000 bpd of clean fuels involving a $5 billion-$8 billion investment.

Saudi Aramco already has two joint venture partners in Saudi-based refinery operations, The 320,000 bpd Sasref refinery at Jubail is operated with Royal Dutch Shell while ExxonMobil is the partner in the Samref already established refining complex at Yanbu. In addition, Saudi Aramco operates five wholly-owned domestic refineries at Ras Tanura, Rabigh, Yanbu, Riyadh and Jeddah which are used to supply domestic needs.

Saudi Arabia's combined capacity from domestic refineries is around 2.05 million bpd. In addition, Saudi Aramco maintains 1.6 million bpd of refining capacity overseas. The company continues to move ahead steadily with multi-billion dollar investments for construction, upgrading and integration of its domestic refineries.

And those are just projects in KSA. They appear well geared to remain on a plateau, if Manifa and Khurais allow them to do so.

"Imo, KSA and OPEC are not responsible for the short sightidness of the worlds oil consuming nations."

Matt Simmons made a comment in one of his videos that he had considerable sympathy for the Saudi rulers. He said that for a long time they had been assured by the oil companies that their reserves were almost unlimited. It is only in the last decade, or so, that they have started to have a more realistic understanding of how their reservoirs are depleting.

Someone once posted here that chocolate shops never go out of business in bad times. They did well even during the Depression. Still true, it appears:

Slowdown prompts UK to turn to chocolate

Food prices are soaring, household bills are through the roof, the cost of petrol continues to riseord levels, but despite the credit crunch British consumers are not losing their appetite for chocolate.

It'll be one of the last things I give up, that's for sure! :)

It is funny - chocolate is one of those things that just doesn't do much for me.

Farmers and fertilizer costs from up top...

Monday I was called for jury duty and, since it's a round trip of 120 miles, I thought I'd also pick up some fertilizer at our farm supply there.

I bought 2- 50# bags of 15-15-15 prilled, 2-50# bags of rock phosphate and 2-25# bags of 20-20-20 soluble (I fertigate). Total price for 6 bags - $178.00

As I look at my little fertilizer inventory (about 1k#), I am really happy I bought much of it over the years when prices were lower.


Good morning Todd
I'm kickin around some ideas about a compost tea brewer, 200 gal. min. off grid
I've an old air compressor. Any thoughts?
my salad spinner

Oh, a salad spinner!, I thought it was a honey extractor, though, it did look like it could get a bit messy!

Hi Earl,

You know a compost tea brewer has been on my "to do" list for three years. I got a 30 gallon plastic garbage can and I had a Little Giant circulating pump that I was going to use to not only circulate the liquid but also to aerate it. But, like a lot of stuff, I simply haven't gotten to it. It's been all set up in the garden waiting for me to actually do something. I REALLY believe in compost teas!

My fun ag project this year has been to try to mimic a Hydrostacker hydroponic unit. What I did was attach a series of 3 quart plastic bottles to a 7' T posts. I used several growing mediums which I'm fertigating. I'm using bush beans for the test crop.


Plenty of other forums to ask that.

Acres USA, WormDigest, or even the soil food web people.

Track down Frank Teuton at WormDigest - he was speaking of his 200 gal unit 10 years ago.

thanks Eric

Hello Todd,

Big Kudos to you for stocking up on fertilizer! For those that own land: I have been long encouraging them to buy NPK and do composting. I-NPK is expected to basically double again according to this weblink:

U of IL says production costs to increase dramatically in 2009

The cost increases were projected for central Illinois farms having high-productivity farmland...

"Fertilizer is the input with the large cost increase," said Schnitkey. "For corn, fertilizer costs in 2009 are projected at $215 per acre, an increase of $97 per acre over the 2008 projected level of $118 per acre.

"For soybeans, fertilizer costs in 2009 are projected at $98 per acre, a $53 increase over the 2008 level of $45 per acre."

He noted that projected 2009 fertilizer prices are significantly above fertilizer prices in recent years.
I have long warned that I-NPK will be increasingly expensive due to the postPeak double whammy effect, but I must admit: I am not happy to read more and more confirmation articles in the MSM.

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

As long as the feds don't think I'm stockpiling fertilizer to make things that go boom. I'll probably be running around with the wheelbarrow scraping up horse patties from the plot next door...

Hello Durandal,

Good idea! Please scoop the poop!

Let's do the rough math for Todd's purchases:

$178/150 lbs = $1.19/lb x 2,000 lbs/ton = $2,373.33 per ton

Roughly 8 barrels of oil per ton of crude, so $140 x 8 = $1,120

As posted before: I-NPK double whanmy effect. Remember, the P & K ores are basically free, and the Sulphur & Nitrogen is free, too--> the costs are all the energy inputs required to extract, beneficiate, then transport globally.

Also, remember my earlier posting series on FF/I-NPK latency, then relate to the above posting on fertilizer doubling again in 2009.

Hugged your bag of NPK today?

As a side note: notice that Todd paid twice what the Bangladeshis pay:

Bangladesh in severe fertilizer crisis

Despite repeated warnings by Weekly Blitz, Bangladesh government failed to take timely measures in recolsing the forecasted crisis of fertilizer, which has now finally put the agro production of the country into complete jeopardy...

...While a huge shortage of urea fertilizer is in sight, prices of non-urea fertilizers, mostly imported by the private sector, have spiralled out of farmers’ reach, which may lead to less-than-required use of the soil nutrients and result in poor harvest, many feared...
IMO, since I-NPK & seeds are the most future-oriented products you can buy: you would expect to see ELM-type bidding wars to visibly occur in these global markets.

I have posted before: when the First World starts freaking over their water & food supplies, that this will make I-NPK prices rise so fast that most global subsistence farmers will be priced out of the market. Is this now happening to some degree?

Imagine the effect of headline photos of Daniel Yergin loading up in the Home Depot Gardening Dept, plus Tiger Woods and other PGA professionals plowing under lots of golf courses. Of course, if the Google 'unlucky button' [long ago suggested by me] ever premieres on their Search Homepage: I would expect change to pick up the pace even faster.

Summary of Weekly Petroleum Data for the Week Ending July 11, 2008

U.S. crude oil refinery inputs averaged nearly 15.5 million barrels per day during the week ending July 11, down 21 thousand barrels per day from the previous week's average. Refineries operated at 89.5 percent of their operable capacity last week. Gasoline production rose last week, averaging about 9.1 million barrels per day. Distillate fuel production increased last week, averaging 4.7 million barrels per day.

U.S. crude oil imports averaged nearly 10.8 million barrels per day last week, up 1.2 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 10.2 million barrels per day, 235 thousand barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.0 million barrels per day. Distillate fuel imports averaged 150 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.0 million barrels from the previous week. At 296.9 million barrels, U.S. crude oil inventories are near the lower boundary of the average range for this time of year. Total motor gasoline inventories increased by 2.4 million barrels last week, and are in the upper half of the average range. Both finished gasoline inventories and gasoline blending components inventories increased last week. Distillate fuel inventories increased by 3.2 million barrels, and are in the upper half of the average range for this time of year. Propane/propylene inventories increased by 1.0 million barrels last week but remain below the lower limit of the average range. Total commercial petroleum inventories increased by 7.5 million barrels last week, and are near the bottom of the average range for this time of year.

And here's what they were expecting:

Analysts surveyed by Platts expect that U.S. crude stockpiles decreased by 3 million barrels last week. They also expect a decline of 1.1 million barrels in gasoline inventories and a buildup of 1.7 million barrels in distillates.

I wonder where did all those imported oil barrels come from. Still, it is fun to see the price drop $5 in s a few seconds...

Just shows how unpredictable reality is, when both doomers and cornucopians get it so wrong.

Good point. The four week running average of US net oil imports has gone from 11.8 to 12.0 mbpd, about 800,000 bpd below the year ago four week running average number.

BTW, our middle case is that in 2018, it would take all of the net oil exports from Saudi Arabia, Russia, Norway, Iran and the UAE to meet current US net oil imports of 12 mbpd.

An interesting factoid. A year ago, the average weekly spot price was $73. Let's assume an average price of $140 last week. We import both crude, of varying grades, and product. So let's assume that WTI is a fair approximation for what we pay for total petroleum imports.

A year ago, we paid about 6.5 billion dollars for one week of net oil imports. Last week, we paid about 11.8 billion dollars for one week of net oil imports (four week running average in both cases).

One would suppose that nearly doubling the amount of wealth sent out of the country to pay for imported oil might have some affect on the economy. It has IMO.

Reducing the amount of wealth leaving the country is one of the best reasons to support biofuels. Since EROEI does not recognize price or wealth leaving the country as being significant factors, concentrating on EROEI to determine mitigation policy is wrong.

In addition the fallacious accounting of EROEI of imported oil which assigns a positive number from the view point of the importing country is clearly wrong. The exporting country collects the energy gain on the oil when it extracts it. The importing country collects the economic gain from the oils consumption.

If the economic gain from oil consumption is high enough (i.e. the wealth produced from the oil consumption is great enough) a portion of the wealth or all of it can be sent to the oil exporters to pay for more oil. Japan survives this way.

From the point of view of the importing country there is no energy gain on imported oil. The EROEI is -1. Those who attempt to blend imported and domestic oil together and assign the greater EROEI of domestic oil to the whole lot are doing a disservice to our understanding of the situation.

The energy loss on imported oil is great enough such that it makes ethanol viable for partial mitigation of the Peak Oil dilemma since most agree that EROEI is marginally positive and imported oil with a -1 EROEI is well over 50% of consumption.

But it is not the low energy gain of ethanol that is the big gain. It is the economic gain as wealth is retained in the country and the economic gain as low utility corn is transformed into a higher utility liquid fuel for transport.

The proper EROEI comparison for ethanol is not against domestic, or foreign oil for that matter, but a comparison to the EROEI of a pig, chicken or cow since that is corn's alternate use for the most part. The EROEI of exporting the corn so that foreigners can feed their animals is even worse since large energy inputs to move the heavy corn half way around the world must be added in.

When EROEI is wrongly applied it is irrelevant. Properly applied with the use of logic rather than numbers run crazy, it has some limited utility when making apples and apples comparisons in a controlled environment.

If it takes a unit of fossil fuel energy to make a unit of corn ethanol energy, it does not keep any money in country. You still need to have the fossil fuel, from wherever it came from before you entertained the insane notion to make corn ethanol.

i propose a new term, WRO$I. welfare return on $ invested ($invested in lobbying politicians)

But, a US person cannot have it both ways. On the one hand, a $ is a worthless piece of paper that is just a promise to pay in the future, i.e., an unsecurred IOU. On the other hand, it is the wealth of the country. I guess that each of us has to decide which it is.

a $ is the wealth of the country.

Really? Can you point to the law(s) on the books that back this statement?

Just responding to the statement by x.

Well, I would expect this increase to put some serious pressure on oil prices. Although I didn't expect to be thinking this several months ago, I wonder if we're in for a period of decreasing oil prices (subject, of course, to the usual unpredictable factors). Between weaker than expected demand (amazingly, high prices change consumption) and reduced tensions in the Middle East - there appears to be serious talk of an Israeli/Syrian accord, or at least understanding, and the US-Iranian situation is considerably less strident than it was (in my opinion, the risk of war was massively over-estimated; force dispositions alone made the prospect of any sort of real conflict unlikely). Anyhow, given that we blew right through the $135/barrel level, I'm wondering if we'll see sub $120/barrel in the medium (3-6 month) term?


Things happen, commodity prices fluxuate. Anyone who thought that oil prices would vector upwards unbroken was bound to be surprised and disappointed. Sawtooth, they will. However, the long term trend will be up, there will be more ups than downs, and the ups will be more up than the downs will be down. Those are pretty broad brushstrokes, but that's about as far out on a limb as I'd dare venture.

As it happens, I agree with you on the long term view. I guess what I'm poking at is that many folks (myself included) been discussing the price rise of late (last 6 months to a year) as evidence that some level of supply constraint is being felt. At what point do we say that a fall in price means that supply constraint is no longer a factor? If the price were to drop below $100/barrel, would that be evidence that we're not as close to the edge as we thought?


Now that OPEC has seen $146, I think they would respond and keep the price support above $120.

In my ongoing search for any sign of sanity inside the DC beltway I came across this jewel...hat tip to Proff Juan Cole at Informed Comment...

Gates Warns of Militarized Policy
Defense Secretary Stresses Civilian Aspects of U.S. Engagement

By Ann Scott Tyson
Washington Post Staff Writer
Wednesday, July 16, 2008; Page A06

Defense Secretary Robert M. Gates warned yesterday against the risk of a "creeping militarization" of U.S. foreign policy, saying the State Department should lead U.S. engagement with other countries, with the military playing a supporting role.

"We cannot kill or capture our way to victory" in the long-term campaign against terrorism, Gates said, arguing that military action should be subordinate to political and economic efforts to undermine extremism.'...snip...



As the price of oil fell, I began to expect an inventory build. If it holds in the $135 range or below, I will expect more inventory build next week. And if it drops into the $120s, then I would expect lots of inventory build. And no one is factoring in Invest 94 or any subsequent disturbance either.

The Gulf Coast showed a 2.1 mb build and an increase in imports, but they are still bouncing along their seasonal inventory lows. IMO, they had to either curtail refinery runs or import more oil.

Consumption fell substantially, see below.

WT, I reluctantly have to conclude that the way you characterize local petroleum markets is actually incorrect and can lead to a misunderstanding of the situation.

The refineries are not starving for oil. There is no net export hurricane in the GOM region. Those companies have ready access to the world markets.

Instead they can't move product because sales are down at these prices.

Of course, the world net export situation is behind this. Which is in turn caused by geological constraints. But if markets function well...as they have to this point....there will be no local shortages.

"No net export hurricane"

My point is that the system is under strain, with both Europe and the US straining to offset export declines from their proximal producers--Russia & Norway and Venezuela & Mexico respectively--while China and some other countries are trying to increase their imports to meet higher demand. It takes significantly longer for the EU and the US to offset the declines from the proximal producers with oil from other sources.

As I have previously noted, VenMex accounted for more than one-fifth of US petroleum imports in 10/07, and the last data I looked at showed their petroleum exports to the US dropping at an annualized rate of over 30% per year.

As I pointed out in 9/07, we have seen US refineries cutting their refinery utilization rate--because they are caught between rising oil prices and the falling demand for refined product.

The question is if Gulf Coast refineries can continue to bid the price up enough to offset the decline in imports from VenMex--and get the oil to the US quickly enough--in order to avoid additional refinery curtailments, with the obvious alternative being the SPR.

The question is if Gulf Coast refineries can bid the price up enough to offset the decline in imports from VenMex--and get the oil to the US quickly enough--in order to avoid additional refinery curtailments, with the obvious alternative being the SPR.

No, here is where I think an error in analysis is being made.

As demand falls, there is no need to avoid refinery curtailments because consumption of what the refineries produce is falling in the US. Some of those refineries will close unless they can find foreign markets to accept their product.

There is no urgency to get more oil to the US.

As I pointed out in my 9/07 article, I expected to see declining refinery utilization: http://www.theoildrum.com/node/2975

And I have been expecting, for quite some time, to see some refineries in importing countries closing.

However, we will have to agree to disagree. Because of logistical constraints and because of a very strained JIT system (basically about 48 hours of crude supply in excess of MOL nationwide), I think that there is a very good chance that the decline in available Gulf Coast crude oil supplies will outpace the decline in Gulf Coast product demand.

US crude consumption (for a 12 month period) peaked in the 12 months ending August 2005.

I would expect to see some big hiccups as the infrastructure is revamped for much lower consumption. But that's not because of a shortage of crude oil imports. ie. Not: "We can't get crude. We have to close refineries and pipelines". It's because the system has been adapted to much higher levels of output and is a pain to scale down.

So it's more like:
"Our sales are falling. There will be disruptions as infrastructure is taken offline"

Of course, the falling sales are ultimately caused by geological constraints.

Weeeell, it looks to me that the US commercial sector is returning to the crude stock levels that prevailed in 2003 - Gulf Coast inventories were actually a tad lower than they currently are, and, en gros, US crude stocks were a fair bit lower than they currently are. I'm pretty sure that there were no noticable shortages anywhere in the US, demand was growing ( it's currently falling ). I very much doubt that the US as a whole is anywhere near its MOL, with the possible exception of the East Coast, which maintains very small crude inventories ( 10-16 million barrels ), but offsets with high product inventories. I also think that it's worth taking into account the totality of commercial inventories - well, at least gasoline, propane, jet fuel and diesel - as these also have to be factored in to any equation regarding where the US's true bottom-line capacity actually is. In totality, US commercial crude and product inventories do not look remotely stressed - they look as if they are adjusting to a new pricing environment, with a shift in the ratio of crude to end products. Total commercial inventories will have to decline to under 900 million barrels before we can begin to talk of a crisis.

Given current crude prices, it is utterly unsurprising that the US commercial sector is shedding whatever excess crude inventory it can and is operating as leanly as possible; insurance and finance costs alone dictate this response -the "cost" of current US commercial crude stockpiles has risen by about 50% over the same time last year, and that's in spite of a 15% decline volume decline, and that's before we start looking at issues of rising operating costs, poor pricing power for gasoline - the principle end-product, and capital constraints in the midst of a credit crunch.

One "small" difference between now and 2003. In 2003, Mexico's net oil exports had not yet peaked. At their current rate of decline, Mexico's net oil exports could approach zero as soon as late 2010.

The thrust of my 9/07 article, linked above, was that tracking crude oil inventories is a poor way to determine what is going on in oil markets, especially since refiners have drawn down their inventories to just a small cushion in excess of MOL, presumably because they have the SPR as a backstop.

However, my point is and was is that the rapid decline in net oil exports from Venezuela and the crash in net exports from Mexico (both just a few days shipping time away from the Gulf Coast) may cause a crude oil supply problem on the Gulf Coast--as refiners have to increasingly rely on crude oil supplies that are more than a month's shipping time away.

So, Gulf Coast crude oil inventories are bouncing along around the all time low that we have seen for summertime, while the two exporters that accounted for more than one fifth of US imports in October are showing a 30% plus annualized decline rate in the volume of petroleum delivered to US shores.

In simplest terms, we are replacing short supply lines with very long supply lines--while many other importers are trying to get the same oil that we want. With a bare minimum of supply in excess of MOL, there are plenty of opportunities for something to go wrong.

There is no urgency to get more oil to the US.

IMO, the increase in oil imports this report is evidence of that urgency. As it turns out, the additional imports they needed were available, likely because the KSA (maybe OPEC as a whole) was able to increase production.

Net exports to the US from our traditional suppliers are down more than consumption is down. That means we have to buy oil from somewhere else to make up for the loss (less demand reduction), either new production or production that someone else was previously buying. If it is the latter, it will cause prices to go up. I will note that it was during this reporting week that oil hit its all time high (to date).

Like the second week of June 07, increase of
6 million barrels, on ethanol.

Record gas price: Dirty dozen
Gallon approaches $3.23 to set 12th-consecutive record high; widespread increases continue ahead of the Memorial Day holiday weekend.
By Chris Isidore, CNNMoney.com senior writer
May 24 2007: 7:26 AM EDT

NEW YORK (CNNMoney.com) -- Gas prices hit record highs for the 12th straight day Thursday, as drivers prepared to hit the road for the Memorial Day holiday and the start of the summer driving season.

There is no immediate relief in sight, as prices continue to rise in most of the country. Midwest prices continue to soar, resulting in the three most expensive states in the nation being in that region.
Gas prices have stayed above $3 a gallon longer than during any previous spike, and relief is nowhere in sight.

The latest reading from AAA Wednesday showed that the nationwide average for a gallon of regular unleaded hit $3.227, up from $3.221 on Wednesday."


Oil Crisis As Barrels Go Missing, According to Audit

January 10, 2008 4:19 PM

Marcus Baram Reports:

How do you not notice when 308,000 barrels of oil go missing?

That's the question government auditors were asking after they looked into the Department of Energy's management of oil received for the Strategic Petroleum Reserve, a critical program to assure energy stability in the U.S. in case of an oil crisis.

The department's Inspector General Gregory H. Friedman and his auditors found that in 28 percent of the oil transfers they examined, the amount received did not match the estimated amount to be shipped by the Interior Department's Minerals Management Service."


I'll remember this report.

It will be an anomaly at best, IMHO.

In this week's report, they finally started using their revised stat for April consumption which has been available on their web site for several weeks.

Thus they now think oil consumption has fallen 3.2% (year to date) from the same period last year.

That consumption estimate will fall further since it contains unrevised estimates for May and June. Lately all the revisions have been massively downward (and growing in size month by month).

Here are the revisions for the last few months between initial estimate and final revision:

Oct 07 -248
Nov 07 -195
Dec 07 -375
Jan 08 -574
Feb 08 -756
Mar 08 -620
Apr 08 -863
(thousand barrels per day)

Note: these are not forecasts that are subsequently corrected. They are estimates made after the month has ended which are then revised in the following months.

How do you miss a fall in consumption of 863,000 bpd?

For context, Alan Drake is proposing partial electrification of a rail system that uses 250,000 bpd.

The EIA can misplace more than 3x that for a few weeks.

[not to fault electrification. It does need to happen]

The EIA's demand (read consumption) data in their International Petroleum Monthly is always three months behind, (as opposed to production data which is always two months behind). So the last data they have is for March. March OECD demand was 1,927,000 barrels per day below March of 2007. That is a drop of 3.9 percent, year over year. That is demand destruction!

That being said, world crude production, according to the EIA, was up 1,169,000 barrels per day, March 08 over March 07. That is a difference(drop in OECD consumption verses increase in world production) of over three million barrels per day. That means that, if the EIA numbers are correct, while the OECD nations consumption was down by almost two million barrels per day, non-OECD nations consumption was up by over three million barrels per day for March. Either that or there was one hell of a lot of inventory build in non-OECD nations in March. And I seriously doubt that was the case.

What I see as far more likely is that the EIA numbers are pure crap! But then those are the only numbers we have.

Which reminds me of a Dilbert cartoon of a few months back.

Pointy haired boss to Dilbert: What did you do with our production and inventory numbers?
Dilbert: I threw them away.
Boss: Why?
Dilbert: Because they were wrong.
Boss: But they were the only numbers we had.
Dilbert: No, we actually have an infinite number of wrong numbers.

Ron Patterson

"What I see as far more likely is that the EIA numbers are pure crap! But then those are the only numbers we have."

And/or the SPOR has been tapped. Or inflow into the SPOR
has been diverted.

Who are you going to believe, me or your own lying eyes!

Once this number is invalidated, we're past the game is over.

The thermostat's been shot off the wall
and the only one that works is in the White House.

Mac, I agree. I don't believe any of the numbers that I see anymore. I have been listening to Bernanke taking questions on tv. Ben comes across as a confused and frightened man as the questions get tougher and tougher. Most confused and frightened men that are occupying a hot seat will not hesitate to fudge numbers if they think that course will lessen the heat that they are feeling.

Bernanke and Paulson have crossed the Rubicon. They face no moral hazard anymore for moral hazard is now in their rear view mirrors. Why would these guys be concerned about changing a few numbers when they are busily nationalizing US housing and banking?

How do you miss a fall in consumption of 863,000 bpd?

To answer my own question.....

I've lost the link but a month ago I read a possible explanation. An energy analyst was calling the EIA's oil products demand numbers into question. Their early estimates are based on a sample of sales data sent in by a subset of the companies that sell the stuff.

HOWEVER, there is no law punishing those who lie to the EIA. And if you fear your sales data might be leaked to a competitor there might be ample reason to lie. Especially in a shrinking market where everybody is trying to determine who lives and who gets eaten by bigger fish.

Not so in California, the analyst said. Arnold doesn't like lying it seems and there are laws that threaten heavy penalties if it is detected. So, he argued that California's early consumption estimates where more accurate and timely.

The analyst didn't call into question the EIA's final revised figures, however. In fact, he correctly predicted based on California data that April's would be revised down.

With production, imports and inventories all tracked separately. It's pretty hard to hide the truth for long, if one wanted to.

Any guesses about the impact of the 4th of July weekend? Did the importers do a bit of hurried processing to prepare for the long weekend, when many workers would have been expected to be absent? Also, with the threat of Hurricane Bertha in the Atlantic, there may have been even greater incentive to unload a few extra VLCC's before the weekend. I suppose we won't know an answer to that until next weeks data is posted...

E. Swanson

Do the lower grades of crude (heavy sour vs light sweet) have lower quantities of propane in them? And if so, could that account for the very low inventories of propane? (ie larger quantities of heavy crude being refined = less propane?)

Price Elasticity of Demand
4 Week Averages 08 vs. 07 plus % YTD 08 vs. 07

Finished Motor Gasoline . . 9,346 . 9,550. -2.1% -1.5%
Kerosene-Type Jet Fuel. . . . 1,654 . 1,662 . -0.5%. . -2.8%
Distillate Fuel Oil . . . . . . . . . 4,181 . 4,079. +2.5%. . -2.1%
Residual Fuel Oil . . . . . . . . . . . 554. . . 706 . -21.5%-19.0%
Propane/Propylene. . . . . . . . . . 922. . . 962 . -4.2% . -4.8%
Other Oils . . . . . . . . . . . . . . . . 3,640 . 3,744. . -2.8% . -5.5%

Total Products Supplied. . . 20,297. 20,703 . -2.0% -3.2%


Whipple in the latest Peak Oil Review says no less than 90 nations have endured ongoing energy shortages in the past few months. That would be where the "increased supply" is coming from, I'd wager.

That's a pretty bleak report.

3. Blackouts and Shortages

The CIA reports that there are 266 “nations, dependent areas, and other entities” on the world today. During the last few weeks at least 90 of these are reported to be having continuing serious or very serious energy shortages. The number of countries with energy problems may be much higher as the CIA also reports that 94 of the world’s nations are islands many of which are so small they are rarely heard from but are almost certain to be suffering from $140 oil.

Most of the places having serious energy problems are in South Asia, Africa, Latin America, and scattered islands. Taken together, they make up over half of the world’s population. Nearly all are having electric power shortages that have resulted in daily blackouts ranging from a few hours to most of the day. Droughts, fuel costs and rapid growth in electrically powered consumer goods are behind most of the shortages. Insurgencies, mismanagement, and even accidents are taking a toll. Liquid fuel shortages are growing rapidly as poorer nations struggle to keep up with surging prices.

In sum, these shortages are causing serious hardships among peoples who have grown accustomed to electric lights, refrigeration, air conditioning and motorized vehicles. Some form of energy-related strike, demonstration, or riot is now being reported almost daily somewhere around the world. It will not be long before serious repercussions evolve from these shortages.

From Automotive News Europe (requires free sign up to access full story)

European car sales plunge in June

The European car market suffered another month of heavy declines in June and its fourth drop overall this year as rapidly deteriorating economic conditions kept new car buyers from leaving the house.

Without even so much as one extra working day to mitigate the bleak figures, new car registrations in June slumped 7.9 percent to 1.43 million vehicles, according to data published on Wednesday by the Brussels-based European automotive industry association ACEA.

Italy down 20%, Spain down 31% on June 2007 (although Spain's new market was boosted last year by incentives for scrapping heavily polluting old cars)

Russia is set to overtake Germany as Europe's top new car market later this year - three years earlier than expected. Well, look who's still got plenty of oil and therefore plenty of money, even if Russia is peaking.

IMO the end of cheap oil is not - yet - directly pricing consumers out of buying cars. It's still to do with tight credit and falling confidence. But as oil prices go on rising, people in oil importing countries won't just feel poorer, they'll be poorer. This is just the beginning.

I think it's important to identify the difference between volume of car sales and volume of cars on the roads. When Spanish car sales drop 31%, my impression is that, because of economic woes, people are not buying new cars. I don't think this equates to not driving their old cars, at least not to a significant extent. In fact, using the US as an example, broader economic woes are preventing at least some people from selling their low mpg cars to buy high-mpg cars. Contrast this with China (June car sales up 18% year on year) and India (May car sales up 14% year on year) where a much higher % of new car sales represent first-time drivers and new cars on the road. I don't have the data at the moment to weigh these opposing factors against each other, but my hunch is that the demand increase in China, India, and other developing economies from new cars on the road is significantly greater than the decline in demand in developed economies...

I'd agree that total use of cars in Europe and the US is falling much less significantly than new car sales. Having said that, reliable data for the UK showed car mileage falling by 3% year-on-year at the end of 2007, which was before fuel prices really spiked upwards here. I expect to see a fall of between 6% and 10% in 2008 depending on where prices go between now and December.

I posted the story because of the scale of the collapses in sales. The only time markets have seen drops like 20% or 30% in recent times is when the Eastern European countries entered the EU. In Poland, for instance, people suddenly had access to good quality used cars from Germany, so new sales plunged.

But 20% for one of the big West European markets like Italy is something new. It shows the dislocation already being caused by a relatively short period of high energy prices. The factors are now in place for a spiral of falling real incomes, falling sales, factory closures, rising unemployment and further falls in spending.

There are over 230 million passenger cars in Europe, so a 5% (?) fall in mileage would roughly balance out the additional 10m new cars hitting the road in China and India in 2008. Of course, those 230 million European cars are an 800lb gorilla of suppressed demand for oil. Any significant fall in road fuel prices would quickly restore consumption, which - in the cruel lore of peak oil - would run headlong into faltering supply. Fuel prices go back up, demand and consumer confidence take another knock and the Western economies take another punch in the kidneys.

Money for Oil

Just a note to let folks know that the Energy Export Databrowser has been updated to allow you to plot oil imports and exports in constant dollars as well as barrels.

This makes for some very interesting graphs. Using the North Sea as an example we can see that:

  • the UK had poor timing in exporting their oil when it was cheap
  • Norway, in contrast, will do well in coming years

Happy Exploring!

Great work Jonathan. Thanks.

Brilliant material -- keep it comin'!

I was listening to NPR this morning, and they were profiling each of the candidates energy policies. It was pretty depressing.

McCain: If we drill the OCS, America will have more cheap oil than we know how to use.

Obama: We don't need to drill the OCS, because it won't help for 10 years. We just need to give subsidies to alt energy and we will be fine.

Neither Candidate: We need to drill for oil in the OCS, but this will not lower the price. Oil is becoming harder to get at, and will not be available in current quantities forever, so we need to act quickly to protect our country from the effects of scarce, expensive oil.

I think we need to form a peak oil party. Neither of these guys get it.

I nominate:

President: Matt Simmons
Transportation Sec: Alan Drake
Communications Dir: Leanan
Commerce Sec: WestTexas
Ambassador to China: JHK

I can't agree-there is no evidence these guys don't "get" it. Would, IYO, either guy tell the truth if it meant he would lose the election because of it?

No, I was basically just expressing frustration. Of course I don't expect them to tell the truth, that's been shown to be the quickest way to lose an election. Even I might not vote for a guy who said "American Dream no longer applicable in lower 48 states".

I would just like it if Obama had the testicular fortitude to tell Democrats that we need to drill, and that corn ethanol subsidies are moronic. Obama has been really disappointing me recently. I will probably still vote for him.

Given all the leases that are now currently available for drilling, is is really true that we need to drill? Aren't there plenty of opportunities available without drilling in the remaining OCS? And after we drill in the OCS, what then? Do future generations have no rights?

However, if drilling were part of a comprehensive package that maximized alternatives and conservation, then it would probably be worth doing as a way to get something, anything, off the ground politically. If were negotiating this, I would scream long and loud about how horrible offshore drilling was so that my opponent would thing I thought I was really giving up something. As it is, we can't even get an extension of a modest renewable energy tax package.

How do you know that Obama is not setting this up for future negotiations? You don't know whether he has the balls to tell people that we need to drill because you don't know what he really believes. Anyway, he should do what is necessary to get elected. We have some great people out there who will never get elected.

And after we drill in the OCS, what then?

Any oil gets extracted and used.

Do future generations have no rights?

Err, they get the same rights as anyone now has. If the corporations are willing to exchange FRN's and you have FRN's - you can get whatever they are selling.

Not having oil to sell, that is a simple problem of economics no?

The time for discussion about ANWAR/OCS/Shale/Biofuels was 20 years ago.

World petroleum output is already peaking and will begin to decline very soon. This endless happy talk is just going to make all the necessary adjustments a whole lot harder.

Politicians should be talking about how a large portion of their population is simply going to survive in the coming years.

Americans have to wake up to the realities of 2008 - oil *imports* are now higher than the alltime peak of US production in 1970. There is no easy fix for this mess.

US energy policy ever since Reagan has been absolutely and totally insane.

"The time for discussion about ANWAR/OCS/Shale/Biofuels was 20 years ago."

not much more than 20 years ago, exxon was turning the colony oil shale project into "senior housing". probably a wise decision on exxon's part.

"...exxon was turning the colony oil shale project into "senior housing"..."

Yes, it was a good decision for Exxon but not for the country as a whole.

There was plenty of time during the 1980's and 90's to do the basic engineering to determine if oil shale extraction was practical. Same applies to all kinds of other solutions. You just can't do a "Manhattan project" at the last minute.

I have vivid recollections of the energy debate in Canada after the 1973 oil shock. Some things like drilling for oil in the Arctic didn't work out. But other initiatives were taken:

  • big expansion of hydro dams in Quebec and, more recently, wind power. Big hydro projects in remote locations can take decades to build.
  • big expansion of nuclear plants in Ontario using domestic technology and domestic uranium
  • government support for oil sands development in Alberta. It took a long time for the equipment and technology to evolve to the current state. In Fort McMurray, there is a "graveyard" of lots of stuff that didn't work - you can only learn that through real world experience

It's been *35 years* since the 1973 oil shock and I simply can't comprehend how the US today is even more vulnerable than it was back then. And the happy talk just makes it worse.

I was listening to NPR this morning, and they were profiling each of the candidates energy policies. It was pretty depressing.

While I find the proposed energy policies of both candidates severely deficient, these calls to tap the SPR are simply maddening to me. I was driven to rant about it.

The SPR is designed for an acute oil shortage. What we are facing is a chronic oil shortage (with possible acute shortages thrown in).

The SPR is simply the wrong weapon to fight chronic oil shortages. I would not oppose "trading it in" for weapons suitable for chronic oil shortages, like Non-Oil Transportation.

Best hopes,


Now that you mention it, it is holding some $70 billion worth of oil right now. You could fund a lot of alternative transportation with that. How much rail would that build?

*WAY* more than enough for, say, 25% tax credits to electrify and enlarge our rail mainlines. Maybe enough for 14,000 miles of semi-HSR.

A good chunk of Urban Rail, but not enough.

We have brought a knife to a gunfight


Couple of questions about HSR:

1) a Bombardier engineer once told me that the secret to HSR was simple - externally supplied power and an excellent roadbed with very gentle curves. Is your "semi-HSR" diesel-electric with special suspension or a TGV-style full electric.

2) in NA, rail lines are used mostly for freight. When you mix in HSR a) how do you keep the freight trains from messing up the track alignment and b) how do you schedule the slow/high speed mix without a lot of sidings

-- TIA

1) Semi-HSR would be electric only, top speed in 110 to 125 mph range (140 mph maybe, some serious engineering required),

Speed limits (upper and lower) for good track are a function of curve radius, super elevation (how much is the outside rail raised above the inside rail on curves), axle loads, grades and center of gravity.

Pax cars all have low centers of gravity (just air mainly above the floor, wheels and chassis below the floor). The higher the density of cargo, the higher % of the load is in cargo and the lower % in structure.

This more weight above the floor, the same below, higher center of gravity.

Just as race car ovals are banked, so are rail curves. But if one goes too slow around a high banked turn, with a high center of gravity, there is a tendency to tip. And even with a low center of gravity, there is a lot of side force on the wheels of a slow moving train on a high super elevation curve and any defect in track and ...

High axle loads with a slow moving freight on a high super elevation curve and that curve will take a beating. Trains are NOT "one time events". A 300 car train has almost 1250 axles (with locos). Two trains/hour on a busy track, for years at a time between major maintenance. Railroads want to run trains that match the track.

IMO, A railcar full of fruit or vegetables, operating at 90 to 100 mph can use the same track as a passenger train at 110 mph. Likewise a typical double stack container train. All within a close to optimum track profile.

2) As CSX proposes from DC to Miami, you add a 3rd and 4th track for semi-HSR service on the same ROW. The regular freight tracks can be used for slower running passing as needed when there is only one semi-HSR track.

Set the other two tracks for 60 mph or so heavy freight. When two semi-HSR trains approach head-on, shunt one over onto a heavy freight track and slow down to 70 mph or so.

Hope this helps, I need to catch up with other comments,


The SPR is storing oil for us to use in the event of war between Iran and Israel.

My idea for the OCS wrt the SPR was to say: OK, we will allow drilling in the OCS and ANWR, but we (fed gov) have the right to purchase the first 1 billion barrels extracted @$100 per barrel. This gives a short term price floor, and guarantees investment return for the drillers, plus gets the SPR lots of "cheap" oil.

Fed gov could then, say put half of the oil in SPR, and resell half to the market @ say $150 per bbl, and this would be the royalty fee. Win win.

I don't think alternatives like solar and wind will make it all fine but we do need to subsidize them and we do need to face up to the fact that we need to transition away from oil and fossil fuels, in general. Human beings possibly have millions of years left on this planet so I don't think there should be a hurry to drill offshore or in Alaska. At some point, there will be no additional drilling opportunities, offshore or otherwise. I don't see that we necessarily should foreclose some options for drilling for future generations.

Those who bang the drum for drilling everywhere now have done nothing to prepare us for peak oil. George Bush still thinks that conservation is purely a matter of personal preference and the 'Murkan' people are smart enough to figure out how to conserve without any govment interference or assistance. And this laissez faire attitude has worked out so well so far, so why not continue.

Anyway, I agree in the sense that all will not be fine. Although, was Obama's position really that devoid of nuance?

Just drive less, but not too much less, without necessarily having to give up ur pickup or your SUV, and drill, drill, drill, and all will be well.

I don't think we need to subsidize solar and wind IF we end subsidies for FF and price the externalities into them. I started reading Plan B 3.0 yesterday, and according to them, to recover the external costs of gasoline, the tax would need to be $12/gallon.

Do this, and you don't need to worry about subsidizing anything. Let the market do it's job.

I don't think alternatives like solar and wind will make it all fine but we do need to subsidize them

Why not just stop the subsidies for oil/gas/coal?

There is zero chance we will stop the subsidies and price the externalities for oil and gas. At least subsidies for renewables have some chance. Our politics sometimes giveth but would never overtly raise the price of oil or gas. A gas tax was dead on arrival even before the runup over the last year.

Ron Paul is quizzing Bernanke on CNBC right now... good fun.

Liked the answer Bernanke gave to Paul on price increases. Again he emphasised that there was a supply/demand problem with oil and it was outside of their control. As he put it: "The Fed can't create a barrel of oil."

But the Fed did destroy many a barrel of oil by creating cheap credit.

No, they certainly can't create a barrel of oil. Which makes one think, what exactly DO they create?

The Institute for 21st Century Energy has composed an open letter to both McCain and Obama linked by a brief AP item above. Here is the Letter's full text.

I'm just now digesting it, but I wanted to post the link so others could as well.

Saw this at the top of my Gmail page:

Quote of the Day - Aesop - "After all is said and done, more is said than done."

^_^ I suppose you could apply that to GM, Monetary Policy Report, OPEC, etc.

Concerning the link up top: Human consumption: Flying in the face of logic.

It is all about the Ehrlich's new book The Dominant Animal: Human Evolution and the Environment. Amazon now has a search feature which you can search many books, (but not all), for keywords you may be interested in. I searched the book for "peak oil" and came up with four references. Two of which were:

3. on Page 283: "... Even so, the approaching (if not already reached) peak of global oil production, combined with the rapidly intensifying demand from China and other developing nations, plus rising prices, may well soon force ..."

4. on Page 352: "... " 12 As the world passes the global peak of conventional oil production- especially if little effort is made to increase efficiency and develop alter- native energy sources-and as developing nations escalate ..."

So at least some authors of population and environmental books are finally getting the peak oil message. For this and several other reasons, I decided I would love to read this book so I ordered it. I will post you my opinion of it after I have read it.

Ron Patterson

"Storm 94" looks like it is just about to be upgraded.
National Hurricane Center


More tracking info

Sadly, I just put Invest 94 on my marker board. For those of you who have been around a while, you know what that means.

For those of us who have not...can you explain Prof G? Sounds very dour.

Hurricane watch.

Best Hopes for all of that cold, fresh water we just dumped out of the Mississippi River,


Yep, it basically means that we're on a watch to go to a yellow alert if conditions warrant. Remember, Katrina, unfortunately, was a big event for TOD...we take hurricanes pretty seriously.

There's another "interesting" area of disturbed weather over Central Florida today, which looks like a minimal TD. There was quite a bit of circulation with it last evening when it was just off the coast over the Gulf of Mexico, but some upper level winds blew thru and it lost some strength, due to the wind shear. It's still there and it's proximity to the U.S. makes it important to watch. Here's the NOAA radar loop.

E. Swanson

Black Dog. I have been watching that one closely. Here, near Daytona Beach, we have had high solid overcast, with lower cumulus thickening beneath as the day has progressed. Looks like we will get some showers or tstorms by nightfall. No wind to speak of yet.

We need the rain.

Latest quote from the US National Hurricane Center

200 PM EDT WED JUL 16 2008



Area #1 appears to be drifting to the East, which would place the center of the circulation over the Florida Current in a few hours. There's lots of warm water to feed the convection, though it's not as warm as the Gulf of Mexico. The SST in the Gulf is above 30C along the coast of at the TX/LA border, according to satellite data.

E. Swanson

1. We have formed a TOD Readers Group on Linkedin: http://www.linkedin.com

Linkedin is basically a networking site that allows folks to connect with people who are thinking about or working on similar things. If you'd like to be a part of the list, go to linkedin, login, and pull down the search box to groups and type in The Oil Drum or peak oil.

Other social media links: http://twitter.com/theoildrum and http://friendfeed.com/theoildrum.

Twitter is a mini-blogging site that allows folks to text. Friendfeed is a social media accumulator. Any further explanation would take a page. :)

2. Thanks for helping spread our work and efforts around. If you have a blog, or are a member of a messageboard, or play at a link farm like metafilter or anything else, the more you plant links to our stuff that you like, the more eyes it gets...it's that simple. Every little bit helps. Submit our stuff to those link farms or use the ShareThis buttons found around each post, they're simple (as long as you are logged in to the respective sites).

3. We really do need and appreciate your support. That and educating folks about the problems we face is what keeps us all going.

Thanks for hanging out, and thanks for making this all worth doing. I learn something here every day--and I apologize for these incessant reminders of things.

As regards the first item I am surprised Paul Ehrlich is being taken seriously. The Population Bomb was the biggest load of rubbish and completely wrong in his predictions. Yet people treat him like a guru. Amazing.

When I was in the market, both as a trader and a broker, we had a saying about insider traders, the legal kind: "Insider traders are nearly always right and always early". I have noticed the same phenomena in my prognostications about peak oil, population and environmental issues, I am nearly always right and always early.

That was Paul Ehrlich's problem, his only problem. His book "The Population Bomb" was spot on, he just had everything happening a few years before it actually happened, and will happen. And anyone who currently thinks we do not have a "Population Bomb" is out to lunch!

Unfortunately things seem to now be happening well before I thought they would. It seems the economy is currently going to hell in a hand basket. I figured we had at least five years before that happened. At any rate I just ordered Ehrlich's new book "The Dominant Animal" and am looking forward to reading it.

Ron Patterson

I agree. Things are going downhill faster than I anticipated, by around 2 years. I was hoping to have my land paid off by the time we got to this point, and I just bought it! (5 yr mortgage)

Best Hopes for fast payoff of mortgage loans.
~Durandal (http://www.wtdwtshtf.com)

Yep, Darwinian has posted previously that he is getting scared, and so am I at the accelerating pace of change, but such is life [acceptance].

I sure hope than things can be mitigated sufficiently with Peak Outreach and optimal Overshoot decline so that history doesn't later record empirical proof that Jay Hanson was actually a wild-eyed, techno-cornucopian optimist in his prediction timeline:

...If you were born after 1960, you will probably die of violence, starvation or contagious disease...
Go, go, go, Alan Drake and Ed Tennyson! We need RRs & TOD pronto Tonto
Go, go, go, JHK and the relocalized Permaculture experts!

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

...If you were born after 1960, you will probably die of violence, starvation or contagious disease...

I was born in 1952, so I must be just fine. ....uh.... (Why don't I feel super reassured about that?)

Yes, and whats all this talk about dieing?

I haven't died yet so I don't believe it will EVER happen.

The Population Bomb was the biggest load of rubbish

Ohhh, don't keep us all in suspense. Why not man up and SHOW us how it was rubbish.

VS just making a claim.

Yet people treat him like a guru. Amazing.

And yet you keep posting here, without backing up your claims. Amazing. Oh wait. Predictable.


Weatherman is an attention-seeking troll, even if thanks to his capacity for self-deception he doesn't know it yet.

Best ignored by applying the art of dynamic silence.

It's rubbish because it predicted the World would starve to death in the 1970's. 30 years later and we are all still here, only more of us. he is living proof that nothing succeeds like failure.

it predicted the World would starve to death in the 1970's.

Incorrect. He predicted some would starve to death, and many did, just not as many as he predicted. Given the general ignorance and inhumanity shown by the Christian West toward the rest of the world its grown fat from, I think he was quite right to sensationalize, to shock at least a few people out of their ignorance to show some humanity.

And people are starving to death right now, all over the world. Especially since the push to ethanol.

Face it, we've filled up the planet.

It's rubbish because it predicted the World would starve to death in the 1970's.

And you can show this in quotes from the copy of the book you own? As I remember, the World was not going to starve to death, just a whole lotta the population.

But do show how you read the book, m'kay?

Oh and do feel free to show how the present world population will continue to grow and stay fed - as you claim the ideas in the population bomb are bunk, m'kay?

I got the book at a garage sale, but don't have it anymore, there are some quotes on wiki.


"The battle to feed humanity is over. In the 1970s the world will undergo famines . . . hundreds of millions of people (including Americans) are going to starve to death." (Population Bomb 1968)

"By 1980 the United States would see its life expectancy drop to 42 because of pesticides, and by 1999 its population would drop to 22.6 million." (1969)

My point was not to know if others had read the book, but to know if the person calling the book bunk had read the book.

The population bomb critics like picking on the 'scenarios' - 2 of them have nuclear war and one features mass starvation. The people who call the book bunk traditionally pick on the mass starvation and never mention the nuke war versions of the future. If you are going to call scenarios 'predictions' - why not point to 2 obvious failures like the lack of a nuclear-based conflict?

But your response lets the cat outta the sack. But its not like weatherman will actually provide useful responses.

Americans may be losing faith in free markets

Errr, if there were 'free markets' in the Americas...wonder when the other 'myths' will be seen as such? Because their are alot of them.

Better title would have been Americans realizing markets were never free...

Simmons on Bloomberg today

I can't watch it from work, so I'll have to check it out when I get home.


We've had two days of oil declines, so Simmons was asked if he had a reason to change his views. A couple of more days of declines and he won't be interviewed anymore. Oh, and based upon today's markets, the banks are fit as a fiddle.

Hilarious. The poor woman (Carol Massar) was hoping Simmons would back off his $600 oil prediction. Instead, he stuck to it...and said it could happen as soon as six months.

Here's my guess.

The consensus here is that the price is not from speculators but is supply/demand in nature. I agree with this opinion.

I believe that since we are in July the August contract is trading--any real trader back me up. Once the Olympics are over in August China won't need as much diesel and so demand will drop in August. In fact, I've noticed over the last few years that the lowest demand time for the whole year is the August, September, October period since the driving season is ending, nobody is burning heating oil, etc. So these drops are natural drops from a demand point of view. Plus, increased economic weakness showing up worldwide.

Now the key to me seems to be the 4th quarter. These contracts trade around October and November. Rembrant's oil production without biofuels says oil production is 85.5 mbd right now. The IEA says that oil demand will be 88 mbd for the 4th quarter vs. 86.5 for the 3rd quarter. This is a 1.5 mbd rise--seemingly for heating oil. Can anybody produce this much more to meet this? Are these demand projections reliable? Stocks are low and I can't see them building to a huge level over the next few months to really cushion this.

Seems to me that 4th quarter 2008 may be a test point. If its speculators, and we are witnessing the pop of a bubble, then 4th quarter price should be pretty low. If supply and demand, then 4th quarter pretty high. Of course, economic cratering is the wild card factor. Also, warmth or coldness of the winter for amount of heating oil burnt.

Anyone else?

Lot of good TV on the energy situation today:

Here is USGS presenting their view on estimated recoverable reserves etc:


press briefing by dana perino


i forecast widespread posturing by the administration, a meaningless agreement with iran, falling oil prices, much gratitude (and votes) for the republican candidate.

I also forecast that there will be an announcement on November 5th that the US GDP quarterly growth figures have been revised, and that we have officially been in recession since 3rd Qtr 2007.

More blathering on the hill about speculators.

IMHO, I think the speculator issue is a second rate witch hunt.

It seems to be the only thing the dems and rebulicans agree upon in re: to engery issue and why we have high prices. So look for the only legislation coming out of congress is to rid us of these nasty speculators. I think it will have a different unintended side effect however. I think Matt Simmons, from the bloomberg link upthread, has the opinion that forcing the speculators out will actually increase the price of oil...if I heard him right.

"Oil prices have settled sharply lower for the second straight day, capping a dizzying drop that has left crude more than $10 cheaper in just two days of frenzied trading."

Why is it that when prices go *up*, everyone blames the speculators but when prices go *down* it is always due to falling demand or increased supply.

There must be a new breed of speculator in the market that only knows how to make one kind of bet ;)

How come those damn speculators let the price go down? They are not doing their job.

You're looking at the new speculator. I went long oil today (USO).

This just off Bloomberg.

"...as the two-day retreat in crude prices overshadowed a government report showing the fastest increase in consumer prices since 2005. The Standard & Poor's 500 Financials Index surged 12 percent as every bank rose at least 10 percent. The Amex Airline Index advanced a record 18 percent."

The swings seem to be getting wilder. A two day drop in oil and the market goes nuts.

"Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,"

-- William Butler Yeats, "The Second Coming"

"Oil prices have settled sharply lower for the second straight day, capping a dizzying drop that has left crude more than $10 cheaper in just two days of frenzied trading."

See? See? I told you so. It's all a bubble. The nightmare is over!! At last those peak oil Cassandras have had their come-uppance.

Phew! (wipe sweat from brow). Nyah nyah na nyah nyah. I'm off to order that 4-wheel drive I've always dreamt of.

Just heard an ad for a 36 month lease on a new Toyota Tundra pickup, nothing down, just a check for tax, title & license--for $199 per month.

Amory Lovins

On Charlie Rose last night ....

PLUS ....


Is he the energy guru ? Any comments ?

Not sure I agree with him on Hydrogen ,but his views on Nuclear interest me ...

No wonder the MSM, in general, doesn't want to talk about Peak Oil. Some headlines from Drudge today:

FLASH: USA TODAY ad sales fell 27% in June...

Atlanta newspaper cutting staff by 200...


OREGONIAN closing three metro bureaus...

Hello TODers,

Recall that it was just a few days ago, July 8th to be precise, where I posted a POT news release weblink where they announced an increase to $800/ton.


Canpotex to sell potash at $1,000/tonne-analyst
From an Asimov's Foundations' predictive collapse and directed decline concept: the 1918 Webb-Pomerene Act can be a primary tool to force O-NPK recycling and other changes.

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

The 1918 Webb-Pomerene Act is quite interesting. This link posts and briefly discusses a WSJ acticle referencing the law: "Major fertilizer producers deny any allegations of gouging. They say they are simply raising prices to reflect tight supplies and growing demand after years of relatively low prices.

"But there's an unusual piece in the pricing puzzle: In several countries, obscure laws shield makers of potash and phosphate from certain antitrust rules. In the U.S., for example, phosphate makers are among a handful of industries empowered by the 1918 Webb-Pomerene Act to talk with competitors about pricing and other issues."

Later in the item we read: "In the U.S., Potash Corp. and Mosaic are the sole surviving members of a phosphate export cartel called the Phosphate Chemicals Association. Under a 90-year-old law designed to promote American exports, the companies are allowed to legally market and sell their product overseas as a single entity at a price set in consultation with one another. Similarly, Canada has Canpotex, and Russia has Belarus Potash Co., another export cartel.

"While the individual cartels can't legally collaborate among themselves on pricing, they regularly -- and legally -- follow each others' price increases. After the Russian cartel recently said potash prices would rise to $1,000 a ton, Potash Corp.'s Mr. Doyle said Canpotex would soon match that price."

So Bob, from my understanding of how this law functions, how do you see it becoming "a primary tool to force O-NPK recycling and other changes?"

I can also see OPEC pointing at this law in any anti-trust action that might be attempted.

Someone wrote in to CNN tonight, claiming that the drop in oil prices is because Bush lifted the ban on offshore drilling.

We're freakin' doomed.

Kudlow also just said that on his CNBC show. His panel just nodded, I would assume in agreement. No mention of inventories, Iran, etc. And if congress approves OCS and ANWR, he said it would go down some more. This man claims to know something about economics. Oh, and the traders sold off oil because of Bush's announcement. If only he had known it was that easy, he would have made this announcement months ago.

This is what happens when ideology trumps analysis and reason. The man has no regard for the truth.

And what will Bush do for a second act?

This is all just part of the coming elections, to set up a scenario where the Dems get blamed for high oil prices. If prices go back up, they will be blamed for not acting immediately on drilling.

Kudlow should be forced to live in his Escalade like that woman in Santa Barbara.

You have to wonder if Bush had some prior intelligence/knowledge that the market was set up for a price drop. The timing is perfect for him. Even if the lower price only holds for a few days, we won't hear the end of this one for a long time. The right works kinda like terrorists, they only have to get lucky occasionally. The few lucky coincidences then get brought into the high canon of propaganda.

A friend send me this clip. I had never seen it. If I could describe it...it would be titled "The best of Peak Oil" video clips. Or maybe "The Stars of Peak Oil speakout". Anyway, a good clip to show someone new to Peak Oil I think.

Yesterday's Future - 35 min - Jan 17, 2007
A collection of short clips from six current documentary films describing some of the challenges that face us as a species.


It's about 35 minutes and also has primer on GW. This was put together for by a community in Hawaii to view and discuss.

"flat production, charge crimps nexen's results"


nexen took a $ 330 million charge for stock based compensation and reported $380 earnings. yeah that is a company i want to put money into, yeah this is a well run company (for the management, not the stockholders).

Yes elwood,

Another good example of the dangers in the villagers reading the press releases and reserve reports of public companies. The companies have their own unique agendas which the public will never understand but readily read as good news for the village.

American inequality highlighted by 30-year gap in life expectancy

The United States of America is becoming less united by the day. A 30-year gap now exists in the average life expectancy between Mississippi, in the Deep South, and Connecticut, in prosperous New England. Huge disparities have also opened up in income, health and education depending on where people live in the US, according to a report published yesterday.


Free market solutions at work ?

Despite an almost cult-like devotion to the belief that unfettered free enterprise is the best way to lift Americans out of poverty, the report points to a rigged system that does little to lessen inequalities.

Peak Oil as well as Peak Education !

Some of its more shocking findings reveal that, in parts of Texas, the percentage of adults who pass through high school has not improved since the 1970s.

Unfortunatly louisc the free market is working just like it's suppose to. Individuals are compensated for the economic value they add to society. A difficult task if you're poorly educated. I'm in TX and confirm first hand the failure of our gov't schools to prepare our youth for a happy and properous life. The free market will just as readily punish failures without mercy just as it will reward success without limit.

The American Human Development Index has applied to the US an aid agency approach to measuring well-being – more familiar to observers of the Third World – with shocking results. The US finds itself ranked 42nd in global life expectancy and 34th in survival of infants to age. Suicide and murder are among the top 15 causes of death and although the US is home to just 5 per cent of the global population it accounts for 24 per cent of the world's prisoners.

Which just provides one more piece of evidence that life in the USA is a lot more crappy than the MSM and the political elites are letting on.