DrumBeat: September 14, 2008

Saudi pursues plan to raise output

Saudi Arabia is pushing ahead with mega projects to lift its sustainable oil production capacity to 12.5 million barrels per day at the end of 2009 but it appears to have suspended long-term plans, a Saudi group said yesterday.

..."The five capacity expansion projects will cost nearly $60bn. They will bring on-stream 2.95 million bpd of oil. This is equivalent to three per cent of global oil supply and greater than the total production of Kuwait," the Riyadh-based Jadwa Investment Company said in a study, citing government data. "Total production capacity will increase by less than this as Saudi Aramco assumes some production declines elsewhere. The net addition lifts capacity by about 12.5 million bpd and the bulk of the capacity to come on-stream over the next couple of years is light crude."

Buoyed by a surge in its petrodollar income, Saudi Arabia kicked off the world's largest capacity-building programme five years ago to expand its sustainable output and maintain existing capacity by offsetting a decline in some fields. Opec's de facto leader has set a target of 12.5 million bpd by the end of 2009 and 15 million bpd in the following years. But the Saudi Oil Ministry has said recently the extra capacity would not be needed at least at present.

Saudi Arabia will Account for 20.03 pc of ME Oil Demand

Jeddah – Saudi Arabia will account for 20.03 per cent of the Middle Eastern regional oil demand by 2012, while providing 40.71 per cent of supply, according to a forecast in the latest Saudi Arabia Oil & Gas Report from BMI.

The report says that ME regional oil use of 8.24mn b/d in 2001 rose to an estimated 10.61mn b/d in 2007. It should average 10.86mn b/d this year and then rise to around 11.84mn b/d by 2012. Regional oil production was 22.87mn b/d in 2001, and in 2007 averaged an estimated 25.56mn b/d. It is set to rise to 28.94mn b/d by 2012. In terms of natural gas, last year the region consumed an estimated 371bcm, with demand of 542bcm targeted for 2012, representing 46 per cent growth. Production of an estimated 368bcm in 2007 should reach 576bcm in 2012 (+56 per cent), which implies net exports rising to 34bcm by the end of the period. Last year, Saudi Arabia consumed an estimated 20.75 per cent of the region’s gas, with its market share forecast at 17.97 per cent by 2012. It contributed an estimated 20.90 per cent to 2007 regional gas production and, by 2012, will account for 16.91 per cent of supply.

Ike destroys oil facilities, damages pipelines

HOUSTON - Federal officials say it appears Hurricane Ike destroyed a number of production platforms and damaged some of the pipelines in the Gulf of Mexico.

Lars Herbst, regional director for the U.S. Minerals Management Service, said Sunday that flyovers revealed that at least 10 production platforms were destroyed by the storm.

Herbst stressed the assessments were preliminary, but the damage appeared far worse than that caused by Hurricane Gustav two weeks ago.

Twelve Texas refineries showing little damage

PORT ARTHUR, Texas (Reuters) - Twelve of the 15 Texas oil refineries shuttered ahead of Hurricane Ike showed no visible signs of flooding or damage in the storm's wake, although fewer than half of them appeared to have power, a Reuters eyewitness said Sunday.

The assessment was in line with reports from emergency management officials that the state's refineries appeared to have escaped serious flooding -- a sign fuel production could resume more quickly than initially thought.

BP, Gazprom to Revive Kovykta Talks

LONDON -- BP said Friday that it expected to revive talks on a joint venture with Gazprom after settling a dispute in TNK-BP.

BP and Gazprom last year agreed to contribute assets worth about $3 billion to a joint venture. TNK-BP planned to sell its stake in the Kovykta gas field to Gazprom, while BP had an option to buy back a quarter of the deposit. Talks stalled while BP was locked in a power struggle with its partners in TNK-BP.

U.K. ethical investment fund wary of oilsands push

Just days after Canada's oilsands moved into the federal election spotlight, one of Britain's largest investment firms is launching a campaign to convince petroleum giants BP and Shell to scale back their plans to exploit the controversial energy source.

Bahrain: Oil production to be increased

Bahrain oil field will undergo a major development to boost production capacity, for which help will be sought from international oil companies to deploy the latest technology to achieve the target.

Critics: Smithsonian too cozy with oil

WASHINGTON (UPI) -- The Smithsonian Institution has expanded its research ties to oil companies seeking to explore drilling, a newspaper's analysis shows.

Since 2000, researchers at the Smithsonian's National Zoo have received more than $5 million from oil companies to conduct biological studies and help choose sites for drill platforms, The Washington Times reported Sunday.

Greenspan: Economy in 'once-in-a-century' crisis

WASHINGTON (CNN) -- The U.S. credit squeeze has brought on a "once-in-a-century" financial crisis that is likely to claim more big firms before it eases, former Federal Reserve chief Alan Greenspan said Sunday.

Greenspan told ABC's "This Week" that the situation "is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go."

"Indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes," Greenspan said. He predicted that would not happen until early 2009, and said the odds of U.S. recession have gone up in recent months.

"I can't believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring," he said.

While recent declines in the prices of oil and food may help avert a recession, he said, "I wouldn't put my money on it."

Ike's supply toll rises as more closures reported

HOUSTON -- Assessments of Hurricane Ike's blow to US oil supply climbed as new closure reports reached government agencies.

The center of the wide storm made landfall near Galveston, Tex., in the early morning of Sept. 13, knocking out electrical power in most of Houston and many surrounding communities. Damage was widespread from a combination of unusually strong storm surge, a very large wind field, and windspeeds just below Category 3 hurricane status.

The Department of Energy's Office of Electricity Delivery and Energy Reliability added two refineries to the closure list it issued before the hurricane came ashore.

Alaska Airlines to cut 1,000 jobs

Alaska Airlines says it will cut up to 1,000 jobs and reduce flight departures by 15% as record oil prices and a slowing economy take their toll.

Niger Delta Militants Attack Shell, Chevron Plants

(Bloomberg) -- Nigerian militants said they killed at least 22 soldiers and destroyed parts of Royal Dutch Shell Plc's Soku gas plant and Chevron Corp.'s Kula oil pumping station in overnight attacks.

The Movement for the Emancipation of the Niger Delta, or MEND, said in an e-mailed statement that it also blew up a crude pipeline at Nembe at several points. Chevron confirmed the attack on its Kula pumping station in Robertkiri, which lies in the Kula district, southwest of the main oil hub of Port Harcourt.

``There was an attack on Robertkiri flow station, though it was already shut due to pipeline leakage,'' a Chevron spokesman said in a telephone interview from Lagos, declining to be identified. Shell spokeswoman Caroline Wittgen said the company is investigating reports of attacks on its facilities.

Valero says power restored to Houston refinery

NEW YORK (Reuters) - Valero Energy Corp said on Sunday power has been restored to most production units at its 130,000 barrel per day Houston oil refinery.

Shell: Offshore restaffing begins, more next week

HOUSTON (Reuters) - Shell has begun restaffing offshore oil facilities after Hurricane Ike and aims to be at full strength as soon as possible, the company said Sunday.

Experiment Boosts Hopes for Space Solar Power

WASHINGTON — A former NASA scientist has used radio waves to transmit solar power a distance of 92 miles (148 km) between two Hawaiian islands, an achievement that he says proves the technology exists to beam solar power from satellites back to Earth.

Texas oil refineries could be down 9 days - US senator

WASHINGTON (Reuters) - Texas oil refineries disabled by the massive Hurricane Ike could remain idled for up to nine days and Americans should brace for possible gas shortages, U.S. Sen. Kay Bailey Hutchison said on Sunday.

'We are looking at another week or eight or nine days before refineries are up and going, so refined gasoline is going to be in a shortage situation because of the power outages and flooding,' the Texas senator said on CBS' 'Face the Nation.'

'It is going to be felt for the next week, that we have gasoline shortages, so people need to be prepared for that.'

Oil slides below $99 - Markets relieved

NEW YORK (CNNMoney.com) -- Oil prices fell below $99 a barrel Sunday in a special early trading session as traders bet that Hurricane Ike did not cause significant damage to refineries.

"The market is expressing some relief," said Andrew Lebow, a broker at MF Global in New York. "We were worried on Friday that the storm surge would flood the refineries, but right now it looks like that was not the case."

Ike's aftermath: The return of $4 gas

NEW YORK (CNNMoney.com) -- Gas prices are poised to shoot back toward record highs after Hurricane Ike's direct hit to the heart of the nation's oil refineries, analysts said.

...In addition, Hurricane Ike could turn out to be the third-most expensive natural disaster in U.S. history, according to preliminary forecasts from a firm that does loss estimates for the insurance industry.

Russia's Opec bearhug is something to worry about

As if the prospect of a global recession isn't enough, consider the latest threat to world economic stability: an alliance between Russia and Opec, the oil-producing cartel dominated by Saudi Arabia.

That's a scary possibility, as Russia supplies one third of Europe's energy needs, while Opec accounts for nearly 40 per cent of global oil production. Together they produce half the world's oil, so any pact that paves the way for Russia to become a full member of the cartel would present a threat to countries such as Britain, which is becoming increasingly dependent on foreign imports as supplies of North Sea oil dry up.

Tapping Power From Trash

WHEN talk turns to alternative energy and global warming, let us not forget stinking piles of garbage.

Buried in airless pockets deep inside landfills, the organic matter in these great mounds of waste is consumed by bacteria that give off gas rich in methane, increasingly used to generate electricity and heat.

Europe Lowers Goals for Biofuel Use

PARIS — European legislators said Thursday that government goals for using biofuels should be pared back, prompting the fledgling industry to fire back with a campaign warning that alternatives may be no cleaner.

Hung over from the Ethanol Party

The headache from the Ethanol Party hangover is getting worse. However, ethanolics (the drinkers at the Ethanol Party) are not the people who are feeling the pain.

Like drunkards on the highway, ethanolics have disrupted traffic in the world food supply by diverting corn to ethanol plants. As a result, everybody pays higher food prices. And, like alcohol-related traffic fatalities, some people in poor countries are likely to starve to death.

Wind: The other offshore energy source

Visitors to Rehoboth Beach, Del., soon may be greeted by more than sand dunes, seagulls and beach umbrellas. If offshore-wind advocates have their way, scores of 140-foot blades will be spinning in the ocean breeze nearly a dozen miles away, barely visible to the sunbathers.

Offshore wind has taken a back seat to offshore drilling for oil and natural gas in the current energy debate. But those wind-driven turbines probably will be operating long before oil platforms appear off Atlantic Coast states.

Offshore Drilling Is Coming to a Vote

Congressional Democrats, balancing political reality against a policy they have long opposed, are on the cusp of approving legislation that would open the Atlantic and Pacific oceans to oil drilling as close as 50 miles offshore.

With votes scheduled this week in the House and Senate, Democrats have essentially given up defending the current ban on drilling within 200 miles offshore along both coasts. Instead, led by House Speaker Nancy Pelosi (D-Calif.), they are offering a mix of proposals that would allow drilling, with the waters off Massachusetts, Virginia and Georgia most likely to be the first affected.

Ike Shutters 20% of U.S. Refining Capacity; Reserves Released

(Bloomberg) -- Almost 20 percent of the U.S.'s oil refining capacity was shut after Hurricane Ike slammed into the Gulf Coast, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its strategic reserves.

...``If these refinery outages go three weeks or more, most of the nation could see $4 gasoline again,'' Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Dallas, said in an telephone interview. ``If they are back up in a week, it may be a 15- or 20-cent-a-gallon increase.''

Tennessee: Region's gas stations largely deserted following Friday’s panic buying

Despite stern warnings to prospective price gougers, the price of regular gasoline in the Model City climbed as high as $4.49 on Stone Drive by Saturday afternoon, sparking continued outcries for price relief from consumers disturbed by the upward trend.

In contrast to Friday’s parking lots jammed with cars and drivers, area gas stations resembled ghost towns Saturday. For several, it was because the supply of gas ran out Friday or early Saturday.

Bolivia army patrols town under martial law

LA PAZ (Reuters) - Bolivian troops patrolled a restive city in the impoverished nation's north before dawn on Sunday, the mayor said, as the death toll rose to 30 from days of clashes between government and opposition supporters.

Troops fanned through the streets of Cobija city early on Sunday after forces grouped in the airport for two days when leftist President Evo Morales declared martial law on Friday in Pando province, where Cobija is the capital.

Russian warships to help Chavez's anti-U.S. drive

CARACAS (Reuters) - Russian warships will sail into the Caribbean later this year, helping Venezuelan President Hugo Chavez to fend off perceived U.S. aggression and weaken Washington's influence in its traditional backyard.

Evoking Cold War memories, Russia said this week it would send the missile-laden, nuclear-powered cruiser Peter the Great and other hi-tech ships for joint naval exercises with Venezuela scheduled for November.

The manoeuvres show a resurgent Russia flexing its military muscle at a time of diplomatic tension with the United States after the Georgia war and over Washington's plans for a missile defence shield hosted by several former Soviet states.

Higher food prices hard to stomach

Ballooning gasoline prices made their way through the food-supply chain, and now we're all paying more for less at the grocery store.

Youths protest persistent power outages in Guinea

It has been three months with no electricity in Bambeto and Cosa in Conakry, Guinea and hundreds of youths have demonstrated against the state-run Electricity of Guinea (EDG).

Windfarms: One of the great deceptions of our time

The total power generated by all the 2,300 turbines so far built in Britain, is less than that contributed by a single medium-size conventional power station.

Wind-Power Politics

For years, wind-farm projects had stalled in the face of local political opposition. Then an entrepreneur named Peter Mandelstam came up with a new and energizing approach.

One green baby - Limiting your quota of offspring to one is the latest way to reduce your carbon footprint. But will it really help save the planet?

In spite of the fact that this remains a Cinderella subject, an examination of online discussions reveals that interest in the topic is growing. Momentum is building in the wake of the oil-powered juggernaut of climate change. Population is an issue for those concerned about it, not just because of rising CO2 levels, but because of a growing re-engagement with the idea of peak oil, recent food crises, and a renewed sense that the planet's resources are not infinite. Yet, for all that this argument is out there, discussed on many internet forums (mainly by men), it is incredibly hard to find anyone with the commitment to live by it. Many of the advocates of the idea were in their 50s or older and had already made their contribution to the next generation of world population.

Energy Culture in Hasbro’s 1980s Universe

The energy crisis of the 1980s should probably be appropriately called the energy crisis of the 1970s. This crisis was the result of the members of the Organization of Arab Petroleum Exporting Countries, plus Egypt and Syria to stop providing oil to countries supporting Israel. Effects of this political action were rising energy costs, rationing of reserve and an attempt of many nations to limit their dependence on oil, or to look for alternative energy sources. On toymaker Hasbro, the direct result was the reduction of the size of its action figures. The G.I. Joe line of toys was introduced as a 3 ¾ inch action figure line, instead of a 12-inches line, in 1983.

Big Three should get with the program

Pity the poor industrial giant. The Big Three, made up of Ford, General Motors and Chrysler, have for years been building gas-guzzling vehicles amid myriad stories in the popular press about the increasing cost of finding and refining oil; upheavals like hurricanes, real or anticipated, on oil infrastructure; and disturbing scenarios of the world approaching peak oil levels that will see consumer pump prices mushroom.

The three continued to pump out big trucks, SUVs and cars. Why in the face of all these warning signs?

Militant group in Niger Delta declares war on oil industry

LAGOS (AFP) - The most prominent militant group in oil-rich southern Nigeria on Sunday said it had declared an "oil war" and threatened all international industry vessels that approach the region.

...The group warned all vessels to stay on the high seas and not to come into port.

"All international oil and gas loading vessels entering the region are warned to drop anchor in the high sea or divert elsewhere until further notice. Failure to comply is taking a foolhardy risk of attack and destruction of the vessel."

It also reiterated the warning it issued Saturday to oil companies telling them to evacuate their staff from field facilities.

"Again, we are asking that oil companies evacuate their staff from their field facilities because the brief is not to capture hostages but to bring these structures to the ground," MEND said.

Chevron confirms attack on Nigeria oil platform

ABUJA (Reuters) - U.S. oil major Chevron confirmed one of its oil platforms in Nigeria was attacked by militants on Sunday, but production was already shut down due to previous pipeline problems, a company official said.

Nigeria oil facilities unaffected by fighting - military

ABUJA (Reuters) - No oil facilities in the Niger Delta have been affected by two days of fighting between security forces and militants, a Nigerian military spokesman said on Sunday.

"There was heavy casualties on the part of the militants," said Lieutenant Colonel Sagir Musa, spokesman for the military task force in Rivers state. "We are hopeful they will give up the fight very soon."

Iran, Ecuador sign deal on energy, refinery plan

TEHRAN (Reuters) - OPEC members Iran and Ecuador have signed an energy cooperation deal, an Iranian news agency said on Sunday, the latest in growing ties between Tehran and leftist South American governments that have annoyed Washington.

The memorandum of understanding included a plan to build a refinery and a petrochemical unit in Ecuador, in cooperation with both Iran and Venezuela, two of Washington's most outspoken opponents.

DOE talking with IEA in case emergency oil needed

WASHINGTON (Reuters) - The U.S. Energy Department said on Saturday it was providing information to the International Energy Agency on the disruption in U.S. oil production and fuel supplies caused by hurricanes Ike and Gustav in case a drawdown in emergency petroleum stocks was needed.

"We have been producing analysis for the IEA that demonstrates the lost amount of production," Kevin Kolevar, assistant secretary for electricity delivery and energy reliability, told reporters at a Federal Emergency Management Agency briefing.

Two US Gulf refineries tap emergency oil stocks-DOE

HOUSTON (Reuters) - The U.S. Energy Department will send 309,000 barrels of crude oil from the nation's emergency stockpile to two Gulf coast refineries that are running short of supply due to hurricanes Gustav and Ike, the department said on Sunday.

Far from Ike's path, an aftershock is felt: $5 gas

HOUSTON - From Florida to Tennessee, and all the way up to Connecticut, people far from Hurricane Ike's destruction nonetheless felt one of its tell-tale aftershocks: gasoline prices that surged overnight — to nearly $5 a gallon in some places.

Fears of supply shortages, and actual fuel-production disruptions, resulting from Ike's lashing of vital energy infrastructure led to pump price disparities of as much as $1 a gallon in some states, and even on some blocks.

Italy seeks last-minute deal to save Alitalia

ROME (Reuters) - The Italian government scrabbled to save Alitalia from collapse on Sunday, less than 24 hours before the airline has said it might start cancelling flights as it cannot secure fuel supplies.

CIA’s Overthrow of Iran in 53 Reaps Bitter Harvest

In his new book, “An Enemy of The People”(Doukathsan), Lawrence Velvel, dean of the Massachusetts School of Law at Andover, notes that after Kermit Roosevelt, (grandson of President Theodore), then head of Mideast Operations for the CIA, created a state of anarchy that toppled the legitimate government, the U.S. oil companies cashed in.

“Our oil companies---Gulf, Standard of New Jersey, Texaco and Mobil---received a 40 percent share of the new National Iranian Oil Company, and the shah established a tyrannical dictatorship, with the dreaded Savak doing dirty work for him,” Velvel writes. “So our misconduct of yesterday contributed greatly to, (and) probably caused, the terrible situation in the Middle East we find ourselves in today.”

US turns up the heat in biofuels dispute

A transatlantic trade dispute over biofuels has escalated, with the US biodiesel industry accusing European companies of hypocrisy for protesting against subsidised fuel that they are themselves importing.

Higher food prices could benefit global warming, U.S. waistlines

But what if Americans respond to inflation by eating less?

Some environmentalists and experts in nutrition consider that a good idea.

Sydney suffers and the winner is...Melbourne

THE outlook is bleak. Melbourne, not Sydney, is Australia's city of the future.

A world study evaluated cities on their efforts to improve sustainability including public transport, local economy, environment, health, education, recreation and living standards. Melbourne rated sixth on the top 10 list of sustainable cities and Sydney was nowhere to be seen.

Phase out coal and burn trees instead, urges leading scientist

Humanity must urgently embark on a massive programme to power civilisation from wood to stave off catastrophic climate change, one of the world's top scientists has told The Independent on Sunday.

Twenty years ago, Professor James Hansen was the first leading scientist to announce that global warming was taking place. Now he has issued a warning that a back-to-the-future return to one of the oldest fuels is imperative because the world has exceeded the danger level for carbon dioxide in the atmosphere.

Melting permafrost may hasten global warming

TWICE as much carbon is locked away in the frozen soils of the earth's permafrost regions as had been thought, raising the concern that global warming will accelerate faster than expected once the soils start to thaw.

A three-year study by an international team of researchers including Pep Canadell of the CSIRO produced the new estimate, based on cores up to three metres deep taken from permafrost regions, particularly across Russia.

Dr Canadell said temperatures near the poles were predicted to rise by as much as 8 degrees by the end of the century. "The world could experience a major melt of large tracts of permafrost in Canada, Russia, Alaska, Norway, Sweden, Finland and Greenland."

"From Florida to Tennessee, and all the way up to Connecticut, people far from Hurricane Ike's destruction nonetheless felt one of its tell-tale aftershocks: gasoline prices that surged overnight — to nearly $5 a gallon in some places."

In Calgary, gasoline has gone from $1.27 per litre on the morning of September 12 to $1.39 by the end of the day. Unfortunately Canada is in the middle of a federal election, so all the politicians are pouring gasoline on the fire by making flammatory remarks about oil company price gouging. A lot of Calgary service stations no longer post prices; you have to drive up to the pump to see what it is. Since both my cars are Honda Civics, it doesn't matter to me, but it does annoy the SUV owners.

Petro-Canada stations, which had been out of gas for the past week because of their refinery shutdown, are now open again.

Anyone heard of power problems outside the Ike hit areas?

Anyone else experiencing a power outage?

I'm in Huntsville, AL. Neither storm came near me, but the governor declared an emergency based on a DOE warning. I didn't think they meant electricity, but a natural gas shortage might be a problem for the grid.


"Governor Bob Riley on Friday afternoon declared a state of emergency for Alabama after he received new information from the U.S. Department of Energy that energy shortages will likely occur in the state due to Hurricane Ike.

The Governor’s declaration notes that “disruption of essential utility services, systems and severe energy shortages will likely occur.”

PS: Currently running on UPS.

Gov. Jindal addressed the natural gas issue, pointing out that Louisiana had adequate natural gas in storage and on-shore production to cover an expected 3 week shut-down of the GoM.

Odd that he did not mention NG exports.


I suspect that's true of everyone. Summer is traditionally the time of year when natural gas is stockpiled, for use during winter. So stocks should be near their peaks now.

We may end up paying for it in March, but I don't expect problems now. Outside the direct impact zone, of course.


We're currently at 2905 Billion, which is 2.9% above the 5 year avg. Five year peak is around 3500 Billion. No national crisis yet.

The fall and winter following Katrina/Rita was the warmest on record in the US. Which is why we got through that year. Lightning may need to strike twice.


Natural gas storage usually peaked in October. Natural gas was used for peak power load generation during air conditioning season. With rising electricity prices some households may be cutting back on electrical usage. Those compact florescent bulbs might save as more than $100 a piece in electric bills over ten years of usage. Very high return on capital invested.

Throughout much of the 1970's and, in particular, during the Blizzard of '77, natural gas was in critically short supply; at one point things got so bad major industries on the east coast had to shut down and half a million Americans were laid off for weeks at a time. I posted this link sometime ago, but for anyone who may have missed it, see the lead story of the CBS Evening News that begins at about three and a half minutes into this clip:


If you don't think something like this could happen again, best think again.



Aubrey McClendon and Boone Pickens assure us there is an abundance of natural gas, so much so that it can be used as a transport fuel.

HereinHalifax, you need to re-examine your priorities. People freezing in their homes simply is not important. In America, what's important is driving your car. That's why we need massive state and federal subsidies for people who want to convert their Hummer from gasoline to CNG.

Just in the interest of accuracy, Pickens says that if we stop burning natural gas to generate electricity, then there's enough to be used as a transport fuel. Temporarily, until we convert to electricity for transport.

Just in the interest of accuracy:

But contrary to Pickens' proclamations, in relation to its need, the U.S. is not rich in natural gas. Just as with oil, the U.S. consumes 23% of the world's natural gas but it only has 3% of the world's reserves. Its reserve-to-production ratio is less than 10 years. At last month's Senate Homeland Security and Governmental Affairs Committee hearing (in which both Pickens and I testified), he invoked a recent Deutsche Bank study, "From Shale to Shining Shale," which claims that there are massive reserves of gas shale in the U.S. Just like oil shale, such unconventional energy sources hold great promise. But their recovery costs are still high, and their existence has not been able to suppress the rising price of either oil or natural gas.


Twist, Twist. I disagree she is talking "Conventional Reserves" and her comments are at best marginally correct. With an International LNG market price currently near 3 times the current MCF price in the U.S.(trades more on a BTU equivalence. 6:1) the price of U.S. natty is indeed being suppressed by production. Recovery costs in shale are higher true but production costs still keep the BTU equivalent price well below that of oil. I find the argument to use natty as a liquid fuel replacement especially in trucks and local, state and governmental fleets as a very sound policy. The use reduction of natty for home heating and electricity generation should be a targetted goal. Bring on the heat pumps, wind mills and nukes. Choke down the flow of dollars out of the the country for oil we are bankrupting ourselves at an alarming rate. Inspite of so many painting this as another get rich scheme by Mr. Pickens I find the arguments well based on logic. You Go Boone!

It is, IMHO, possible to conserve NG faster than it depletes. 22% of USA electrical generation from wind will *NOT* displace the 22% produced by NG, as claimed by Mr. Pickens. Time of day, seasonal demands (summer peak for most US electrical demand, summer minimum for wind) will, SWAG, displace slightly more coal than NG at these levels (absent pumped storage).

OTOH, increased insulation, better windows, tankless gas hot water heaters, solar water heaters and perhaps even wind driven ammonia production will save significant NG. Greater industrial efficiency will save even more.

Wind should be PART of a larger strategy for reduced NG use. Devoting some NG for specialty transportation (city buses, airport shuttles, garbage trucks, etc.) is a good strategy IMHO.

Fewer VMT (vehicle miles traveled) in smaller cars/SUVs is a better strategy than converting them to NG.

T Boone Pickens is NOT in favor of anything that he cannot make money off of. That much was crystal clear in a conference call with his staff.

Best Hopes for Better Plans than the Pickens Plan,


Ah, you have hit the nail squarely upon the head. Sure, the Pickens/McClendon plan has a little to do with using less natural gas, but it has much more to do with using more natural gas.

One thing became apparent to me Sir Alan of the BE, and this has been the underlying theme through much of the TOD comments since I've been participating (I've actually been on longer than my present handle). That is, we are having the discussion at all.

This may seem intuitively obvious to most whom post on this site, but if we take a moment to reflect, we are having discussions our parents would think absurd only some 40 years ago. Of course I ponder on this point on a daily basis, but I believe it deserves repeating in a larger audience.

Even though I go about my everyday job such as flying around in a helicopter in the BC mountains defining run of river hydro electric developments, the scale of our challenges still humbles me.

And in case you are interested, we were putting clear engineering conceptual design to run of river hydro electric developments in the same area where most of the 2010 Olympics will be conducted. Its not every day you get to fly around in the beautiful mountain terrain on a perfectly clear September day where most would pay 100's of dollars while you are getting paid $150/hr. Also, we are sensitive to the environmental and long term impacts and are doing all we can at the front end.

I don't want to really string transmission lines everywhere, but if someone can come up with a better use of the laws of physics, I would be most pleased to hear it.

"......we are having discussions our parents would think absurd only some 40 years ago."

now hold on there just a minute....... my parents were of the great depression and ww2, they new about shortages, they new about the need to conserve resources, what they would think absurd is the waste .

I have very fond memories of flying between Kitimat and Kemano in an Alcan helicopter to inspect a surplus power plant. Another stop to inspect the transmission towers.

Best Hopes for Once in a Lifetime Experiences,


PS: A some point (today ?) Power electronics will become cheap enough to justify using HV DC Lite transmission towers with two (or even one, ground return) wires instead of three.

Lower cost transmission (higher $ on either end) with much less obtrusive poles.

What MW are you looking at ? 49 MW is limit for "good hydro" in BC I think ?

This may seem intuitively obvious to most whom post on this site, but if we take a moment to reflect, we are having discussions our parents would think absurd only some 40 years ago.

Sorry, BC, but I completely disagree.

We are having exactly the same discussions my parents had 40 years ago. Well, maybe more like 35 years ago.

They had these same discussions back in the '70s, during the first oil crisis. The '70s oil crisis was only partly political. The reason OPEC was able to cut us off was because of peak oil USA, ca. 1970.

Many of our current mass transit systems were built because of the '70s energy crisis. Much of our research into alternative energy had its roots then, too. The "new" technology stories so beloved by technocopians were news back then, too - oil from algae, solar from space, nuclear fusion, etc.

In the '70s, my parents thought we would run out of oil in 40 years, and it was a fairly common belief, even taught in many schools. Limits to Growth was written in 1972, and even though my parents were conservative Nixon voters, they thought the book was correct. They truly believed that their children would grow up in a much poorer world - one where meat and personal cars were a luxury beyond the means of ordinary people.

But...it didn't work out that way. Yet. The oil crisis turned out to be temporary, soon we were "drowning in oil," and people forgot.

IMO, this is a big reason it's so difficult to get people to pay attention. They've gone through it before, nothing really happened, so why is it different this time?

"They've gone through it before, nothing really happened, so why is it different this time?"

i think humans share at least one of the pavlovian dog's genes.

If things are as you say, then why does the Pickens/McClendon plan need massive government subsidies to make it happen? Why have they unleashed a $58+ million advertising campaign to persuade the public and policy makers of the need for these subsidies?

One needs to remember the Pickens/McClendon plan is a two-part plan:

Part 1--22% of U.S. electricity is currently generated using natural gas. Part 1 entails using wind power to replace the electricity that is currently generated using natural gas.

Part 2--Once the natural gas that is currently being used to generate electricity is freed up, use that natural gas as a transport fuel.

Why can't I support Part 1 without supporting Part 2? This is deja vu of Bush's Manichean world construct: "You're either with us or against us."

To begin with, I, along with others such as Bonnie Tatom of the Oregon Public Utilities Commission, are skeptical of these reports of an abundance of natural gas:

Tatom said the PUC, which has endorsed the need for new gas supplies in Oregon, was exploring the implications -- including the need for LNG -- of increasing domestic production. New production from unconventional sources is encouraging, analysts at the PUC contend. But many of those predicting breathtaking new supplies, such as T. Boone Pickens, are big investors in natural gas and wind production.

Moreover, U.S. demand for gas is picking up because of the effects of population growth, the drive to shut down dirty coal plants and the need to back up renewable resources such as wind farms with more reliable generation fired by natural gas. Meanwhile, Canada's National Energy Board says consumers in the Northwest can expect to see more of the Canadian supplies they rely on diverted to help extract oil from tar sands in Alberta.

"There's a lot going on," Tatom said, "so I'm not sure we're willing to take the those reports of 'awash in gas' at face value."


You have to remember this perception that we are "awash in gas" is coming from one place, namely the $58+ million Pickens/McClendon media blitz:

A study released Wednesday by a Washington foundation that promotes the use of natural gas indicates that the U.S. has enough supply of the fuel to last for more than a century.

The study, prepared for the American Clean Skies Foundation by Chicago-based consulting firm Navigant Consulting Inc., showed that the nation has 2,247 trillion cubic feet of natural gas reserves.

That would be an 118-year supply at 2007 production levels, said Rick Smead, the consulting group's director and a co-author of the study. He said the U.S. consumes 22 trillion cubic feet of gas per year.


Of course McClendon is the chairman of American Clean Skies Foundation.

The use of natural gas for a transport fuel would also affect other uses of natural gas, as was not lost on this farmer who expressed his concerns during a town hall meeting in a small community in Iowa:

One man later asked if already tight margins in farming would be even tighter when demand for natural gas increases the price of anhydrous ammonia, a natural gas product.

"It probably will happen," Pickens said. "I can't solve everything."


Even though I am pretty much sold on Part 1 of the Pickens/McClendon plan, I am far from being sold on Part 2.

But even then, if they can bring Part 2 about without massive tax-payer subsidies they are lobbying for, I say "Go for it!"

"Meanwhile, Canada's National Energy Board says consumers in the Northwest can expect to see more of the Canadian supplies they rely on diverted to help extract oil from tar sands in Alberta."

One interesting aspect of the Alaska pipeline debate in the American mass media is that they seemed to have missed the point that most if not all of that natural gas will be intercepted at the Alberta oilsands. SAGD (steam-assisted gravity drainage) is not going away, nor NG-fired electrical generation. How many Americans are aware that Alaska will not save them?

I don't know the pipeline business very well Calgary, but that was my take on it. The Alaskan pipeline is to route through northern Alberta. Ummm, just what is in northern Alberta??? The Edmonton Oilers? No, of course not, the oil sands and they use prodigious amounts of natural gas and that consumption is expected to increase with production - duh!!

Is the all the talk of the N.A. gas reserve just really turning into a game of three card Monte?

Bingo DS, and look up the Puget Sound Energy Resource Allocation Plan (IIRC) on their site and have a look at their projections for increase NG generation to meet their forecast.

I think the WECC should be considered in the whole, and it will soon become apparent that the expected energy supply will not be available. The WECC affects western N.A.

I wrote Richard Heinberg on this previously and he didn't take me up on it. Since he lives in the region, maybe he will have his interest piqued. Whether it's Oregon PUC, PSE, or BC Hydro, the region could move from an energy supplier to an energy purchaser (net), and one has to ask the question, "Just where will it come from?"

My understanding of likely NG supply, which comes primarily from readin TOD's Gail the Actuary, is that it will be reasonably available for perhaps another decade or two. Displacing NG consumption for baseline power by wind (or solar, or even nuclear) is a good thing. IMHO the best use for NG is as a backup for time variable sources, such as wind, and solar. We should be discouraging uses with poor thermodynamic efficiency, such as space heating, and using NG to dry crops etc. If we can convert some currently diesel powered mobile uses, such as trucking, buses, and construction equipment to NG instead of diesel, that would be a plus for the short-term. We need to keep in mind, that the most critical part of the petroleum based fuel demand is for diesel. Many of these same diesel uses, would also be natural places for hyrid electric as well.

I am not really concerned with whether T Boone stands to make money from his plan. The important thing is to start making progress against the twin problems of oil import dependence, and global warming emmisions. It is worth paying some subsidies, if they they will speed the process.

He might be mistaken in his assessment of Natural gas supplies, but at least he is trying to do something, and building generating equipment which is not fossil fuel.
It is usually a bad idea to make the best the enemy of the good, and none of us know completely how things will pan out.

I'm in Kansas City, Missouri and starting since last night, my power has been fluctuating noticably (i.e., all lights in house are flickering about every 10 minutes or so). The fluctuations are not steady, but they continue this morning. The KC area has had lots of rain and some winds, but my power lines are buried locally out to the main street lines.

Not sure what to make of it, but wondered if it's somehow connected to power issues down South. Anyone else in the Midwest experiencing this phenomena?

Electric transmission in the U.S. is largely divided into east, west, and Texas. The outage in Texas should result in my electricity being available in their area and should have no effect as far north as you. You do have a tropical depression coming at you, but that will be no worse than what comes on a sultry summer afternoon by the time it gets there.

Did Georgia get an appreciable rain out of this business? 19% of Alabama's electricity comes from a nuke plant that depends on outflow from Lake Lanier. It'll be a real shame if tropical storms go all around them this year and do nothing to refill that body of water. A sudden cut in outflow would be ugly for the state of Alabama.

Lanier got a little bump from the storms.

I think what I am experiencing is wind related. Although it was dead calm when I first posted, it has since picked up some strong gusts. Also NWS has issuing a wind advisory.


Evidently Ike isn't quite done with us yet.

Depends what you mean by "this business". Ike did not help at all, the bump it got (in the chart linked by Bitteroldcoot above) was from Fay. Note that the level is still at an all-time low for this time of year, but it is not making much news. I guess it will only start making news again when it goes below last year's December low. Strange how a little seasonality can induce so much complacency.

Yes, I see some institutional and personal psychological similarities between the Atlanta region and Peak Oil.

No concern about contingency planning, or long (1+ year) term preventative strategies. Just hope that "God will provide" with a foot of rain (not really enough, but enough to take Lake Lanier through another year of drought).

1050' is the "dead pool" and today is 1055.2'. Normally the dead pool is below the intakes, and it contains decades of organic and inorganic sediments suspended near the bottom. Inch a day drops have been "normal" during this drought.


The Chattahoochee River could dry up (and the Alabama nukes shut down) while the dead pool is pumped and hyper-chlorinated for domestic use. But even this eventuality has not been seriously discussed and this may come to pass in just 3 months (potentially less or longer).

Are there plans for pumping and treating the dead pool for domestic water ? Is the required infrastructure in place, with some "proof of concept" trial runs ?

I am unaware of any serious planning or even discussion of "what needs to be done". And just 63 inches to go, at an inch a day.

ARE humans smarter than yeast ?


MEED article, subscribers only, alas:

Doubts surface over Qatar Petroleum's Ras Laffan complex

Rising feedstock prices and a shortage of supplies are delaying the expansion of Qatar Petroleum's giant petrochemicals complex and threatening the state's plans to become the dominant force in the sector.

... Subscriber-only Content ...

I said so, didn't I?

That's why I posted it in the comments, instead of up top.

Yes, you did. Sorry, ADHD. I clicked the link.

Two rigs adrift in Gulf of Mexico

"MMS is closely monitoring these rigs, and they have been relatively stationary for several hours," said Lars Herbst, regional director, MMS Gulf of Mexico Region. "We expect tugs to be on location to secure the rigs as soon as sea conditions allow."

I suppose it will be several days before we know how much, if any, damage was done to offshore production platforms and undersea pipelines.

Ike takes toll at the pump, curbs energy production

As of Saturday afternoon, 99.7 percent of the oil production and 98.5 percent of the natural gas production in the gulf were shut down, according to the Minerals Management Service. Oil production from the gulf is estimated at 1.3 million barrels per day, while natural gas production is estimated at 7.4 billion cubic feet per day.

That is a lot of oil and gas shut in. Some of it will start to come back on line in a week or so but much will be delayed for a month or more. A lot of undersea pipelines must be inspected before they can be put back into service.

Ron Patterson

I thought this was interesting:


An estimated 500,000 Alaskans received up to $3,269 in their bank accounts Friday morning, thanks to direct deposits of their annual PFD and one-time "resource rebate" payments from the state, meant to offset high energy prices.

Are there any other states that pay dividends like this? (Certainly not Michigan)

I had heard about these dividends before, but didn't realize they were still paying, nor how generously.

In California, we don't get direct rebates. However, we're under-taxed to the tune of 10 billion a year which is causing huge and growing deficits that make the feds look prudent.

Given my income level and state expenditures, I would expect my taxes should be about $3,269 dollars higher, so there's my rebate.

Unfortunately, the religious zealots, I mean current administration, have been told by their god that taxes are a sin and deficits are good.

LOL - I do not live in CA and you do so clearly you and other Californians must decide on taxes to be paid at the State Level.

However, here is a take from a CA (LA) newspaper:


$350,000 for a male Prison Nurse in San Francisco. That is nice.

Hello TODers,

With the electrical power out in the Gustav and Ike areas, many people are probably using their backup generators until the utility juice is restored. This maybe weeks for some people. Here is a link to Honda brand generators so you can easily see the output power and the hourly gasoline burn rate:

6500 watts (54.1/27.1 A) 120/240V Automatic Regulated Power
Powerful Honda commercial OHV engine Operates 10 hours @ 50% load (6.6 gal.) Voltage
I just picked one model for illustration, but you can easily see that a family can burn more gasoline for backup juice than they normally would use in a car: for 24 hours = 15.84 gallons.

Thus, this is just more pricing pressure to help send gas prices higher. I am guessing that this model would be enough to run one refrigerator, plus a small window A/C unit for a room, and maybe a few small kitchen appliances [microwave, coffee pot, etc].

I bet theft of gensets and jerry cans is rampant down south if you leave your house unoccupied for any length of time.

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

Generator demand exceeded vehicle demand for gasoline in blacked out areas of Louisiana after Gustav.

OTOH: Houstonians drive on 10 to 14 lane freeways EVERYWHERE , so staying home clustered around a generator and eating cold food may be a net savings. Especially as the generators run out of gas, one by one.

Hard to judge if a blacked out Houston will increase or decrease gasoline demand.


Hello AlanFBE,

Thxs for responding. I think most of the people in this photo are queued up with their gascans to get fuel for their generators:

Gas Prices Continue to Rise as Hurricane Destroys Oil Facilities
Spring, Texas is north of Houston so I am guessing most of them are still without electricity.

Does anyone have any figures on the numbers of gas stations wrecked by wind and water versus just the power outage?

A gas station whose tanks were polluted, if ethical, will not attempt to sell this fuel. But if a station with clean fuel has to wait some time before it can finally get normal grid electricity or a backup genset to power its operation: it may have to sell the fuel at a reduced price if the fuel's volatiles are rapidly going sour.

Hi Bob,

I have a small Honda generator that's basically large enough to provide emergency power for our refrigerator, one or two CFLs and oil-fired boiler. One good thing about a natural gas or oil-fired boiler is that it can supply all of your space heating and DHW requirements for about 250-watts (burner and circ pump) and your runtime can be as little as one or two hours a day if need be -- enough to prevent the pipes from freezing and to maintain minimal comfort. Air conditioning is obviously a different beast; powering a CAC is probably out of the question due to high fuel usage, but running a small, energy efficient window unit to cool a bedroom might be feasible and offer much needed relief.

For those who use bulk propane and who possess the financial means, a propane generator could be a very smart investment.


Interesting. A gallon of gasoline yields somewhere around 130 megajoules, give or take some depending on who you ask. So the 6.6 gallons yield around 235 kWh. And you only get 32.5 kWh at the plug. So the efficiency is about 14%. Not very impressive, is it? I suppose the smaller ones are even worse ... ?

Most lowcost 60 hz. AC ICE gensets spin 3600 RPM
independent of load, Longer life ones for Boats and RV's turn 1800 RPM.
An inverter unit like a Honda 2000i, the ICE is not synchronous
to 60 hz, so the speed (and noise) depends on load. They use a fraction
of the fuel to keep the Fridge and lights alive.
Rule of thumb, kWh's from a Genset cost 10x Grid kWh's
Solar PV costs costs 3X grid power, but impossible to calculate real ROI since we
can only guess future power costs. Note you have
to change the oil in those 3600 RPM gensets weekly.

Why do we continue discussing anything about energy without the inclusion of Sarah Palin in the conversation?

"She knows more about energy than probably anyone else in the United States of America," McCain said.


Clearly we have nothing to offer in comparison. Perhaps we should just hang it up and defer to the Empress of the North?

Today's New York Times has this commentary:

No longer able to remember his principles any better than he can distinguish between Sunnis and Shia, McCain stands revealed as a guy who can be easily rolled by anyone who sells him a plan for “victory,” whether in Iraq or in Michigan. A McCain victory on Election Day will usher in a Palin presidency, with McCain serving as a transitional front man, an even weaker Bush to her Cheney.

Frank Rich - NY Times

This lady scares the hell out of me.

How many months before the McCain-Dingbat ticket blunders into WW3?

If she wins, I'm moving to the *deep interior* of the Rocky Mountains. Call me when it's over.

How many months before the McCain-Dingbat ticket blunders into WW3?

It may not be a blunder.
It might be a plan.
The last Great Depression was fixed with a World War.

The last Great Depression was fixed with a World War.

True for the United States.

Try telling that to someone living in Germany or Japan where WW2 destroyed their major cities and killed millions of citizens. Depends what you mean by *fixed*.

I was thinking more in terms of WW1 where the major players didn't want to start a big war, but managed to anyway.

== Situation ==
Russians send Tupolev long-range bombers and nuclear-powered warships to Venezuala.

== Jan 2009 ==

Ok Putin - take your toys and go home! (Monroe doctrine stuff follows)

Oh yeah! Well make me, old man!

Look! I'm not kidding!

Couldn't save Georgia, could you old man!

John!!! you're embarassing me!!! Do something!!!

Last chance Russki!!!

Yah-Yah.... McCain's a sissy ... yah-yah


== Jan 2010 ==
Survivor 1 to survivor 2:

"Hey, with the world population now down to 1 million people, we have plenty of oil for the next 100 years. And nuclear-winter has stopped global warming too!

Thank you, John McCain"

+1 for that post - very insightful thinking. Generous of the US people really - electing someone who is so clearly going to take them down a path of self-sacrifice.

As someone who does not live in the US, I would like to thank US citizens for graciously sacrificing themselves in order to make our lives more comfortable. Once you get McCain/ScaryBitch elected, I am confident that your 10 million bpd of oil consumption will be rapidly reduced, and nuclear winter should take care of the GW thing. As a resident of the Southern Hemisphere, I look forward to experiencing virtually no radiation, but some very pretty sunsets.
< / sarconol>

As a resident of the Southern Hemisphere, I look forward to experiencing virtually no radiation, but some very pretty sunsets.

Then, after that, settle down for the evening and watch a good movie, like say On the Beach




Palin: John!!! you're embarrassing me!!! Do something!!!

This will solve all our financial problems.
Yes. Exactly what we need.
Never give up. Never give in.
Fight. Fight. Fight.
Drill. Drill. Drill.
See John.
See Sarah.
They are plain and simple folk.
They know lipstick.
They know a pig in a poke.
See them pray. See them bray.
Drill. Drill. Drill.
Kill. Kill. Kill.
They love life.
They love flags.
They love marching troops.
And they hate _ags. (sorry, it just happened to rhyme & just happened to be true)

John McCain is more adept at using hyperbole than probably anyone else in the United States of America.

Than "anyone else"? I detect a bit of hyperbole there :)

I pump my own gas so I'm at least as much an energy expert as she is.

What isn’t Related to Peak Oil?

Hello TODers!

This weeks show asks the question what isn't related to peak oil? http://www.kriscan.com/archives/109

Comments appreciated.

Also one of my oldest most popular videos has been censored by Youtube!!!! Do you think google is anti peak oil awareness?


Did they say why it was removed?

I don't think they're anti-peak oil awareness. There's a ton of peak oil videos on YouTube.

Hi Leanan!

They did not say why it was removed. I have asked them.

I suspect it was flagged by youtube viewers but considering what is on youtube it was very tame so it may have been flagged because it said high gas prices are caused by peak oil.


I'm assuming this is video you made yourself, which was posted here a few weeks/months ago.

Maybe you can try vimeo.com - seems to be the rage among at least some portions of the digerati at this the point.

Talking about being banned, HuffingtonPost momentarily banned me from posting comments at their site. I had routinely challenged HuffPo's "energy blogger", Raymond J. Learsy whenever he posted one of his opinion pieces. I usually took jabs at Learsy and suggested that HuffPo hire someone from TOD to post instead, as anyone here knows more than Learsy about the subject matter.

My commenting privileges were restored when the reader rep's at HuffPo got wind of my predicament.

Bottom line though is that my comments to Learsy rarely get posting approval, but everything else I submit to HuffPo goes right through.

Yeah, delusional thinking energy crosses political boundaries, although I think that the GOP, as a group, is more delusional than the Democrats, but probably not by much.

Yes but small shifts on perception can have huge impacts on policy. For instance, here in Minnesota we have Norm Coleman (R) going against Al Franken (D). Norm was for a while against drilling in the Arctic National Wildlife Refuge and then he squandered huge amounts of time investigating the overrated Iraqi "Oil for Food" controversy. This makes him sound like he might know something about energy, but they are simply feints for implementing a more-or-less corporatist GOP strategy.

I am interested in getting Al in there because the guy is actually mathematically smart and can get mean and feisty.

So these are all slight shifts but being a probability type of person, I go with the odds.

Franken is unusual. He actually talks about peak oil.

Minnesota seems to be more peak oil aware than the average state.

Thanks for the link. Another factoid about Franken is that he scored a perfect math SAT score and whenever I listen to him talk about about Social Security and other economic issues I am blown away by his ability to create intuitive analogies out of some complex financial scenarios.

The ethanol debate is very strong and divided here. A few of the Dem populists are for ethanol from corn and soybeans but otherwise they seem to get it.

The other area is in PRT and transportation, which is a great wedge issue for progressive Minnesoata pols.

Apparently, the latest polls show it neck-and-neck. I haven't given to the Franken campaign for a while, but maybe it's time I do so again.

I think Franken has a good shot, because people are pretty dissatisfied with Coleman, but I think he still has to overcome the "Not Serious" image.

I didn't take an SAT, and I think I would have scored average anyway - but I did do well in multi-variable differential calculus, so what does that say to the test/scoring system - bullocks! I believe our Brit friends across the pond would say. Anyway, I have a good analogy to describe the Ethanol fuel situation to both sides.

In the screen writing style, I take you to a carnival midway in the midst of a perfectly sunny afternoon...

Carny: "Step right up and get your Ethanol Buck! Yes, that's right ladies and gentlemen, an Ethanol Buck just for you!"

Carny: "Well little lady, you would like an Ethanol Buck, step up next to me and here it is!! Yes-s-s, ladies and gentlemen this little lady is going to enjoy ONE Ethanol dollar!"

Carny: In stage whisper: "Now mam, if you'll just give me $1.30, we'll be all square."

I think the practically good minded folks of the farming community would understand this dynamic quite clearly and may have second thoughts about the ethical nature of their enterprise.

WT - Why isn't there more analysis of this Picken's Plan which proposes switching USA car fleets to NG as an answer to energy security. Can domestic natural gas scale up? Also there is an assumption that renewable energy will make a replacement of oil and coal. Isn't that just feeding the delusion that the suburban experience will continue after a mild adjustment?
On wind this was posted upstream

Turbines are hopelessly ineffectual. The amount of electricity they deliver is derisory. The total power generated by all the 2,300 turbines so far built in Britain — covering hundreds of square miles of countryside and sea — averages just over 600 megawatts in a year, less than that contributed by a single medium-size conventional power station.

The real danger of the “great wind scam” is that it takes the eyes of politicians off the real energy crisis fast approaching us, so that we are not building the proper power stations we need to keep our lights on. That is why it will one day be looked back on as having been one of the most incomprehensible blunders of our age.

I realize that the focus has been on Hurricanes in the GOM and falling commodity prices but I think that hard-care Peak Oil watchers accept as fact that the price adjustments are supply and demand issues and not contrived at all.

What I want to know is what is the real potential of some of these programs?

Thank-you - Joe

Germany, with much poorer wind resources than the UK, has about 20,000 MW of wind turbines installed.

NIMBYs and an excruciating permitting process for the UK prevent development of their (the UKs) excellent on-shore wind resources.

The USA could potentially supply about half of our electricity from wind (the resource is larger than that) if coupled with pumped storage and HV DC transmission to shift generation both in time (pumped storage) and distance (HV DC) to where the demand is. Cost perhaps 50% higher than today.


Alan - doesn't the bulk of the Wind Potential lie in the Midwest? Isn't one of the fundamental challenges to this program creating the transmission network to support such a widespread resource?

The "Saudi Arabia" is from Canadian Prairie Provinces down to Texas.

see map (276 kb for dial-up)




But substantial resources in Illinois, Wisconsin, New England, New York, West Virginia, Hawaii, all through the West, West Coast and East Coast, on the coast & off shore, Great Lakes and small spots that do not show on the map (due to local typography).

Only the SouthEast is devoid of substantial wind resources (off shore not an option due to hurricanes).


Regarding natural gas, maybe, but I am concerned about the number of wells that we will need in order to keep increasing, or even maintain, our current production rate, but of course we are still talking about a finite fossil fuel resource base.

For transportation, I think that a better investment would be to implement Alan Drake's plans for Electrification of (rail) Transportation.

WT - The difficulty for me is getting my mind around the smorgasboard of energy options and what might be a well reasoned energy mix based on demand and resource base.

I went looking for a graph detailing ERoEI and this is the best I could find:

Nonrenewable Liquid Fuels ER: EI
Oil and gas (domestic wellhead)

1940's max production 1971 10.9 million barrels of oil per day (mbpd) 1: > 100.0
2007 current production 6.1 mbpd 1: 13
Coal as compared to earlier production
1950 1: 80.0
2007 1: 17
Oil shale 1: 0.7
Coal liquefaction 1:0.5 v 4.2
Natural gas 1: 1.0 v 5.0
Renewable Liquid Fuels
Ethanol* (sugarcane) 1: 0.8 v 1.7
Ethanol* (corn) 1: 0.6 v 1.3
Ethanol *(corn residues) 1: 0.7 v 1.8
Methanol *(wood) 1: 2.6

Electricity Production
U.S. average 1: 9.0
Western surface coal

No scrubbers 1: 13
Scrubbers 1: 2.5
Hydropower 1: 11.2
Nuclear (light-water reactor) 1: 4.0 v 12.0
Solar and Wind
Wind turbines * 1: 17 v 30
Power tower 1: 4.2 v 12.6
Photovoltaic 1: 19 v 30
Liquid dominated 1: 4.0v12.0
Natural Gas production 1: 13 v 28

This graph is inadequate and probably inaccurate. Are there better sources? I believe that Alan's plan is actually the right direction but I think there needs to be an acknowledgment that this means a shift in the suburban paradigm which is too often glossed over. There is a fundamental disconnect in communicating what this "change" might mean. When I say "shift in the energy paradigm" people think "buy a Prius" but if you say "walk, ride a bike, and use mass transit and live in higher density communities" peoples eyes glaze over.


peoples eyes glaze over

I rarely throw newbies into the deep end of the "information pool".

I am pushing building a non-oil transportation system in parallel to our existing oil based system. That most transportation will shift over time almost completely to the non-oil system is left unsaid. I just try to sell it as an option/redundancy. Something "other people" can use#.

Best Hopes for matching message to audience,


# 98% of Americans are in favor of other people using mass transit.

I just tell em the 'burbs are probably toast.

I quit posting on Learsy's spew quite some time ago for the same reason my posts were not approved! Pretty frustrating to spend a fair amount of time constructing a detailed response to his vehement, delusional ignorance only to have it denied for no reason other than it disagreed with his POV. So much for the tolerant left. They are as afaid of the truth as the far right.

I am still trying to get to the bottom of this. It is not clear that Learsy is the one that grants final approval or that someone else at HuffPo is doing the rejecting of comments. Learsy himself almost looks like a corporate plant; IMO he tries to push the common populist hot-buttons that in the long-range serve his cronies because they hide the ultimate reality.

Learsy basically has two choices: he can tell the truth and marginalize anything he has ever done, or he can try to deflect the truth via damage control through some clever righteous indignation that he displays to his readers. This is the same kind of "maverick" image that McCain uses to great advantage.

So progressives can see through the fake maverick approach when it comes to McCain, but they may indeed need some help in uncovering the fakes amongst other corporatists. Learsy is the real problem, not HuffPo, and we need to make them aware of this.

HuffingtonPost momentarily banned me from posting comments at their site....I usually took jabs at Learsy

At a guess, that may be why you were banned. Taking "jabs" at another person is not necessarily the most conducive behaviour to a polite and informative debate.

(Whether or not this is the case, I don't know; I'm simply suggesting a possibility based on your description of the situation.)

I've never been banned anywhere. I go near the edge but have never crossed over. Here is the response I got from HuffPo:


We noticed your blog post here:


I hadn't recalled banning your account, so I checked it out. It appears there was some kind of error caused your account to be blocked. I apologize for the confusion!

I reactivated your account, and you should be able to comment again as usual. Our techies will be looking into the error.

Best regards,

Katie Saddlemire
Community Manager
Huffington Post

The reason I got agitated was that the comment submittal page said that I was "banned", not "inactivated" or something to that effect.

Yet, they still rarely seem to publish any of my comments to Learsy. Not clear if Learsy himself exercises editorial control. Background on Learsy is that he is a financier and commodity trader. This apparently makes him an expert on oil, probably only second to Sarah Palin in knowledge on energy.

kriscan: Glad to see your presence here, I'am a big fan of all your youtube vids, even enjoy the music. Concerning youtube and the way they exercise the TOS terms of service, I was banned for posting facts about the middle east, along with supportive sources such as the white house press corps. Many vids are pulled and comments removed, while blatant porn and graphic violence remains and is promoted.
Seems if you call for turning an entire region of the world into a "glass parking lot" with nukes....its youtube worthy and not considered "hate speech".
Point out facts about war crimes by American or Israeli gov & military and it is deemed hate speech. Speak the truth or ask questions (like you do) and be removed from view.
Dont,what ever you do, become discouraged. Realise you
got under their skin and have the upper hand. Know for
absolute certainty that they squelch you because they fear you. Now just get someone else with another IP address and youtube acount to repost whatever was deleted. Never give up the high ground, never stand when you can sit, never sit when you can lay down, if ya got em, smoke em, never bring a bee bee gun to a howitzer fight....now get back on the front lines and
knock em dead...and break a leg kid!

Interestingly, they allowed that silly "hot for words" video to stay.

Apparently they see more harm in serious messages than silly sexiness...

Electronic trading is now open for the WTI crude contracts, heating oil, gasoline and natural gas on the NYMEX. It opened early because of Ike. Right now WTI crude is trading at $99.55, down $1.61. Heating oil is down 7.94 cents per gallon and RBOB gasoline is down 10.71 cents per gallon. Natural gas is down 7 cents per mmbtu.

I simply don't understand this. All this oil and natural gas off line and all those refineries shut down but energy prices are falling fast. I think some folks are for a rude awakening very soon. (See my above post for Gulf oil and gas off line.)


Ron Patterson

And once again, the question begs....why are they opening electronic trading early and who benefits this? I don't remember it happening during Rita/Katrina. What's different this year that we need to open trading earlier than usual?

I've read no good explanation of why.

IMO markets have their own internal logic which is unrelated to the real world. Most traders look at charts and know going against the trend is stupid except for very short term. The trend is down.

Suppose you were long crude oil in anticipation of supply disruptions due to coming hurricanes. It now transpires that the hurricanes, while doing some damage, likely were not as bad as feared. And the Atlantic is now bereft of new ones on the horizon.

So what do you do? Crude oil is in a bear market and the trend has not yet reversed. You have to cover your long positions by selling. In doing so you push the market to new lows. It makes perfect sense from a trading point of view.

I have watched this kind of stuff happen in the grains for years. Right now the bins are empty so prices should be high, right?
No way. Corn and bean prices are still correcting downward. After the harvest is in and the bins are full of grain, the price rises.

There is little demand for crude when the refineries are shut down and crude has been released from the SPR. After they start up again and things get back to normal crude demand should pick up. But that is a trade for another day.

If force majeure was declared, would anyone want to buy that contract?


There seems to be a growing disconnect between the paper trading of commodities and the reality on the ground. How can you have shortages and the price goes down? I've starting to lean toward the notion that commodity markets, as currently configured, are about to undergo a paradigm shift/crash/discard onto the trash heap of history.

My comment from the refinery thread:

As they say, even paranoids sometimes have enemies (and sometimes paranoids are just better informed), but I wonder if a primary contributing factor to the price discpreancy is what amounts to a global margin call as some individual and institutional investors are forced, or elect, to sell highly liquid assets like energy holdings?

We have an oil downtrend and the SPR is full and wide open to refiners. Refinery margins are up and may be up for some time to come. OPEC has grumbled about oil prices falling and may have quietly cut half a million barrels of production. In 2006 they cut once and then again in early 2007. The first cut I ever noticed was in 1999.

Currently I do not need a futures contract. I wait for my next dividend distribution.

Evidently, the downward pressure on energy prices is unphased by what appears to be very bullish supply and demand fundamentals. We'll probably hear that Lehman was long on commodities and they were forced to liquidate them by the Federales. Isn't fascism great.

We'll probably hear that Lehman was long on commodities and they were forced to liquidate them by the Federales

Leh and AIG - my bet that would explain a great deal. And anyone with knowledge of these positions isn't going to buy ahead of forced liquidations (if this IS the reason though, the market will turn around like a scalded dog, once the selling is done...)

What is perplexing to me is that none of the brokerages that are blowing up have to close out positions that are long on the dollar or short on commodities. For example, if the Lehman was the holder of concentrated silver shorts, how would THOSE positions be closed out....?

It does look awful suspicious-maybe the taxpayer eats those, finessed through the Fed to disguise it?

I wish I knew as well. The game certainly seems to be rigged and propped up to keep the music playing. I suppose their strategy might be to dispose of long positions to cause the most damage, while transfering any dollar/commodity shorts as an open liability. If the dollar/commodity shorts were closed out it might start a counter trend avalanche, which is to be averted by the Fed at all costs. Could such a thing happen?

Bullish demand fundamentals ?
Recession / depression in the US (if you look behind the phony stats)...
Recession in the UK, Germany, Spain, Japan...
Slowdown all across Asia, including China.

Demand is strong only in Russia, ME, possibly Brazil.

Demand fundamentals have not been this weak since the Asian currency crisis 10 years ago, or even possibly since the early '80s.

TODers are too focused on supply issues. The world has changed. Weak DEMAND fundamentals are king, at least for 6-18 months.

China has hardly a slowdown. 10% growth is expected this year and next. Asia isnt really slowing much. 6% growth in Indonesia, 4-5% in Taiwan and South Korea, India at 7.5-8%, Thailand at 5%, there really isn't much slowdown! Only the most open economies will see more slowdown, like Singapore and HK, but still growth in the 4-5% range. A long way from the 2001 situation which saw a much much bigger asian slowdown.

With oil down with draws like today, a sell off down to $80 or $90 is not only possible, but probable. Then you got to pick your spots.

Two reasons.....

As I said after Gustav, with refineries down the refining companies don't need to buy as much oil until they get back on track. As far as I know about 60% of oil is delivered under contract and doesn't go through the spot market, that oil is coming to the refiners no matter what (unless it is GOM oil).

Also traders believe the price of oil is going down so it will take a big push to convince them otherwise. With the election coming traders are reluctant to get too long as "someone" with deep pockets could make sure oil doesn't get too high before November.

The GOM shut-in is just over 1% of global production. If you are shut-in for two weeks that is a half percent shortfall. The GOM shut-in probably needs to go over a month before traders worry about it but again that worry has to exceed their internal belief in a downward trajectory first.

"With the election coming traders are reluctant to get too long as "someone" with deep pockets could make sure oil doesn't get too high before November."

That's the point! Nothing to add.

GOM shut-in is currently approx. 1.3mbpd - that's actually about 1.7% of global crude oil production ( I'm being pendantic about crude oil versus all liquids here ). The shut-ins started on August 29th - and to date the cumulative production loss is nearly 17 million barrels. The current best-case scenario that I can see is that the cumulative shut in by month-end will be nigh-on 25 million barrels.

Before Ike closed everything down again, the production re-starts from Gustav had crawled up to the magnificent figure of some 300kbpd. At this stage, we have absolutely no idea of what the long-term damage from the evil twins has been, let alone how rapidly production will be restored.

I suspect that the election dampening effect is going to be overwhelmed by some harsh supply realities in the not-too-distant future - this is already happening with gasoline prices in some areas.

The GOM shut-in is just over 1% of global production. If you are shut-in for two weeks that is a half percent shortfall. The GOM shut-in probably needs to go over a month before traders worry about it but again that worry has to exceed their internal belief in a downward trajectory first.

It has already been down for over two weeks. Everything was shut down a well before Gustav hit. They started to put people back on the platforms but quickly pulled them back when Ike was predicted to go into the Gulf. It will be well over a week before they even get any idea as to any damage to the undersea pipelines. It may take another two months or longer before everything is back up to pre Gustav/Ike levels. For Katrina/Rita it was well into 2006 before all Gulf production was back on line, and we have never yet gotten back pre Katrina/Rita levels.

In July of 2006 the US produced 5.240 mb/d and 5.218 mb/d in August. In December production was still under 5 million barrels per day at 4.984 mb/d. Some 40,000 barrels per day of Gulf production (several small production platforms) were never brought back on line. They were deemed too far in decline to be worth the expense and effort. Here is US production May 05 thru Jan 06, in thousand barrels per day

May  5,581
Jun  5,460
Jul  5,240
Aug  5,218
Sep  4,204
Oct  4,534
Nov  4,837
Dec  4,984
Jan  5,106

Since then the highest we have ever reached was was 5,197 kb/d in May of 2007. In June of this year it was 5,109 kb/d.

Ron Patterson

does anyone here have the link to the one scene in the movie 'three days of condor' or something that has to deal with oil? i know someone posted it awhile ago.

Hi TrueKaiser

This may be the scene you're thinking of: http://www.youtube.com/watch?v=Eovei355l4o&feature=related


yup thats it. i wanted to show it to a family member this in relation to current events but could not find it.

That film was made in the wake of the Pentagon Papers.

Today, they wouldn't print it.

Not looking good for Lehman:

Barclays quits Lehman sale talks

Barclays has pulled out of talks to buy most of troubled US investment bank Lehman Brothers, the BBC has learned.

The decision, which a source close to the talks said was unlikely to change, is a setback for the rescue effort.

Barclays walked away because it was unable to obtain guarantees in relation to financial commitments faced by Lehman when markets open on Monday.

Perhaps the drop in commodity prices is an indication of a rapid need for cool, hard cash (liquidity). God knows Wall St. needs it right now.

Bloomberg is reporting that Bank of America is also walking away, and that Wall St. is preparing for a Lehman bankruptcy filing on Monday.

``Trades are contingent on a bankruptcy filing at or before 11:59 p.m. New York time, Sunday, Sept. 14, 2008,'' the ISDA said. ``If there is no filing, the trades cease to exist.''

BOA role is now saving Merrill Lynch. I wonder why? The offer could be $10 over market.
Maybe, it is not pure good will on their part---

I just don't see how this is ending well.

I think I saw this game on the sidewalk in Manhattan-the guy had three shells and I had to guess which one was hiding something. I think he called the game Financial Engineering.

Leanan: Iam glad you mentioned Bank of America "Walking away". Just goes to show how much America has changed, over the years the frogs have been boiling. For those not familiar with BOA and its history, Bank Of America was started by an immigrant
(Amadeo Giannini) When the 1906 San Francisco earthquake struck, Giannini was able to get all of the deposits out of the bank building and away from the fires, he set up a table made of scrap planks of wood and made loans and filled withdrawl orders to account holders. The bank never missed office hours during the crisis.

Fast forward to today folks. Today doesnt even need a natural disaster to cause the monetary systems collapse. Doubt the financial systems are crashing?
Look no further then your home value, IRA, Roth, 401-k
kids 529 accounts. Don't listen to some smuck like me
on TOD who probably wouldnt know a shekel from shine-
ola. Trust what Jim Cramer on Mad Money tells you...
yeah...thats the ticket!

This is not quite that Bank of America.

Bank of America was purchased about 10 years ago by an outfit called Nations Bank. It was a small Southern Bank and had grown through acquisitions under a fella named Hugh Mcoll (from memory - spelling could be wrong).

Nations Bank bought Bank Am and moved headquarters from Frisco to Charlotte, which is where Bank America (formerly Nations Bank) is run out of.

I know BOFA has changed since 1906. I was giving a historical difference since then...and accurately so.
I lived in the Peninsula for 6 years on Lake Norman


and am quite familiar with BoFA head quarters in Charlotte,NC. Nearly the entire upper management were
my neighbors and I saw their garbage cans on the curb
on garbage day, complete with the empty liquor bottles
they drank, pizza boxes they ate from. I should know a bit about BoFA I emagine when I see the ranking officers picking up their dogs poo with a plastic bag
over their hand and walking around my neighborhood with it...do ya think?

Today doesnt even need a natural disaster to cause the monetary systems collapse.

Huh? Overfull planet doesn't count?

cfm in Gray, ME

Lehman Said to Prepare Bankruptcy as Buyers Withdraw

(Bloomberg) -- Lehman Brothers Holdings Inc. prepared to file for bankruptcy after Barclays Plc and Bank of America Corp. abandoned talks to buy the U.S. securities firm and Wall Street prepared for its possible liquidation.

Lehman and its lawyers are getting ready to file the documents for bankruptcy protection tonight, said a person with direct knowledge of the firm's plans. A final decision hasn't been made, though none of the other options being considered appeared likely, the person said, declining to be identified because the discussions haven't been made public.

BOA buying Merrill, $12 premium over Friday close.


Wow, back to the 90's. We all got slapped in the mouth. Instead of peak oil we just have a huge oil glut. Looks like petroleum supplies are indeed adequate for our current financial and economic system for decades to come. Nothing to see here. Boy have I lost money. No point in selling, It'll payoff for my great grand kids grand kids when oil peaks.


Dude, I recommend you go and check your homework again. This is playing out exactly to the script how those familiar with the Peak Oil theory understand it. A month or two of price decline and apparent oversupply are just dynamic responses.

I should aquaint you with the common second order Transfer Function, and you will see there is nothing new under the sun here;


The math may look hard, but the typical plots are quite easy to understand.

Your short term thinking with a dearth for understanding the grander implications only reinforces the negative perceptions of most Americans. Pick it up pal!

Greenspan's once-in-a-century tag reflects a very deeply held view among conservatives. They have convinced themselves that present woes are a temporary setback akin to a bout of flu. Captains of industry tell us that things will be back to normal in a year or two. Politicians visit dried up dams and speak of a OIAC drought, then make the same speech two years later. It's like we are hard wired for irrational optimism. If the slow squeeze fails to go away by say 2010 I think the public may realise this time it's different.

It's not just conservatives. It's everyone.

If the slow squeeze fails to go away by say 2010 I think the public may realise this time it's different.

I doubt it. That's just two years. The Great Depression lasted 10 years. People put up with shortages and rationing for four years during WWII, and probably would have for much longer if necessary.

This is why I expect our politicians to string us along as long as possible. We'll put up with all kinds of privation, as long as it's temporary, and we think there's better times ahead. (That's kind of the point of organized religion, isn't it? ;-) It's not in our leaders' interests to let us think that this time it's different.

It's not just conservatives. It's everyone.

Yeah, I'm looking forward to a "debate" between the two pod-people running for CD1 here in Maine next week on the topic of "sustainability". Questions have to be pre-submitted. My stomach hurts now just thinking about it because I know that whatever comes out of them as proposals will only make matters worse if implemented. What's the responsible thing to do? Pie them? Maybe put on a sandwich board "the end is nigh" and picket? Yeech.

I can go and write a thoughtful op-ed that won't get printed but that's giving them too much respect.

cfm in Gray, ME

I just recalled something about Galveston that made me shudder just a little. Remember when they built a Biosafety Level 4 facility at UTMB (University of Texas Medical Branch - Galveston) to study the most dangerous pathogens around?


Not surprising that their website is down:

I sure hope it was built to the specs they promised...

This was discussed in one of the previous Ike threads. Apparently, it's not complete yet. Still under construction, which means no germs yet.

But you gotta wonder if building it in Galveston was such a bright idea.

Hmmm....I missed the previous mention of this topic. However, I remembered them breaking ground on that facility a few years ago when I lived in Houston, and it was active. Confirmed by this MSM story:


Includes the following:

"The pathogens, which include the deadly ebola virus, were purposely destroyed before the staff left the facility in advance of the hurricane, said Gov. Rick Perry's spokesman, Andrew Barlow."


"But a former student who worked at the Level-III laboratory while the Level-IV facility was being constructed and who knows the manager, said she would be surprised if all of the pathogens had been destroyed, since some of them are rare and extremely valuable."

Between a Texas Governor (at least of the recent lot) and an anonymous former research student, I'm not sure who I would believe more. Could be the basis of a nice novel, in any case...

Hello TODers,

PARIS, Sept 15 (Reuters) - European equities were set to tumble in early
trade on Monday as Wall Street firm Lehman Brothers filed for
bankruptcy protection, fueling more fears over the battered financial sector.

..."We're going to see major falls today. It's probably going to be one of the worst days the financials have seen, with these three big stories all happening at once," said Matt Buckland, dealer at CMC Markets...

Saudi Arabia ramping up production for 12.5 mbpd sustainable output? How does that play with the notion that the Saudis are struggling with Ghawar and is soon to go into decline?

Net Oil Exports from Saudi Arabia (EIA & my estimate for 2008):

2005: 9.1 mbpd

2006: 8.5

2007: 7.9

2008: 8.4*


We shall see what happens going forward, but at their current rate of increase in consumption they would have to be producing about 12 mbpd total liquids in 2010 in order to match their 2005 net export rate (they produced 11.1 mbpd in 2005).

BTW, I frequently cite the Texas State Geologist, who predicted in 2005 that Texas could--with the use of better technology--significantly increase its production, perhaps back up to its 1972 peak production rate, so delusions of grandeur are common in the oil patch.

Yes, I guess we will have to wait and see. But might some have underestimated their ability to ramp up production? When these reports are coming from the top of the saudi oil hierarchy, and they seem determined to go through with the production increase, I believe that they actually think it will happen. Are the top dogs in Saudi delusional or do they know such production figures is impossible and are actively trying to mislead everybody? I find it hard to believe neither. But we will see.

I differ with WT on this issue based on info attributed to people who have actually been inside Aramco. Sadat al Husseini, former VP, and an article in BusinessWeek not long ago basedon docs supposedly from an insider both say Saudi is serious about getting to 12.5. al Huessini says they can, the BW article says they can't get quite that high, but can get up to 10.5 or so.

I can find no reason to doubt al Husseini or the article. WT is essentially basing his opinion on stats. I'll take hard info from an insider (the assumption being it is trustworth) over tech analysis every time.

That said, I don't think Saudi can do it today, or even within, say less than a year, but I do think they are confident that with Khursiniya, new projects, etc., they can eventually get to 12.5. Whether that is accurate or not remains to be seen.


It basically slaps that notion in the mouth. With this paper sell off and ramp up in production, a lot of people including myself feel sheepish.

And then they will boost it to 15 mbp after this. Economics 101 will hold up here. Higher price will bring more oil to the market until it doesn't. People won't act ahead of time because it's viewed as unnecessarily painful to switch away from from oil, but luckily it looks like an issue for my grand kids and not me. We may actually have enough oil to completely destroy the earths atmosphere. Wall Street should like that.

Like the Saudis, I have been voluntarily reducing my production. In my case, to a level somewhat below one mbpd, but my plan is to be personally producing 2 mbpd within five years. And if private companies were put in charge of Saudi production, they could probably achieve the same kind of production results that we have seen in Texas & the North Sea: