DrumBeat: July 17, 2008
Posted by Leanan on July 17, 2008 - 9:02am
Oil futures: Know when to hold 'em
NEW YORK (CNNMoney.com) -- In the last three days oil prices have fallen by roughly $10 a barrel. Many analysts say slackening demand, or the threat of it, is the main culprit.But another force could be at work in the background. Last week various analysts said there was talk that Mexico, the world's fifth largest oil producer, was hedging its bets - the country was said to be signing contracts to deliver oil several years into the future at today's prices. Essentially, it was betting oil prices have peaked.
"This is a smart move," said Phil Flynn, senior market analyst at Alaron Trading in Chicago, who also thinks there's a good chance prices have peaked. "If I were an oil producer, I'd want to lock in these prices."
Czechs dealing with Russian oil cutback
BERLIN: With Russia cutting oil deliveries to the Czech Republic, a strategic decision made by Prague in the early 1990s to reduce its energy dependence on Moscow appears to be paying off.The Czech Republic was the only former communist country in the region to diversify energy sources immediately after the fall of the Soviet Union, and it seemed unfazed this week by the Russian decision to cut oil deliveries by about 40 percent.
House rejects bill to require drilling on leases
WASHINGTON (Reuters) - The House of Representatives failed to approve legislation on Thursday that would have pushed oil companies to drill on federal leases they already hold and required the government to lease tracts in a Alaskan oil reserve more often.
Shell may invest up to $300 million in Peru
LIMA, Peru — Royal Dutch Shell may invest up to $300 million in oil and natural gas exploration in northern Peru, a company official said today, a decade after the Anglo-Dutch company suspended gas exploration operations here.
Texas gives green light to lots more wind power
AUSTIN, Texas - Texas officials gave preliminary approval Thursday to the nation's largest wind-power project, a plan to build billions of dollars worth of new transmission lines to bring pollution-free energy from gusty West Texas to urban areas.Texas is already the national leader in wind power, and wind supporters say Thursday's move by the Public Utility Commission will make the Lone Star State a leader in moving energy to the urban areas that need electricity.
Oil extends slide below $130 on demand worries, Iran
NEW YORK (Reuters) - Oil prices dropped by $5 on Thursday, adding to a decline of about 12 percent from last week's record on worries over U.S. demand and easing political tensions between Iran and the West over the OPEC producer's nuclear program.Oil's slide marks the biggest 3-day loss in the market in percentage terms since December 2004, and the biggest 3-day loss in dollar terms since oil futures started trading in New York in 1983.
N-power plant remains offline / Pressure mounting to resume operations at Kashiwazaki-Kariwa site
A year has passed since the Niigata Prefecture Chuetsu Offshore Earthquake, but the Kashiwazaki-Kariwa nuclear power plant operated by Tokyo Electric Power Co. (TEPCO) is not likely to resume operations soon.
White House threatens to veto oil drilling legislation
WASHINGTON (Reuters) - The White House on Thursday threatened to veto legislation being considered by the U.S. House of Representatives that would force oil companies to give up undrilled federal leases and ban the export of crude drilled in Alaska.
Iran satisfied at US involvement
Iran has welcomed as positive America's decision to take part in international talks on its nuclear programme.Speaking in Damascus, Iran's foreign minister said Tehran was looking forward to constructive engagement.
Galp to get 1st shipment of Venezuela crude in Aug
LISBON (Reuters) - Portugal's oil and fuel company Galp will receive the first shipment of 1 million barrels of crude from Venezuela in the first week of August, the transport ministry said in a statement on Thursday.Last year, Galp signed an agreement with Venezuela's state-run oil giant PDVSA envisaging imports of oil from the South American country to account for up to 30 percent of Partugal's refining demand of over 300,000 barrels per day.
Costa Rica to Join Chavez's Oil Alliance for Low-Cost Financing
(Bloomberg) -- Costa Rica requested full membership in Petrocaribe, Venezuela's preferential oil program, giving the Caribbean country access to low-cost financing on oil purchases.
Britain gets first taste of big tidal power
LONDON (Reuters) - The world's first commercial-scale tidal power turbine has supplied the British grid with its first surge of tidal electricity, Marine Current Turbines (MCT) said on Thursday.The tidal current turbine, known as SeaGen, briefly generated 150 kilowatts of power off the coast of Northern Ireland as part of testing ahead of full commercial operations in a few weeks, the company behind the project said.
Maybe Phil Gramm wasn’t entirely wrong. Maybe we are happier whining about problems rather than coming up with solutions that entail any sort of inconvenience.
Church oil theft leaves huge mess
An environmental cleanup is underway at St. Luke's Anglican Church at O'Leary Corner in western P.E.I. after thieves made a mess while stealing heating oil from the tank outside the church.The theft occurred last month. Thieves unhooked a line to empty the tank and oil spilled into the ground. The cleanup is expected to take several more weeks and is costing thousands of dollars. The church has insurance to cover the cleanup, but still has to pay a deductible.
Moscow should host "gas OPEC" base - lobby group
MOSCOW (Reuters) - Russia's top business lobby group said the country should host the headquarters of an OPEC-like gas group and sell oil in roubles to help achieve the Kremlin's desire to make Moscow a global financial centre.Russia, which is flush with oil revenues and holds the world's third largest gold and foreign exchange reserves, aims to boost its influence in global political and financial affairs and wants to lure international investors to its capital.
Get ready for the last oil war
The now accelerating countdown to Peak Oil marking the ultimate peak of world production – with a faster fall-off in net export supplies than total production under several logical scenarios - can only aggravate existing global and regional tensions, especially in the Mid East. Any decline in global export supply (currently running at about 51 million barrels/day (Mbd)) will be catastrophic for attempts at maintaining flagging credibility in ‘market supply/demand balance’ and open market price setting. The date at which this will happen, without war accelerating the process through destroying oil infrastructures is of course disputed. Several studies indicate likely date could be 2012-2013.When we arrive at permanent undersupply, prices will explode. This will be the end of market trading. Bilateral country-to-country arrangements will replace open market trading – returning world oil commerce to pre-1990s structures and arrangements, best suited to opaque and complex supply deals. Moving on from oil-for-food, supply deals will be dominated by weapons-for-oil, and support for using them. This was a key part of supply deals operated by major powers with Iraq, including third party supply of oil from Iraq’s Sunnite-ruled GCC neighbor countries, during the 1980-88 war.
Europe Seeks North Africa Energy
With stability returning to Algeria and UN sanctions lifted from Libya, European energy giants are vying with each other to tap new sources of natural gas and oil in these North African countries. Their hope is to reduce what many fear is an overreliance on Russia - and beat the United States to the punch. Gazprom, the state-owned Russian energy monopoly, which supplies more than a quarter of European natural gas needs, is also in the region, trying to reach long-term contracts to diversify its own energy sources. But Gazprom, which opened an office in Algeria last month , is facing tough competition.
Rush Limbaugh - See, I Told You So: Oil Price Drops
Now, I remember, what was it, a month ago now, we had a long discussion on this program when everybody was saying that the oil price per barrel was going to get to $200, and I said, "Folks, even if it does, it is not going to stay there 'cause the market can't support it, the market won't be able to support $150. The aviation industry will not be able to stay in business if it gets that high, it's just that simple. Market forces are market forces and nobody is going to bail out airlines and nobody is going to subsidize fuel costs, it isn't going to happen." And so, lo and behold, look what happens when Congress just stays out of things, when they just stay out of it. By staying out of it, I don't mean opposing drilling. If we could come to an agreement on that, then these prices would plummet even further.
Suncor says oil sands pipeline shut after leak
CALGARY, Alberta (Reuters) - A pipeline carrying diesel fuel from Suncor Energy Inc's northern Alberta oil sands operations sprung a leak on Tuesday, but production at the facilities has not yet been affected, the company said.
Despite declining reserves, China's leading oilfield vows 40m tonnes
BEIJING (Xinhua) -- China's leading oilfield, Daqing, said on Thursday it will make efforts to maintain high output, to ease oil shortage in domestic market.Daqing aims to produce around 40 million tonnes of crude oil every year in the next 10 years, said Wang Yupu, the oilfield's general manager.
Despite declining reserves, Daqing will rely on high-tech to maintain high output, he said.
Ivory Coast's main city crippled by transport strike
ABIDJAN (AFP) — Ivory Coast's economic heart Abidjan was crippled by a transport strike over fuel price hikes for a third day Wednesday as motorists queued up at petrol pumps following rumours of an oil shortage.Tens of thousands walked to work in the sprawling seaside city as communal taxis and minibuses, a cheap means of transport for locals, remained off the streets.
Iraq To Limit No-Bid Deals With Big Oil
(CBS/AP) The Iraqi government is planning to limit no-bid contracts being negotiated with several major oil companies to one year to avoid overlap with longer-term deals expected to be signed next June, a senior Oil Ministry official said Thursday.
How to buy organics while on a budget
If you’re like me, your household budget is getting clobbered by the one-two punch of $4-plus-a-gallon gasoline and higher food prices. Most of us can find a way to drive less, but we all have to eat.To stretch their food dollars, people are changing the way they shop. For some, that means buying fewer organic products or taking them off the shopping list entirely.
Where to ride out a gas crunch
Here are 10 places where commutes are short or many residents get to work in ways that don't use a lot of fuel.
Ultra high-strength and super-light steels are the plastics of the 21st century. There is high demand for these steels for use in everything from jet engines to rail components. In turn, there is a big push for the quirky metals so critical in making them. And in those quirky metals are good opportunities for investors. One of them is vanadium.
Continental smothered by fuel prices
HOUSTON (AP) -- Continental Airlines Inc. said Thursday it swung to a second-quarter loss, hurt by record high fuel prices and weakening economic conditions.But the result was far better than expected, and shares rose 73 cents, or 7.9 percent, to $9.92 in trading after the opening bell.
Eskom Full-Year Profit Plunges 86% as Coal, Diesel Costs Soar
(Bloomberg) -- Eskom Holdings Ltd., South Africa's state-owned power utility, said full-year profit plummeted 86 percent as coal prices jumped and it spent more on diesel to ease a national electricity shortage.Net income fell to 923 million rand ($121.4 million) in the year to March 31, from 6.5 billion rand a year earlier, the Johannesburg-based company said today in its annual report. Sales rose 11 percent to 44.4 billion rand.
``Our financial performance was severely impacted by the increasing cost of primary energy, mainly coal and diesel,'' Eskom said in the report. Coal exported through South Africa's Richards Bay port tripled in the past year.
Eskom Sees 100 Million-Ton Coal Gap in South Africa
(Bloomberg) -- Eskom Holdings Ltd., South Africa's state-run power utility, estimates the country may face a shortage of 100 million metric tons of coal by 2017 if the government doesn't intervene to secure supplies for local use.``The low growth in South Africa's coal production is of very great concern and poses a serious supply risk to Eskom and South Africa,'' the Johannesburg-based company said today in its annual report. Lower quality coal, previously only used by Eskom, is becoming attractive to importers, particularly in India, it added.
National Aluminium to Import Coal to Avoid Reducing Production
(Bloomberg) -- National Aluminium Co., which last month cut production because of a coal shortage, plans to import 100,000 metric tons of the fuel to prevent another disruption at a time when prices of the lightweight metal are near a record.The company, India's biggest alumina maker, will purchase thermal coal from countries including Indonesia in two months, Chairman C.R. Pradhan said in a phone interview from the eastern city of Bhubaneswar. Last month, it bought 30,000 tons at an average 8,000 rupees ($186) a ton, he said.
Major power shortage foreseen in China
BEIJING (UPI) -- A major power shortage reportedly looms in China, brought on by rising coal prices and low government-controlled electricity rates.
Iluka Resources, the world's biggest zircon producer, said second-quarter mineral-sands production fell 20% after declaring force majeure at its Western Australia operations because of a power outage.
2008 Has Been an Incredible Year for Commodities
No, this is not a bubble. It’s a coming of age, a big, hard reality check that has been decades in the making. I have seen more activity by Wall Street in the resource markets in the last three years than in the previous 17. And I do not expect that it will ever go back to the way it was. I also don’t expect to see 42nd Street filled with porno and hookers again, either.Change is often hard to accept. $140 oil, $1,000 gold, $8 corn... this is all the new reality. None of these new price trends are a figment of some rogue speculator’s imagination or the products of evil activity. This is a wake-up call that our growing world is hungry for the limited resources it still has.
Officials: Heating costs to spike
Although the price of gasoline has been in the news lately, Sen. Charles Schumer, D-N.Y., says, "You ain't seen nothing yet" when it comes to home-heating oil.He spoke during a Wednesday telephone news conference about legislation he is co-sponsoring in the Senate that would provide an additional $2.53 billion for the Low Income Home Energy Assistance Program. This would supplement the $2.57 billion already available.
There's Washington Buzz About National Speed Limit
With gas prices now topping $4 a gallon, talk of a national slowdown is again swirling. Sen. John Warner, R-Va., has asked for a government study on a national speed limit.But don't expect a repeat of 1974 anytime soon.
Some predict shakeout in Michigan as fuel prices hit home health care
"Some businesses have gone to four-day workweeks, but in this industry, we have to take care of patients 24/7 and we don't have that luxury. We have to be there every day," Osofisan said. "We've lost staff that can't afford to make it work."We're not in a great position, but the business has got to go on," Osofisan said, noting he raised mileage pay recently. "Unfortunately for everybody, the population is getting older, and it's going to get worse if there's no relief in gas prices."
No fuel like an old fuel crisis
The biggest annoyance caused by the increasing price of gasoline is that you have to listen to people complaining about it.People who bought vehicles slightly smaller than the USS New Jersey were taken by surprise that there is a big tank in the back somewhere that they have to keep filled. They hold it to be self-evident that all good Americans have the unalienable right to life, liberty, arms-bearing, taxes with lots of representation and gasoline under three bucks a gallon.Gasoline prices are making it hard to feed the family. If it gets any worse, the old man might have to cancel the $120 a month cable package that allows him to watch any sporting event live from anywhere in the world, with an option to watch Martian sports if that new robot on Mars finds any. The machine is looking for ice on Mars, so there may be figure skaters or curling up there.
The Optimizer: Energy Conservation
With its huge hydrocarbon reserves of gas and oil, Saudi Arabia is among the richest countries in the world in terms of natural resources, yet for the Kingdom and Saudi Aramco, energy conservation is an important concern.
Ethiopia hit by diesel shortage
Major towns throughout Ethiopia have been hit by a major shortage of diesel fuel, starting Thursday, July 10, 2008 this week, gas stations were congested with vehicles queuing to fill up their tanks.Damenu Kibret, Public Relations head of the Ethiopian Petroleum Enterprise (EPE), told Capital that the shortage occurred from reduced supply at retail companies.
Saudi refinery unit to start output soon
SINGAPORE: Saudi Arabia's new 60,000 bpd petrol-making unit at its Rabigh refinery will come online between end-September and early-October, a source said yesterday.The unit is part of the 400,000-bpd PetroRabigh refinery, which is linked to the $10 billion joint-venture petrochemical complex between Saudi Aramco and Japan's Sumitomo Chemical.
Will Offshore Drilling Lower Gas Prices?
Bush argues that lifting the offshore drilling ban would send an important psychological signal to markets, which could ease oil prices. According to NPR, "The Department of Energy says there may be 18 billion barrels of oil in coastal waters, but they also say that drilling for it would not have a significant impact on production or prices until 2030." Oil industry insiders "say drilling won't ease the oil pinch." Matthew Simmons, President of energy investment bank says, "It's really misleading to hold that out as a panacea. It won't work. It might work for our grandchildren."
Tropical depression less likely in SE Caribbean: NHC
The energy market has been watching this system since the NHC on Monday first forecast it could develop into a tropical depression.Some weather models forecast the system will pass near Aruba, where an oil refinery is located. All models project the system will swirl westward across the Caribbean Sea and hit the Yucatan Peninsula in Mexico in about five days.
If it crosses the Yucatan it could disrupt the Cantarell Field in the Bay of Campeche, the biggest oil field in Mexico.
Alaska bets gas line jump-starts production
The newest in-state gas pipeline plan for Alaska is based on a bet.By connecting a region with a declining supply of gas to another region desperate for affordable fuel, the state is betting it can jump-start production of untapped Cook Inlet reserves by using demand from the Interior like a battery and a pipeline like a set of jumper cables.
What remains unclear is whether the jolt will do the trick.
Big oil companies to spend $7 billion on flow from Canada
SIOUX FALLS, S.D. - Two major energy companies will spend $7 billion to nearly double the amount of crude oil flowing through a pipeline from Canada's tar sands to the U.S. Gulf Coast, highlighting intense demand for crude that was once too expensive to pull from the ground and process.
Disinformation Age: OPEC lies, the SUV dies.
The folks over at OPEC, the Organization of Petroleum Exporting Countries, must think we’re pretty stupid. The other day, Chakib Khelil, the current OPEC president, asserted that “the intrusion of bioethanol on the market” is responsible for 40 percent of recent increases in the price of oil.
Rising oil prices likely to reverse trend toward sprawl in suburbs
Newly released estimates from the U.S. Census Bureau show a continuation of long-standing population trends in Pennsylvania, and south central Pennsylvania in particular, from the most recent census in 2000 to July 2007. Growth -- or as it is sometimes referred to, "sprawl" -- continued apace in the outer suburbs, while the cities and older suburbs saw declines in residents.But this decades-old trend may have run out of gas, literally. Cheap gasoline encouraged ever-longer com mutes, largely in an effort to find afford able housing on an acre lot with lots of grass to mow. Record-high oil prices are bound to change -- indeed, have already altered -- the economics of "country living," especially when it is supported by long drives to and from work every day.
Electrical infrastructure faces crisis, experts say
Experts said this week that the infrastructure that provides electricity to homes and businesses throughout the country is nearing the breaking point because of increased energy demands - and it remains vulnerable to cyber and terrorist attacks.That's part of the nation's grim electrical picture according to industry and homeland security experts who gathered Wednesday at a forum in Shepherdstown to discuss the need for an improved electric transmission infrastructure system in West Virginia and the Mid-Atlantic region. The forum was sponsored by West Virginians for Reliable Power, and it included Daniel Larcamp, spokesperson for the Edison Electrical Institute. Larcamp previously served as chief of staff for the Federal Energy Regulatory Commission.
Who’s Backing Gingrich’s ‘Drill Here’ Push?
As you’ve probably noted, Newt Gingrich, once casting himself as a conservative conservationist, lately has been proclaiming “Drill here, Drill now, Pay less” through one of his online organizations, American Solutions for Winning the Future. Is anyone experiencing cognitive dissonance?
The facts have not slowed the legend of Gull Island oil
Along with a surging interest in fuel-efficient automobiles and biking to work, the legend of Alaska's Gull Island, a speck of land four miles or so offshore the North Slope in the middle of Prudhoe Bay, seems to have an uncanny ability to appear when the United States is facing soaring oil and gasoline prices.
Oil and trouble: Sometimes it's not worth it
There must come a point when BP and Royal Dutch Shell give up on the whole messy business. In Russia, the chief executive officer of TNK-BP, the British firm's half-owned Siberian oil producer, is again facing the loss of his Russian visa. In Nigeria, Shell is pondering new threats of violence by militants in speedboats targeting the company's offshore operations.These are core oil-producing regions. For BP, its share of TNK-BP represents almost 900,000 barrels a day, about a quarter of the multinational's annual output of oil and gas, while Nigeria is Shell's heartland, a country it has inhabited for almost 50 years. The war of attrition conducted by militants and criminal gangs in the Niger Delta is chipping away at oil production but Shell ought to be getting some 400,000 b/d from Nigeria, about 12 per cent of Shell's total.
This is not the whole story, however, because profitability is what these companies are about and the barrels emerging from these troublesome countries are subject to punishing tax regimes. In both Russia and Nigeria, it is the state, not the oil companies, that gets the windfall from oil at $140 (U.S.) a barrel. For Shell and BP, these most troublesome parishes are the least profitable, per barrel.
The Peak Oil Crisis: The Blackouts Spread
Of the 266 distinct nations or entities on the world today, nearly 100 are now reporting continuing energy shortages, mostly in the form of inadequate electricity supply, but in a growing number of cases, shortages of liquid fuels and natural gas. The actual number of countries affected is probably well over 100 but there are dozens of isolated island-states scattered around the world that are rarely heard from and are almost certainly suffering in silence while waiting for the next oil tanker to come in.The majority of these energy-short states are small, poor and play only a minor role in world trade. While we should feel sorry for the plight of their inhabitants who are, or shortly will be, enduring severe hardships from greatly reduced supplies of electricity, water, food and use of motor transport, the impact of their problems on the better-off OECD world is likely to be minimal for a while.
Nigeria locals blow up Eni oil pipeline, output shut
ABUJA (Reuters) - Nigerian community members blew up a crude oil pipeline operated by Italian energy group Eni in the restive Niger Delta, shutting around 20,000 barrels per day, the Bayelsa state governor said on Thursday.
Norway oil output fell to 1.93 mln bpd in June
OSLO (Reuters) - Norway's oil production fell to a preliminary 1.93 million barrels per day on average in June from 2.18 million in May hit by maintenance, the Norwegian Petroleum Directorate said on Thursday.The figure was up from 1.87 million barrels per day in June last year.
Democrats try to spur more oil exploration
WASHINGTON (AP) -- Seeking to blunt GOP efforts to permit oil exploration off Atlantic and Pacific coasts, House Democrats are pushing legislation they say would spur oil drilling on already available lands in Alaska, the West and the western Gulf of Mexico.Republicans scoffed that the so-called Drill Act - imposing a tougher "use it or lose it" rule on leases already held by oil companies - would do little to boost oil exploration, saying current policies are aimed at the same goal. A vote was set for Thursday.
Brazil oil strike negotiations stall
SAO PAULO, Brazil - Negotiations between striking Brazilian oil workers and state oil company Petrobras stalled late Wednesday with no immediate end of the walkout in sight.
ConocoPhillips vows Darwin evolution
US supermajor ConocoPhillips said it was “dedicated”to expanding its Darwin liquefied natural gas project in Australia’s Northern Territory to meet booming energy demand in Asia.
Spain broke rules in energy deal
Europe's top court says Spain broke EU law by trying to obstruct a German takeover of Spanish energy firm Endesa.The European Court of Justice ruled Spain broke competition rules by insisting mergers in its energy sector be pre-approved.
Australia to Examine Undeveloped Fields as Oil Supplies Dwindle
(Bloomberg) -- Australia will step up calls on companies to bring undeveloped oil and gas fields into production as dwindling reserves make supply security a ``major concern,'' Energy Minister Martin Ferguson said.
The cost of oil is rising and will continue to rise. At what price do we say enough is enough and abandon oil as a home heating fuel?
Peak Oil and Energy Imperialism
The rise in overt militarism and imperialism at the outset of the twenty-first century can plausibly be attributed largely to attempts by the dominant interests of the world economy to gain control over diminishing world oil supplies. Beginning in 1998 a series of strategic energy initiatives were launched in national security circles in the United States in response to: (1) the crossing of the 50 percent threshold in U.S. importation of foreign oil; (2) the disappearance of spare world oil production capacity; (3) concentration of an increasing percentage of all remaining conventional oil resources in the Persian Gulf; and (4) looming fears of peak oil.
The future of fuel is wide open
The only certainty to emerge from the Future Fuels Forum last month is that we are in a time of transition regarding fuel: just how that transition occurs, and where it takes us, is anyone's guess.The 44-page document that was produced from the forum, and released last week to headlines that shouted '$8 a litre by 2018', gave equal weight to two opposing concepts—peak oil, and energy agency forecasts that current high oil prices are temporary.
The plain truth we are confronting today is this: Cheap energy in any form - oil, gas, whatever - is gone forever. Expensive gasoline is here to stay. But from observing many of the media's so-called experts, it seems we as a society have not acknowledged this fact.It has been said that when you've dug yourself into a hole, the first thing you should do is stop digging, but our economy doesn't seem to be doing this yet.
Hopes for peace grow as Iran and US hold first high-level talks for 30 years
The US is to send a senior official to talks with Iran on Saturday, the highest level meeting between the two since the 1979 Iranian revolution and a departure from George Bush's previous hard line.
US Airways pilots: We're pressured to cut fuel
WASHINGTON (AP) — The pilots union for US Airways said Wednesday the airline is pressuring pilots to use less fuel than they feel is safe in order to save money.
Soaring fuel sinks 2000 Qantas jobs
QANTAS will slash about 2000 jobs next week as the national carrier seeks to offset cost pressures caused by the crippling fuel crisis.The belt tightening also will include cutting loss-making flight routes from both domestic and international schedules.
The economic situation confronting the airline is so grim senior managers, flight crew, engineers and ground staff will be included on the hit list. The cuts are expected to affect 5 per cent of the carrier's 36,000-strong worldwide workforce.
Lester Brown: Redesigning Urban Transport
The world’s cities are facing unprecedented problems. In Mexico City, Tehran, Kolkata, Bangkok, Shanghai, and hundreds of other cities, the air is no longer safe to breathe. Respiratory illnesses are rampant. In the United States, the number of hours commuters spend sitting frustrated in traffic-congested streets and highways climbs higher each year. In response, forward-thinking city planners are seeking ways to redesign cities for people not cars. They have begun to realize that urban transport systems based on a combination of rail lines, bus lines, bicycle pathways, and pedestrian walkways offer the best of all possible worlds in providing mobility, low-cost transportation, and a healthy urban environment.
More nuclear power is coming to Ontario.Last month's announcement by Infrastructure Ontario named Ontario Power Generation (OPG) as the operator of two new reactors to be built at its Darlington site, east of Toronto. Now some questions have to be answered:
What technology will be used?
Who will build the reactors?
How much will they cost?
How we will pay for the project?
Energy: Biofuels producers hit back at Opec over oil price
The global biofuels sector has launched a ferocious attack on the Opec oil cartel by accusing it of deliberately "misleading" the public about who is responsible for soaring fuel prices.An open letter to Chakib Khelil, president of Opec, from the main biofuel organisations in Europe, North America and Brazil accuses him of providing self-serving explanations by claiming that 40% of the $140-a-barrel crude price results from the intrusion of bioethanol into the market.
Costly biofuel support offers few benefits-OECD
PARIS (Reuters) - Public support for biofuels is costly and has little impact in cutting greenhouse gas emissions so governments would do better promoting lower energy consumption to fight climate change, the OECD said on Wednesday.
Pope: World's natural resources are being squandered
SYDNEY, Australia (AP) — The world's natural resources are being squandered in the pursuit of "insatiable consumption," Pope Benedict XVI warned in a speech Thursday that also slammed television and the Internet for exalting violence as entertainment.
WASHINGTON - Earth scored another Top 10 finish in June — climate wise.It was the eighth warmest June on record, the National Oceanic and Atmospheric Administration reported Wednesday.
And the first six months of the year were the ninth warmest since record keeping began in 1880, NOAA's National Climatic Data Center reported.
Austro-Canadian team to examine climate change effect on fish
VIENNA (AFP) - Austrian and Canadian researchers will travel to the Arctic to examine links between climate change and high levels of poisonous heavy metals found in local fish, team leader Guenter Koeck said Wednesday.
Gore sets 'moon shot' goal on climate change
WASHINGTON - Just as John F. Kennedy set his sights on the moon, Al Gore is challenging the nation to produce every kilowatt of electricity through wind, sun and other Earth-friendly energy sources within 10 years, an audacious goal he hopes the next president will embrace.
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The decline in US demand for gasoline is now quite signifigant (down 5% last week) .....
Retail gasoline demand drops: MasterCard
A couple of months ago, TOD ran an article asking "Where is the demand destruction?".
To quote a section near the end of that piece:
Note however that if these new developments continue, our situation is currently considerably better than either of these two scenarios since world production is still rising slightly and US demand is off 5%.
The conventional economic wisdom is that our sensitivity to high gasoline prices increases with time so there are substantial declines in demand ahead. Back when oil was around $100 some economists thought that price was enough to reduce demand by 10 - 20% over the next decade. It wouldn't surprise me if it turns out current prices are enough (if they hold) to reduce demand by 25% by 2018.
For the world as whole, a higher price would be required.
Reported OPEC production is rising slightly. You might want to investigate the accuracy of this data (and the ability to manipulate it) before you munge it...
I do believe that demand is dropping. I'm not sure MasterCard is the source to look to for proof, however.
People may just not be paying with credit cards. Many have had their credit cut off due to fallout from the mortgage crisis. And some gas stations are not taking credit cards any more, forcing customers to pay cash. MasterCard's model may not have caught up with that yet.
MasterCard Advisors estimates retail gasoline demand based on aggregate sales activity in the MasterCard payments system coupled with estimates for all other payment forms.
It looks like this refers to all gasoline purchased, not just credit cards. I don't know how good the data is, but it does seem clear Mastercard is presenting it that way.
I know, but I question whether their model is accurate, given the recent changes I mentioned.
I'm just watching from the cheap seats, but wouldn't a more accurate measure be gasoline production (plus imports), averaged over months, etc.? I would think that virtually all such gasoline ends up being used in vehicles...
Is that showing a downward trend?
For the last three months or so I've seen it.
when I fill up. and I always fill up now, I look at the other pumps.
The prices are always, $10, $15, $20.
The diesel $15, $20, or $154 (guess they've got a job
or run to make).
Demand Destruction is Economic Destruction.
Robert Rapier's trip from Wyoming to Texas very illuminating.
Mac...I have a good friend that drives a big Kenworth for an exotic auto transport company. We talk a lot and it is usually when he is on the road delivering and picking up autos. I ask him specific questions, like how many large RVs are you now seeing compared to a couple of years ago...ans, very few now. He also reports that several large truck terminals that he once used are now closed, he informed me that 'Loves', a large chain of truck terminals is owned by the Chinese, and he said auto and truck traffic is way off in most areas. All this is anecdotal info but if his observations are correct, and I have no reason to doubt him, then it reinforces the data that demand for fuel is down somewhat. One thing that he said recently is that his company is now having fewer requests for auto transport and that his company has cut mileage compensation for all it's drivers. Iow, he has taken a pay cut recently.
The auto transport co owns 32 rigs and their biz is down. My friend suggested that the company might not survive untill Sept. Most of their customer base are wealthy auto collectors that compete in auto shows or rich people hauling their $500K - $Many Millions exotic sports cars south in winter and north is summer...seems even the wealthy are cutting back somewhat.
"Most of their customer base are wealthy auto collectors that compete in auto shows or rich people hauling their $500K - $Many Millions exotic sports cars south in winter and north is summer...seems even the wealthy are cutting back somewhat."
Nooooo!! Oh, the (well heeled) humanity! What's next? Substituting French's for Grey Poupon? Buying suits at Macy's instead of Brooks Brothers? Wha-wha-what will the children think??
Get this indicator though: I saw a guy the other day going to great pains to look nonchalant while filling his full size Hummer. It must have been killing him, but he wasn't going to let it show! I wonder if a forensic expert would be able to find bits of forehead flesh on his steering wheel?
LOL!
Come to think of it I have heard Large SUV owners field a few remarks in recent weeks while filling up.
Nothing mean, more along the lines of sympathy,"Dude, thats gotta hurt".
At least its not as bad as it was in the predigital pump days when the pump would "ding" at every 10c increment.(I believe that was for the benefit of the gas station attendant(me) who would come running to top it off once the sound stopped)
No way to hide it then!
or maybe, more people are paying WITH master card because they ran out of cash. that maxed out credit stereotype does not apply to everyone. i happen to believe that demand is dropping, based on antecdotal evidence, and the fact that i personally have cut down. not because i have to, but because i live below my means.
if one takes a look at the period 1979 to 1984, 5 yrs, there was a lot less demand, so it didnt happen overnight.
Leanan,
> Many have had their credit cut off due to fallout from the mortgage crisis.
MC would filter for people who had a cc back then and still have today.
About the same correction that a.o. WalMart makes when they publish their earnings: Increase/decline of sales for shops open more than 12 months (existing stores)
So I would be surprised if they would fall for that.
People still have their credit cards. So far as I know, nobody's has actually been revoked.
Instead, what has happened is that their limits have been lowered (because their house is worth less). So they have the card, but they can't charge anything on it. Or have to be more careful what they charge.
There are also gas stations that have started refusing all credit card purchases. The fees charged have risen along with gas prices, and with their razor-thin profit margins, many can't afford to take credit cards any more.
Another factor is that many debt advisors will suggest, when they think at least part of the debt is due to people not "really" realising the level of their spending (rather than entirely due to dramatic external circumstances), that people use cash in all cases so they can "see" the money they're spending.
We have gone from 75%Ccards/25%cash to the reverse.
Seeing lots of tatty bills and old coins.
People are spending more time digging through pockets, wallets, purses to get the right change instead of just giving in and slapping a card on it.
Also the CC processor company has announced no more discounts and future rate hike.
Our (Khebab/Brown) middle case is that in 2018 combined net oil exports from the current top five net oil exporters will have fallen by about half from their 2005 peak--from about 24 mbpd to about 12 mbpd. And by 2018, our current #3 source of imported crude oil, Mexico, will probably be as much eight years into net importer status. So, I agree that we are looking at lower consumption in importing countries.
The EIA top five net oil export numbers so far:
2005: 23.8 mbpd
2006: 23.0 (-3.4%/year)
2007: 22.1 (-4.0%/year)
Of course, Saudi Arabia has shown a rebound, to an annual level which will almost certainly be below their 2005 annual rate (while their consumption is on track to double every 10 years), but Russia has resumed its production decline. In any case, simply extrapolating this volumetric decline out puts the current top five at about 13 mbpd in 2018.
Hi Datamunger,
I gather that the statistics you cite are for the Master Card payment system. Is it possible that part of the fall is due to more people paying for fuel with cash now? - I read recently that discounts were being offered in the US for cash purchases. According to the article, year-to-date demand has dropped 2.18 percent compared with last year, so demand would have to fall quite a bit to get a 5 percent decline for this year. But I expect a great deal of demand in the US has been for non-essential personal transport and it can drop 10 percent with relatively little pain. Guess we'll find out when prices hit upwards of $10 per gallon.
People are pimping their new smaller rides:
From the New York Times:
Car Buyers Downsize, but Spend Big on Options
Take a look at the graph below entitled "Small car sales as share of all vehicles" (from the article).
The change in trend actually began to occur several years back. The automaker's own data was telling them a major shift toward small vehicles was in the works. One less excuse for being caught napping.
This is a very good article - Just because a car is small and fuel efficient, it does not need to be spartan. Most luxuries like moonroof and leather upholstery ought not to have any effect on fuel economy.
why the nob do septics call it a 'moonroof' ... does it let in the moonshine ? You know it's a sunroof, twits.
Usually a moonroof refers to a sunroof with a built in glass panel so you can get light in from above without getting blown around.
I call mine a rainroof.
mine always leaked.
Trading down from a 20mpg SUV to a 33mpg compact will save about $1,500 at the gas pump over 20,000 miles. Assuming the owner takes an extra hit against the resale price of the SUV, because the dealers don't want them, and is therefore already a couple of thousand down before buying their compact, maybe it's best not to go too crazy on leather and high end ICE.
And don't those charts show that transaction prices in the two segments are flat or falling since the credit crunch got going last year?
Maybe the story was artfully placed by Detroit? Still singing that old song by Blondie. "One way or another we're gonna getcha, getcha, getcha."
Why do you call it "Trading down"?
Leather seats (heated of course), surround sound stereo, sun roof, power everything, and, best of all, a 54MPG diesel engine. I do enjoy my creature comforts. Best of all, the VW new Beetle has a place on the dash board for for the flowers! Driving like Grandma to get that mileage figure, though....
Funny, over the past year, most certainly over the past four months, I've noticed that only about 1/4 of the cars are now passing me, whereas in the past it was more like 7/8 or better -- especially at the stop lights.
Now, if only the EROI on Bio-Diesel was better, I would consider switching.
To some extent what the Prius offered Americans was their first chance to buy a fuel-efficient car that has lots of fancy features and costs a lot of money (and has some sort of status-symbol status), rather than a car that gets good gas mileage as a side-effect of being small and cheap and devoid of luxury goodies (and is obviously cheap and 'low-status'). You need only glance at the road to see that most vehicles are not sold on the basis of being the cheapest possible option determined by strictly rational financial calculation. Not too surprising that with some financial push for better fuel economy and some fashion change from 'I'd look cool in a pickup' to 'I'd look foolish in a pickup' people are buying fully-loaded minis and whatnot. Not to mention manufacturer push to make the higher-profit option-laden versions of the now-hot models. Just try to get a base-model Prius.
One really interesting part of that article is the last paragraph:
Most Americans can technically afford $4, $5 gas. They could just give up something else and keep guzzling.
But for many that choice increasingly starts to really really suck because they see money going up in smoke that could be spent elsewhere. If you get rid of your Tahoe, you instantly see the savings at the pump.
If you spend less money on gas, you will have more money for other things. That's why I think the term "demand destruction" is a bit overdone. For most Americans, lowering your demand for gas means increasing it for other things.
How long are the lines at Disneyland this summer? I know we did not get a season pass to Sea World (as we've done for a couple of years) because six hours in the car to buy overpriced drinks and pay to park is just too much.
If your interest is in oil prices, gasoline demand doesn't really matter right now. Gasoline is not what is driving oil prices.
Diesel is what's driving oil prices, and diesel supply remains a problem in most of the world.
Bingo! And even if diesel demand is down in the US, it is still rising in the rest of the world as a whole. Now, it may slow as the US-induced financial mess spreads to the rest of the world, but it will affect countries with strong currencies less, and it will affect oil exporters less still (and I'd include Brazil in that, even though it is a marginal importer).
But, the decision of the refiner to buy (bid up the price of) an extra increment of oil depends on his overall expected profit from selling the basket of products. If the price of gasoline goes down, he has to get more for the diesel (and other products) he sells, or else his profit deteriorates. Every product in the mix affects the price he is willing to pay for oil. If demand for gasoline decreases, the expectation would be that diesel and other oil products go up somewhat in price, and oil demand decreases somewhat. This assumes of course there there is some demand elasticity for these other products.
It does seem like we're seeing some demand destruction, but there are three critical points to keep in mind:
1. Is the demand destruction accelerating? Let's assume for a moment that the MasterCard figures are accurate (unknown): their June 15th figures show a 5% decline from the same point last year, whereas their April 8th figures showed a 6.8% decline from the same point last year. That means that, according to MasterCard's figures, gasoline consumption rose faster this year than last year between April and June.
2. Global demand destruction is the more relevant question. If US demand destruction continues at 5% or even 10% per year, but global demand continues to grow, we're in trouble. It's simply unknown at this point whether global demand can continue to grow, whether China and India have self-sustaining consumer middle classes or not, and how hard an economic slowdown in the US will affect their demand figures. I wrote about this here. Recent figures are cause for alarm: China June auto sales up 15% year on year, India May sales up 14% year on year.
3. We pick the low-hanging fruit first. There is lots of "easy" to eliminate demand in the US. Buy a more efficient car, drive the more efficient of two cars on longer trips, skip the Summer road trip, combine errands, etc. When people need to reduce consumption, they eliminate the easiest and most painless consumption first. Therefore, the next marginal amount of consumption they need to eliminate will be more difficult. Demand inelasticity increases as demand destruction progresses. I have no doubt that the US can destroy 10% or 20% of demand fairly easily. But continuing a 5% rate of demand destruction over time will become increasingly difficult. I'm not saying it won't happen, but that one of two things will be required to make it happen: steadily increasing oil prices, or steadily declining economic situation. Given a choice, we should hope for the former.
The Hairless Prophet of Doom on CNN this morning was all smiles, because of the drop in oil prices. The anchors weren't impressed, though. One of them said, "It's because the economy's collapsing!!!!!"
Naw....Happy days are here again, oil is down $10 in two days - Market up 400+.
Time to go to the beach and have some fun.
Seriously.....
Ladies and gentleman, prepare yourselves for WW 3.
Perhaps within a year.
This is the last gasp for the economy before the bottom falls out and the rug gets pulled out on the majority of people who are up to their eyeballs in debt.
This is nothing new - ala 1929.
The difference between then and now, however, is the world moves at such a frenetic pace events will happen so fast it will make your head spin.
Hardly anyone noticed when deregulation was taking place in Wall Street during the Clinton Administration, and few understood the significance of the abrogation of the Smoot Hawley Act and the consequences this would have on the average person.
Most thought it was a great opportunity and that they would all become millionaires through Wall Street investing - not realizing that a trap was being set for them and All of the Banks involved.
The trap is about to be sprung.
Watch carefully Sept. 2008 - Feb. 2009.
Collapse and depression may seem mild by comparison.Do not run with the multitude to do iniquity.
What do you call a 14x price increase in a decade?
I guess I'd call it a 14x price increase. I'm not sure of the relevance, though. 14x price increase has been sufficient to destroy whatever demand has been destroyed to date, but doesn't really pertain to whether we'll see future demand destruction, nor whether that future demand destruction will be due to steadily increasing prices a steadily declining economy. I'd guess that another 14x price increase over the next decade will create a significant level of demand destruction, but how much is anyone's guess. There are plenty of guestimates about the demand (in)elasticity for oil, some even cited in this Drumbeat, but all of those are just that--guesses. They're based on past changes in demand due to past changes in price, and fail to recognize that both elasticity and demand destruction are marginal issues not controlled by a linear, or even knowable non-linear rate of change. The one thing that I think we can say with some confidence is that inelasticity increases as demand destruction progresses...
That's a surprising assertion to me.
Wouldn't you say that it's pretty much impossible for an increase of an order of magnitude in the price of oil not to have continuing effects? Are you implying that we have already seen all the adjustments that stem from this new higher oil price?
Given that every $10 increase in the price of oil extracts $76B from the U.S. economy, in my view we're just at the beginning of seeing the economy attempt to adjust to this new higher price. There is a lag in the system. We haven't even seen a major domestic car manufacturer go under, nor a major airline, although I am certain that we will see at least one of each going bankrupt and being liquidated "soon."
-André
Yeh, but the right wing chorus eveywhere is in unison chanting that the recent price decreases are due to Bush's announcement about drilling. The icing on the cake would be if the congress folded. When people see this reflected at the pump they will think, well, the storm is over, it's safe to consume, consume, consume again. Forget that idea we had about trading in our SUV, etc. they will think. The power of wishful thinking will prevail. Besides, demand destruction was pretty pathetic anyway given the magnitude of the increases. Yes, Bush is right. Psychology matters. Unfortunately, his chanting will have the reverse effect, people will start increasing their consumption based on the belief that future drilling has magically solved the problem.
Maybe I am biased by seeing SUV after truck after SUV on the tourist highway that goes through my town.
"Wouldn't you say that it's pretty much impossible for an increase of an order of magnitude in the price of oil not to have continuing effects?"
Surely we can expect some delayed effects such as shifts over time to higher MPG cars, so the assertion is indeed too strong. But I find it strange that people are shocked, just shocked mind you, that the price rise so far has affected demand so little. Try it on this way:
Non-transportation uses of oil are generally pretty valuable. Another $1 for a computer monitor is beneath notice. So unless we're analyzing minutiae at book length, let's ignore such uses. Heating oil is a serious issue for a few, but it has become a very small use. So to understand demand we need to look at transportation. And it takes us to a big problem.
Too many TOD posters can't grasp transportation demand because they stubbornly insist on taking the value of time to be zero, at least implicitly. In the real world, it simply isn't so. With a 30mpg car, going from $1.50 to $4.50 raises the cost of driving by a whole whopping gigantic enormous unbearable world-ending unfair ten cents a mile. Not nearly enough to justify squandering 90-120 minutes on the bus to do a 20-minute trip. Not even close. Not even in the same universe.
Now, add another $10 to the cost of that trip, and the story may start to change (though not among $800/hour lawyers.) But we'd be talking on the order of $40/gallon - and even more than that over time as people switched to smaller cars. And long before it gets to $40, everyone's crystal ball shatters anyway.
Likewise, should populist Congresscritters create artificial shortages as they seem wont to do according to their speeches, then all bets are off, only differently. The whiners will discover that there's something worse than ten cents a mile added cost: losing their jobs because they're simply useless to their employers if they can't get to their job sites.
Now, you did mention "continuing effects", so possibly you were quietly changing the subject to something broader than the demand for oil. That's a whole other matter. Most people in the USA are working flat-out, so money spent on oil products must come from something else. But it's hard to say how much that indirect effect might change oil demand.
To date, we seem to be in a strange lull, a sitzkrieg, where we hear bitter complaints and fiery speeches about the evil ways of the domineering "rich", such as speculators and executives, even while little else changes. But that nonsense takes us nowhere because the notion of evil "richness" in play is so highly selective and idiosyncratic as to be devoid of analytical meaning. For example, I've not seen a shred of evidence that the angry complainers are dropping their cable and satellite TV subscriptions in measurable numbers, on the grounds that it offends them to pour vast and ever-increasing sums straight into the hands of fantastically rich 'stars'. Apparently the color of money changes arbitrarily and capriciously depending on who is holding it.
Most of the demand destruction is likely to be in the form of a good, old-fashioned recession.
The airline industry, aeroplane makers, car makers and all their sub-contractors will be laying off workers in their thousands, as they can't instantly switch to small cars.
The housing bubble and excessive household debt meanwhile will lead to demand destruction, and job insecurity will decrease propensity to spend.
It is not having a job to go to rather than the price of gas as such which will do the damage, and rising heating costs will likely do as much damage as transport costs.
Transport costs will also have heavy indirect effects, as the price of everything goes up, and any eventual transfer to rail means the scrapping of vast amounts of assets.
Revaluation of property in particular as it looses viability in a world of high transport costs in itself will wipe trillions off of American net worth.
What is Hawaii worth with expensive oil, compared to cheap?
You make a good point: I should have clarified that there will be delayed effects from the prior run-up in prices. It takes time, especially with the energy use of big-ticket goods like vehicles and homes, for the demand destruction to work its way through the system. Additionally, some demand destruction is being postponed while people decide (mostly subconsciously) that this is a long-term price increase, not just a temporary spike. So I'm not claiming that we've seen all the adjustments that will stem from the prior price increases. However, I think we've seen a significant portion of them--just a hunch there, I'm not sure that's even a knowable figure, let alone a known figure. I think the key is that, while we'll continue to see a great deal of demand re-allocation, I'm not sure there's that much reduction yet to be seen from prior price increases. Every $10 increase does extract $76 billion from the US economy, but it also adds $76 billion to someone else's economy. My hunch is that much of the remaining adjustment will be declining US demand directly compensated for by increasing foreign demand--and the psychology of the permanence of the new prices works both ways on this one, as countries like Saudi Arabia, UAE, Russia, etc. are making very long-term investments in higher energy use.
A good warm up.
Best Hopes for Massive and Quick Demand Destruction with not TOO much reduced economic activity,
Alan
A good warm up.
Best Hopes for Massive and Quick Demand Destruction with not TOO much reduced economic activity,
Alan
Against that, oil demand is much more elastic in the long term than the short term. Moving, changing jobs, buying a new car...Even at $3/gallon people included gas costs in the mix. When you're doing one of the above anyway it's low hanging fruit to cut your gas usage 10%. I'd swag those items as an ongoing 2%/year cut for the next ten years even if gas falls back some.
It's not destruction in economics parlance, until the demand is structurally (and 'permanently') removed from the market.
It's just demand adjustment or somesuch.
Anyway, the book on oil demand price elasticity for oil is being rewritten as we speak.
Here's a recent meta-review from Bank of England (6/2008):
According to BoE price elasticity is close to nil in short term, but naturally increases as a function of time, while still remaining comparatively low. Income elasticity is much higher in developing Asia compared to OECD countries.
So, in the end - how much world GDP goes down when oil price goes up 10%?
This has been modeled and debated endless, it seems to me. I can't find anything that is close to consensus. Some say that 10% rise means a 1% reduction in GDP growth. Some say less.
However, what appears to be evident in the real world right now is that the price rises cascade through the system in bursts, from one value sector to another. Major buyers are hit first, then refineries, industrial users, then added value users, then transport, then gas stations, then consumers, etc (not necessarily in that order). At each step there is a delay, before the pain is passed on to the next party.
This is one of the reasons why effects are not immediate and some parties (or parts of the chain) are hit harder than others.
samuM -
I think the term, 'demand suppression' is a more accurate description of what is really going on than 'demand destruction', which to me has a certain permanent connotation. If oil suddenly went down to $40/bbl, this 'destroyed' demand would have to miraculously come back to life.
The problem is that China is still subsidising the price of oil. So there will be no demand destruction, indeed it could go on rising. the only hope is that the Chinese economy slows down and subsidies will become unaffordable.
From a quick comparison of US consumption versus oil price (price histories on www.wrtg.com and consumption somewhere here on TOD), it seems apparent that from WWII to the late 90's that any shock rise in oil prices was immediately accompanied by a fall in US consumption. In the absence of a such upward shocks (during the rare drops, occasional plateaus, and many slow rises in prices) consumption trended steadily upwards.
Why is it that since the late 90's vast increases in price have not been accompanied by reductions in consumption? Either we grew so rich it didn't matter, or the graphs are not accurate. The only easy explanation I can imagine for a display inaccuracy is the inflation adjustment. Is it possible that an unseen dollar devaluation component coupled with a vast inflow of cash has somehow masked the price rise of oil from public perception?
For this to be plausible it would seem that a rush of cash influx from all our creditor nations much have been flowing in to provide us with enough new dollars to mask those we were spending on oil. I'm no economist, and I would welcome a sage explanation for the apparent inelasticity, but it seems to be that we have been trading the equity of our nation for oil (the area under the consumption multiplied by price curve), and she's just about sucked dry.
OPEC production is rising slightly. OPEC exports are falling. It's the exports that matter to the US economy.
You're recent comment about the Hummer as a status symbol reminded me of a poem I wrote for my enviromental friends who, when not flying all around the world or going on cruises, are preaching conservation. I try to get them to read the TOD, but they know what they believe which is our engery crises is caused by "speculators" and "big oil".
THE END OF OIL IS COMING, WON'T YOU SLOW THAT HUMMER DOWN
The end of oil is coming
and there won't be any more
so if you care about your childern
best you slow that Hummer down
There's a crisis surely coming
cause the end of oil is near
and them boys out there drilling
ain't providing any cheer
If you care about your childern
and the people yet to come
best you think about tomorrow
and just slow that Hummer down
Them big rigs are a rolling
diesel fuel is what they need
If you want to keep them rolling
just remember what I say
best you think about tomorrow
and just slow that Hummer down
There's a sherrif's car a coming
your big Hummer in his sights
cause your're trying to beat the system
and you know it isn't right
If you care about your childern
and the people yet to come
best you think about tomorrow
and just slow that Hummer down
There's a big plane up there flying
tons of fuel it will surely use
the people they aren't a careing
the future says they should
It's three o'clock in the morning
I ain't getting any sleep
cause I lay in bed a worring
what's the future's going to be
If you care about your chhildern
and the people yet to come
best you think about tomorrow
and just slow that Hummer down
cause
If you don't
Someday the kids will ask you
about the end of oil
so what are you going to tell them
sorry, I couldn't slow it down
It could use some new stanzas
Hey, thats a great poem buddy... :)
Well done..,
CNN had a story this morning about how Generation Y (18 to 29 year olds) are the most pessimistic of Americans. Couldn't find it on the CNN site, but it's this poll.
Of course, the CNN hairdos started talking about how to get those kids turned around. Never considering that hey, maybe the kids are right.
If suburbia were not already imploding, consider the demographic factors, as millions of empty nester Baby Boomers try to unload their large family homes, on the younger generations that are probably: (1) Not able to buy the large homes in many cases and (2) Not interested anyway.
Maybe the kids read pieces like this by Howard Kunstler?
"The result, pretty soon into that process, will be social breakdown and political upheaval. Every tattoo freak out there who has been prepping for his own starring role in some kind of comic book armageddon will finally get his chance to shine. Lots of people will get hurt and starve. Property will change hands in a disorderly way. And at the end of this process an American corn-pone Hitler may be waiting to set everything and everyone straight."
I read that piece and thought "oh-oh" I think he has a valid point. We used to be a nation with a lot of resources. Now in a state of bidding (polite fighting) over whats left, those without the financial means to reduce their own suffering have but few options. reminds me of Rodney King - "can't we all just get along"...hmmm...not likely.
How do you think Britain will get on? With 60-80 million people on an island where you're never more than 80 miles from the sea or 4 miles from a road no matter where you are. And most of the population are squeezed into urban conurbations due to large tracts of the Country being uninhabitable.
Also resource constrained. Without the British empire or the neocolonial benefits of globalisation to provide the additional carrying capacity, necessary to support such a large population on such a small island.
not to mention they are several million in overshoot due to lost land that used to be used to feed people..
if i lived there i would be looking to making it to mainland Europe, at least one has a slightly better chance there.
Yes, that's what I thought, so I moved to France.
Similar population, but with twice the land area and probably a larger percentage of it habitable too. Also, the French government have gone to great lengths to keep people in the countryside and arrest the flight to the cities.
It has been widely understood that in terms of lifetime earnings, my generation ("X") will be the first to do worse than our parents' generation. Yeah, I guess that's depressing.
Randy Udall spoke on my campus last April and gave permission to BBQ the Boomers.
That is not true. The generation born in the late '50's, 1960's, did not do as well as their parent's generation. It's been downhill since then for the majority of Americans.
It's not the Boomers fault, Idiot. The neocons are just trying to "blame the hippies", who were actually trying to prevent every avenue of devastation we now face.
A little study of recent cultural history might help.
This is exactly the sentiments of my 29 year old son. Sometimes he gets downright nasty about what we boomers have done (Though not to me personally).
If/when things get really bad, Mad Max isn't quite what I envision. More like Mad Gen X/Y/Z. Anyone over 50 will be despised - and probably eaten.
Well, then, why aren't you setting the smug little twit straight?
This bullcrap about the boomers being responsible has gone far enough. Yeah, I know, every generation blames their parents, but WE started the Earth movement, WE warned about the Greenhouse Effect, WE warned about over population, WE warned about resource depletion, WE were shot at by those bastards at Kent State and 4 of us died!
Those of us that I know have never sold out, have maintained our integrity. It was the pre-boomers and the post boom Reaganites who are responsible, who actually fought us tooth and nail to bring this about.
The blame needs to land where it belongs.
I don't think singling us out is of much value either, but I certainly know plenty of people who have sold out. Many didn't as well. And many of us really weren't any more "conscious" to begin with than most of the previous generation, or the one before that, etc. I think that's one thing that's reached mythological proportions, that everybody was a "hippie" or "political." There were a lot of people who were and a lot of hangers on who never thought about it except it was "cool" and an awful lot who were pretty much against all the "newfangled" ideas. I remember about as many people selling their souls to Jesus as to the revolution, actually.
It's a scale issue. ;)
Hi, I've lurking here for a while, thanks to everyone for such an amazing site.
As a 23 yr. old, i fit nicely into this demographic, and i think that I can add some perspective to this. Something that should probably be pointed out is that the most recent and memorable third of my life is made up of Bush's two terms and all the wars and debt that comes with it. Also in that time we have seen both the Dot Coms and housing bubbles burst, and i think this article pretty much sums up how i see this economy (which is sad because it is an Onion story). When you put this together with long standing problems (social security, environment, etc) and the current economics woes, it's not hard to see why we are so gloomy.
Good points. One thing: Social Security is NOT a longstanding problem. It is one of the best programs ever created and has worked as designed for many decades. There are reasons for gloom, but let's please try to avoid spreading this false idea.
Social Security is a Ponzi scheme that relies on more and more workers in each generation to subsidize payments to the previous one. It was designed with the expectation that almost no one would live long enough to collect it - an expectation that died with the advent of effective treatment of heart disease.
It current represents an unfunded liability of hundreds of thousands of dollars to each resident of the country.
There is no way to repair these deficiencies.
I don't think describing it as a "longstanding problem" is in any way problematic, other than not going far enough in its criticism.
Yes. As I posted yesterday, when the system was put in place, the retirement age was set to the current life expectancy. The problem is that the age has not been adjusted upwards as life expectancy has increased.
The system was to be solvent because you were supposed to work for 40 years, then have a heart attack while waiting in line at the bank to cash your first check.
Keep in mind, the life expectancy for infants in the US has changed quite a lot over the last 60 years. The life expectancy for a 65 year old has not changed as nearly as much.
Nonsense. Social security requires a certain number of people working for each person who is employed. That balance is still positive, and the SS trust fund is hugely in the black (had it not been raided by the crooks in Washington to hide their deficit spending). At some point in the future, 20-40 years out depending on whose numbers you use, the trust fund will go negative for a while, till population dynamics returns it to the black.
It is a net liability only for people who don't live long enough to collect; it is a net asset for those who do. For the country as a whole it is neutral. It is probably the most successful government program in history, which is why the right hates it so much.
Of course all of the above assumes BAU, which I don't believe in.
Exactly. Nobody's going to stop getting their checks. A simple adjustment to retirement age and/or income ceilings could fix any shortcomings that might exist (which won't strike for another ~30 years at current estimates). Yes, this assumes BAU.
Without BAU, there's a lot more to worry about than SS, but that doesn't change the fact that it's a fantastic, successful policy that has helped many millions.
"Of course all of the above assumes BAU, which I don't believe in."
Which is precisely why it is a ponzi scheme...
Without BAU everything is a Ponzi scheme (superannuation, real estate investments, stock portfolios).
For years now as the economy has expanded working class pay has been static or falling. If workers (who are the ones paying into SS) had gotten a proportional share of the expansion, SS would be in a very different financial situation. Is this true? If so, how often have you heard in mentioned?
Yeah, that's true, both ways.
Think of it this way, the import 'tax' hits low skilled workers, the 'immigrant' tax hits low skilled workers, and then social security, medicare, income, and disability taxes hits them again. About in that order of significance.
I wouldn't worry about it. The treasury bonds will go into default next week, or month, or year anyway. It's far too late to matter.
We'll just go through national bankruptcy like the Germans and Japanese did after WWII. We'll confiscate the rich people's assets to pay off on the middle class people's social security benefits. Que serah, serah.
If there is a constant ratio of retired folks to working folks, then simply taxing a constant fraction of working folks pay to provide a pension to retired folks, of some constant fraction of the average salary... it is perfectly sustainable and no kind of Ponzi scheme at all.
Of course the ratio is not fixed - people live longer, the birth rate bounces around, etc. So sometimes the retirement age needs a bit of tweaking, or the excess tax payments of a boom need to be wisely invested so the boom in retirees can be supported in later years. Really the problems are quite simple.
Except of course if the excess tax payments are thrown away on destructive adventures, rather than being productively invested!
Since 1965 Washington has used SS to fund their wild and wacky parties. Billions in handouts to buy votes. They Spend every dime of the SS surplus every minute. Call it what you like, but in the real world its a gov't sponsored ponzi scheme.
I personally don't have an opinion about this particular topic, but i've heard people complain about it. In other words that post represents some of the issues that i hear people my age complain about, which is important to get perspective on why we seem so unhappy in this poll. It is a common belief that social security will be a burden on our generation as the baby boomers retire. A quick look at wikipedia shows that, with out some sort of reform, they may be right.
Social Security Debate (wikipedia)
Edit: Grammar
Social Security is a longstanding problem. Back in the 70s the WWII generation arranged to spend their kids (that would be the boomers) contribution on themselves, knowing already that there not enough of gen X and Y to cover the boomers in the same way. In the 80s Tip O'Niel and Ronald Reagan cut a deal to cover the problem until they were safely dead.
They are safely dead.....
Hello Encinitas and other TOD youngsters,
The future always belongs to the young, always has, always will. Your generation has simple postPeak choices to assert optimal Overshoot decline:
wheelbarrows & bicycles VS guns & machetes
Let's hope that your generation will stop playing videogames and watching silly TV. The money spent in these worthless pursuits can buy large amounts of mitigative biosolar goods [plus free much time, which is even more important!]. Continuing in the current default path only leads to this photo:
http://www.msnbc.com/news/1974473.jpg
A pink teddy bear backpack cannot hold very many clips for an AK-47, plus cheap flip-flops are not known to provide high wear mileage.
A wheelbarrow can repeatedly move lots of NPK, then much harvested food in the opposite direction. Recall that ancient China considered rickshaws and wheelbarrows as top-secret strategic tools for societal and military logistics.
Will your generation decide to bleed out in foreign lands? Or will your generation decide to try its mitigative Earthmarine best to optimize the ecosystem out here at home? [I'm 53--I expect and accept that I will be an early casualty.]
The gradual accumulation of repetitive heavy-work injuries are much less painful than having a microbe-infested machete' swing suddenly into your soft abdomen. I am fascinated what your generation will decide to Thermo/Gene do. Too bad I can't post my favorite photo of 50,000 [100,000?] wheelbarrow workers anymore--I found it hugely inspirational--maybe that is why it is now Error 404.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
To most of that, all i can say is "only time will tell."
Dude, i can't tell if this is a troll, hyperbole meant to scare us on the right path, or if you, yourself, need to stop watching all that silly tv. A word of advise, all the school shootings in America happened while i was in high school, and they were all blamed largely on media. People my age recognize those accusations as BS. Using TV, video games, and armed children together to make a point will probably get knee jerk reactions instead of impact.
By the way, where is this from, sierra leon are something? Maybe if those kids watched less TV, played less video games, brought less needless stuff, and actually lived in a largely agrarian society, this wouldn't happen...
Bob,
Re: "Let's hope that your generation will stop playing videogames and watching silly TV. The money spent in these worthless pursuits can buy large amounts of mitigative biosolar goods [plus free much time, which is even more important!]. Continuing in the current default path only leads to this photo"
Watch out. They may be saying the same thing about TOD'ers, wasting their time on blogs, statistics, and such.
I know I could use more time prepping and less time reading. I do work, but with 300+ comment days here, and Leanan finding so many on-point links, its hard to get out there and refurbish the old wheelbarrows.
It's not just CNN or here in the US. The Pope talks the same worldwide in today's Australia address.
"Pope says young inheriting scarred, squandered earth"
http://news.yahoo.com/s/nm/20080717/ts_nm/pope_australia_dc;_ylt=A9G_R3K...
Well, for once on this site I can actually speak from personal experience! I would definitely extend this age downwards to 15 or 16 at least (in the UK at any rate). The majority of people I've spoken to about future energy issues believe that things will be worse for us that for our parents, but there's also a sense of hope that we will be able to correct the mistakes of the older generation.
Is Main Stream Media really more 'out of touch' now than it was in 1929? It appears from information provided by Kevin DePew at Minyanville that Americans took almost no notice of the stock market crash of 1929, unless you were a pedestrian on Wall St dodging leaping bankers, and continued in blissfull ignorance for several years as the US economy eased into a black hole. MSM certainly took little notice as Time Magazine, which was a greater factor in the days before tv, continued to feature covers of men like Samuel Insull, 'The Financial Father Of The Chicago Opera'. By 1932 the US economy was in dire straits and what did Time feature on it's cover? Playwrite Phillip Barry's 11th play, 'The Animal Kingdom'!
I will let Kevin DePew take up the tale for he is a far better scribbler than I.
'By the end of the following year, 1933, President Franklin Delano Roosevelt had squeezed the Emergency Banking Act through Congress, signed the Economy Act, the Credit Act, the Reforestation Relief Act, the Agricultural Adjustment Act, the Farm Act, the Federal Securities Act, the National Cooperative Employment Service Act, the Home Owners' Loan Act, the Glass-Steagall Act, the National Industrial Recovery Act, the Emergency Railroad Transportation Act, created the Federal Emergency Relief Administration, the Federal Deposit Insurance Corporation and Civil Works Administration.
In short, everything in America was falling to pieces and going to hell. And yet I am staring right now at the cover of Time from August 7, 1933, just past the mid-point of that awful year, and Marie Dressler is on the cover [Time] in full character as a "a raffish, vigorous old woman whose generous heart thumps under sleazy clothes that do not fit her." '...snip...
Perhaps we all just wish that the Main Stream Media was doing a better job in 1929 than it is today? Once again reality does't seem to fit with our pre-conceived notions. Drats, between our narrative creation and real black swans we are spinning...spinning...spinning...
I leave this on a positive note from Mr DePew...
...snip...'During the first Great Depression, times were tough for many people, but even now the vast majority of us will adapt and continue on and soon take for granted the change in lifestyle that may (or for some may not) entail.
I read a piece in the New York Times several months ago by a woman consistently finding herself feeling humiliated by her parents' reckless disregard for money during the Depression - they didn't have much anyway, but her parents were intent on squandering what little they could accumulate on fancy clothes and cocktail parties. As I remember the story, she asked her mom, "Why on earth are you having a party with things the way they are?" Her mother, without missing a beat, said, "It's times like these when people need parties most of all."
Indeed. The time for preparations and battening down the hatches has passed. It's finally here. Let's party.'
FDR knew what America was feeling and knew what to say to his people... When he said 'All we have to fear is fear itself' he hit the nail squarely on the head.
http://www.minyanville.com/articles/time-mortgage-housing-california-dep...
So tonight we're going to party like it's 1929...
http://www.youtube.com/watch?v=GsfVw9xxoNY
Living in a Amish Paradise!
River thats great story there. I been trying to learn more about the depression from family and what they went through. Its quite fascinating that it boils down to one thing. History repeats itself :/
Consumer, SlicerDicer, Thanks for your replies. History might not repeat itself exactly but at times it rhymes. (pun intended). If your local library has a copy of John Kenneth Galbraiths history of the depression I think you would enjoy it. Galbraith could really write and there is a lot of humor in his books. He saw through the bs and made light of those that were the obviously full of it. I wish he were still around to chronicle the current debacle...But, we do have Proffessor Kevin DePew, who is a great wit in his own right.
Remember, I'm pullin' for ya. We're all in this together. Red Green.
That is such a great parody. LOL I'll bet Illargi grabs it for one of his Automatic Earth posts.
River -
Coincidentally, I just finished reading John Kenneth Galbraith's classic, 'The Great Crash 1929', originally published in the 1950s and updated in the late 1980s. It's not overly technical, and very well written - an easy and pleasant read.
The crash of 1929 has now become so much a part of American folklore that many of the facts surrounding the build-up to the actual event have been either forgetten or distorted.
One of Galbraith's main point is that by October 1929 the US was already in a de facto recession, with many of the important economic indicators increasingly pointing downward, but few wanted to admit what was happening. Acccording to Galbraith, the crash did not cause the depression, but rather the recession caused the crash and then later morphed into a full-blown depression.
What really aggrevated the situation, and caused the crash to be worse than it had to be, was that the stock market became increasingly disconnected from the surrounding economic reality. These worrisome economic facts were there for all to see, but few people wanted to, as the received wisdom of the time was that stocks had no where to go but up and that you'd be a fool not to get in on the market.
Various 'experts' were cheerleading the whole thing. When some nervousness in the market started to appear in the months leading up to October 1929, they repeatedly reassured the general public that 'the fundamentals are sound'. (Does this sound familiar?)
However, many in the banking industry were getting increasingly worried about all the leveraged debt out there and the way stocks were increasingly being bought on margin. Then there was the problem of the growing use of so-called investment trusts, many of which were little more than pyramid schemes (long story). The relatively small number of people in finance and government who did try to sound the alarm bell were rudely dismissed as party-poopers who wanted to destroy the burgeoning American prosperity.
For the most part, the mainstream media of the time aided and abetted the euphoria about the stock market, and never was heard a discouraging word. The rest, of course, is history. The Crash of 1929 and the onset of the Great Depression is a perfect example of mass denial among a general public almost incable of hearing bad news.
Don't worry - be happy!
Joule, Yes, Galbraith's portrayal is much different than other histories that I have read. He focused on different aspects of the crash and depression than other authors and that is a good thing...imo.
Some histories that I have read focus more on the inside manipulation by brokers/bankers/specualtors that was taking place. At that time bankers were allowed to short the stock of their own banks... some did and made fortunes doing so...at great cost to their stockholders.
It is amusing that some very good financial minds went against their own advice...'You can't fight the ticker'...and proceeded to dump tons of money into a rapidly falling stock market. In some cases their actions worked for a short time, sort of a dead cat bounce in a bear market, but the bear returned with a vengance shortly. As long as I have followed the market there have been few times that I thought it was acting rationally. The market has a collective mind of it's own and even the PPT can only move it on light volumn.
I believe we saw a little of the same yesterday...dead cat bounce in a bear market plus a little drop in oil prices seemed to give the market a boost. I am waiting patiently on the sidelines and don't care if I miss the absolute bottom by 10 points or more. The housing market must clear before financials can clear...or, vice versa depending on one's point of view. Of course, a lot depends on the price of crude. I don't think our economic model is sustainable with oil over $100. Time will tell. I have lots of patience. Good luck.
I have not read the Galbraith book yet. It has been on my list for a long time. I have some time coming up soon where I'll be away from a computer and could use
aseveral good books to distract me from my inlaws (hope the wife isn't reading this). :)IMO, there were several causes of the Great Depression. World War I and the debts that came out of it were a big factor. The games being played on Wall Street were another. Domestic debt (especially farmers) was yet another. I think people who write histories of the GD tend to pick the one that fits their ideological preferences and run with it.
I'm not sure that any one thing is capable of bringing about a global depression. Maybe it requires a whole confluence of stupid human behavior.
While I think the article makes a good point, it should be recalled that Time was published by a right-winger, Henry Luce, notorious for his influence on the news being reported. You might recall him from the movie "The Right Stuff" where he pimps the astronauts and their wives on a multi-year plan to turn them into celebrities, which runs into a problem when he dislikes the idea of an astronaut named "Gus".
I'm not surprised that Time was useless as a source of relevant survival info, and still is today.
The newspapers, however, were in every household from rich to poor. I imagine that a scan of the papers back then would show a high fluff-to-warning ratio. The page placement of the warnings, and the repetition of their themes, would have been as important as it is on today's cable news. I bet after a couple of years of the daily drip-drip-drip of bad news, a good many Americans were properly freaked.
I have posted an article in several places that concerns itself with how the Depression transpired in my home town (New London, Iowa, population always about 2000), written in the 1970s in a special centennial edition of the town's newspaper. So far a number of people have said they think it is useful. If you'd like to take a look, it's here (pdf): here.
What is wrong with oil drum today? At least on my computer, all the graphics are gone and in place of that is html.
Yes, its a mess. I'm not coming back until its fixed.
Same here. The graphics made a brief return around an hour ago, and have now disappeared again.
Me too. Been that way for a few hours. I was hoping there would be some kind of notice that someone was working on it.
I have no clue. It's been fading in and out since last night.
Someone suggested the problem is one of the ads. Supposedly, we're not the only site affected.
I haven't seen a problem today but I do block ads. Does clearing the cache make a difference?
I block ads, too, and still have seen the problem. It's intermittent, but when the site is wonky, everybody sees it.
something from 'aka.zero.jibjab.com' crashed my browser. I'd start by looking there.
I don't think that's it. The problem started before PG posted that. Before this thread was even posted.
It looked like the style-sheet was not found.
And, hm, "1045968452bc8ff66f0420d23078deb0.css" is quite a strange name for a file. Just change one of them digits and then guess which one it was ..
That file is created by Drupal by combining the style sheets into one (to cut down on the number of transactions between the browser and the server). It's an option that can be turned on/off.
That might be a place to look, Leanan.
I use extremely strict ad blocking and have not seen any problem. However on my iPhone it crashes the browser from time to time.
Looks like an md5 hash of the file contents (there' 128-bits). Naming autogenerated files this way isn't particularly unusual.
NG weekly Storage Report:
Summary
Working gas in storage was 2,312 Bcf as of Friday, July 11, 2008, according to EIA estimates. This represents a net increase of 104 Bcf from the previous week. Stocks were 361 Bcf less than last year at this time and 49 Bcf below the 5-year average of 2,361 Bcf. In the East Region, stocks were 17 Bcf below the 5-year average following net injections of 68 Bcf. Stocks in the Producing Region were 11 Bcf below the 5-year average of 753 Bcf a net injection of 25 Bcf. Stocks in the West Region were 22 Bcf below the 5-year average after a net addition of 11 Bcf. At 2,312 Bcf, total working gas is within the 5-year historical range.
Natural gas prices are down around 22% in 2 weeks. Looks like it was a mini-bubble.
PBS showed two episodes of its new animated show about the guys from Cartalk, "As the Wrench Turns" last night. The basic premise of the second episode is that the world is going to run out of gasoline someday, so what replacements are available? So the Cartalk guys have their Eastern European genius mechanic invent a car that runs on pasta, which we are told has an energy density of 6 kJ/g as opposed 45 kJ/g for gasoline, resulting in overcooked pasta pollution and war with Italy. Among other things, ethanol and its EROI are explicitly discussed along with the ridiculousness of vegetable oil. The only major demerit the episode was its certainty that cars will be powered by some sort of replacement fuel, but I expected no less from a show about auto mechanics, even ones with MIT degrees.
Cool - no graphics. Maybe the server is shot or a virus from the CIA or KGB. I thought it was just my computer. It happened after I checked out the visitors' stats so I guessed if I fiddled with the computer it would fix itself but nothing doing as it looks the same on all computers here in the office. I will be away for two weeks starting Friday evening sono more TOD/Energy bulletin,etc. just French MSM(and I don't speak French). To the French Atlantic coast by TGV. I hope the weather is better there than in Germany (rain pouring down outside, year without a summer type of thing.)
I guess it may be my last trip abroad for a long time if the economy tanks (and my job with it) and transport cost go as high as expected.
To the French Atlantic coast by TGV
Not yet complete.
Red is open, red dashed is under construction (2007), dark gold dashed will be open by 2020, thin gold solid is 200 to 220 kph "classic" upgraded to "modern lines", light gold dashed is 2021-2030 and distant hope is blue.
Moral: It takes a LONG time to build a complete HSR system !
http://lgv2030.free.fr/cartefra.htm
Best Hopes for just 220 kph trains,
Alan
I noticed the stories up top on Eskom in South africa making a loss. Wehre I work we have a factory down there making auto parts and it is kind of slow business so we are thinking of transitioning to solar water heaters. Part of the transition happening, never thought I'd see enthusiasm here for that but "Money don't stink" as they say here.
I am wondering whether this technology might get us off the hook in Britain with our energy gap:
http://www.popularmechanics.com/science/earth/4273386.html
Portable Nuclear Power Shows Promise - NuScale Power for Nuclear Energy - Popular Mechanics
They should be ready to be ordered in around 18 months time, and presumably would be very quick to build and install.
Hopefully most of the discussion on this will address build practicalities, as the issue of whether nuclear is a good idea has been done to death.
Since in the UK we have huge amounts of generating capacity due to come off-line by 2015-20, and other than natural gas which is likely to be both expensive and unreliable, this seems about the only way I can see which might allow a really fast build.
It would also fit in really well with CHP, due to it's small unit size, although putting in the plumbing for that might be time consuming and costly.
Since they are underground then safety should be good.
It should be possible to build most of the parts in Britain, and first orders could be done in around 18 months.
The needs of the UK would be 1-2 reactors a week, and the build would be pretty steady, so it should be possible to set up an economic production line.
This incremental upgrade would be a lot easier than 1.5 GW additions, and on any particular site would presumably simply be a case of adding more reactors as we went along.
Transmission upgrades would also be a lot more gradual and easy on our rather precarious grid - perhaps electrical engineers here would comment on this.
If combined with heat pumps and better insulation then we might be able to scrape through.
DaveMart,
You certainly have the knack of finding the most fascinating articles on the web. For a moment I thought this was a spoof -- but no, it's the real thing. Nanotechnology meets nuclear science.
See also:
A Nuclear Reactor in Every Home
http://www.acceleratingfuture.com/michael/blog/2006/10/a-nuclear-reactor...
There are a lot of designs for small reactors about, the difference is that this one is going through certification.
I'm not sure of how the cost MW installed works out The Toshiba design was rather high I seem to recollect.
There are, after all, a lot of small reactors about, mainly in the military, so the design issues are not new.
What I'm really looking forward to is:
Ryan-Nuclear-Air --- the 'radiant' future.
Apparently it's technologically quite feasible -- see this article in the New Scientist:
Nuclear-powered drone aircraft on drawing board
http://media.newscientist.com/article.ns?id=dn3406
I know some readers will think I'm writing tongue-in-cheek. Actually I'm approximately 87.56% serious about this.
Why aren't they spending this money on nuclear solutions for the US civilian population?
Blasting a few more caves in Afganistan isn't going to do anything to fix the very real problems starting to hit the heartland.
I think I will stick to flying in planes which use artificial fuel produced by nuclear or solar energy, thanks!
I may have a glowing complexion, but those planes are taking things altogether too far....
If we can produce nuclear or solar energy at, say 10cents/kwh, which seems on the cards as the Toshiba quotes around 5cents, admittedly in a design that youo would not use to produce fuel with the PBR looking a lot better, any ball-park idea how much hydrogen could be produced for? Or a more kerosene like fuel?
However, New Scientist is approximately 0 percent serious on any energy-related, especially nuclear-related, matter.
Sorry for this really ignorant question: What is the process of bringing mined uranium to a Nuclear plant? Is the ore brought there and processed, or is the ore processed into fuel at the mine? How is it transported?
It seems to me that this could complicate the issue of municipal sized nuclear, as you would be transporting around all of this radioactive material everywhere.
This site has a lot of information - might have what you want.
http://www.world-nuclear.org/how/default.aspx
Consumer -
The answer is none of the above.
Uranium for nuclear power plants is produced neither at the uranium mine nor at the power plant.
Through a series of complex and costly processing steps, uranium ore is first converted into uranium hexafluoride, which is then sent through a series of multiple centrifuges to separate the uranium hexafluoride into two streams: one rich in the fissile U235 isotope, and the other depleted of U235 and consisting mainly of non-fissile U238.
Through a chemical reduction step, the 'enriched' uranium hexafluoride stream is then converted back into metallic uranium, and this is what is finally made into fuel rods for the nuclear power plant. The other uranium hexafluoride stream is also converted back into metallic uranium, and this is referred to as 'depleted uranium', the main used of which is to make armor-piercing artillery projectiles.
Neither enriched uranium nor depleted uranium are terribly radioactive (which is not to say that they don't pose any health hazards), as evidenced by the fact that they both have a half-life of several billion years. It is some of the byproducts of a nuclear reaction, such as various isotopes of cesium, iodine, strontium, cobalt, etc that have much shorter half-lifes and are thus extremely radioactive and acutely dangerous. (This is why uranium is not used as a radiation source for radiation therapy - it simply isn't radioactive enough).
With proper safeguards and reasonable precautions the transport of new uranium fuel rods to a power plant does not pose an undue risk. Spent fuel rods, on the other hand, are far more dangerous to handle and transport.
It is some of the byproducts of a nuclear reaction, such as various isotopes of cesium, iodine, strontium, cobalt, etc that have much shorter half-lifes and are thus extremely radioactive and acutely dangerous.
And while extremely radioactive is not bad enough, but some of it is bio-active so the body will want to use the material in the body. (watch the replies of others to see if they mention this BTW)
Remember also that U is a heavy metal, so it has heavy metal effects in the body.
eric blair -
You are quite correct: uranium has a definite chemical toxicity quite apart from any radiation health effects. This is of particular concern when the uranium is in a finely divided inhalable form, such as aerosols formed with a depleted uranium shell disintegrates upon hitting a target.
While it is relatively safe to handle solid, intact metallic uranium objects such as depleted uranium shells before they are fired, you sure want to avoid getting fine particles of the stuff in your lungs or bloodstream.
you sure want to avoid getting fine particles of the stuff in your lungs or bloodstream.
You also want to avoid getting hit with the depleted uranium shell.
Don't try this at home folks...
http://www.telegraph.co.uk/news/uknews/1541847/Britons-caught-in-terrify...
Thanks guys for your very lucid and informative posts.
These are typical of why I keep coming to TOD every chance I get.
We need to distinguish between the fission products, which are the ones you mentioned, and the decay products. Without fission, Uranium decays to lead. I'm not sure what the rate of spontaneous fission, but I think it is pretty low. To get a significant amount of fission you need to run it either through a reactor, or a bomb. Of course spent fuel has been run through a reactor, and so contains fission products.
The best radioactive isotopes for use as sources have a simple decay route, best if a single decay leads to a stable isotope. Polonium 210 was preferred both because of its short halflife, and the fact that its decay product is the end of the line.
Cobalt-60 is not a fission product. Reactors produce it only if cobalt-59 is put into them; this is done because it is much more radioactive than any fission product of similar lifetime, and its radiation is mostly highly penetrating gamma rays, good for radiography (the Liberty Bell was once gamma-radiographed with 60-Co, as I recall, and the story was told in a Kodak ad).
Typical nuclear fuel rods are metallic only on the outside. The meat is uranium dioxide, a better choice since it cannot undergo combustion nor react with water.
Not all nuclear fuel goes through any isotopic separation process such as the above-mentioned centrifuges.
--- G.R.L. Cowan, H2 energy fan 'til ~1996
Only the government enriches uranium in the US. I believe it is done at the Savannah River Plant in South Carolina. Uranium Enrichment Enriched uranium contains about 5% U235 instead of .7% U235 as found in raw uranium ore. This enriched uranium is not nearly as dangerous as spent uranium fuel. Spent fuel is so much more dangerous because it contains virtually every radioactive isotope, some of them very short half-lives therefore much more dangerous. The shorter the half-life of an isotope, the more radiation it gives off in any given amount of time. So it's the spent fuel you must worry about most, not the enriched nuclear fuel.
The half life of U235 is 704 million years. (5% of enriched uranium) the other 95% is uranium 238 with a half life of 4.47 billion years. The fuel contains some trace amounts of U234 with only a half life of 246 thousand years but not enough to be concerned about. Raw uranium ore contains only 0.0055% U234 of the total uranium in the ore.
Ron Patterson
There are no dumb questions - what is dumb is any failure to seek answers.
Here is the fuel cycle:
http://www.world-nuclear.org/education/nfc.htm
It should be noted that the enriching in France is done in a rather old-fashioned process, and as new facilities are set up they will not use anything like the 3GW of power that is currently used.
As it says in the link I gave, a 1GW reactor would use around 25tons of fuel a year.
This means that the 45MW reactors here would likely use around 1 ton a year, assuming that they have around the same efficiency - a lot of new designs have the potential to be a lot more efficient, but this one is AFAIK fairly basic.
Now a ton is not a great deal, nor would it take up much room, IOW transport could be a rare and heavily guarded operation.
In addition, most of these reactors, at least in a British context, would be in reactor parks, with more reactors gradually built on the same site, so the fuel could be held centrally and the transport would be even more in bulk.
Incidentally, they carried out a test in France to reassure the public on nuclear transport, and drove a railway train straight into the steel containers which are used there to transport fuel and waste - it was barely dented!
The underground location of these plants would also greatly enhance security.
I think that this is the problem that Nuclear has. Even for moderately intelligent human beings like myself, it's hard to understand. I still don't quite understand how it produces steam; fission seems very complex, and thus it's scary.
Most people I've talked to (most who wish I would stop talking to them) don't even understand how coal turns into electricity. Seriously; ask someone to describe how to make electricity out of coal, and their answer is "I think you burn it". In fact, a lot of people have no idea where electricity even comes from.
This makes the reported problems with Nuclear seem scarier, because most people don't really understand what's going on in those big buildings. I like nuclear power, because I look more at statistics - how many people are harmed by coal emissions vs. nuclear emissions, etc, but many people are allergic to this kind of analysis and just say - I don't understand it, it's scary, let's not build it.
A powerful coalition of interests has held back nuclear power.
The weapons industry wanted the present rather inefficient design of reactors, and in combination with the nuclear industry itself which made a lot of money processing fuel killed the far superior molten salt reactor, which is not only way more efficient but is useless for producing weapons grade material.
The coal industry, which does not pay for the huge damage its emissions and mining does, entered into an unlikely coalition with the Greens, who fancied that renewables could provide all the power, which is unrealistic even now, and in the 70's was absurd.
For a detailed appreciation of the UK's realistic limits in the production of renewables, see:
http://www.withouthotair.com/
Sustainable Energy - Without the Hot Air (withouthotair.com)
Then allow for the truly stupendous costs of off-shore wind - around £10 million MW installed, after allowance is made for intermittency.
This couples with the allegedly low price of fossil fuel, which was only cheap because externalities weren't costed, and of course big oil, which has known for some time that nuclear and battery technology together could provide most transport needs.
Opposition is also a lot less solid than commonly believed, at least in the UK, with opinion about evenly split, depending on how the question is asked.
Greenpeace has also been utterly ruthless in its scare tactics, for instance producing casualty counts for Chernobyl wildly in excess of the WHO calculations, and basically attributing just about everything to Chernobyl, and not even taking into account ameliorative measures such as iodine tablets.
Thankfully, it seems to me a least that we are now past that endless debate, as there are no costed, properly engineered proposals for the UK which do not involve nuclear power, and shortages are imminent, so that they are effectively sidelined.
If it is thus useless, this does not distinguish it from water-cooled power reactors; in saying "the weapons industry" wanted these, you may have meant the military submarine industry, and if so you were right, but your choice of words lent unfortunate support to the proliferation lie.
--- G.R.L. Cowan, H2 energy fan 'til ~1996
I would be grateful if you would explain this criticism in more detail, as I do not understand the distinctions you are making, doubtless due to my lack of expertise.
With thanks.
fission seems very complex, and thus it's scary.
No. What is 'scary' is that man can not build a safe machine. (Ok, not scary, just a fact)
If man would have been able to show that man can run a fission plant without accident, then 'irrational fear' would be 'irrational'. Instead the operational history of fission plants is filled with failures of varying degree. When the fission boosters can show operation without error, then support will be possible.
(as an aside: The day before the French leak was published I was thinking - hey, I know of no French problem with fission plant operation.)
As you say elsewhere, it is not possible to guarantee freedom from all error, and so such a requirement would effectively rule out the nuclear option.
Of course, it would rule out every other option too, as it is not possible to provide absolute security for any means of producing power, even if it is mining the iron for windmills.
What is a proven mass-killer though is coal.
As for renewables, they can't run Northern Europe at least:
http://www.withouthotair.com/
Sustainable Energy - Without the Hot Air (withouthotair.com)
Since the options in reality are either getting very cold or accepting some level of risk, I personally have no hesitation.
Of course, it would rule out every other option too,
If a wind machine fails - only the people around a turbine (300 feet? 500 feet?) are at risk. If a mine collapses, the people in the tunnel are at risk and perhaps the people above ground are at risk. Very limited risk and you can opt in or opt out. I've yet to see the opt-out for fission reactors - do show how one can opt-out of fission reactors m'kay?
When radioactive and heavy metals are released, the risk area becomes quite large.
Since the options in reality are either getting very cold
I keep hearing this claim, yet homes can be built with passive solar and solar hot water such that this claim is not true. And the risk of solar hot water is broken glass and stones tossed at your EQ by passing assholes who just wanna show that they can break glass.
You do not seem to have looked at the link I gave - it is pretty massive though, so would take some study.
The problem is one of scale in Britain at least, and in my view the author definitively and in detail shows that none of the renewables options can possibly provide the needed power.
That is before you come to the question of cost.
Most of the supposed renewables options rely on technology which is unproven and not working at the needed scale.
In contrast nuclear power provides most of the electricity for a whole large country, France, and so far peaceful nuclear energy has not been proven to have caused any non-mining deaths in the West.
So I am very comfortable with the levels of risk involved, and until those in favour of rejecting the option have costed alternative plans based upon current engineering practise I am not going to engage in debate with them, as the option they suggest does not exist in the real world.
BTW, I very much support renewable energy, but only where it is practical and cost-effective, for instance the on-shore wind resource in the States provides an incomparably better resource than anything in Europe.
Mine collapses are by far not the only risk to coal. Granted, many of the problems with coal could be fixed by forcing upgrades to the most safe and modern (read expensive) plant/mine designs. Of course, this is the same issue with nukes.
Mercury releases are a major problem for coal.
Whilst the industry desecrates the mountaintops of West Virginia it is also dumping pollution in the streams.
When what is actually being used instead is coal, it staggers me that some people seem to think that nuclear power is dangerous or dirty - the containment vessel in TMI did it's job just fine, and there has never been a proven death from civil nuclear power other than in the mining operations in the West.
All that is before carbon emissions are considered.
How much damage has already been done to the climate by opposition to nuclear energy leading to coal burn for the last 30 years?
If we had pressed on with designing cheap, safe nuclear plants, China would be building those now instead of coal plants.
In the interests of these 'safety' concerns, we may have condemned billions to die.
We have certainly already killed millions with air pollution.
Of course, those who shouted loudest against nuclear energy are actually in favour of providing power with pixie-dust, but their numbers have never added up and still don't.
If you are concerned with radioactives and heavy metal release then consider that coal is thousands of times worse than nuclear, in addition to the massive and inevitable releases of CO2.
For exposure to radiation I would personally feel safer working in a nuclear power plant than in my county courthouse, thanks to the large amount of exposed granite surfaces in enclosed spaces in the courthouse.
Just because you do not understand radiation does not make it more dangerous than the dangers you do understand. Learn what radiation really is and how it works, and you will find that nuclear [fnord] power is much more palatable than many of the available alternatives.
If you are concerned with radioactives and heavy metal release then consider that coal is thousands of times worse than nuclear,
In normal operation. What part of failure mode(s) is beyond your ability to understand?
For exposure to radiation I would personally feel safer working in a nuclear power plant than in my county courthouse,
For this statement to have any meaning WRT the topic of failure modes, you'd have to be willing to stay in a plant during failure.
Are you willing to drink the runoff from the British dump site - How about some of that fine French water from the 'release' mentioned 2 weeks ago, just as 2 examples.
(and look here - from the next drumbeat
http://afp.google.com/article/ALeqM5guWSVW7BaXtHeX_WGVKBhXH36oyQ
Go ahead - tell us of how you are eating that fish.)
Just because you do not understand radiation
Your claim of ignorance is interesting, what with your demonstrated ignorance of failure modes. You claim you'd be willing to 'work in a plant' - yet you did not say that you would be willing to do that during a failure mode.
I dunno, how about we try the fact that coal power, in normal operation, releases more heavy metals and radioactives into the environment each year than western nuclear powerplants have in accidents total.
I don't have the statistics at hand for how much Chernobyl released, but I wouldn't be surprised if world-wide coal power beat it on an annual basis.
Understand the scale of coal power, when you are burning millions of tons of anything per year it doesn't take a lot of trace elements to add up to some really big numbers.
I dunno,
Yes, it was obvious. And you are welcome.
The first caveman that discovered how to make fire was probably stoned to death. Maybe it was you in a former life. Man still has not been able to prevent deaths, destruction etc from careless use of fire. So, why hold nuclear to that standard?
jbunt--I'm sympathetic to your point, but the difference is in magnitude of damage. Plus, there is a long and sordid history of gross cover-up of very bad practice by both the US government and the US nuclear industry, which has rightly made those entities very untrustworthy in citenzenry's minds. Actually, I think the best solution is to locate all the nuclear plants and their toxic waste in DC, so if there's a problem no one of importance is harmed.
I think the best solution is to locate all the nuclear plants and their toxic waste in DC, so if there's a problem no one of importance is harmed.
Alas the poor debt shackeled Starbucks employees might be.....you ARE a sage for the ages.
in a former life.
No wonder you have such odd posts, you have magical thinking.
It gets hot, very hot. Then you pass water around the rods of hot fuel, or some other substance like liquid sodium, then pass that through a heat exchanger that simply heats pressurized water. That hot water, when released turns, to steam. That steam passes through a turbine and that turbine is hooked, directly (1 to 1) to a generator. Yes, it is that simple.
Ron Patterson
The PM articles isn't really news. There are several small nuclear power systems already available.
You can have long lasting units with very low power, so called "atomic batteries":
Atomic Batteries
Toshiba has been promoting a device like the one in the PM article, but I can't find any references to an actual operating unit:
Toshiba Micro Reactor
There are Canadian designed small reactors installed at several universities and research centres:
"AECL also designed and built a scaled-up version (2-10 MWth) called SLOWPOKE-3 for district heating at its Whiteshell Nuclear Research Establishment in Manitoba. The economics of a district-heating system based on SLOWPOKE-3 technology were estimated to be competitive with that of conventional fossil fuels. However, the market for this technology did not materialize.
A Chinese version of the Slowpoke exists, designated the Miniature Neutron Source Reactor (MNSR). This version is nominally rated at 27 kW with similar characteristics and performance."
SLOWPOKE Reactors
"Pebble Bed" reactors can be made in larger sizes and are designed for simple and safe operation. There is one unit currenly operating in China:
Pebble Bed Reactor
AFAICT, the main reason that small reactors have not been more widely deployed is because they couldn't compete with low-cost fossil fuels. Also, there are issues of licensing and public acceptance because of perceived (or imagined) dangers.
High prices and energy shortages will probably change peoples perceptions over the next decade or so. There is lots of technology already available.
CalgaryDude,
Thankyou for the references. I found that report on the Toshiba Micro Reactor so interesting I think it's worth quoting in full here, in case other readers miss it:
Wow! I was aware of the Toshiba design, but had no idea that it was ready to roll out!
In my opinion, this changes everything - mass-producible, cheap power!
It looks like lithium will be in even greater demand - anyone got more technical information, or any idea of the constraints in materials and build?
Might want to talk to Toshiba and verify this. The 4S is definitely real though.
Toshiba Nuclear Reactor Hoax
Thanks, Undertow. To think I fell for it. The power of faith, I reckon.
Of course, I should have checked it out at one of the urban legend websites (such as 'The Museum of Hoaxes'):
http://www.museumofhoaxes.com/hoax/weblog/archive/2008/01/
It seems the 10MW Toshiba is due to come out in the mid-2010's:
http://peswiki.com/index.php/Directory:Toshiba's_Micro_Nuclear_Reactor
So it doesn't look like anything will be out in time to help with Britain's energy gap.
As for the US, it seems that bureaucracy there means that licensing a small reactor is all but impossible:
http://www.atomicinsights.com/AI_03-20-05.html
The US seems destined to be by-passed by nations intent on improving nuclear technology
Oh well. :-(
In the good old days you could stick a nuclear reactor anywhere in the UK - well if you're the military anyway :-)
Jason Reactor
DaveMart
I just asked Dr Google to tell us all we ever wanted to know about lithium:
Forget peak oil. Are we facing peak lithium?
http://www.autobloggreen.com/2007/01/30/beyond-peak-oil-are-we-facing-pe...
It's the scaling up problem again, as in the case of PV solar, wind energy etc.. It's a long way from boutique to Big Business. When it comes to EROEI, one or two orders of magnitude changes everything.
In my view, Tahil's critique was effectively answered here:
http://www.evworld.com/article.cfm?storyid=1434
EVWORLD FEATURE: Lithium in Abundance: Battery | Lithium | Evans | Tahil
And:
http://www.worldlithium.com/Home_files/An%20Abundance%20of%20Lithium.pdf
An%20Abundance%20of%20Lithium.pdf
For batteries there are also a lot of other materials which can be used.
Ramping up production could cause some problems though, and if these Toshiba batteries catch on that is another demand.
It was this bit which caught my eye:
Most of the delay, as usual is for regulatory approval, so energy shortages and high prices might conceivably cause them to get a move on - the actual time to finish the design is given at around 18months.
Power cuts in the UK might force their hand.
Let's not overlook FLYING CARS. Popular Mechanics and other pulp rags for those that like to tinker have been trotting out versions of flying cars since the 1930s. Over 50 variations. Jesse James, the famed motorcycle builder that has made five attempts to reach the Sturgis Rally from his home base in Southern Cal on one of his custom cycles...but has yet to get there without mechanical help from a sag wagon, is now going to attempt to build a FLYING CAR for Popular Mechanics. Who would be a better choice than Jesse to build a reliable flying car? Hey, why not build one more version of a really stupid idea? Could this be the next BIG BUBBLE that The Onion claims that America needs to get the economy pumped up again? Why not?
Never mind that the FAA has stomped the flying car concept into the dust on numerous occasions. We need to get the economy rolling again! So a few houses will have an flying car sticking out of the roof...So what? We have plenty of houses that are empty so whats the chance of hitting one where people actually live?
'PM And Flying Cars
We just can't help it, it seems. Somehow, over our 103-year history, POPULAR MECHANICS has been involved with flying cars in one form or another about 50 times. This time, it's with Jesse James (right) of "Monster Garage" fame. Jesse and his maverick mechanics built themselves a flying car on the show, starting with a Panoz Esperante. PM's own MIke Allen was there for the build. And we'll show you plenty of his behind-the-scenes photos on Monday, with more to follow. The flying car episode is actually a two-part season finale that begins Monday night on Discovery Channel. Check your local listings for air times. Our finale to this extravaganza is our July cover story, which subscribers are getting right about now, and which starts hitting newstands next week. Look for it. In the meantime, here's a little teaser to get you pumped.'--Ken Juran
http://popularmechanics.smartmoney.com/blogs/science_news/1603326.html
Just knock it off. Both of you - River and DaveMart. I'm getting a lot of complaints about both of you. You're acting like 5-year-olds. Grow up, or I'll put both of you on time out.
Dave,
Can we order it online?
:-)
Hi, Mike, I'm saving my pennies for the Toshiba!
I posted this on our UK yahoo group - I am hoping some of you engineering types will put some numbers on whether we can fill much of the hole in Britain's generating capacity in time by building small reactors.
There are ways and means, like you say - when we get hit hard by the power gap.
I like this idea. De-facto battery back up to wind and resilience.
BTW , I am a Geologist. Engineers would get mightily offended if we rock doctors were put on the same shelf as them...
Regarding offense, and vice-versa.
BTW, one of life's little mysteries is that petroleum engineers tend to be pessimistic about discrete fields, but optimistic about total world production--while geologists tend to be optimistic about discrete fields, but pessimistic about total world production, e.g., Michael Economides versus Kenneth Deffeyes.
I had not thought about it in that context westexas but your absolutely right. Guess that's why as a reservoir engineering geologist I feel so conflicted at times.
Please go back through Popular Mechanics "predictions" about "ready in X months" by skimming through a couple of years worth of back issues.
You'll quickly get an idea of their prediction abilities.
Good luck with getting permits for those - regardless of how cold and dark it gets in the UK.
Let's keep somewhat realistic, shall we.
(PS. I'm not against nuclear in general, it all depends)
Fair comment - I think that the Toshiba sounds better than the NuScale anyway - which would you rather have, Japanese or American engineering?
It was really the general idea of building small nuclear reactors on a production line which seems to me about the only way I can imagine of providing the power Britain needs in time - and with the first power cuts licensing here is likely to suddenly get a speed boost, if the authorities do not want lynching.
DaveMart -- we were had. See above (my reply to Undertow) and here:
http://www.museumofhoaxes.com/hoax/weblog/archive/2008/01/
(scroll down)
Atomic Insights is here:
http://atomicinsights.blogspot.com/
He's too busy typing.
H.R. 6495 – Transportation and Housing Choices for Gas Price Relief Act of 2008 was introduced Tuesday in the U.S. House by Rep. Earl Blumenauer.
Here is the actual text of the legislation. I have not read the entire text yet, but the general goals of the bill are excellent and should be pursued.
China's Economic Growth Cools to Slowest Since 2005
China is still growning at 10.1%.
Currency valuations are a double-edged sword these days. Weakening your currency may help exports, but oil prices will kill you if you are a net importer. Strengthening is going to slow the economy, but it puts you in a better position to outbid the US for oil.
Shargash, so what does it say in your crystal ball? I bet we see a trading range as long as oil's in a trading range.
I kicked my crystal ball across the room this morning, and it cracked.
I get the feeling we're heading towards an economic discontinuity. The market has been gyrating wildly, which is not a good sign. The TED spread is moving up (1.41 now), and yesterday's "let the good times roll" rally didn't affect it much. The dollar is overvalued, but the Fed is talking about raising rates. I don't believe them, but who knows? The news is grim, but then again it has been grim for a while. I can't put my finger on what is bugging me. It's like there's something there I should be able to see, but just can't see it.
I'm selling some stuff to get more in cash. I'm taking a long-hard look at my investments to make sure they're where I want to be. To answer your question directly, I don't know. We're in a period of extreme volatility, and I suspect it will resolve itself in a big move down for something(s). But what? And what won't move down?
Do you see any reason this increase in the TED spread increase will not resolve itself the way the last three-ish peaks have? That is, with a few hundred points lost on the stock market, some bail-outs by the tax payer of the companies that didn't make it and then things go back down again. Maybe this is what the "soft landing" feels like?
The bailouts have some finite limit. I don't know when we will have reached that limit, but I think each sucessive bailout will have less positive effect and greater negative effects. Some people have made the point that the Fed is kind of paralyzed now. There are serious consequences to raising lowering rates. That's why the guy at UBS is predicting a crash soon. The TED isn't anything magical, just a measure of risk.
A well located organic farm is looking more and more attractive. Here is a website for a successful CSA type small farm on the edge of the Dallas/Fort Worth area:
http://www.barkingcatfarm.com/
Westexas, you write:
The guys you mention ('Barking Cat Farm') produce cut flowers, herbs and vegetables.
That's boutique agriculture even if they farm as organically as my great-great-grandparents in the West of Ireland during the famine years. Cut flowers, herbs and vegetables are for anorexic teenage girls. The first two have zero calories and vegetables are what people eat either as a side dish or when they're on hunger strike.
Now, give me the particulars of an organic farm that grows organic potatoes, organic rice, and/or organic wheat -- and I might consider opening an account there!
http://chico.craigslist.org/rfs/727062583.html
Shargash, Moe, I sold the last of GE and am completely out of stocks now. Cash, CDs and gold now till I see a real clear in housing/financials, which I do not expect untill after great upheaval. My hatches are battened down securely.
A cautionary tale: I took a large check from Smith Barney to my local credit union for disposition. Most of the money went into CDs but I wanted $47K in cash. It was like I wanted their eye teeth and their first born to get the cash out of them. I had to wait 7 days for a certified check from 1/2 mile away to clear and then present my drivers license for photocopy and answer questions while they filled out numerous forms. They made it very obvious that they were not happy about what I was doing although I am rated as a 'Platinum' customer and have done biz with them since 1980.
Moral of this tale...If you want some cash get it soon. If you are over the FDIC limit anywhere, spead it out. Good luck.
Until about a month ago, I was about 80% stock, 20% bonds (treasuries and agencies). Over the last month, I have moved about half my stock position to cash, and yesterday I went long oil (USO). I'm waiting for some money to get moved to the right account, then I will be going long more oil (DBO). I'm thinking about adding a general commodity ETF as well.
This market scares the crap out of me, but I don't think it's time to go long ammunition and canned goods yet.
Consumer,
Forget the canned food -- it takes up too much space.
Stock up with drugs and addictive substances instead: plug tobacco, tea, aspirin, coffee, Maalox, Stilnoct, and above all oodles of Single Malt Whisky.
You can always barter these items for tinned beans and tuna when the going gets rough.
In my experience the UK is the same as the USA - I discovered how much (er ... little!) cash my bank actually has on hand despite the week long warning I gave them - my own little 'run on the bank'.
First I amalgamated funds from several different banks and learned some very important lessons - they all make it VERY easy to deposit cash and very difficult to get it out ... you can write cheques or transfer funds between accounts but there is a daily cash limit on most accounts. Watch and learn from banks close to failure like Northern Rock and IndyMac ... long queues for the lucky ones.
Like all insurance too many payouts destroys their business model, the bank account insurance only works as long as only a very few banks fail - it seems that in the UK the funds may not be adequate to pay out for failure of any of the largest 20 or so banks.
I think the only traditional stock I own is POT, and I sold half of that today when it was down only a few cents. I have a fair amount of money in oil trusts (PBT, SBR, & BPT). They seem to be a bargain at their current prices. The dividend yield on BPT, for example, was 12.6% before today's 7% drop. And those dividends are mostly based on longer-term contracts when oil was much cheaper than it is today. I'm still moderately long oil & natural gas. Some of the oil & all the natural gas are "buy and hold" to me, so I'm not concerned about about even large drops. I was a little slow getting rid of my short term oil. I got kind of paralyzed by the rumors of an imminent Israeli attack. I held back from some sales near the peak on account of that. Oh, well. Some days you eat the b'ar, and some days the b'ar eats you.
Me too :(
"I can't put my finger on what is bugging me. It's like there's something there I should be able to see, but just can't see it."
Right with you there, shargash...but I think it has something to do with a big rally in a broken/insolvent financial sector! Seems like there are a lot of guys out there who just want to be long no matter what the fundamentals say. This is a period of extreme irrationality and I'm dumping what ought to be perfectly good energy stocks and going into cash until I see a little more sense in the action. This is just plain nuts.
Early Registration Savings End July 21st--and this time they're not going to extend the breaks after the deadline from what I hear. For Conference Agenda and Registration, go to
http://www.aspo-usa.com/aspousa4/
Don't miss the chance to join us in Sacramento in September and be a part of defining our energy future. Early Registration ends July 21st, Sunday sessions are likely to sell out and our two core days of plenary sessions always have limited seating capacity. Register today!
Agenda Spotlight: Sunday afternoon, Sept. 21
On Sunday you will be able to choose from the following concurrent sessions:
- Reporting the Peak Oil Story
National journalists Neil King (Wall Street Journal) and Bart Anderson (Energy Bulletin), Rob Collier, Stuart Leavenworth, Lisa Margonelli, and Tom Whipple
- Investing in the new Energy Economy
Investment specialists Rick Schechter, Jim Puplava, Jim Hansen and Atticus Lowe
- Tracking the Public Data and the Latest Developments
Nate Hagens, Kyle Saunders, Jeff Vail, Euan Mearns, Robert Rapier, and Gail Tverberg of The Oil Drum
- Scenarios Planning for State and Local Government
Connecticut State Representative Terry Backer, Bryn Davidson, Dan Bednarz, John Kaufmann, and Dick Lawrence
The day will conclude with a social reception and an evening presentation on "The Oil Story in Iran and Iraq" by Peter Wells.
Two Full Days of Plenary Sessions, on Monday, Sept. 22 and Tuesday, Sept. 23 will each be followed by social receptions and evening presentations.
Monday, Sept. 22 Demand, Meet Supply
Presentations will include "Petroleum 101", and "Alaskan Oil: Prudoe Bay Discovery and Outlook for North Slope Oil"; a "Peak Oil Global Overview - An American Wakeup Call"; extent and aging of Global Energy Infrastructure;and the economic impacts of $100 and €70 Crude Oil. Our luncheon presentation will feature Jim Buckee on "Big Oil & Resource Nationalism", and a surprise evening presentation (Hint: The words "Exponential" and "growth" will be mentioned.)
Tuesday, Sept. 23 Where Now? Choices for the Long Haul
Presentations will address Natural Gas and Coal as Liquid Fuels Substitutes; Fossil Fuel Limits on IPCC Scenarios; and the costs of renewable energy vs. coal. Our luncheon and afternoon sessions will focus on the Future of Aviation and Ground Transportation, Sustainable Mobility, and the Transition of Fuels to Flows as the future becomes electric.
Act Now! For details and early discounts, see our Conference website at
http://www.aspo-usa.org/aspousa4/
2008 Sacramento Peak Oil Conference
September 21-23, 2008
Hyatt Regency Sacramento, California
http://www.aspo-usa.org/aspousa4/
ASPO-USA is A Non-profit, Non-partisan Research & Public Education Initiative
The haves vs the have nots:
Other than oil, the other story has been fertilizer which Bob Shaw constantly reminds us.
Today a fertilizer billionaire bought Donald Trumps 100 million mansion in Florida. Rumor is that he will tear it down and re build it.
http://www.telegraph.co.uk/news/2304936/Donald-Trump-sells-home-for-$100-million.html
http://www.forbes.com/lists/2008/10/billionaires08_Dmitry-Rybolovlev_KOX...
On CNBC, Mark Haines' comment was something to the effect that "We should have been investing in fertilizer. Who knew?" I guess he hasn't been reading Bob's comments on The Oil Drum.
Recession-Plagued Nation Demands New Bubble To Invest In
http://www.theonion.com/content/news/recession_plagued_nation_demands
Every once in a while, The Onion hits PURE GOLD.
That is not a joke. Long term buy and hold doesn't seem to be working anymore. Traders switch from bubble to bubble to try to make their money. The analysts said as much on CNBC yesterday. Of course, arguably many of them are a joke.
I read recently (can't remember where) that to beat just about everyone else over the last four decades, you would have only had to make four trades:
Long gold in the 1970s
Long Nikkei in the 80s
Long Nasdaq in the 90's
Long crude since 2000.
US Long Bonds 30 year maturity at 17%. Issued in 1983 mature in 2013. Not a bad investment. Timing is everything.
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.
The above article about the shortfall of Chinese electrical output to meet demand is interesting. Power producers in China haven't been able to pass on the increasing cost of coal to their consumers because of gov't price controls. The gov't is concerned about inflation! Don't they understand that price controls distort resources and contribute to inflation!
Physician heal thyself. The US is the biggest tax haven of all. Just heard on CNBC that the US collects no taxes, capital gains or otherwise, on foreign investors who invest in the US. Their profits are totally tax free. So the current demand by many in congress that US go after US investors who invest in offshore tax heavens is pure hypocrisy.
Of course some would say that it is not the government's responsibility to collect taxes for foreign governments. And that is exactly the argument given by offshore tax havens. Is it Liechtenstein's responsibility to collect taxes on investors who invest in Liechtenstein and then pass those taxes on th the US. Do we collect taxes on Liechtenstein investors who make profits on their US investments and then pass those taxes on to Liechtenstein? Of course not! So what is the bitch?
Ron Patterson
Re foreign investors in the US. There is a 30% withholding tax on dividends, but capital gains are not taxed. IMO, the IRS is really just trying to implement effective exchange control, to re-patriate dollars to help support the dollar; also, the US capital-a/c and budget deficits need all the help they can get. But yes, it is very hypocritical...
Pope: World's natural resources are being squandered
I wonder if the pope knows that high population affects resource usage and environmental degradation and that the Catholic Church with its "no contraception" stance is directly responsible for some of that high population.
I hope to have a word of two with Rosco Bartlett at the SMART Showcase tomorrow. If you live in the Central MD area, come check it out.
Prof. Goose, how appropriate (Prof. Goose)!
I would like to pose a general question regarding refinery capacity. One argument that seems to be cropping up a lot these days, particularly in angrily-worded letters to the editor, is that high gasoline prices are the fault of mean-spirited federal and state regulators who have effectively prevented the construction of any new refineries for the last thirty years.
However, from what I can tell profits in the oil refining sector seem to be pretty poor at the moment, and gasoline consumption in the US is down a few percent from last year. This suggests that there may be a surplus of refining capacity, rather than a lack of it.
Is the "no new refineries in the last thirty years" refrain a bogus argument? Are there any nuggets of truth to it? What about building refineries to handle heavier crude which is currently selling at a discount to the light, sweet stuff?
look back through the last few drum beats and search for "Gail". You will find her post on refinery utilization, which as you say, is down. With oil production peaking, there is no need for new refineries.
Stocks up big, oil down 4$, as Congress and the Fed bemoan our woes.
I certainly don't understand it.
I'm not one of the oil gurus around here, but Iraq turning down the US proposals for retaining control of their airspace and having sole control of their bases and so on seem to me to have made a strike into Iran considerably less likely, although I will only start to get really confident if the strategic reserve is run down.
Stocks have risen and oil dropped since Iraq pulled the US back into line. Co-incidence?
Moe Gamble said it would be volatile trading this week, and he was right. In any case, since the current rally kicked off, IMO in June, 2007, we have seen two months with month over month declines--August, 2007 and December, 2007, and we have seen six straight months of increasing prices, January to June, inclusive:
http://tonto.eia.doe.gov/dnav/pet/hist/rwtcm.htm
Therefore, so far we have seen two down months and 10 up months, with an overall rate of increase of about 6% per month. So much for the history. I think that the price continues to be a horserace between declining demand and declining net oil exports, and I think that declining net oil exports are "winning," so I do expect prices to rise in what is best characterized as a geometric progression, but I don't know what the time periods will be between the doublings.
I won't claim to understand the markets in any detail either, but my take is that the change is the result of a bunch of stuff:
1. The 'Iran-attack' risk, which was massively overblown to begin with, is now dissipating.
2. The producers have been fairly stable lately - no major disruptions making the news in the last little while.
3. Consumption figures, at least for the US, are trending down and stocks are building (like in the natural gas report today). It would appear that higher prices do lead to behavior changes.
4. The dollar is gaining strength, and the news out of companies is less bad than expected - it still looks pretty bad to this layman, but apparently that, in combination with retreating oil prices, is enough for a rally.
I'm surprised a bit at how far oil has fallen - 10%+ in the last 5 days - and it implies to me that my assumption of how close to 'the edge' we were in terms of production/consumption balance was mistaken. I've been treating the rises over the last 6 months to a year as evidence that we were in fact approaching supply constraints that would be difficult to alleviate. I'm now reconsidering that - it appears to me that there's more slack in the system than I thought.
-S5
The fluctuations in oil prices since May, 2007 have produced an average monthly rate of increase of about 6% per month. If we assume, for the sake of argument, that this is currently the rate of increase necessary to balance declining net oil exports against the aggregate declining demand in importing countries, we should average about $140 in July. We were "above trend" in early July. With the latest decline, it looks like the average price for July is so far about $139.
To play devil's advocate here, what would the implications to you be if the trend broke down? What if we averaged around 130 (in my view, not hugely likely, but within the realm of possibility) - does that imply there's something in your model that's been missed?
I'm interested because we're now (at least temporarily) below both the $140 and $130/barrel levels, both of which prompted extensive discussions here on what the proximate causes of the rise could be. Now that we're back down through those levels, I'm trying to instigate a discussion of why that might be. I understand that commodities in general fluctuate a great deal, but it seems to me that a sustained drop of this magnitude ought to be at least a signal to check our assumptions for something that got missed...
-S5
It's the damn speculators.
Three principal types of declining demand: (1) You have your job, but you are forced to conserve because of higher prices; (2) You lose your job, causing a big drop in consumption; (3) You voluntarily reduce your consumption, by changing your lifestyle. Oil prices currently balance, IMO, aggregate declining demand in importing countries against aggregate declining net oil exports.
Since May, 2007, we have seen two monthly price declines of -2.3% and -3.1%, followed by very substantial price rebounds; however, modeling net oil exports is a lot easier than modeling price behavior.
If someone can think of some way to model demand and price, we could match that against the export model, but my outlook, as I said up the thread, is for something that looks like a geometric progression in price; I just don't know how to predict the time periods between the doublings. One of the problems is how do you predict the rate of change in #3--in the number of people who start voluntarily conserving by downsizing, sometimes radically, their consumption?
We can say that from May, 2007 to May, 2008 prices doubled (6% per month), and at this precise point in time, the average price in July is where it should be to maintain an average rate of increase of about 6% per month.
I don't have the statistical modeling knowledge to contribute much, but given that gasoline futures prices are down some 30 cents in the last 3-4 days, there may be an opportunity to see if folks will buy more gasoline at lower prices in the reasonably near future - that might indicate a relative balance between the cases you've listed.
-S5
So many articles, so much to choose from, so little time.
But one stands out today -- it's Andrew McKillop's Get ready for the last oil war
at Energy Bulletin:
http://www.energybulletin.net/node/45944
A long and insightful article worth reading twice or three times over. Get a printout.
The funny thing about that one was that it was originally written at least three years ago.
Thanks for the link, Leanan.
The earlier version is somewhat shorter (3190 words) than the latest one (4218 words), actually. It's a genuine update, not a rehash.
Yes, I know. Otherwise I wouldn't have posted it. :-)
Ryanair withdraws 30% of planes from Stansted
And yet Gordon Brown continues his drive to building a third runway at Heathrow. Madness !! IMO it will be approved but not built.
Hello TODers,
It will be interesting to see if this is where some strategic reserves of biosolar goods* will eventually be stockpiled:
http://www.canada.com/reginaleaderpost/story.html?id=6a4b7409-82ac-441d-...
------------------------------
New intermodal rail container yard will be huge
..."This will be an area with extremely large warehouses. Think of the biggest warehouse you know and multiply by a factor of two, three or four and you get a sense of the scale of these," Jeff Lehman, a principal with MKI, an independent consulting firm contracted to prepare a concept plan and cost analysis for the IMF, said Wednesday.
"Some of these are one million square feet so it's a type of land use that isn't in Regina yet -- a very, very large warehouse."
-------------------------------
*wheelbarrows, bicycles, I-NPK & sulfur, seeds, water purification equipment, ammo?, etc, etc. Have you hugged your bag of NPK today?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Folks Dave Cohen's article over on The Energy Bulletin, Peak Oil is a Done Deal is really great! He says basically what I have been saying for months about non-OPEC oil:
Non-OPEC, which presently produces 55 percent of the world's oil, has been on a plateau for four and one half years. It is now in the lower half of that plateau and, in my opinion, is about to fall off that plateau.
Dave talks about OPEC production as well showing that Ghawar has clearly peaked.
Ron Patterson
I think this story has some relevance, as this town sounds like some people's vision of a post-peak paradise. It reinforces the idea that people everywhere have problems, and that strangers are often not welcome:
http://www.cnn.com/2008/CRIME/07/17/homeless.beating.ap/index.html
Hello TODers,
You would think the designers of a critical food warehouse would make sure that this facility was built on high ground, and include strong wall and roof components to easily ride out a typhoon. So, instead of adding some safety measure of social resiliency--It has turned into a cascading blowback:
http://newsinfo.inquirer.net/inquirerheadlines/regions/view/20080716-148...
----------------------------------------------
Protesters picketed the National Food Authority office here to demand accountability for the wastage of at least 200,000 bags of rice that are now rotting in an NFA warehouse after these were soaked in water when floods struck this city at the height of Typhoon “Frank.”
“It is so ironic that while farmers and other poor people have been going hungry because of high prices of rice, tens of thousands of bags of rice are rotting here,” said Edgar Pelayo, regional council member of the farmers’ group Pamanggas, a group allied with Bayan.
--------------------------------------
My guess is they haven't read my Ft Knox postings: using critical infrastructure that will be largely impervious to Mother Nature and can even repel screaming, starving mobs. Such is life.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hello TODers,
Recall my earlier posting series on Yucca Mountain: basically our taxdollars are building the ultimate secure storage for elite hoarding postPeak.
http://www.redorbit.com/news/science/1482255/yucca_mountain_cost_estimat...
-------------------------
Yucca Mountain Cost Estimate Tops $90 Billion
...Commission officials have said they hope to complete a license review in three or four years. Even so, it would take almost a decade more, under DOE's best-case scenarios for a repository, to open Yucca Mountain for business, with some experts predicting delays even years longer than that.
------------------------
TSWHTF long before Yucca is waste-operational. I speculated earlier that the desperate peons trying to attack this; to try and gain access to the biosolar resources stored inside, when it is in the middle of a huge, scorching desert--> will be next to impossible.
As others have stated before: Privatize the profits, socialize the costs. Such is life.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
The drop in price of oil is right in line with the 'pattern C' I proposed, meaning the price of oil will move between a low and high price, with the high price never exceeding some arbitrary amount like 200 dollars (in 08 dollars). I just think the idea that oil could sell for 300, 500 or 1,000 dollars a barrel to be out of line with feedback systems within the economy.
News from Britain:
Source:
http://www.dailymail.co.uk/news/article-1036057/Bleak-house-Families-fac...
Pakistani investors attack bourses after share collapse
Investors ransacked stock exchanges in Karachi, Lahore and Islamabad yesterday, reacting to a share-price rout that has devastated the life savings of many Pakistanis.
Police and paramilitary officers were drafted in to protect the Karachi Stock Exchange after a mob stoned the building and smashed windows. In Lahore, investors burnt tyres and blockaded the local bourse.
The violence came after a 35 per cent fall in the Karachi index in the past three months on concerns over the stability of Pakistan's fragile coalition Government, soaring inflation, and the weakness of the rupee.
35%?!?
These people should think seriously about not investing in tech stocks.
The Truth About Crude Oil
First Crude Oil is NOT from Dino the Dinosaur or his brothers. Logically speaking if the earth was covered with a dense primeval forest and there was a Dinosaur living in every five square mile area on the face of the earth, and all this was compressed into a sub surface space for tens of thousands of years, and produced a pool of Crude Oil, it WOULD ONLY FEED the needs of this world for the PAST twenty years, so WHAT FUELED the Industrial Age for the first EIGHTY YEARS???????????????????????????
Think about what is stated above! Science states that oil is the by product of the earths ENGINE as it rotates creating GRAVITY and super heating rock formations, that through this process release oil and this oil flows into cavities within the earth.
Now with this said, what is the reason for the excessive spike in Crude and Natural Gas prices? GREED.
In the 60’s gas sold for 35 cents a gallon, cars got 5 to 7 MPG so a 100 mile trip would take some 16 gallons at a cost of 5 dollars. Today cars get 30 miles to a gallon and that same trip would only take 3 gallons of gas at a cost of 12 dollars. Take into account the LOSS OF VALUE of the FRN and you will see that BIG OIL is KEEPING ITS bottom line HIGH as the efficiency of the engines increase.
There was a contrived oil crisis in the 70’s and there is one today. Why? It is the GREED of BIG OIL! It takes less than 20 dollars to get oil out of the ground and refined into its product and delivered. It takes from 6 months to a year for a well from the day the drill head starts the hole until it produce oil. The Russians can do it in three mounts. Today’s wells exceed 6000 barrels a day, and one off shore platform can have over 20 SLANT WELL HEADS producing oil 24 hours a day.
The United States of America is sitting on the worlds largest coal reserves; it also has more crude oil than the Middle East. Recent finds in Montana exceed what is found in Saudi Arabia, and Pennsylvania has over 3 trillion cubic feet of Natural Gas yet to be pumped into the system. Alaska has extensive reserves yet CONGRESS has for years REFUSED to allow the release of this oil, because of RED TAPE and that they are under the control of ENVIRONMENTALIST groups. These groups want all Americans to ride bikes and live as the settlers did in the 1800. Congress continues to LIE regarding the time it takes to drill a well and get the oil into the system. They state that it would be ten years before wells drilled today could produce oil. This is a BOLD FACE LIE. Congress has prohibited drilling for the past two decades, if what they say is true and if they allowed drilling decades ago we would NOT HAVE FOUR DOLLAR A GALLON GAS PRICES, and HOME HEATING OIL WOULD NOT BE OVER FOUR DOLLARS A GALLON, THAT WILL CAUSE A HEATING CRISIS THIS WINTER, and SOME AMERICAN MAY FREEZE TO DEATH FOR LACK OF HEAT. CONGRESS IS TO BLAME IF THIS OCCURS.
Today’s advances in drilling insure a protected environment. The WILD CAT wells of the early 1900 are a thing of the past.
Environmentalist claim that the exhaust of power plants create TONS of CO2, HOWEVER, CO2 is a GAS and is measured in cubic feet NOT TONS. The advance scrubbing of the exhausts prevent most hydrocarbons from being suspended in the atmosphere. Most ALL the reasons given by environmentalist are not science, but an agenda to deprive Americans of their standard of living.
For MORE INFORMATION of the Truth About Big Oil visit
http://www.ilm-efx.5u.com/photo4.html
You Will Be Amazed, and make sure you click on the link GLOBAL WARMING and read what the ENVIRONMENTALIST do not want you to know about NON GLOBAL WARMING BY MAN.
Is the monitor you designed this on about 8000x6000 pixels?
The abiotic theory of oil has been thoroughly dismissed elsewhere which is why we don't have time for it here.
If you say it is produced at a similar rate as the dinosaur theory, then it makes no practical difference to the implications. If you say it produces fast enough to remotely compare with our current usage, then one would expect the planet to be absolutely swimming in the stuff after these millions of years.
Attempts to find abiotic fields have pathetically failed which is why there aren't zillions being earned by exploiting them.
Gerard,
You're exactly right about oil pricing. I've been a petroleum geologist for 33 years. The current price of oil has nothing to do with the cost to find it or produce it. I know of a bunch of oil wells where the lifting cost is around $10/bbl. But then I also know of oil wells that will never pay for the money it cost them to be drilled in the first place. Those bbls of oil sell for the same price as the cheaply produced oil. The price of oil has never been based upon the cost to find it or produce it. It's always based upon the market demand forces. Right now Saudi could produce a couple of million bbls of oil more then they are currently selling. But there is no one to buy it. The oil buyers have all the want/can afford. Now if Saudi offered their extra oil for, lets say, $40 bbl less than another exporter they could take there market share from them. The other exporter would have to lower their price or lose market share. That's why oil fell to $10 bbl in 1986. Saudi undercut all the other OPEC producers and took their market share away.
The reason oil prices are high is that Saudi is happy with the current market share/prices. They are the only ones with significant excess production capability. During the first 6 months of this year OPEC made almost as much income as they did for all of 2007. Saudi doesn't really have any incentive to force prices lower. Use yourself as an example. Would you try to take away someone else's job by offering to work for less than they do? Maybe if you needed the job. But if you were content with your current salary would you swap it for a lower one just to get the other guy’s job? Such is the free market.