DrumBeat: July 18, 2008

Fuel costs strain U.S. mass transit, too

"High gas prices are really a double-edge sword," says Virginia Miller, spokeswoman for the American Public Transportation Association (APTA). "While they are bringing more people to ride buses and trains all across the country, public transit agencies are facing challenges to meet their costs."

In many cases this means fare hikes and service cuts. So far this year, nearly half of metropolitan bus operators surveyed by the APTA said they had increased prices to address the strains of rising fuel costs; 19 percent said they had reduced service.

Such fare hikes are hurting the poor disproportionately. While more of the country's suburbanites are choosing mass transit, many of the nation's poorest urban dwellers, whose only option is often public transportation, aren't riding at all because of fare hikes and the downturn in the economy, transportation experts say. Some no longer have a job to commute to, they add.

Russia's LUKOIL forecasts production decline: RIA

MOSCOW (Reuters) - Russia second largest oil producer LUKOIL has revised 2008 production forecasts to a decline of about 3 percent, Russia's RIA news agency reported on Friday, citing comments by Lukoil's president.

The forecast of a decline in LUKOIL production comes after a previous estimate of slight growth or at least flat output, the news agency said.

McCain: States should set fuel efficiency marks

WARREN, Mich. — Sen. John McCain said this morning that states should be able to determine their own fuel efficiency standards.

The policy, which a dozen states are pushing, is strongly opposed by the domestic auto industry as a job-killing proposal that would seriously harm the industry.

Iraq, U.S. agree on 'general time horizon'

WASHINGTON (AP) — The United States and Iraq have agreed to seek "a general time horizon" for deeper reductions in American combat troops in Iraq despite President George W. Bush's once-inflexible opposition to talking about deadlines and timetables.

BP on verge of losing control of Russian joint venture

MOSCOW: For all its effort to retain an equal share in a Russian joint venture here, BP seems to be edging ever closer to losing control.

The British company's four billionaire Russian partners have pressed an unrelenting campaign to oust the joint venture's chief executive, Robert Dudley, who was appointed by BP, and to expel other foreign managers from the company, and from the country, in the latest turmoil in Russia's oil patch.

Nigeria: Sabotage behind pipeline blast

An explosion that destroyed an Eni SpA oil pipeline in Nigeria's restive southern oil region was caused by aggrieved youths from a nearby community, a military official said Friday.

Col. Chris Musa, the head of the Bayelsa State military, said Thursday's blast was not an accident but "deliberate sabotage" by a group protesting the alleged nonpayment of fees by the energy company to the local population.

Drivers going to great lengths for free fuel

NEW YORK - Some U.S. motorists sick of getting clobbered at the pump seem willing to do just about anything for free fuel, from giving up the right to name their children to stealing from day-care centers to donating blood.

Russia gears up to develop vast oil reserves

MOSCOW–President Dmitry Medvedev signed a law today enabling the Kremlin to handpick companies to develop the vast oil reserves believed to be located in the Russian Arctic.

In a televised meeting with Deputy Prime Minister Igor Sechin, who oversees the energy industry, Medvedev outlined priorities for developing some of Russia's richest and most challenging oil deposits.

The government will take the unusual step of selecting companies to develop the Arctic reserves, instead of holding auctions or tenders, the president said.

"The continental shelf is our national heritage," said Medvedev, signalling a move toward greater state control over the country's lucrative energy industry. "This was done consciously to ensure rational use of this national wealth."

Ukraine's Naftogaz halts siphoning of Gazprom gas

MOSCOW (RIA Novosti) - The Ukrainian oil and gas company Naftogaz has stopped tapping Russian gas in excess of a standing contract with Gazprom, the Russian energy giant said on Friday.

It said the Ukrainian company had complied with Gazprom's demand to stay within the contract-mandated quotas for 2008.

Deadly tension on the roads — cars vs. bikes: As gas-shocked commuters opt for bicycles, they save money — but are left more vulnerable to accidents

The problem is that so many new riders create road hazards because they don’t know the rules, police say. Too often, inexperienced riders take traffic signs as suggestions, not commands.

After the Seminole County, Fla., sheriff’s office recently began fielding scores of complaints from drivers that bicyclists were clogging major streets, it sent out deputies with video cameras. The cameras revealed large groups of bike riders illegally disrupting traffic.

Park tests hybrid buses in McKinley's shadow

ANCHORAGE, Alaska - For years, visitors wanting to see Denali National Park's grizzly bears, moose, sheep and caribou have had to ride school buses that polluted the air and spoiled the tranquillity with their noisy, carbon dioxide-spewing diesel engines.

Now park officials are testing a hybrid bus that promises to run cleaner, cheaper, and quieter.

American to lay off 1,500 maintenance workers

DALLAS - American Airlines will cut 1,500 jobs in its maintenance division as it reduces its fleet of aircraft.

U.S. Fuel Use Drops Most in 17 Years in 1st Half 2008, API Says

(Bloomberg) -- U.S. fuel consumption fell 3 percent in the first half of 2008, the biggest decline for the period in 17 years, as high prices and a slowing economy curbed demand, an oil industry report today showed.

Deliveries of petroleum products declined to an average 20.08 million barrels a day through June, American Petroleum Institute said in a monthly report. Gasoline deliveries fell 1.7 percent, the first ``significant'' decline in 17 years.

Soaring inflation undermines sustainability of Persian Gulf region

Cairo - Just as Persian Gulf cities such as Dubai and Abu Dhabi were becoming synonymous with excess and success, the Gulf boom is in danger of going bust. Instead of conjuring images of towering skyscrapers and indoor ski slopes, they are struggling with soaring inflation rates. Indeed, the Gulf region may want to position itself at the center of global capitalism, but it will first have to contend with the impact that skyrocketing energy costs and a cooling global economy are having on the local economy and the impoverished migrant labor force that bears the brunt of rising oil and food costs.

High inflation is causing concern among policymakers in the Gulf Cooperation Council (GCC), a regional organization that includes Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the United Arab Emirates (UAE).

In June, inflation in Egypt, the most populous Arab country, hit a 19-year high of 20.2 percent. Saudi Arabia also saw a 30-year inflation high of 9 percent in May. Meanwhile, inflation in Bahrain rose from 4.07 to 6.2 percent between December 2007 and April.

To make matters worse, five of the six GCC members, with the exception of Kuwait, peg their currencies to the US dollar. As its values drops, their inflationary woes grow, and the sustainability of economic growth in the Gulf is brought into question.

Crude oil at $250 per barrel?

You should never make predictions, especially about the future”, advised Samuel Goldwyn. Forecasting future price of oil is even more hazardous. Yet, in this article we gaze into the crystal ball to guess where the price of oil is headed.

Russian natural gas monopoly Gazprom to slash jobs in effort to cut costs

MOSCOW: Gazprom announced Friday that it will slash some of the nearly 6,000 jobs at its Moscow headquarters as part of a cost-cutting plan.

Report: U.S. sanctions fail to cripple Iran's oil industry

WASHINGTON (Xinhua) -- The United States, having long imposed sanctions against Iran for its controversial nuclear program and alleged support for anti-U.S. militants in Iraq, has failed to cripple the oil industry of the Islamic republic, the Wall Street Journal reported Friday.

China May Face Worse-Than-Expected Power Shortage

(Bloomberg) -- China, the world's second-biggest energy consumer, may face a worse-than-expected power shortfall when demand peaks in summer, the nation's largest electricity distributor said.

Fiji: Islanders without kerosene

VILLAGERS of Dravuwalu on Totoya in Lau have been without kerosene for the past three months as a result of irregular shipping services.

Sikiti Cakacaka told The Fiji Times from Totoya it has been hard to cope without fuel, food or medical supplies.

Mrs Cakacaka most families have to resort to using candles at night.

The Crises of Our Time - and the Need for a Paradigm Shift

For the first time in history the human family as a single entity is faced with multiple global crises, each of which has far-reaching implications for the future of our species. These crises are not just the consequences of specific events or even systemic flaws in say the global economic architecture. They are related to fundamental values and deeply entrenched worldviews. The solutions to these crises may require an unprecedented paradigm shift --- a radical shift in the way in which we look at ourselves, at others, and at the planet that we inhabit.

America's Economic Demolition... Through Oil Implosion

We're exactly where they want us, where they've been maneuvering us for decades.

hey've been clear about their desire to increase the price of gasoline so high it would drive SUVs and other oil/gas guzzlers off the streets - while doubling tax revenues - using global warming as their means of deception. Achieving power over the masses. with unbelievable wealth, Al Gore and his panic-cronies will not debate real Climatologists and other professionals, because they know their claims are fraudulent. Their strategy of creating an energy shortage by shutting down American drilling and oil refining facilities for the past 25 years has been successful and the American economy is sliding into a painful recession with gas at over $4.50 per gallon (Calif.) and continuing to climb with no end in sight. Chavez, in Venezuela, and OPEC anticipate that oil will reach $300 a barrel, and liberals will not allow us to do anything to stop it from happening. 'Evil' public-owned oil companies - that liberals are suing - have tried to save us, as they were forced to purchase over 70% of our needs from foreigners, mostly from Muslims who demand we convert, or die. But why die quickly when they can keep us in self-imposed bondage of extortion oil costs.

Roads feeling bumpier? Blame soaring costs

Sweigart said an increasingly popular technology being employed by oil refineries in just the last few years is beginning to contribute to higher asphalt prices.

"Cokers" can refine the material in oil that used to end up on the market as asphalt and fuel oil into more lucrative gasoline and diesel fuel. Less of that material going for asphalt means higher prices, he said.

Prius owners get the last laugh as gas prices rise

Justin Wages became "one of them" when he bought a new Toyota Prius hybrid three years ago.

"I always had really high-horsepower racing cars, so all my friends on that side give me the tree-hugger, hippy stuff," says Wages, who lives in the south Placer city of Lincoln. "My Prius gets 53 mpg, but if I take the back roads, drive slow and am careful, I've gotten 62 mpg."

Qantas name will survive but low-cost fares are over

As the dust of more job losses, grounded planes and additional capacity cuts starts to settle on the worn tarmac of the aviation industry, three clear things have begun to emerge from the gloom.

Energy crisis? What energy crisis? Petrol is still cheaper than sweets

The difficulty I have with getting cross about the price of petrol is that, the way I see it, it's still relatively cheap.

In some places it's about £7 a gallon, but that's still only roughly the same price as semi-skimmed goats' milk (please don't ask how I know this), or just a third of the cost of a pint of bitter in my local.

Don’t Drink the Nuclear Kool-Aid

We can't let the nuclear power industry use global warming as an opportunity to sell its insanely expensive and dangerous power plants.

Israel to invest NIS 400m in alternative energy

The government will invest NIS 400 million in the five-year plan for 2008-12. The plan is intended to encourage R&D and production of electricity by renewable energy sources in order to consolidate Israeli industry's standing as a central player in the global market as the world turns to using renewable energy. The goal is for Israeli renewable energy companies to achieve NIS 500 million in annual sales.

Crop residue may be too valuable to harvest for biofuels

In the rush to develop renewable fuels from plants, converting crop residues into cellulosic ethanol would seem to be a slam dunk.

However, that might not be such a good idea for farmers growing crops without irrigation in regions receiving less than 25 inches of precipitation annually, says Ann Kennedy, a USDA-Agricultural Research Service soil scientist and adjunct professor of crop and soil sciences at Washington State University.

“With cultivation, organic matter tends to decline in most places around the world,” she said. “In the more than 100 years that we have been cultivating soils in the Palouse,”—the wheat growing region of Eastern Washington, Northern Idaho and Northeast Oregon—“we have lost about half of the original organic matter.”

Ideally, according to Kennedy, soils in the Palouse should have about 3.5 percent organic content. In most farm fields, she said, it is now closer to 2 percent.

Gas bills 'to top £1,000 a year'

Energy bills could rise by more than 60% within the next few years, a report for the UK's biggest domestic energy supplier Centrica has said.

It said annual average gas bills could rise from £600 to more than £1,000 early in the next decade.

Continuing high oil prices could lead to rises in the cost of both gas and electricity, it added.

Of ‘myth’ of a shortage and Saudi capacity

Crude demand-supply balance is definitely tight, no one argues. The spare cushion has perilously gone down to two percent from six percent a few years back. Galloping consumption in the emerging economies of Asia coupled with rising demand within the Arab Gulf has contributed to tight markets.

Skepticism appears ruling the sentiments. Pundits continue churning out various, cooked and semi-cooked, theories about the Saudi capacity to sustain and increase its production from the current levels. Matthew Simmons and his disciples term the Saudi announcement to take production to 12.5 million bpd by next year, and 15 million bpd, if and when required as “a bunch of empty boasts.”

In transportation, it looks a lot like 1910

Automakers with names like Maxwell, Ames, Corbin the Baker Electric and Haynes don't leap to mind for most of us, but they were all on the market and motoring along roadways at one time. In 1910, there were dozens of automobile manufacturers banging away from coast to coast. Cars were powered by gasoline, diesel fuel, steam electricity and alcohol. If some imaginative tinkerer could find a way to squeeze a few horsepower out of a new engine, or a new fuel, he did. Shortly afterward, he took it upon himself to hang out a shingle and begin selling his creation.

That's the beauty of the American system. A hard-working man or women with a good idea can open up shop, sell the wares and possibly change the world. Henry Ford did it. Thomas Edison did, too. In our own time, Bill Gates, Steve Jobs, Ray Kroc and Col. Harland Sanders each made an impressive impact in their own way.

The New Boom Towns: Latest Energy Crisis is a Boon for Many Cities Across the U.S.

The steep hike in gas and energy prices has created a national debate about the future of American metropolitan areas -- mostly about the reputed decline of suburbs and edge cities dependent on cars. But with all this focus on the troubles of traditional suburbs, one big story is overlooked: the rapid rise of America’s energy-producing metropolitan areas.

Energy crisis to alter utilities, speaker says

What are the jobs of the future? Think solar panel installer. Think energy-efficiency auditor. Think about jobs that help conserve energy or make it from renewable sources, said Tom King, president of National Grid USA.

Money talks on climate change

Al Gore's call for carbon-free electricity changes the terms of the global warming debate by focusing on investment

Nations with vast oil wealth gaining clout

MOSCOW -- The boom in world oil prices is bolstering autocratic governments in a handful of petroleum-rich countries, emboldening them to challenge U.S. objectives and weakening their own democratic movements.

The cost of a barrel of oil has climbed dizzyingly, from $80 in September to more than $147, before settling Wednesday at $134.60. Some analysts expect it to continue rising to $200. The effects are visible across the globe:

Iraq's warring factions are scrapping for a share of the massive oil wealth. The Sudanese government has more money to spend on military equipment and the campaign against rebels in Darfur. Saudi Arabia has grown more distant from its allies in Washington.

But some of the most obvious effects are in countries whose leaders are most hostile to the United States: Venezuela's populist President Hugo Chavez, Iran's stringent Islamic rulers and Russia's growing autocracy.

The governments of these three countries, among the top eight in proven reserves, are demanding a greater role in world affairs while spending on domestic social programs, raising salaries and building infrastructure -- measures that help blunt concerns over a slide into greater authoritarianism.

Inflation threatens global economy, IMF warns

Driven by surging oil and food costs, inflation in countries such as Saudi Arabia, Pakistan and Russia is expected to crest at an average of 9.1% this year before easing to 7.4% in 2009, the IMF says. A key risk is that officials in fast-growing developing countries won't do what is needed to cool off their economies, Johnson says. If they fail to act, the risk of a global recession in 2009 would rise.

Oil markets: Bottoming out or taking a breather?

NEW YORK - Oil prices tumbled below $130 a barrel for the first time in more than a month Thursday, as crude's dramatic slide entered a third day accompanied by a sharp sell-off in natural gas.

The declines accelerated amid growing concerns that the weakening economy and creeping inflation are eroding demand for fossil fuels in the U.S. and other large energy-consuming nations.

Oil is now more than 10 percent cheaper per barrel than it was on Monday; natural gas prices are down more than 20 percent just since the Fourth of July. Still, experts are not convinced that prices have turned a corner.

Cutting Through the Energy Myths

Since crude prices have moved into the stratosphere, the world of oil has become awash in myths and other misinformation about the causes and potential cures for the run-up. The biggest problem with these myths is that they subject policymaking to politics, rather than to economics and engineering.

Holiday travel will get costlier

If you want to travel during the fall or winter holidays, consumer travel experts say you ought to be checking prices now.

"This is going to one of the most expensive holiday travel seasons ever," warns Tom Parson at BestFares.com.

Nearly all U.S. airlines are making big cuts in their schedules this fall in response to record jet fuel prices. Airlines' domestic flying will fall about 9%in November vs. a year ago, according to a USA TODAY analysis this week of schedule data from OAG-Official Airline Guide. More cuts are likely.

For Sale: Cheap heating oil -- from my basement

NEW YORK (Reuters) - U.S. homeowners scared of paying through the roof for heating oil this winter are cruising online classified sites for deals on unwanted fuel -- and finding them.

"I have an old pickup truck and I stock it with 50-gallon drums, and I have an oil transfer pump," said Bob Difiore, a mechanic who lives on Long Island, outside New York City.

"I pull into people's driveways and lower a hose through a window or other access points and I start pumping it into the drums."

The deals are possible because many homeowners in the Northeast are switching from heating oil to cheaper natural gas or other alternative fuels, leaving them with tanks full of unused oil. And those still using heating oil are eager to snap it up at a discount as the oil market skyrockets.

Patriotic answer to $4-a-gallon gas: Drive less, and slow down

There are two steps we can take right away that could have greater impact than oil from the Arctic. They are so simple and straightforward that they are seldom mentioned. But Americans took these steps during World War II, and they worked.

First, drive slower.

Second, drive less.

The savings of gasoline from these two steps would be phenomenal. (More on that in a moment.)

Gas majors seek more say on Norway export pipelines

OSLO (Reuters) - Some of the world's biggest energy producers accused Norway on Friday of giving its own companies too much say in running Gassled, a pipeline system that carries nearly all Norwegian gas to Britain and continental Europe.

Total, Royal Dutch Shell, Exxon Mobil, Eni, Danish Dong and ConocoPhillips jointly complained to Norway's Petroleum and Energy Ministry about what they see as an overly dominant role of StatoilHydro and state-run Petoro in Gassled.

Schlumberger profit tops estimate; shares rise

HOUSTON (Reuters) - Schlumberger Ltd (SLB.N), the world's largest oilfield services company, posted better-than-expected quarterly profit on Friday, driven by energy companies' brisk spending on oil and gas exploration.

UK: Labour attacked on fuel poverty

Opposition parties are queuing up to lambaste the government over its attitude to fuel poverty today, as Centrica released a report warning of further rises in domestic gas bills.

"Frankly it’s frightening that the Government has no strategy for protecting the poor against rising prices," said shadow energy minister Charles Hendry.

France to test water near reactors after uranium leak

PARIS (AFP) — France's ecology minister has called for tests of the ground water near all of the country's 58 nuclear reactors after a uranium leak at a plant in the south polluted the local water supply.

"I don't want people to feel that we are hiding anything from them," Jean-Louis Borloo said in a newspaper interview Thursday.

Residents in the Vaucluse region of southern France have been told not to drink water or eat fish from nearby rivers after the liquid uranium spill on July 7 at the Tricastin nuclear plant.

Hydrogen future doable, experts tell Congress

A transition to vehicles that run on hydrogen — and independence from oil as well as a sharp drop in carbon emissions — is doable but that best-case scenario requires nearly $200 billion in funding and further breakthroughs, National Research Council experts said Thursday in a report requested by Congress.

The Free Green Energy Age (Part 5)

Did you know that we will, over the next year, send to foreign oil producers around $700 billion to pay our annual oil bill, while we invest less than $1 billion on renewable energy research? What are our personal priorities? Americans annually spend $25 billion on video games, $80 billion on cigarettes and $100 billion on alcohol, with a huge subsequent downside on time lost, health and relationships. Problem #1: the lack of public will regarding critical national priorities.

Obama shifts stance on environmental issues

WASHINGTON — In May 1998, at the urging of the state's coal industry, the Illinois Legislature passed a bill condemning the Kyoto global warming treaty and forbidding state efforts to regulate greenhouse gases.

Barack Obama voted "aye."

The presumptive Democratic presidential nominee now calls climate change "one of the greatest moral challenges of our generation," and proposes cutting carbon emissions 80% by 2050. But as a state senator, from 1997 to 2004, he usually supported bills sought by coal interests, according to legislative records and interviews.

Should we move species to save them?

WASHINGTON - With climate change increasingly threatening the survival of plants and animals, scientists say it may become necessary to move some species to save them. Dubbed assisted colonization or assisted migration, the idea is to decide how severe the threat is to various species, and if they need help to deal with it.

Shell Says Carbon Capture Could Cut EU Emissions 3.7% by 2015

(Bloomberg) -- Royal Dutch Shell Plc, Europe's largest oil company, said financial incentives for carbon dioxide capture would cut the region's emissions from factories and power stations by 3.7 percent as early as 2015.

Warming health report: Poor, elderly to hurt most

WASHINGTON - Global warming will affect the health and welfare of every American, but the poor, elderly, and children will suffer the most, according to a new White House science report released Thursday.

The 284-page report, mostly written by the U.S. Environmental Protection Agency, said every region of the country will be hit by worse health from heat waves and drought. It said all but a handful of states would have worse air quality and flooding. It predicts an increase in diseases spread by tainted food, bad water and bugs.

Offshore Drilling & Shale Oil to the Rescue?

Offshore Drilling

This is an interesting website that shows the onshore producing regions for various parts of the US Lower 48:


Note that the offshore production in the Gulf of Mexico (GOM) and in the Pacific off California were both extensions of onshore production. Note the lack of any significant onshore production in the coastal region from Florida to Maine (Southeast and Northeast regions). While this does necessarily not condemn the Atlantic offshore region, it certainly is not encouraging.

Shale Oil (Emphasis Added)

America’s Untapped Oil
Could the Rockies out-produce Saudi Arabia?

"It's coming eventually. It's just a matter of when," say Roy McClung, mayor of Parachute, Colorado, a community in the heart of oil shale country. . . With oil bubbling over $140 a barrel, the political push is heating up. On Monday, President Bush announced that he is lifting an executive ban on offshore drilling. In June, he also championed oil shale, calling it "a highly promising resource," and asked Congress to lift a year-old national moratorium that critics say prohibits the industry from tapping oil-rich shale deposits.

But are McClung and Bush being overly optimistic about shale? Yes, say some oil industry executives, government officials and environmentalists. They point to a 2005 RAND Corporation study that suggests a commercially viable means of extracting oil from shale may be at least 12 years off, if ever. . ."We have demonstrated that our technology works. We have produced oil and gas," says Terry O'Connor, vice president external and regulatory affairs for Shell Exploration and Production Company, Unconventional Oil. In all, O'Connor says, the company has produced only 1,800 barrels, and, won't commercially produce for another 10 years at least. "Our challenge now is whether we can do it on a larger, commercial basis," adding Shell has yet to prove groundwater can be protected. "If we are not able to do that, I can assure you that we will not proceed to commercialization." When will Shell decide? Says O'Connor: "We hope to have enough knowledge by 2009 or 2010."

There is a fair amount of confusion between the Tar Sands (Bitumen) Play, the Bakken Shale Play and the Oil Shale Play in Colorado. The two former plays are both commercial operations. Bitumen is a very heavy oil that is upgraded into a light oil, and the Bakken produces a thermally mature light oil.

The Oil Shale Play is really a kerogen deposit, a precursor to oil that has to be "cooked" in order to obtain an oil that can then be refined into a usable product. A key question is the net energy output, and as the article noted, there is presently no commercial oil shale operation in the US.

Jeffrey J. Brown

The WSJ has an article on oil shale:

Squeezing Oil From a Stone

It's behind a paywall, but someone liberated it here.

That article says:

Oil shale rock burns on its own when lit with a torch.

Has there been research on using it more or less as it is to generate electricity rather than separating oil from rock for transportation purposes?

I gave a talk at Sandia Labs on Monday, and I asked one of the Sandia guys this exact question, since I had read that Shale Oil is used, in I believe one of the former Soviet Republics, as a boiler fuel. He said that it was, in some cases, possible, but that like coal, there are different grades of Shale Oil quality, and it has to be a fairly high quality kerogen deposit in order to make it worthwhile to use as a boiler fuel.

In any case, I suspect that this may be the future for Shale Oil--stripmining high quality deposits to use to generate electricity. However, the volume of waste ash will be tremendous, and I think that this is really dirty stuff that I suspect will make some grades of coal look clean.

Was your talk in Albuquerque? I would love to see an overview of what you said and have some feeling for the response. I live there and know several Sandians...technocornucopians and speculator-blamers all. I don't bring up peak oil lest I lose my friends...I figure they're smart, eventually it will sink in.

Well, I wouldn't call "all' of them technocornucopians. My talk (in Albuquerque) was videolinked to two other national labs, and it is reportedly being widely viewed on the national laboratory intranet. They are working on posting it on the Internet. We had a very good turnout, and I would say the primary response can be characterized as shock.

BTW, we were given a tour of solar research facilities, and it was very impressive, especially the concentrated solar research facility. I just wish that they had more funding for solar research. FYI--as you probably know, it's not exactly easy (for obvious reasons) to get in. My wife and I had to clear a background security check and we could not bring any electronic devices of any kind in to the facility.

Thanks...I'm glad you talk shocked people and is being widely viewed...that can only be a good thing! I often wonder what kind of progress could be made if all research at the national labs related to nuclear weapons/bunker busters/infrared crowd control guns/ spy satellites....all the military industrial complex bs was halted and they focussed solely on alternative energy research.

Yes I have seen the solar concentrator, you can get a good view from a plane coming or going from the Abq airport. Security clearances are a common topic of conversation amongst the Sandians I know - who's up for review, how long it takes etc. And I really don't know what any of them do other than the basics - computer programmer, mechanical engineer etc...I would lose my mind working there!

impressive, especially the concentrated solar research facility.

Are you willing or able to spill the beans when the masses will see an actual sterling cycle engine that is 'afforable' (cheaper than solar panels as an example)

R&D is not needed. Estonia get 75% of their electricity from burning shale:

For now I guess coal is cheaper (in the US) and the environmental effects of burning shale is of course enormous, but it is easily done on an industrial scale.

Thanks for the info ( WT also).

That led to checking the EIA's country profile for Estonia. They are a net exporter of electricity (most from oil shale) and that business is quite profitable and a substantial source of government revenues.


The stuff is marl, not shale, with kerogen, or former organic life, embedded in it. It will burn if heated with a hot enough torch, but it does not burn very well and much of it does not have enough kerogen to even burn at all.

Marl is a kind of very dirty limestone.

Marl or Marlstone is a calcium carbonate or lime-rich mud or mudstone which contains variable amounts of clays and aragonite.

And the volume of tailings, or ash if you burned it, is greater than the original volume. This is because the tailings are not nearly as compact as the original marl.

Ron Patterson

My Sandia source thought that the stuff in FSR's (apparently Estonia) was higher quality than most US Kerogen sources.

The Estonian shale has an average heating value of 9.0 GJ/ton. Is there any numbers for the US?

Sounds like a pre-mixed Portland Cement source...

"Oil" shale?

Geochemists can speed that process by heating the rock to several hundred degrees Fahrenheit until the kerogen turns into flowing crude oil.

Sounds pretty simple. And they also point out that oil shale burns with a flame.

Is the energy density of oil shale really high enough to justify mining, heating, extracting, refining -- not even counting the cleanup costs, which we can safely assume any corporation will outsource to the public purse?

Surely the basic calculations have been done many times -- can it be that the process can be profitable if environmental degradation is ignored, and the energy companies are just waiting for the right combination of political will and public desperation to go ahead?

Or is it just another ponzi-type scheme to bilk investors out of money? Maybe the best use for that stuff would be in oil-shale lamps for illumination?

Geochemists can speed that process by heating the rock to several hundred degrees Fahrenheit until the kerogen turns into flowing crude oil.

Sounds pretty simple.

No, it is not that simple at all. The kerogen must be heated for at least two years. The original plan called for it to be heated for three years. A "freeze-wall" must also be constructed by freezing the parameter around the area to be heated. This is to protect the groundwater from being contaminated as in the Wall Street Journal link posted by Leanan above.

Shell shelved its plan to do this until they could do more research.Shell shelves oil-shale application to refine its research

"We are being more cautious and more prudent," Davis said. "Because of the nature of research you have challenges. With that in mind, it is taking a little longer to build a freeze wall than we planned."

The delaying of the freeze-wall test means a plan to hire 600 new workers and build temporary housing for them will be on hold.

As I understand it that research is still going on and the project has not been restarted as of yet.

Ron Patterson

the current research is focused on how to create a freeze floor and freeze ceiling to complete the freeze house. someone in the earlier research program discovered the need for this by accident.

Makes the tar sands sound by comparison like "easy oil".

Note that the Shale Oil play is widely described as having hundreds of billions of barrels, up to a trillion barrels, of "proven" reserves, which is a very interesting use of the term proven.

Just think how much "proven" geothermal energy there is at the earth's core. Who's up for some drilling?

You obviously don't know anything. You only have to go down to the earth's mantle to get hot. Piece of cake.

More seriously, the EROI of drilling for heat energy would seem to be slightly unfavorable.

I guess the Russians didn't find any abiotic oil down there, either.

Perhaps if we all came together in one place, ate beans, and lit our farts in unison, it would solve a lot of the world's energy problems, too.

Dammit Dennis,

You weren't supposed to mention it in public until our patent came through!

We gotta hurry. At work in Argentina is the competition. Uh, I think.

OMG! However, they are missing the crucial "ignition" concept that assures us of prior intellectual property. But I agree, it is only a matter of time before they hit upon it...

Hi guys, love you all. I believe 100% in peak oil, but I've sold out of all my oil contracts now and will short any rally to $136 or back up to $147. I think the commodities cycle has peaked for a few years (Similar to mid '70s).

I guess no one will care about my opinion, that's cool, but just felt posting this was the right thing to do, as I way of saying thanks for all the good info.

Long Yen. Short Equities. Short Commodities.
Peace, Love, Survival.

But you could be wrong of course :-)

Yes I could be wrong.

From a fundamental analysis viewpoint I believe oil at over US$100 per barrel is bad for the world economy, consumers have less discretionary income after paying for gas and businesses have higher expenses, which will result in lower profits. This puts downwards pressure on global share prices which reflect discounted future cash flow. Additionally the Ponzi scheme that is fractional reserve banking began unravelling in 2000 with the dotcom bust, artificially low interest rates by central banks (including Yen Carry Trade) helped to prevent a collapse from 2003-2007 but now interest rates can't really get much lower (at least in US/Japan and even Europe).

So it's time for a global stock market crash, and we've been in one since about mid last year ('07), a year is enough time for reduced economic activity to begin putting pressure on energy prices. So it's time for oil to go down due to demand destruction.

But that's all becoming common knowledge, so let's talk about technical analysis.

The chart you've shown is what really concerns me. Can you see the straight line support that was broken when oil feel below $136? (Look at the low points in the chart before the recent selloff started to see it, it extends back to Jan if you extend the chart). Additionally looking at a month view of oil extending back several years shows oil is as overbought as it's ever been (using RSI), so that's another reason for it to crash.

Now broken support becomes resistance so that's why I'm planning to sell at $136.

Now maybe I'm wrong and supply destruction from peak oil will be greater than demand destruction from the ongoing economic collapse, but AFAIC those are the two major forces at work. Either way I'd like to be short equities, and long yen. I admit shorting commodities is riskier.

Also the SPR appears to no longer being filled. Congress has halted deliveries. Reserves appear approximately constant at 706 million barrels.

Some say that a potato would be as good an energy resource as oil shale. And potatoes probably use less water.

The crux of the shale/kerogen project is to create vertiucal curtains of frozen water (presumably using electricity) and within the curtains, a massive oven to cook the stuff into oil (again, presumably using electricity). Does this sound like it might use just a wee bit of energy to make happen? Good thing we have all this surplus energy to apply.

That is absolutely absurd and will never be economic. It might just possibly make sense to fracture the deposit, supply a controlled amount of combustion air, burn it in situ, and use the heat to drive an electric generator located immediately aboveground. I could just see something along those lines maybe working out.

Assuming that the "ice wall" works during extraction, what happens years later when the electricity is turned off?

Does the "ice wall" simply delay polluting the ground water for a few years? Maybe I'm missing something, but it sounds like a Rube Goldberg solution.

No, Rube's inventions might actually work, and as they are mostly cobbled together from various odds and ends one might have around the attic or garage, they were a darn sight cheaper too.

feed potatoes to slaves running in squirrel cages to generate electricity.

The future is bright.

My calculation says that 93% of the output will be required to light and heat the cages...

The EROEI issue has always been the crux for oil shale potential. At the Denver ASPO-USA Conf., a Steve Mut of Shell gave a presentation about where Shell was in their research and discussed the many issues regarding Oil Shale. His Powerpoint presentation slides are linked here. His last slide, remember this was 2005, says "End of Decade Commerciality Target." At some point in the desperate future, Oil Shale might provide energy. But I suspect the best use for the massive Oil Shale formation is as a platform for wind generators.

A key question is the net energy output, and as the article noted, there is presently no commercial oil shale operation in the US.

Hmm...not invented here, I guess! Must be bad stuff!

Of course, the US has no oil sands-syncrude operations either--thought it mines lots of oil sands for ROAD bitumen. Isn't that strange?!

Currently, oil is not produced from tar sands on a significant commercial level in the United States, although the U.S. imports twenty percent of its oil and refined products from Canada, and over forty percent of Canadian oil production is from tar sands.

The reason why is fairly obvious(to me). The US strategy has always been to import..import..import. Energy independence is that tired old meme from that weakie, Jimmy Carter. Besides, the US has a REALLY BIG military to 'guard' all those Gigabarrels, owned by 'people who hate us for our freedom'.

As to energy balance, that's nonsense. The Alberta Taciuk Process(ATP) of external retorting, around for a decade, uses volatiles (approximately 1/3 of the boe of oil shale to heat the kerogen continuously)

A report here based on a number of ATP installations says that the net energy(ei/eo) of ATP is .5 or an EROEI((eo/ei)+1) of 3 on primary energy, as good as the tar sands we depend upon now.


The largest ATP retorts can process 900 tons of oil shale per hour
producing 16000 barrels per day so a 1 mbpd operation would require about 100 such behemoths. The operation who generate a lot of CO2 based on the type of oil shale found in Colorado.

In other words, oil shale the ATP way would be UGLY and DIRTY just like Alberta (and I hate that too). I'd be willing to go Shell's way but they are playing way too coy with a very straightforward technology(the toaster).

But folks...we are talking about Peak Oil!!!
We need a plan B!!
Anyone who thinks we can dump oil for electricity doesn't know much about oil!

I believe that the threat of the US being able to turn on a couple million barrels per day AT WILL would have a calming effects on international oil markets(far more than a dipshit SPR).
A couple million barrels of shale oil per day isn't going to destroy the planet. We need to do all the good things Al Gore and friends want us to do(close those 24/7 coal plants or sequester the CO2 per Hansen), but business is business--we need that shale oil available (just in case).

And there is always the chance that we will have a breakthrough allowing us to maintain an infinite rate of increase in our consumption of a finite fossil fuel resource base. In the mean time, we should support the UN led effort to repeal the laws of nature.


"And there is always the chance that we will have a breakthrough allowing us to maintain an infinite rate of increase in our consumption of a finite fossil fuel resource base."

and those clever saudi's have come up with just that breakthrough (at least according to this latest piece of saudi gibberish)

"Saudi Arabia insists it would be able to pump at 12.5 million barrels per day for as long as the market needs"

"A variety of new technologies, including multiple lateral wells and microscopic robots swimming through rock pores deep underground, will allow Saudi Arabia to start recovering much more of the oil from its fields..."

The Saudis are using miniature submarines to loosen the oil - like the technology shown in the film Fantastic Voyage.

Actually, building the "microscopic robots" isn't the main difficulty. The hardest part is finding billions of tiny Raquel Welches to pilot them.

Really, I'm just trying to be serious here... :)

The quickest way to a couple of million barrels of extra oil is to drive slower and drive less. Turn the heat down to 65 and the AC up to 75 adds a few more. That's just for starters. Imagine what carpooling and reasonable, reliable bus service could do. http://news.yahoo.com/s/csm/20080715/cm_csm/ydillin

All this oil shale is simply stupid. Are we a nation of morons?

You left out the part about parking the motorhomes and the party barges. We may not have as much fun, but we will have a lot more fuel.

I'll write the letters to the dealers who sell those things, but could I use your return address?

The energy density of a potato analogy comes from Udall/Andrews's timeless article Oil shale may be fool's gold. Less often remarked is their observation that you'll find higher energy content in other foodstuffs, like granola and Cap'n Crunch.

Ex situ approaches would quickly drain/pollute the local watershed - impacting inflow into the Colorado as well. Shell's in situ toasters are estimated to use 1/10 the water, but at a 1.2 GW electrical demand for every 100 kbpd. Oh, and the elements need to be made of highly conductive metal - silver/copper/gold. And what do you do with the field when you're done?

Oil shale is a colossal non-starter. It goes way beyond the usual tap vs tank analogies.

Oil Shale Development in the United States : Prospects and Policy

Potential Ground Water and Surface Water Impacts from Oil Shale

Check out the analysis for water impact in Table 2 of the second document.

Sure-- use my return address. I'm used to abuse from the stupid.

Today the local radio mouth was yammering on about how absolutely un-American it was to even think that we would have to change our way of life or our expectations to go where we want when we want and eat what we want-- etc. Al Gore and Barack Obama were held up as proof of the left wing conspiracy that wants to destroy our country.

One thing I do like from our local radio guy is that he calls Obama "Changey Changerton".

Maybe we should at least turn the air conditioning up to a temperature that's actually comfortable given that in the summer it's potentially possible to dress in summer-type clothing. Bundling up in sweaters on a hot summer day to survive the air conditioning is not only crazy, it's unpleasant. I'm a big believer in air conditioning, I really am, but I prefer it to be used for comfort, not for a different kind of discomfort.

So what your saying is that you hate America? If we set the A/C above 68, we've let the terrorists win.

At least you have electricity to run your A/C. Millions of Americans are having/have had their home's energy shutoff, through the fault of none of the usual terrorists.

The terrorists must have won in Japan where the salarymen work in 82-degree offices!

Yes, yes they have.

I know, I work in one of those saunas!

Ah, yes.

Jeffrey - the MMS has an excellent page on Gulf of Mexico : Maps and Spatial Data. Select one of the "General Purpose Maps." Leases to fields to pipelines to rigs.

If you are going to use a low grade fuel, there is a tremendous amount of Peat around the world.

"... the world's largest peat bog, located in Western Siberia and the size of France and Germany combined , is thawing for the first time in 11,000 years. As the permafrost melts, it could release billions of tonnes of methane gas into the atmosphere, greatly exacerbating global warming."

Peat doesn't get the press coverage that is deserves - either as a potential energy source or its role in global warming.

Today the local radio mouth was yammering on about how absolutely
un-American it was to even think that we would have to change our way of life or our expectations to go where we want when we want and eat what we want-- etc. Al Gore and Barack Obama were held up as proof of the left wing conspiracy that wants to destroy our country.

That would be Lars Larson, I'm guessing. Sounds like his brand of douchebaggery.

Pop Goes the Oil Bubble!

"Oil prices fell $5 overnight, dropping 11% in the past three sessions. As William Smith, president, CEO & senior portfolio manager at SAM Advisors sees no justification for the high oil prices, he tells CNBC's Amanda Drury & Sri Jegarajah oil could fall as low as $40-a-barrel."


Why I even bother listen to CNBC I have no idea. Matt Simmons on one day saying $300 oil, then this guy on the next saying $40 oil. So much for hybrids and electric cars, we don't need them with $40 oil.

These must be the people who advised GM. Lots of SUVs available at fire sale prices for those who want to take this bet.

ROFL. $40/barrel? Sure, if everybody started walking or riding bicycles everywhere, or suddenly 2 Ghawar oil fields came on simultaneously... Let them predict $40/barrel oil, and let the suckers get played! I have no pity for those who mistakenly believe things will return to BAU in just a year or two...

We saw another example of CPSR--Cornucopian Primal Scream Response--on CNBC this morning. Ron Baron, a wealthy Wall Street type, used the old "Stone Age" analogy and asserted that we have used only one trillion barrels out of the 13 trillion barrel resource that the world has. He also asserted that it was crazy that the value of underground reserves exceeds the value of world stock markets and said that oil prices had to fall and that the current economy just doesn't work with oil prices at current levels.

I do agree with his statement about the current economy, and I addressed the 13 trillion barrel number up the thread. This is why I think that the net oil export story is the biggest underreported story in the world. The very lifeblood of the world industrial economy, exported oil, is draining away in front of our very eyes, while the Cornucopian Cheerleaders are effectively encouraging us to increase our consumption of energy.

As he floated on his boat with gleaming white teeth spouting that drivel; it was surreal.

Too much weirdness happened this week.

``The staff is recommending exceptions to the short-sale order for market makers of the 19 stocks and their derivatives from arranging to borrow in advance for short sales in their market-making and related hedging activities, to avoid constraining the market makers' provision of liquidity,'' SEC spokesman John Nester said in an e-mail from Washington. The full commission may vote as soon as today."

consider the above a done deal.

This is what happens with manipulations on the fly.

When the Sag Harbor crowd gets hurt, the loopholes
come in.

Like the Berlin Wall Collapse beginning on the Polish/Czech

``Without a market-maker exemption, I could see this having a profoundly negative impact on the liquidity that would be provided in stock and derivatives,'' said Steve Sosnick, an equity risk manager in Greenwich, Connecticut, for Timber Hill LLC, one of the largest options market makers in the U.S. ``The SEC has to be very careful not to craft a rule that has undesirable impacts on liquidity in various sectors of the marketplace.''


"Options market makers engage in short selling to reduce the risk they assume when pairing off customer orders. Forcing them to pre-borrow the shorted shares could make it harder for them to trade, making it more expensive for investors, said Peter Bottini, a former CBOE market maker."

From a great post by Mish, who notes China is the latest country to have tried this market-manipulating tactic and their shitty index fell another 50%, here are the restricted nineteen, I promise you with problems unforeseen:

BNP Paribas Securities Corp
Bank of America Corp
Barclays PLC (ADR) (BCS)
Citigroup Inc
Credit Suisse Group AG (ADR) (CS)
Daiwa Securities Group Inc
Deutsche Bank Group AG
Allianz SE
Goldman Sachs Group, Inc. (GS)
Royal Bank ADS
HSBC Holdings Plc ADS
JPMorgan Chase & Co
Lehman Brothers Holdings Inc
Merrill Lynch & Co Inc
Mizuho Financial Group Inc
Morgan Stanley
Freddie Mac
Fannie Mae


And as WT has so admirably expressed, w/o
oil fields you have no financial institutions,

feel free to match your favorite Top 19
fields with the above 19 Financials.

How about Merrill with Prudhoe for starters.

What's Wrong With Pakistan? 'Pakistani Investors Stone Stock Exchange' Pakastani imposed a 1% decline rate on trading in market equities and the result is much the same as in China...Sinking like a rock.

Maybe Chris Cox could go to Pakistan and set the ship right?

'Police surrounded the exchange after hundreds of investors stoned the building and shouted anti-government slogans. Securities and Exchange Commission of Pakistan, which imposed and then removed a 1 percent daily limit on price declines this week, had attempted to halt a slide that wiped out $30 billion of market value in three months, threatening to undo a 14-fold rally since 2001.'

Lots of great photos at site link...and then there is this bit that could win understatement of the year award...

'"There has been some level of mismanagement by the authorities,'' said Habib-ur-Rehman, who manages the equivalent of 6.5 billion rupees in Pakistani stocks and bonds at Atlas Asset Management Ltd. in Karachi. "This may be due to their misperception that they can prevent the market from falling. Investors have to learn to bear losses as they do gains.'

'the investors' seem a might restless and none too happy that their money is being lost because of mismanagement. I hope Bernanke and Paulson take a gander at the photos and realize that people get riled when their money disappears.'


They've been one of the first to have major energy disruptions.

And food shortages. Instead of which banks are going under,
we should start looking at which countries.

And now they've broken with the US.

How do you drop a nuclear state down to Third World Status?

We're about to find out.

Mac...Illagri at Automatic Earth made some comments along the same lines...

'And I fully agree with Meredith Whitney that none of this will be resolved, neither the crisis itself nor the sentiments about it, until ALL hidden risk and toxic paper is dragged out into the daylight. And that will be the end of all banks but a handful, plus the vast majority of mutual funds, hedge funds, and pension funds. Which means it's very doubtful that even the Federal Reserve, the Bank of England and the ECB (and the EU itself, for that matter) will exist in their present form 5 years from now.

Rumor has it that the next big bomb to drop will not be a bank, but an entire country. Sit tight, but sit back. Relax, and have a beer. You'll need all your awareness and energy soon enough.'


The difference is, China's government has been TRYING to slow down their stock market because of the inflationary effect of money pouring in. Inflation is a historical concern in Asia. As for Pakistan, it also should have popped its stock market bubble long ago. Better to do it now and lose 50% than wait too long and lose 90%.

The "market makers exemption" is directly tied to the illegal naked short selling problem. Lots of companies that exposed themselves to the options market are now penny stocks because of this illegal--according to the 1934 SEC Statute--"exemption." Those interested in this and other SEC lawbreaking are invited to visit the NCANS section of Bob O'Brien's Sanitycheck website. Readers of Automatic Earth will want to read Bob's insights, too.

Who is not allowed to short these stocks?
Here in Europe it's still possible. There are hunderts of put options or short mini futures available reg. these stocks.

Even worse we can spread bet on the change.

If I were on the Obama campaign, I would send CNBC a thank you note and ask them to move their studio permanently to Sag Harbor, on a mega-yacht. With people losing their homes, and having to choose between food & fuel, it almost seems like "The Onion" guys were producing Squawk Box on CNBC this morning. My favorite part was the description of upper end in the Hamptons beginning at $15 million. All that was missing was a "Let them eat cake" comment.

"Let them eat cake" is so...yesterday!

The New American Dream version is: "Let them eat Twinkies and Moon Pies"...

E. Swanson

"Cheese Doodles"

You have been drinking too much of that stuff you make.

Once net exports in Mexico go to zero, I don't suppose Gulf hurricanes will matter much!

Tell that to people from New Orleans

New Orleans: the fastest growing city in the US.

I would guess the MS GC is growing just as fast.


Wrong. As in, predictions make fools.

What I'm wondering is why Big Oil isn't concerned.


Chances for development: High> 50%


Why I even bother listen to CNBC I have no idea.

Don't get too upset at CNBC, after all they do present both sides of the story. They have had Boone Pickens on many times saying it is not a bubble. Matt Simmons has also been on CNBC many times, so have many others been there trying to say it is not a speculative bubble.

And these cornucopians just make life more interesting. We need to examine their arguments to see if they have merit. I have argued for years that simply "holding" a long position in oil does not "hold" up the price of oil. Any oil contract affects the market "only" at the time of th transaction. And all contracts must be closed so at the end of the day, or more correctly, at the end of the contract, it is a zero sum game. But I am more amused than aggravated when I continually hear people blame it on speculators.

This guy talked about demand destruction and saying this would bring the price down. That may be the case but the twit apparently did not have enough sense to realize that the current high price is what is causing that demand destruction. If the high price causes a recession, or even a depression, then the price will like fall well below the $100 mark. However that will not change the fact that the high price was originally caused by increasing demand and falling supply. And that supply will continue to fall regardless. That is the point these twits simply cannot understand.

Ron Patterson

And, of course, the falling price will start the whole cycle over again. Anyway, they need to quit treating oil like widgets, the stuff that one analyzes in Econ 101 and even Econ 401 for that matter. They need to get on board with the idea that falling prices are not a good thing if there is nothing else helping people to prepare for an oil constrained future and global warming for that matter.

We could, of course, provide incentives for preparing for the future and cut the flow of dollars overseas at the same time. That would require carbon taxes or at least higher taxes on fuel or imported oil. But noooo. Obama, for example will address this problem by providing bigger and better stimulus packages for people to deal with the high prices of gasoline. McCain will drill, drill, drill. Either way we're screwed. Obama, to his credit, calls for scaling up alternative energy. He will, however, run into the Republican filibuster machine unless we get a filibuster proof Democratic congress.

Along the same lines, anyone catch McCain on NBC last night? They had a clip from his town hall meeting in Kansas City. He got a standing ovation for telling the audience we are going to open up the OCS for drilling and lower oil prices.

He might actually be correct about lowering oil price--in 2018, when those fields might come online.

Well, what he wants people to hear is "lower than they are now", but what he really means is "lower than they would otherwise be".

Nymex crude has been over $120 for 2 1/2 months and equal or greater than current $130 for 1 1/2 mos. - - no bubble popping yet. . .

“Right now, Wall Street traders can raise oil and gas prices simply by logging onto their computers and executing a few trades,” Mr. Reid said at a news conference Thursday.

It's that simple. Everybody pitch in today and help out the longs.

The sad truth of the situation is that if prices fall for any extended period, all that hard won demand reduction/destruction will be lost, along with valuable time to correct our infrastructure before things get really bad on the supply side. All the talking heads declaring the bubble is over and we can all relax are helping doom us to a future for which we are not prepared. Every media outlet I see, from the left to the right are talking about how to reduce the price, rather than how to adjust to higher prices.

If prices even settle down for a period, lets say to $125 (because $140 was probably a price overshoot), then the panic will be over. In the past we have seen moderate attitude changes/demand destruction during periods of rapidly rising prices, only to have BAU continue once the price pulls back a bit. This latest spike, was several times more severe than the previous ones, but it is an open question that if a period of partial relief arrives, how many will slip back towards BAU thinking.

I do think, that the market for early adaptors, such as people who bought hybrid cars, even as beancounter types were saying they were a waste of money, has been increased. This at least ought to improve the green investing climate, and development of alternatives viable. My guess is (assuming we get a couple of years of relief) that maybe 10% of the public will be looking to purchase products that shield them from future oil shocks. That is not enough to change the economy, but at least it my put alternatives within a stones throw of being able to scale up once the crisis come back.

"(assuming we get a couple of years of relief)"

We might, maybe get one month of relief.

The time it takes us to figure out where that "extra" oil came from
in the Gulf Coast PADD.

America will get no breathing space.

"once the crisis come back."

The crisis won't leave.

Ex. IndyMac ain't over. And somehow the US is going to have to
find $1.4 trillion to cover Fannie/Freddie.

How about we sell Taiwan to China. Something like that.

I agree that the economic fallout has only begun. With so many dollars being diverted into energy purchases, the velocity of money's slowdown throughout the economy is just starting to be felt. The damage has already, and continues, to be done. An indicator is the vast increase in the numbers of people no longer having any discretionary spending money as reported by increasing un-and underemployment levels and the millions of people having their home energy shutoff for lack of payment. NPR did an anecdotal story on this yesterday regarding the Chicago-Detroit-Cleveland region. On another note, it's ironic/prescient that the Oregon Festival of American Music's focus is on the Depression (please view the photo at the link).

The Oregon economy is a mirror of the CNBC thread above as we continue to have a boom in luxury vacation homes and associated resort complexes, while many counties are preparing to go bankrupt and may cease to exist.

"Only begun" might be about right. Apparently cutoffs are running at a 10% annual rate in some areas (though almost all are very brief). But I don't find any evidence that ever more breathtakingly expensive cable and satellite TV subscriptions are dropping by 10% annually. My grandparents, being of the Depression generation, would have had strong words about that. But, hey, we're on the far side of the bridge to the 21st century now. New priorities for a new era: nothing can go wrong ever again, so no harm in putting moronic entertainment first.

This is a self defeating proposition. The more price rises, the more demand is destroyed. Then supply can meet demand a gain and price drops. Then demand raises to exceed supply again and price rises. The cycle continues on and on.

It will take a while before people accept that there is a lasting uptrend beneath the short term fluctuations.

Look for a short term oil price drop (it usually happens when RW/conservative BAU types are in the ascendancy, as they are now under the Bush regime and it's congressional enablers), where the drop is smaller or nonexistent when a government that makes noises about taxation of fossil fuels or significant ramping up of alternatives. There was no significant drop in 1980 or 2000, while in 2002, 2004 and 2006 the price of oil/gasoline dropped significantly. Look for the price to fall to between $85 and $110 a barrel just before the election, with gasoline prices dropping to between $3.25 and $3.50. After the election, look for the upwards trend to resume...

More fuel shortages in India.



Unlike Chennai (some readers may have seen my post from Chennai about the fuel situation there earlier this month), Hyderabad has a particularly bad problem. There have been numerous power outages this summer (often several hours at a time) and many apartment buildings use diesel generators to provide backup power. Summer daytime temperatures can rise to be well over 110F.

Much electricity has been diverted to agricultural use since monsoon rains have not been good - consequently irrigation pumps have been working especially hard.

These problems are going to cause significant troubles for both heavy industry and IT outsourcers.

I notice that congress is still pushing the solution using hydrogen fuel cell vehicles. Why? When electric vehicle technology is here and now and can have immediate results. Is it because the oil companies see hydrogen as a way to stay in the fuel selling business? If 20% of the gas gusslers were replaced with EVs in would only increase the need for more electric generation by 1% and less if battery charging was done intellegently at night. What are we waiting for?

I notice that congress is still pushing the solution using hydrogen fuel cell vehicles. Why?

When Because electric vehicle technology is here and now and can have immediate results.

Yes, we will finally be able to utilize those vast reserves of hydrogen we have throughout the US, and achieve energy independence!

And once US supplies of hydrogen are exhausted, there is still the rest of the universe:


"Hydrogen is the most abundant of the chemical elements, constituting roughly 75% of the universe's elemental mass."

There is just the annoying little detail that hydrogen is usually chemically combined with something else and that it requires energy to separate it.

"Some scientists claim that hydrogen, because it is so plentiful, is the basic building block of the universe. I dispute that. I say there is more stupidity than hydrogen, and that THAT is the basic building block of the universe." - Frank Zappa

How much is a 4 door electric sedan NOW ?

How many have been sold ?

What is there range ?

Link please

Picture Imperfect: Media Gas 'Tax' Hikes Cost 32 Cents in June

The broadcast networks have created what amounts to their very own tax on gasoline. The “tax,” on average about 32 cents, gets applied when news shows use images to go with stories about the “whopping” price of gasoline. That amount is equal to Wyoming’s entire state gas tax burden.

The Business & Media Institute looked at a snapshot of coverage during the week of June 23, following a trend it has documented in years past. The pictures showed pump prices higher than the national average 83 percent of the time.

I'm not familiar with this particular news source, but it seems to be of the things-aren't-really-as-bad-as-they-appear variety. Since people aren't paying as much as what is being shown, why is the media doing it? To get more viewers?

Regardless the lesson people vote with their wallet has finally hit home for me. No matter how great an idea may be we as a people don't look for better alternatives until the current system is broken.

why is the media doing it? To get more viewers?

Yes, it's an offshoot of the "If it bleeds, it leads" rationale.

A house on fire beats cute kittens every time. If cute kittens are RESCUED during a house fire, bonus, but not mentioned until the end.

Freelance Producer working for the BBC, kindly asks for your help.

Hi guys I wondered if you could help?

We’re currently producing a film dealing with Food security in Britain at the end of the cheap oil era (by the way there doesn’t appear to be any security at all, so no surprises there then).

We’re lining up a number of interviews with commentators and experts in various fields but to add more credence to their contributions for the as yet uninformed public we’re scouring the net for famous quotes that hint at the fact that the bigger players know about or have a very good inkling about peak oil.
We’re looking for quotes from heads of western states, official governmental bodies, CEOs of oil and gas companies, car manufactures, electricity giants etc,
Such as “ We have a problem America is Addicted to Oil” dubya , or “a path from our economies that are today over-dependent on oil towards the post-oil energy economies of the future.” Mr Brown

I’m Sure I read some humdingers from the likes of Cheney, and also one by the head of Royal Dutch Shell, etc.. but I’m having trouble locating them, also if there are others I’d be very interested in hearing them, well the more the merrier it all adds weight to the argument.

We’ve been reading TOD on a daily basis for over a year but only signed up recently. Can I take the time to congratulate you on a fantastic site and brilliant work.

Any help would be hugely appreciated

Best Hopes for good quotes (sorry couldn’t resist that one)


By the way the film will be on UK television in spring next year on BBC2.

One of Cheney's most repeated quotes on this site is 'The American way of life is not negotiable'.

I would like to help out with GWB quotes but I cannot recall him saying anything memorable...Oh, how about 'Mission Accomplished'.

Bush had a good one about $4 gasoline. He hadn't heard anyone predict it.

Bush then took his leave of the summit by saying "Goodbye from the world's biggest polluter" and adding a "we're #1"-style fist-pump on the end.

Glad to see the media catching up on this one, but another nine months before broadcast? The world will have moved on by then.

Nine days would be a more realistic timescale.

I'm so sorry RalphW, but my partner (a fellow producer) and myself first became aware of peak oil back in 2005 while working on a documentary in Hawaii.
To cut a long story short we've been fighting/ screaming at our BBC
executives ever since to make a film about this issue, and to help bring it
to a mainstream British audience.
Finally this year, we've been given the go ahead,
To make a heavy weight film that will do justice to this issue and then to edit it, finish it and get broadcast clearance .. alas it does take 6 months.
But we’re working as fast as we can, it's the buggers above us that slow down the process.
Where will the world be moving to in 9 months time? - well my guess further down the same line, it ain’t going to get better that’s for sure. Sadly very little danger of PO and food security becoming yesterdays news.

Anyway found the Shell quote:

After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand"
-Jeroen van der Veer.

thats very optimistic-

But this is the kind of stuff we're after , and better if possible.

If you help at all we'd be so grateful


The idea of Peak Oil has been out there for decades. The WorldWatch Institute under Lester Brown has published many papers over the decades. Brown has since published Plan B: Rescuing a Planet under Stress & a Civilization in Trouble (2003) and he has other newer works as well.. The book "Beyond Oil: The threat to food and fuel in the coming decades" by John Gever (1986) was a good source on the subject in it's day, as I recall. Of course, a recent video was "Crude Awakening", which had some long interviews included on the DVD. There's quite a bit of information contained on the web sites referenced here under "Blogroll" on the RHS of this screen. Have fun!

E. Swanson

Quotes; A couple from before 2001... Just to see that the players, KNEW the game back then.

UNOCAL Corporation To House Committee on International Relations
FEBRUARY 12, 1998

From the outset, we have made it clear that construction of our proposed pipeline (sic across Afghanistan) cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.


Of course this one by (the) Dick Cheney 1999

A speech at the London Institute of Petroleum Autumn lunch in 1999 when he was Chairman of Halliburton.

...That means by 2010 we will need on the order of an additional fifty million barrels a day.

.... For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our seventy one million plus barrel a day of oil depletion, but also to meet new demand. By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day.

I believe Cheney also said at the same lunch

The middle east is still where the prize lies...

The prize being oil of course.


Jeroen has made a few good quotes. Plus there is Meacher from a UK end, the BNP (if you want to see who will exploit it), and Warren Buffet (exploiting it in a different way).

If you are focusing on food security, could I suggest you talk to some of the homeland security and resilience lot, civil contingencies act and all - Bruce Mann has his head screwed on in a civil servantish way.

If you have not seen it, this might be useful background material.

Kenneth Mellanby wrote a book in the seventies called Can Britain Feed Itself? which aimed to work out how this might be done from home produced food. There is a kind of updated attempt along the same lines by Simon Fairlie linked from here:


Thank you so much emdeef thats very kind,
You'll be happy to hear we've already read it , in fact we're trying to get Simon Fairlie on camera to talk about updating that work,

but thank you so much for suggesting it:)

redthefox...I found this bit yesterday. I don't know if it will be of any use to you...The article goes on to mention that GB receives 17% less sunlight than the European average...etc.

'Miserable? Well no wonder, as UK trails on quality of life

16 July 2008
By emily pykett
HIGH retirement age, too few public holidays, miserable weather and the soaring cost of living have combined to leave the UK trailing its European counterparts in a survey measuring quality of life.

The poll of ten countries placed the UK ninth, behind Spain, France and Poland and ahead only of Ireland.

Despite earning the highest net incomes with the average household paid £35,730 – roughly £10,000 a year more than their continental compatrADVERTISEMENTiots – the survey concluded the rising cost of living in the UK is having a serious impact on disposable income and quality of life.

The study, which also includes the Netherlands, Denmark, Sweden, Italy and Germany, reveals Britain is now the most expensive place to buy diesel at £1.32 per litre, 20p more on average than on the continent.

Researchers said UK food prices have increased by 12.6 per cent over the past year and claimed we are the third-highest spenders on gas and electricity.'...snip...


very useful thank you River, you're a star!

People in the House of Commons have known about peak oil for years and years.


People in the House of Commons and their civil servants are adamant that they won't consider a national contingency plan with the words 'peak' and 'oil' mentioned anywhere in case the public hears about it and panics.

My personal favourite was that Blair's line, "Look, nobody wants war". I also like these quote collections:


Hands Off Iraqi Oil


"By 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from?... While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies."

—Dick Cheney, CEO of Halliburton, 1999

"By any estimation, Middle East oil producers will remain central to world oil security. The Gulf will be a primary focus of US international energy policy."

- Dick Cheney, US Vice President, 2001

Responding to a question about whether the Iraq invasion was about Iraqi oil:
"It has nothing to do with oil, literally nothing to do with oil."

- Dick Cheney, US Vice President, 2002

Brilliant!!! :D

President Jimmy Carter in the 1970s, speaking at the unveiling of a solar hot water system just installed atop the White House:

"A generation from now, this solar heater can either be a curiosity, a museum piece, an example of a road not taken, or it can be a small part of one of the greatest and most exciting adventures ever undertaken by the American people - harnessing the power of the sun to enrich our lives as we move away from our crippling dependence on foreign oil."

We know what happened; components of the system can now be viewed at the Smithsonian and the Carter Presidential Library.

See: http://www.youtube.com/watch?v=7gQSAlO277o

- A preview of the documentary, "A Road Not Taken" by Swiss directors Roman Keller and Christina Hemauer.

Thank you wisco, it's all really useful, :)

And here's Tony Blair going on:

No, let me just deal with the oil thing because this is one of the... we may be right or we may be wrong, I mean people have their different views about why we're doing this thing.

But the oil conspiracy theory is honestly one of the most absurd when you analyse it.

The fact is that, if the oil that Iraq has were our concern I mean we could probably cut a deal with Saddam tomorrow in relation to the oil.


Good luck with the documentary, Rebecca!

Responding to a question about whether the Iraq invasion was about Iraqi oil:
"It has nothing to do with oil, literally nothing to do with oil."

- Dick Cheney, US Vice President, 2002

The Iraq invasion started in march 19, 2003, so how could Cheney say this?

maybe he was talking about the iraq invasion in 1991. i dunno

But the First Gulf War was just as definitely about oil.

Hess of Hess Oil has some solid quotes that are searchable on the "oil crisis" coming the next 10 years.
See www.reuters.com/article/companyNews/idUSN1224859920080212

and you can find more online.
If you have other things I can help you with, you can contact me through my site:



Thank you Den that's fab, and thank you very much for the very kind offer of help :)

Cheney knows about peak oil. Or at least, he did before he ran for VP.

So does Bill Clinton.

Jim Buckee, until recently CEO of Talisman Energy, is one of the most peak-aware oil industry guys.

Here's an article I ran across the other day while researching Cheney quotes.

Cheney Tax Plan From '86 Would Have Raised Gas Prices

In October 1986, when Dick Cheney was the lone congressman from energy-rich Wyoming, he introduced legislation to create a new import tax that would have caused the price of oil, and ultimately the price of gasoline paid by drivers, to soar by billions of dollars per year.

''Let us rid ourselves of the fiction that low oil prices are somehow good for the United States,'' Mr. Cheney, who is now vice president, said shortly after introducing the legislation.

Oil prices had plunged to $15 from nearly $40 a barrel in the early 1980's, as Saudi Arabia flooded world markets, and Mr. Cheney argued the tax was needed to stabilize oil-state economies devastated as a result. But other lawmakers, including some Republicans, criticized the Cheney plan and similar proposals as ''snake oil'' that would throw 400,000 Americans out of work. They also said then, as President Bush does now, that higher taxes would stall the economy.

There is an an interview with Charlie Rose where Al Gore actually says "Peak Oil" out loud. But its in reference to the famous Cheney Speech about oil demand vs supply and the middle east being the prize. Gore is making a point to Rose that Cheney is a Peak Oil conspiracy nut and pushed for the invasion partially based on Cheney's belief in the imminent oil supply peak.

Another funny ( funny in a dark , very horrid sense) is Charlie's interview with Lee Raymond of Exxon Mobile fame just before Mr. Raymond's retirement. Mr Rose asks Mr Raymond if he would care to to take the opportunity to deliver an Eisenhower Military-industrial complex type speech. Mr. Raymond , in a rather befuddled way, declined the opportunity.

Personally, I think Charlie Rose is the person most guilty of not making an effort to inform the public. He has met with and spoken off the record with all kinds of government and energy industry officials. Hell, he and john doerr (the venture capitalist) must talk about peak oil all the time. But Charlie pretty much refuses to say the words out loud on TV.

Gore was in Berkeley (California) about 3 years ago. I didn't go but somebody taped his speech and we saw part of it at a peak oil meeting. He said, nearly as I remember, "Peak oil can be what we make of it." He definitely acknowledged it, and I rolled my eyes.

Good Luck, Rebecca! Glad you're doing this..

Here are the two I could find..

"In a rare moment of candor, Jeroen van der Veer, the chief executive of Royal Dutch Shell, acknowledged what many have long considered a forgone conclusion: the end of the oil era is almost upon us, and sooner than you might think. The Oil Drum retrieved an e-mail sent to all Shell employees in which the CEO admitted the obvious (emphasis ours):

"Regardless of which route we choose, the world's current predicament limits our maneuvering room. We are experiencing a step-change in the growth rate of energy demand due to population growth and economic development, and Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."

He went on to criticize the sluggish response by policymakers to the coming energy crisis:

"Taking the path of least resistance, policymakers pay little attention to curbing energy consumption - until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility."


Motive - Peak Oil: At some point between 2000 and 2007, world oil production reaches its peak; from that point on, every barrel of oil is going to be harder to find, more expensive to recover, and more valuable to those who recover and control it. Dick Cheney was well aware of the coming Peak Oil crisis at least as early as 1999, and 9/11 provided the pretext for the series of energy wars that Cheney stated, "will not end in our lifetime."


"Cheney knew about Peak Oil in 1999 as CEO of Halliburton, long before was Vice President. A speech he gave at the London Institute of Petroleum demonstrates this clearly." 12 (http://www.dtic.mil/jcs/core/overview.html Ibid,p47 hyperlink seemed incomplete)


... and here is that speech (full text at link)

"..Energy is truly fundamental to the world’s economy. The Gulf War was a reflection of that reality. The degree of government involvement also makes oil a unique commodity. This is true in both the overwhelming control of oil resources by national oil companies and governments as well as in the consuming nations where oil products are heavily taxed and regulated. .."

"..In the new century, will the oil age give way to another source of energy or to new technologies? Some predict natural gas will erode oil’s performance, others say that technology, fuel cells, telecommuting on the internet or some other breakthrough will lessen our dependence on hydrocarbons.

Well, the end of the oil era is not here yet, but changes are afoot and the industry must be ready to adapt to the new century and to the transformations that lie ahead. .."

Robert Fiske (not Fisk.. not by a long shot!)

Robert, those are heart stoppers and just what we're after, oh thank you my friend, thank you so much


You're most welcome. Good Hunting!

"I have now learned the truth, and the truth is that the UK still has 25 billion barrels of oil left"

Hayley Millar, BBC Scotland economics correspondent - hahahhahahah

"Oil and Gas are cheap and abundant fossil fuel"

A Deputy Director of BERR (whose identity I'll protect) Aberdeen about 2 months ago.

You already picked up Gordon Brown's "post-oil era" speech.

A great quote from an unknown TODster that stuck in my mind:

"Gordon Brown's plans for the third world is for Britain to join it"

I think GB somehow learned that the UK oil and gas situation is critically bad and following his trip to Jeddah, has learned that the magic Saudi oil tap is full on. So I suspect at the very top of the UK establishment hope and denial are now giving way to reality.

On the somewhat more serious note of food security, as I see the main short term problem for the UK is importing food whilst the balance of trade goes to shit and the pound continues it's fall. But there should hopefully still be plenty food around in the EU for decades - so long as the wheels don't come off industrial civilisation altogether - which looks increasingly likely. The types of real problem we might face ths winter or in a handful of years is grid failure and or distribution companies going bust. We may end up with cabinets of rotting food in Tesco or lost ability to deliver food by truck. Also the real possibility that the lower third of incomes may no longer be able to afford food + gas + electricity + fuel.

Remember that there is a 7:1 energy loss or thereabouts in converting grains to meat. So we can all survive quite comfortably by eating a more healthy vegetarian orientated diet. And as things stand, somewhere between 5 to 10% of our energy use is in agriculture. So things would have to get very bad before energy shortages led directly to starvation.

Did you catch the Centrica guy on C4 last night warning that nat gas prices may still rise another 40% this year.

The types of real problem we might face ths winter or in a handful of years is .... distribution companies going bust. We may end up with cabinets of rotting food in Tesco or lost ability to deliver food by truck

How does it work in the UK?

Do you have competing distribution companies?

The normal dynamic in recessions is for all companies in a sector under pressure to experience shrinking profit margins and losses until some go bankrupt or are purchased by bigger players. The survivors are then able to raise prices and do OK.

There was an article in the New York Times today that in passing showed this happening in agriculture.

Smaller herds will eventually put a floor under hog prices, and there is already some liquidation going on. But in the short term, sending more hogs to market will increase the supply of pork and push prices down further. Every farmer is hoping his colleagues will liquidate first.

“We’re all waiting for someone else to blink,” Mr. Uttecht said.


Some people are forced out of the business. That brightens prospects for the survivors.

Cheers Euan and yes i did watch it and cheers so much for the info.
I have to say hats of the rosie boycott for her article nine meals from anarchy that she got published in the Mail, way to go to get that in the mainstream
My worry i have to say is fertilizer and how much of our land is bloody reliant on it, we interviewed one farmer who rents National Trust land so is not allowed to dose the soil up-to the hilt with nitrates.
Last year his nitrates bill over just under 20 grand this year it's gone up over 60, and putting his order in for next year and well he doesn't know if he'll get any it's so scarce and everyone is clamoring for it .

Discussing fertilizer requirements means you should also be talking to the Soil Association, whose nat. conference at the beginning of 2007 was Peak Oil based.

The key thing I picked up from a video (cannot recall where this time of night) was that the extra tonnage of inorganic nitrogen-fertilized crops was water. If you don't use extra nitrates, the yield goes down, but the calorific content stays the same over the acreage used.

For the avoidance of hearsay, I'll find the source and post on tomorrows DB.

I've never managed to fully work out the energy efficiencies associated with fertilizer use in the UK. By way of example, reducing our fertilizer use by half may cut our yields by 10%, 50% or 75% - I don't know - but i do know the people working in government organisations who do know.

I also don't know enough about "off shoring" petrochemicals industries in recent years, e.g. shutting down EU fertilizer plants and opening new ones in Abu Dhabi? I suspect there have been some gross errors of judgement here moving energy intensive industries to countries that have loads of energy - but which just turn out now to be short of nat gas. It's a very complex tapestry that TOD has no yet managed to untangle. Big oil selling off their petrochemicals assets to private equity also muddies the waters. So you need to take care to not mix fertilizer shortage caused by lack of energy with that caused by logistical cock ups caused by the approach or energy shortages.

The here and now is inflation caused by high energy prices caused by energy shortages leading to a financial singularity where banks cannot lower interest rates to rescue a debt laden economy. The result will be / is inflation masking recession, eroding savings and pensions, and casting the lower third of Uk society into insolvency (probably). This will all unfold this winter - a major catastrophe in the making that no one is reporting.

Your comments about 6 month lead times at the BBC are noted - no longer able to recognise let alone report news but to merely comment on the past.

The UK is not self-sufficient in food, so food security has more to do with what happens outside of the UK. I suppose the ultimate question is whether Britain with its 60-80 million population now can do what it couldn't do in the 1940's with a 40 million population, namely feed itself.

I think the key is fertiliser. Britain already has a highly efficient agricultural industry, which is of course fuelled by oil and given fuel priority it could expand into marginal lands to produce more food. Distribution, likewise, if given priority can get food to the people. Britain is only small, taken to an extreme delivery could be done with horse power if necessary. However, none of this could be achieved without the necessary fertilisers, if the UK went organic it would starve.

Britain is going to have to out bid the rest of the world for food or fertilisers. Whatever the UK does it is going to cost more for food in real terms and if it doesn't come up with something the rest of the world wants in trade, besides ponzi finance, then it will cost a great deal more than now.

how 'bout eddie chiles "if you dont have an oil well, get one"

Hello redthefox

Watch the documentary Truth, lies, oil and Scotland, 15:00 20 July BBC Parliament Channel.

There's plenty of laughs there. Pay particular attention to Malcolm Wicks our energy minister and his reliance of OPEC for information.

Also you'll need to be aware of the new scientific measurements that the program uses like "lots of" when describing the amount of oil left in the North Sea.

Drilling technology accuracy is likened to "hitting a haystack from 2 miles away with deadly accuracy". So you'll need to know the best place to hit a haystack to kill it in order to get a sense on that.

Best hopes for better BBC documentary making. Hopefully you'll be working for BBC Bristol.


Rebecca, email me at the eds box...

Powerswitch.org.uk pdf

Ever wanted a leaflet with quotes and comments on Peak Oil from media and politicans? Well, here you are! Print if off,
give it to friends, family and colleagues.
Download the leaflet

oh nice one, cheers so much Kafka
hhhmmm yes that newsnight Scotland was just, ....oh it was just pure Enid Blyton. (on a bad day)
BTW bang on the money with the guesswork about which department I'm from . ..wink

If this posted twice, please delete. (big problems getting on to TOD at present. Dont know why.

The only quote that I can think of regarding food supply is:

>>''It is neither practicable or possible for the UK to become self sufficient in food production''<<

Try here: Population will be key…


UK Population Grows To More Than 60m
Posted by Chris Vernon on August 27, 2006 - 10:28am in The Oil Drum: Europe
Topic: Miscellaneous
Tags: population, united kingdom [list all tags]
On 24th August 2006 the Office for National Statistics published updated population information for the UK:
In mid-2005 the UK was home to 60.2 million people, of which 50.4 million lived in England. The average age was 38.8 years, an increase on 1971 when it was 34.1 years. In mid-2005 approximately one in five people in the UK were aged under 16 and one in six people were aged 65 or over.
The UK has a growing population. It grew by 375,100 people in the year to mid-2005 (0.6 per cent). The UK population increased by 7.7 per cent since 1971, from 55.9 million. Growth has been faster in more recent years. Between mid-1991 and mid-2004 the population grew by an annual rate of 0.3 per cent and the average growth per year since mid-2001 has been 0.5 per cent.

Try Here:


My favourite:


The posters are appropriate:


Why the home front 1940-1944? – because it’s the nearest experience we have had.

A direct comparison would be appropriate, but mention that back then , we had rich friends….

Good luck. Hope they dont spike your story because you are going against the UKGov , EUGov grain.

And I look forward to your programme.

ps , I forgot.

>>''It is neither practicable or possible for the UK to become self sufficient in food production''<<

This comes from our very own DEFRA in 2003.

Hello Redthefox,

All you need to know about lack of food security in an age of Overshoot is Malthus & Borlaug. Borlaug said [not exact quote, but close from memory], "Without industrial fertilizers [I-NPK], its over."

Malthus warned us over 200 years ago, but nobody listened. Such is life.

FF depletion flowrates plus I-NPK & sulphur depletion flowrates plus acquifer depletion flowrates, plus topsoil degredation, plus ecosystem extinction rates means Hell on Earth. I suggest O-NPK recycling as a critical path to help move to optimal Overshoot decline. My hope is the youngsters will lead the way with bicycles and wheelbarrows as key strategic weapons.

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

One more link in the chain that I just thought of recently:

What happens to the phosphate cycle as fisheries collapse, and we are no longer transferring phosphate from the oceans to the land in the form of fish bones? Even if we start O-NPK recycling, will there be a negative balance of phosphate if we are no longer "liberating" it from the oceans, and then pooping it out or grinding up discarded fish bones?

Fish bones are quite poor when compared with crab and shellfish, with carbs likely to remain and grow in numbers. Crabs' guts, shells and the water used in the cooking process are all excellent fertilizers, and a secret of several organic farmers here in Oregon. (Sorry, but the secret is too important to remain one.) Much of the seafood industry's offal is currently dumped at sea, which makes me wonder about practices in other regions.

Bob, You posted some interesting stats the other day about fertilizer use showing the UK to be one of the highest users. Any chance you can post this again? It struck me that maybe countries with short growing seasons need to use more? Some explanation of the trends would be interesting to have.

I'm also struggling to recall the stats here, but is fertilizer use actually very inefficient? Sure it increases yields but not in proportion to the energy applied. Great when nat gas is cheap but crap when it gets expensive.

Hello Euan,

Sorry, limited time this weekend--funeral for my favorite Aunt--no time for comment. Repost of earlier weblink you requested:


Nationmaster.com website has lots of statistics. I have no idea as to accuracy.

check BP's [old name British Petroleum of course]name change. BP is the legal name was my research a ways back & then they use Beyond Petroleum when desired in commercials.

Also Chevron's willyoujoinus.com


used to say a logo of 'the end of cheap oil', or similar. i don't know when website began but at least 2-3 yrs. is my memory.

these examples are clear some higher ups saw some kinda peak oil problem.

Hello Rebekka (redthefox),

You are kind with your effusive thanks.

Here is an additional quote:

"If they don't have a lot of additional oil to put on the market, it is hard to ask somebody to do something they may not be able to do."
- GW Bush, In an interview on ABC's Nightline regarding asking Saudi Arabia for more oil, after he went, hat in hand, to ask, nay, beg for for oil production.

You might also make use of the following that turned up today:
The time may be near for Saudi oil decline. They are now searching for experts in enhanced oil recovery to start the research.

Best of fortune to your group on the documentary.

Lurker heres a bit more effusiveness for you, Been racking my brains for that one from Georgie-boy!!!
Cheers my dear, and yes a bit on the gushy side for a Brit but I am genuinely thankful - considering the recent track record of the media collective on this subject I wouldn't have been surprised to be greeted with a polite "sod-off"


One more bit that might be worth rewatching.. could even make a decent audition tape.

Robert Newmans History of Oil - 45 min - Apr 21, 2006

Including, as it does, the stirring refrain,
"The G8 has endorsed a US Plan to bring Democracy to the Middle East"

and a fine review of Britain's first deployments of WW1, to Baghdad.

Best, Bob Fiske


I think the best summary of what Cheney and Bush and the rest of their crime family knew is in an article from John Bellamy Foster in yesterday's drum beat.


It'll give you that cold chill up your spine--- "They knew. They knew all along."

Thanks for the link. I actually took the time to read this ;-)

What made it more chilling, for me, is that I am nearly done with my read of "The Shock Doctrine" so it was easy to ID those neocon corpatism statements.


Also scroll down the page to Brit -referenced sources here:


[From the Matt Savinar 'DefCon 1' Peak Oil Primer link at right side of The Oil Drum home page]

Your link wins the coveted 'Denial Destroyer' prize for the week; that news is just plain scary!

First the soaring KSA rig count, and now they're advertising for an EOR hired gun. If they keep this up, I'm going to start doubting their assertions that they have "just oodles and oodles of that black goop" : )

Errol in Miami


open a new gmail for this and publish your email for this purpose. People can keep sending quotes/people/links/interviews to you. This thread will close in a few days anyway.

I can't send stuff for another week or so myself due to time constraints. I'm sure others might be in a similar situation.

For starters, listen/read to all the interviews from David Strahan at http://www.davidstrahan.com/blog/

THere are some heavyweights in there (Schlesinger, ex Saudi oil execs, etc).

If you give me an e-mail i will send you the file I keep of CEO peak oil admissions. I am at treefarm at halekua dot com

Hi Rebecca,

no quotes, but any plans for UK food security will almost certainly be based on arrangements used previously. Thus setup during Cold War was based on that used for World War II, etc. During cold war there were approximately 50 food depots across UK holding strategic stockpile of sugar, flour, corned beef, etc. Enough for extremely basic diet for maybe 9 months. There were also grain silos and cold storage depots. These were largely based at ports. And there was usually additional couple of months of food in supply chain.

As far as I know, and I work quite closely with port of Bristol, these arrangements were largely run down after end of Cold War so little remains.

Essential reading is "The Secret State" by Peter Hennessy, plus "Beneath the City Streets" by Peter Laurie.

Therefore, it seems that Home Office are counting on any crisis being long and slow with lots of warning during which they can reinstate previous systems. But with great increase in population, way past ability of UK to be self-sufficient agriculturally, they would probably also hope that many UK citizens of non-British origin would return "home". (Presumably not too many accountants have migrated from India in order to live on bread and cabbage in the cold and dark.)


Hello again redthefox,

considering the recent track record of the media collective on this subject I wouldn't have been surprised to be greeted with a polite "sod-off"

You may well find that the folk on TheOilDrum are a bit different from the norm. First, the guidelines say, in essence, "be polite, no ad hominin attacks." Second, many of the people who are willing to speak up and say, "uh, guys, there's a wolf at the door...," during a whopping big party are quite pleased when someone turns to them, asks for help, listens, and then kindly says thank you.

Please seriously consider giving back to the group by posting a compilation of the quotes and tid-bits you dig up. If the editors are willing, perhaps the list could be added to or linked in from the TOD's faq page.

I second the suggestion to open up a g-mail account so that folk can continue sending you material.

Best regards.

Hi Rebecca,

I've bee busy and tired and I thought someone else would mention one of the usual suspects, Matt Simmons. I'm suffering from Peak Oil data overload so, I don't remember which one of the PO documentaries I watched that, captioned Matt Simmons as energy advisor to the Bush administration. I remember seeing somewhere else that, he was a member of a commission that advised Cheney. I don't know if both instances refer to one and the same role. We all know Matt's stance on PO, to quote him "when Saudi Arabia peaks, the world has peaked". You really should try to interview Matt. If you play your cards right, you should be able to find out exactly which members of the administration knew about PO and when they knew.

Don't forget our favorite broken record, Roscoe Bartlett. There's a website, Energy Policy TV that, has a collection of videos from congress on energy related issues. I'll link you to Representative Roscoe Bartlett's 39th special order presentation which he opens by saying

Mr. Speaker in just a few days now it will be the third anniversary of the first time I came to this floor to talk about this subject. I believe this may be the 39th time I have come to the floor and what an auspicious time to come.

To the immediate right of the video window is a "Search By Keyword" option. If you enter Bartlett, I count eight results including his latest on 6/20/2008. You should watch at least one of these presentations especially the last one. It is the most up to date and has a shot of a gentleman that he yields to, showing the huge attentive audience, cough, cough (sarcasm). He always refers to a speech (pdf) by Rear Admiral Hyman G. Rickover of the U.S. Navy delivered at a Banquet of the Annual Scientific Assembly of the Minnesota State Medical Association, St. Paul, Minnesota, on May 14, 1957, a little over a year after the famous March 1956 Hubbert presentation (pdf). Bartlett has repeated the same basic presentation almost every time to a largely empty room. I give him an "A" for persistence.

From the Al Gore story on July 18, majorian wrote Yes, Al Gore told Larry. Did some more searching and found a video on youtube of Al Gore on Charlie Rose in which Al Gore says the words "peak oil" at 31min. 15sec.

Last but not least T.Boone Pickens on CNBC and elsewhere, when asked if he thought speculation had anything to do with oil prices, answered in his characteristic Texan drawl, "Look, 87 million barrels a day's just about all we're gonna git.....".

Hope those players are big enough fer ya!

Alan from the islands


Dear Mcgowanic, Black_Dog, Samsara, Neon9, Garyp Emdeef, River, Xeroid, Trichter, Wisco, Jussi, Radlafari, DenMarkatos, Leanan, phreephallin, Barry99, Dennis, Jokuhl, Datamunger, Lanterne Rouge, Burgundy, Elwoodelmore, Prof Goose, Kafka, Mudlogger, Consumer, Karlof1, Euan, Totoneilla, Creg, Bob, neconned, Pete, Urbangardener, Errol, Samum, treeman, Gavin, lurker and by no means least islandboy.

I’m so sorry I didn’t reply sooner, I’ve been running round like a headless chuck filming,( just about to go off on another shoot in an hour,) but before I do just wanted to stop by and say I’m sincerely grateful to you all for your help, advice and quotes, so a huge big thank you to you all.
I’ve read through most of your posts and there is a huge plethora of info . However on my return, I’ll sit down properly and go through them all with a fine-toothed comb to see how we can fit which bits into the script and where.

SamuM, treeman and Lurker all suggested I register a Gmail account – so I did and here it is:
redthefox(at)googlemail.com, so if there is any other info you think I should know about that’s the place to send it to.

Bob thank you so much for the link to Robert Newmans History of Oil,
I never knew that about WW1, actually it was a very enlightening watch all the way through.

In fact thank you to all of you for all the links, I just need to read/watch all of them.( which I will)

And Lurker ( in the unlikely event I do find an odd tid-bit that guys are not aware of then, I’ll be sure to let you know, I promise.. but I have to say you guys do seem to have eyes and ears everywhere, you’ve got the issue well and truly covered so I doubt little old me is going to tell you something you didn’t already know, but if I do I guarantee I’ll pass it on.)

Lastly I wondered if I could politely ask If I get stuck again on finding out stats or info would it be possible to ask you guys, I promise not to bother you, just occasionally I may need help and your advice?

Anyway my very best wishes for now

And thanks guys

Rebecca ..x

"Linda Cook Names the Three Hard Truths of Energy"


World Petroleum Congress
Madrid, Spain
Jul 2nd, 2008

Linda Cook of Royal Dutch Shell describes how the past "flood of cheap oil" transformed to our current oil supply drought.

This drought grew from three truths of the energy challenge: declining supply, increased demand, and more carbon emissions.


The full program is;

"Natural Gas: An Emerging Global Commodity"


"This plenary session of the 19th World Petroleum Congress is a discussion of the emerging natural gas market.

Speakers include Abdullah Salat, senior adviser to the Deputy Premier Minister and Minister of Energy and Industry of Qatar; Linda Cook, Executive Director Gas and Power,"


Again calling the 21st century the century of natural gas, 2 to three times current use.wtf?

Arctic sea ice continues to back away from last year's low:


True, but the detailed analysis


indicates that this is due to different dominant weather patterns this year. It also says that the ice, whilst spread over a larger extent, is generally thinner, and almost all multi-year ice seems to have melted. Large areas of ice near the pole has begun to break up, and the potential for very rapid melting in the next two months has not gone away. That is the trouble with weather, it is so hard to predict...

It's funnny, but it seems like Artic ice is to AGW proponents what WTI price is to peak oilers!

Both are used as barometers. I don't know what to conclude from this - it may be a meaningless observation!


The fact is that the long term decline in minimum extent of Arctic sea-ice is continuing. Last year's rather remarkable minimum may have been exacerbated by wind patterns, so one should not expect this year's minimum to be as low as that last year. It would not be a surprise to see the trend continuing, and the graph clearly shows that the melt is proceeding at a pace below the long term average. The other part of the problem is that the thickness is also decreasing as well, thus the volume of sea-ice remaining on the date of minimum extent is pointing to a much larger decline. It's too early to know the final value of the minimum, but the way things are progressing, it's almost certain that the number will come in at a lower value than the historical mean. In some future year (some say by 2013), a repeat of last year's wind patterns could push the last of the sea-ice out the Fram Strait, producing the first year with no remaining sea-ice. Once that happens, I think the climate will flip into a mode which is completely outside the human experience over the past 10,000 years.

E. Swanson

Once that happens, I think the climate will flip into a mode which is completely outside the human experience over the past 10,000 years.

Excellent point. I would also expand the question regarding the flip-flop between glacial and interglacial periods (that have been fairly regular and cyclical) over the last 400,000 at least: Will Mans' input be enough to unbalance this long term cycling?

If we upset the cycle I would assert the termperature of the planet will slowly rise and we could forestall the next glacial period. If our C02/greenhouse input is not enough to upset the cycle then I would say we are headed for a rather nasty drop [not for a few thousand years yet hopefully!!] in temperature that definitely does not support life in what are now the temparate zones.


All of these sea ice comments restate a few crucial points

1. The sea ice present now is thin, poorly formed ice. The deep pack ice is gone.

2. Last year, weather patterns force a dramatic breakup of this ice.

3. Early this year, ice was breaking up at an even faster rate than last year. This was expected given the poor quality of ice.

4. Since then the breakup rate has SLOWED to below normal levels, even though the ice is of poor quality and should tend to break up more quickly. (See the graph linked above.)

5. Add to this that the latest UAH and RSS satellite data all suggest that 2008 is one of the cooler years on record.

The evidence suggests that we are exeriencing notable polar cooling and stabilization of the polar pack ice.

Usually the low point for sea ice is in September. In two months we will know whether 2007 was the trend or an outlier, in the sense of the ice pack is going to be gone in twenty years or five.
If it's going to be gone in five years, we will survive peak oil as the oil fields in the North are developed to cushion the downslope. If it's twenty years till the ice pack melts then we are well and truly screwed.

Usually the low point for sea ice is in September. In two months we will know whether 2007 was the trend or an outlier, in the sense of the ice pack is going to be gone in twenty years or five.

Actually, not really. 2005 was the first massive drop after steady declines over a long period of time. There was a rebound in 2006. The next big drop was in 2007, partially weather-related.Why not a rebound in 2008? So, regardless of what the 2008 final tally is, it isn't really telling us much except taht the overall trend is intact since 2008 is also below the baseline avg.

What I would like to suggest is for everyone to look at that graph closely. Take a straight edge and follow the last several centimeters down to the end of the graph... end up pretty darned close to where it was last year just by continuing on as is. Note that last year there was a drop a long steady slide, then a bit of a rebound. To repeat: The steady continuation of the current trend takes us to nearly the same point.

Others have correctly pointed out sea ice thickness as important. The total MASS is important. Overall, it is far more important in the short term. It tells us the true health of the ice. We have a small amount of multi-year ice left and a bunch of that is melting north of Alaska and Western Canada. Look at the open water there and the amount of blue in that area and throughout the pack.

This is all pretty much as I predicted some months back when one of the AGW denilists was crapping all over the board about the "huge amounts of ice this winter!" (I paraphrase.) I said then we'd likely see something relatively close to last year and no surprise of higher than last year. Climate data pretty much loves the saw tooth form, no?

But we ain't done yet.


apparently while most co2 only stay in the atmosphere for a few centuries some will linger. 25% will still be in the atmosphere 30,000 years from now. 7% will stay in the atmosphere for 100,000 years. This could compromise the ice age cycle.

If we upset the cycle I would assert the termperature of the planet will slowly rise and we could forestall the next glacial period.

NASA climatologist says we'll never have another ice age unless the human species goes extinct.

Under natural climate change
CO2 varied between 200 ppm (ice ages) and 300 ppm (warm periods). With our CO2 pulse into the atmosphere we have kicked planet Earth out of the cycle of the last half million years.

Hello Blackdog,

From my reading of the ARCUS assesments and as much of the literature as I can obtain, I think you're right on last year being an exceptional weather forced event. By both physical and statistical modelling it seems that when one takes a set of years' weather (e.g. 2001-2007) an baselines from those, it's only with 2007 that you'd get a crash using this year's spring ice as an initial condition. Once pre-conditioned the ice is more vulnerable, the more thining the less "weather" is needed to produce crashes. However it is by no means certain if this year will be above or below last year's areal minima. Despite certain headline indicators being reassuring, the detail suggests a rapid meltback may be starting - we'll soon see.

I too am worried that there's a real risk the climate will undergo rapid reorganisation as the Arctic transitions to a seasonally ice-free state. I take it you've read about Dahl-Jensen's work on high resolution ice-cores? i.e. http://www.sciencedaily.com/releases/2008/06/080619142112.htm

I agree with your sentiments. I won't be surprised if higher than lat year or if low. The lack of heavy ice means it's all very vulnerable. Add in any reciprocal feedbacks from the tundra melting and additional methane, and it would be no surprise at all to see the ice exceed last year's low. The blue shading (concentration) indicates that the ice is highly fractured in almost all areas but for two roughly circular areas, one north of Canada and the other north of Russia. The sea ice concentration looks to me it might be taking a dive the last day or two. If so, accelerating melt will be following.

I too am worried that there's a real risk the climate will undergo rapid reorganisation as the Arctic transitions to a seasonally ice-free state. I take it you've read about Dahl-Jensen's work on high resolution ice-cores? i.e.

Yes, and those denialist bungholes will claim this is proof against anthropological forcing of climate change.


I was reading an article the other day that said it was raining in the Antarctic much more. The result being that penguin young were getting wet and freezing to death, meaning likely extinction for one type of penguin in about 5 years.

I must admit to being rather shocked. Especially when I read the bit about King Penguins wondering about surrounded by the skeletons of their young.

We seem to be in an accelerating extinction event which is so rapid that the Planet has probably never seen anything quite like it before. In the geological record it will probably appear as an instantaneous extinction. But what percentage of living things on the Earth will go extinct? What will the Earth be like if we get say a 90% extinction event?

In an ecosystem, I assume there is a tipping point, beyond which a cascading collapse occurs as failing environmental niches take-out carrying capacity from the entire system.

There is, sneaking behind the shadows of mainstream pleas of sincere support for saving the environment, some phantom belief among ordinary Americans that if mass extinction occurs, we will simply cut ourselves off completely from nature and live in sealed climate domes eating (fully) synthetic food.

That may be true, but you won't be let in, and I won't be let in. A few million of the elite and their key stooges might be let in. The rest of us will be left to die, because it will be fantastically expensive to support human life in this way.

The hydrogen future is the biggest scam in the alternative energy field.


The National Academy of Sciences and the U.S. Army Corps of Engineers recently examined the hydrogen economy and concluded that it is not practical (virtually impossible) for multiple obstacles.

So called "experts" who represent an industry and want government subsidies will tell Congress what is best for them, not what is best for the nation.

Anyone want to buy some good snake oil?

This type of nonsense misleads Congress and the public, and it wastes everyone's time and attention to the real issues of Peak Oil impacts.

This example reveals the need for a major energy policy study by the National Academy of Sciences (last done in 1977), so that the NAS study will have prominence in giving Congress advice.

Unfortunately, many people in Congress, the media, and many energy scientists are not familiar with the existing studies of energy alternatives, which I have researched extensively. Best regards, Clifford J. Wirth

What about the methanol economy? That seems to be the latest saviour that is being touted.

The more I read up on it, the more I like it. One of the big issues would be designing ICE engines that weren't corroded by the CH3OH, but that doesn't seem to be an impossible hurdle. MeOH is a relatively compact store of energy (not as good as gasoline, but better than H2); easier to store than H2 and can be created many different ways.

And what is the EROEI for methanol, when ALL of the energy inputs and energy spent on transportation are factored in. Methanol can't be transported in the existing pipeline system coving the U.S.

I don't know. The only figure I could find was 2.6, but that probably does not include all of the above.

There's been tons of papers/reports/books published about our continuing Energy Crisis. Many of the alternatives being discussed these days were considered back in the early 1980's and the basics haven't changed very much. What has changed, IMHO, is that PV is finally becoming cost competitive and the electronic devices available to manipulate DC can turn battery power into AC efficiently to run electric cars or feed the grid.

What hasn't changed, apparently, is that the U.S. media is run on snake oil, of which there is a nearly infinite supply. When your average Joe Sixpack high school graduate (or his main squeeze, Barbie) wanders thru the supermarket, what does he/she see in the magazine section? Lots of pretty faces on the glamor mags and lots of muscles or muscle cars or muscle guns on the guy mags. All of which is snake oil designed to sell these overgrown kids on that "Non-Negotiable American Way of Life". When the Snake Oil finally runs out, a sure sign will be magazines about how to build solar or wind installations or how to grow your own bio-fuels instead of the ones catering to the mass market consumerism which pervades our "modern" society.

E. Swanson

First there will have to be primers on how to read stuff that ain't got pics of pertty celebs.

See Jane.
Jane reads.
Jane reads and reads.
Jane does not spot Brad on the page.
Jane reads and reads anyway.
Jane reads about thermodynamics.
Jane learns that celebrity power is not real power.

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.

A sign of the times. The late night television commercial, always a uniquely american phenomenon, have gotten into the energy act. Now, instead of the gadget that will slice and dice your vegetables in wierd and wonderful ways, or the the one that will take care of your most mundane tasks while you sleep, or the beautiful person that you can call on the 900 line to spice up your love life....we now have -- SECRET DIESEL!


DSE has developed a revolutionary method for producing an inexpensive, high performance fuel that can power ANY DIESEL ENGINE and the cost to you is only *46¢ per gallon! That means over $3+ savings for EVERY gallon of our fuel you use!
You have NOT heard of this before. This is an entirely new way in America to make your own fuel from fry oils that takes only minutes. It can be used as a 100% replacement for petrol diesel fuel OR as a fuel offset by using it with petrol diesel fuel in any percentage you desire. DSE fuel and petrol diesel fuel are perfectly compatible.


I've actually seen films of this equipment working. It's a legitimate process. I'm sure the infomercial skipped over the fact that the $0.46/gal price assumes 1)someone buys the expensive equipment for you (the $0.46/gal is just the cost of the chemicals you need to run the process), 2)the restaurants continue to give you their used oil for free, 3)someone provides you with the vehicle/gas you'll need to make your cooking oil pickup runs, and 4)you work for free while picking up the cooking oil and then tending the processor.

Yes...thanks. I have seen as well. And I know in my own neck of the woods thier has been folks stealing other folks cooking oil. You have done a good job describing the other issues. Imagine trying to scale this solution!

Mostly , I was taken aback by how this has been capatilized on by the use of television commercials. It seemed out of place when it came on for my viewing but considering our times...fit in perfectly. And it was so American!

I figure if you're frying enough food to power your car on your own waste oil, you probably can't get in the car.

A patent lawyer once told me about a lawsuit concerning a "guarenteed way to kill flies".

For $5.00 (IIRC), they sent you two pieces of wood. The instructions said that you had to catch the fly, place it between the two pieces of wood, and hit the top piece of wood with a large hammer.

And they *guarenteed* that it would kill the fly or your money back.

Anyway, I won't be buying the magic fuel solution. Yesterday, I sent in $25.00 with two boxtops and the plans for my DIY "Toshiba Micro Nuclear Reactor Kit" should be arriving any day now.

What you are describing is making biodiesel out of veg oil. This is NaOH, methanol and vegetable oil. The glycerin is removed from the oil and you get single esters, essentually diesel.

DSE is an additive that when you add so much oil, so much kerosene, so much gasoline, etc. you can put it directly in you diesel tank and burn it.

I burn SVO in my diesel car by heating it. I have done a lot of research into DSE and ways to run the vegetable oil directly in your tank. What I have found is you can cut veg oil with kerosene and RUG without the DSE and get the exact same results.


Crop residue may be too valuable to harvest for biofuels

Unless you put back in what you take out, soil will degrade. Look at the deserts of North Africa and the wasteland around the "fertile crescent" for what happens when soil is used continously without replenishment.

The issue of peak soil may be more significant than peak oil. After all, we can live with greatly reduced energy. The same can't be said of food.

Tillage reduces soil organic matter, so growing corn and removing the stover for cellulosic is a recipe for disaster -- a double whammy. Harvesting a sod-crop like switchgrass is less damaging -- probably no worse than, say, cutting hay off of a field -- but there will still be a cost in long-term fertility and productivity. This will require periodic liming and fertilization to maintain fertility.

There is a grand misconception on the part of lay-people that anything that does not end up as dinner or sawn lumber is somehow waste. Not true.

The Bible tells us to not harvest the fields every seventh year and let the plants lie fallow. This was not just superstition - soil is not designed to have it's produce removed perpetually.

"There is a grand misconception on the part of lay-people that anything that does not end up as dinner or sawn lumber is somehow waste. Not true."

Well said.


Can anyone provide accurate data or references to ascertain the true nature of the NatGas Reserves? I have a hard time believing there's all this natgas when it's really a purer byproduct of fossil fuels anyway, no? Any insight would be appreciated.


I quickly scanned your link. His story isn't really new. While NG has fewer C's than wood that hardly matters in a modern economy. As far as a replacement for motor fuel it isn't easily transported as he says. You either need a very big tank or you need to liquify it...also very impractical for motor fuel. But there are many benefits to NG as he points out. But that's why there has been on ongoing switch to it for decades. About 75% of homes built in the last 20 years have NG. Lot's of E power plants can run on NG.

As far as NG reserve estimates they are out there. A google will keep you busy for a few hours but you'll end up with a rough gage. But pay attention between proved producing reserve numbers and "probable" reserves. But also bear in mind: I wouldn't guess when but eventually we'll hit Peak NG. NG is just another diminishing commodity like oil.

TheFinanceDude - Check out the presentation on NG at the 19th World Petroleum Congress I linked above. (the audio is fixed about 10 min. in so be patient)

They talk about current/future global production and future projects including LNG and GTL.

I know it's not as detailed as you need but interesting none the less.

Sounds like the world is gearing up for the Natural Gas Century.

They talk about NG being in it's infancy. Comparing it to oil in the 50's.

Seems to me that just about the time infrastructure is in place and the switch-over done we hit peak and everyone knows what the back side of that bell curve looks like.

Isaac Berzin - The Algae for Biofuel Pioneer

This year Time Magazine voted Berzin as one of the world’s most influential for 2008 for his ability to turn a dream of an oil-free future into a reality through GreenFuel, the company he founded in Boston in 2001. (His daughter saw the email notification from Time and told him it was spam). Today with a new CEO of GreenFuel in place, Berzin’s back doing what he loves best: Science.

theantidoomer -

What a gem! Just when I thought that the technically illiterate mainstream media couldn't get any sillier, they pick this guy Berzin as one of the world's most influential for 2008. (Influencing exactly WHAT, may I ask?)

As has been discussed here at TOD time and time again ad nauseam, the notion of producing biodiesel on a large scale using power plant stack gas fed into clear plastic tubes filled with a single-strain algae medium can almost be dismissed by inspection as being fundamentally unworkable.

The main selling point of these algae systems is that the rate at which they can produce biofuel in terms of lbs per acre of area per year is many times that which can be achieved with land crops. This is a patently false basis of comparision. Land is readily available and relatively cheap, but covered ponds or, worse yet, acres of clear plastic tubes would be prohibitively expensive in the size range needed to produce commercial quantities of biodiesel. I wouldn't be surprised if a few square miles of clear plastic tubes or clear plastic sheeting would consume some major fraction of the entire world's production of the stuff.

Then we have the significant (and energy-intensive) material handling problems associated with separating the algae from the water, separating the lipids from the algae, and doing something with the lipid-free dead algae biomass. We also have the problem of supplying the requisite nutrients, not to mention the problem of diverting the massive flowrate of stack gas from even a modest size power plant into a maze of tubes or covered ponds.

I'm sure this fellow Berzin will continue to get publicity and funding for more sexy looking but pointless demo projects and will go to many conferences and give papers on his work. He will do well.

I will go out on a limb and make a blanket statement: Until someone can demonstrate that a high-lipid algae mono-culture can be grown at high concentrations on a large-scale and long-term basis in OPEN ponds rather than enclosed transparent bioreactors, then this whole algae/C02 sequestration scheme will be a technological deadend.

Stuff like this would be amusing if it didn't divert people's attention away from things that have a chance of doing some good in the real world.

There is one thing that would solve the problem and make covered algae rectors the bee's knees:

Biotechnology re-engineering the photosynthesis process so that CO2 becomes the limiting rate factor (at which point the slipstream CO2 causes those reactors to be worthy of calling reactors).

If that happens (a mighty big IF, and definitely not a when), peak oil and global warming would become solved problems. But counting on such a thing is like counting on the lottery to rescue your mortgage. Not a good idea.

My problem with this is a bit easier. Coal - CO2 - Algae - biodiesel - CO2 (from the tailpipe of a car).

So you added a few steps but still dumped it in the atmosphere.

Apologies if this has been discussed. Can someone please take a look at this video and provide comments about it? (Water power)


Frankly, I think you should use the search function within TOD before reposting crapola. Sorry.

From the video 20 sec's in

A flame that only feels warm to the touch..... instantly heats to hotter than the surface of sun when it touches anything else

Didn't get any further as I'm not a Harry Potter fan.

Sorry paula...no miracle here. The process they describe was discovered over 100 years ago. But it is true: if you can develop a cheap enough electrical source to break the water down into usable hydrogen you would have an economical fuel. People have been trying to figure out how to do that for many decades.

Thank you, Rockman. I wanted an explanation like you provided to share with someone who is barely beginning to understand the resource limitation problem. Thank you for providing a clear, simple explanation.

This nonsense is a horrible distraction - here is the scoop.

If you have electricity available you can crack water into H2 and O2, then burn the H2 or use it in a fuel cell. You get back a bit less energy as you use in the form of electricity.

H2 is a nasty substance - ranks right behind loose neutrons from nuclear reactors in terms of the trouble it gets into with metals and it's flammable/explosive. It is great stuff to have around ... if you can make something else with it. That would be ammonia using the Haber Bosch process, or maybe methanol (need CO2 and H2), and I believe there is an ethanol synthesis method as well.

So, potential fuels in terms of viability given lots of nearly free electricity would be ammonia, methanol, and ethanol, the last two depending on goodly supplies of CO2 for their synthesis.

Even if you could economically produce large amounts of hydrogen, it's still a terrible transportation fuel. Hard to store, low energy density, there's just nothing going for it.

On CSPAN I was listening to the USGS tout gas hydrates. Seems there is a lot of projects and work going on in this area and the potential reserves are huge. Has that been discussed here on TOD before?


Upper right corner "Search The Oil Drum with Google"

First result:

I love the fact that this site has years and years worth of analysis and discussion. This allows people with basic questions about many proposed silver bullets to quickly learn what the ups and downs are of each idea. This is like snopes but for energy. Still, people have to use it for it to make a difference.

Thanks much for the step. Duh. Works great. I agree...this is one handy site. Thanks TOD

Hey, if you think those methane gas hydrates are great, I have a bridge over in NYC that I can sell you cheap for few thousand dollars.

Oh, the methane gas hydrates will probably have a very big impact on our future - as the earth warms and they vent into the atmosphere. From what I read they are widely dispersed over very large areas, and the odds that we can come up with any way to capture them before they are released are low. This is one of the possible climate change events that I am most worried about. It would actually be good if we could burn them, as they would be converted into CO2, which is a much less potent GHG than methane (at least in the short term).

Methane is an ironic case - it's often dangled as yet another false hope that we can keep on with our energy slaves just like always, when in fact it's likely to be an agent of severe problems for us all.


Does anyone know of a good analysis concerning the new amounts of NATURAL GAS that the lower 48 can be expecting from all the new activity in the various shale formations?

EIA says most of the 9% increase in production from 1Q07 to 1Q08 came from horizontal drilling in the shales. I'm hoping to find a credible report that tries to outline future production growth out to 2010 or 2015.

Westexas do you know of any?

Thanks to anyone who can reply.

The USGS presented in this weeks Energy forum. I can't find a video clip...but here is something from their website:



I don't have any hard numbers, but the key problem is going to be personnel and equipment constraints. We are replacing the old high production rate Gulf of Mexico gas wells, with a much larger volume of low rate of production unconventional wells. In effect, the industry has to run harder and harder to keep the production level stable, the "Red Queen" problem, and a lot of us in the oil patch can't run like we used to be able to.

My continuing point: big difference between the oil & gas industry making money finding smaller conventional fields and exploiting unconventional resource plays and making a real difference in energy supplies.



My continuing point: big difference between the oil & gas industry making money finding smaller conventional fields and exploiting unconventional resource plays and making a real difference in energy supplies.

I'm having second thoughts on prod growth going forward. It seems a bit shocking that EIA is reporting 9% production growth in 2007, with most of it coming from shale formations. The same EIA report says:

Recent drilling trends indicate continued growth, with a stronger concentration on unconventional resources like shales. Shale formations in the lower 48 States are widely distributed, large, and contain huge resources of natural gas. They are just starting their full development. Already, the production from just one Barnett Shale field in Texas contributes more than 6% of production from the lower 48 States, which is more than from the large producing State of Louisiana.

WT, perhaps the shale will add a material amount of gas for several years to come? I have no idea...I'm just trying to find out.


the key problem is going to be personnel and equipment constraints. We are replacing the old high production rate Gulf of Mexico gas wells, with a much larger volume of low rate of production unconventional wells.

Where can I go in order to better understand this problem?

The EIA shows about a 4% increase in marketed natural gas production in 2007 in the US:


This basically brings us back to the production level we had earlier in the decade.

The Quebec provincial government tentatively allows low-speed electric cars on some roads:


It is certainly a step in the right direction. The practicalities of using electric vehicles on an everyday basis are going to take several years to work out - especially in cold climates.

Nothing beats real-world deployment to find out what works and what doesn't.

Want a Used 'Econobox'? Better Get in Line

Prices of Fuel-Efficient Models Approach Those of New Cars; Is Trading Down Worth It?

The appeal of fuel efficiency is moving beyond the new-car market and creating a run on small used cars.

Some used cars' prices are even approaching the levels of new models. The average 2006 Honda Civic costs $16,118, or 86% of what a new 2008 model costs. The average price of a used 2006 BMW Mini Cooper is about 81% of what a new model costs. And the long-sought-after Toyota Prius costs 87% of the new-model price. Typically, three-year-old used cars cost between 50% and 60% of their new equivalents' prices.

The private-party value of my 2000 Civic HX, which is rated at 43mpg highway (Old EPA rules) has risen $1500 from 2 years ago.

Anybody want to buy it? *chuckles*

I heard something lately about someone buying a 1988 Honda Civic for $5,000. I found that rather hard to believe, but maybe there is something to it?

My buddy Henry, the one that is building a '57 Chevy drag car and rides a '53 Harley Pan Head, is head mechanic at an Accura dealer in the Orlando area. He also has a 6 bay shop that he rents for his after hours work and working on his hobbies. For about the last 1 1/2 years he has been refurbishing older, and some fairly new, economy autos for resale. It has turned into a lucrative sideline and it is happening when his hours at the dealership have been reduced due to fewer customers having work performed. Customers of the Accura dealership are skipping scheduled service, even oil changes, to cut corners. Of course skipping oil changes will result in larger cost repairs for customers in future...like engine overhauls.

Having worked on Civic engines, I can believe it. Excellent supply line for spare parts, well designed engines that are easily repaired and take a while between needed repairs. Good mileage. Hell, on the Civic subcompacts, two men can hold up the entire engine & tranny.

Pickens endorses Al Gore for Energy Secretary, if Obama wins:


BTW, Pickens endorsed a much higher gasoline tax--to bring the price of gasoline up to European levels, offset by cutting Payroll Taxes--before Al Gore did.

Let's have a proposal to use gasoline taxes to completely eliminate income taxes for everyone making less than $30,000 a year, and see who screams bloody murder. It will be very educational.

The sad thing is, I bet a lot of the people bitching about it would be ones making less than 30k who were upset about the high gas tax.

I make less than 30,000 dollars per year. Income taxes are the least of my worries.
My major tax problems are
1. Differential immigration tax. That's the one where they only let in low skilled workers (and some tech types like engineers) to compete with me instead of a balanced set of immigrants (or even give preference to college educated immigrants like the rest of the world does) to compete with higher income workers as well as low income workers.
2. Import tax. That's the one where they import low skilled labor in the form of factory goods to compete with me, instead of high skilled labor. There is some high skilled labor imported, but it's mostly low skilled labor that comes in.
3. Differential government job tax. That's the one where they hire huge amounts of middle class workers for management workfare jobs like the military industrial complex, or the regulatory police complex, instead of low skilled jobs like street cleaning.
4. Social Security tax.
5. Medicare tax.
6. Disability tax.
7. Unemployment tax.
8. Sales tax.
Federal and state income taxes are about position 3.5 and total maybe ten percent of my income as taxes, slightly ahead of Medicare through sales taxes.
The only bright side to this whole situation is that we soon will be importing less labor from positions 1-3 because the dollar is collapsing.
Less immigrants when they can't send American currency home because no one will want it, less imports because we can't pay for them, and less government workfare raising middle class wages and making life expensive for me.
I figure that my real tax rate is about to be cut in half. Speed the day.

Ummm, So oil is at 128$ a barrel, whats the deal? Is it really speculators, theoildrum has done a poor job of explaining such..

I don't think anyone has a problem with the belief that speculators might affect short term prices. Speculators are not responsible for a ten-fold increase in crude pricing in the past ten years.

I guess everybody went home, so I will try to answer. :)

As stated before, there are short term movements based on speculators, but the long term trend is supply/demand.

I imagine that some people are looking at the recent good inventory numbers and hopeful talks with Iran. But, reality will be back shortly.

I'm starting to doubt we'll return to the upward climb we saw earlier, at least not for a longish while. The reducing tensions in the Middle East have been building behind the scenes for a while, and the lower prices for oil may encourage more inventory build (I would think, although I'm hardly an expert). Of course, there's always the chance for a hurricane or some other disruption, but in general I see the trend as downwards for a while yet. I had sort of convinced myself that $120 was a floor for the price now, but I'm not sure about that anymore...


It doesn't mater what the floor (or the sealing) is. In the end, the ELM (Export Land Model) with still mean that we get less oil soon. In the near term look for:

1. Gulf of Mexico Hurricane (until October)
2. Election period (November)
3. Violence in middle east before Bush leaves office (watch Israel)
4. New administration in January 2009
5. Next update on Mexico production/export numbers

All or any of these events will have upward pressure on oil price.
I can't think of as many reasons why prices would trend down.

Even if it drops to $120 and stays there a while it's probably enough to bankrupt a few airlines - might take another fiscal quarter or two.


Don't those guys lock in prices for a year at a time?
Some airlines might have contracts from last January. They better cross their fingers that the "BUBBLE" stays burst.

I know that Southwest was a bit more forward-looking in their fuel purchases, so it took a little longer for the higher prices to bite them. They really try to cut costs in a lot of other areas, too.

ptoemmes...I do not believe that the major airlines can maintain anything resembling their current biz model with crude over $100 barrel. That goes for the truckers as well and, of course, will eventually effect all Americans.

As others have mentioned, I am hoping that the crude price continues to be high enough to force modification of the current US biz model and forces a behavorial change of Americans to a more sensible and sustainable model. It will take time. The worst that can happen is for oil to drop too low in price and Americans revert to their former behavior of wasting energy. A controlled decline in FF usage will be better for all in the long run than runaway crude prices and a collapse of the world economy.

Of course the world economy can still collapse due to the rediculous credit debacle that started in the US but has caused very large problems for economies around the world...and shows no sign of subsiding.

$120 oil? One good sized hurricane or a medium sized war could change it all, and fast.

I have a hunch that the announcement that the administration is sending an envoy or statesman to Iran for meaningful discussions about the USs many differences with Iran might be a factor in the drop in Crude prices the last few days. Call it a hair cut of the war premium, or whatever...give it a name.

Also there is this link from ATOL that discusses how the Russians are beating our brains out of late in regards to sewing up oil and gas deals abroad while America pursues wars. With little time left it appears that Bush is beginning to understand there is more to geopolitics than a military and is making a sensible move toward diplomacy...but it is merely a baby step.

'Russia's energy drive leaves US reeling'

...snip...'In early July, Medvedev undertook a diplomatic tour of the Caspian region, covering Azerbaijan, Turkmenistan and Kazakhstan. In Azerbaijan's capital Baku, he made a stunning offer that Russia was prepared to buy Azerbaijan's entire gas output at market prices. In Ashgabat, he shored up Turkmenistan's commitment to the modernization of the Central Asia-Center Pipeline and the construction of a new littoral Caspian pipeline.

Medvedev succeeded in prevailing over competing European and US rivals in the struggle for Turkmen gas. He further ensured that oil and gas from Turkmenistan and Kazakhstan will not bypass Russia. But what has truly incensed the Bush administration are Gazprom's dramatic inroads into Africa.

Russian giant Gazprom, the largest extractor of natural gas in the world, has announced plans to build a pipeline across the Mediterranean to pump Libyan gas to Europe. This is the final lap of a Kremlin strategy that involves Gazprom handling the entire output of Libya's gas, oil and liquefied natural gas (LNG) designated for export to Europe and the US.'...snip...

and...There is much more in the article about Russia's successes in Nigeria and elsewhere. The Russians want to build a pipeline from Nigeria waaaaay to the north and take control of Nigerian oil/gas. The Nigerians, fed up with Shell, et al, are listening...


Three things:

1) It ain't speculators, the inventory situation (despite this week's buildup) proves that.
2) One good Gulf hurricane will get the price back up right quick.
3) Despite this, we're really close to needing another one of Prof. Goose's price polls again...not for the reason most thought, of course. :)

I commented on this before but it was late and might have been missed.

The August contract trades in July. According to Moe Gamble, diesel was the driver and I bet a lot of the diesel buying was China in preparation for the Olympics. So that demand has decreased.

Also, I have noticed over the past few years that price always seems to go down heading into the fall season because driving season is over, temperatures mild, etc. So demand decreasing.

The big Q is Quarter 4 which should trade around October, November. IEA has demand jumping by 1.5 million barrles from Quarter 3. It doesn't appear anybody has the ability to put a bunch more on the market then. If its speculators and just a bubble then prices would be low then. If supply and demand,then they would be high.

This assume, of course, the world hasn't entered a depression by then.

It's official. The days of high fuel prices are over. The bubble is about to burst. Pam Ewing is about to wake and find out it's all been a dream.

Given the market's inability to spark a larger rally Friday following the week's big sell-off, is it time to declare the energy bubble over?

Experts aren't ready to go that far just yet. Oil has bounced back from big drops more than once in its march to fresh records over the past year.

But in a sign sentiments have shifted, the question is being asked more often, even by industry observers who just days ago thought the market's meteoric run still had legs.

"If this is not the bubble's implosion, than it's a reasonable facsimile," analyst and trader Stephen Schork said in his daily market commentary. "Perhaps all we have witnessed was a replay of last August's subprime induced sell-off. Time will tell. Nevertheless, for the time being we no longer care to hold a bullish view."

Adam Schreck, "Oil Markets looking for signs of bubble burst", AOL money & finance


Rejoice munchkins. The wicked witch of the west (the bad speculator) is dead. The scarecrow can sing, "If only I had a brain..."

Oh, I could tell you why
The ocean's near the shore,
I could think of things I never thunk before
And then I'd sit and think some more.

I would not be just a nuffin'
My head all full of stuffin'
My heart all full of pain.
I would dance and be merry
Life would be a ding-a-derry
If I only had a brain--Whoa!

Oh right! I forgot. Dorothy awoke from that dream, too.

Now that the sandman is finished with Pam, Dorothy & everyone else, listen folks, it's BAU. Wake up and go shopping.

Public service announcement by infomercial specialists, Cheney & Company.

If that was the burst of a bubble (like tech stocks and housing), where's the blood on Wall Street? Shouldn't all those speculators be leaping out of windows by now? Shouldn't more investment firms be imploding? What? Nothing? Hmmm...

I suspect that demand destruction, largely taking place in developing nations, will only be "visible" to the market in sputters and spurts.

If the speculators have so much power, why didn't they prevent this drop? Oh, I know, because now they want the price to go down. Damn fickle speculators. Just when I was beginning to get the hang of this.

Ding Dong! The Witch is dead. Which old Witch? The Wicked Witch!
Ding Dong! The Wicked Witch is dead.
Wake up - sleepy head, rub your eyes, get out of bed.
Wake up, the Wicked Witch is dead. She's gone where the goblins go,
Below - below - below. Yo-ho, let's open up and sing and ring the bells out.
Ding Dong' the merry-oh, sing it high, sing it low.
Let them know
The Wicked Witch is dead!

Here is a table showing when WTI first closed above $40, $50 etc (Since 2004)

Price Month
40 May 2004
50 Oct 2004
60 July 2005
70 Apr 2006
80 Sept 2007
90 Oct 2007
100 Feb 2008
110 Mar 2008
120 May 2008
130 May 2008
140 June 2008

These people, acting liked we're saved cos it's gone under $130! Unbelievable. We've returned to where we were 6 whole weeks ago.
The future is either a much higher oil price wrecking the economy, or else chaos in financial markets wrecking the economy, which will probably reduce the price of oil significantly for some time. But we won't be celebrating the fact.

Canada's provincial premiers pledge to increase energy efficiency by 20 per cent by the year 2020.



An optometrist friend once told me that 20/20 vision is not perfect eyesight. These guys are seeing triple, 20 by 20/20. What more needs to be said?


Hi Tom,

The double vision could be due to the double martinis consumed at lunch. :-)

The details were sketchy at this time so it's a little hard to judge their sincerity, but I understand one of the proposed measures is to beef up national and provincial building codes. That's a step in the right direction, but I suspect if these targets are to be met, higher energy prices will be the key driver.



Agree. Enforcing building codes would be a step in the right direction. Since 2020 is another 12 years in the future, higher prices are most likely do the trick.

The silver lining is that demand destruction may allow the politicians to match at least one target on time now that Kyoto is all but a dud.



Early bulletin:


Crane collapses at Houston refinery, killing 4

HOUSTON - A company official says a crane collapse at a southeast Houston refinery has killed four people and injured six others. Fire Department Assistant Chief Omero Longoria says a crane several hundred feet long fell over at the LyondellBasell refinery at about 2 p.m.

Well oil is now below $130 bbl, maybe going as low as $120 or $110, but I'm thinking that demand increases from lower gas prices will cause it to go up again, round and round we go, job losses, inflation, here we go again. We've completed one circle, and we're getting ready to begin again. It's October 2007 again, the market is up, oil is down and cusumer spending on gas will increase again but this time oil will go higher than $150 bbl and the market will go lower than 10,000 points, we have only just begun.

Oil price may go down to $110 but could just as easily go to $200 if any significant supply shortages occur due to hurricanes, middle east military/terrorist intervention, Nigeria militant action or any other reason. Supply and demand remain in a precarious situation. My forecast shows a steady oil price averaging about $130 for the next year, before resuming its uptrend in late 2009. However, this forecast does not include weekly price fluctuations which could be extremely high during the next year.

Demand destruction continues to occur as smaller cars are being purchased and the global airline industry continues contracting. Demand destruction will have to occur in October 2008 as supply is highly unlikely to increase by 1.6 mbd to meet demand, as shown in the chart below. The recent price drop is also shown in the chart.

click to enlarge
Note that the price in the chart is 'All Countries Spot Price FOB Weighted by Estimated Export Volume (Dollars per Barrel)' from http://tonto.eia.doe.gov/dnav/pet/xls/pet_pri_wco_k_w.xls

Forecast world supply additions roughly offset natural field decline losses, further reinforcing a total liquids supply plateau. Consequently, the maintenance of a high oil price is required to destroy excess demand until it equals the supply.

click to enlarge

Oil's price decline is part of a general sell off in commodities. The same thing is going on in the grain sector.

I think it is a normal seasonal sell off. In grains it usually starts about the 4th of July and lasts though harvest. When the bins are full of grain in the late fall, prices will rise again to draw grain out of storage.

Commodity markets are forward looking. Oil's big run up until just lately was to make sure there would be no shortages for summer driving and other needs. The demand destruction has been achieved.

Now the market needs to build a base for the next leg of the run up if there is to be one. It could take a couple of months or more or it could happen quite fast if the hurricane season turns out to be severe as some expect.

I see the price pull back as just normal market behavior. A $15-$20 or more drop at these price levels is nothing unusual.

Thanks for the charts, very informative.

Well this beastie (94) is still there and will be moving over warmer water by the looks of it. Still not resolved into a depression as yet, though it is rated as having a high probability of doing so.


If it did develop it has a modeled trajectory that could cause problems. I suspect this thing hanging around may put something of a floor under crude in the early part of next week. If it did turn nasty watch the price jump as the shorts taken out in the past few days get covered.

Well the latest satellite shows more organization, and they are talking about an imminent upgrade to a depression:

As oil sands mining and extraction is profitable; 40,000 new homes are scheduled for the Ft. McMurray, Alberta area:

Ft. McMurray Housing Expansion

The link above is broken, correct link:


Should read new homes for 40,000 instead of 40,000 new homes.

You can edit your post and fix things like broken links...as long as there are no replies.

There is never a 'reason' for price movements. Markets should be viewed as complex systems. Every day you might hear a report saying "stocks fell today because...". It's all bullshit. News does not move markets in any term but the very shortest. I know few will believe this because the human mind is designed to find a reason for events but all the 'reasons' for price movements are a product of the way the mind works and don't actually describe reality.

It must be added that prices are ultimately a function of the amount of money existing in the syatem. If the amount of money in the world today was the same as 10 years ago, or 100, then the price of oil or anything would be pretty much what they were then. Of course economic activity would be about the same also. Instead the amount of money worldwide has possibly doubled since 2000. There is a gigantic monetary component to the oil and commodity price run ups. Is speculation playing a large part in the oil price run up? Sure it is and that is in the end a function of the availability of vast pools or money available for speculation.

No doubt the supply demand balance is close and this does go into explaining why prices are high but it doesn't totally, by a long shot, explain exactly why prices are where they are now. The supply demand equation and the amount of money extant could explain any price between $300 and $50. The latter within the realm of possibility if you understand how centralized markets work. That is driven by greed and fear. It must be assumed that many spec longs are long from the current or higher prices. Some probably sold last week. This tends to have a self reinforcing dynamic as longs liquidate to book profits or stop losses. Which brings more selling, wash rinse repeat. The same dynamic applied to the upside. Every price rise brought in more buyers, etc. etc.

There is no right price. There is only price. There is no one 'reason' for price but rather thousands. Thousands of fundamental reasons and hundreds of thousands of decisions by market players.