DrumBeat: October 1, 2008

Time to bet on an oil crunch: Oil prices will keep rising, says billionaire investor Richard Rainwater - and he's putting money on it.

NEW YORK (Fortune) -- Back in May, when oil was at $129 per barrel and rising, billionaire investor Richard Rainwater did something as prescient as it was shocking: He sold off all the energy stocks he owned.

Now he's making another bold move: He's betting on oil again.

A few weeks ago, when the price of oil tested a low near $90 per barrel for the first time in many months, Rainwater decided that he had found the right reentry point. "I reinvested back in the oil business, and it's worked out really well for me," he told me the other day. "I bought Exxon stock under $75. I bought ConocoPhillips under $68. I bought Pioneer Natural Resources under $50. I bought BP. I bought Statoil. I made a big bet on the sector. I bought a lot of stocks back."

Oil sinks below $99: Government report stokes fears of softening demand and crude traders see little benefit from bailout plan

NEW YORK (CNNMoney.com) -- The price of oil fell Wednesday after a key inventory report highlighted concerns about waning demand and doubts emerged about the impact of the government's proposed bailout plan.

Light, sweet crude for November delivery fell $2.11 a barrel to settle at $98.53 on the New York Mercantile Exchange.

Ford, Toyota post huge drops in Sept. sales: Tight credit, economic worries and high gasoline prices hurt auto purchases

DETROIT - Tight credit, economic worries and high gasoline prices combined to cut automakers' U.S. sales once again in September, with beleaguered Ford Motor Co. reporting a 34 percent decline and Toyota Motor Corp. posting a 32 percent drop.

It was Ford's worst sales month this year, and the results at both of the automakers are a strong indication that analysts' forecasts of another dismal month will come true.

General Motors Corp.'s sales drop was a less severe 16 percent, mostly thanks to an offer of employee pricing on most of its vehicles.

Hyundai Motor Co., whose single-digit sales decline this year has looked like a success against the Detroit automakers' slide, reported its U.S. sales fell 25 percent. Honda Motor Co. reported a 24 percent drop. Other automakers are set to release their results later Wednesday.

Small businesses take hits, find ways to prevail

Back in Georgia, Smith, too, said he feels the pinch from rising food costs. When corn prices go up, so do the prices for animal feed, which push up the cost of beef and poultry. He is also seeing the effects of the July minimum wage increase, to $6.55, and the rising cost of gas.

"Most of the stuff we sell is commodity items -- so it's beef, produce, a lot of things that are affected by fuel," Smith said.

The price of oil has other ramifications, Smith and Claesson said.

"People have to drive. They've got to drive here to eat. My employees have to drive here to work. My vendors have to put stuff in a truck and drive it here," Smith said. "Pretty much anything that gets to this building has been brought by something that's using fuel."

The Recurring Myth of Peak Oil

The Peak Oil theory maintains that world production of conventional oil will soon reach a maximum, or peak, and decline thereafter, with grave socio-economic consequences. Some proponents of the theory argue that world oil production has already peaked, and is now in a terminal decline [1].

Although, on the face of it, this sounds like a fairly reasonable proposition, it has been challenged on both theoretical and empirical grounds. While some critics have called it a myth, others have branded it as a money-making scam promoted by the business interests that are vested in the fossil fuel industry, in the business of war and militarism, and in the Wall Street financial giants that are engaged in manipulative oil speculation.

Regardless of its validity (or lack thereof), the fact is that Peak Oil has had significant policy and political implications. It has also generated considerable reactions among various interest groups and political activists.

Not since 1999 have Canadians driven so little

OTTAWA - Canadians were driving their cars less - at least their big cars - at the start of this year as gas prices were rising towards their mid-year peak, Statistics Canada reported Wednesday.

In fact, the number of kilometres driven on average during the first quarter of the year was the lowest this decade, and down 3.4 per cent from a year earlier.

Blockades slow work on C$3 bln Enbridge oil line

CALGARY, Alberta (Reuters) - Enbridge Inc said on Wednesday native blockades in the Canadian province of Saskatchewan have forced the company to halt most construction on its C$3 billion ($2.8 billion) Alberta Clipper pipeline project.

ANALYSIS-Can emerging economies stand alone as cash flees?

LONDON (Reuters) - As western investors dump emerging assets, the fate of the sector's major economies will hang on whether Brazil, Russia, China and others such as Gulf Oil producers have built up enough funds to survive the storm.

Just months ago, many analysts argued the fast-growing sector had "decoupled" from the developed world. But a Wall Street-led rout has since hit stock markets from Lusaka to Bombay as western banks failed or needed bailing out.

Moscow super-rich pour millions into luxury homes

MOSCOW (Reuters) - The world outside may be in the thralls of crisis, with house prices plunging, markets slumping and banks collapsing; but Russia's cocooned super-rich can still spare 2.5 billion roubles ($99 million) for a Moscow townhouse apartment within strolling distance of the Kremlin.

Spurred by petrodollars and booming consumer confidence, Moscow's real estate - where sky high prices can outpace Manhattan and London - has so far avoided following the local stockmarket's downward spiral, which continued Tuesday.

Kinder, Energy Transfer in US South gas line pact

NEW YORK (Reuters) - Kinder Morgan Energy Partners LP and Energy Transfer Partners LP said Wednesday their Fayetteville Express Pipeline LLC joint venture will build a new $1.3 billion, 187-mile natural gas pipeline in the southern United States.

The line, with an initial capacity of 2 billion cubic feet per day, will originate in Conway County, Arkansas, and continue eastward through White County, Arkansas, to an interconnect with Trunkline Gas Co in Quitman County, Mississippi.

Suspected U.S. missile strike kills 6 in Pakistan

ISLAMABAD, Pakistan (AP) — A missile strike by a suspected U.S. drone killed at least six people in a Pakistani tribal region near the Afghan border, two Pakistani intelligence officials said Wednesday.

American forces recently ramped up cross-border operations against Taliban and al-Qaeda militants in Pakistan's wild border zone, a possible hiding place for Osama bin Laden.

The attacks have drawn stiff protests from Islamabad, an uneasy ally in Washington's seven-year war on terror, particularly since a highly unusual Sept. 3 raid by U.S. ground troops in the South Waziristan region.

Hurricane experts predict a stormy October

Think hurricane season is over? Think again. Top hurricane forecasters at Colorado State University are predicting well-above average activity for the month of October. Forecasters say that October should feature three named storms, of which two will be hurricanes. Of those two hurricanes, one should become a major (Category 3-4-5) hurricane. Overall, the forecast team expects activity to be nearly twice the activity of the average October.

"We expect the month of October to be quite active," says Phil Klotzbach, lead author of the hurricane forecast. "We continue to observe low sea-level pressures and warm sea-surface temperatures across the tropical Atlantic," he says. "A combination of these two factors typically leads to an active October."

CO2 increase means louder oceans, study finds

Beyond the damage it is expected to inflict upon sensitive marine ecosystems, ocean acidification may also allow sound to travel farther underwater, creating a louder deep sea din.

The change may have implications for marine mammal communication, and for military, commercial and scientific applications.

Do we need a 'Gaian führer' to save the world?

Here is a worrying thought. Or maybe not. One rich philanthropist could take it into his head to re-engineer the planet's climate. It might only cost a few billion dollars, and even in these days of financial meltdown there are people around with that kind of cash.

Dutch Nobel prize-winning chemist Paul Crutzen recently proposed that, if things went really pear-shaped on climate change, we could start spraying the upper atmosphere with sulphate particles. They would intercept enough solar radiation to cool us down again.

It might be a last resort, but it could prevent us crossing some tipping point to irreversible climate mayhem. And it wouldn't cost the Earth.

Transition Town

Toward the end of his life, Thomas Jefferson realized the American Revolution had failed to provide institutional mechanisms to keep the creative spirit of insurrection alive in the populace. He wanted to institute a township system, giving more self-determination to local communities, or “elementary republics.” For Jefferson, the goal of a democratic republic was to make everybody feel “that he is a participator in the government of affairs not merely at an election one day a year but every day; where there shall not be a man in the state who will not be a member of some one of its councils great or small, he will let the heart be torn out of his body sooner than his power wrested from him by a Caesar or a Bonaparte.” He worried that the representational government devised by the federalists had deprived people of a public space where their freedom could be meaningfully exercised.

Unlikely as it seems, the Jeffersonian model may get its chance in the next few years, due to the converging forces of peak oil and climate change. Richard Heinberg, author of Powerdown: Options and Actions for a Post-Carbon World, calls the project that confronts us “a species-wide effort toward self-limitation.” Such a project requires global coordination and cooperation to reduce resource consumption and energy use, while industrialized countries “forego further conventional economic growth in favor of a costly transition to alternative energy sources.” For Heinberg’s “powerdown” approach to work, the U.S. would quickly decentralize food, energy and industrial production, and return a great amount of decision-making power to local communities.

Return of US refineries slower than hoped - Bodman

PARIS (Reuters) - The return of U.S. oil refineries to normal following last month's Hurricane Ike is taking longer than expected, the U.S. energy secretary said on Wednesday.

Sam Bodman, who was in the French capital for a meeting on nuclear power, also said that long-term energy projects needed to expand supplies and meet demand could be at risk if the financial crisis continued.

Hurricane Ike and earlier storms have disrupted oil supplies in the United States, the world's top oil consumer, helping to drain inventories. U.S. gasoline stocks as of late last month sank to the lowest since 1967.

"I would have imagined we would have seen more progress," Bodman told reporters, adding it was expected to take four to five weeks for the refineries to return to normal. "It's not going to take 10 weeks."

U.S. Senate Attaches Energy Tax Breaks to $700 Billion Bailout

(Bloomberg) -- U.S. tax legislation valued at more than $100 billion, including a host of alternative energy credits, gained new hope after Senate leaders late yesterday announced plans to tie it to a $700 billion financial rescue bill.

The tax plan will extend roughly $17 billion in tax breaks for solar wind and other renewable energy sources. It includes $42 billion in incentives for businesses and individuals for two years, including an $8.6 billion annual research and development benefit, and it would spare 24 million households from a $61.8 billion alternative-minimum tax due to take effect this year.

Russia gas deal to bolster Ukraine PM, avoid price

MOSCOW (Reuters) - Ukraine's Premier Yulia Tymoshenko will sign a gas deal with Moscow on Thursday aimed at showing Russia's support for her government without any mention of a final gas price, Interfax news agency reported on Wednesday.

"This agreement is of political nature and aims to support the government of Yulia Tymoshenko," Interfax quoted an informed source in Moscow as saying.

Gazprom says European gas price exceeds $500 per tcm

MOSCOW (Reuters) - Russia's gas export monopoly Gazprom said on Wednesday its export gas price for Europe has reached an all-time high of over $500 per 1,000 cubic metres.

"As of today we can say that the price growth dynamic has surpassed Gazprom's expectations, and the price for the gas supplied by Gazprom to Europe exceeded $500 in October," Gazprom's statement quoted chief executive Alexei Miller as saying.

Natural Gas Gains as Lower Gulf Output Expected to Cut Storage

(Bloomberg) -- Natural gas futures gained on speculation lingering production shutdowns in the Gulf of Mexico caused by two hurricanes will keep stockpiles from rising near the record levels expected in early September.

Analysts including George Hopley of Barclays Capital and Martin King of FirstEnergy Capital Corp. had predicted stockpiles would top 3.5 trillion cubic feet by the end of this month. Most analysts have pared that to about 3.4 trillion.

Tales of The Tape: Ike Battle Seen As Oil Producers' Victory

Although Hurricane Ike wreaked damage to energy infrastructure and halted oil output, the storm's toll is seen as a partial victory in oil producers' battle with Mother Nature.

Preliminary damage assessments indicate that Ike had a smaller impact than past major hurricanes - such as Katrina and Rita in 2005 - on crude oil and natural gas production in the U.S. Gulf of Mexico.

While it's still too early to quantify the impact, analysts say the hit to oil companies' bottom lines isn't expected to be substantial, and Ike will turn out to be less costly than previous storms. Katrina and Rita were more intense hurricanes, but the improvements companies made in their wake also played a key role this time around.

Gas Shortages Plague the Southeast

Barry Tipping spent three days searching for gas in Atlanta. The quest seemed to be in vain, as the 44-year-old tried nearly 20 gas stations, many with their pumps draped in bags, or waits that stretched to more than an hour. Twice when Tipping did find stations with gas, he sat in a long line only to see the station run out of premium unleaded before he reached the pump. So here was Tipping on Sept. 30 happily paying $4.33 a gallon to fill his silver Mercedes at an Exxon (XOM) station in the northern part of the city, a sense of relief on his face. "I'd pay $5 a gallon if I had to," he said.

Refineries back online; gasoline demand, price might drop into October

A decrease in demand for gasoline should continue into October, bringing retail gasoline prices down as much as a quarter by the end of the month, an oil analyst said Tuesday.

"The way the global markets have behaved, I would suspect that whatever you pay on Oct. 1 will be at least 25 cents a gallon or so higher than what you'll pay on Oct. 31," said Tom Kloza, the Oil Price Information Service's chief oil analyst.

Most area refineries are operating at reduced rates, and local gas prices should at least remain stable until normal refinery operations resume, Kloza said.

Mountain slackers embracing “no-gas” excuse as strong sick-day ploy

Due to the fuel shortage in Western North Carolina, local workers have saved “thousands of life-hours” by calling in “no-gas” to their work places, according to several Recreation Science instructors at UNCA.

“The lack of gasoline has affected worker transportation, and workers’ ability to manipulate the perception of worker transportation,” said Mike Blackstone, head of the Recreation Science Department. “Worker sleep patterns have been altered, as more adults stay up late on work-nights on the gamble that gas will still be scarce enough in the morning to take another day off from their jobs.”

In addition to the “no-gas” excuse, WNC employers report an increase in worker sick days for “marginal reasons.”

“I had four workers call in this morning. They had gas, but they said they were too worried about the impending total collapse of the national economy to make it in,” said one local manager. “I can’t have my people citing ‘the economy’ as their reason for not making it to work. It’s just so broad. And I’m trying to run a bank here.”

Gas shortage spurs telework in southeast U.S.

Gas shortages in the southeast United States are prompting companies to consider expanding their telework programs so employees can conserve fuel. Other options workers are weighing include greater use of carpools and public transit, along with alternative scheduling arrangements such as four-day work weeks.

McCrory defends handling of gas shortage

CHARLOTTE - Mayor Pat McCrory rejected any suggestion Tuesday that he should have rationed gas or otherwise interfered with the marketplace during two weeks of outages and lines at Charlotte's gas pumps.

McCrory's office has received more than 100 e-mails on the issue, many of them critical. Residents have asked why McCrory hasn't limited gasoline purchases, as leaders did in the 1970s. Some accused him of underestimating a problem that has hobbled the community.

Did state do enough with gas-crisis plan?

Under the Georgia Energy Emergency Plan, updated just last year, the governor has the power to enforce gas conservation much as he enforced water conservation last year. With supplies running low, Perdue could limit drivers to every-other-day gas purchases, set minimum and maximum limits to prevent topping off and hoarding, and add temporary car pool lanes on Ga. 400 and other roads.

Turkmen Opposition Reports on Fuel Shortage Cases

There is a lack of petrol in Dasoguz Region [northern Turkmenistan, bordering Uzbekistan].

One can observe long rows of vehicles stretching for hundreds of metres at filling stations an apparent paradox for a country with rich oil resources.

Car owners and drivers, standing in queues for hours, sometimes engage in discussions. Some of them accuse authorities of making allegedly false reports on the annual production of up to eight million tonnes of crude oil while others believe that someone is creating an artificial shortage of fuel to discredit the authorities in the eyes of the population.

Kansas Energy Council Discusses Lowering Speed Limit

A generation ago, the government responded to an energy crisis by lowering the speed limit. In crafting a state energy policy, the Kansas Energy Council recommends lowering it again.

This time, they are considering a maximum speed of 65 miles per hour instead of 55.

Multiple Oil Finds Continue String of Success in Brazil

A series of oil finds reported to Brazil's National Petroleum Agency on Tuesday demonstrated once again the immense promise the country holds for global oil companies.

Pakistan: Chinese technology can address energy crisis

BEIJING: Pakistan can address to a large extent its power crisis through Chinese innovative hydro power generating technology, said a senior official at Pakistan Embassy in an interview.

"China has advance technology of generating electricity through small and medium size hydro power plants and Pakistan can greatly benefit from it," the Counselor Technical Affairs Syed Ali Tallae told after a visit to Hanzhou Province where these plants were functioning successfully.

Malaysia: Seafood prices going up due to fuel shortage

Catches from the Hilir Perak coast, an important fishing area, have slumped by more than 60 per cent since Aug 22 as a shortage of subsidised diesel has left fishing fleets idle.

Seafood prices are expected to rise by at least 20 per cent next week, with fears that prices could rise further if the fuel shortage persists.

Maine Experiences Wood Pellet Shortage

BANGOR, Maine -- In the South, motorists are dealing with short-term gas shortage. In Maine, consumers are dealing with a shortage of an altogether different type of fuel - wood pellets.

Pellet fuel distributors in Greater Bangor are running out of pellets within days of shipments. Pellet experts said the problem is that people are stockpiling them.

Canada opposes Alaska refuge oil drilling

OTTAWA (UPI) -- Canada's Conservative government has been lobbying Washington not to drill for oil in Alaska's pristine Arctic National Wildlife Refuge, documents indicate.

The quiet lobbying by Canada's Department of Foreign Affairs and International Trade considers "opposing drilling in the Arctic National Wildlife Refuge" one of Canada's top environmental objectives with Washington, the CanWest News Service reported.

Act or the planet is at peril: new study

THE world will have to take drastic action within two years to reduce greenhouse-gas pollution if it is to avoid the worst effects of climate change, a new British study warns.

The Economist Hosts Online Debate on Global Water Crisis

NEW YORK (Business Wire EON) September 30, 2008 -- The Economist Debate Series announces its 13th online debate (www.economist.com/debate) focused on the global issue of water as a scarce resource. The proposition for this debate is: “This house believes that water, as a scarce resource, should be priced according to its market value.”

Oil Shale: Viable Domestic Energy, Or ‘Dirtiest Fuel on the Planet’

After months of bitter wrangling, a quarter-century ban on offshore drilling along most of the nation’s coastline will expire at midnight tonight.

But amid the rancor surrounding that fight, punctuated by cries of “Drill, baby, drill” at the Republican convention, Congress is also allowing a moratorium freezing the development of oil shale to expire today.

In theory, the end to the oil shale ban, which has been in effect for two years, could open two million acres for development across Colorado, Utah and Wyoming. As with offshore production, it will be up to the next administration to set the parameters on whether to expand domestic production.

...But for its many critics, oil shales is a particularly nasty way of dealing with the energy crisis. To get hydrocarbons out of the shale, the sedimentary rocks must be heated to temperatures of 900 degrees by injecting steam. The process, which melts the oil and allows for its collection, uses vast amounts of energy and water.

High Gas Prices Expected to Push U.S. Car Sales to 1980s Levels, Economists Say

(CEP News) Ottawa - High gas prices are likely to do something that oil price shocks of the 1970s and 80s could not accomplish - push large numbers of vehicles off American roads, says a report released Tuesday by CIBC World Markets.

Economists Jeff Rubin and Meny Grauman say sales of new vehicles have already plunged from almost 17 million units in the first half of the decade to below 14 million on an annual basis, and with gas prices expected to remain high sales will likely fall below 12 million a year - a level not seen since the early 1980s.

By 2010, Americans are expected to be scrapping 14 million vehicles a year, meaning there will be fewer vehicles on the roads, wrote Rubin and Grauman.

Fiji: Save electricity, consumers told

FEA chief executive officer Hasmukh Patel said the Monasavu hydro dam is at a dangerously low level and is not expected to improve any time soon with the continuing dry spell.

Mr Patel said the FEA is supplementing Fijis energy demands with their diesel power generators.

Embassy's 20 Most Influential Books

Rising Powers, Shrinking Planet: The New Geopolitics of Energy

By Michael T. Klare

With the recognition that the natural resources necessary for the functioning of modern industrial societies are finite, governments rather than corporations are increasingly spearheading the pursuit of resources. In a world where Russia is transformed from Cold War loser to arrogant broker of Eurasian energy and the U.S. is forced to compete with the emerging "Chindia" juggernaut, acclaimed writer and columnist Michael T. Klare argues, the only route to survival lies through international co-operation. A must-read in a country that is trying to declare itself an energy superpower.

Solutions to Everything, Pt. 1

First up: the energy crisis. Why start small?

There are a lot of people who think we're headed into a Mad Max future because pretty soon, we're going to run out of oil.

One possible solution: frozen natural gas. Also known as methane hydrate, there are huge deposits of this substance in fields just below the sea floor -- more than all the fossil fuel deposits on earth combined. With any luck, we'll learn to tap this in time to make the transition to solar power easier -- or we'll just use it all up, the way we did oil.

What global warming has to do with subprime mortgages

Unless the United States starts addressing global warming now, we might have to spend $700 billion to bail out the planet, too. But $700 billion is a nice figure compared to the $19 trillion estimate from the European Commission.

Premier Speakers Address Climate Crisis

TAMPA, Fla. (BUSINESS WIRE) -- The Earth Charter is a remarkable document that brings together remarkable people. With a message that encourages a shift towards a just, sustainable, and peaceful society, it's no wonder that some of the most forward-thinking leaders and scientists are participating in Earth Charter's Community Summits on Saturday, October 11th. People in cities worldwide will meet in these summits to discuss local solutions to the global issue of climate change. Keynote speakers will be broadcast via webcast to participating cities.

Crude prices 'to drop from fourth quarter of this year'

Oil prices will begin to ease from fourth quarter of this year as the market will witness substantial increase in spare capacity, according to a forecast by a US think-tank.

Global Insight, the world's leading company for economic and financial analysis and forecasting, said crude prices will drop as the supply and demand projections indicate that the world is set to see a significant increase in spare capacity over the next six to 18 months, following a string of new projects entering production.

Oil dips to $100 ahead of U.S. stocks data

LONDON (Reuters) - Oil dipped toward $100 a barrel on Wednesday ahead of weekly U.S. oil data, which was expected to show an increase in crude oil inventories.

U.S. crude fell 30 cents to $100.34 a barrel by 7:42 a.m. EDT, after rising by more than $2 to as high as $102.84.

U.S. driving drops for 9th straight month

WASHINGTON (Reuters) - Motorists on U.S. roads applied the brakes hard on driving when gasoline prices peaked over the summer at more than $4 per gallon, according to the latest government figures released on Tuesday.

The 3.6 percent year-over-year decline in miles traveled on all roads in July cemented a downward trend begun nine months ago in response to rising pump prices and economic weakness.

While the June drop was 5 percent, the July drop was still sharp and may be more illustrative of consumer habits and concerns about the economy. July is a usually heavy driving period marked by traditional summer vacations and the Independence Day holiday.

Five Reasons Why the $700 Billion Banking Bailout Will Translate into $250 Oil

I’ve been predicting record oil prices for a number of years now, so when crude oil prices recently plunged from their record highs, I warned investors and consumers that the decline was nothing more than a temporary respite.

But now it’s clear that the fallout from the $700 billion banking bailout pact will virtually guarantee that my prediction will come true.

Of mavericks and market meltdowns

Houston's Matt Simmons, the very successful investment banker, prophet of $300 or $400 per barrel oil and subject of a lengthy profile in the current Fortune, sees the present problem much less starkly.

"The Houston economy is as strong as horse radish," he says. And: "I think basically we have total gridlock in Washington, but Armageddon is highly unlikely."

Energy Stocks Ready to Melt Down

It doesn't take a super-secret report to know that energy stocks have been on fire. Over the past five years, the energy sector has outperformed the S&P 500 by 125 points. However, recent declines in oil prices may be signaling an end to the easy money.

Explaining 'peak oil' theory

ALBANY — Stephen Leeb, an author and editor who in 2006 predicted economic collapse and $200-a-barrel oil, will talk about the peak oil theory tonight.

Leeb, editor of The Complete Investor, a financial newsletter, will speak at an energy symposium at The College of Saint Rose organized by the Capital Region Energy Forum, an advocacy and education group.

Leeb does not hide his feelings about peak oil, the theory that the world has hit the zenith of oil production worldwide, which would spark a global economic crisis as demand starts to outstrip supply.

"You need a solution or else the world is going to be in desperate straits," Leeb said.

Logistics News: Does U.S. Need a “No Oil” Contingency Plan?

Even a modest disruption in the flow of oil could have a devastating impact on the economy and commerce, especially the flow of goods.

“First the trucks and shippers will curtail shipments. Shelves will become scant and in some cases bare,” Black cheerfully notes in the book's first pages. “Quickly, unemployment will become epidemic as people are laid off due to economic contraction or because many will simply be unable to get to work. That in turn will worsen the country’s economic convulsion. Mobile America will cease to exist as we knew it because transportation via automobiles, taxis, buses, planes and other vehicular traffic will become an ever more unaffordable luxury. When people cannot get from Point A to Point B, the nation’s economic vitality will quickly wither.”

Energy prices 'stronger for longer', says BP

Surging demand in developing countries and global fossil fuel supply constraints are creating volatility in energy markets and will keep prices up over the long term, BP's Chief Economist Christof Rühl told EurActiv in an interview.

...BP's chief economist vehemently countered the idea that the world was facing a physical shortage of oil as proposed by 'peak oil' theorists. "I have no reason to accept [peak oil] as a valid statement either on theoretical, scientific or ideological grounds," he said.

"There is no resource constraint at the moment for oil. There is enough oil if you're willing to accept the costs – including the environmental costs for sources like tar sands," he added.

(The interview itself is here.)

Canada: Candidates focus on rural, agricultural issues at meeting

McQuail accused agriculture leaders and bureaucrats of a “subtle Stalinism” that he said has aimed to "industrialize and collectivize Canadian agriculture.”

“They’ve done a good job at marginalizing family farmers,” he said, “denigrating them as hobby farmers after structuring agriculture so they can’t earn a living from a modest land base.”

McQuail said industrial agriculture is on a shaky foundation, however, and he believes that in the peak oil period and post-petroleum economy, “we are going to need more family farmers.”

Gas lines shorter in largest city hit by shortage

ATLANTA - Lines eased somewhat Tuesday in Atlanta, the largest city hit by a hurricane-induced gas shortage in the southeast, as Georgia's governor waited for a White House answer to his request to release more crude oil.

Gov. Sonny Perdue sent a letter to President Bush on Monday requesting that a "signficant amount" of crude oil be released from the Strategic Petroleum Reserve to help ease the shortage.

Perdue contends that while many Gulf Coast refineries are operating again after disruptions from Hurricanes Gustav and Ike last month, not all are receiving enough oil to return to full capacity.

Kinder Morgan Oil Terminal Fire Doused in Ohio

(Bloomberg) -- Firefighters doused a fire of burning oil at a terminal operated by a unit of Kinder Morgan Energy Partners LP yesterday morning near Cincinnati, WLWT radio reported, citing fire department Captain Michael Washington.

Oil sands safe from U.S. law, advocates say

U.S. environmentalists have declared another victory in their efforts to protect legislation that threatens Canada's booming oil sands, but oil sands advocates say there is no triumph to celebrate.

Russia's crude export duty down to $372.2 per ton as of Oct. 1

MOSCOW (RIA Novosti) - Russia's crude oil export duty is down by almost 25%, from $485.8 to $372.2 per metric ton, as of Wednesday.

Prime Minister Vladimir Putin signed off on the cabinet's September 19 decision to reduce crude export duty, made in the wake of a sharp decline in oil prices in September.

Northwest profitable with oil at $100: CEO

TOKYO (Reuters) - Northwest Airlines Corp (NWA.N), which is set to be acquired by Delta Airlines (DAL.N), can be profitable with oil at $100 per barrel, Doug Steenland, the company's chief executive, said on Wednesday.

Despite the turmoil in credit markets, Steenland said he was confident the merged airline would have sufficient liquidity to manage its operations well into the future, noting that the airline would have $6 billion in cash on closing.

Shell to take big stake in Sibir by year-end

MOSCOW, (Reuters) - Royal Dutch Shell is poised to take a large stake in its Russian partner company Sibir Energy before the end of this year, the Financial Times reported on Wednesday.

Nigerian militants 'dodge' arrest

Militants in Nigeria's oil-rich Niger Delta region say none of their fighters have been arrested by the military.

On Tuesday, the army said more than 400 men had been arrested following a recent week-long campaign of militant attacks on oil infrastructure.

But the Movement for the Emancipation of the Niger Delta (Mend), said the arrests were "random harassment".

Iran fears nuclear witchhunt

The latest news from the International Atomic Energy Agency (IAEA), aside from a gloomy portrayal of an international agency starved of cash and manpower, is that it cannot confirm the absence of a clandestine Iranian nuclear program. The head of the United Nations' watchdog, Mohamad ElBaradei, should know better that this is not his agency's mandate to begin with, no matter how much new affection is poured on the troubled agency by Western powers.

Hence the question: is there a discrete quid pro quo for the simultaneous announcements whereby the IAEA tags along with the United States' plan of action with regard to Iran, as long as Washington promises no military action, and then it is rewarded with Washington's and London's power of the purse?

Africa Command is operational, but skepticism persists

WASHINGTON (AFP) — The US military's Africa Command becomes fully operational on Wednesday, but it still faces skepticism about its intentions as it seeks to provide security assistance to African states.

Military, Business Leaders Release Comprehensive Energy Security Plan

The Energy Security Leadership Council (ESLC), a project of Securing America's Future Energy (SAFE), yesterday released A National Strategy for Energy Security, a comprehensive plan that offers the public and policymakers specific solutions to the very real threats posed by our nation's dependence on oil.

The National Strategy lays out a pathway toward a long-term goal of an electrified transportation system that is no longer dependent on oil, along with the interim policies needed to reach that goal while keeping our economy and our nation strong and secure.

"Our oil dependence has put our nation at unacceptable risk," ESLC Co-Chairman Frederick W. Smith, Chairman, President and CEO of FedEx Corp., said.

China's coal export volume on falling trend

China's coal exports have been falling sharply in volume since June, and the total export volume of this year is predicted to be approximately the same as last year, according to Customs statistics.

French biofuel tax revision threatens jobs - makers

PARIS (Reuters) - Thousands of jobs could be lost in the French biofuel sector if the government's proposal to scrap tax advantages for the grain-made fuels by 2012 is adopted, ethanol makers said on Tuesday.

World's largest uranium refinery plans $6M expansion

Over the next 20 years, world demand for electricity is expected to double. Cameco's uranium sales volume has tripled since 1991.

According to the World Nuclear Association website, there are currently 439 reactors operating around the world, 36 under construction, 97 reactors planned and 221 proposed. Canada has 18 operable reactors, two under construction, three planned and four more are proposed.

Farmland birds not bothered by wind turbines, study finds

The sight and sound of ranks of whirling 100-metre high turbines had little effect on the numbers of birds in the area, scientists found.

The results will disappoint conservation groups, who claim turbines pose a threat to birds but will provide a boost for wind energy groups who want to erect hundreds of wind farms around Britain.

Solar Energy From An Unlikely Source: The Amish

On the porch of a white Lancaster County farmhouse in Pennsylvania set between corn and soy bean fields, an Amish woman makes apple sauce the old-fashioned way: She crushes them in a manual press. Chickens run across the yard. A long line of laundry dries in the sun.

But at her husband's dairy equipment shop next door, the scene is quite different. Energy-saving fluorescent bulbs light the basement. And wiring has just been installed to run heavy machinery off the sun.

Despite their reclusion from the modern world, the plain-living Amish are leading the way when it comes to embracing solar energy.

Maine study weighs impact of more wood heating

AUGUSTA, Maine (AP) — Burning more wood for heat could save homeowners money in oil-dependent Maine, but a task force in the nation's most forested state cautioned that care is needed to avoid health problems and damage to the wood products industry.

Revealed: oil-funded research in Palin's campaign against protection for polar bear

The Republican Sarah Palin and her officials in the Alaskan state government drew on the work of at least six scientists known to be sceptical about the dangers and causes of global warming, to back efforts to stop polar bears being protected as an endangered species, the Guardian can disclose. Some of the scientists were funded by the oil industry.

In official submissions to the US government's consultation on the status of the polar bear, Palin and her team referred to at least six scientists who have questioned either the existence of warming as a largely man-made phenomenon or its severity. One paper was partly funded by the US oil company ExxonMobil.

Australia: How we can be a green super power

Al Gore says the United States should embark on a "man on the moon"-style effort to satisfy all of America's electricity needs by renewable energy within a decade. Just 10 years. That’s an incredibly bold vision - a real stretch goal. But it is also what’s needed to avert a climate crisis.

So why not do the same in Australia? Here, it could become a "nation-building" symbol of pride, akin to the 19th Century construction of the Overland Telegraph Line or the post-WW II Snowy Hydro Scheme.

Eating kangaroos could help fight global warming: scientist

SYDNEY (AFP) - An offbeat suggestion that Australians should eat kangaroos instead of cattle and sheep has been given a scientific stamp of approval by the government's top climate change adviser.

The belching and farting of millions of farm animals is a major contributor to Australia's greenhouse gas emissions, Professor Ross Garnaut noted in a major report to the government on global warming.

Kangaroos, on the other hand, emit negligible amounts of methane gas.

Scientists aim to boost Southern Ocean CO2 monitoring

SINGAPORE (Reuters) - Australian scientists set sail later this week on a voyage that could lead to better data from the Southern Ocean, which plays a major role in acting as a brake on climate change.

Oceans absorb vast amounts of carbon dioxide and the Southern Ocean between Australia and Antarctica plays the greatest role of all the world's oceans, scientists say.

Melting ice magnifies Arctic risks

The news that Lloyd’s insurer Catlin is sponsoring a major scientific expedition to capture vital data for scientists studying the impact of global warming on the Arctic ice cap is a further sign of increasing concern at the uncertain future of the region.

...The project — the Catlin Arctic Survey — will be led by British explorer Pen Hadow. The programme of measurements will include some of the most accurate and detailed observations of the thickness of the permanent Arctic ice. The measurements will be taken as part of a pioneering surface survey over a 1,200-mile route from the Canadian coast to the North Geographic Pole, beginning in February 2009.

Failure on climate change will 'haunt humanity': Australian expert

SYDNEY (AFP) - Failure to curb global warming would "haunt humanity" forever, Australia's top climate adviser said Tuesday as he urged the country to cut greenhouse gas emissions by at least 60 percent by 2050.

Ross Garnaut, presenting his long-awaited report on climate change, said Australia was more vulnerable to rising temperatures than any other developed country because of its hot, dry climate and faced environmental destruction and a major decline in farming in nothing was done.

"If we fail, on a balance of probabilities, the failure of our generation will haunt humanity until the end of time," Garnaut told reporters in Canberra.

As of September 30th, 742,266 barrels of oil per day were still off line in the Gulf of Mexico. That is only one half of one percent less than was off line four days earlier. 746,459 bp/d was off line on September 26th.

The natural gas story is a little different. As of September 30th, 3,384 MMCF per day was off line. That is 13.4 percent less than was off line just four days earlier. 3,909 MMCF was off line on September 26th.

http://mms.gov/ Click on “Hurricane Gustav/Hurricane Ike…” under “News Briefs”.

MMS has recalculated the number of manned platforms in the Gulf of Mexico since 23 manned platforms have been confirmed destroyed from Hurricane Ike. The new figure of 694 manned platforms was used to calculate today’s percentage of manned platforms evacuated….

From the operators’ reports, it is estimated that approximately 57.1 % of the oil production in the Gulf is shut-in.

Ron Patterson

i think there is a related update, but i couldnt find it on the mms site:


"...As of September 29, 2008, 52 of the 3,800 offshore oil and gas production platforms have been confirmed as destroyed. Initial estimates are that the 52 destroyed production platforms produced a total of 13,300 barrels of oil per day and 90 million cubic feet of gas per day."

by the mms definition, a platform can be anything from a single well to thunderhorse.

As of September 30th, 742,266 barrels of oil per day were still off line in the Gulf of Mexico. That is only one half of one percent less than was off line four days earlier. 746,459 bp/d was off line on September 26th.

Maybe they need to be loaned some money to do repairs to their infrastructure... Oops, that darned credit crunch is kicking in...

But, on a more serious note, if there is a long term credit crunch, how does this impact producer's ability to get financing for new projects and for maintenance of existing ones? I mean, look at it this way- if it takes $300 Million of investment to get at $2 Billion of oil, and no one can loan $300 Million, then it ain't gonna happen.

Naw, it ain't likely to happen. Big Oil, by and large, does not borrow money for drilling or repairs. Their problem is what to do with all the cash they are generating. What you describe is a problem that most small business' have. They operate on a line of credit and if that line of credit disappears they disappear also. But this does not apply to Big Oil.

Ron Patterson

this does not apply to Big Oil

What about independent refiners like Valero?

And what about oil field service companies?

Obviously I am not privy to the books of refineries or oil field service companies but I doubt very seriously that they depend on a short term line of credit to keep operating. This is largely a small business method of operation. Very large companies, when they need money, usually issue corporate bonds to raise cash.

I think shortage of credit is likely to have a fairly big impact on oil and gas operations.

The way companies are run now, independent contractors do almost everything. I observed this when I visited the BP operation in Wamsutter; TOD posters have confirmed the same thing. Also, the supply chain for gasoline is getting more and more broken up, as oil majors spin off gas stations and parts of the chain that aren't making enough money. It is the small, but necessary, pieces of the supply chain that are going to have credit problems.

When I talked to Red Cavaney, President and CEO of the American Petroleum Institute, last Friday, he was quite concerned about the impact of current credit problems on oil and gas companies. (See 57:54). In his words, "Our economy runs on credit." He was quite concerned that there would be a "big impact" on the oil and gas industry if the credit problem continued for a "couple more weeks".

Actually, large corporations are more likely to have established lines of credit negotiated with some well entrenched financial company(ies), with multiple lines of credit being the norm. For example, Matt Simmons's bank likely has numerous lines of credit servicing a universe of petroleum companies engaged in different facets of that industry.

What just happened with Big Auto is their inability to continue accessing their established lines of credit, which caused them to go begging to Uncle Sam, who gave them $25 Billion. Such lines of credit can be risky as they expose the debtor company to potential margin calls and/or repo action.

A delay in getting money from a line of credit means Santa Rosa-based ThermaSource must postpone plans to buy drilling rigs it needs to consummate several pending deals.The geothermal drilling company, which applied for a line of credit last month, thought it would have the money in November. But bankers are now saying it could take until January, giving them extra time to scrutinize the company's books and make sure it can repay the loan.

While ThermaSource is still confident the funding will come through, the delay means it must postpone plans to buy drilling rigs it needs to consummate several pending deals, said Louis Capuano, the company's president.

Maybe we could burn their cash for heat. Wonder how many BTUs are in a bundle of 100s?

Today, it bumped up a trifle to 58.8% shut-in.

From the article linked uptop:

(Georgia)Gov. Sonny Perdue sent a letter to President Bush on Monday requesting that a "signficant amount" of crude oil be released from the Strategic Petroleum Reserve to help ease the (gasoline) shortage.

Gov. Perdue should be congratulated for serving as a perfect example of the level of knowledge regarding energy supplies among our esteemed politicians and among the population as a whole.

The guy sounds like Sarah minus the lipstick.

If we sent him a petition demanding a program to recapture and recycle used gasoline, I'm halfway afraid that he would endorse it and send it to Bush.

A little bit of history here: this guy got elected in part because he promised to return the confederate battle flag to Georgia's state flag. Worrying about what's on the flag isn't exactly the highest priority I would want a political leader to focus on personally, but it's obviously not an emotional issue for me. He did get re-elected in 2006 though, not sure why. Used to be a democrat but switched parties in 1998.

Yeah, wasn't he the guy that Prayed for Rain?

He got it, didn't he?

Who's side is God on, anyway?

"I feel like God wants me to run for President. I can't explain it, but I sense my country is going to need me. Something is going to happen... I know it won't be easy on me or my family, but God wants me to do it."
--George W. Bush commenting to Texas evangelist James Robinson in the run-up to his presidential campaign

Maybe he's dyslexic. Listening to the fellow sitting on the wrong shoulder?


Dog told him to run for President ?



Large trucking company (western Michigan) loans are called by Wachovia:


Wachovia alleges the Wyoming-based transportation firm wasn't making appropriate payments by late March. The bank is asking the court to appoint a receiver to manage Gainey Corp.'s assets.

The complaint, filed Friday in Kent County Circuit Court and obtained by Courthouse News Service, states Gainey Corp. appointed a "chief restructuring officer" in early February to try and right the corporation's financial condition.

Gainey Corp. had a $260 million credit line from Wachovia, according to the complaint. Other firms are named in the complaint, but the bank alleges Gainey Corp. or its subsidiaries wholly own them.

This is the kind of thing I'm looking for - to see if Bush/Paulson are correct about the financial meltdown. The high TED Spreads have been around for a year now and we've seen a lot of bank failures. But Bush warns of main street business failures. Where are they?

They'll start after we p*** away $700 billion on a bail-out.

Their problems started before the "financial meltdown". According to the article, they were having issues last February. I would guess it is more related to the price of fuel.

Right, the trucking firm has fuel price issues, but their commercial banker has liquidity issues and has started calling in loans.

If the "Collapse" is just around the corner, if the problems are going to spread to main street, why aren't we hearing about more companies having trouble getting credit? So far it's all banks. Why not grocery chains, or restaurant chains, or department stores?

This is the beginning of a recession, as time goes on the situation may worsen before it gets better. Obama was claiming not to be in favor of bailing out the people who lost investor's money while voting for a bailout of those investment banks and others who made bad investment decisions on behalf of those who owned stock in those companies by purchasing subprime high risk notes.

Several years ago I was with a woman who audited mortages for a mortgage broker and she told me it was possible to get a mortgage after going through a recent bankruptcy. It was possible for someone who was not a citizen to get a mortgage, it was possible to get a mortgage without a downpayment or work history etc. Now the people and corporations with bad credit have been crying to Congress that if they do not get more credit the economy will go down. It is a recession, this package is like trying to put a bandaid on a tire blowout. If you try to put air in a leaky tire you cannot stop the loss of more air. Need to fix the leaks before you try to invest in inflating the economy if you are going to inflate a badly blown tire anyway. Before the recession those who partied and took out more and more loans to make ends meet are now finding the money is not there for borrowing anymore. Some of the weak will fail, some of the strong will succeed. The intelligent who wisely invested should not be frantic. Those who invested in what they did not know will reap the results of their own ignorance.

The high TED Spreads have been around for a year now

Ah, No. They haven't. Take a look at the graph.


I expanded the view out for 5 years. Around 20 Aug 2007 the spread widened suddenly & has been bouncing around since then with much larger values than the preceding years.

And the economy's never been better!

From your first linked story, I found this quote remarkable:

Despite sound arguments against 'peak' oil, there is quite a bit of controversy surrounding not only how high the price of oil might climb, but also the long-term direction of oil prices, up or down.

Thus, Global Insight has prepared an alternative forecast of the WTI price and consequent projections of light-vehicle sales in the US and major Asian markets, and for West European passenger car sales, building upon the current base case [which anticipates continued high oil prices] and subsequent years of 'peak' oil.

The report said the price of oil increases faster than the base case for 2008 and 2009, reflecting either a faster-than-expected deterioration in non-Opec supply and/or a production disruption from a major producer.

Subsequently, the perfect storm is generated, where all negative factors come together:

- Severe supply constraints

- Financial and speculative issues continue to remain in force

- Demand from emerging markets continues strong for some time after the United States downturn

- Market psychology supports peak oil, despite sound fundamentals pointing to the contrary

This drives the average for the WTI from just under $150 per barrel in 2009 to average a $160 in 2010 and eventually $195 by 2012.

Global Insight said the price will stay there through 2015 and retreat only slowly over the next few years.

Sound arguments against peak oil. Like?

Well yes, quite. These are supposedly experts who charge for their advice. Notice how they say that even in the unlikely event that we do peak between now and ~2012, they expect the price of oil TO DROP after 2015! I mean, wtf?

The guy that wrote that is an economics Prof. That would qualify him for...?


"SUWA Guest Calls Oil Shale World's Worst Fossil Fuel"


""We concluded that oil shale is the world's worst fossil fuel, it's the least prospective fossil fuel on the planet. It is a fossil fuel, but just barely. There is three times more energy in a ton of captain crunch than there is in a ton of oil shale. Oil shale has the energy density of baked potatoes," Udall said."

I suspect SUWA will be quit successful in their efforts. Reminds me of another group which, in the late 70's, began a lobbying effort to prevent drilling in Long Island Sound. Given that the LIS is underlain by igneous/metamorhpic rocks with zero oil/gas potential their efforts were 100% effective. Totally unnecessary but effective.

It's less about oil and more about water. Folks there don;t want their water taken away... and the water requirements for this are enormous... And this stuff is located in some very dry places- EROEI (or at least resource constraints) might start kicking in. It's like tritium on the moon: The moon is covered with tritium (due to 4.6 billion years of bombardment from the sun), and we might figure out how to burn it with a fusion reactor, but it's on the moon... EROEI kicks in...

Yes, and there are oceans of Liquid Natural Gas on Titan.

The problem is, that the political process seems to allow for letting no-bid contracts to drill in the igneous rock of Long Island Sound, steam the "oil" shale and build pipelines to Titan, or reactors on the moon.

Reasonable people would never commit their own money to such projects, but somehow we elect politicians who are happy to "invest" someone else's.

One almost longs for a new post-Cromwellian restoration of Monarchy. The good old days, when people didn't really matter.

But seriously, the only hope I see is to elect better politicians, then educate them, and hold them accountable. And put some TOD graduates in positions of authority! Time to get political.

And put some TOD graduates in positions of authority! Time to get political.

Make Totoneila the Secretary of Agriculture.
Westexas the Secretary of Energy.
Gail The Actuary the Secretary of the Treasury.
Prof. Goose as Secretary of Education.
And Kunstler the Secretary of Housing and Urban Development.


Don't forget AlanFromBigEasy as Secretary of Transportation.

What a Dream Team!

Leanan for President!

And let's add Richard Heinberg as Secretary of State, and Michael Ruppert as Secretary of Defense.

That would certainly be better than what we have now. And it raises the question: dont you think that just by chance, we would have at least one competent person in Bush's cabinet?

Of course it is a loaded question because we know that many of them are in fact very competent; competent at scamming trillions of taxpayer money.

Hello Geckolizard,

Thxs for the plug, but I highly doubt if the PTB would want me as Ag Secretary as my first act [see below]*** would be to test the depth of the following concepts:

Jay Hanson's Requiem Quote: "Trapped in obsolete belief systems, Americans won't even know why their society disintegrated."

Where there is no vision, the people perish.-> Proverbs 29:18

*** WT's PTB Iron Triangle believes that infinite #'s of Alaskan King Crabs bearing wines and chocolates in their uplifted claws scuttle eastward across the continent, matched by equally infinite #'s of Maine lobsters loping westward bearing bananas and frozen steaks in their grasp.

IMO, the annual nexus events of the Iron Triangle is the Oscar Awards Ceremony and the SuperBowl. Please use your imagination as to the huge throttling up of vehicles, jets, giant A/C venus and hotels, food and liquor flows, fashion frenzy, etc.

To save energy: I would have these two events combined, then held in a scorching Asphalt Wonderland parking lot in July about 2 PM. The participants and spectators would be required to pedal 50 miles to achieve admission. No red carpet for the stars to prance across--replaced by a brown carpet of Humanure. No golf-course quality grass on the A/C refrigerated football green--just a chalked off area of tarmac. The idea is to see how badly the PTB wish to participate in briefly experiencing the likely postPeak fate of the common Joe Sixpack.

The only advertising allowed on TV and onsite would be for the Peak Movies [Blindspot, End of Suburbia, etc] and Peak Books [Simmons, JHK, Deffeyes, etc], and Peak Websites [TOD,EB,LATOC,DIEOFF,etc]. This would help promote Peak Outreach.

The golden trophies: 'Oscar' replaced by a single Oscar-Mayer wiener, and the football trophy replaced by a can of sardines.

Alternatively: "I know we're needing something worth believing in."

Remember When the Music --by Harry Chapin

...Remember when the music was the best of what we dreamed of for our children's time...
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Got my vote!

Got to have a name - a party name.

Peak Oil Party, POP as in I'll POP you in the (fill in the blank) if you keep (fill in the other blank).

I defer...


The moon is covered with tritium (due to 4.6 billion years of bombardment from the sun), and we might figure out how to burn it with a fusion reactor, but it's on the moon... EROEI kicks in...

*IF* we can make this work someday, I doubt that EROEI will be a problem.

You are expending fuel for a *chemical* reaction for transport to obtain fuel for a *nuclear* reaction.

There are orders of magnitude more energy released from a nuclear reaction than from a chemical reaction.

I would expect HUGE gain for EROEI.

The tritium, if there is an appreciable amount, will be very diffusely spread over the surface, and will require huge efforts to gather and concentrate to the point where you would even think about sending it back to Earth.

Send missions to the Moon, set up "mining" bases, concentration factories, compression facilities, launch facilities for the trip back to Earth, etc. etc.

The EROEI is likely to be a very real issue. In fact, it might not even be possible to pony up the required EI.

In my opinion, this is a pipe dream and a distraction from confronting the situation.

My comments were only concerned with the energy expended in transportation.

However, since you asked....

1) Energy density by mass (MJ/kg)
Liquid hydrogen (chemical reaction) - 143
Hydrogen (fusion reaction) - 645,000,000

IOW invest 143 and get 645,000,000 in return

2) The operation would obviously be done by solar powered robots like the ones that have been roaming around Mars for the past two years. No moon base.

3) The desired material is a product of solar emissions - probably all within the first few millimetres of soil. The "mining" operation is basically sweeping up surface dust.

4) The Mars landers were launched by a Delta II rocket which could certainly deliver a similar (or even heavier) payload to the Moon. Cost per launch $36.7 million USD

5) Launching from the Moon shouldn't be a big deal. No atmosphere and low escape velocity. Most of the weight in the Apollo mission was life support for the crew. When you are launching a bucket of dust back to the earth, the systems can be very simple (no safety issues).

6) As for it being a "pipe dream" ... Well, at the moment, there is no fusion system requiring this resource. But, in the event that one is developed at some future date, then IMHO getting a fuel component from the Moon should be a relative no-brainer. It is a worthwhile to know the relative feasibility of various possible options.

Energy Densities
Delta II Rocket

BTW, there was an excellent PBS Nova presentation last night on the launching of the Sputnik satellite in 1957.

"IOW invest 143 and get 645,000,000 in return"

Oh please! You are bordering on TheAntiDoomer territory here.

What's the emergy of the effort to design, fabricate, launch the rockets? The return launchers? The mining apparatus? How do you scoop the stuff up and concentrate it to make it worth shipping back?

Launching from the Moon no big deal? How many payloads? How big?

Who knows what the theoretical EROEI might be, but if you can't come up with the investment, it doesn't matter. We need to concentrate on realistic things, not pie in the sky.

What's the emergy of the effort to design, fabricate, launch the rockets? The return launchers? The mining apparatus? How do you scoop the stuff up and concentrate it to make it worth shipping back?

You obviously didn't even read the post, since I gave an exact number for a Delta II rocket launch - $36.7 million.

The other details I obviously can't know until somebody builds a fusion reactor and generates the fuel specs.

I am not making a detailed project proposal here - I am just trying to establish if the concept might possibly be feasible. IMHO, it is a lot easier to do than I originally thought.

This is probably an idea for the 22nd century. It is fun to play with ideas - people in the 19th century were kicking around lots of ideas ideas that became practical realities in the 20th century.

We need to concentrate on realistic things, not pie in the sky.

You've got to be joking... If anyone lives in fantasy land it is the doomer crowd. I have spent most of the past 40 years working with real scientists and engineers doing real science and real engineering... Makes for a certain intellectual toughness.

BTW, your reponse was worthy of Sarah Palin...

I wasn't talking about the dollar price of a Delta launch in 2008. I was talking about the emergy (that's emergy, with an "m") to deploy this thing on a useful scale.

"This is probably an idea for the 22nd century."

OK. I thought you were serious for a minute there! I guess we're just fantasizing.

"You've got to be joking... If anyone lives in fantasy land it is the doomer crowd."

I'm not exactly a doomer - I just think schemes for mining tritium on the Moon and shipping it back to Earth is not the way to go.

"I have spent most of the past 40 years working with real scientists and engineers doing real science and real engineering... Makes for a certain intellectual toughness."

Oooh! I am impressed. You really are coming across as a blithering wackjob.

"BTW, your reponse was worthy of Sarah Palin..."

That's just about the most assholish remark I've ever read on TOD, which is saying something. Just what did you mean by that?

I saw the Nova special and found it pretty interesting. However, I did find it a little problematic that, during the portion detailing the Nazi A-4 (V-2) rocket program, a marquis in the lower left corner of the screen said that viewers could "Build a rocket!" (instructions at pbs.org).

Update: In case any of you hold any grudges against London, Paris, and/or Antwerp (and I know you do), PBS provides you with the knowledge you need to exact history-appropriate revenge:


There are plenty of legitimate uses for rockets. What? You don't think that rocket science is a legitimate endeavor that should be taught in every school? Because when I was a kid in school many many moons ago we learned how to make them and we launched them. Sheesh! Next you'll be telling me that private citizens shouldn't be allowed to bear arms in case they need to protect themselves from their tyrannical rulers.


It's what you do with it once you have built it that may or may not be a problem.

"Once the rockets are up
Who cares where they come down
That's not my department,"
Says Werner von Braun

(Though actually I quite agree with your broader point... the over-the-top comparison to firearm control inevitably brought the Tom Lehrer song to mind)

Of course there are, I was merely pointing out the IRONY.

There are orders of magnitude more energy released from a nuclear reaction than from a chemical reaction.

Yes, but look at the rockets they used in the Apollo missions... . It took 7 MILLION pounds of vehicle structure to send a few guys to the moon and back at $2.4-3.5 billion per launch. Now, not to say it can't be done... But, that's a pretty damned high hurdle to get tritium from the moon.

On the other hand, tritium from fission reactors seems much more reasonable.

Cost for payloads:

Saturn V: $1000/lb (1969 dollars = ~$6k/lb inflation adjusted)
Space Shuttle: ~$20,000/lb
Average current costs for commercial payloads: $9-$11k/lb

Odds are, nobody is mining anything anywhere off-planet. :(

Here's an idea for trying to improve the efficiency:


Moonbase Alpha?

It's so easy, I even built one when i was 5 years old!

Moon Base Alpha!

jp (just playin')


i just bought "the moon is a harsh mistress" again for a buck.

nice! you obviously got my username's reference. ;)
i'm rereading the Dune series atm. It's timeless and also eerily prescient for our current ecological and energetic (spice) crisis. A good friend of mine's father worked at the SF Chronicle when Herbert was there, and when he published Dune it supposedly came as a surprise to everyone. Herbert's co-workers were like, "So THATS what you've been doing all this time!".


as a sort of tribute to Leanan and Hagens (ala Diamond) my gmail sig, is:
"If things aren't going well, build a bigger stone head!".
A lot of my friends have commented to me saying "thats awesome, what is that from?"
It's a nice conversation opener.

Ah yes, the Apollo mission ...

I have come upon PROOF that the Apollo mission could never have occurred:

This foolish idea of shooting at the moon is an example of the absurd length which vicious specialization will carry scientists working in thought-tight compartments.

For a projectile entirely to escape the gravitation of the earth, it needs a velocity of seven miles a second. The thermal energy of a gramme at this speed is 15,180 calories....

The energy of our most violent explosive-nitroglycerin-is less than 1500 calories per gramme.

Consequently, even had the explosive nothing to carry, it has only 1/10 of the energy necessary to escape the earth......

Hence the proposition appears to be basically impossible.....

Of course, at first I didn't believe it, but I have checked the figures over and over...

I am sad to say that the author of this statement is on very solid scientific ground. The Apollo mission did not and could not have occurred. Numbers don't lie and the above proof is beyond dispute...

Of course, some dreamers cling to the vain hope that *someday* we will reach the moon - poor romantic fools. They wanted me to Google "A. W. Bickerton" to see some other opinions but, why bother - the proof speaks for itself.

(Doomsterism can be fun) :)

Are you joking or what?

*edit* er, okay, I read that a little more carefully, I guess your joking.

Incidentally, escape velocity of 7 miles/second is just for an object that needs to leave the surface of the earth with no further kinetic input. As you go higher, the escape velocity decreases (e.g. wikipedia quotes at 9000 km altitude it is only 7 km/s). Thus, the important quantity for your propulsion system is whether it gives the spacecraft the proper escape velocity for whatever altitude at which it runs out of fuel.


Thanks for the syllogistic summersault! This kind of logic (sic) reminds me of the WWI army helmet conundrum. The head of a field hospital saw a lot of head injuries and recommended that the soldiers be required to wear metal helmets into battle. The shinier brass up above finally allowed a trial involving some of the companies as test subjects. After a few months the number of head injury cases brought to the hospital increased. It took a while, but they finally figured out why. Without the helmets those extra wounded soldiers would be called ‘casualties.’

Statistics are like lawn darts.


Actually, it is not Tritium, which decays to Helium-3 with a half life of roughly 12 years, it is the Helium 3.

There are a couple of huge EROI issues. One, we don't have fusion reactors to consume the He3. Two, if we did (and needed He3 cause that was the only fuel we could burn), we have the difficulty of collecting the stuff, which is spread all over the surface of the moon, not concentrated in a few convenient spots.

I stand corrected- Yes, Helium 3. OK, I've made a fool of myself... But hey... All fun...

HOWEVER... Helium-3 is a byproduct of tritium decay. One in the same, sort of...

I think that you are confusing H3 with He3. Tritium (Hydrogen, atomic weight 3) has a half life of 5 years and some months. He3 (Helium, atomic weight 3) is stable (AFAIK) and can accumulate over millions/billion of years (or 6,000 years for VP Palin).


I do not have the expertise to evaluate this idea: could oil shale, with minimal energy input, be suitably converted to Terra Preta, Biochar ingredients to help rejuvenate topsoil? If so, it might save a lot of currently growing biomass habitats from being burned to charcoal.

I hope some TopTODers can put their best mental efforts into exploring this brainstorm [brainfart?]

From the article:

Oil sands safe from U.S. law, advocates say

The legislation in question bans the U.S. government and its agencies from buying alternative fuels that produce more greenhouse gases than conventional fuels.

Alberta's representative in Washington, Gary Mar, along with Canada's ambassador, Michael Wilson, and oil industry executives have been lobbying hard for the past nine months for the repeal of the provision: Section 526 of the U.S. Energy Independence and Security Act of 2007. U.S. President George W. Bush signed the section into law last December.

In the meantime, however, the provision has made its way into a massive defence spending bill - and an official of the Washington-based National Resources Defence Council (NRDC) said on Friday the Alberta and Canadian governments and the oil industry failed two days earlier to overturn or weaken it.

I'm a little amazed at this, an actual step against carbon emissions by the U.S. Wow. But why am I hearing about this from a canadian newspaper? Have I been asleep and just missed this being covered in the U.S.?

Entrepreneurs struggle to hang on across the USA

Interesting article about how small business owners are coping across the US. Though it's spun as a story about the credit crisis, it's really a story about the bad economy in general. Much of the trouble the businessmen are dealing with seems connected to high energy prices, rather than lack of credit. One car rental business is doing really well, because they've added scooters to their lineup.

If one accepts the premise of a long term accelerating rate of decline in net oil exports, the restrictions on credit, especially for business and consumer expenditures related to discretionary spending make a lot of sense, e.g., respectively building and going to a new amusement park.

The slow down is even affecting online businesses. About the time the Fannie/Freddie mess hit the news I saw both the site visits and the purchases for my garden tool business start to plunge. Normally it should still be fairly busy this time of year.

And just a couple months ago I decided to go ahead with a new venture to revive and produce a clothes drying rack that used to be popular back in the 1920's to 40's. Now I'm wondering if there will be enough customers willing to pay a bit extra to buy a good sturdy laundry drying rack when the economy is sliding hard and people are losing jobs.

It is indeed a scary time for small businesses (and big ones too)


As one who has dried my clothes on "those weak and tippy accordian type
drying racks" for the last 15 years, I look forward to seeing what you come up with. And I will likely be a customer.

Interesting. I've have thought gardening, like cooking, would do okay in a bad economy. I've heard a lot of newbies are taking up those hobbies, to save money on meals.

Though high-end items aren't doing that well. Beginners tend to buy at the low end of the price scale.

I bet Home Depot is selling fertilizer and cheap shovels like there's no tomorrow.

You're right on target Leanan. Brand new gardeners do tend to buy their first tools from the big-box stores. Then when those tools quickly break- or just don't work - those now wiser gardeners come looking for good sturdy tools.
(Those that are still lacking wisdom trudge back to the big-box store for another lesson...)

I do believe that as the economy tightens and people's "discretionary funds" dwindle that quality and durability will triumph over cheap and low-quality. Another one of those slow, almost imperceptible, shifts in our cultural habits.


I do believe that as the economy tightens and people's "discretionary funds" dwindle that quality and durability will triumph over cheap and low-quality. Another one of those slow, almost imperceptible, shifts in our cultural habits.

I think that will happen, too. As energy grows more expensive, the cost of cheap and low-quality will rise. Our throwaway society is built on cheap oil. As that vanishes, cheap will get more expensive.

Lowe's sells a wood-handled full-sized spade for $3.97, which I find astonishing. When I shopped for a replacement handle, I found it was $10.99! Go figure.

I've used my cheapie spades for a year now without complaint (after first sharpening them), and I'll buy more of the same if/when they do fail. For turning soil, it just doesn't pay to get the best.

Now machine tools are a different story - A broken socket or drill bit can mess up the work and inflict injury. But garden tools? Not so much.

My latest example is my coldframe, which is made from glued PVC tubing covered with 6-mil greenhouse film, secured with batten tape, staples, and tiewraps. Total cost for the 15' X 17' X 6.5' structure: $250. Cost of a complete coldframe kit the same size: $2500.

My message is, Know when the marginal return does and does not justify the expense of paying for quality.

One of life's little lessons: ALWAYS buy the heavy duty model.

"ALWAYS buy the heavy duty model."

Amen and amen.

A question...where is the source for the steel used in your products?

The grub hoes and grape hoe are SAE 1045 steel made by a Brazilian company using special Italian forging and heat treating equipment. Very multi-cultural.

If you want to see what other sorts of interesting agricultural tools they make and use in Brazil you can check out Bellotto's website at http://www.bellotto.com.br/en/ The Portuguese to English translation is a little rough in spots, but understandable.

Besides lots of different hoes, they also use a huge variety of foliage chopping tools and these interesting tools called "diggers" that are just straight blades on a stick. I have one that I am trying to find handy uses for to maybe include in my store someday.

Hang in there, Greg. Something like that is on my shopping list. The thing is, I am in debt liquidation mode and no longer buy on credit. I suspect that a lot of people (including most people here on TOD) are in the same mode. Those that aren't should be. That means we buy things the old fashioned way - we save up until we have enough money to buy something. There are a lot of things on my shopping list, but your clothes rack is not at the bottom.

Apparently this in NOT just a bailout of US banksters and their cronies...it's the bailout of the entire world of banking. One good congressman found a section in the bill that allowed Chinese, British, Austrailian, German, Japanese loans that are toxic(of little value) to be dumped onto the American taxpayer. He informed the leadership and Paulson. HE WAS TOLD THAT ITS A FEATURE NOT A BUG AND PAULSON WOULD VETO ANY PLAN THAT TOOK OUT THAT PROVISION!

Here is a clip explaining what is happening and shortly into the clip MSNBC interviews that congressman.


This is outrageous! The US taxpayer will get dumped toxic crap from all over the world! Northern Rock, bad Chinese investments, bad Austrailian real estate, etc.

How did the US taxpayer become responsible for bad Chinese investments in China? Or anywhere in the world? This is a world bankster bailout being foisted apon Americans.

Denninger posted about that last night.

On CNN this morning, they had an interview with former FDIC chairman Bill Isaac. He is against the bailout, and that's one reason why.

They asked him why, if the bailout is that bad, none of the "experts" are speaking out against it. He said plenty of experts are speaking out against it, but they're being drowned out by politicians.

Well, here is a letter from about 200 economists, including three Nobel prize recipients, opposing Paulson's bailout plan. I would think that these could be characterized as "experts" speaking out against it.

This was covered in the media, but just barely, and was mostly burried.

Apparently, barely covered in the Senate, too. Then again, what can anyone teach the patrician class?

Senate passed Paulson's package, 74 votes to 25.

Now it's back to the House on Friday to see what happens next.

And two thirds of the Senate is not up for re-election ... hmmm ...

Caveat: I didn't actually check to see if there was a good correlation. I did notice that my retiring senator voted NAY and my not-up-for-election senator voted AYE.

Both Obama and McCain (who apparently decided to actually show up for a vote) voted AYE.

And two thirds of the Senate is not up for re-election ... hmmm ...

Surely the US Senate has more important things to worry about than what the plebs think.

Sarcasm aside, the vote was in mirror contrast to the CNN poll quoted earlier by Geckolizard (see below), "Should the Senate pass its revised version of the $700 billion bailout pkg? yeas, 37%, nays 63%

Although this puts added pressure on the House of Representatives to comply, a lot depends on the mood of constituents. Representatives are far more sensitive to public opinion since their jobs are on the line.

IMO, the House is still a wild card. The not-too-subtle transfer of power from the legislative to executive branch of government is not yet a forgone conclusion notwithstanding media & business hype.

Montesquieu who articulated to the world the merits of the balance of power in government must be dancing a jig in the great beyond. The people's reps are still in a position do him proud.

You can find how your senator voted here. My Dem voted Nay, while my very besieged Rep senator up for re-election voted Yea, despite all the imput calling for him to vote Nay. His challenger, whom I'm already going to vote for, will surely use this vote against him. I say, Good Riddance!!

And, yes, back to the House, where there are now several competing bills.

That's actually hilarious if you follow the money... We'll end up selling treasuries to foreign investors so we can pay for a program that will buy up their bad debt. Actually, now that I think about it, it's pretty bad... With no benefit to the US taxpayer, we're taking foreign junk bond material (at inflated price) and basically converting it into treasuries, at extreme cost to the taxpayer. The analogy is buying toxic waste from our neighbor at an outrageous price and having to PAY to dispose of it.

Yeah, this sucks. No way in he!l would I support this...

This isn't exactly what the government of Argentina did, but it is pretty close. These are not your elected representatives-you might have voted for them, but to them you are just a rube to be fleeced.

The reason given is that we originated the crap, we are responsible. It is probably to try to preserve the ability to sell more loans to foreigners. If they are not made whole from the last batch of crud, they may balk at buying the next batch. Of course economic nationalism is a pretty powerful force. Paulson probably knows his economics, but he has no public marketing skills whatsoever.

"Apparently this in NOT just a bailout of US banksters..."

As I said in Jerome's post this is about appeasing our creditors in order to keep up the game and to maintain the dollars global reserve status.

IMO that is why Obama and others are pushing it. It has been explained to them.

TPTB are negotiating The American Way of Life. lol

Souperman2 thanks for responding,
I just sent an email to Obama stating my reasons for opposing this theft, I mean "bailout".
I find it's very interesting how this problem had been hidden from the regulators and congress until it blew up badly. Makes me think their are other "hidden" surprises for us brought to you by Paulson-Bernake-Bush.

Grover Norquist's dreams of dismantling the protections of the american workers came within a few votes in the House and I expect the patrician Senate to back the powers that be. My only hope is that the Democrats in the House seize this opportunity for a thorough re-working of the bill. If not, we are going to have an Obama presidency where the financial elite run the country for the ultra wealthy with little check from the congress. The Democrats are an opposition party in thought only, they have no deeds(they were elected on the Iraq war failure) and what happened? They went for the surge and increased spending. Some opposition there. The only power the congress has left is the power of the purse and once that is gone we do not have a democracy but a Fascist-lite corpocracy.

Since when did paying back a loan become appeasement? These are not loans by China to North Korea to grow rice. These are US mortgages owned by foreign banks. The only thing stupider than this bailout is the ignorant uproar over bailing out foreign banks who just so happened to have loan the money to us.

I'm not accusing you of saying this, but it seems American's just don't want to pay their bills. All my bills are current and it is personally very satisfying knowing that I'm upholding my end of the contract I signed. I would get a paper route before work and deliver pizzas after work in order to uphold this agreement and keep my house.

I always pay my bills. Heck, I don't have a mortgage because I don't want to be in debt.

I object to paying someone else's bills, however. And that's what this amounts to.

jteehan - The nominal amount of mortgages in question are but a small % of what is outstanding by US.

The so called "Subprime" element is a distraction from the
real issue of the fact that the US is INSOLVENT. HELLO!

Not Americans, but the USA. If you want to focus on one thing and ignore the 800lb primate in the room then go ahead but it just showes your ignorance.

Every nation on the planet has benifited HUGELY from this fact but as you wish to believe its just us then party on.

I think it's more like blackmail. Hence the urgency.
China(as and example) holds a lot of bad MBS paper sold to them by US banks. I think they quietly have said, either buy them back(via the vehicle in the bill) or...

You can FORGET about the 2-3 Billion dollars of borrowed money per day you need.

One problem with nationalizing our financial institutions is that in the eyes of foreigners it makes our country responsible for the misdeeds of those institutions.

Curiously YouTube has removed the video "by request of the author". Hmmmm..I think I smell a big bankster croney-rat.
Here is the post from his website:


I learn something new here every day. I've read the entire US constitution from beginning to end, with amendments, dozens of times, and studied many of its provisions in depth in various college courses. I can probably recite parts of it from memory. Somehow, I must have totally missed the provision that grants the Secretary of the Treasury veto power over legislation.

It's right there in the secret executive order that gives him the power to write legislation.

Paulson told the Congress that it would get a veto from Bush. Not an idle threat as bush will ok anything that his masters require.

As long as he have Bush's support, the president will veto it for him.

The actual phrasing is that "it would be vetoed."

simple. tptb have sucked out all they can out of this country, and now want it to fail.

Summary of Weekly Petroleum Data for the Week Ending September 26, 2008

U.S. crude oil refinery inputs averaged nearly 12.5 million barrels per day during the week ending September 26, up 948 thousand barrels per day from the previous week's average. Refineries operated at 72.3 percent of their operable capacity last week. Gasoline production rose last week, averaging about 8.7 million barrels per day. Distillate fuel production increased last week, averaging nearly 3.7 million barrels per day.

U.S. crude oil imports averaged nearly 9.0 million barrels per day last week, up 1.8 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.3 million barrels per day, 2.0 million barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged about 1.3 million barrels per day. Distillate fuel imports averaged 195 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.3 million barrels from the previous week. At 294.5 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year. Total motor gasoline inventories increased by 0.9 million barrels last week, and are below the lower boundary of the average range. Both finished gasoline inventories and gasoline blending components inventories increased last week. Distillate fuel inventories fell by 2.3 million barrels, and are near the lower limit of the average range for this time of year. Propane/propylene inventories increased by 2.5 million barrels last week but remain below the lower limit of the average range. Total commercial petroleum inventories increased by 0.5 million barrels last week, and are below the lower boundary of the average range for this time of year.

And here is what was expected:

Analysts at MF Global expect to see a 3 million barrel increase in crude supplies. It would be the first rise in crude supplies in six weeks. The analysts also expect to see a decline of 3.6 million barrels in motor gasoline supplies and a fall of 1.1 million barrels for distillate inventories, which include heating oil.

However, industry analysts surveyed by Platts, on average, predict that the data will show either a draw of 1.5 million barrels or a build of 1.5 million barrels. The survey also showed expectations for a fall of 1 million to 3 million for gasoline supplies and distillate-inventory decline of 1 million to 2 million barrels.

Yet if you deduct the reduction in the SPR, Total petroleum inventories declined once again. The decline in demand continues to mask the declining inventories. If the freaking economy ever stablilizes or turns up coupled with the loose monetary policy prices will rocket again.
I filled up in Wichita yesterday for $3.12 a gallon. Traffic here has been picking up will be interested to see if the motorcyles and scooters get packed away here soon as the temps are a dropping.

CNN breaking news:

Oil prices tumble after government reports big jump in crude inventories and surprise rise of gasoline supplies.

The high prices/shortages/recession combo has seriously crimped consumption.

Their estimate for the last 4 weeks is that consumption is 7.1% below last year.

In fact, it is within a few barrels of breaking below 19,000 barrels per day.

IMO by far the biggest recent impact on consumption is gasoline shortages (forced rationing).

I should add that so far this year the EIA's 4-week estimates have been seriously wrong on the high side when compared with their final revised value. It's possible they have fixed that problem. If not, then we are looking at 18.5 million barrels per day.

A link to the report:


"In fact, it is within a few barrels of breaking below 19,000 barrels per day." Datamunger, don't you mean 19 million barrels per day?

Thats going to make Southerner's (US) grumpy!

Things seem to be getting better in Atlanta, but they are not back all the way.

The Shell gas station I usually go to had regular for $3.99; no premium; no mid grade; and no diesel. The CITGO across the street seemed to have nothing.

There weren't bad lines at the Shell station. The stations were all full, and there might have been a car or two waiting.

Prices are actually lower in Toronto-about $3.92 US/gallon last night.

Looking deeper at the EIA data, the gasoline stocks for PADD III (the Gulf Coast/Southeast) don't look as if there's much of a shortage.

Table 11.  U.S. and PADD Weekly Estimates Most Recent 4 Weeks
           (Thousand Barrels per Day Except Where Noted)

                                       09/05/08 09/12/08 09/19/08 09/26/08
Finished Motor Gasoline                   8,398    8,326    7,954    8,690
 East Coast (PADD I)                      2,126    2,111    2,093    2,247
 Midwest (PADD II)                        2,414    2,270    2,398    2,382
 Gulf Coast (PADD III)                    2,193    2,256    1,802    2,330
 Rocky Mountain (PADD IV)                   253      252      265      252
 West Coast (PADD V)                      1,412    1,437    1,396    1,479

Finished Motor Gasoline                    91.9     89.3     85.9     86.8
Conventional                               90.0     87.3     84.2     84.8
  East Coast (PADD I)                      20.0     18.9     18.4     18.1
  Midwest (PADD II)                        31.3     30.1     28.9     29.0
  Gulf Coast (PADD III)                    29.4     28.8     28.0     28.9
  Rocky Mountain (PADD IV)                  4.2      4.2      4.1      4.1
  West Coast (PADD V)                       5.2      5.3      4.8      4.7

If I interpret the data correctly, there was a loss of about 600,000 bbls/day of gasoline production, so the stocks went down about 6 million bbls over 3 weeks, but the stocks have started to recover. One wonders why there are still shortages, especially after reports that the Colonial Pipeline is operating at 100% capacity. If there had been even the slightest effort to limit consumption downstream of the refineries which were shut in, such as an odd/even limit on buying, one might conclude that the shortage would not have happened. How much gas was wasted by people who sat in lines with their engines running or drove around looking for a fill up?

I lived in the Atlanta for decades and recall that the speed limit in the Atlanta metro area was 55 mph. After attending a conference on air quality improvement, I asked the newly elected Governor of Georgia, Roy Barns, if he would seek to enforce the speed limit to reduce pollution. He turned and walked away. If the government in Georgia had even thought about the situation and actually enforced the speed limits on the freeways, there would have been much less fuel burned, thus more available as the crisis developed.

E. Swanson

I bet gasoline consumption spiked in that region, though. All those people who had to evacuate for the hurricanes. There were reports from Houston and Louisiana that gasoline demand was up 80%.

Gov. Sonny Perdue sent a letter to President Bush on Monday requesting that a "signficant amount" of crude oil be released from the Strategic Petroleum Reserve to help ease the shortage.


Nowhere is there a report on shortage of oil! We are turning away crude under contract from Mexico, and using oil from the SPR? Is this just political pandering? Terrible MSM reporting? Are the ports not functioning due to damage? I just shake my head.

Maybe someone who knows a lot more about refineries than I do can comment.

Looking over historical reports, the ratio of gasoline plus distillate produced to crude input is roughly 0.85. However, for this report we see (8.7 mmbbl/d gas + 3.7 mmbbl/d distillate)/12.5 mmbbl/d crude = 1. Do they keep a magic refining formula on the shelf just for those cases where they need it?

Yes, and I wonder how we deliver 19 million barrels of product with 72% refinery utilization. Last year, we delivered 20.4 million barrels of product with probably somewhere around 85-87% refinery utilization. I don't think imports are making up the discrepancy. What gives with this data?

I would guess that the answer to your question is located in the production stocks added of 1.254 ( ie product delivered was really 17.75 million barrels ) - which, presumably, represents winter gasoline blends made available to the market.

so where did those "production stocks" come from? Were they not being counted in inventory previously?

No idea mate, but it sure beats knocking 9 million barrels off the inventory total for the week!

"Yes, and I wonder how we deliver 19 million barrels of product with 72% refinery utilization."

Imports of finished product ??

Triff ..

Price Elasticity of Demand ?

Products Supplied
Finished Motor Gasoline   8,867   9,289    -4.5% -2.3%
Kerosene-Type Jet Fuel    1,527   1,551     -1.5%    -4.4%
Distillate Fuel Oil       3,811   4,160     -8.4%    -3.4%
Residual Fuel Oil           478     683    -30.0%   -17.5%
Propane/Propylene           807   1,147    -29.6%    -6.9%
Other Oils                3,531   3,651     -3.3%    -7.5%

Total Products Supplied  19,021  20,480    -7.1% -4.4%


The pitched political battles that have raged over the $700 billion bailout plan have produced a number of winners and losers. But probably no one has emerged more victorious than the economists. They have demonstrated that not only is it possible to occupy and hold a prominent place at the nation’s policy table with absolutely no connection to real-world reality, but they almost succeeded (and may yet) in setting themselves up like the infallible popes of old. For it is they, in the proposed new economic order, who will decide whether, and who, to punish like Jehovah or forgive like Jesus Christ.

Contrary to its claims, economics is no science. Philosophy and religion are its closest cousins. Physics and chemistry are not even in the same family. The scientific pretensions of economists are perhaps the greatest fraud that has been perpetrated upon Western society since Catholic theologians asserted that the earth is flat. Here on TOD we lament the fact that so many prominent economists are completely divorced from physical reality, our pet peeve being their delusion that economic dogma somehow not only can, but will dictate the availability, and the price, of oil.

But I would argue that the reigning school of economics—known variously as classical liberal economics, the school Milton Friedman or the Chicago School—also fails in another, entirely different realm. For its adherents are not only bad materialists, but bad vitalists as well. They not only get the atoms wrong, but the monads too. Oblivious to physical reality, they’re just as clueless about human psychology.

Two points:

Jacob S. Hacker in The Great Risk Shift explores in some detail the nexus between human psychology and economics, and more specifically between human psychology and economic risk. What he finds is that, for most of us, the psychic pain caused by an economic loss is much greater than the psychic joy caused by a comparable win. And for this reason most of us, but not all, are risk averse.

Hacker cites two studies that show that about two-thirds of us are not risk takers:

Americans are famously opportunity-loving. But when asked in 2005 whether they were “more concerned with the opportunity to make money in the future, or the stability of knowing that your present sources of income are protected,” 62 percent favored stability and just 29 percent favored opportunity.”

Jacob S. Hacker, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream

The second study Hacker cites is this:

In 1996 the Panel Study of Income Dynamics asked participants a similar question. Which would you choose: your present job with your current income for life, or a new job that offered a fifty-fifty chance of doubling your income and a fifty-fifty chance of cutting your income by a third?

On paper, the deal was pretty good. If John was making $30,000 and won the gamble, he’d make $60,000—a comparative fortune. If he lost the gamble, he’d make $20,000—not great, but not terrible compared with what he had. If John didn’t worry at all about risk, the choice would be easy: Since he has a fifty-fifty chance of ending up with $60,000 and a fifty-fifty chance of ending up with $20,000, the rational position would be to treat the gamble as offering $40,000 (the average of the two salaries)---an amount a third higher than his present income.

Few people who were asked whether they’d take the gamble were rational in this fashion: Only 35 percent said they would roll the dice.

These findings fly in the face of classical liberal economics. As Hacker goes on to explain:

…in classic economic theory, goods are simply tickets to enhanced welfare, and we should have no special attachment to things we already possess if other items could deliver welfare just as effectively. Aside from the “diminishing marginal utility” of income (the fact that every dollar buys slightly less happiness or well-being, making us value a $100 gain modestly less than we lament a $100 loss), people should, according to standard theory, value losses and gains in roughly equal terms.

Experiments show that few actual people think this way.

My second point is that made by Daniel Yankelovich in Coming to Public Judgment. During his many years of experience in conducting public opinion polls he has observed that the lay person, quite unlike the economic “expert,” does not view the world through the prism of abstract technical constructs such as Gross National Product or Mean Household Income. Instead, the lay person sees the world through precepts like morality, character, fairness, equal treatment before the law and good principles to live by. And historically, when it comes to crafting public policy, it is the public that has always insisted on having the last word.

It is this head-on collision between classical liberal economic theory (the “experts”) and the world of real, living human beings that we now see playing out on the political stage. The Chicago boys would assert that the maximization of gross national product is the paramount goal and that the “creative destruction” needed to achieve that—the resultant economic volatility, insecurity, anxiety and psychic pain visited upon the people--are necessary sacrifices in order to achieve that greater abstract good. Value-laden concepts like character, fairness or equality before the law, and the question as to whether the policies they advocate can be implemented through democratic means, fall outside their area of expertise.

The economists thus advocate a three-pronged approach. First, millions of Americans are being asked to self-sacrifice for some greater abstract cause. Second, they are being asked to abandon their moral compass for this transcendent cause. And third, if the popular will must be jettisoned in order to achieve the prescribed policy initiatives, so be it. In our new culture of technical control, the “experts” know best.

There is a sturdy strain of pragmatism that inhabits American culture, and thus far the pleadings of the economists have failed to resonate with the masses. The public is adamantly insisting on having the last word. But it is not a safe bet to assume that could not change. The history of Christianity teaches us that many people can be persuaded to make sacrifices in this world in exchange for the promise of a better life in the next. The history of Communism and Nazism teaches us with what ease the religious cause (everlasting paradise in the hereafter) can be substituted with a secular one (utopianism or jingoism).

This past week the high priests of classical liberal economics reaffirmed and cemented their unholy alliance with the forces of greed and risk taking, and in so doing came very near to scoring a powerful political victory. Massive private fortunes are at stake. Academic careers and philosophical conceits are on the line. For the modern-day banker or financier, the prophets of liberal economics play the same role that the secular Catholic priests did for the Spanish conquistadores, which was to goo over their greed and heartlessness with a thin, metaphysical veneer. The Spanish conquistadores had a phrase for this marriage of power and self-serving piety. They called it “the cross and the sword,” succinctly voiced here by one of Hernando Cortez’ top lieutenants:

We come to America not only to serve God and to serve our King, but to get rich too.

As an interesting historical note, the Church hierarchy originally rejected the “cross and the sword” philosophy in dealing with the Indians, as did the Reyes Catolicos. Laws were promulgated to protect the Indians. However, America was a long way from Spain and the laws were subverted and not enforced. The mendicant religious orders did what they could to protect the Indians. But the Renaissance proved ephemeral in Spain, and by 1570 most of the mendicant priests had been replaced by secular clergy. A period of human suffering unparalleled in human history ensued and by the end of the 16th century more than 95% of Mexico’s indigenous population, once 25 million strong, had perished.

Having no one to work the mines or haciendas, the colonial economy imploded. This leads me to a second point of contention with the adherents of classical liberal economics. For I would argue that not only can economics not operate independent of physical reality, but it cannot operate independent of morality either.

OTOH quite a few prominent economists have spoken truth to Power on this one, which is somewhat surprising. IMO this episode has shown that although economists as a group are purchased, they do have lines they will not cross. As an analogy, economists as a group are higher class call girls-American politicians as a group are crack whores in comparison.

As Roubini has complained, zero economists (other than Bernanke) were asked to testify to Congress about the bailout. Over 190 economists, including 3 holders of the Swedish central bank's award in honor of Alfred Nobel, wrote a letter to Congress asking them not to pass a bailout in haste. I don't think I've seen a single economist who was in favor of the Paulson plan.

Economists have actually been looking pretty good in regards to the bailout. I fail to see how the current bailout mess is in any way, shape, or form a "win" for them.

Yes, and Bernake is probably a little biased by being in charge of a possibly insolvent fed that is now in need of this bill so the treasury can buy the crap the fed has lately taken as "collateral" for its loans. Just a theory I have.

Shar: You are correct-they deserve more credit on this one than I gave them.

DownSouth thanks for your post,here are some articles along the same line:

An excerpt:
Lionel Robbins has described David Hume (1711-1776) as "the greatest philosophical mind in the English language". Hume was a Scottish historian and philosopher whose ideas profoundly influenced the development of skepticism and empiricism.

Hume -- like empiricists (scientists, engineers) even to this day -- did not understand the futility of pointing out to an economist that his dogma does not agree with observation or experiment. Hume simply did not understand that economics was a religion based on revealed truth, and thus, immutable. In fact he became so exasperated after a heated exchange with the physiocrat Turgot that he wrote to Morellet:

"I see you take care in your prospectus not to offend your economists by a declaration of your views; and in this I commend your prudence. But I hope in your work you will batter them, crush them, pound them, reduce them to dust and ashes The fact is they are the most fanciful and arrogant set of men to be found nowadays, since the destruction of the Sorbonne... I ask myself with amazement what can have induced our friend M. Turgot to join them." -- David Hume, July 10, 1769

If the New Man finds his life in the market, what of his death? All great truths must in one way or another speak of last things; the Bank's is no exception. The Bank's nominal mission is to promote development. Development in its biological sense means an organism's attainment of its inherent potential, inexorably followed by decay and death. In the Bank's vocabulary, however, this biological meaning is replaced by a concept of never-ending growth. The Bank's priesthood specifically denies limits to growth and promises an ersatz eternity in the here-and-now. If such endless growth is supposed to lead to an American or European middle-class standard of living for over five billion people today and who knows how many tomorrow, we already know this to be an ecological and biospheric impossibility, even assuming tremendous and rapid changes in technology. The Bank refuses to confront this last of all last things -- not merely individual or societal death but the possibility of species extinction, including that of the human species. Incantations like "sustainable development" stave off the moment when the finite must at last be faced.

The Church's traditional imagery of heaven and of hell is graphic and explicit. Although it cannot prove that anyone has ever gone there, it still issues the visas to the promised land. The Bank paints no pictures with saints, angels and demons but it does put up signposts pointing towards paradise, exhorting the faithful to imitate the blessed -- the now-developed rich market-economy countries or at least those who are well on their way, like the Asian tigers.

The very vagueness of the concept of development and the great number of candidates who hope to attain it legitimize the Bank's functions, justify its existence and explain its power. As long as the fragile planet's heavenward journey lasts, as long as the poor are with us, as long as salvation is sought where it cannot be found, the World Bank will find for itself a role and a mission.

Interesting post. Demonstrates that the idea of money is at least as durable as the idea of God.

And also, in the end, that cooperation is more adaptive than elimination in dealing with adversaries. However, coming to that realization is the result of wisdom -- which except in rare instances, is dependent on aging. None of the studies quoted in your post seem to take into account the effect of age on risk-aversion or risk-taking. Young bucks would be expected, I should think, to behave more like "classical" economists. Morality usually develops later as a sort of mitigation of mortality.

Thank you Down South for your words of wisdom. You've managed to capsulize very nicely what is at the root of our present malaise: economics, the religion of mammon, with its own prophets (Adam Smith, John Stuart Mill), cathedrals of glass, priesthood (economists and think tank gurus), indulgences (stock markets) and mendicant orders (banks, financial firms, etc.) is not science nor is it anchored in reality.

And your final conclusion, IMHO, is brilliant:

This leads me to a second point of contention with the adherents of classical liberal economics. For I would argue that not only can economics not operate independent of physical reality, but it cannot operate independent of morality either.

Nicely said. Cheers!

Technical Analysis (TA) – 16th Post (Last post for a while)

It looks like today's post will be my last for some time. I had some spare time this month to write posts, but it looks like that is coming to a halt.

I have asked a couple of times if it was ok to post on investments, and was told by most that it was ok. There are many professional investors (and some real, honest-to-god “big shots.”) on this website who hopefully will post again about investments. And, I would hope that if any uses a TA program, that they let us know which one it is so that there is a chance of verification.

Many thanks to the people who posted or emailed to let me know that they enjoyed my posts!!!

Dow gains 485 points and cnbc.com after the close didn't say anything about it in their “Top News” section! On cnbc this morning, the only thing I heard was a dismissal of yesterday as “short covering.” As if Monday didn't have its much larger share of “long covering.” One funny thing, I heard that Fox is thinking about starting their own business news channel, because, and get this, Fox says that cnbc is biased against the SM! How funny! I have this vision of the new Fox channel where the video is simply a loop that tells all of the poor people to give all of their money to the rich people. A fellow on cnbc did say (in almost desperation) that in the future they will use actions without “politics.” I guess that this dictatorial power already exists...

Does anyone else get the feeling that we are entering an end game, where the SM are desperate to saddle the people with as much debt as possible? One thing is certain, no matter what happens to the banks or governments, no matter how long it takes, the people will be forced to pay every penny of the governmental debt. I did send more emails to my representative and senators with the title, “No bailouts, period!” However, I am sure that the SM is more persistent than I am. At the very least, they could sneak it in on Christmas eve like they did the Federal Reserve Act http://www.federal-reserve.net/thefederalreserveact.htm

Even though cnbc has attempted to ignore it, a 485 point rise is huge (the biggest DJI gain day in history was on March 16, 2000, when the DJI closed at +499.19). Therefore, I would expect a reversion to the mean next in both oil and the DJI, which is bearish for oil. The SM must be loving all of the stop orders that are getting triggered.

By the way, I no longer put in stop orders. I have a piece of paper with me that has my stops that I determined the night before. When I hear that the stop has been exceeded, I place my order using a limit order.

Silver and gold lost most of their gains yesterday, and the dollar (vs EURO) had what has to be a close-to-record rise! However, I am not aware of one metric in which the US is greatly stronger than the EURO (don't get me started about the trade balance). However, its still real, the price is the price no matter where it comes from.

Dollar strength is normally bearish for oil. Overall, it seems like something is going on with the dollar. Maybe the “world central bank” has reminded the world's central banks that if the dollar goes down, then everyone goes down with it. The only problem with this is that this kind of action requires more and more money (and derivatives) every day (sounds like a junkie story). I'm assuming that the SM knows what to do when this all reaches a toxic level...

Gasoline inventories are up??? In the meantime, here in Atlanta...

The DJI futures were lower today, which could lead to some selling of oil to cover long margins. However, I'm guessing that most traders have been so whipsawed lately, that not as much will occur as usual.

As far as my TA on OmniTrader is concerned, for USO, I am only getting unfiltered (“unconfirmed”) signals. I am getting an overall short signal of (26/99) from combined short signals from the unfiltered volume, “all systems” and reversal strategies, and a short “kicking” (2/5) recognized pattern. All of these weak signals indicate to me that the price of oil could be held in a trading range.

USO is still in medium and short term down trends. But, there is still a short-term trading range between about 89 and 73.

I am going to be waiting for clearer signals before investing anymore in USO, but maybe it is a good time to accumulate some long-term positions. That is what I did a couple of days ago. (I am a beginner at TA, so you really need to take anything I say with a grain of salt.)

Anyway, I believe that the more people we have who are prepared for the “hard times” that may be coming, the better it will be for all of us.

Good luck everyone!


I have this vision of the new Fox channel where the video is simply a loop that tells all of the poor people to give all of their money to the rich people. A fellow on cnbc did say (in almost desperation) that in the future they will use actions without “politics.” I guess that this dictatorial power already exists...

Trying to figure out if this falls under "I'ts better to ask for forgiveness than permission", but under the surface it's more like a legalized wholesale robbery of the lower 90% of the population to the upper 10%.

Lazy scum! Why do the poor need to sleep eight hours every day? And they expect meals, too?

Here's an Aussie senator's kinder, gentler solution to unemployment - sort of Welfare-meets-Gitmo:

SYDNEY (AFP) - An Australian politician has used his first speech to parliament to call for unemployed idlers to be stung with a cattle prod to get them to work.


The original article is just hysterical, with all its colorful local parlance:

Fox already launched their Business Channel earlier this year.


I think it means Smart Money.

A few sane Reps. got together after the vote and came up with a very short and to the point bill they introduced as The No Bailouts Act. Here is DeFazio's letter introducing the legislation.

As The Oregonian notes, news of The No Bailouts Act is being given the blackout treatment by the usual culprits. It's just this sort of behavior by the Propaganda System that proves how deep the fix is in. I think most of the Reps who voited against the Bush/Paulson extortion bill will back the No Bailouts Act provided it gets support from constituents; but of course, the constituents must know about this alternative, but that information is deliberately being withheld from them.

A "Free Market" is supposed to enjoy a free flow of information so the best decisions are made. It's quyite clear that such a market is a chimera.

U.S. default? Some bet on it

NEW YORK (Fortune) -- What odds would you lay that Uncle Sam is going to be a deadbeat?

Until a few weeks ago, that sounded like a ludicrous question. And even amidst bailout insanity, the market has shown that the vast majority of investors still hold the view that U.S. Treasury bonds are the safest of safe havens, the kind of investment you'd bring into your bunker in the event of a nuclear attack.

But a few skeptics are willing to put money their money where their doubts are.

CIA List of world debtors, public debt as a percentage of Gross Domestic Product

1 Zimbabwe 211.90 2007 est.
2 Japan 195.50 2007 est.
3 Lebanon 186.60 2007 est.
4 Seychelles 144.30 2007 est.
5 Jamaica 127.20 2007 est.
6 Egypt 105.80 2007 est.
7 Italy 104.00 2007 est.
8 Singapore 101.20 2007 est.
9 Sudan 98.90 2007 est.
10 Greece 89.70 2007 est.
11 Belgium 84.90 2007 est.
12 Sri Lanka 83.90 2007 est.
13 Bhutan 81.40 2004
14 Cote d'Ivoire 81.10 2007 est.
15 Israel 80.60 2007 est.
16 Norway 75.10 2007 est.
17 Jordan 72.70 2007 est.
18 Morocco 72.40 2007 est.
19 Canada 68.50 2007 est.
20 Hungary 67.00 2007 est.
21 Uruguay 67.00 2007
22 France 64.00 2007 est.
23 Portugal 63.60 2007 est.
24 Germany 63.20 2007 est.
25 Nicaragua 63.00 2007 est.
26 United States 60.80 2007 est.

This year might add another trillion dollars in debt or more. The all time debt as a percentage of the United States GDP peaked in 1944. If the current rate of debt expansion continues we will have a situation similar to Zimbabwe.

The United States 2006 GDP was GDP: $13.13 trillion (2006 est.) There is some loophole that the United States holds some of its own debt as it borrowed from Social Security fund to make it appear like it is less of a debtor nation. In reality the debt level may be approaching dangerous levels. There are too many different ways to spin statistics.


How is it that Japan approaches Zimbabwe in this category, yet manages to be one of the wealthiest countries on earth? Also, aren't they still a major haven for exports, and don't they run trade surpluses with e.g. the US? If so, then what on earth did they do to make it near the top of this list???

The Japanese people are among the world's greatest savers. Thus the government can borrow money at low interest rates from the people (apparently this is done through accounts at the post office). In 1944 Americans were great savers, and the government borrowed money at low interest rates from the people as War Bonds. So apparently the trick is keeping the money in your country instead of having to repay foreigners.

As for how it happened, they spent a lot on public works to try to reignite the economy after their own financial collapse in the early '90s. A deflation can be a really stubborn thing. However, at least Japan got some infrastructure out of the deal.

How is it that Japan approaches Zimbabwe in this category, yet manages to be one of the wealthiest countries on earth?

Because debt isn't a very good indicator of a country's economy.

Japan has 10x the debt of Namibia or Guatemala (in terms of %GDP), but nobody would have trouble telling which one is the rich nation, or which one is the world's second-largest net exporter, or which one has the longest lifespans in the world.

Part of the reason is that Japan's debt load is large but light; most of their debt pays only 0-2% interest, meaning the cost to service that debt is surprisingly small (30% of the budget (11% of GDP), vs. 15% of the budget (6% of GDP) for Germany's debt of 30% the size.

That's not to say Japan's debt isn't a problem - it is. The point is simply that fixating on one particular number won't give the whole picture.

This year might add another trillion dollars in debt or more.

That's not as serious of a problem as you suggest. Consider a simplified version of the situation:

  • 2007 GDP: $14.8T
  • 2007 Debt: $9T
  • 2007 ratio: 60.8%
  • 2008 GDP: 3.5% inflation + 1.5% growth --> $15.5T
  • 2008 Debt: $9T + $1T = $10T
  • 2008 ratio: 64.3%

Adding $1T of debt in a year with weak economic growth increases the debt by less than 4%.

If the current rate of debt expansion continues we will have a situation similar to Zimbabwe.

An interesting exercise for you to try: increase GDP by the same sluggish rate (3.5% inflation + 1.5% real growth) and debt by the same high amount ($1T) and see when the US's debt reaches Zimbabwean proportions.

It never happens.

Plug in those numbers, and you'll find that debt never even reaches 80% of GDP. Even though $1T seems like a big, scary number, it's pretty modest in terms of the US economy, so even a weak rate of growth soon surpasses it. Even if you plug in a permanent proportional deficit of 7% with a permanently weak growth rate, you still never reach Zimbabwe's debt level - the debt asymptotically approaches 147% of GDP.

That's not to say that the US's debt and deficit are good things; the point is simply that they're nowhere near as much of a problem as alarmists suggest. 65% of GDP is quite a modest debt level - it's about average for the OECD - so the US just plain is not in serious trouble due to its federal debt.

There is some loophole that the United States holds some of its own debt as it borrowed from Social Security fund to make it appear like it is less of a debtor nation.

Not correct, for a couple of reasons.

First, the $10T figure is "gross debt", which includes debt to the social security fund. That's everything the US government owes anyone, including itself.

Second, if you're calling it a "loophole" to "lower" apparent debt, you don't understand it. It raises apparent debt by having one part of the government owe money to another part of the government. Only if you consider the part of the government which pays social security to be entirely separate from the "real" government which does anything else does that "debt" become meaningful.

The debt that the US government owes to groups that are not simply other parts of the US government is called the public debt, and is about $5.3T, or roughly half the gross debt figure of $10T. That $5.3T is the amount the US government owes to Japan, and to China, and - for most of it - to Americans who invest in Treasury Bonds.

Estimates for unfunded liabilities go as high as 90 trillion. USA accounting is not exactly reliable.

Alabama County Misses Bond Payment; Wall Street Talks Continue

(Bloomberg) -- Jefferson County, Alabama, won't make an $83.5 million payment on some of its $3.2 billion of sewer bonds, as it continues to seek more time to negotiate an end to the debt crisis that has pushed it close to bankruptcy.

Jefferson County, Alabama, won't make an $83.5 million payment on some of its $3.2 billion of sewer bonds

"Oh, cr@p!"

Sorry, I just had to say it...

Hello Leanan,

Thxs for the link. Alabama would be money ahead to stop the digging, then go to full-on O-NPK recycling [Humanure, composting, etc]. Recall that Pres. Clinton is calling for the closing of landfills everywhere.

It would be interesting to know the current sewage flowrate that is recycled back to the farms vs the flowrates sent to the landfills or just flushed out to sea.

Sewage systems are very expensive to maintain plus very energy and chemical input intensive to run. The money saved could be shifted to insure the Optimal security & design of their postPeak minimal-usage potable water system.

Will Alabama wise up in time to do this? IMO, Highly Doubtful.

More likely-->they will continue Zimbabwe-style until sewage is backed up inside houses, and people will be wading through it on various streets, plus dire health effects. Should be quite the tourist attraction, too. :(

Oh, well. Their religious beliefs are strong. If they think singing hymns, holding hands, then praying around gasoline pumps will bring energy miracles, I suggest they move to the next progressively delusional step: full baptismal immersion and fervent prayer circles 'waste' deep in the coming local plenitude of urban sewage ponds. This will, of course, instantly Rapture the stinking pools back to the farmland.

Full-on O-NPK recycling with AlanFBE's ideas plus SpiderWebRiding plus wheelbarrows for the final square footage dispersion would be my choice for Alabama. But if Alabama won't take the advice of a former US President: they certainly won't listen to me. Neither did Zimbabwe.

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

For the person who downrated me,

As posted many times before: I welcome all pro-elaboration & con-argumentation. The hallmark of TOD is reasoned and polite debate; an online peer-review Meatgrinder to further refine the coming Peak Everything Downslope Ride.

By your down-mod: I assume you have a better thought out plan than me on postPeak Key Element Control [NPK & sulfur] for Optimal Overshoot Decline--I would like to read your proposal.

My plan is to providentially harness the evolutionary tendency of the simple Thermo/Gene Collision concept of 'poop on the grass' vs the present infrastructure of 'poop on the rock' [ceramic throne powered by drinking water].


The Platinum LEED Chesapeake Bay Foundation Headquarters public bathrooms have compost toilets [with roof rainwater for handwashing]. Amazingly [not to those familiar with compost toilets], there is no smell, and the final broken down compost is eventually distributed around the building's [nonedible landscaping] grounds.

If this non-flushing system were to be widely adopted by municipalities and eventually applied to local food* production, then there would be some

benefits: saves water treatment plant energy; saves the drinking water; creates local organic fertilizer supplies to supplement dwindling I-NPK imports; reduces sewer runoff algae blooms/fish kills.

and some costs: kills more local trees for sawdust [how many I wonder, especially if, post-PO, more trees were also being killed for substitute heating fuel and charcoal?]; procedures of safe handling and processing of humanure collection for potential O-NPK [all three?] use in local agriculture]

Has anyone ever described/estimated the measurable costs and impacts of mass switchover to this system in the water-flushing industrial west, [or even within one water-starved US state or county]?

I would be interested in reading. If so, IMO such a post-PO sewage system planning subject and discussion thread deserves a separate post topic on TOD. [Perhaps it has already been explained/discussed here? If not, Bob, since you are the O-NPK uber-researcher here, do you think you could collect/edit a sewage planning -specific TOD post of collected articles on the subject, like Leanan does for Drumbeat? :^) ]

*Before anyone downrates this post on a gag reflex reaction to the concept of humanure composting in agriculture, consider that your city drinking water is already coming from recycled sewage water at a much higher energy, and chemical pollution, cost. Humanure which like any manure is very dangerous before proper composting, does eventually break down into smaller non-dangerous organic chemical parts [that are as harmless as composted horse or cow manure] when properly composted over long periods of time.

These were Municipal Bonds, not US Government bonds. Municipal bonds are tax free, unlike government bonds, because municipal bonds are much higher risk bonds. The government gives municipalities tax free status on their bonds in order to help them raise money. This is not something that has never happened before. Many times, in history, municipalities have defaulted on their bonds. True, it is very unusual but not unheard of.

Jefferson County is the largest county, population wise, in Alabama. That is where Birmingham is located.

In a couple of years, we will be hearing about defaults on municipal bonds almost as often as we hear about foreclosures now. For pretty much the same reason.

All those empty houses aren't paying their property taxes anymore.

All those empty houses aren't paying their property taxes anymore.

I beleive that the banks that own them will be paying the property taxes.

Provided they still can, of course. How many more banks will fail between now and December 31, and how many "sound" banks will there be to pick up the slack?

I'm skeptical that they'll stay current. They have three years before the county will try to take the property (in many cases).

My condo assoc. had numerous units behind on their condo fees. If a unit went into foreclosure, the lien for unpaid fees was canceled and the new owner was required to start making payments. The association has a deficit in fees paid and this reduces the amount of reserves that we lend out for interest.

Here's more info written by a very credible investigator as to the "crisis's" cause and Paulson's motive for the $700B:

Paulson’s Great Depression:

It is difficult to believe that Paulson is not intentionally destroying the world economy, since his company, Goldman Sachs has been so intimately involved in setting the stage for this fiasco.

Goldman Sachs was involved in many sub-prime securitizations, and then was instrumental in setting up the ABX index, which Goldman then shorted to death after selling the index to its clients. By shorting the ABX index, Goldman not only made huge profits, but also eliminated all financing for real estate securities by spreading the notion that they had no resale value, because the value “indicated” by the ABX index was so low. The notion of “toxic securities” was sold to the world by Goldman and their confederates. Once new real estate lending was substantially restricted, a broad decline in real estate prices was a certainty, and recently adopted “mark-to-market” accounting rules forced lenders to report balance sheet losses even for loans that were current.

Goldman also helped develop and sell complex securities, that have magnified the extent of the damage done. Collateralized debt obligations and credit default swaps can magnify any actual loss, since there are many more credit default swaps sold than actual loans made. A $1 actual loan loss can become $10 or more of losses to one side of the swap transaction, and $10 or more of gain to the other side of the transaction.

Paulson has made the financial crisis much worse by his publicly stated intention to “punish” some companies. While Bear Stearns was “bailed out”, Lehman was allowed to fail. Fannie and Freddie were “rescued” in a way that arbitrarily removed $10 to $15 billion of capital from banks that had invested in the preferred stock, which then reduced those banks’ lending capacity by $100 billion, making the “credit crisis” much more severe than it was before the “rescue”. Instead of stopping a run on Washington Mutual by providing cash loans, Washington Mutual was unnecessarily liquidated, to demonstrate the urgency to authorize $700 billion to Paulson’s Treasury.

Of course because of credit default swaps sold around the world, financial institutions’ losses on the Washington Mutual liquidation are vastly larger than the cost of keeping Washington Mutual open as an independent entity.

Now we come to the $700 billion. If this is used SOLELY to purchase whole loans, then the institutions now holding those loans do not experience losses that get magnified by credit default securities, and the government is in a position to rework the loans with affordable payment terms, so that people keep their homes, and the government recovers its entire investment. If this money is used to purchase “downstream securities”, such as securitization interests, CDOs, and credit default swaps, then vastly more money is required, and homeowners still lose their homes.

Why would Paulson seek the authority to buy “downstream securities”? Could it be that Goldman and its confederates hold these securities, and make vastly more money at taxpayer expense by selling these securities than by allowing people to remain in their homes, eliminating the defaults that make these credit default swaps so valuable to one side of the contract, and so costly to the other side of the contract, the US taxpayer, if Paulson gets his way.

Sounds plausible-listen to financialsense this week for more on this theory.

It's kinda like hiring Hannibal Lecter to catch a serial killer. Sure, he might be an expert on the subject, but you could never really be certain that he wouldn't eat your brains while doing the job.

I had somewhat moved away from NCANS activism to pursue Peak Oil and its different investment paradigm. But with the so-called credit crisis and calls for bailing out Wall Street, I dove back in and have tried to catch up on the great investigative work done over the last year or so. I've regailed theoildrum with a few stories and their connections to the "crisis" and its premeditated beginnings. But there's just so much more, so I hope drumheads will bear with me as I post a few more stories and provide other evidence chains.

In our battle against Wall Street's illegal market manipulation and illegal securities transactions, we knew we were fighting a very vicious beast with almost unlimited resources and absolutely no morals. Now that the criminals have asked to be bailed out, a lot of information and even some long delayed action is taking place. Here is one such revelation:

Two and a half years ago, Overstock.com CEO Patrick Byrne penned an editorial for The Wall Street Journal, warning that widespread stock manipulation schemes - including abusive naked short selling - were threatening the health of America's financial markets. But it wasn't published.

"An editor at The Journal asked me to write it, and I told him he wouldn't be allowed to publish it," Byrne says. "He insisted that only he controlled what was printed on the editorial page, so I wrote it. Then, after a few days, he got back to me and said 'It appears I can't run this or anything else you write.'"....

In the wake of the SEC's crackdown, the mainstream financial press has acknowledged that widespread and deliberate naked shorting can artificially deflate stock prices, flooding the market with what amounts to counterfeit shares. But for years, The Journal and so many other news outlets ignored Byrne's warnings, with some journalists - most notably a Forbes.com columnist and former BusinessWeek reporter named Gary Weiss - painting the Overstock CEO as a raving madman.

Now that's just a teaser of what the 3 page item reveals. Perhaps a bit more:

Wikipedia's on-site records show that these changes were made by the Mantanmoreland account, and changes made just hours earlier came from the IP address in the header of Weiss emails. In short, Weiss' first Wikipedia edits were made before he created an account, then he got wise and hid his IP behind a pseudonym.

Linked at the item's beginning is a link to the article Mr Byrne was asked to write for The Journal, not published as promised, and just recently published by Forbes:

According to former Undersecretary of Commerce for Economics Dr. Robert Shapiro, "There is considerable evidence that market manipulation through the use of naked short-sales has been much more common than almost anyone has suspected, and certainly more widespread than most investors believe."

His research turned up at least 200 companies that were destroyed, for "a combined market loss of more than $105 billion." Shapiro added, "we believe that this type of stock manipulation has occurred in many hundreds and perhaps thousands of cases over the last decade. ... Illicit short-sales on such a scale or anything approaching it point to grave inadequacies in the current regulatory regime."

And there's so much more. It is no accident that the No Bailouts Act has a prominent section devoted to specificly telling the SEC--in so many words--to enforce its laws against naked short selling.

We talk about the need for greater transparency in markets. The DeFazio bill tries to do something about that. But we clearly need regulators to enforce the laws on the books. Those few of us familiar with the depths of the current crisis/scandal are 100% certain that if the SEC had done its job we wouldn't have this mess today.

I have an MPG question. Here's the background. My wife drives a Prius pretty far to and from work. Periodically, when I drive the car, I get to see what her gas mileage has been. Normally I can tell how fast she's been driving. If she drives 75-80, she gets about 46mpg. If she drives 65, she gets 48 or 49 mpg. When I drive the car, I can usually coax it over 50, but barely.

So, today I took the Prius, and her gas mileage on the current tank (with over 300 miles on the tank) is 53.2. I talked to her about it. She said she noticed the better mileage, and that it had just started with the current tank, when she coincidentally decided to drive 65. She seemed somewhat defensive when I suggested that was insufficient to account for the extra mileage, at least based on past performance. There have been no other changes (no new tires, no tuneup or other work done to the car, same gasoline station as usual, etc).

I've been trying to figure out why the gas mileage suddenly jumped. We've had the car for two years and never got mileage like that. The only hypothesis I can come up with is that maybe she got a tank of winter gasoline, and the higher vapor pressure boosted fuel efficiency (at the cost of some extra pollution). But I don't know if that even makes sense. Any ideas?

My guess is slower driving. I have a 2008 Prius and I have found that at about 45 MPH, there's a sweet spot where it gets good (>50 MPG) mileage. My guess is that it was designed to get the best mileage there- because half of the time you are a bit below it (city driving) and half the time you are a bit above (highway driving).

Other factors I have found include acceleration (i.e. don't slam on the gas) and decelration (don't slam on the brakes). And when you are 'coasting', the car naturally decelerates a bit by design and actually pulls some forward momentum from the wheels and stores it in the battery.

But, they are fun little toys, aren't they...? Can't wait for the plug in model.

Don't forget about aerodynamics. Driving slower cuts your aerodynamic drag, which is the main reason the MPG numbers increase. But, aerodynamic drag also depends on the winds and thus when and where you drive. If one has a 15 mph headwind, driving 65 mph would be about the same as driving 80 mph with no headwind. Similarly, a 15 mph tailwind would reduce the effective airspeed to 50 mph. In other words, just looking at the results of one short period of driving without considering the weather won't give a good comparison with the results from other periods.

E. Swanson

In addition to aerodynamics, headwinds hurt, tailwinds help (a lot not just a little). Cross winds hurt but not too much. Also temperature matters a lot. Mine gains one or two mpg for every ten degree increase in air temperature. Usually if the winds are consistent a headwind in the morning will be balanced by a tailwind in the evening -although you lose more to the headwind than you lose from the tailwind.

Of course, if she changed her driving style, independently of her average speed, that could have an impact. The pure electric mode usually only has enough power to maintain speed at maybe 40mph. At higher speed if one is willing to speedup, and then lose some of the speed in electric mode, then repeat, you can do a bit better than constant speed.

I had been getting 58mpg (summer) on my commute, but a 5mile 40mph section has just been replaced by a 55mph 4 mile bypass, so I think my mileage is going to suffer.

My wife has repeatedly cut her speed to save gas. By doing that, whe was able to get up to about 48.5mpg. When I drive 55-60, I can get up to about 50.

Driving slower doesn't explain the delta between about 49 and 53.


It certainly does, drag is proportional to the square of velocity, since at a steady state your vehicle is subject to aerodynamic drag and rolling resistance (check your tyre pressures) then ignoring the rolling resistance (which is much less) a 10% speed difference theoretically lowers your energy requrement by 19%, similarly increasing your speed by 10%, increases it by 21%


Aero is complicated, but if we stay in the turbulent regime, you are indeed correct that drag goes as the square of airspeed. But drag - friction - isn't a conserved quantity, so it's not as useful as looking at the energy transfer.

It's the same formalism that's used for a windmill calculation: The force - stagnation pressure - on an obstruction goes as the square of the airspeed, but the number of air particles is also proportional to airspeed. So the energy imparted to a windmill - or robbed from your car by the wind - goes as the CUBE of the velocity. A little change in airspeed goes a long way!

That's why most cars get their best mileage at the lowest speed that they can maintain in top gear - typically 40-45mph.

The force - stagnation pressure - on an obstruction goes as the square of the airspeed, but the number of air particles is also proportional to airspeed.

The distance travelled is also proportional to speed, however, so that term cancels out if you're looking at energy consumed per distance travelled.

Accordingly, when looking at miles-per-gallon, air resistance increases as the square of speed.

Hmm... I don't know what electronics they've got in there for calculating fuel economy, but if it were my car where I calculate all this by hand I'd assume that the fuel pump at the station where I filled the tank up last cut off too soon giving an anomalously low consumption. If that were it, I'd assume that the fuel economy would go down again the next time you fill up because you would include the extra fuel from the discrepancy.

None of that would matter if the Prius makes its own measurements though because it would know if its tank was completely full or not.

they use the EFI system probably, as it meters the fuel to the engine

Interesting. I can only comment on my reverse-MPG-wise experience. I have a 2004, which consistently got 54-56 in the (Oregon) summer and just over 51 during the cold of winter as it takes more gas to keep battery pack charged during the latter season. Then in 2007, I bought new tires and Oregon mandated E-10 blend for all gas, and saw my mileage drop almost 20% to 46-48. I suspected about half the drop is due to E-10 and the other because the replacement tires had greater friction (they sure did handle the rain and curves better). But if I can "hypermile" behind an SUV, pickup or RV at 50-60, then my mileage jumps back to 52+. Here on the Oregon coast, HWY 101 is the main road and its speedlimit is 55, with many slowdowns when traversing towns. We also get lots of wind. On one occasion this summer, I was in a long queue of cars and RVs driving from Newport to Yachats, about 25 miles, with a 15+mph tailwind at no more than 40-45 mph and recorded about 63mpg for that trip. I intend to go back to the original Goodyear tires or their equivalent. I do notice better mileage when running California gas, which has 60% less ethanol. Buying the higher gas grade doesn't seem to make much of a difference.

I think it possible for the 53.2 result to occur from a combination of slower speed and greater time spent drafting/hypermiling in a queue of vehicles at 65. Also, as your tires weardown, your mileage will increase as there's less friction due to less tread. (I was very impressed how my mileage jumped during the last 10,000 miles of wear on my original tires.)

We replaced the tires on the Prius about 5,000 miles ago, and we noticed a slight drop in gas mileage. Mileage has creeped back up since then, and it had been back to close to where it was with the old tires before the current weirdness. I attributed that to the new tires with better a better grip having greater rolling friction. But this is a much bigger change than the tire replacement was.

To those who attribute it to changes in driving habits, the car has over 70,000 miles. My wife has probably driven half of those miles driving exactly the way she has been driving on the current tank, in all kinds of weather and temperatures over two years. The MPG over those 2 years and 30-40k miles driven this way has been 48.5 +/-1. Now we have a +4.5. I think I can safely rule out driving habits, including driving slower.

The gasoline mileage is calculated by the Prius both instantaneously and over time, until you reset the counter. My wife resets the counter every time she gets gas. I have considered a sensor malfunction as a possibility, but it seems unlikely based on the observed behavior.

This behavior started exactly upon a fillup, and it has persisted througout the entire tank of gasoline (now down about 60%). Purely on circumstantial evidence, I suspected the gasoline. Nothing else I've seen suggested on this thread seems remotely plausible.

The mileage computer resets automatically when more than 4 gallons of gas are put in the tank. It can also be reset manually by pushing the reset button on the touchscreen. I've tested the accuracy of the computer by doing mileage the previous way, and I'm confident in its results. It might just be the gas, as you say, since I certainly notice the mileage difference when I'm able to get non-E10 gas. After this winter, I'll likely purchase new tires and will watch closely for improved mileage. I guess your mileage improvement will remain a mystery.

Has anyone looked at the apparent MPG increase with old tires simply due to their having a smaller diameter?

Let's say a tire has 1/2 inch of wearable tread and an initial outer radius of 13 inches (just a guess). When the tread has worn down 1/2 inch the radius is now 12.5 in. The distance the car travels per tire revolution is its circumference or 2 * pi * R. In the above case the car travels 81.7 inches/revolution on new tires and 78.5 inches/rev on the worn tires.

This means that for a car driven the same number of miles on new and old tires, the odometer (which measures wheel revolutions) will register about 4% fewer miles on the new tires than on the old ones, making MPG appear lower with the larger, new tires. The odometer doesn't account for differences in wheel radius.

Certainly new tires are "stickier" and might be less efficient than older tires, but is the MPG difference mainly due to this, or is it just that for the same distance travelled, the lower rate of odometer change makes you think you got better mileage?

Tire diameter does make a difference in speedometer and odometer readings. It is not uncommon for people to buy a tire that is not the same size as the manufacturer's original tire. Often because a the price is less expensive for a slightly different tire size or simply because the original size is not in stock. From a mechanical point of view, as long as the tire size change is small and it does not contact the suspension or body, it is not a big deal. From a cop's point of view, you might find what you think is driving 7 mph over the speed limit turns out to be 12 on radar:)

I still have not figured out how to post links properly without simply pasting, but here is an interesting tire size calculator that shows you exactly what how your mph and odometer will be affected when you change tire sizes.

And, as the previous poster mentioned, tire wear will also have the same effect.


Sorry to say, since you all seem so convinced, but tire size has nothing to do with your distance per fuel use unless you get out of the car and use a tape measure to check your distance...on most cars and trucks, the speedo runs off of the transmission gear at the output shaft. Soooo. DASHBOARD mpg is based on the shaft revs which will remain constant at all tire levels (as a ratio to engine speed..Trans output shaft will turn the same number of revs in 5th gear regardless of tire size)when you drive drown the road. If you change tire size you must recalibrate the ecm. Some cars and trucks can do this, most cannot. In the old days, a worm gear was driven off of the front tire to get speed reading and as a result, odo tally. We all know of used car guys that ran the speedo backwards with this cable to lower miles on a "Florida car driven by an old lady to church"...now, modern electronics bypass many of these, although it can still be done on almost any vehicle.

do you have cooler (air conditioner) cooler weather will result in way better mileage. Also windows up or down will make 2 to 3 mpg difference...

Actually as I noted above, warmer weather provides the Prius with better mileage as colder weather causes higher discharge rates from the battery pack. When our Prius is in constant 70+ degree weather (including overnight), we get anywhere from 2-6 extra mpg depending on driving conditions. The Prius even has a temperature sensor to warn when the outside temperature drops below 37 degrees because greater rates of discharge occur at that and lower temps.

I used to autocross and race modified street cars with a group called NASA - There's a lot to be learned about setting up a suspension.

I found that the single most important factor in the rolling efficiency was the toe-in, which is typically set at the factory to several millimeters to make the steering return to center, and feel more stable. I have my street car set up with zero toe, front and rear, and also with significant negative camber. It makes a huge difference, especially with the sticky, high-performance tires that I run.

Now I routinely get 35mpg from my thrashed, ancient '96 2L VW GTI, with many of those miles in the city. The best I've managed is 530 miles on a tank, which is over 41mpg. I swear! At this point, the only way that I can add much to my "hypermiling" score is by shutting off at stoplights - like a Prius with a manual control. But guess what, I finally had to replace the starter, with 175,000 miles on it. No surprise there.

More minor improvements in fuel economy resulted from running low-viscosity Mobil 1 oil, which does not thin out when hot like low-vis conventional oils, so it doesn't risk the engine. Synthetic oil also lasts longer, so it saves money and reduces waste since it needs less frequent changes. A low-restriction K&N air filter helps too, as does the performance chip. Yes, the oil, air cleaner, and chip all add to the max engine horsepower, but they also make the engine more efficient at low rpm too.

I do all this for fun, since I'm no longer in the game to see how fast I can get from A to B. Much of the fun results from seeing how close I can get to my family members' mileage results in their shiny new matched Priuses (Pria?). At $28k a copy, their 45mpg would take me a couple lifetimes to recoup in fuel cost.

A couple of other ideas.

Replace old incandescent bulbs (except headlights) with LEDs. Less parasitic loss. They last longer too.

Carry less weight. At an extreme, do not fill up but go from 1/10th to 1/3 full tanks plus no unneeded weight.

Keep car aligned, filters clean,.



do you have cooler (air conditioner) cooler weather will result in way better mileage.

I am usually pretty tough heatwise, usually don't need the AC until the temp reaches the low to mid nineties (Cali dryness helps here). But I noticed I got just as good mpg running with AC at 110F, as with fans at 90F.

Scaling of drag. Assuming the drag coefficient doesn't change, due to stuff like the change in the Reynolds number, drag scales as velocity squared. Power, is drag times speed, which will go as the third power. But power/speed is energy per unit distance will go back to velocity squared.

The biggie with the Prius is to maximize the time when the ICE is off. That means trying to maximize the benefit (time/distance) you get from the limited charge in the battery. Don't use the battery to accelerate, or climb hills, but only to maintain speed (or even to let your speed gradually decrease). Also a light brake foot maximizes the capture of kinetic energy to the battery, i.e. regenerative braking. Using a light foot for both braking, and acceleration means planning ahead and letting the vehicle do what is needed in the most efficient manner. Few drivers do this, but the fuel savings can be substantial (15-30%).

Bid of $1.75 on eBay gets abandoned Saginaw home

Her bid was one of eight for the home.

"I am going to try and sell it," she told the newspaper. "I don't have any plans to move to Saginaw."

Smith said she hasn't seen the property or visited Saginaw, which has been hard-hit by economic troubles in recent years.

There's a notice on the door of the home saying a foreclosure hearing is pending, the newspaper said. She must pay about $850 in back taxes and yard cleanup costs.

I am somehow reminded of "The Ransom of Red Chief," where two ne'er do wells kidnapped the child (who turned out to be a little hellion) of a local banker and demanded a ransom. The banker countered that if they would pay him a few hundred dollars, he would take said hellion back, provided the men brought the kid back at night, since the neighbors, thinking that the kid had disappeared for good, might resort to violence if they saw someone bringing him back.

Raising Arizona!

"Biology and the prejudices of others conspired to keep us childless. "


Paid too much. Should have negotiated seller concessions to pay back taxes and spring for a coat of paint.

Her bid was one of eight for the home.

Can you imagine being one of the 7 losing bidders?

"Yeah, I bid a buck fifty for a house. And I lost it. By TWENTY FIVE CENTS."

I mean, Damnnn... I'd have paid $20, stripped it for materials (wood, copper, etc.) and given the lot to the next door neighbor if they would pay the property tax. Or 'donated' it to the fire department for, um, practice...

Look at the photo in the story. Not much there. Who will buy them, how do you transport the materials?

At $851.75 payment, and guessing at a 50x100 lot, that's $7400 an acre. Much cheaper land in MI I bet.

I always thought the best buyer for a seller is his neighbors. They know the place, often see the most potential. When they don't want it, dig deeper. Everyone dreams of the out of state bid, the California buyer. Those days are ending.

Look at the photo in the story. Not much there. Who will buy them, how do you transport the materials?

Copper is about $3.50/pound. I'm sure there's a local market for it... As well as for any other metal in the house.

The wood... Probably also a local market. My grandfather bought a house for some rediculously small price a while back that was slated for demolition because it was in the path of a new highway. Why did he do that? He took the studs and other materials to build a new garage. I would guess that someone would have a use for this... Even to burn.

Any other trim/etc... Again, maybe a local market, maybe you take it home.

The lot to a neighbor... I'm sure that someone would buy this for $1000...

But, I agree that this woman probably bought herself something with an intrinsic negative value. Her loss, however, probably won't be much more than $1,000 tops...

I recall some people in New Mexico buying an old mining shack. Apparently heavily heathered (100 years) wood can be sold for a pretty good price, because of its presumed artistic value.

Two video clips, four years apart, the trailer for the 2004 End of Suburbia video and a highly recommended 12 minute video of "Foreclosure Alley" in California, linked at Calculated Risk:


Foreclosure Alley:

"Foreclosure Alley" is just shocking!

People are abandoning everything -- EVERYTHING -- when they leave their houses, and it's all being "trashed out," that is, TAKEN TO THE DUMP!

Then, the brown lawns are spray-painted green so it "looks nice."

This is "The End of Suburbia," cubed. It reminds us of what geniuses and prophets Gregory Greene and the rest of that crew are.

It made me semi-ill to watch - all of those new pieces of furniture, kitchenware and electronics going to the dump - what makes no sense to me is why the owner of the the "Trashout" business doesn't have a second trailer that he loads with the better stuff - I'd have a crew of high school kids listing on craigslist and ebay or going to local swap meet with it every weekend - even $10 for one of those tables they are trashing would add up fast as a side business if you are doing this to 15 houses a day....

computers? dvd players? giant screen tv? nice-looking lamps? all stuff worth enough to sell I'd think...probably all bought with credit cards or home-equity lines - so just walk away...

It is something that you kind of watch in mute horror. . .

But the workers are keeping the better stuff. There is no way that a large screen TV went into the dumpster.

As somebody who has cleaned out a house after a relative died I can tell you that it's impossible to get rid of stuff, especially on short notice. I took things to charity places but once there it was obvious they had mountains of this kind of stuff already. I took recent bestsellers to used bookshops and they didn't want them (I donated them to the local library, where you guessed it, they had mountains of donated books already). I had estate people come in and they didn't want any of the furniture. And getting somebody to come and pick up the larger pieces would take days if not weeks of notice.

In the end I just sort of spread the word around and told people they could just come and take whatever they wanted, like a free garage sale. I managed to 'get rid' of most things but it took the better part of 6 weeks and this was before all the foreclosures. These guys are doing so many a day there's just no way.

You would think the TV got rescued but who knows? If you listen you can hear that guys can only take what they can carry away right then. They're probably all travelling together in one car. The house has to be empty in just a few hours and then it's off to the next one. There's no packing material and that TV would probably only fit in the back of a pickup truck.

If they've been doing a dozen houses a day, everyone on the crew (and their friends) probably already has a big screen TV. And a nice sofa.

I agree with the idea of setting up a side business and listing stuff on Ebay / Craigslist, but I guess it would be hard to do that AND keep their contract with the bank, which is clean the house out quick and leave nothing behind. This guy had a hard time just meeting up with a charity truck. He has 70+ employees and no lack of work. Wow.

After reflecting on the video, I had a couple thoughts:

All these people that walked away from their homes will likely never get a mortgage again, thanks to the tightening credit laws. It's possible (can't say without more detail) they should never have gotten one in the first place.

With so many folks (hundreds a day) leaving their homes, where are they all going?

A bunch of the "stuff" they are throwing out was possibly (likely?) bought on credit and they are walking away from those bills, also. So don't cry too much for the big screen TV or computer they left behind, chances are Best Buy or Radio Shack or whomever is getting stuck with the bill for it.

The guy paying $3,000/mo on a house that's worth $1,000? Think he's still there?

So much stuff -- but the rate at which you can liquidate it ends up being limited. The effort needed to take care of the job in the needed time period outweighs the value of the stuff.

Seems like a reverse metaphor for peak oil -- "plenty" of oil in the ground, but we just can't get it at the flow rates we need and/or the value of getting it can't be justified in terms of ERoEI.

For all those who say "all that stuff going to waste... what a disgrace"... I imagine most Joe Schmoes will be saying something similar in regard to oil at some point: "But, but, but... WE HAVE ALL THIS OIL IN THE GROUND!". ; )

They 'trash out' fifteen homes a day (of the 470 a day in the area that are foreclosed).

Anybody trying to chart 'peak foreclosures?'

@Foreclosure Alley

Wow, all of those goods being buried in a landfill. What a disgrace.

Did anyone catch the huge 'landfill-buried' pun of the video website name?

SoCal Connected = So CalORIE Connected = what a waste of energy!

Behind a paywall, but you can get in through Google News:

China's Thirst, Saudi Clout Buoy Oil Prices

Two stalwarts are still standing between the world's slumping economies and a steep drop in oil prices: China and Saudi Arabia.

The credit crisis and fears of a recession have sparked some predictions in recent weeks of an imminent plunge in crude prices. A global recession could clobber demand, causing a surplus in supply and a swift fall in oil prices, the argument goes.

But so far, prices have been surprisingly resilient, bobbing around $100 a barrel for weeks, despite the U.S. stock-market turmoil and congressional wrangling over a financial rescue package. Two of the main forces keeping oil aloft, analysts say, are China's continuing thirst for it and Saudi Arabia's ability to tighten the spigot on world supplies when it pleases.

Buffett Buys BYD's Battery Brain Trust

In the midst of financial turmoil elsewhere, a vote of confidence went out Tuesday to the Chinese battery manufacturer and automaker, BYD, when MidAmerican Holdings, a division of Warren Buffett's Berkshire Hathaway, announced a $230 million investment in the company.

That gives MidAmerican a 10 percent stake in BYD, with the stated goal of developing storage devices for solar and wind energy, according to Bloomberg News, as well as improved battery technology for electric vehicles.

Buffett Invests $3B in General Electric

General Electric received a vote of confidence Wednesday afternoon from billionaire investor Warren Buffett, who made a $3 billion investment in the corporate conglomerate.

On top of a newly announced $12 billion common stock offering, GE (GE: 24.54, -0.96, -3.76%) said it has sold $3 billion in perpetual preferred stock to Berkshire Hathaway, Buffett’s holding company.

GE also backed its 2008 earnings guidance provided a week ago and said it is on track for third-quarter financial-services earnings of approximately $2 billion.

Man Gets Burned While Using Lighter to Siphon Gas

MUKWONAGO, Wis. (AP) -- Police said a man was arrested after he used a cigarette lighter while trying to siphon gasoline from a van. The man, who was visiting friends, went to drive home early Saturday but realized that he didn't have enough gas in his SUV.

Police said the man tried to siphon the gas with help from another woman, but he couldn't see how much gas was in the container, so he used the lighter to check.

Oops. Might be a good idea to make sure you've got a locking gas cap on your vehicle as our energy crisis deepens...

"He was arrested on suspicion of theft and negligent use of burning materials."

I love the weird charges they can tag on someone nowadays...

Behind any strangely worded state law, there is always a story.

Might be a good idea to make sure you've got a locking gas cap on your vehicle as our energy crisis deepens...

I have come to the determination that I would prefer to lose the gas in my tank versus having someone cut my fuel line or puncture a hole in my gas tank. Of course if the thief is bucking for a Darwin award by using a flame to illuminate his work space, hopefully my insurance company will replace the vehicle :-)

My Bonnie peered into the gas tank
the height of its contents to see
she lighted a match to assist her
Oh bring back my Bonnie to me...

I'm shocked by the Toyota numbers. I was not expecting that.

Total sales for Toyota, Lexus, and Scion were 50% higher last Sept than this Sept. 50%!!!! Talk about implosion. Better save that bailout money to buy tazers and body bags at the rate things are going.

I was surprised too, but Toyota does make a large number of SUVs: 4Runner, Land Cruiser, Sequoia, etc. Lexus is kind of a luxury vehicle for those who still want a reliable car. I'm guessing a lot of those people will downgrade to another car.

Also, for about ten years now Toyota has been charging a lot of money for their cars and I haven't observed any increase in quality. Actually, I suspect there was a decrease as they increased their production and moved it away from Japan. So maybe it's not surprising they'd get hit this hard. Who would want to pay a premium for a Toyota when there's a Honda that's just as good or better and costs less?

IMO, Toyota quality has gone down, yet they still charge a premium over Honda and Nissan.

We are very disappointed with a Toyota we purchased only a few years ago; it's running ok but cheap bits of plastic are all but flying off the car inside and out. On top of this the local service department is downright nasty when you question something (we took something in we thought was under warranty, it wasn't so we said don't fix it. The manager accused us of trying to "steal" from his department budget for having the nerve to think a three year old car shouldn't be having this problem!)

That's all I'll say about that. I'm not surprised to see numbers down, given the slacker quality lately.

I've heard that too: Obviously, it can't be Toyota's problem because Toyota makes perfect cars. If must be your fault.

I had a fiasco with a 1991 that I bought that was kind of like that. After that, a neighbor had a 1987 4Runner for $2k. I bought it and that one has been running for 7 years now, when it dies I'm going for a Honda or something else small and fuel efficient.

Toyota's legendary quality numbers came from superb numbers on the Corolla and Camry, and for a long time those carried slightly lower numbers for everything else.

For both Toyota and Nissan, their big vehicles suffer more quality issues than any of their cars Of course those are the ones built in the US, so some blame US labor and factories while others blame the lesser design investment.

I have a small question:

How much natural gas do you have to burn (in a gas-fired powerplant) to get 1 kWh of electricity?

I know it depends of coarse on the type of power generator, but what is the ballpark figure?


Gas power stations tend to be a single turbine for peak power ~40% efficient requiring 2.5kWh of natural gas Or a combined cycle system which tends to run more constantly with about 60% efficiency using about 1.6kWh of gas. These conversion efficiencies are (one of) the reasons why the price of electricity is much higher per unit than fossil energy.

Any thermal conversion is less than 100% efficient thermodynamic processes are limited by carnot cycle efficiency which depends on the difference between the hottest and coldest parts of the cycle, this is the reason that newer coal plants are more efficient than the older ones as the operate at higher (supercritical) temperatures and although emissions are reduced slightly per unit of electricity produced it is still by far the most carbon intensive form of energy production (except shale)

All the cars you see rated at XHP actually use 3XHP's worth of petrol and put out 2XHP waste heat!


Nuclear power must go through this same bottleneck (unless smaller reactors can be used in CHP applications) and IMO this affects the EROEI in comparison to wind. The following calculates an energy return using centrifugal enrichment of 58:1 but the useful energy delivered is only about 40% of this which drops the EROEI down to 23:1 still better than most alternatives but falls well below wind which shows improving EROEI with larger turbines sizes with modern multi-megawatt machines having energy returns around 30-50 with most of the materials recyclable.

I'm not anti nuke, I think we need every non fossil energy source we can and the sooner nukes push coal off base-load the better. I just get annoyed with the way some alternatives are promoted in a vacuum


So you say one would have to burn 2.5 kWh worth of natural gas to get 1 kWh of electricity, right?

How much cubic feet (or m^3) is that?


I heard on CNN that the Capitol server is crashing due to high traffic load - irate voters letting their elected officials know how they feel about the bailout.

IME, it's true. It's slow as molasses, if you can even get in.

Obama's speech just now plecked me off. He tried to claim the taxpayers would make money on the deal. Either he's an idiot, or he's lying like a rug.

Warren Buffet essentially was saying the same thing today...he said he would take 1% of the fed bailout deal because he thinks the market price of these assets are at a good price and he thinks they'll make money.

Warren Buffett would publicly say the Moon was made of blue cheese if he thought it would make him a nickel (feel free to downrate this because everyone knows the folksy Grandpa doesn't do anything just for the money).

No, I wouldn't downrate you on that score. But if you weren't already at zero I'd downrate for not knowing that the Moon is made of green cheese, not blue.


Obama is real sharp-I am starting to think his dream is to become Hank Paulson someday.

NPR ("Marketfarce") just issued an ad hominem attack on citizens opposed to the bill. They had a Psychobabblist inform us that people are opposed to the 700 billion dollar package because they want revenge on Wall Street.

Not because it's a bad bill that grants unprecedented powers and sends US taxpayer monies to foreign investors; no, it's because people are "predictably irrational."

Unfortunately for us in the US, there's no way off this insane cruise ship to hell.

They're all saying taxpayers are likely to make money on the bill.

It's because they have near-cornucopian viewpoints, and stress the point that, "The market will recover."

I don't think they have cornucopian viewpoints. I think they're lying sacks of fertilizer. Ron Paul isn't afraid to call a spade a spade.

We should get out of the way and not buy up bad debt. There's illiquid assets, but most of those are probably worthless. They're mostly derivatives. And we're sticking those with the taxpayer. So we have to recognize that the liquidation of debt is crucial. And if we did that, we would have tough times, there's no doubt about it, for a year. But if we keep propping a system up that's not viable, we're going to have a problem for decades, just like we did in the Depression. That's what we're on the verge of doing.

"I think they're lying sacks of fertilizer."

I think you meant "lying sacks of O-NPK"


But will it matter? 10 years from now, when world oil production is down to <70 mbpd, what difference does $700 billion more in the hole make? We're boned either way.

And yet, I can't take my eyes off it. I don't want it to pass but I think I will be releived if it does: just one more month of BAU before the rest of the "spit" hits the proverbial fan.

Yes, it matters. It matters even more, IMO. If resources are scarce, that's even more reason to be careful how we spend our money.

One of the most impressive parts of this scam is the way the MSM has convinced a lot of the public that 700 billion isn't a lot of money. You will notice that every advocate, from Bush to Obama takes pains to never mention what 700 billion dollars of immediate spending on e.g. rail, nuclear, wind and solar would do to the USA economy.

It'll buy time till after Obama is in office, then when TSHTF 'fer reals' everyone can blame him.

But, notice how nobody seems to notice who gets blown up by car bombs over in the sandbox these days?

It's hard to compete with Billions for Bankers for any sort of time on the news right now.

Look on the bright side, it takes exactly the same resources to print a $1 billion bill as it does to print a $1 bill. We can even put Bush's picture on it! We can use them to light the campfires in our Bushburgs beside the tracks...

No, no. It's "Shruburbs."

"We should get out of the way and not buy up bad debt. There's illiquid assets, but most of those are probably worthless. They're mostly derivatives"

Leanan: Thats the whole point of calling a spade a spade....you don't call it something it isnt.

George Bush appeals to the public in a televised speech and says..."So we can unclog the system of these bad assets"

Did you catch that? "BAD ASSETS" is the term for worthless debt notes. Like calling dead civilians "COLLATERAL DAMAGE"...(people) become (collateral) and (dead) becomes (damaged).
Almost sounds acceptable....like a few soft tomatoes out of an entire field of vine ripened beauties.
Alluding that what clogs the system MIGHT actually be an "asset" is tantamount to calling people collateral and dead collateral, damaged!

I don't think they have cornucopian viewpoints. I think they're lying sacks of fertilizer.

Sweden's banking system had a similar problem in 1992, and the government executed a similarly-large "bailout". It turned out to cost little or nothing in the long term, though, as the government's ability to be the ultimate "buy-and-hold" investor allowed them to sell back what they'd purchased after markets had calmed. Not immediately - some of those sales happened years later, and the Swedish government still owns some bank equity it acquired at that time - but it's a real question whether the "bailout" made a direct profit or loss for the Swedish government (it depends on the rate of return one would demand to call it a profit), so it's not at all unreasonable to suggest that the US government could arrange a similar situation.

Of course, that doesn't mean the current bailout legislation will do so; from all accounts, it's inferior to the Swedish legislation, which saw the government take significant equity in banks that needed its help. This legislation (online here) also seems to be lacking accountability, which is a problem. As Krugman puts it:

"So am I for the bill? Yuk, phooey, I guess so. And I’m very angry at Paulson for putting us in this position."

This bailout bill may be shoddy, but the idea that a well-executed "bailout" can eventually turn a profit is far from crazy.

There's illiquid assets, but most of those are probably worthless.

Probably not, actually.

Calculated Risk - who is far from bullish on housing - estimates $840B of total housing losses, peak to trough, and financial firms had already written down $500B as of a month ago.

Obviously, one can't simply subtract those two numbers, but it's likely that a substantial portion of the eventual losses have already been suffered. That doesn't mean the bailout bill is a good one; it just means that its eventual pricetag is likely to be substantially less than the $700B nameplate value.

I could support a Swedish-style bailout. (I posted that link myself, a few days ago.) But near as I can tell, Paulson's plan is specifically designed to not be a Swedish-style bailout. As others have pointed out, the Swedish plan resulted in a lot of short-term pain. I think that is what they are trying to avoid. (And I think they will be unsuccessful, whether the bailout passes or not.)

U.S. Senate Attaches Energy Tax Breaks to $700 Billion Bailout

I've been wandering thru the new Senate Version. The WSJ has a copy available (PDF warming), but it may be behind a paywall for most folks.

With all the tax credits and other energy related additions, the PDF file is 451 pages, double spaced. It looks like about two thirds of the text is the energy portion. There's more to the energy portion than just renewable, as there's incentives for "clean coal" and CO2 sequestration. And, there are added taxes for the oil companies, primarily in the accounting of foreign income. There are even rules for new appliance efficiency and building energy conservation.

I'm sure there's much more to the energy side of the bill that I haven't had time to digest. This is a massive bill, which I think won't pass the House, since they've already shot down both the banking bailout and the energy tax credits. While I would be in favor of a simple extension of the tax credits for renewable energy, the dump everything into the kitchen sink approach would seem to lead to defeat as more votes may be lost than gained.

E. Swanson

So the Senate has passed it. Does anyone know if it contains the "not subject to review by the courts clause"?

By the time the thing gets merged with whatever passes in the house in conference, and line item vetoed by signing statement, it could say just about anything. Including about what Hankie Pankie asked for originally.


According to the EIA there were a billion barrels of oil discovered in Angola during 2007, they had an estimated 8 billion barrels of oil January 2008. They are a top three African producer. Ten more land blocks might be opened to exploration in the future. With what is known about existing blocks:

"Despite the expense of developing the deepwater and ultra-deepwater fields, Angolan oil production has grown rapidly over the past decade and will continue to do so in the short-term. Industry analysts (Wood Mackenzie/Petroleum Intelligence Weekly) estimate that at current reserve/production ratios, total production capacity will peak at around 2.5 million bbl/d in 2011, before slipping to 2.4 million bbl/d by 2013." (EIA)

One unconfirmed source indicated oil development and production costs $70. a barrel in the Angola deepwater. Am not sure if this includes royalties and fees.

Petrobras stated they were going to Angola to search for a subsalt oil play.


Petrobras reported finding 10 billion barrels at Tupi and Iara, with another 2 billion barrels of light subsalt oil reported this week at Espirito Santo.

Carioca is a subsalt hydrocarbon discovery in an area not fully evaluated, but initial hype about the field was that it was potentially larger than Tupi and might contain tens of billions of barrels of oil.

There has been an initial high success rate in Petrobras' subsalt exploration.

And in the nine months since 1/1/08, the world has used, from fossil fuel + nuclear sources, the energy equivalent of about 55 billion barrels of oil.