DrumBeat: July 25, 2008

Current Oil Price `Not Expensive,' Petrobras's Gabrielli Says

(Bloomberg) -- Crude oil at $126 a barrel is ``not expensive,'' considering production costs and rising demand, said Jose Sergio Gabrielli, chief executive officer of Brazil's government-controlled oil company, Petroleo Brasileiro SA.

``Oil is an exhaustible resource,'' Gabrielli said in an interview today in Rio de Janeiro. ``In order to produce new oil to replace the barrel you just used, you have to find oil that's much more expensive than what you already produced.''

Oil prices drop to 124 dollars in New York

LONDON (AFP) - Oil prices headed south again on Friday, cutting short a brief rally amid a drop in fuel demand across the United States, the world's biggest consumer of energy.

Crude futures had risen earlier Friday and on Thursday in what traders described as a technical rebound following two days of heavy falls.

New York's main contract, light sweet crude for September delivery, shed 1.49 dollars to 124 dollars a barrel in pit trading.

Brent North Sea crude for September dropped 1.41 dollars to 125.02 dollars in electronic deals.

Worst over for drivers as pump prices slide: AAA

NEW YORK (Reuters) - U.S. retail gasoline prices have fallen more than 10 cents per gallon in a week and could fall another 25 cents by the end of summer, a sign the worst is over for U.S. motorists this vacation season.

Venezuela agrees to sell Spain oil at 100 dollars a barrel

MADRID (AFP) - OPEC member Venezuela agreed Friday to sell Spain 10,000 barrels of oil per day at 100 dollars a barrel in exchange for medicine and other goods, a Spanish government source told AFP.

Venezuelan president wants oil to stabilize at 100 dollars per barrel

MADRID (AFP) - The price of oil should stabilise at around 100 dollars per barrel, Venezuelan President Hugo Chavez said Friday during a visit to Spain.

"The price of oil needs to stabilise. The price according to our interpretation should be lower and stabilize at around 100 dollars per barrel," the head of the OPEC member state told a joint news conference with Spanish Prime Minister Jose Luis Rodriguez Zapatero.

"No one, no one, no one thought that oil could come near 150 dollars a barrel in such a short time. It was unthinkable six months ago, now it should stabilize," he added.

Fuel deal for new HECO plant challenged

Hawaiian Electric Co. is a year away from switching on a new power plant that will run exclusively on clean-burning biofuel, but getting the fuel delivered is turning into a challenge that may cost utility customers more than expected.

The Seattle-based company that was supposed to build a $90 million biodiesel processing plant to supply the fuel for HECO's new facility at Campbell Industrial Park has put its plans on hold.

Device could help stretch a gallon of gas

CHICAGO - A new, highly efficient material that converts heat into electricity may one day help cars get the most out of a gallon of gas, U.S. researchers said on Thursday.

Amish also feel strain of high fuel costs

The Amish, widely known for their horse-drawn buggies and a lifestyle that shuns many modern conveniences, are as susceptible to the sting of rising oil prices as anyone else.

From the diesel fuel for tools used in milking cows, building cabinets and sawing timber, to the gasoline used to power washing machines and freezers, the pinch is real.

Amish are banned from driving cars and trucks because Amish leaders worry that faster transportation could "pull the community apart." The prohibition, however, does not extend to fuel-powered motors and engines such as those used to run power tools and washing machines, says Donald Kraybill, a scholar on the Amish at Elizabethtown College in Elizabethtown, Pa.

An old misconception

The UK has around 60 million people; but the average British citizen creates nearly 10 times more carbon dioxide emissions than the average Indian, and 166 times more than the typical Ethiopian. So the best way to deal with climate change is not for Ethiopia to curb its (runaway) population growth, but for the British and others in the west to reduce their greenhouse gas emissions. Since most of the population in 2050 will be in the poorest countries with the smallest carbon footprints, birth control will do little on global warming. For the British to limit themselves to two children per family, as the BMJ piece argues, is besides the point: birth rates in the UK are just 1.7 children per couple. The authors of the BMJ piece are associates of the Optimum Population Trust. That group believes the UK should only have 17 million people; which 17 million it does not say.
(The article that spurred this response is here.)

Canada: Food for thought

"There could be a food shortage in Canada in time."

...He said irrigation costs have doubled because some equipment used to pump water into fields uses up to 23 litres of fuel per hour.

"It’s like having your bank account attached to a fuel line; just draining the money out of it," Mr. Evans said.

Farmers are also facing steep increases in the cost of fertilizer, packaging materials and labour.

"We are going to lose farmers," he said.

Qatar seeks solution to food crisis

Tariq Ali Faraj Al Ansari, a First Secretary at Doha's UN mission, told the General Assembly that skyrocketing food prices have reached "emergency proportions" that only "radical solutions" will overcome.

The Qatari diplomat spoke during a two-day debate at the UN headquarters in New York that assessed whether slashing subsidies and lifting trade barriers would stimulate food production and help Africa's one million smallholder farmers.

"The time of easy access to food is long gone — the world is today witnessing unprecedented increases in food prices in global markets," Al Ansari told the 192-member body on Monday.

Charcoal, agriculture and climate change

Slash and Burn agriculture is practiced by 300 to 500 million people on one third of the 1500 million hectares of arable land on the planet. Yet pressures remain high for clearing of natural habitat in order to expand agriculture. This is because of the expanding population, countries need for export market income and American and EU demand for biomass fuels. In Brazil alone carbon emissions from annual forest clearing amounts to 20% of the total released in the country.

There is another type of tropical agriculture called slash and char which would promote soil fertility, allow for shorter rotation periods and also reduce dependence on chemical fertilizers. This farming technique was formerly practiced by the Amerindian people 500 to 2500 years ago and was discovered independently in Asia. It is quite a simple concept actually, as these native Amazon Rainforest farmers had only stone tools and felling the forest for fresh, fertile ground was very difficult. Instead, they conducted a smothered combustion of agricultural debris, and supplemented this with domestic manure and household debris. This charcoal built up in the soil over time and became a durable substitute for soil organic matter. This black carbon lasts for ten’s of thousands of years in the soil as opposed to a few seasons at best. The result is a soil with chemical and biological properties that convert unproductive tropical oxisols to fertile soils that are still farmed even 1000 years after the original people have disappeared.

Fuel-toting border crossers draw ire in Juarez

The cross-border commerce is raising the ire of some Mexican fuel consumers in Juarez; they don't like the idea of U.S. consumers taking advantage of fuel prices kept artificially low courtesy of their own tax dollars.

Crude and oily: Energy reform in Mexico

All parties agree that things look bad. There is also some consensus that deepwater exploration of the type that has been so successful in Brazil is now necessary. But there is no agreement on how to fund it, or where to get the technical expertise for deepwater drilling from. This wrangling reveals much about Mexico’s underlying thinking about the respective roles of the state and the private sector.

Power, diesel crises hit industry hard

BANGALORE: The acute shortage of diesel and interrupted power supply have adversely impacted the workflow and productivity of businesses across domains in the city. The scenario has compelled some large IT, BPO firms to cut their pickup/drop cab frequency and almost all industrial units in Peenya to sign on a “staggered holiday’’ policy. The city has a tech/BPO population of around 10 lakh, who need over a lakh cabs and own vehicles to reach workplace and back.

In fact, the current power and diesel scenario is eating into the mindshare of company heads. Every day they are uncertain about how many of their employees get to work.

China Holds Meeting on Coking Coal, Steel Price Caps

(Bloomberg) -- China's National Development and Reform Commission, the country's top planner, held a meeting to discuss imposing price caps on steel, coking coal and coke to help manufacturers cope with rising costs, two officials said.

The oil speculator sideshow

NEW YORK (Fortune) -- Watch out, speculators: The Commodity Futures Trading Commission is getting tough on crime. But since, as the CFTC has said, speculation hasn't pushed up prices, the crackdown will benefit its image more than the economy.

Last night's TV

Still, I can't help thinking Burn Up is issue-led, rather than story-led. The overall feeling is of an environmental message, with a drama shoehorned into it (dramaganda?). Obviously it's an important message; I'm just not sure this is the best place to get it across. A bit crude, then, as opposed to refined.

Higher prices, wider waistlines: Unless the cost of food is reined in, expect to see obesity levels continue to climb

In many parts of the world, the huge jumps in food prices have added to the millions who go hungry. Even in the U.S., food price increases have driven many more to seek out food banks and pantries that are already being squeezed by higher costs and greater demand. Although one might think that higher food prices would decrease obesity by decreasing food consumption, the reality is that one can expect higher food prices to increase rather than decrease obesity.

...Using biofuels to address the energy crisis is turning out to be a cure that may be worse than the disease. Burning food in gas tanks while hundreds of millions around the world face starvation is a horrific prospect. But it's not just a problem for poor countries. The inevitable increases in obesity from high prices of food and fuel will be costly in human suffering and healthcare dollars here as well. Along with hunger, rising obesity, diabetes and heart disease will take their toll on the poor and middle-income -- while agribusiness literally makes a killing.

Energy Is Top Economic Issue for Voters

WASHINGTON -- Congress will likely break for the summer without passing legislation to curb high gasoline prices. But Americans are fashioning their own energy policy, founded on conservation and support for more production.

A new Wall Street Journal/NBC news poll finds that energy -- including gasoline and utility costs -- ranks as the economic issue that voters say affects them the most personally.

Some Reality, Please

If the Senate could summon some wisdom, it would interrupt its mud wrestling over partisan placebos for the gas crisis long enough to debate something real: emergency help for the nation’s poorest families who face skyrocketing home heating costs this winter.

FACTBOX: Dolly's impact on Gulf of Mexico oil sector

(Reuters) - Companies begin returning workers to U.S. Gulf of Mexico oil and gas platforms and restoring oil and gas output shut due to Tropical Storm Dolly. Shut-in gas was down to 5.5 percent of Gulf output, down from 7.9 percent July 23, and shut-in oil was down to 1.4 percent of Gulf output, down from 4.5 July 23.

Even Southwest's outlook is uneasy for 4th quarter

Buffeted by stubbornly high fuel prices and a soft economy, U.S. airlines are facing such a tough outlook next quarter that even Southwest Airlines' (LUV) 17-year string of quarterly profits could come to an end.

Australia: Food supplies to be halted by rogue truck drivers

Truck drivers are planning a nationwide two-week strike that could limit the supply of food and fuel.

Requesting better pay and conditions, the organisers, led by the Australian Long Distance Owners’ and Drivers’ Association, are asking truck drivers to strike for two weeks from July 28.

Gas crisis ‘to push building costs up’

Perth is the 10th most expensive city in the world in which to build and prices are predicted to rise over the next year because of the State’s gas crisis, figures compiled by a leading global property and construction company have revealed.

Post Carbon Institute Releases Plan for Al Gore's Generational Challenge to Repower America: 10 Steps in 10 Years to 100% Renewable Energy

Post Carbon Institute today announced a comprehensive 10-point plan to achieve Vice President Al Gore's goal of 100% renewable energy in 10 years:

1. Reduce 2. Share 3. Diversify 4. Distribute 5. Store 6. Reinvest 7. Relocalize 8. Reengineer 9. Reskill 10. Remobilize

A detailed framework has been released online at http://www.postcarbon.org to serve as a guide for policy makers, citizens, and businesses.

Oil group warns against attack on Iran

A peak-oil lobby group has warned against an attack on Iran, saying it could cripple Australian transport.

Tensions between Iran and the US are high because of Tehran's continuing nuclear program.

“A conflagration in the Persian Gulf could make a 30 per cent reduction in petrol and diesel supplies, similar to Western Australia's gas shortage, but with much more severe and widespread consequences,” the Australian Association for the Study of Peak Oil and Gas said in a statement.

The FDRs of Green explain the gentle art of planet saving

A "triple crunch" of financial crisis, climate change and soaring oil prices threatens the world with a new Great Depression so, 'drawing inspiration from FDR' the Green New Deal Group proposes "a modernised version" of the solution. FDR himself being unhappily unavailable, we have the newly-formed group and its eponymous report instead. And frankly, it goes downhill from there.

Oil Drillers’ Lies Are Too Damaging To Be Ignored

But all the tea in Houston can’t undo the clear words of the U.S. Energy Information Agency’s “Energy Outlook 2007” report: “The projections in the Outer Continental Shelf access case indicate that access to the Pacific, Atlantic and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.”

In the case of the oil industry’s Holy Grail, permission to drill Alaska’s Arctic Wildlife Refuge, the EIA finds that such a boondoggle would lower the price of gasoline by approximately 78 cents per barrel – or four cents a gallon – in 2027.

Anyone casually familiar with the concepts of global warming and peak oil and gas (see www.energybulletin.net/primer) already knows that if the world is still that dependent on petroleum use by either 2027 or 2030, it’s all over anyway.

India: Opec’s got us over a barrel, let’s play our cartel right

Finance minister P. Chidambaram made an eloquent plea in Jeddah for the adoption of an oil price band mechanism in which consuming countries guarantee that prices would not fall below an agreed level while producing countries undertake that prices would not rise above a guaranteed level. How feasible is this idea? The assumption is that oil producers like Saudi Arabia have the say in price fixation. Not surprisingly, he also asked them to reassert leadership in price formation from speculators.

Arctic oil is no Texas tea

“This report supports my view that the era of cheap oil is probably over, and that the peak oil theory may be premature in its dire forecasts,” he said in a note to clients. “So do we sell energy stocks now and buy property in Greenland? No and yes, in my opinion. If oil prices continue to tumble, we can count on OPEC to say, ‘See we told you so. The oil market has been well supplied.' We can also count on OPEC to cut production.”

Congress out of gear on oil plans

As the nation's consumers and businesses suffer from sky-high petroleum prices, both parties blamed the other for playing political games — a refrain that is becoming increasingly frustrating to a public that gives Congress an approval rating of just 11 percent.

Byron King: A View from the Peak of the Global Economy

What seems pretty clear is that at $140, a lot of things in this world just don't work anymore. Airlines are, obviously, one business not built around highly priced oil. Worldwide, 24 airlines have gone bankrupt so far this year.

But there are other parts of the transport system, the food system and the economy that are cratering with the oil run-up.

Sure, a lot of things don't work well even with oil at $130, $120 or $110. But that's not the point. It seems that above $140, the developing world just stops developing. We saw pain at $100 and above. We were beginning to see true demand destruction above $140. So oil pulled back, and perhaps for a while.

Record prices put Arctic oil within reach

WASHINGTON -- Global warming and record high oil prices could put Arctic oil and gas into play much sooner than many people think, analysts and industry officials say.

The significance of this week's groundbreaking U.S. Geological Survey report on the Far North's untapped potential is that it stretches the bounds of just how much crude may still be out there, said Kevin Book, an analyst at FBR Capital Markets in Arlington, Va.

"Everything is now in play," Mr. Book said. "That should give any peak oil person bad heartburn, if not outright anxiety."

The Real Question: Should Oil Be Cheap?

Expensive energy, in many ways, is good. Why? When the price of oil goes up, people will use less, find substitutes, and develop new supplies. Those effects are just basic economics. Things are so painful now, many economists say, because of the past two decades of cheap oil. Prices stayed low in part because they didn't reflect the full cost of extras such as pollution, so there was little incentive to use energy more wisely. If those extras had been counted, the country would be better prepared for both today's soaring prices and the day that global oil production begins to decline.

Oil majors' profits to soar on record crude

LONDON (Reuters) - The world's five largest fully publicly traded oil companies are expected to, yet again, report record profits next week, thanks to high oil prices, even as investors fret over the recent pullback in crude.

In addition to earnings, investors will also be watching for news on controversial, long-delayed service agreements with Iraq and for signs soaring costs are easing.

China's coal price caps could worsen shortages - Morgan Stanley

BEIJING (XFN-ASIA) - China's attempts to cap coal prices in order to encourage power generators to maintain full output could be counterproductive, with private miners likely to cease operations until the caps expire, said Morgan Stanley.

In a note to investors, it said that 'given the inelastic coal demand, we believe the incentives for coal mines, especially privately owned mines, to ask for higher prices remains high.'

Spotlight on a ‘Dark Market’

Lawmakers have leveled some scathing adjectives at the IntercontinentalExchange, known as the ICE, a technology company whose electronic markets are at the center of fierce debates about commodity speculation raging in Congress recently. It has been called shadowy, conspiratorial, unregulated and opaque. There have been hints, too, of links to market manipulation and even the Enron scandal.

House proposal to tap strategic oil reserves fails

WASHINGTON - The House of Representatives on Thursday failed to pass legislation intended to cool off gasoline prices by requiring the government to sell 70 million barrels of light sweet crude oil from the Strategic Petroleum Reserve, the national stockpile.

Democrats had pushed the legislation, hoping to lower surging oil prices by putting more of the reserve’s light sweet crude, sought by refiners, on the market. Sweet crude is desirable because it has less sulphur and is more easily refined into gasoline, diesel fuel and other petroleum products.

Billions needed to shore up nation's bridges

States are fixing bridges that are in the worst shape, but long-term repairs and upkeep will still suffer unless funding increases, says Kent Harries, a University of Pittsburgh engineering professor.

"We will see more bridge collapses," says Harries, who specializes in bridge engineering.

Colorado has identified 125 major bridges in need of replacement or major repair at a cost of $1.4 billion. Funding for repairs, though, fell from $32 million in 2007 to $18 million in 2009.

States are facing cuts in federal funding next year because of a projected $3.2 billion shortfall in the Highway Trust Fund. The gap is expected to grow because Americans are driving less.

Virgin Islands weighs gas pipeline to Puerto Rico

CHARLOTTE AMALIE, U.S. Virgin Islands - The U.S. Virgin Islands may build a pipeline to replace diesel-generated power with natural gas brought in from a bigger grid in the nearby U.S. territory of Puerto Rico, the head of the islands' utility company said Thursday.

Engineers are looking to recalibrate oil-dependent generators to burn cheaper natural gas instead, Hugo Hodge Jr., chief of the U.S. Virgin Islands Water and Power Authority, known as WAPA, told an annual meeting of the utility's board.

State highway patrols struggle with big gas bills

HELENA, Mont. - In big, wide-open Montana, a state trooper might have to drive more than 100 miles to answer an emergency call, and routinely puts several hundred miles on the odometer in a day.

With gasoline at $4 a gallon, all that driving is tearing up the Highway Patrol's budget.

It is the same story elsewhere around the country, especially in big, sparsely populated Western states with vast stretches of highway. State police agencies nationwide are scrambling to reduce gasoline use and find the money to cover their costs. Some are beginning to worry that they will have to cut back on hiring officers.

The Insanity of Drive-55 Laws

It didn't seem possible that politicians could think up a sillier energy proposal than Barack Obama's windfall profits tax on oil companies, but Republican Sen. John Warner of Virginia has done just that.

Earlier this month, Mr. Warner suggested a return to the federal 55-mile-per-hour speed limit on America's highways, as a way to save on national gasoline consumption.

Gazprom counts on Western lobby to soothe EU fears

MOSCOW (Reuters) - Russia's Gazprom is working on turning its Western partners into a lobby network to try to overcome the European Union's worries about its aggressive expansion plans.

EDF lifts gas and electricity bills for millions

Millions of households will see their fuel bills increase by 20pc from today after EDF Energy said it could no longer cope with soaring global gas and oil prices without passing on the costs to its customers.

...Energy experts, who had been expecting energy companies to increase their bills during the summer, were taken aback by the scale of the increases. Most had forecast an increase of 15pc at most.

Schools eye four-day week to cut fuel costs

NEW YORK (Reuters) - Facing a crippling increase in fuel costs, some rural U.S. schools are mulling a solution born of the '70s oil crisis: a four-day week.

Cutting out one day of school has been the key to preserving educational programs and staff in parts of Kentucky, New Mexico and Minnesota, outweighing some parents' concerns about finding day-care for the day off.

FACTBOX - German electricity transmission grids

(Reuters) - Vattenfall Europe is the latest big German power company to propose selling its high voltage grid to help unify the country's 1.7 million kilometre transmission networks amid tight regulation.

Policymakers have put pressure on dominant utilities to give new players access to former monopoly markets to help scale back soaring energy prices and increase pan-European integration.

China oil giant says it will cut jobs

BEIJING - China's biggest oil producer, China National Petroleum Corp., will reduce its workforce by 5 percent to control costs, the company said on its Web site Friday, amid a profit slump blamed on government price controls.

Gunmen kidnap two oil engineers in Nigeria: sources

PORT HARCOURT, Nigeria (Reuters) - More than a dozen gunmen in speedboats kidnapped two oil engineers, one from the Philippines and one Nigerian, in the main oil industry city of Port Harcourt on Friday, security sources said.

The men were working for Damas Oil and Marine Services, an offshore oil services firm, a private security contractor in the oil industry said. He said no ransom had yet been demanded and that the kidnappers were not known to the security forces.

Controversial environmental author Paul Ehrlich talks biofuels, offshore drilling, peak oil (video and transcript)

Forty years ago, author Paul Ehrlich stirred up controversy by predicting that the world's steady population growth would cause hundreds of millions of people to starve within a decade of publication of "The Population Bomb." Though his predictions were wrong, he is often credited with having had a major influence on the environmental movement in the '60s and '70s. During today's OnPoint, Paul Ehrlich, author of the new book "The Dominant Animal" and Bing professor of population studies and professor of biological sciences at Stanford University, gives his take on today's top energy and environment issues. He also responds to critics who have accused him of using scare tactics.

Gassing Up With Garbage

After years of false starts, a new industry selling motor fuel made from waste is getting a big push in the United States, with the first commercial sales possible within months.

EPA chief won't explain climate choices

WASHINGTON - Environmental Protection Agency chief Stephen Johnson has declined to explain before Congress how a conclusion he made last year that global warming put the public in danger could lead to a decision not to regulate greenhouse gases.

EPA: Few volunteering to cut greenhouse gases

WASHINGTON - Voluntary pollution-reduction programs touted by the Bush administration as part of the solution to global warming have "limited potential" to reduce greenhouse gases, according to an internal government watchdog.

The Environmental Protection Agency's Inspector General's Office said industry's unwillingness to participate and unreliable data that casts doubt on claimed reductions are hindering efforts to control some of the most potent greenhouse gases from aluminum smelters, landfills, coal mines and large farms.

China: Melting glacier leaves world's worst polluter with no room for doubt

Compared with the collapse of ice shelves in the Antarctic, the melting of the mountains in China's far west is one of the less spectacular phenomena of global warming, but it is a more immediate cause of concern and hope.

There is concern because this glacier - more than almost any other in China - is a natural water regulator for millions of people downstream in the far western region of Xinjiang. In winter, it stores up snow and ice. In summer, it releases meltwater to provide drinking and irrigation supplies to one of the country's most arid regions. It brings hope because its rapid shrinkage is helping to set off climate-change alarm bells in a country that emits more greenhouse gases than any other.

UK: Call to dub climate change 'a catastrophe'

THE government should stop talking about global warming and start using the term "climate catastrophe", a leading scientist said yesterday. Dr Richard Pike, chief executive of the Royal Society of Chemistry, also called for a commitment to deliver a large-scale use of renewables and nuclear power, rather than encouraging "trivial solutions" such as washing clothes at low temperatures.

Google, who we all know and love, announced an investment in Aptera yesterday....

Driving plug-in technology with investments of $2.75 million

Today we are pleased to announce our first RechargeIT investments in two promising companies tackling the challenge of vehicle electrification.

Aptera Motors of Carlsbad, California is building an ultra-high efficiency vehicle based on improved aerodynamics and composite materials. Aptera's first prototype achieved over 230 miles per gallon during testing, and they are developing an all-electric as well as a plug-in hybrid vehicle based on this design.

Some youtube vids of the vehicle:


Data, this is a neat little summer vehicle. Not wanting to quibble on the design I think those outlier front wheels would be a real vulnerability in the real world. In any event, these efforts are still part of the effort to maintain or commutting as usual life style. I am more excited by their investment in the battery technology and certainly hope tha makes progress. It would be great to see more investment in electrified farm tractors.
and this is an interesting read:
But thanks for the post. The car is a very interesting bit of technology.

would be a real vulnerability in the real world

I don't know about you, but the real world I'm going to be living in shortly is going to have a lot less (and smaller) cars on the road - and it won't be by choice either.

Take for example Fords moves to smaller vehicles. It's already started re-tooling it's facilities. Cuts in non-discressional driving, car sharing, move to public transport, freight to rail etc.. etc.. All these things are going to REDUCE the amount of traffic on the raods by necessity due to high fuel costs.

Therefore these vehicle will become more practical as time progresses. There is one caveat. This is all assuming the roads are in good enough condition to handle personal vehicles without resorting to 8in suspension!!


This is all assuming the roads are in good enough condition to handle personal vehicles without resorting to 8in suspension!!

I believe that is assuming a lot. I’ve noticed that roads, especially the two lane county blacktops have been getting much worse. In large urban areas there are streets that are almost impassable from large potholes after the winter freeze/thaw/salting cycles. With less vehicles, less taxes to repair. County budgets are stressed as it is to maintain roads. I’d lean toward a modified dune buggy type of vehicle myself, one that could go down gravel roads with a minimum of discomfort or loss of handling.

I see the same as you. There is the other side to the coin and that is less traffic and lighter vehicles will do much less damage to the road.

If you study the dynamics of sprung masses (a highly exciting topic I got to do (almost fail) in 2nd year engineering!!) - reudcing mass greatly reduces rebound forces and road damage.


I foresee a boom in the shock-absorber business.

I am also anticipating rougher roads. That's one of the reasons for my procurement of a dual-purpose motorcycle. Offroad capabilities, but street legal, and gets fantastic gas mileage. If I can run through mud pits, go over felled trees, over large rocks and across large holes in dirt trails, I'm pretty sure I can handle a few potholes. ;)


Bruce: I saw a modified dune buggy sort of thing at the Plug-in 2008 Conference in San Jose two days ago that looked really, really sweet. All-electric (lead acid) 4WD, ~50 mile range (on the flat) on a charge, incredibly beefy steel construction, rear and roof cargo racks, winch on the front, great suspension, big knobby tires, the works. This ain't no dressed-up golf cart. Runs about $9K though, made out of Mississippi. www.badboybuggies.com The trade show rep said they have about 10,000 of them in the field so far. Might be just the thing for the badly maintained roads of the future!

Therefore these vehicle will become more practical as time progresses.

One way to get a fix on the underlying economic logic for vehicles such as the Aptera is look at what's happening with golf carts.

Golf carts are incredibly inferior to regular vehicles in almost every way.


(with a quick search on news.google.com)

Here's a fraction of recent stories:

Golf carts may take to the streets

Pinehurst allows carts on village streets

Golf carts switch course from green to road
Rising fuel costs drive move to economical but unconventional transport

Gas prices fueling golf cart use, sales

Golf Carts Prove Good Alternative in Certain Neighborhoods

Vincennes considers making golf carts legal streets

Golf carts driven on city streets

The Aptera, on the other hand, can do 85 miles per hour. There are youtube videos of it on highways alongside 18-wheeler transport trucks. At one point they draft behind one! :-)

You are not going to see electric tractors working our USA farms.
If diesel fuel becomes too expensive or unavailable, then farmers will return to farming similar to what they did before oil. They will grow their own fuel. No, they will NOT go back to horses as growing the oats and hay to feed them took about 1/3 of their agricultural land. By growing oil seed crops on about 1/10 of their land they can produce the biodiesel fuel to continue to power their diesel tractors.
This will precipitate a result similar to Jeffry Brows ELM for oil. Farmers will be consuming more of their crops themselves and therefore they will have less to "export" off the farm.
As we head down the back slope of Hubert's Peak and farmers start growing their own fuel (for their tractors, home heating, electric power?, crop drying, barn heating, etc...), I will predict that "exports" of food off the farms will drop by 1/3 to 1/2 and food prices will raise very dramatically. We might be able to feed maybe 200 million citizens out of a population of 300-450 million. Do you think we can add "grave digger" the the list of very secure jobs?

This is joke, right? :-)

If not, may I offer a rebuttal in outline?

Calculate the amount of diesel used by farmers as a fraction of total crude consumption. It is tiny. Maybe in the 1% range. Note that crop prices have been rising handsomely along with oil prices.

BTW, the land in the US currently devoted to biofuels is already close to enough to cover agricultural usage.

(I'll work the numbers later if necessary)

I agree ..... farmers will NOT grow internal combustion engine fuel , if they have to use that fuel to do it.

"farmers will NOT grow internal combustion engine fuel, if they have to use that fuel to do it."

I think farmers don't think in absolutes like the above. They will discuss. Ask the county Ag Ex agent to run the numbers. Run the numbers themselves. Reject the idea if if doesn't make sense, but try it if it does. At risk of contradicting may own assertion. Farmers will absolutely not wing it based on something they read on the internet or heard on CNBC.

yabut. are you including the diesel used in transporting stuff to the farm and stuff from the farm ?

grain trucks are a major hazard, they always seem to be in a big, real big, hurry. i dont know why. some of their trucks are worn out otr trucks, the safety of which may be in doubt. imo, they are a menace.

livestock haulers are similar, except they have fancier trucks. i dont know why, but they always like to have lots of marker lights.

The ELM model applied to farming is very interesting - and frightening.

I have a question about using biofuels for farming.

When horses were used to power farming, the nutrients containing in their food was returned to the soil via manure. Producing their food did not deplete the land.

Burning biofuels in an ICE doesn't return any nutrients to the soil, AFICT. So, wouldn't the use of biofuels increase soil depletion rates?

Ahh but the oil is mostly C and H.

The plant matter COULD be returned to the soil in the 'local farmer makes local fuel' model VS the other models of bio fuel

I can see electric tractors in 20 years. DC motors are great for low rpm/ high torque applications. That's why diesel locomotives run a electrical generator instead of direct driving the wheels. The tractor could even partially recharge as it worked from PV solar.

Wouldn't a decent solution for tractors (non fossil fuel) be hydrogen internal combustion? (H2 ICE)

The H2 ICE is simple (unlike fuel cells) and already thoroughly usable once you secure your source of hydrogen. But that's a practical rather than technological problem since they can produce H2 for under $4.00 per kg now from renewable sources.

For some time H2 ICE vehicles have offered decent performance.

But gas was too cheap for them to be taken seriously as a mass market item, especially with little hydrogen infrastructure.

Wouldn't a decent solution for tractors (non fossil fuel) be hydrogen internal combustion? (H2 ICE)"

It depends a lot on where the H2 comes from. If from NG, I doubt H2ICE makes much sense. If from biomass, maybe the conversion will have to be done locally to avoid transportation cost (more fuel spent on process). There are many suggestions for sources of H2. Some appear to be implementable on small scale, others only make sense at a nuclear power plant. I think the Hydrogen Economy presupposes that there will be multiple source of H2 in competition, all getting paid the cost of the most expensive process. (as required by economics) Again, I think farmers will run the numbers and each will choose what works for him/her.

In the context of picking themselves up and trying to survive in a collapsing economy, I think they gravitate towards self-supply.

Wouldn't a decent solution for tractors (non fossil fuel) be hydrogen internal combustion? (H2 ICE)"

Nope. H2 doesn't store well and making H2 is rather 'lossy'. Then you will react that H2 to make H2O in a heat engine that is 30% efficient - so unless you have more energy than you know what to do with, it is a bad plan.

The problems with H2 storage is such that the fuel cell people who want to use H2 in fuel cells have given up.
(Source - the watt podcast - talking about the fuel cell trade group)

Can you provide a link? That seems ridiculous.

For small vehicles, hydrogen is losing to EVs. But note that losing to another technology doesn't mean a technology can't work. It means it can't compete head to head. H2 ICE vehicles have existed for a while and have been in commercial use for a couple of years. If battery tech for EVs were to hit a snag, H2 ICE would be brought forward.

And regarding H2 fuel cells, they are very much in play for the future, especially in applications quite different from personal vehicles.

Can you provide a link?

Sure, because why should anyone believe me.


Dr. Ulf Bossel who is the organizer of the European Fuel Cell Forum in Lucerne - the below is from him.

the week of July 3rd and the announcement was that any discussion of hydrogen and PEM fuel cells will not be continued.
If you go through a hydrogen chain, you find that after the fuel cell only 25% of the original electricity is available for use by consumers. A hydrogen economy is a gigantic energy waste. We cannot afford this in the future. Therefore, three of four renewable energy power plants are needed to balance the losses within a hydrogen economy luxury. Because of the losses, electricity derived from fuel cells and hydrogen must be four times more expensive than power from the grid.

And regarding H2 fuel cells, they are very much in play for the future,

Your turn. Prove this. Show your references.

Just go to news.google.com and search on hydrogen fuel cell.

You'll have 100's of references.

And what part of The people who are running the fuel cell conferences are not willing to waste time talking about straight up H2 fuel cells until other issues not related to the actual H2 fuel cells themselves is not worthy of consideration?

Just go to news.google.com and search on hydrogen fuel cell.
You'll have 100's of references.

So? I can read 100's of reference articles calling slavery OK. Or 100's of articles saying there is no Peak Oil. Or 100's upon 100's claiming my God is right and whatever God you are following shows you are wack and doomed. 100's of 'references' to bullshit doesn't make the bullshit less bull-shitty.

You made a claim that H2 fuel cells are viable. So prove it. Show how Dr. Ulf Bossel's concerns are wrong. For extra credit - debunk Don Lancaster

(Me, I'm off to edit my profile yet again to add how hydrogen is bunk. Not as bunk-y as SPS or SSP (space based power) but still bunk.)

i would add: why bother with hydrogen at all? as bad as it is, bio-diesel is pretty close to vegetable oil, which has been under continuous production by plants for billions of years. there has been no free hydrogen on this planet, ever.

water is the exhaust of a hydrogen engine. converting water to hydrogen is exactly the same proposition as converting car exhaust into gasoline. both are fundamentally energy losers, for the same reason.

i sinned by mentioning bio-diesel so i'd like to finish with: there is no way for us to continue industrial society on this scale. bio-diesel won't fix this, and nothing else will, either. we will scale down, whether we want to or not.

i would add: why bother with hydrogen at all? as bad as it is, bio-diesel is pretty close to vegetable oil

I don't care for the Alcohol answer - but it DOES store well - better than oil, rock or veggie.

Oils and Alcohol, in theory, are useable straight up in fuel cells. Both are 'Hydrogen can be reacted and energy released' storage methods.

i sinned by mentioning bio-diesel so i'd like to finish with: there is no way for us to continue industrial society on this scale.

(What sin? It is storable, do-able with machine tools/metal working, and would use less land than using animal power to work the land.)

Hence PowerDown. What we have, and what we are used to is gonna come to an end. We can step away, or we can fight (and still end up stepping away)

(We've had beam power from space and now H2. What's next as the hopeful topic to be brought up - that Space Aliens are real like Edgar Mitchell says and when the aliens share their power generation tech we are all saved? http://www.americanchronicle.com/articles/69539)

(What sin? It is storable, do-able with machine tools/metal working, and would use less land than using animal power to work the land.)

yes, the bio-diesel to power tractors would use less land than growing food for horses and oxen.

but, of course, bio-diesel alone can't work a field. it needs a tractor, which is made of steel, which is explored for, mined, smelted, and manufactured with fossil fuel.

while it may be possible to make tractors without fossil fuel, such a thing has never occurred in the history of the universe, so i would require proof before blindly accepting its certainty.

in the timespan of the next few hundred years, yes of course there will be plenty of steel for tractors, and yes of course bio-diesel will be as good as any other fuel.

but in the timespan of the next few thousand years, we can't assume steel at all. all we've produced today will have rusted away forever.

while it may be possible to make tractors without fossil fuel, such a thing has never occurred in the history of the universe, so i would require proof before blindly accepting its certainty.

I'm willing to be optimistic enough that electric power from hydro will be important enough to 'save' and from such you can power electric heaters to drive the CO2 from limestone to make concrete and drive the steel mini-mills.

but in the timespan of the next few thousand years

Steel is too gosh darn useful to man. It won't go away unless there is such wholesale destruction of man that humans are living hand to mouth and burn the books. Why would a copy of a low acid paper book on laplase transforms or the magnetoresitive properties of motor laminations be useful if you need a fire?


By February we ran out of wood and I burned my mother's dining room furniture.

Steel is too gosh darn useful to man. It won't go away unless there is such wholesale destruction of man that humans are living hand to mouth and burn the books. Why would a copy of a low acid paper book on laplase transforms or the magnetoresitive properties of motor laminations be useful if you need a fire?

No, steel rusts at a rate determined by nature, regardless of what man wants. Within a few thousand years, all of today's steel will have completely rusted.

Before fossil fuel, steel was supremely precious military high-tech. After fossil fuel, it will likely return to this role.

Iceland smelts specialty steel (silicon steel for electrical applications) with renewable electrical power. I believe that Sweden uses the same process for surgical steel.


I've visited a Hydrogen research project in Maine which has been running for 2 years. On our tour, I was not told that they've had these renouned storage problems. The tanks and lines do have to undergo testing, and I don't know the lifespan expectancies, but we do have industries dealing with hydrogen already, it's not fusion.

It's generating H2 from Solar PV, and using Fuel Cells as backup power for some of the foundation's buildings. (They also have an early installation this year of a PV/Hydronic Heating Hybrid that preheats water while it keeps the PV cool and running optimal watts.. sorry, no linky.)

"The Chewonki Renewable Hydrogen Project is a demonstration project that will help bring Maine and the world closer to a healthy, sustainable environment..."

here's their tech links page, while much of it is Password protected..

some other H2 Projects they point to..


I've visited a Hydrogen research project in Maine which has been running for 2 years. On our tour, I was not told that they've had these renouned storage problems.

So you were expecting that people who are getting research money are going to mention negatives?

I'm going to ignore the effects of what would be a big increase in H2 in the air - because like when chloroflorocarbons where introduced - no one really knows. People I'm sure have theories and long term O3 - H2 reactions and H2 escaping the biosphere might just be an issue.

I'll stick to what others say about storage.

Hydrogen's low boiling point requires excellent insulation of storage containers; otherwise, left for a period of time, the storage tanks could become depleted. Maintaining the extreme cold temperatures of LH2 during refueling and onboard storage currently poses a significant technical challenge, with 25 percent of LH2 boiled off during refueling and 1 percent lost per day for onboard storage.

(Loosing 1% of your stored energy a day strikes ME as an issue. If you are selling H2, sounds like a good business to be in)

Hygrogen Metal embrittlement via NASA


But a separate issue — hydrogen “embrittlement” — is an equally challenging technical hurdle that has gone largely unnoticed by the general public.

“Because of its small size, hydrogen can readily diffuse (scatter or disperse) into materials at room temperature,” says Somerday. “Other gas species can promote embrittlement of structural materials, but the mobility of hydrogen at room temperature makes it unique as an embrittling agent.”

As many farmers have possible sources of methane available already, either from manure or from left over organic matter, bio methane powered tractors are much more likely than H2 powered tractors.

Lots of news on the Aptera these days. This out today...

Aptera Raises More Than $24M in Series C Round

Funds will be used for a new manufacturing facility in Vista, California.

Some vehicle details:

The first production models of the Typ-1 are planned to be available in December 2008 with the production rate increasing throughout 2009. With a coefficient of drag one-third of that of a subcompact car and less than half the weight, the all-electric version will get up to 120 miles per charge, while the hybrid version, which will follow in about 12 months, will achieve close to 300 mpg.

Google is also investing in space tourism, but I don't expect to be taking a ship to the Moon in my lifetime. :)

As with the air car, the hydrogen car, the plug-in electric car, and the personal jetpack, I'll believe in it when I see it for sale in the stores. Until then, it is just more geek vapourware.

I'll believe in it when I see it for sale in the stores. Until then, it is just more geek vapourware.

But if we wait that long before accepting that a technology is inevitable, we would have no forecasting ability about future tech.

As much as we are energy, we are also technology and it saturates our lives. So forecasting technology is a huge part of seeing what we will be in future.

In fact, if we don't figure out what tech will be available, it's arguable we don't know what our daily lives will be like.

RE this vehicle in particular.....

It doesn't strike me as being rocket science. To re-quote a newstory I quoted upthread:

With a coefficient of drag one-third of that of a subcompact car and less than half the weight....

That's the key there. Change the shape to reduce drag and cut the weight in half.

A little smaller and lose a wheel and you could call it a motorcycle.


According to the company website it is classed as a motorcycle in California for most purposes, though you don't need a motorcycle license to drive it. If I recall correctly that's because it has 3 wheels and is enclosed.

Make it a little smaller, lighter, add pedals and put it on rails :)

...the personal jetpack,...

Jet pack unveiled by New Zealand inventor ;)

Sorry to clutter the Drumbeat with this, but I'm a long-time member who was frozen out by the June 1 changeover, and I still am. When I was finally apprised of the situation in mid-June (at first was just literally in the dark until I logged in from elsewhere) I contacted gaiahost as directed by Super G. They responded immediately with request for info, but then didn't follow up. I reprompted them about 7/1, and got several back and forth e-mails from their tech, but after one last request for info from me, I've now had silence for a month. E-mails (cc:d to Super G) have gone unanswered. I can access TOD via prawxy.net, but cannot connect to any page that is over a couple thousand words and/or several dozen comments. So I can get into the Drumbeat first thing each morning, but not after that. (I'll likely soon be unable to see any response comments here. I can be emailed at adkdan at hotmail.) TOD had become my main source of real news, and now I am lost in the darkness. I can only hope this will help me get back. Thanks.

Me too, Same exact story. I used ComCast cable.

I ping'ed and did everything asked, haven't heard anything


Some shut-out here, but only occasionally. When it happens, I just re-boot and it lets me in. Hope the same will work for you. Also, try your public library during the day and check in again at night.

Same for me. I'm still shut out on my home computer. Fortunately I spend most of my waking hours in my office and I have perfect oildrum access here. If I am at home, I can access through a proxy server with no problems or limitations (just not nearly as "smooth"). I can't recall the name of it though. I have considered changing my router by taking it into Time Warner and getting a new one to see if that does the trick. I just haven't gone to do that yet. It seems to be a big mystery??? Nobody seems to be able clearly to diagnose the problem.

just a suggestion from a non techi. is it your ram ? have you tried increasing that ?

The problems people are describing sound like a simple network routing problem. What mystifies me is why it is taking so long to resolve. A few traceroutes (in a dos box type "tracert www.theoildrum.com" - without the quotes) forwarded to TOD and ISPs should immediately point out where the routing fails and allow for resolution. Probably Super G should give a status update.

For example, this is what I see (with first few lines removed for privacy in a public post).

H:\Documents and Settings\aaa>tracert wwww.theoildrum.com

Tracing route to wwww.theoildrum.com []
over a maximum of 30 hops:

  8    96 ms    96 ms    99 ms  xe-1-1-0.er2.iad10.above.net []
  9   108 ms    96 ms    95 ms  above-vzb.iad10.us.above.net []
 10    97 ms   122 ms    96 ms  0.ge-5-1-0.XL4.IAD8.ALTER.NET []
 11   104 ms   105 ms   105 ms  0.so-6-0-0.XL2.BOS4.ALTER.NET []
 12   117 ms   107 ms   106 ms  0.so-7-0-0.XR2.BOS4.ALTER.NET []
 13   105 ms   104 ms   104 ms  178.ATM6-0.GW7.BOS4.ALTER.NET []
 14   152 ms   106 ms   106 ms  colospace-bos-gw.customer.alter.net [157.130.26.
 15   106 ms   107 ms   108 ms  www1.theoildrum.com []

Trace complete.

H:\Documents and Settings\aaa>

If the tracert ends with lines of
* * *
* * *
* * *
or some other error you have a problem.

Users having a problem should call their ISP and say: "I can't get a traceroute to www.theoildrum.com to complete (assuming it doesn't!). Please resolve the problem." If your ISP allows you to open a problem ticket online then do so. That's harder for them to ignore as it guarantees it's in their active problems database.

Lower Mississippi River may be shut down for a week

Per reports from the Port of New Orleans after conference call yesterday.

Over 200 ships now stacked up and incoming ships are being diverted (some must wait because no other port can deal with their cargoes). It will take days to clear them out.

OTOH, the "Overseas New York" just cleared under the bridge at drift speed 6 minutes ago. When reporter called Coast Guard traffic control about this, she got an "Oh SHIT !" response.

Disruptions to the supply chain are now being discussed. "Economically unacceptable" was one term used.

Potable water crisis under control.


Two refineries are located on the closed section of river. AFAIK, they have no product pipelines, all product is shipped out. Their product is effectively stranded.

Other area refineries can barge their products out and should have enough crude on site to last for a couple of weeks. Product imports are halted and distribution upstream is disrupted.


I got to ask, why? What does #6 residual oil do that makes the river impassible to ships?

Environmental damage and wakes disrupting booms and other clean-up efforts.

Over 20 ships will have to be "car washed" to remove oil. Both halves of the barge are "parked" against two bridge abutments of the Crescent City Connection Bridge (The New Orleans Mississippi River bridge). The ship that went by at drift speed could still disrupt the booms around the barge with it's wake.

Potable water intakes downstream are double or triple boomed, as are diversions into the swamps.

Still, reading between the lines, there is pressure for the "environment be dammed" lets move that oil and other cargo.


Latest reports are that no part of the river is more than 40% to 50% covered with oil (sheen excepted) and most of the oil is along the West Bank. 8,000 gallons recovered so far.


AlanfromBigEasy -

While New Orleans has many things going for it, its source of potable water sure ain't one of them!

As a person with a background in water and waste treatment, I'd be interested to kwow exactly what treatment steps the Mississippi River water is put through before it is sent on to the public water distribution system. Given all the petroleum and chemical industry effluents upstream, I sure hope the treatment included a very good activated carbon adsorption system. Of course that's not going to do much for the nitrates and phosphates from all the upstream agricultural runoff.

I guess the only saving grace is the fact that the Mississippi flow rate is so enormous that it provides a good measure of dilution.

When in doubt, drink wine, not water.

Actually, water quality is quite good. NOT an expert, but some pH swings precipitate out lots of stuff. Upstream industrial water pollution MUCH reduced. Not true 40 years ago.

Very low to zero traces of heavy metals (not true for much of the USA), quite low traces of organics, below average.

Absolutely no worries about quantity of fresh water. Drought level water flows could take care of most of China. We will not be drinking our own treated sewage.

The solution to pollution is dilution :-)


AlanfromBigEasy -

Well, pH swings in the river water are not going to precipitate out any soluble organics and would have barely a marginal effect on heavy metal ions. To get out much in the way of heavy metals you generally need to get the pH well above 9.0, but if the pH of the Mississippi River ever got above 9.0, then trace heavy metals would be the least of your problems!

While dilution certainly helps and often IS the solution to pollution, you also have to keep in mind that some of these organic constiuents from chemical plant effluents are real bad actors at even in the low parts per billion range. Unless the New Orleans water treatment plant uses carbon adsorption, you are essentially drinking a whole cocktail of aromatic organic compounds and other goodies. You ARE indeed drinking chemical plant effluent (as well as a bunch of other goodies), albeit in highly diluted form.

Of course, all that New Orleans has been through, I'm sure something like this is way way down on the worry list.

...and many of those "bad actors" are reconcentrated by bioaccumulation, making dilution NO solution.

As I said, details of Sewage and Water Board treatment is beyond me (I once missed a chance for a walk through tour :-(

Inside the water treatment plant, they do pH swings. If bio-action concentrates organics, just remove bio-agents.

I have talked to some experts (leading authority on lead for example) and they are quite satisfied with potable water here.

Our REAL worry was the pumps. All four main water pumps were immersed in saline water. We can maintain decent pressure with two and minimal pressure with one (not close to enough pressure to fight fires with). All dried out and put back unto service. Two burned out shortly after Katrina, FEMA refused to pay for "hot job" repairs, S & WB was broke (company did quick rebuild anyway at no extra cost). One of two remaining pumps was acting up, so it was cycled. New pump arrived (early), the other pump that was not acting up burned up. Today 3 of the 4 pumps have been rebuilt AFAIK.


I wonder if a large oil spill like this would have any effect on the much ballyhooed dead zone?

Nah, it's all caused by ethanol.

maybe not all, but what, 99.9% ?

Burn, I would presume. I don't think I'd want to be sitting in a ship in the middle of a huge puddle of fuel oil if it caught fire.

Alan's response makes sense (cleanup efforts). #6 oil won't burn easily at all at ambient temps, too heavy.

What is #6 used for?

shargash -

No. 6 fuel oil is extremely viscous at ambient temperatures. That is why, for marine applications at least, it is normally put through an oil heater before being fed to the boilers. It will of course burn (think of all those torpedoed tankers ablaze during WW II), but it is not all that easy to just light off.

It is also interesting to note that oil-filled bulkheads (about 4 - 5 feet deep) were included in the design of the torpedo protection on some American battleships. It was found that a liquid-filled chamber helps distribute the force of an underwater explosion, and since there is not an abundance of air in the immediate vicinity of the oil-filled chambers, such was not considered an undo fire hazard.

As a final bit of trivia, when the major navies of the world started to switch over from coal to oil during the period just prior to WW I, a great deal of trouble was encountered in just getting the oil to combust properly. If the oil wasn't atomized into sufficiently fine droplets, it wouldn't burn fast enough or completely enough, and a great deal of smoke would result. All sorts of clever devices were tried before satisfactory results were achieved.


Thanks for the detailed reply. I had visions of various WWII naval sinkings and the problem a spreading fuel oil spill caused if it caught fire. I realize there are a lot more things during war that could ignite a spill, but I'm still not sure I want to motor my way slowly through one even in peacetime.

Well, look on the bright side: at least you don't have a Cat5 roaring down on top of NOLA right at the moment. Something to be thankful for, at least.

Those two refineries can truck a limited quantity of product to local stations (underbidding the other refineries), so no supply worries here (and price may take a drop). Upriver is a different story.

WTI in Oklahoma feeds into the same markets.


One of three traffic lanes in the Mississippi River has been reopened. Ships are being sorted by "economic priority".

Other lanes may reopen soon.


Exact rules are still unclear. A working group is deciding which ships to let out/through.

So far, ships stalled in the spill zone (some reports of distress by crew from oil fumes) are being let out. They are being washed down upon exiting.

Very slow transit, hugging the East Bank (oil collecting more on West Bank).

"Economic priority" for limited ship movement. It appears (to me) that the number of ships let through the spill zone are less than the new ships arriving.

So far, no barges. This is significant because the Intercoastal Canal crosses the Mississippi River in the spill zone.


I sat down with a friend who works in Saudi Arabia last night and had a long conversation. For obvious reason I cannot revel his name. Also his job does not give him access to production numbers, and certainly not decline rates, so he can only tell me what he has observed in his many years in Saudi.

He says there have been dramatic changes in Saudi in the last few years. He says there has been a massive influx of new employees in ARAMCO. Many of them, he says, are from Venezuela, anti-Chavezites who were fired by Chavez during the strike. He says there are about 1,000 new employees in Ras Tanura and many more than that in Dharan and other camps. Many of them in Ras Tanura are there for the new chemical plant but most of the rest are working on new drilling projects.

He said: They are poking holes everywhere….everywhere! Qatif, he said, has been completely reworked, new wells, new water injection, everything. Of course we know about the old mothballed fields that are being pulled out of retirement and reworked with great expectations like Manifa, Khurais and Khursaniyah but he says they are poking a lot more holes in the very old large producers like Safaniya and Berri and all the rest. He is of the opinion that the very high price of oil has brought about this new activity.

That was about all he could tell me about production. He told me many other stories about the goings on there but nothing that would shed any light on production numbers or decline rates.

I have just one more thing to add. It concerns the criticisms often posted by others, flung at those of us who posts opinions about what is happening in Saudi or other OPEC nations. I have stated, over and over again, that we are just guessing. And we must guess because OPEC, and especially Saudi, is extremely secretive about everything. That being said I must stress that it is an educated guess. And I believe that some of us, because we have studied Saudi for years, have a far better educated guess than others, especially many in the MSM who take everything Saudi or OPEC publishes at face value.

And here is my assessment, my educated guess, at what is happening in Saudi. I think Saudi is at least 60% depleted and only heroic efforts are keeping them from a steep decline. They have found that they can keep production up by greatly increasing the injection water and poking more holes in their fields. Their new wells are horizontal and therefore suck only from the very top of the reservoir. I believe that Saudi is only a year or two away from hitting a decline wall. Reviving old mothballed fields like Khurais will hold the decline off for awhile but when it hits it will hit with a thud.

I believe that Saudi reserves, as well as well as all other OPEC reserves are grossly exaggerated and that is the bombshell that will rock the world when that fact is finally realized by the mainstream media. Here is what OPEC says they have: What are OPEC's proven oil reserves?

At the end of 2007, OPEC had proven oil reserves of 939,016 million barrels of crude oil, representing 78.0 per cent of the world total of 1,204,182 million barrels.

That, in my opinion, is an unbelievably gross exaggeration. I believe OPEC reserves are less than half that amount. However I must stress that that is only my opinion. But that is an opinion which has a sound foundation. Petroleum Intelligence weekly confirms Kuwait’s bogus reserve claims: Kuwait oil reserves only half official estimate-PIW

Now I must clarify a misunderstanding concerning my opinion of the reliability of Saudi claims…from yesterday, emphasis added:

I wrote: "Saudi Aramco, according to Wikipedia puts Ghawar reserves at 71 billion barrels but that is probably a gross exaggeration."

River replied: "My question to you is: Why do you suddenly believe what SA says, or what WIKI reports, regarding SA reserves? Is it because that now it is convenient for you to believe SA, even though they are known liars, because it fits what you want to believe?"

Errrrr….exactly what does the term "gross exaggeration" mean anyway?

Ron Patterson

Of course, the advantage of the logistic HL method is that we can take the two numbers that we have the most confidence in--annual production and cumulative production to date--and derive a plausible estimate of URR. I think that it is very likely that Saudi Arabia will average less than 9.6 mbpd of crude oil production in 2008, which if true, means that Saudi Arabia is going to show three straight years of production below their 2005 annual rate at about the same stage of depletion at which the prior swing producer, Texas, started declining. And by the way, Texas had the biggest drilling boom in state history in the Seventies--and production went from 3.5 mbpd in 1972 to 2.5 mbpd in 1982.

Meanwhile the total liquids rate that Saudi Arabia would need to show, just to match their 2005 net export rate, keeps growing. I estimate that they would need to produce about 11.8 mbpd Total Liquids in 2009, versus their 2005 rate of 11.1 mbpd, if they wanted, and were able, to match their 2005 net export rate.


From what I'm reading, I'd be a little cautious with the HL method here. By restricting production in the past (a.k.a. having "spare" capacity) the numbers could skew it so that the HL method would show less URR than is there.

On the other hand... if Darwian's guess is close to the truth, and they are doing secondary, tertiary, ... and UMPtiery recovery, then there are far less URR than the HL method would show.

Just my opinion.

Which is why we used the prior swing producer, Texas, as a model for the successor swing producer, Saudi Arabia:

Texas and the Lower 48 as a Model for Saudi Arabia and the World (May, 2006)

In round numbers, the HL model, using a middle case decline rate of about 3%/year, predicted post-2005 cumulative Saudi production through 2008 of about 10 Gb (C+C), which is probably about what they will show, assuming an annual rate of about 9.4 mbpd for 2008, which may be on the high side. If they had maintained the 9.6 mbpd rate, their cumulative post-2005 production would have been about 10.5 Gb. We shall see what happens in 2009.

Note that Texas produced about 14% of its remaining URR in the three years following its peak. It would appear that Saudi Arabia produced about 13% of its remaining URR in the three years following 2005--based on HL in both cases.

I would also note that Texas and Saudi Arabia showed the same pattern relative to 1972 and 2005 respectively: Higher Crude Oil Prices + Increased Drilling = Lower Crude Oil Production

BTW, the East Texas Field, the largest oil field in the Lower 48 and which provided a good deal of the oil for the Allies victory in the Second World War, produced about 5.5 Gb over several decades. In three years, the Saudis will have produced the equivalent of about two East Texas Fields--and close to one Prudhoe Bay.

You have to keep in mind that the OPEC fields were badly overproduced from 1965 to 1979 to balance out the time they were throttling back with spare capacity. According to Simmons in Twilight, the Saudi fields were probably damaged leaving bypassed oil that will never be produced by the high flow rates of primary recovery. They held U.S. congressional hearings on this field mismanagement (done by the American oil majors before the Aramco of today). Much of the throttling back after 1979 was needed to rest the fields.

This over/under production probably evens out the cumulative numbers to about what the HL model is based on for normally produced regions, except for the bypassed oil, which would make HL overestimate current production capability.

Here is a number of interest issued today by Petrologistics regarding OPEC production and specifically Saudi production:

“Saudi Arabia, OPEC's largest producer, is expected to pump 9.45 million bpd in July, up from 9.32 million bpd in June but less than the 9.7 million bpd that Riyadh said it would produce this month.”

The execuse in the article is that Saudi arabia is not proudcing more because no one is buying the extra oil, my question is, is it because no one is buying? Or Saudi Arabia couldn’t produce more?



I also wonder if there is some sleight of hand going on. I have theorized for a while that the Saudis may be planning to reduce their domestic refinery runs, in order to boost their reported crude oil exports, and planning to increase their product imports, which are not widely reported.

If this is what it happening, it's possible that they are having trouble finding enough diesel, since there are reports of diesel shortages in the kingdom, with one farmer's group threatening to sue Saudi Aramco over the lack of diesel fuel.

Westexas, Moe Gamble and others:
Do you think we are at or close to a bottom here for the price of oil?

Westexas, Moe Gamble and others:

Do you think the dice under the cup are odd or even?

Taking another look at what OPEC claims their proven reserves are, from the link I posted above. Currently OPEC produces 45% of the world's crude oil. And I think most of would agree that, with the possible exception of Saudi Arabia, OPEC is producing flat out. I think Saudi is producing flat out as well but that's another story.

But here is the anomaly, countries with 939,016 billion barrels of reserves (78% of total), are producing every barrel they can and still only producing 45% of the world's oil. This while countries with 264,920 billion barrels (22% of total) of reserves are producing 55% of the world's oil. Or, to put in into percentages, OPEC nations are producing 1.25% of their remaining reserves each year while non-OPEC nations are producing 5.63% of their remaining reserves each year. Or wording it differently, non-OPEC nations are going through their remaining reserves at 4.5 times the rate OPEC nations are going through theirs.

Of course many will say that total reserves have nothing to do with how much oil you can produce, or have produced. But the entire Hubbert Linearization Method is based upon the assumption that there IS a connection. At any rate, when we see such lopsided numbers between reserves and production, OPEC verses non-OPEC, we can be sure something is amiss.

Ron Patterson


Have you ever listened to Henry Group's interview last December? If you have listened to it...what do you think? He thinks Aramaco can keep production between 8-9.5 million per day for the next ten years. He is highly skeptical they can maintain production above 10 million for any amount of time.

Here is the link:


Thanks Don, I found the interview extremely interesting. Of course Mr. Grouppe's estimate of oil prices have already proven way off the mark. He predicted $65 to $85 a barrel for oil for several years to come, even as we realize we are well post peak. He says a decline in consumption will cause the price of oil to stay low.

But there is no doubt the man is very knowledgeable about Saudi Arabia. However reports from a senior vice president at Aramco put the decline rate of their major fields at between 5 and 12 percent. (That was on the EIA's page on Saudi Arabia. I have the link but it has since been removed.) Saudi claims that they have reduced this to 2 percent with field maintenance.

There is no doubt that Saudi would like to have a cushion of a million and a half barrels per day of spare capacity. I do not think they have that today but they are hoping that their new projects will give it to them. But they are battling, every month, decline from their older fields.

Anyway it was a great interview and I had not heard it before. Here is a better link to the interview, I could not get yours to work.

Ron Patterson

Thanks Ron...I realized right after I posted that I spelled his last name wrong..opps.

I thought it was very interesting to hear him discuss quality of data from different sources especially Iran. He has been way off the mark as far as prices go but it is difficult to predict consumer behaviors as we reach peak. I think he expected prices to remain somewhat rational compared to cost of production. I expect as I think many on this board do for price to get very volatile(meaning high) as we move to the other side of the curve. How far in advance should prices go up before we start seeing overall production declines? This is anyone's guess...

Thanks again,

I think he expected prices to remain somewhat rational compared to cost of production.

If prices were based solely on price of production plus a bit for profit, then most houses would cost $50,000, a pair of Nikes would cost $10, and music CDs would cost $2.

Supply and demand, plus, "charge what they're willing to pay" make the prices of these things - and oil - much higher.

I would have to agree, Darwinian. When one weighs this thing up, Saudia Arabia has provided little substantive information to support its claims, other than a series of propaganda stunts and the accompanying chorus of flat-earth types like Robert Mabro who mindlessly ape the Saudi party line. Conversely, there are many telltale signs that would lead any thinking person to be highly skeptical of the Saudi claims.

That said, just imagine what would happen if Saudia Arabia´s production were to take a nose dive live that of Mexico or the North Sea. The consequences would be unimaginable.

The consequences would be unimaginable

You grossly underestimate the imaginations of the TOD doomers.


Worst case - a dead planet. Nothing. Not even microbes.
Not quite that bad - humans all gone.
Not quite as bad, but sucks for me - I'm dead.

All of us end up in the last spot eventually.

Millions of zombies will stream north from Los Angeles trying to reach the oil sands in a last desperate attempt to save their doomed lifestyle.

Huge pits filled with sharpened spikes are now being secretly prepared to stop their advance... :)

this is silly, anybody familiar with shitty 80's pop knows that nobody walks in LA.

Search Zombie Singles. ("Because the Apocalypse Doesn't Have to be Lonely")

lol, when i go home during the holidays, i ended up having to listen to my dad's crazy political rantings. I usually tire of them quickly and quickly derail the conversation by bringing up the futures most important human rights issue. You guessed it, Zombies. I implore all people here to write you congress critters about Zombie rights. It doesn't matter what side of this argument you pick, we just need a national policy on Zombies before the horde is march on American soil!!!!

DownSouth, et al, It is not in the best interests of SA to reveal their reserves or any other data that would in any way help their potential enemies. SA is already looking beyond the days of 'guaranteed protection' proffered by the US. SA is now looking at a future that includes Iran as a very big threat to the House of Saud. The king is already making geopolitical moves to counter Iran.

I hear a lot of comments on this board to the effect that soon 'SA will have to put up or shut up'. That statement is pure baloney. Put yourself in the shoes of the King of SA. He gazes out on the geopolitical scene and observes a rapidly declining US that will be forced to contract it's military due to economic constraints. He sees an Iran that has aligned itself with the SCO members. He does not view the US as a reliable 'protector' in a long run scenario. The king has a plan A, B, C, etc. The king's view of the US is of an empire in decline and he doesn't care what we think about SA oil reserves and he is not going to 'put up or shut up'. Americans need to take a long hard look at America and where it stands in the world pecking order. Economically, America is a wreck in progress.

Anyone with a passing aquaintence with world history will know that today's ally can be tomorrow's foe. If for only this reason it is not incumbent upon the King of SA to tell anyone, anything.

I agree with this. I don't see any compelling reason for SA to ever show us their hand. SA is not just another Shell or Mobil, they are a Country with citizens that need to be kept happy, oil or no. A lot of the stability in the region is based on oil reserves at the moment, and the people with the most oil are the people in charge. I don't think the Arabs are too excited about the Persians being the dominate player in the region. If the Saudi's are about to take a nose dive, the are going to hide it for as long as possible, because any admitting of declining oil will automatically make Iran the most popular girl in school. Better to spin the gears of propaganda than give Iran a head start in power.

they can lie all they want to the US, but if they're trying to prove to the world they can produce any amount of oil they want, showing consistant declines is no way to do it. Suffice it to say, they can't reduce oil prices.

That statement is pure baloney.

Reading comprehension might help, River. That statement, which I thought was pretty clear in context, is merely to say that if the Saudis want to continue to be the 600 pound gorilla of oil producers, the time will come that they either have to increase production or be taken a lot less seriously -- no more American presidents groveling for more oil, and maybe no more big fancy jets for his pretend military. It has nothing to do with the King of Saudi Arabia gazing "out on the geopolitical scene". In fact, it has nothing to do with the King of Saudi Arabia at all. It has to do with the way the rest of the world treats the KSA.

This is inherently true of all oil producers, some day the declines will be too obvious to cover up. Until that day though, they are going to use every trick in the book to make it seem like the are in control of the situation. If they can hold on long enough, maybe they can make it to the point that iran is in decline as well, and thus not have to risk a major power shift in the region. I think that there are a lot of people here at TOD that think that SA is at/near peaking, but if that is the case, the world seems to still buy their lines about excess oil. as long as people believe SA has oil, and isn't producing/releasing for economic reasons, they are the oil gods. It's all about perceptions, and right now SA has done a great job making themselves look like a bunch of greedy jerks that is holding out on us. This perception will allow them to get by for a while after they start to decline.

In other words, the the fact that declines will become obvious is a necessary truth of all oil producers and isn't really breaking news. The trick for SA is to keep the perception of being the 600lb gorilla until they can secure themselves as a regional power after the oil is gone. SA will never show us their hand, it's just that they have a tell that will show us when they are bluffing

In terms of population, Iran is about the same size as France or UK, both of which are nuclear powers. Saudi is slightly less than half that size and about the size of Iraq. Iran will be a nuclear power before they run out of oil, IMO. I doubt that Saudi population is sufficient to support a nuclear power industry ( France and UK are the two smallest nuclear powers, except perhaps Israel. ) Iran might be thinking of nuclear power as a source of energy to replace its oil. (They will certainly need some replacement, and they might be capable of thinking with more foresight then US, maybe.) Saudi is in a difficult position. Off hand, my advice to them would be to seek a joint oil marketing agreement with Russia, but that might not work because of ethnic animosities.

Honestly, i think that peak oil will be the best thing in the world for Iran's nuclear program. I'm not going to speculate if Iran is making nuclear weapons, but if say the November IEA report comes out and calls peak oil (just as an example), than Iran's program will quickly go from crazy to prudent. I'll take your word about the ethnic animosities, but when oil peaks, a lot of those might be ignored in the mad panic for securing oil. Then again, some of those might go away when one country invades and kicks out the ethnicities they don't like. I don't think that the SA is doing the right thing, it just seems to me that this is how they are setting themselves up for the future. Is SA friends with Jordan? Word on the street is that they are using all this Iran hoopla to build their own Nuclear power plant.

Alien invasion.

The aliens, watching us from space ever since the USAF beat them at Roswell, sense our weakness as Saudi production nosedives and they swoop in to take over.

By the way, I´m currently in Bogota for a few days.

Your comments about ARAMCO recruiting in South America certainly are consistent with what I have seen here. A few months ago there was an article in Bogota´s principal daily newspaper about the aggressive efforts of Middle Eastern oil companies to recruit oil workers in Colombia. They were offering huge salaries with loads of benefits, 30 on and 30 off, etc. But according to the paper there were few takers, which was a great relief for Columbia, because the country lacks sufficient oil field personnel to carry out its own aggressive petroeum development aspirations.

En route to Caracas recently I sat next to a woman who worked for the Venezeulan national oil company, and I could believe ARAMCO would have much greater success there. She was extremely unhappy, and a little reluctant to express her unhappiness as Chavez punishes dissent. Anyway, according to her, the Veneuzuelan national oil company has become very corrupt and patronage ridden, and also very inefficient. So I think the highly lucrative offers coming from ARAMCO and other Middle Eastern producers would find much more sympathetic ears in Venezuela than other parts of Latin America.

Any mention of Abqaiq production ? I understand that this depleted oil field is being held in reserve for emergencies. (GWB begging is not an emergency).


I doubt it because as I said, he is not privy to production numbers, but I will ask him tonight if he has heard anything concerning Abqaiq.


Great post. And I agree that if you are correct, and Saudi is heading into steep decline (along with Non-Opec looking like its peaking) we are toast. I hope every day you are wrong.

Truly, nobody here knows the numbers as well as you do. I always look forward to your posts--most reliable source of oil production numbers on the planet.

And I agree with you that OPEC and the Saudi's are lying, the question is how much?

I have two sides:

Side 1--Semi-Cornucopian

The folks in oil patch and OPEC are well aware of peak oil, they are not completely ignorant about their own business, they have been acutely aware ever since the United States peaked in 1970 and Hubbert. They had a general idea about how much OPEC has since they owned the stuff until the revolution and nationalization--but they don't have the best data since OPEC has had control since the revolution and 3-D seismic and other technology came about so they may have found more.

Upon the request of the Reagan administration, Saudi opened up the spigot for the already car-dependant United States providing a market for their oil while they built up large foreign reserves in exchange. Cheap oil and food enabled more and more servicing of debt and that debt was used to purchase more oil and goods from the developing world at a cheap cost. This has been the world for the past 25 years--America as the consumer while the Middle East and the Asian countries have been building up foreign reserves and their infrastructure and manufacturing capabilities. This also had the added beneficial effect of bankrupting the Russians due to the depression in oil prices and allowing the Eastern European countries to enter into the EU.

Things continued along this path for decades. The IEA had oil production going to 130 million barrels. In my opinion, this was premised upon the idea that Enhanced Oil Recovery would increase the amount of Original Oil In Place that could be recovered along with boosting production and therefore demand would be the only thing driving production.

Then, in 1999-2000, something unexpected happened. The North Sea peaked well ahead of expectations. Note Alan Greenspan's statement "earlier than expected peak in oil production." Enhanced Oil Recovery did not increase the percentage of original oil in place recovered, it only extracted those reserves faster. Technology failed us. And the North Sea collapsed faster than a normal oil curve.

Upon this realization, the future production of Non-Opec was going to peak much quicker than originally expected. Accordingly, OPEC became the "prize" as stated by Dick Cheney in his 1999 speech while he was the CEO of Halliburton who was one of the oil service companies working in the North Sea at that time.

Fast forward to 2003, and the demand of the developing countries was also higher than expected beginning the steady climb in oil prices till today and we have been in "Peak Lite" for a while as production is flat and price is increasing.

Now, where I can get semi-cornucopian is that the Saudi's are the best in the biz and they know more than anybody out there how much we have and I'm sure they are well aware of everything going down in the oil world.

My semi-cornucopian theory is that perhaps Saudi and OPEC have figured out now that without Non-Opec production the production ceiling can't go all that much higher even if they got the goods. But that doesn't mean the shape of the curve after reaching that ceiling has to be bell-shaped. As the King stated "we need to keep more oil in the ground for our grandchildren." Maybe that's an excuse for peak, or maybe he is saying Saudi and OPEC are setting the ceiling.

As production is restricted, and price goes up, eventually demand destruction occurs. I think CERA is stupid, however, the undulating plateau idea could have legs. It depends on how much shut in production is out there, and how much, if any.

The lower amount of projects coming on line for 2010-2012 could be because this oil spike will drive the world into recession reducing demand and therefore the new projects (and any currently delayed projects) need to only partially offset declines until more is brought on.

Now, of course, this can't last forever and eventually the total declines will eventually pull the curve down but perhaps the plataeu can be extended for a long time. I've seen some of the ex-Saudi guys say the plataeu will be long.

To develop alternatives, trim the fat, and reorganize lifestyle and infrastructure the world needs a high oil price to kick people in the butt. I'm as big of a SUV hater as any on this site-- but $4 gas has killed the SUV Yay!--not any admontions about how wasteful they are. I mean, I care about those things but most people I know don't--they care about status, bread & circuses, and whatever they have in their pocketbook.

As The Chimp Who Can Drive has on his site, real money won't pour into alternatives until oil is at around $200/barrel with some expectation it won't go back down. Of course, our current financial structure cannot handle $200/barrle oil and the financial events of this year appear to be actions to adjust the financial system to these new realities.

Tweaking production to keep oil at $200/barrel (or whatever equilibrium price--in the words of Warren Buffet) will move alternatives (including nukes) along greatly--doesn't mean happy motoring is here to stay and Kunstler will probably still get his dream of the suburbs becoming slums--but they are given many years to transition, where if we did decline 3% year we would not have that time, as Hirsch stated 10 years can get it done, but there will be pain. 4 years on the plateau so far and we've changed--oil use is down. Can it be extended another 6?

People think Saudi's are afraid of the world getting off oil, but I don't think that is true. They know the world isn't going to transition off of oil in a heartbeat and that the way we live will have to drastically change. Plus, watch what they are doing with thier money--building refineries, chemical plants, plastic plants--they will make money on the value-added applications of oil. Not to mention they have a lot of soverign wealth funds to spend on assets at the right price.

I think there is a chance that oil will stay on a long plateau, or a gentle downward trending line, keeping prices high and forcing us to change our ways but not result in civilization falling apart. Alternatively, we might have a very steep initial decline (which will make it much, much, much, more painful) and then a long plataeu as Chris Skebrowski states.

Side 2--Doomer

There has been little to no forethought or planning made concerning these matters. We are no smarter than yeast. The oil forecasting bodies have been completely incompetent and failed miserably at their jobs. The Maximum Power Principle has only been applied. We will peak and decline at 2-5% rates and things will be very, very, bad.

I think in 4-8 years we shall have our answers.

While the peak in Saudi production may come, it is not likely to happen this month or the next as the Saudis are planning to increase production by 200,000 barrels in July. Their capacity is expected to peak in 2009.

In 2009 Khurais is expected to add 1.2 million bpd of Arabian light crude to Saudi Arabia's production capacity.

Manifa is a multi-billion barrel field discovered in 1957 scheduled to produce in 2011. ARAMCO scheduled production of 900,000 barrels of heavy crude and 50,000 barrels of light condensate per day from Manifa.

Berri and Abqaiq were declining in production.

Saudi Arabian production is expected to fall after the Khurais project will be completed.


Ethanol is not likely to replace oil. Further efforts to expand ethanol production are likely to diminish the amount of food available in the export market. If the U.S. reaches its lofty goal of 10% ethanol-gasoline blending, the U.S. might require massive grain imports at prices currently unheard of. The combustion of ethanol was known to produce the carcinogens formaldehyde and acetaldehyde. Higher concentrations of ethanol byproducts in enclosed areas such as garages or in cities with temperature inversions are likely to contribute to poor health.



The stuff that gives ripe fruit, coffee, and fresh bread it's tasty aroma. Sounds to me like it beats Benzene, and Butadiene. Drink too much ethanol, though, and the acetaldehyde will give you a hangover.

Rainsong, we're doing about 7%, now. By the end of next year we could be doing close to 10%. Assuming a 13.5 Billion Bushel Harvest, and taking Distillers Grains into consideration (you have to) we will probably be using about 26% of our corn crop. Export will probably be little effected.

I can't drive 55.

But I can live with 60.

While drivers universally disobeyed the 55 mph speed limit, (as did the cops tasked with enforcing it), they did drive 61-64 mph and saved a lot of fuel.

I'm not big on the idea of a federal government imposing its will on states, but it would be a good idea if we slowed down.

It would save fuel.

Sooner or later, Americans will deal with this reality: the rest of the world is not going to continue to allow us 25% of the oil produced on this planet.

So the question becomes, how do we reduce consumption, because reduce we will, one way or another.

Any ideas?

So the question becomes, how do we reduce consumption, because reduce we will, one way or another.
Any ideas?

I have alot of ideas. But one that is workable and mostly acceptable:

For any given transport there is a optimal fuel consumption for distance calculation. This calculation can be done given data from the transport - and most modern horseless carriages have the ability to output this data. (see scangauge II as an example)

Thus, a add-on can be had that can tell you 'you are now traveling at the best rate of speed to consume the least fuel'

It becomes in the enlightened best interest of the fuel consumer to travel at that rate, no?

The unacceptable part - mixed speed traffic. If the overall speed is slower, then the compliance officers would be able to 'use their judgement' on writing tickets with the parts of the traffic law that state 'you must be driving in a safe manner'

The revenue enhancement option just may be why such a 'plan' would be encouraged by the sovereign.

'you are now traveling at the best rate of speed to consume the least fuel'

The answer to that question can't be useful for the public. One of the oil companies used to run annual fuel mileage competitions among its engineers. The best performance was always achieved at very low speed, well less than 20mph. Think about driving LA to Vegas at 15mph. Crazy!

Think about driving LA to Vegas at 15mph. Crazy!

VS walking? I'd take the drive...if for some wierd reason I'd want to go to Vegas.

"How do we reduce consumption? Any ideas?"

Yes. I commute to work at 2 mph, 0 mpg. I walk.

I get to work 50% faster than you, 3mph walker here, =P

I could probably make 3mph too if I had a flat, level, paved route all the way. But I'm in the mountains and have a steep climb part of the way, and much of the rest is unpaved - more like a hike than a walk. Plus I'm carrying a pack with a change of clothes, rain parka, and lunch.

Atleast you have the scenary.

Ah, c'mon, guys. I walk 3mph every morning for an hour up and down hills in my woods full of deer, turkeys and the fossilized bones of Model T's, challenging my bad heart to just go ahead and quit on me the way it has done before. This is the only way I can keep my head going enough to effectively worry about all those business problems trying to make me miserable.

BTW, do keep in mind, All, that the solution to energy is solar thermal in the desert, HVDC to population centers, and hydro storage both ends. (Mutatis mutandis- -population-- ).

Disclaimer. If this were widely adapted, I would be very very rich. Probably. And dead, very probably, anyhow.

Gooood Luck, ya'all.

Email me. I want to know my fellow Mainers here. You still working on your project?

Bob (address at ID link)

15mph on my bicycle @ 0.1 bpm (banannas per mile)







Disclaimer: Within the first year of getting my liscense at 16 in 1971, I had gotten enough speeding tickets to have my liscense suspended. I haven't had one since in well over a million miles of driving.

"When you ride alone you drive with Hitler."


...or Osama
...or Obama
...or Jane Fonda.

Around here there is a lot of very vocal opposition to lowering the speed limit.

The argument goes: I'll drive slower if I want to save gas, but by God, the government better not tell me I have to drive slower.

In fact, a favorite gripe here is a highway construction project that is lasting about five years. A 20 mile stretch of road has been reduced to 55 mph from 70 so they can get the work done (making it into a toll road, naturally). So what used to take 17 minutes now takes 22, and everyone acts like it's worse than walking.

I have been amazed at the rabid opposition by Americans at even taking a look at whether 55 or 60 might save fuel with modern cars (by Senator Warner).

The subject was broached by a column in our local paper, and the online responses were incredibly angry that "the government" would interfere with American's freedom to drive the speed they want.

Hardly a peep about the Patriot act and loss of important freedoms, but raving madness about lowering the speed limit.

Stephen Moore's piece, The Insanity of Drive-55 Laws, panders to the basic lack of understanding by the American motorist. While most everything he writes is true, the way he presents it is pure CATO Institute political disinformation. The fact is, the faster one drives, the more energy (here meaning oil) one consumes in the process. That's been shown to be true innumerable times and is beyond question. Moore just wants the public to continue to believe that it's OK to go ahead and burn up all that oil (or coal, or tar sands, etc.), thus allowing the business interests to continue to gather in the money from the poor fools that insist on driving fast.

As noted, the U.S. is less than 5% or the world's population, while we consume about 25% of the oil. As Peak Oil Production occurs, the rest of the world's peoples are not going to allow us to continue doing this. Moore throws out the usual conservative talking points, but ignores the basic geophysical reality we face. He is a fraud and should be punished for writing this sort of crap. Over the years, we've come to expect such from the WSJ, given their bias against any idea that there are actually Limits to Growth.

Judging from the few comments I looked at, Moore (and the Repugs) have hit a nerve. I can only hope that the Democrats can present a better case, although I'm not seeing it happening as yet. It's almost as if the Democrats actually want to lose the election. I think Jimmy Carter was right when he noted that saving energy is The Moral Equivalent of War. The problem, then as now, is that we are "at war" with ourselves. I'm afraid that we are all going to lose in the end...

E. Swanson

The fake freedom to drive fast is given to morons in exchange for the real freedom to criticize the rulers without being spied on by them, to find out the facts of the rulers' actions, to hold the rulers accountable for violations of law. The rulers would be crazy to lower the speed limit.

Still, it's better than the old fake freedom to beat black people and frame them for crimes whenever you felt like it. When the rulers had to clamp down on that, the masses demanded goodies. Now they can't afford the goodies. I'm sure there are all kinds of fake freedoms waiting in the wings.

I wonder what the answer would be if the question were: "Which would you prefer - lower speed limits or motor fuel rationing or higher motor fuel taxes?"

if you held a gun to my head and told me to choose, it would be higher fuel taxes.

Europeans pay $9 a gallon, and most of their highway speed limits are 130 km/h or 81 mph. I'll take the high fuel taxes too. The safety argument is bunk. With the proper following distances and everybody obeying Slower Traffic Keep Right laws, 80 mph is perfectly safe, or rather, Reasonable and Prudent, which is the legal standard of the Basic Speed Law.

The safety argument is bunk.

Is that true?

This page seems to indicate something else.

A recent study examined the impact of higher travel speeds on US rural interstates after the repeal in November 1995 of the national speed limit. Researchers found states that had increased their speed limits to 75 mph (120 km/h) experienced a shocking 38 per cent increase in deaths per million vehicle miles than expected, compared to deaths in those states that did not change their speed limits. States that increased speed limits to 70 mph (112 km/h) showed a 35 per cent increase in fatalities.

Do you have studies that indicate otherwise?


How about the rate of motorway deaths per billion vehicle miles? The US has a higher death rate than most European countries even though they have higher speed limits, 120-130 km/h and unlimited in Germany.


The IIHS is hardly an unbiased source, and even from a partisan perspective, they're hardly our allies in energy conservation. They'd be the first ones to throw a hissy fit about the Aptera, a three-wheeler licensed as a motorcycle and therefore is exempt from all crash tests.

Wow, mod me down for posting facts and pointing out the bias of the IIHS? Not that many of us will ever get to meet personally with an IIHS lobbyist, but be careful who you ally yourselves with. The auto insurance lobby is not our friend in this.

Rationing. With the ability to sell unused rations.

Thanks for your support. Next, the real problem, which is, how to get the rest of the U.S. "on board" this slower train (a.k.a., Way of Life (tm))? Must we wait until AFTER TSHTF?

E. Swanson

Anything that 'seems' like 'force' will be shot down under the whole 'free market' or 'share the shortage like them commie countries' with a side helping of 'Russia used to be commies, now look at 'em prosper with the free market'

And yea, there will have to be a waiting till it is a 'national security' issue. War/Food/plague/riots over something/'martial law' - take your pick over what boogie man. Even then - you will still have grumbling/reaction. The 'sunday family drive' was still something that happened till the 1970's - a reaction it seems to the 'no sunday driving' of WWII.


If you care about your childern
and the people yet to come
best you think about tomorrow
and just slow that Hummer down

july 17th

the insanity of reading the wall st journal.

the claim is that the granny driving 20 mph under the speed limit is the REAL hazard.

the road is full of real hazards. you have an obligation to drive at a speed that allows enough distance to avoid all hazards.

anyone driving above the speed limit is breaking the law. when you take the wheel of a 2 ton vehicle and hurl(yes i said hurl) down the highway above the speed limit, you are endangering yourself, your passengers and other law abiding drivers.

in other words, you are negligent.

interstate highways also have a minimum speed, now if you are driving below that minimum, you are also neglegent.

The Insanity of Drive-55 Laws Mr. Moore?

Calls for a 55 mph speed limit -- and for that matter most other government energy conservation plans, such as urging people to ride a bus or a bicycle rather than driving a car -- reflect a mindset that oil and gasoline are more valuable than human time.

But America is not running out of energy. We have potentially hundreds of years of oil and natural gas and coal supplies in America alone, if Congress would only let us drill for it. What is in short supply -- the only truly finite resource, as the late economist Julian Simon taught us -- is the time each of us spends on this earth. And most of us don't want to spend it sitting longer than we have to in traffic.

Mr. Moore is the senior economics writer for The Wall Street Journal editorial board.

Mr. Moore is the senior economics writer for The Wall Street Journal editorial board.

'nuff said.
Maybe it's just me -- but I've been thinking that the economic dogmas of the WSJ editorial board will one day be viewed in the same way we now view the dogmas of the medical profession in the late 1700s.

By extension, the economic practice of the current administration will be viewed to be about as effective as bloodletting.

By extension, the economic practice of the current administration will be viewed to be about as effective as bloodletting.

Umm maybe more like voodoo or astrology... Bloodletting is a modern FDA approved practice with very specific benefits. http://www.fda.gov/fdac/features/2004/504_leech.html

Surgeons who do plastic and reconstructive surgery find leeches especially valuable when regrafting amputated appendages, such as fingers or toes. Severed blood vessels in such cases often are so damaged that they lack the ability to clear the area of blood. In these cases, it is difficult for the surgeon to make a route for blood to leave the affected part and return to circulation.

Ah, yes. that's the danger of making up analogies, there's always an exception. ^_^

The bloodletting I had in mind was the kind applied to George Washington (link not for the feint of heart).
Bloodletting was a kind of cure-all back then, applied to any ailment without sterile instruments. Kind of sounds like the Republican prescription for tax cuts, doesn't it.
There are exceptions here as well, just as modern medicine has found uses for the leaches and larvae, there are surely places where tax cuts, properly applied will help cure what ails the economy.

"....will be viewed to be about as effective as bloodletting."

isnt bloodletting making a comeback? i think it is called leach therapy. i swear i'm not making this up.

I remember watching the terrible Wall Street Journal show on PBS about three years ago and seeing Mr. Moore very confidently assure us that oil prices would be significantly lower one year hence. I wrote them a letter begging them to revisit his comment in one year. I don't think the show lasted that long, however.

Julian Simon, though he may have been very smart, was a complete idiot.

Every prediction he ever made was completely wrong.

If the esteemed Mr. Moore is so enthralled by his memory of Mr. Simon, it's rather telling.

End rant.

"...how do we reduce consumption?"

Simple. Tax it.

Well, increased fuel taxes would have been a great idea back 30 years ago. The U.S. didn't take the opportunity and now it's too late, as there are many, many people screaming about the present prices. I think that taxes work where there is a surplus of supply, such as is the situation with cigarets and alcohol, but once the supply of oil falls below that which the market would need to consume, taxes tend to end up adding to inflation. that's because many industrial and individual users will be able to pass on the increased cost in the form of higher prices. This implies that the level of taxes must continually increase, especially where the supply is expected to decline with each subsequent year. Rationing by price, as in, increasing taxes, only works where prices are fixed, which is even less likely than increased taxes in the U.S. Thus, I suggest that rationing is the only rational option.

Of course, who thinks the U.S. will do the rational thing? Certainly not I.

E. Swanson

One cause for airlines bankruptcies appears to be the rapid rate of change in price of fuel, NOT the high price itself. i.e., rapid fuel cost increases rising AFTER tickets were sold was not covered by the ticket price and the airlines were operating at a loss due to transients. With stable fuel costs they could (or hedging) they could set ticket prices to cover fuel costs and make a profit - assuming they still had sufficient passengers.

DLHagen...It is possible that airlines can stay in biz with $100 oil but what you left out of your post is a phrase I will coin here: 'collective recessionist mood'...If you or anyone has a better or handier term please substitute it.

It seems that the how and the what of mood changes of the public during economic shocks is very much misunderstood by economists and laymen alike. Although economics majors are subjected to some classes regarding how the public is likely to react to various economic shocks these classes do not seem to carry the same weight as so called 'hard economic' or 'data' classes. Recessions begin with economic shocks but then the mood of the public takes over in a very big way. The public is reluctant to change and when forced into change by economic contraction or rising prices their collective mood can become the dominant force in any economy. The consumer is affected by fear and fear can have many sources: Fear can spread in a public that perceives that their leaders are lying to them or that their economy is less than transparent or a question of the soundness of their currency or many other factors. The public senses something is very wrong even if they cannot put their finger on the problem. Since the public is generally not aware of economics they are easily frightened. Bernanke has often used the term 'inflationary expectations' and when he has he is speaking to the public fear factor. If a point is reached in inflationary scenarios where the public believes that their currency is unsound and is going to continue to be inflated, the public will refuse to hold their currency, instead using it to purchase any goods that might retain value.

Look at the current situation in the US from the perspective of the public, not the business or government sectors. If we look at current spending patterns and compare them to spending patterns in former down-turns what is evident is that even among the wealthy spending on discretionary items is contracting (see American Express). The same was evident in prior severe recessions such as the depression of the 1930s. Leading up to the 'great depression' was a period known as the 'roaring twenties', a time of easy access to margin and credit in general...much like what we have witnessed in the US during the dot.com and RE booms. I have stated this before on the board: What we are seeing is a shift from a consumer mindset to a reluctance to spend mindset and it is across the consumer spectrum. Once this change occurs it is very difficult to turn the public mood around. Sometimes it takes generations.

Even if airlines could manage to stay in biz with oil at $100 bbl I doubt that they will have the minimum traffic to keep themselves afloat. Many, many 'small' airports already have had their service sharply curtailed or eleminated. The airlines have always operated on thin margins. Read Ernie Ganns book 'Fate is the Hunter' and in it you will find numerous references to marginal airline operations right from the beginning of commercial airline operations. Doubtless, much of the initial resistance to airlines was due to the public's fear of flying but marginal operations continued even after a large part of the public began flying regularly. The airlines probably had their most profitable years while they were heavily regulated but regulation was dismanteled beginning under Ronald Regan. Once the free for all free market system entered the areana of airlines the competition became very stiff and many airlines folded and the quality of service on the remaining airlines declined and has continued to decline.

Another problem for the airlines these days is the huge increase in corporate and private aircraft ownership. Many 'high end' flyers now have no need of commercial airlines. This topic is almost never broached when the health of the airlines is discussed. Do you wonder why? Airline biz models depend on high volumn and without that volumn their current business model will probably not work.

The obvious response would be raising fares to cover fuel costs, but industry overcapacity prevents that. The new fees like $15 per checked bag and $6 for a small sandwich can be considered stealth fare hikes, but at least the base fare is still a bargain.

With everybody cutting flights and laying off workers, maybe that'll reduce capacity more in line with demand and give room to raise fares.

No, No No, Apparently it is NOT that easy for the airlines to figure out. I have read Aviation Week and Space Technology (AWST) for my entire adult life, and the constant hand-wringing in the articles, editorials, and letters about this subject is amazing. The idea of raising airline ticket prices to actually cover operating costs (not to mention making a profit acceptable to shareholders) is Inconceivable to the industry. My god, if we raise prices to cover costs and make a profit then a whole lot of people won't be able to afford air travel...an AWST article quote follows: "air travel will be the province of the wealthy recreational traveler and the wealthy business travelers, just like it was in the 1930s."....yep, that is exactly right! I love airplanes, and flew for a living for 20 years, but I can't change the facts. If the annual number of air passengers contracts by 30% or more from today's levels, then a whole lot of airlines around the world will go bankrupt...Boeing, Airbus, Bombardier, and Embraer, as well as a myriad of parts and services suppliers would go belly-up. The airlines and the powers that be would rather see airlines continually go Chapter 11 and be rescued by government restructuring (bailouts) and subsidies than see the whole house-of-cards fall. I'm sure that this has EVERYTHING to do with keeping up appearances for the masses as long as possible to avert civil unrest for as long as possible. A friend of mine once said: "Airlines are a GREAT way to make a million dollars....out of 100 million dollars!" Airlines have been capital-destroying concerns for decades. Subsidies out the wazoo for airlines (airports, air traffic control system, security, etc) and for highways, but the Repug retards pitch a damn hissy about subsidies to AMTRAK...take the trains, people!

"...assuming they still had sufficient passengers."

is it that they dont have sufficient passengers, or that they have too much capacity for passengers ?

I found this interesting:

Bicycle parts distributors see more business

(but it's in pockets, some areas of the country folks can't won't even fix their bikes)

Another factor affecting regional sales is the housing industry meltdown. Distributors report weaker sales in areas like Las Vegas, Florida, parts of California, Phoenix and Denver—areas hit hard by the subprime mortgage crisis.

“It’s a mixed bag according to where you are,” said Chuck Hooper, president of Seattle Bike Supply. “But I’d have to say service and repair is way up. It seems people are bringing in their bikes to get fixed, and that’s pretty consistent with the economic downturns I’ve been through in the past,” he said.

And a little something to raise your blood pressure today.


Agribusiness Group Forms To Protect Ethanol Subsidies
The Alliance for Abundant Food and Energy -- which includes seed makers Monsanto Co. and DuPont Co., as well as farm-gear maker Deere & Co. -- wants to spread its belief that renewable fuels won't cut into food supplies if new technologies, such as genetically modified crops, are used to their fullest.

And the money shot for Alan?

The group is also working hard to protect government subsidies for ethanol

Truly pornographic !



Try 4,000 Young Americans Dead, and $600 Billion spent "Protecting" the Oil Supply.

On a Brighter Note: It's estimated that for the 215th consecutive year we will spend No Money protecting the Midwestern Corn Fields.

Also, it's being projected that the Nebraskan Farmers will spend 99.9% of their income this year in the U.S. (the saudi royal family, not so much.

Atleast ethanol has led to a resurgance in grass fed cattle (with an accompanying rise in beef prices).

Thanks kdolliso, for reducing my colesterol.

Note: EROI for Ethanol still very poor. News at 10.

And midwestern corn fields use no petroleum, of course.

Not much. The U.N.'s old figure was 8 gal. diesel/acre. I'm sure it's less by now.

btw, that 8 gallons/diesel gets you 435 gallons of ethanol, and 2,700 lbs of high-protein cattle feed.

Does that include fertilizers, pesticides, and fuel for irrigation, transport, etc.?

Leanan, there's not much Liquid fuels involved in ethanol. It's, mostly (right now,) a natural gas story. This is changing, also. More, and more, refineries are going to gassification of biomass technologies.

Keep in mind; if you were going to do a story on petroleum refining you wouldn't study a refinery built in the 60's. You would look at the new addition Chevron is doing, or one of the new Indian refineries, perhaps. The corn ethanol refinery of today will morph into a unit that not only does the things stated above, but will, also, produce from an acre of corn 25 gallons of corn oil, ash for soil treatment, and enough CO2 to bring up 200 gallons of oil.

Of course, when the corn ethanol plants currently under construction are completed that particular part of the story will be over. It will be on to waste-to-ethanol, biomass, etc.

Just a quick, somewhat off topic comment on CO2 and recent legal developments: A recent law enacted in Wyoming (the first state to directly address this) has defined "pore space"--the ability to store gases underground--as belonging to the surface estate, not the mineral estate. This was passed with carbon sequestration in mind, so it is unclear how it will impact the use of CO2 or other gases for enhanced oil recovery. Depending on how it is interpreted, and how it spreads to other states, existing oil & gas lease holders may not have the rights to use CO2 for enhanced recovery. This would (further) complicate efforts to make the CO2 produced by corn farmers commercially viable. Way too early to make any definitive statements on how this kind of issue will play out, but it's something to keep in mind when considering the "value" of the CO2 byproduct.

Not to mention that most ethanol refineries aren't co-located with sites that need gas injection--there is a significant energy cost to either 1) build refineries where the injection is needed and then transport the corn there, or 2) build refineries where the corn is grown, and then transport the CO2. Without any solid numbers available on the comparative costs, I think it's best not to attribute any value to CO2 byproduct.

I agree. It's for that reason that I don't normally "hit" the CO2 injection theme very hard.

However, having said that; about 1/3 of corn ethanol plants do sell their CO2. Usually for such things as Dry Ice, or carbonated drinks.

"A recent law enacted in Wyoming (the first state to directly address this) has defined "pore space"--the ability to store gases underground--as belonging to the surface estate, not the mineral estate."

wow ! what were they thinking ?

the implications of this are likely to be tested in the courts. the federal government is a major mineral owner in wyoming. i dont think other mineral owners who are not the surface owners are going to like this very much.

does this mean that i own the oil and gas, but not the pore space it is contained in ?

and if i deplete the pressure in the pore space, the pore volume will be reduced*, so have i stolen this surface owner's precious pore space ?

i dont think this law will stand. this could get..... er ... i mean is rediculous.

the us supreme court decided a few years ago that coalbed methane gas was owned by the oil and gas mineral owner, not the owner of the coal reserves.

Yeah, I'm not sure they've thought through all the implications. Here's the source of this info.

I don't think the CBM Supreme Court opinion is directly on point, though, as that was really a question of whether a reservation of "oil & gas" included CBM or not when the mineral estate is divided among oil & gas owners and coal owners--not whether it was naturally part of the mineral or surface estate. The potential implications of this "pore space" decision seem even more far-reaching, especially if there is some kind of carbon legislation enacted under the next presidency that makes the commercial feasibility of coal reserves predicated in part on the ability to sequester carbon. Of course, the technology to do that is still a ways out, and I've heard of several energy and safety issues associated, so it will be interesting to follow...

"does this mean that i own the oil and gas, but not the pore space it is contained in ?"

If the surface owner owns the pore space, and the oil or gas has not been produced, can the surface owner charge rent for storage of mineral rights owner's goods in the ground. "Hey, mineral right owner get your stuff off my property. I want to rent it for storage of CO2."

*Ding* We have a winner. Odds are letters are being sent saying 'hey - you have X days to do this or give up your rights.'

Kdolliso: Quite revealing when you get rated down for stating facts. Hm.

Any person that allows a ratings system to modify the content of their posts in a way that garners more upratings for 'going along with received wisdom' is morally corrupt and not worth reading.

If honest debate on any site is driven out due to a ratings system then the site is morally corrupt and not worth visiting.

Maybe the ratings system is simply a way to say "I think this person has said something that intrigues me" without cluttering up the comments section.

People with negative ratings certainly get offended easily.

Yes, that's how I see it. Sometimes, you appreciate a post, but don't necessarily have anything deep to say about it. Posts like "I agree!" or with just a smilie are pretty boring to others (and are banned at many sites, for being "posts without content"). Clicking the up arrow is a way to express your appreciation without clogging up the thread.

i sometimes "rate up" the negative rated ones, pulling for the underdog and all that. otherwise, i dont give them much notice.

I agree. Actually, about the only time I use the ratings arrow is to push the up arrow for people who have been "unfairly downed", as I did with Kdolliso's post a bit ago (though the ratings are really a frivolity...I try to ignore them as much as I can).

"...about the only time I use the ratings arrow is to push the up arrow for people who have been "unfairly downed"..."

Same here.

I also give up arrows to posts that:

  1. make me laugh - we will need a lot of humor to survive PO
  2. give me some hard facts or links to hard facts
  3. make me think - if a post causes me to re-examine something that I thought I knew, it gets an up arrow

as i posted yesterday, my rating goes as follows: Up is for the reasons you mentioned, down is for off topic and trolls. I don't think that I've modded anybody down here, because the trolls aren't bad, and off topic seems to be generally accepted and an integral part of the community here.

I personally think that modding people down for troll/off topic is a better system than the disagreement method for efficiency reasons. From my experiences, troll and off topic posts tend to be long. This is because long trolls seem more convincing, and off topics tend to be emotionally charged rants. Being easily able to identify and ignore these posts seems more worth while than having to sort them out from controversial posts, as happens with the disagreement method. There is value in dissenting opinions, and they shouldn't be lumped in with the "lol f1rst p0st!" crowd.

This was the rating system on osnews.com for a long time, but it fell apart every time the site got slashdotted. It seems like the people on this site have the discipline to pick up this method, if it is desired.

The up/down arrows are usefull for people that are too lazy or too ignorant to make a reasoned response to a post. The theory is that more people are attracted to a site if they feel that they can 'interact' in some way with the site...and, arrows are supposed to increase site traffic by including the ignorant...which might increase site revenue via advertising.

I have no problem with the site making more money, go site. The rub arises when the drive by clickers begin rating posts because they don't like the content of the post or they don't like the poster because of previous posts that they didn't understand or agree with...or, they don't like a politically incorrect poster or post. Only a fool would let their posts be modified by the ignorant.

I stand by my upthread post. Morally corrupt posters and sites litter the internet landscape.

Once again river, i find myself in agreement with you, except for implications that modding is for the ignorant. I think that interaction with forums is a good thing, i just think that there needs to be a paradigm shift in the way modding works. There is a legitimate reason for modding, and that is to weed out posts that have no useful purpose, those being off topic and trolls. Modding people up, although largely a popularity contest, is useful because it helps cut down on repetitive posting of the same information because people stop getting the positive feed back they desire and stop repeating it. All this leads to a more efficient conversation. Also, you make a lot of good posts but, modding or no, they would be more impactful if you laid of the ad hominem

Encinitas, Too bad you didn't arrive before the arrows arrived. You seem to be a very rational person. Welcome to TOD.

My posts have always been what they are and I have no intention of changing. Hey, I am what I am and if I changed then I would not be me...assuming that I could change if I wanted to. Thanks for the advice, anyway.

When I was an engineer constructing and testing HS Rail my company sent me to a Dale Carnagie course. The company paid $500 bucks and back in the 60s that was some change. My company wasted their money...They found that if they gave me a crew that I picked and left me alone I could accomplish at least twice as much as their next best crew. The company found that political correctness and efficiency did not necessarily go hand in hand. I am not a salesman. My only agenda is to make posts that are thought provoking and stimulate reasoned discussion. Popularity contests are for...to be nice...others. :)

i totally agree, political correctness and efficiency do not necessarily go hand in hand. The other side of the coin is that they aren't necessarily divorced. I'm not trying to change the way you operate, but consider that different situations my call for different approaches. You don't build skyscrapers outta wood. As a great lover of formal logic, I'm compelled to point out that fallacies like ad hominem are a break down of reasoned discussion, strictly speaking.


Exactly. Insulting people definitely stimulates discussion, but the resulting exchange is usually far from rational. :-/

Very much agreed.

River - stop being a jerk, or you won't have to worry about our rating system, because you won't be posting here.

Leanan, thanks for your comment. As a matter of fact I have much better ways to spend my time. See ya but I wouldn't wanna be ya!

*sigh* This seems to the inevitable outcome of these arguments. River, you made a lot of great points in my short time here, but it just doesn't seem that this fact makes up for the attitude that backs those facts. The insults don't really bother me, but I'm in my 20's and even the most rational debates amongst my friends start with the likes of "dude, you're retarded". The obvious next argument is that people need to ignore the insults and read the facts, but on the same note you need to except that the insults were neither necessary or productive. Clearly neither of these things are likely to happen. Sucks, but oh well. I hate to see ya go river, but i understand why you need to leave.

"As a matter of fact I have much better ways to spend my time."

Don't let the door hit you.

Leanan, thank you! I don't know how you find the time to do this, but you are greatly appreciated.

out of fairness, sinking to ad hominem yourself Leanan, no matter how toned down, did not help. I mean, it seems clear that the writing was on the wall for river, for obvious reason. It's just that river played an important role as a dissenting opinion to many arguments. Without dissenters, the dialectic is ruined due to the fact that every thesis needs an antithesis in order to bring upon the synthesis of a new idea. I mean, as far as i can tell, most of the arguing that goes on here, sans river, is about politics and which alternative technology is the best. I basically worry about a monoculture, and it's only so long before cultural inbreeding bears a child with it's head lodged firmly up it's ass. River's insults clearly won't be missed, but i for one will miss his ideas, even if i don't always agree. Perhaps I'll try to bulk up to take a devil's advocate position until some new decenter comes along.

River makes lots of good points. And it is difficult to be a lone voice among all the opinionated people here. But Leanan is right -- you have to argue your point and not let things get emotional, or you invite replies in kind, and the overall tone of the conversation deteriorates (he says, as he whistles innocently).

I'll cut the crap, I don't care about river leaving, i don't know the guy, he dug his own grave basically. If a more civil person filled his void, then this is all just a fart in the wind. Regardless, Leanan agreeing that ad hominem is counter productive , yet in the same post calling river a jerk is hypocritical and unproductive.

Dude, you retorted!

I'm not sure if this is just funny, or you are accusing me of ad hominem.. or both. What the hell, i'll mod you up, but if it is an accusation, I request an explanation.

It's in the tone of voice, Encinitas.

I took 'jerk' to be a, a.. what's the Latin term for 'Dope Slap'? River has surely earned himself a noogie or two today.. Leanan is only human, but I'd have to hear a lot more before suggesting any Hypocrisy on her part.


*sigh* Dude, my mind is boggled. I have nothing against Leanan. Leanan is cool by me. The statement was by definition hypocritical.

I 'preciate the help; Thanks. :)

I think he was downrated for "stating facts" in a misleading way.

It's not like we can run the world economy on ethanol. So with or without corn, we'd be protecting the oil fields.

Stating Facts in a "Misleading Way?" :)

Ai yi yi!

That puts a whole new twist on things, duzn't it?

Misstating facts. WWII protected Iowa as much (or as little) as Massachusetts or Alabama (to be regionally fair). That one cost a pretty penny.

The 99.9 number is bogus too. They may spend their bucks at Walmart, but Walmart sends them on to China.

Not a good way to get me to trust his ethanol numbers.

Classic example-at least 4 sheeple thought WW2 was about protecting Iowa (from the Japanese threat I guess or was it the Huns?) No wonder Bush got elected twice.

Actually, I think they just agree that Iowa was defended / protected just as much as the other United States. It just wasn't on the front lines as much as say, New Mexico was.

It's all in how you phrase it.

And as for Bush, he probably couldn't find Iowa on a map.

Let's face it; I'm Good. :)

"...for the 215th consecutive year we will spend No Money protecting the Midwestern Corn Fields."

how do you figure ? the irs tells me i have to send more money so the govt can provide subsidies to farmers. presumably some of them are in the midwest.

I wuz flashing back to the "Whiskey" Revolution.

Eastern Bankers and Politicians have Always hated small farmers, and their Corn Ethanol.

Don't forget that the Whiskey Rebellion was also one of the 1st applications of Government power to put the competition out of business. George's distillery did MUCH better with the tax in place.

I supect that selling transmission line can backfire. When an underwater HVDC cable was sold for $A1.2bn the line rental was set at $A92m per year. Covering that rent has been given as a reason that hydro dam levels were reduced dangerously low. Summer demand created high spot prices for peak hydro which seem to pay the line rental at first; too bad the expected autumn rain failed. Selling the grid could have unexpected consequences.

I agree. I think breaking up the US electric utility system into all its pieces is a major part of the reason for its problems today. If you haven't already, read my article The US Electrical Grid: Will It Be Our Undoing?

Long time listener, first time caller.

I have folllowed your insight for years, thank you all for all you do. I have seen things from a different angle that I would like to share.

I am a financial planner and work for a small, national firm. For the past 12 years our pitch has been to stretch debt out as long as possible, keep low monthly payments and sav, save, save. It's all about cash flow. The idea being the compounded growth would make you wealthy (assuming you have enough time) as the money grew on itself. Our philosophy on investing was buy the cheapest index funds you could and diversify; basically a buy and hold approach.

Things have changed dramatically over the past 6 months. Every variable that points to a sustained downturn is doing so. There is simply no good indication that "things will turn around" anytime soon. As a firm and personally I have been re-evaluating each clients plan and usually we are paying down debt as quickly as possible. In my opinion this is not a knee jerk reaction. Rather a shift in the economic reality for the foreseeable future.

My point is that the changes in the economy, in our resources and the world are slowly seeping in to "normal" people's point of view.

Lastly, I mention this site so often anymore to clients that I should just put it on my business card. Thanks again.

Nice to know what has always seemed the right way to run one's life is starting to be appreciated by more folks. Sounds like you are a Dave Ramsey kind of guy. Good for you. John

Interesting change from save to pay off debt. I've actually been considering doing the opposite. All I have is my mortgage and student debt. I had been taking the philosophy of putting everything I could toward paying my debt off, now however with the change in the economy and rapid rise in oil, I've cut back on paying toward the loans and trying to save. I figure in a worst case scenario, cash in hand is better than no debt. For me, I've always liked the phrase "cash is king".

I guess as in all things, finding the middle ground is best. My perspective is I would rather have all debt paid off to avoid getting thrown out of my house if/when the depression hits. And the return on your money in cash is a fraction of what inflation is doing. Fun times.

At least here in Indiana the grapes and potatoes are doing GREAT this summer. Wine and vodka for all! (Not sure who said it here,but alchohol and condoms will be king in our future barter economy.

To your health.

alchohol and condoms will be king in our future barter economy.

Wow, I wish there were financial planners like you around here. Mine keeps telling me to stay the course, keep socking that money away into index funds and IRAs.

And toilet paper. Don't forget toilet paper.

Well that's just about the highest compliment you could give me.

I read this somewhere, not sure where....:)

“It's difficult to get a man to understand something if his salary depends on him not understanding it.”
—Upton Sinclair

I agree with having all debt paid off. That was my plan, but then when oil prices started going up faster than I had anticipated, my concern was being able to pay the debt off and then save money in time. I guess it is a timing issue.

My experience is similar to degar7: I already have some sort of baseline savings built up, the value of which is based on my job security (or lack thereof: I'm an untenured professor). When I have any spare cash I've been trying to find the best places to put it. The stock market is in free fall so that's not such a great option. Bonds, etc. I guess are doing okay but not great while the interest rates are down. I've never been a real believer in purchasing gold or other commodities, I just felt that the price is pretty volatile (which may be entirely wrong).

The way I see it, by paying off the debt early, you are saving money because that is guaranteed interest that you won't ever have to pay. If you can find an investment whose return beats the amount of interest you're paying on your debt, it would be a good idea not to have the debt but lately I'm having a hard time finding those returns myself. In my particular case it's a mortgage on a condo., I don't see my condo. value appreciating any huge amount in the next ten years so it's not in itself is going give a good return.

i am buying the things i know we will use the next few years ;first & foremost things that work in a depression era/low energy future.

cash may be king in some scenarios but i don't think the most likely to be king compared to the above useful type things.

if a dollar decline continues things needed from abroad can only go up.

Yeah, debt free is good. I especially like the not having a mortgage part of it, but the car and credit cards are paid off too..

Our situation isn't 100% of where I would like it to be though. I would rather be in a place with a big yard that I could tear up for a vegetable garden, for example. And I would like to be in a spot where we could put solar on the roof (we could sort of do that where we are now though - it is up pretty high though, so installation would cost a fortune).

The big question mark in my mind is whether we might be headed into double-digit inflation. If so, then not paying off my fixed-interest-rate mortgage would be the better play...

Corn prices dropped 25% in the last month. The commodity bubble is bursting. I think we've reached peak hot air.

Economic Cavitation!

That's a real robust data set you got there. Corn is still up 75% on the year. The recent drop probably has more to do with ethanol producers going out of business than anything else.

"Corn is still up 75% on the year."

What commodity isn't? Rice is more than double last years price. I suppose it was the rice ethanol mandate,right? Or,maybe everyone was planting corn. Except that rice had a record harvest last year. I'm soooo confused. Is it possible oil being up 700% in the last 7 years has anything to do with higher grain prices? Nah....it's gotta be the ethanol mandate.

Geee. Do you think it might have anything to do with 6.5 billion people, many of the poorer of which have suddenly bought cars, are eating meat, and decide they want a higher standard of living?

Nah. Can't be. Gotta be a bubble.


"Corn prices dropped 25% in the last month."

Which is quite logical given the drop in speculative net long positions in corn futures since June 10. (Right click on the image to see the latest commercial's net short position, which is the opposite of the speculative net long position).

If speculators keep liquidating their long positions until their net position is zero, the price could drop just as much again.

And sure enough it's possible that all hedge funds in the world decide that going short corn is the next best investment opportunity after shorting the Nasdaq in March 2000 (which very few of them did), in which case the corn price would take a real dive.

I would have to say that the spot price for corn doesn't look much like your chart at all. What your chart looks like to me (for the summer anyway) is the state of the news about weather in the Midwest -- bullish net long when there were floods, retreating after the weather improved. I suspect, in the end, the harvest will determine corn prices, not the commitment of traders.

Sure. What I said about oil in a previous post:

"The oil price can be thought of as a composite signal, resulting from a speculative signal superimposed over a fundamental signal."

applies to any commodity. The COT chart gives you just the speculative component. The fundamental component has a life of its own.

More economic cheer...

Foreclosure filings up 120%

220,000 homes were lost to bank repossessions in the second quarter, and the annual forecast for 2008 will have to be revised upward.

National Australia Falls Most Since 1987 on CDO Loss

(Bloomberg) -- National Australia Bank Ltd. plunged the most since the October 1987 stock market crash after the country's biggest bank increased provisions for potential mortgage-related losses more than fivefold.

What kind of deposit insurance do they have in Australia?

That's not what the loud BAAAA'ing sound from wall street tells me!!!:


Hey it's friday and they need some cheer and a beer so cut them some slack:-)


Leanan, you could just as easily rephrase your question to read: What kind of FDIC does the US have...According to Sheila the blogs might be partially to blame for trying times at the FDIC and the blow up of Indymac. The facts do not support her contention. Finger pointing abounds...

'FDIC Chairman Sheila Bair Is Out Of Control'

'In a sad twist of irony Sheila Bair is accusing blogs of being "out of control".

Sadder still is the fact that San Francisco Business Times writer Mark Calvey agrees. Please consider the incredibly inane article FDIC learns it ignores bloggers at its peril.

The federal agency insuring bank deposits learned that it can't afford to ignore the blogs following its seizure this month of IndyMac Bank, the largest bank failure since the 1980s.

"The blogs were a bit out of control," Sheila Bair, chairman of the Federal Deposit Insurance Corp., told the San Francisco Business Times after a speech in San Francisco this week.'...snip...

'Here's an interesting statement from the article. "The FDIC also plans to begin airing public service announcements as part of a public education campaign on the nation's deposit insurance program."'...snip...

'24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.

25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.'...snip...

Hat tip to Mish Shedlock...


FDIC & Bloggers

"We're very mindful of the media coverage and blogs in controlling misinformation. All I can say is were going to continue to stay on top of it," Bair said. "The misinformation that came out over the weekend fed a lot of depositors' fears."

Prediction: Misinformationalists WILL be the *next "Terrorist" group to be "Neutralized"

Mish said

Silly me. Instead, Sheila Bair wants to shut off the only source of information as to how unsound the banking system and FDIC is.

I don't think Mish appreciates that Misinformationalists will be be painted worse that "Speculators" are today.

The mass mental conditioned transistion from "Misinformationalist" to "Disinformationalist" will be run in the MSM and "Truth" tellers will be "quieted" ...

Future Headline on CNBC crawler;

FDIC investigating whether Blogging Misinforamationalists are responsible for the bank run at...... (fill in blank)

The FDIC, government and MSM will be the next to realize the harsh reality that you can't censor the internet. MSM sees bloggers as a threat to their business model, but complaining about bloggers will probably lead to a Streisand effect. Shutting down bloggers will not go unnoticed. People will find a new avenue to express their ideas. A great example of people resisting extreme attempts at censorship is Wikileaks (wikipedia article, wikileaks tends to have pictures of torture victims on the front page of late, just a heads up). The internet was designed to withstand a nuclear war (literally), and it does this through heavy decentralization. This decentralization causes a huge headache for anybody trying to censor it.

In other news 99.4% of homes were not foreclosed last quarter.

If the annual rate of increase holds up, and 100% of homes are mortgaged, total foreclosure will only take another 6.5 years, to a first approximation.

(0.006 * 2.21^n = 1.0: solve for n.)

All deposits are guaranteed by the Govt. The deposit insurance system isn't used in Australia

There is no explicit government guarantee of bank deposits in Australia. There's an expectation and a belief that bank deposits are guaranteed by the government but this is not actually the case.

http://www.news.com.au/business/story/0,23636,23444519-462,00.html refers to a proposal to introduce a minimum deposit guarantee.

Australia has 4 major banks that have about 80% or so of the market combined. Due to their size and a history of tight regulation (not so tight anymore) Australia hasn't had many bank collapses or runs on banks. Some smaller banks have required bailing out in previous recessions but there haven't been non re-imbursed losses since the 1890's.

The loss for the NAB is relatively minor compared to its size, the salient point for mine was that they set aside 90% of their investment to cover the losses, which is a far higher percentage than most others who have similar investments have set aside.

Hi Leanan,

"What kind of deposit insurance do they have in Australia?"

Sorry for the delay in posting here but just got back from holiday:-)

The problem is not the insurance in Australia but in the USA. This problem was caused when Merrill Lynch took a decision to sell off billions of CDOs (collateralized debt obligations) at a large discount on the book value in order to raise cash without regard to the impact on anything else.

So you may ask, why did this affect NAB? - answer the NAB was a co-investor and therefore had to make the corresponding write-down. You might also ask why Merrill are writing them down only now they have sold them, why did they not write them down before, how much more is there to be written down:-(

What kind of deposit insurance do they have in Australia?

None. The theory is that the Govt not backing your business up means you will take less risks with your depositors money.

I've got a question for my fellow TOD readers.

Could someone recommend a website or forum to research Oil/Energy careers? Google hasn't turned up much quality.

I would like to research entry-level employment options in the oil, gas, & renewable energy industries.

Any help is much appreciated!

Rigzone may be helpful to you.

Um, I don't get how higher fuel prices increase obesity. Is that a joke I'm not getting? Wouldn't be the first time......

What would be the Saudi's motive for overestimating reserves? Why would they want lower oil prices?

Back in the 80s, OPEC had a quota for the cartel as a whole. Each individual member got a percentage of that quota based on their total reserves. As oil prices collapsed after the oil shortages of the 70s, OPEC saw a lot of lost revenue.

Well, one day Kuwait announced that it's reserves had increased by 50%, entitling it to a bigger piece of the OPEC quota, at the expense of all the other members. Within a year, all OPEC members announced big increases in their reserves, some up to 100%.

That's how they got ridiculously high in the first place. Now I suspect it is a matter of pride and place in the world. World leaders beat a path to Riyadh whenever they want something done with oil. Would that happen if Saudi Arabia were just another big producer pumping at max rate? I suspect some of this is cultural, and some of it is just human nature.

But in any case, prices aren't set by size of reserves. They're set by how much is pumped (i.e. supply & demand), so the KSA can have it both ways -- be a world big shot with large reserves, and still have high oil prices -- at least for a while longer. Sooner or later, they're going to have to put up or shut up.

" my father rode a camel, I drive a Mercedes, my son drives a landrover, his son will drive a mercedes, his son will ride a camel"

The sad part about all this BS (Saudi and OPEC) is that it has been the basis for a lot of corporate and government strategic planning for the past 50 years.

An illusion of unlimited cheap oil has prevented the development of a number of practical alternatives. And it has given a surreal importance to an area of the world that was little more than a desert inhabited by tribal nomads.

I will welcome the day when events in the middle east (including Israel) are no longer breathlessly treated as front page news. Frankly, I really don't care what they do to each other.

Developed economies need to develop their indigenous resources even if it is more expensive in the short term.

Actually the relationship of high food prices relative to income and obesity is pretty strong. What happens is that as food becomes more expensive the buying patterns of people drift down to the cheapest, low quality foods. Hence you cannot afford to buy milk so you buy soda pop. The calorie content is the same, but the pop has no nutrition and only empty calories that goes to fat. Can't afford fruit and vegetables, but you can afford chips and candy bars. Everything devolves to sugar for calories. And in meats it shifts to high fat content products which are cheaper than lean meats. This is seen again and again in studies of poor family buying patterns, food stamp buying patterns and the impact of poverty on obesity.

There is a lot of evidence that the primary culprit in obesity is refined carbohydrates producing hyperinsulinemia and insulin resistance. Despite the recent price rises, there's still nothing out there that's cheaper per calorie than good ol' bleached white flour, either as bread or pasta or make into hotcakes smothered in cheap syrup made from high-fructose corn syrup. I was pretty poor at one point in my life, and nearly every money-saving food strategy involved loading up on cheap carbs.

It keeps you alive. In the era of farming, before real globalization, most meals consisted of carbs (potatoes, wheat, rice, etc) and water. Vegetables probably made weekly meals and fruits maybe once a month, and were regarded as certain pastries are today (something delicious to eat, but not really regular foods). The body wants energy above anything else, so sugars and starches dominate. Vegetables and fruit provide good benefits to the body, but significant daily consumption is a recent creation with refrigeration, preservation and transportation innovations. If the apocolapse came, getting carbs would be people's primary concern, well above private vegetable gardens and other luxuries.

When I look through my grandmother's cookbooks, they are a cardiologist's nightmare. It seems like half the recipes call for heavy cream. Tons of carbs (potatos, flour, etc).

They didn't have HFCS, of course, but the other thing was that they lived in a farming community before the days of highly mechanized farming. Even if you have a horse to pull the plow, you still have to walk behind it and steer the thing, and that's just one example. So while they ate tons of calories, they burned tons of calories too.

Yep. I lived on pasta with velveeta, and coke for a couple of years. Turned pretty flabby and pasty...

something tells me you weren't working as a day laborer at the same time.

Actually they maximize their return by exaggerating reserves. Look at it from their point of view. If they know that in the future they will be able to pump less oil and it will cost them more should they tell their customers? Consider 2 alternatives:

1) They warn their customers and the customers begin mitigation (alternative energy, conservation etc. soon) the consequence is they get a lower price than they would of.

2) They assure the customers that everything will be fine forever and the customers are trapped and must pay ever increasing prices because it is to late to mitigate.

Same as consultants overstating their qualifications or banks overstating their reserves.

Each month on a particular date the front month contracts come due. How can I get a listing of those contract prices?

You can check on the NYMEX website:



Interesting. One thing that strikes me as odd is how the way long-term contracts seem to pretty much track the present price. You'd think that if traders had the slightest idea what was going on with oil, that that long-term price wouldn't fluctuate so dramatically...

You'd think that if traders had the slightest idea what was going on with oil [...]

Which is exactly why I don't think that. :)

Contracts along the curve take into account interest rates (because taking future delivery of oil allows you to put money into the bank now and earn interest) as well as storage costs (you'r saving on storage costs by taking future delivery rather than spot). Those factors, combinded with players having to roll their contracts forward affect the price. Future prices generally do not reflect the investor's opinion as to where future prices will be. Lately though the oil future's curve has gotten flatter which may indicate that there are people who think that oil prices will not come down, or come down less than market expectations.

Future prices generally do not reflect the investor's opinion as to where future prices will be.


If by "investor" you mean commercial, then maybe (in a limited way) this statement could be true. If you mean speculator then there is no way it is true.

You can easily back out the rate curve and storage cost to determine the exact market aggregate opinion as to where future prices will be from the futures curve. If this isn't the aggregate market participants view on future price, what is it?

Even if you say it is just spot less carrying and storage that is a view on future price. That view is future price = spot.

What is taught in financial text books does not quite line up with how futures actually trade. The total P/L in futures trading is zero (negative actually if you take into account transaction costs) - They are merely an instrument to transfer risk. (in general) the sellers of futures have different economic incentives than the buyers. A natural seller of a corn future is a farmer. He/She estimates that the harvest will be probably say 100 bushels so depending on market views (if any) the farmer might sell enough futures in the expected harvest month to cover the costs of the crop. Even when the farmer thinks that prices might go up he might sell simply to lock in a minimum amount of revenue. The farmer would be called a hedger - hedging actual, physical production / operating company. The hedger's economic motive is to reduce uncertainty and is willing to pay a premium in order to do so.
On the other side is (let's assume) a speculator, who does not have an operation which needs corn exposure but simply makes a bet on the price of corn. The speculator receives a rate of return for the willingness to accept uncertainty. If this weren't the case the Barclays CTA index's (an index of the returns of speculators) would not be significantly different from zero - and it is. the Annualized Rate of Return for that index since '80 is about 12%, significantly above the risk free rate.

To clarify, the result of these mechanics is that the farmer is unlikely to sell corn 3 years forward. In other words, in forward months there tend to be very few natural (non speculative) sellers), and likely more speculators because they are not locked in into a certain time frame. This results in often unbalanced forward months where it is simply not possible to buy any significant size without starting to pull in other speculators (which in turn likely causes relatively large price swings).


I agree with you on most of that. What I can't get across in most of my attempts is that hedging on the part of actual producers has been very light for the last 6 months, but that is changing quickly. With a dip in the market, mid-sized producers of oil and gas are hedging, as they are getting the impression on this significant of a drop that this is what the future holds. What a surprise they are going to get, in terms of margin calls as the contracts they sold become farther below market. If, as and when they decide to close out those hedges and stick with "market risk" alone, you will see a terrific uptick across the spectrum. If a broker has talked them into hedging over a year out, on a monthly basis, the odd month contracts will seem way out of line, since there will be an even greater lack of market breadth than there is now. If I were a refiner, I would be locking in deals outside of the futures market, like 100%. I look for lease bonuses to come back for producers, with minimum one year contracts attached. I'll let you know if that spreads down to the small producer.

Also, I think that getting everybody outside of the industry out of the (US) futures market will lead to more truly sharp moves in the market - like $10-15.00 a day as each positive and negative scenario plays out. With the whole world out there though, I would imagine that an option will present itself pretty quick. Maybe the Iranian bourse?

It appears that there's a fair amount of pressure on mgmt/risk group of (specially) publicly traded producers to lighten up on hedges, thereby limiting non-speculative supply (in futures contracts) out on the curve. My guess is that, plus more speculative demand (think of the big index guys) who have to roll every month that has spiked vol.
A good sell off might shake out some of those players, and re-think some of the reduction of hedges, thereby restore some semblance of order. Probably wishful thinking though.
In the longer term high volatility reduces the incentive for physical players to produce.

For those interested...on C-SPAN

Constitutional Limits of Executive Power

Started at 10:00AM ET - I was late - but they are still muddling through opening statements.


Off topic? {not that it isn't an important one}

Depends on whether you feel this is an Oil President conducting an Oil War or not...

Yeah - I knew that. Thanks Leanan for letting it live.

Sorry ;-)


regarding the link about the Amish in todays DB.

Cheater Cheater Cheaters!

My world is crushed. I had thought all a long that the Amish shunned all forms of petrol! What little do I know! Still, I think they are way ahead for a post peak world!

Someone here accused me of "hating the Amish" because I have repeatedly said that they are not immune to peak oil.

I don't hate the Amish. I just think their way of life is not sustainable, and many peak oilers have an over-idealized view of them.

For one thing, each community makes their own rules, so what's permitted for some may not be permitted for others. I do like the way they decide what technology is allowed. They think about how it will impact the whole community. That leads to what seems to us to be silly situations. Like deciding tractors are okay...if you have a horse hitched to it. Or having a phone...as long as it's outside the house.

Hitching a horse to the tractor is to prevent greed. So a man with a tractor can't get greedy and take over land from farmers without tractors. Having the phone outside the house is prevent the outside world from reaching in (while still allowing the Amish to reach out, should they wish to).

Similarly, the Amish generally use our hospitals and medical system. Many (though not all) communities vaccinate their children. They aren't allowed to be tied to the outside world (via electricity), so instead run their farm equipment and household appliances using diesel, kerosene, or propane. They can't own cars, but they can and do rent them. Often to make grocery runs at big box stores.

The biggest reason they are unsustainable, IMO, is their large family size. They are growing too fast to sustain themselves farming. That is why they are increasingly tied to our economy (doing things like running restaurants and selling furniture). There's not enough affordable land for them all to farm.

Thanks. I think I have had an idealized view of the Amish. Good perspective.

My family is Pennsylvania Dutch, not Amish, but one of the other "plain" sects that were invited to PA by William Penn in the wake of the 30 Years War. I've spent most of my life living in "Amish Country", including where I live now.

IMO, Leanan is pretty much spot on, especially about the family size. Farms around here are very small and can only be sub-divided so often. Despite losing a lot of kids to the "English" world, the Amish still have had to spread out to a lot of other places in the country to find land to farm.

Even so, there is a lot we English can learn from the Amish. I just wish I had paid more attention when I was a kid visiting my great grandparents' farm. How the heck did Grandma keep the birds from eating all her raspberries?

How the heck did Grandma keep the birds from eating all her raspberries?

We never had any strawberries until our kittens turned into mighty hunters (just ask them). Now we find "leftovers" in the garden alot. Are raspberries different?

Modern methods:

A) Netting draped over the canes when the birds start to take an interest.

B) Permanent netting enclosure.

combined with:

C) Twice-daily picking.

Friends of mine tried A) for some years, but only ever had raspberries in quantity after moving to methods B) and C).

Grandma may have employed scarecrows or cats as well as these.

"The biggest reason they are unsustainable, IMO, is their large family size." Leanan

With no TV or internet porn what else are you going to do on those lonely nights on the farm?

I spoke with an economics professor from China about population control. The big issue they still face is that farmers need the labor of children. More labor than they can give fields to when they grow up. So they keep having more children than is sustainable.

It could be that an agricultural system based on human/animal labor is not sustainable (without a high late teen death rate, say from failed childbirth or constant warfare).

Leanan -

It should be kept in mind that among the Amish there are varying degrees of 'Amishness'. The popular image of the Amish in horse and buggies generally pertains to the more orthodox Amish (and Mennonites), and is not totally representative of the Amish as a whole. I believe there are the terms 'house Amish' and 'church Amish' to describe whether one is fully orthodox or only 'does Amish' on Sundays.

We have a small Amish community in central Delaware. I sometimes see them at the local farmer's market in the Wilmington area about 40 miles to the north. They do not come all that way by horse and buggy, but rather in big pick-ups or vans. They seem to love to stock up on flea market items, which I suspect they resell at a profit at the roadside stands where they sell produce.

Also, many of the Amish are into the trades, especially carpentry and custom home construction. (They do not use horse and buggies for this work, either, I can assure you.) From people I've spoken to who have had work done by the Amish, while they do high-quality work, they appear to be shrewd business people who can be downright stubborn and unpleasant to deal with.

While I admire many aspects of the Amish, particularly their values and resourcefulness, I would picture living in an orthodox Amish society as extremely confining and intellectually stifling. Not for me.

The US Congress continues it's stalemate and ineffectiveness.

Yesterdays fun

- Debate on the bill to release 70 m/b from the SPR and refill it with heavy oil.

Yea. sis boom bah. This will make such a difference. NOT!

Today's fun

- Debate on the speculator bill


These will probably be the only two pieces of legislation to be passed before the Aug recess. To be vetoed of course at the desk of GWB.

awww...the SPR bill was defeated today:


I heard the speculate bill was as well.


The republicans are lining up behind T Boone's "do it all" sales pitch.

My thought, can we even "do it all". Is it possible. I think there is danger in this approach without good understanding of the EROIE. We might increasing the demand for "do it all" more than it is worth.

My concern is if T Boone builds all thoae windmills and the wind patterns shift because of global warming.

Should be obvious - just reverse the current...

The windmills will become giant propellers that push the wind back where it should be :)

Enough people just need to plug in their electric fans, set them outside, facing up, and create a new breeze to run the windmills. "What, me worry?"

from Futurama

Linda: Those windmills should cool them off


As part of his plan should Pickens be promoting heat pumps, bio-digestion (better EROEI than ethanol) and higher standards of insulation to help reduce demand for natural gas.

A (full) plug in hybrid charged from wind running on compressed biogas would be a pretty good goal.

Which is the easiest to relocate:

  • A nuclear power station.
  • A coal power station.
  • An oil power station.
  • A gas power station.
  • A hydro plant.
  • A wind farm.

a nuclear station. I mean, Chernobyl seem to relocate large amounts of itself very quickly =).

Natural gas gains ground as a transportation fuel....

MAN Nutzfahrzeuge Wins Order for 635 Natural Gas Buses

Turkey buys 500.

The Netherlands buy 135.

Anybody catch the 'speculation' news?

Optiver accused of energy price manipulation

Federal regulators accused a Dutch trading firm, its chief executive and two other top employees Thursday of manipulating energy futures contracts on the New York Mercantile Exchange.

More at Financial Times.

Never mind the fact that: they made a whopping $1 million in profits (uuh, I'm impressed. NOT), they tried 19 times, "succeeding" 5 times and this happened throughout 11 days... in March 2007 and for futures only :)

Clearly all sorts of pundits will use this as a proof (sic) that spot prices are now being manipulated to three times the real price of oil - or somesuch silliness.

In fact, a local financial press already wrote today two articles about "the oil bubble" (sic) and how it's manipulative and about to burst.

Somebody tried explaining them the difference between futures and spot price, recent price doubling since fall 2007 to now (vs speculation in March 2007) and the scale of accused speculation.

They would not listen, neither would the readers of the newspaper. People want blood! They are adamant in their position that this must be a conspiracy and manipulators are pocketing all the money. To me it looks like an ideological position - fully ignoring the facts.

I think we are going to get more and more 'news' like these and when oil prices finally rise beyond $160 the real witch hunt will begin. I guess it won't be pretty.

let the financial regulators rant and rave. They might even succeed in curbing speculation. A few hedge funds will tank causing some calamity. Then when the price continues to rise they will have looked like idiots.


Actually, there is an interesting story in the oil markets with respect to speculation. It happened maybe about 12 - 15 years ago (maybe Moe Gamble can add to this). Art Benson, a trader working with Metallgelsellschaft (MG) [and I may not have spelled the German co name 100% correct] put in a hedging program for fuel users (primarily trucking companies) backed by contracts only in the front month. His pitch was you could hedge 100,000 gallons a month at a fixed price for a year (1.2 million gallons total), but you could get out at anytime for the current market price. It was a play after the Gulf war, hurricanes, etc. to book a large gain when an "event" inevitably would come along and cause a huge spike up. Because it was a documented hedge, NYMEX waives the position limits. Well, the front month position that needed to roll every month got so large, that it became the whole trading community versus MG (the traders knew what had to happen every month and made MG pay). So, when the roll came, it started costing up to a $1 a barrel to roll [this is when oil is around $18, so very significant]. Finally MG pulled the plug since they were financing the margin calls and took, IIRC, about a $1.8 billion loss. Art Benson maintains to this day, and actually sued MG, that everything would have worked out fine if they just had kept financing the larger and larger margin calls. Kind of like betting on red in Las Vegas, you cannot lose if you keep doubling your bet until you win. [For more accuracy, it should be noted that his program involved the heating oil contract as a proxy for diesel fuel]

The interesting point is, that this scheme put in place a vast number of "speculative" long positions in front month of the market, but during the entire time, the price of oil went down.

And, to think that Semgroup lost $3.2 billion apparently without trying to manipulate anything - maybe just stupidity.

Let's take a look at the latest news from the CFTC related to the issue of speculation.

Right-clicking on the chart above, we see that the Commercials' net position on July 22 was LONG, which means that the speculative net position was short, which means that

the speculative component of the oil price at the trading close of July 22 was negative.

Checking the other charts from this post, we see that we have to go to Feb 13, 2007 to find a larger Commercial net long position. We also see that we have to go to December 2006 to find a lower Open Interest (total number of contracts outstanding).

We also see that the latest talk about cracking down on speculators has emboldened the speculative shorts, who have added 14K contracts. Are these the "good" speculators perhaps? Come on, hedge funds of the world! Short crude oil to bring down the price and relieve consumers!

I've been wondering about how the mortgage and financial corporations in the world have been staying afloat particularly here in the US and how this could be related to current price of precious commodities.

Is it possible that since there has been a need for these mortgage and financial corporations to raise capital, they could have recently liquidated holdings of stocks/contracts in precious commodities (oil, gold, etc.) in order to raise cash and stabilize their balance sheets? If so, could this be one source of the recent descent of these commodity prices and the temporary survival of these corporations?

Dragonfly41 - unlikely. However, I have heard, annecdotely, that a number of hedge funds were short financials and long commodities and commodity related stocks. With the government drawing several lines in the sand, and it appearing that financials were at least near a bottom, the unwinding of those positions resulted in the sharp spike up in financials and a corresponding decline in the commodities.

this is what i assume is happening as well. Basically people see commodities as a safe bet, and throw money at them when the news is bad. Safe bets don't make big money though, so people rush outta them when it looks like things like financials have no where left to go but up, Up, UP!

NetFind posted this very interesting chart a few days ago. It shows the number of feet the US drilling rig fleet will need to drill to keep US Nat Gas production flat.

I want to draw your attention to how well it mimics this Net Energy chart from Euan Mearn (turned upside down).

Except that the first is a time series and the second (by Mearns) is a lookup table.

In fact, I'm not sure how that Mearns' diagram can be described as a cliff at all.

It's kind of like describing the periodic table as a cup and saucer. Doesn't seem very meaningful.

Certainly there is no net energy cliff you can dive off of!! :-)

My God, it is a cup and saucer! I had never noticed that before. This proves the fundamental importance of tea time in the universe.

It's true that the first chart is a time series and the second is a lookup table. But the two are related. On the first, you can get the EROI figures as time progresses and then right click on the second chart to lookup what a pickle we're in!

A lot of this applies to oil as well. We see the tables of new production scheduled to come online and figure barrel for barrel how that will offset the big, old field decline rates. But a big part of the additions is deepwater, oil sands, and drilling intensive recovery that forces you to compare something like a 15 EROI for the old conventional fields to the addition EROI, which often averages around 3-5; meaning that you have to add 3 or more barrels of the new stuff to give the same net energy as each barrel of the declining old stuff. And you really get into trouble as you go below the critical EROI value of around 3 where so much of the new stuff is precariously operating now.

Compound this EROI problem with the ELM where, post peak, you have an accelerating decline of net exported oil, and you are only getting a rapidly thinning share of all that added production we are counting on that actually does any good.

Compound this EROI problem with the ELM where, post peak, you have an accelerating decline of net exported oil, and you are only getting a rapidly thinning share of all that added production we are counting on that actually does any good.

This is my concern. If Khebab's ELM forecast is correct, then in ~20 years there will be no oil on the market. And the EROI of domestic oil will be very low. Possibly too low to exploit without energy subsidy.

Piccolo wrote an article on Bakken oil shale and I did a quick EROI in the comments section. Maybe 6:1 with his numbers. http://www.theoildrum.com/node/3868

jon freeze, interesting analysis. i am wondering, if the drilling and production values shouldn't be offset by an average amount of time needed to bring a well on production after it is drilled. sometimes, this can be years. maybe this is already built in.

and another thing, what effect does the drilling of horizontal wells have on these trends ? i'm guessing that a bigger % of horizontal wells will be drilled in the future ?

Hi El,

You bring up a critical issue: How does drilling relate to production? A mismatch causes the EROI calculations to swing up and down. One year intensive drilling causes EROI to drop because production has not started. Another year drilling stops but old wells keep producing, so EROI jumps up.

I think that is what you see here:

There are a few ways around this issue. The simplest is to just plot a curve through the swings.

A much more accurate but harder method is to break down the production data into yearly strips. Like this chart:

Then you can match up spending on a years drilling with the gas produced from that years wells. To extend from the current year forward in time, depletion curve models are used. The Canadian Government uses that last technique when they make their 3 year projections.

However, it is getting less and less important because well production decline rates are getting higher and higher. Meaning more and more gas is captured the first year and well life is down to just a few years.

Does anyone keep records on the average cost of bringing an oil well on stream? I would think with new field, the cost should be up over time. I would be a good gauge of how much oil companies are willing to spend to get at oil.

There is a lot of cost info in the Oil & Gas Journal.

Hello TODers,

Report Focuses on the Rise of Agriculture Production Costs

Much attention has focused lately on the run up in the production of agricultural commodities and its effect on food prices. Additionally, key crop input prices are also rising and show no sign of slowing, according to a new Rabobank report, "U.S. Crop Inputs."

..."With demand for fertilizers expected to grow and no significant increase in short-term supplies, farmers are likely to continue paying high fertilizer prices," said FitzPatrick.
See my post in yesterday's DB on Kenya for what to possibly expect at some future point in the US.

Gleadell Fertiliser Report

Calum Findlay, Gleadell Agriculture's fertiliser trader, reports: "It has been another hot week in the Nitrogen market with prices of all products on the rise.

"The Urea market in particular is very strong worldwide with big gains posted again in all areas and values have now doubled in the past 3 months....
With no huge ramp in O-NPK recycling and crop rotation: it makes me wonder if this allocation system will over time drive huge amounts of acreages to a Liebig Minimum.

On a more hopeful note:

THAILAND: The challenge of reintroducing buffaloes

...Yai Krueysawat, another leader of the community project, told IRIN, "Perhaps 30 percent of the nation's farmers are like us. We have buffaloes to plough, to sell and to use for manure," he said. "It's the other 70 percent of small-scale farmers who are facing the hard times, dependent almost exclusively on tractors, high-priced fuel and chemical fertilisers."

Perhaps, maybe now I-NPK and FF prices have reached a tipping point to force relocalized non-fossil-fueled permaculture? Will the First World peacefully postPeak adapt to 60-75% of the labor force emulating Thailand? Or will we unwisely choose giant scale and long duration machete' moshpits? Remember, job specialization depends upon food surpluses:

World Needs a Strategic Grain Reserve

...America has now transitioned from Freedom to Farm in 1996 to Freedom to Starve in 2008 since we eliminated farmer-owned reserves and almost all of our government stocks...

Let Them Eat Free Markets
How deregulation fuels the global food crisis

...Earlier this year, a U.N. commission of 400 agricultural experts concluded that the world needed to shift from agricultural business-as-usual to a more ecological and small-scale approach. To no one’s surprise, the U.S. government and agribusiness refused to endorse its recommendations.

How many more food riots will it take to change their minds?
Have you hugged your bag of NPK today?

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

Fertiliser shortage hits India's farms

...It is really urgent that we get our supplies," he says.

"You can wait for monsoons - that's not under anyone's control - but you can't be made to wait for fertilisers.

"At this rate, people have to keep waiting for rice on their plates. Nothing is going to grow on our fields."

With general elections next year, the government in India could suffer the political consequences of poor agriculture output.

And the anger of unhappy farmers who cannot reap the benefits of a good monsoon.

Has anyone heard the ridiculous radio ads being run against Tom Udall in New Mexico?

Here is the story:


A pro-drilling group called the American Energy Alliance is airing ads on both 770 KKOB-AM and 1350 KABQ-AM attacking Tom Udall's stance on drilling.

Both radio stations are owned by Clear Channel Communications Inc. which also owns popular music FM stations. KKOB is by far the most popular radio station in the Albuquerque media market, with a 9.4 share in the winter of 2008, according to Arbitron numbers. KABQ, a local Air America radio affiliate, has a 2.1 share.

Note: KKOB is owned by Citadel Broadcasting, not Clear Channel. The Independent regrets the error.

"The U.S. is sitting on top of vast untapped oil reserves, estimated at about 2 trillion barrels, enough oil to last us for 300 years," the ad by the American Energy Alliance claims. However, the largest oil reserves in the world belong to Saudi Arabia. Saudi Arabia has an estimated 260 billion barrels of oil, or around one-fifth of the world's known oil reserves.

The group must be referring to oil shale reserves in the United States. Extracting oil from oil shale is perhaps more controversial than drilling for oil because of the energy needed to extract usable oil from the oil shale. Prices must stay above a certain price per barrel for oil shale extraction to be economically viable.

Cornocopian Whopper of a radio ad...hit job on reality


This story linked above doesn't have the full text of the ad either...

Worth repeating...whoever this 'American Energy Alliance' represents is vomiting out over the airways that the good 'ol US of A is sitting, just sitting I say, on a whopping 2 Trillion barrels of oil (I think they mentioned a that we have a commensurate surfeit of natural gas too), enough to slake our most glutenous liquid and gas fossil fuel thirst for THREE HUNDRED years (no matter how many more people we have and no matter how high we drive per-capita consumption)! And we have to suffer these ridiculous manufactured shortages because the lib-rals are in cahoots with the demon environmentalists and the ME sheiks to ruin Amerika 'cause they all hate it so! Wow, I have seen the light! Close down the Oil Drum, we have all been hip-mo-tized by the bad men. Crank up the Hummer production lines, woo-whoo!

I am pretty sure that smart people are vastly outnumbered by the legions of deluded 'low information' dolts...as you can see from this example of cornucopian propaganda sites popping up on the web...

This site is going to set everyone straight (on the path to Hades)

Oh yea, and Grampy McSame and his army of trolls say that high gas prices are Obama's fault...but wait! The MSM is all bubbly the last couple of days...haven't we heard!?! Oil down to 130/bbl and gasoline in the USA down to $4.04 average! Hey kids, let's go cruis'n down town all night long! Maybe something is being put in the food and drinks to cause most everyone a serious lack of memory...anything beyond the short-term (say, a month max).

"...trolls say that high gas prices are Obama's fault..."

We have passed the Continental Divide of Republican blame. Everything bad has gone from being all Clinton's fault to all Obama's fault. It was certain to happen.

Mexico has shortages again...



I just wonder how long it's going to be until Americans are going to need a coyote to get into mexico for gas.

I'm putting together a report on the relationship between global oil supply and demand & prices over the last 15 years and plan to extrapolate out to 2020 what that could translate into. If folks are interested in talking about country by country projections of supply and demand I am game and I've begun the conversation at http://www.setenergy.org

I aim to develop an excel system that people can play with to try to determine prices based on the different supply and demand assumptions they choose. Thanks for any suggestions and tips!

hi Dennis,

I recommend you get hold of a copy of John Sterman's book Business Dynamics. In Ch. 5 (page 151) he has a diagram showing the mechanics of the four major types of demand-side response to an increase in the price of oil. In later chapters he has more detailed diagrams that model the behaviour of prices in general. The book comes with a CD with the diagrams stored as computable models.

To help in building your spreadsheet you could take John's models and elaborate them.

Hello TODers,

Khotang faces food shortage

Khotang district has been facing shortages of food items leading to the starvation of thousands of people for the last three months.

...Stocks in Halesi, Aiselukharka and Khotang bazaar depots are exhausted.
Recall my earlier posting series explaining that the further inland, and the higher the elevation--the more difficult it becomes to logistically supply an area because of the fixed geo-physics.

Imagine postPeak Nuahtl Tlameme backpacking 100 lbs of I-NPK from sea-level to 10,000 feet above sealevel. Could be worse: Dingboche, the highest elevation agricultural community where some cultivation occurs, is 14,800 feet above sea-level.

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

A Global Agency is Needed for the Energy Crisis July 24, 2008
by Mohamed ElBaradei, Director General International Atomic Energy Agency

Interesting article, maybe ElBaradei understands peak oil. Some excerpts below (bold is mine)

World leaders need to take action on the energy crisis that is taking shape before our eyes. Oil prices are soaring and it looks less and less likely that this is a bubble. The price of coal has doubled.

Global demand for energy is rising fast as the population increases and developing countries undergo dramatic economic growth. The International Energy Agency says the world´s energy needs could be 50 per cent higher in 2030 than they are today. Yet the fossil fuels on which the world still depends are finite and far from environmentally friendly.

Yet there is no global energy institution in which the countries of the world can agree on joint solutions to the potentially enormous problems we see emerging.

A number of institutions focus on energy, but none with a mandate that is global and comprehensive and that encompasses all energy forms. The Organisation of the Petroleum Exporting Countries has just 13 members and deals exclusively with oil - from the producers´ perspective. The IEA represents the 27 Organisation for Economic Co-operation and Development countries from the consumers´ viewpoint. Only 51 countries, almost all in Europe and Asia, have signed the Energy Charter Treaty, whose focus is limited to issues such as trade, transit and dispute settlement. The United Nations co-ordinating mechanism, UN-Energy, is barely four years old. It has 20 member agencies, an indication of how fragmented the UN´s energy activities are.

A global energy organisation could provide authoritative assessments of global energy demand and supply and bring under one roof energy data that are now dispersed and incomplete.

We need to act before crisis turns into catastrophe.

Given things like the pushback on, say Agenda 21 - I would not hold out a whole lotta hope for a UN plans acceptance by the masses.

I tend to agree. I don't think that the key OPEC countries would want to become members of a global energy agency.

Hello Ace,

Thxs for the info. Let's hope the Global MSM will give him much more video interview time to present his concerns. IMO, he has quite a bit of influential Peak Outreach clout, which could help reduce the delusion among the topdogs and the general public.

Yes...and who will be the global, benevolent dictator to enforce the rules of the Global Agency on Energy? Hmmm...and who has been running around the world making friends in foreign countries recently? The "Barackanator", of course!!

Seriously, I think the only way to get the world through the watershed change of energy transition will be to have global programs and enforcement. Could this really happen? Yes, but I think only after some intensive wars.

Could an entity welding such global power not succumb to the intoxication of this power and become utterly corrupt again? That is the big question. It would probably be the first time in human history if successful, but us humans like a challenge.

It would be an interesting discussion to hash out here. What type of government would work best as a Global Government System that could help us through this time period?

Hello TODers,

Rebels could win Pakistan's nuke haven

Bruce Loudon, South Asia correspondent | July 26, 2008

A CRISIS meeting of Pakistan's new coalition Government has been warned that it could lose control of the North West Frontier Province, which is believed to hold most of its nuclear arsenal.

The warning came yesterday from the coalition leader, who, although he is part of the new Government, is regarded as having the closest links to al-Qa'ida and Taliban militants sweeping through the region.

Maulana Fazlur Rehman bluntly told his colleagues: "The North West Frontier province is breaking away from Pakistan. That is what is happening. That is the reality."

...Analysts in Islamabad believe the warning about the situation in the NWFP will prompt renewed concern about the security of Pakistan's nuclear arsenal.

US Secretary of State Condoleezza Rice, speaking in Australia, suggested the restive border region was the source of a surge in Taliban-related violence in Afghanistan, and said Pakistan needed to do more to prevent attacks.

More background info on the NorthWest Frontier Province

Power Rising, Taliban Besiege Pakistani Shiites

...The Taliban, which have solidified control across Pakistan’s tribal zone and are seeking new staging grounds to attack American soldiers in Afghanistan, have sided with fellow Sunni Muslims against an enclave of Shiites settled in Parachinar for centuries. The population of about 55,000 is short of food. The fruit crop is rotting, residents say, and the cost of a 66-pound bag of flour has skyrocketed to $100.
Now I am no military expert, but India and Israel, not to mention many other countries, will get extremely nervous if Pakistani nukes get captured, then scattered to who knows where. I sure hope Putin, Bush, and other leaders, are on top of this nuke situation.

Disclaimer: I have no idea how much is truth and how much is dis-info or propaganda.

Strategic Issues: Difficult time for Pakistan

Brig Gen (Retd) Jahangir Kabir, ndc, psc

HOPE for peace and progress under emerging democracy in Pakistan is being increasingly mired in violence and uncertainty...

Does anyone else find it ironic that the arctic is now being eyed for its oil and gas deposits, while at the same time global warming/climate change has achieved scientific consensus?

Since the next tipping point on a warming planet will probably be huge methane releases from thawing tundra near the arctic circle, are we willing to go head-long into a race to extract and release all that carbon into the atmosphere?

Shouldn't the connection between global warming and carbon emmissions that have led to an ice reduced arctic be the bellweather to realise we need to make the transition to renewable energy? Or is it the macho thing to do, to ignore nature and feel like we can do anything we want?

Fact is, in previous Earth epochs, the build up of carbon in the atmosphere has led to reduced ocean circulation, causing stagnant ocean waters, which led to them being filled with pond scum forms of plant life that reduced oxygen levels in the water causing their own death and the extinction of most marine life, then sank to the bottom and became deposits that were covered up by millions of years of sediment, which are now the oil and gas deposits we extract. This didn't just happen once, but twice in Earth's history. And from this process we now can surmise that a similar process is underway.

But maybe we don't need the oceans. Maybe fish bred in fresh water lakes is all we need. Maybe the weather drastically changing won't interfere with population increases, or even standard of living increases. Maybe we can run right over the top of Gaia.

I suppose that's the choice point we now face; Just keep on drilling, or make the transition to renewable energy.