DrumBeat: October 22, 2008

Organic farming 'could feed Africa'

Organic farming offers Africa the best chance of breaking the cycle of poverty and malnutrition it has been locked in for decades, according to a major study from the United Nations to be presented today.

New evidence suggests that organic practices – derided by some as a Western lifestyle fad – are delivering sharp increases in yields, improvements in the soil and a boost in the income of Africa's small farmers who remain among the poorest people on earth. The head of the UN's Environment Programme, Achim Steiner, said the report "indicates that the potential contribution of organic farming to feeding the world maybe far higher than many had supposed".

OPEC Agrees Oil Markets Are `Flooded,' Ghanem Says

(Bloomberg) -- The oil market is ``flooded'' with crude and an OPEC output cut of 1 million barrels a day won't be sufficient, Libya's top oil official said.

``We are in agreement that the market is flooded and oversupplied,'' Shokri Ghanem, chairman of Libya's National Oil Corp., said today in a telephone interview from Tripoli.

Natural gas cartel would fail in bid for OPEC-like impact

To understand how it might unfold, a few facts need to be established.

The first is that natural gas has yet to become a global commodity, though it is slowly headed in that direction.

This means that any fears about an initiative like a natural gas cartel involving Russia and any number of producers based in the Middle East delaying the development of North American natural gas initiatives such as the Mackenzie Valley pipeline or the Alaska pipeline are unfounded.

Europe Says Gas Cartel Would Force Revision of Energy Policy

BRUSSELS, Belgium -- Europe would have to rethink its energy policy if Russia, Iran and Qatar go ahead with an OPEC-style cartel on natural gas, the European Commission warned Wednesday.

EU spokesman Ferran Tarradellas Espuny said the European Union preferred to see gas traded on a free and transparent market.

Venezuela banks on lower oil prices

CARACAS: Venezuela's budget is forecasting 15 per cent inflation and assuming oil prices of $US60 ($90) a barrel next year, the Finance Minister said.

Buying from a 'dying' car brand

When car brands go away, the service continues but your value can dry up.

Crunch may put price tag on environment

BARCELONA, Spain (Reuters) - The worst financial crisis since the 1930s may be a chance to put price tags on nature in a radical economic rethink to protect everything from coral reefs to rainforests, environmental experts say.

Farmers know the value of land from the amount of crops they can produce but large parts of the natural world -- such as wetlands that purify water, oceans that produce fish or trees that soak up greenhouse gases -- are usually viewed as "free."

George Monbiot: If an hour is a long time in politics, we must start thinking in centuries

From banking to the climate, the wreckage of short-termism is stark, and the need for a 100-year committee is plain.

Unnatural resources

As the world enters an age of scarcer resources, garbage dumps are being eyed for stores of valuable materials. To those on the vanguard of the race to find new kinds of fuel, landfills are nothing less than vaults of buried treasure lying deep beneath the earth.

Environmental failure: a case for a new green politics

The US environmental movement is failing – by any measure, the state of the earth has never been more dire. What's needed, a leading environmentalist writes, is a new, inclusive green politics that challenges basic assumptions about consumerism and unlimited growth.

All of us who have been part of the environmental movement in the United States must now face up to a deeply troubling paradox: Our environmental organizations have grown in strength and sophistication, but the environment has continued to go downhill, to the point that the prospect of a ruined planet is now very real. How could this have happened?

Farmer sees future fuel in switchgrass: As food prices soar, scientists and farmers look for a corn substitute

GUYMON, Okla. - Curtis Raines describes himself as "just a dumb old farmer" who's not afraid to ask an obvious question: Why grow corn for fuel when it could be used to feed hungry people?

"That just doesn't make a lot of sense to me," Raines said.

The 64-year-old Oklahoma Panhandle farmer is growing a 1,000-acre plot of switchgrass, billed as the world's largest of its type, to test whether the native plant can replace corn in making ethanol.

EPA’s SmartWay makes driving ‘green’ easier

Recognizing consumers’ need for a simple way to pick a clean vehicle, the EPA created the SmartWay program, which awards a SmartWay “Green Leaf” or a SmartWay “Elite Green Leaf” to the very cleanest of new cars.

Mexico Is Near Easing Oil Laws in Bid to Attract Foreign Firms

MEXICO CITY -- With oil prices falling and its own output fading, Mexico appears close to overhauling its nationalistic oil laws, allowing private oil companies to help find and produce more oil.

While the changes would be historic given Mexico's longstanding antagonism to foreign participation in its oil sector, the new laws may not go far enough to attract interest from big oil companies or help the country pump more oil anytime soon.

Diesel thefts on the rise in GP as shortage puts the brakes on trucking industry

As a diesel fuel shortage continues to sweep across Western Canada, Grande Prairie businesses are dealing with a spike in diesel thefts.

Companies are taking extra precautions against illegal siphoning, fuelling equipment immediately prior to usage rather than the usual evening fill-up.

“They suck diesel out of the truckers if they can, and the loaders sitting in the bush, any equipment sitting in the bush. It happened three times,” said Mohinder Singh, president of Nose Mountain Trucking.

“You have to put security there to watch, but we can’t really afford it, so we make sure that we don’t fuel up at night now. We started fuelling up in the morning.”

The company has lost around $15,000 worth of diesel fuel, he said.

General Assembly Members Discuss Gas Flow to Georgia

ATLANTA (MyFOX Atlanta) -- The severe gasoline shortage a few weeks ago has state legislators saying "never again." The push is on now to find ways to prevent the frustrating lines we saw after hurricanes shut down Gulf Coast refineries.

The gasoline shortage exposed a thin supply line and the impact of human nature. General Assembly leaders are finding answers are costly and could be years away.

Feds sneak controversial pipeline decision past residents

EAST EL PASO COUNTY, Texas - Crews are already building a new 28-mile gasoline pipeline here, despite vigorous protests from local residents and elected leaders, many of whom now say it's the government's turn to speak up and be accountable to them.

"It's like they didn't even have the common courtesy to alert us that the decision had been made," said Joe Cook, who farms in lands along the pipeline's proposed path near San Elizario.

The U.S. State Department quietly issued a controversial permit last month allowing the pipeline to cross the border and, in effect, giving the project a green light.

The permit, requested by a subsidiary of PEMEX, Mexico's state-owned oil company, relates to the construction of a 11.75" pipeline that will deliver gasoline refined in the U.S. to gas stations for consumption of gas-thirsty motorists in and around Ciudad Juarez.

Oil Companies Vie to Plug Skills Gap That Threatens Supply

Falling raw material and equipment costs in a slowing world economy offer an opportunity for oil and gas companies to solve the problems of rising costs and delays at major projects, but the industry again finds itself confronting a longstanding enemy - a shortage of people with the skills and experience to lead these developments.

If efforts to plug the skills gap don't succeed, senior industry executives say oil companies' ability to tap new and challenging hydrocarbon resources fast enough to meet demand may have already have reached its limit.

China seeking breakthrough in Russia energy

BEIJING (Reuters) - Chinese Premier Wen Jiabao will seek "breakthrough progress" on long-frustrated energy ties with Russia in talks next week, a senior diplomat said on Tuesday.

Wen will visit Russia from October 27 to October 29 before flying on to Kazakhstan for a meeting of the Shanghai Cooperation Organization of Central Asian states and their neighbours.

Iran Launches Delayed South Pars Phase 6

Iranian President Mahmoud Ahmadinejad launched phase six of the giant South Pars gas field Tuesday after a two-year delay, state television reported.

Phase seven is due to go on line by the end of the year and phase eight in May.

The three phases will produce 104 million cubic meters of sour gas, 158,000 barrels of condensates and 4,450 metric tons of liquefied petroleum gas a day.

Pakistan - People protest against unscheduled loadshedding

SHEIKHUPURA: Protests continued in different cities of Punjab against the unannounced and prolonged loadshedding on Wednesday.

The enraged protestors tried to attack the office of a Superintendent Engineer in Sheikhupura, following which extra contingent of police was deployed at all Wapda offices in the city.

Residents of Sheikhupura held protest demonstrations in front of Wapda offices against prolonged power outage and overbilling. They also set the electricity bills on fire and attacked the office of a Superintendent Engineer.

For many reasons, alternative energy is right for Lebanon

Lebanon has no shortage of economic, political and social problems, and one of these stands out as both cause and effect of multiple challenges: the energy crisis. This country needs considerably more electricity than it produces on the best of days, both individuals and companies pay hefty rates for poor service, our generating stations are in various stages of misuse, obsolescence and/or disrepair, and the government has thrown away billions of dollars to subsidize the national utility, Electricite du Liban (EDL). Successive ministers have employed various strategies to address this most intractable of boondoggles, only to be foiled, one way or the other, by the corruption and greed of the political class. Part of the solution, therefore, must lie in insulating this most essential of sectors against those who regard it as their personal money-making machine.

India says it will seek Mongolian uranium for its nuclear power plants

India is hoping to jointly explore for uranium in Mongolia, according to officials.

Currently, India’s nuclear power plants are only running at half their capacity due to a shortage of uranium-based fuel.

Electric car choices are increasing

With the energy crisis on people's minds, car companies are working feverishly to develop electric cars, and they're telling consumers that some of these cars may be available as soon as 2010.

Chrysler LLC formed a special team called ENVI to develop all-electric and range-extended electric vehicles. No price estimates are listed on ENVI's Web site, so it is difficult to say how much these electric vehicles will cost.

Sam Jarvie, general sales manger of the Provo Brent Brown Chrysler Jeep Dodge dealership, said he hasn't heard of the ENVI program or the electric cars. He said he doubts the ENVI cars will be available by 2010 or soon after.

"We've been hearing about the new Chevrolet Camaro for years," Jarvie said. "Have we seen one of those yet? No."

Housing Communites vs. Clotheslines

A few weeks ago, ABC News ran a story about clotheslines and whether or not Americans should have a right to dry their clothes outside. Several housing communities actually ban the practice, primarily for aesthetic reasons. It seems people do not wish to see their neighbor´s laundry flying in the breeze. Many others view a clothesline as; "Memories of a less affluent time." One individual, who was interviewed, said that he would much rather look at nature, not his neighbor´s laundry. It´s an odd comment when one considers the fact the use of a clothesline helps protect nature in the first place.

Rich world seen behind global pollution

NEW YORK (Reuters) - Rich countries are partly responsible for pollution from poor ones, including poisonous mining discharge, because they buy many of the raw materials and goods that produce the waste, environmental groups said.

China to Miss its 2010 Ethanol Target

According to a recent Reuters report, China will miss its 2010 ethanol as fuel target. This is because China is not relaxing control over non-grain feedstocks, at the same time as restricting ethanol production through grain.

Ethanol gets hosed

Researchers from the University of Texas at Austin say not enough people are considering whether they have the necessary water resources to meet the needs of new biofuel technologies.

Energy analysts Carey King and Michael Webber calculated the water usage of several fuels being developed in the United States as alternatives to petroleum-based gasoline and diesel.

Conventional ethanol and soybean-oil biodiesel were among the biggest water culprits in the study, which followed their research earlier this year showing the high water-cost of plug-in electric vehicles.

Michael Pollan Interview

Q: Newsweek ran a story arguing that the organic market was leveling off because it’s just too expensive in an era of higher food prices. Do you agree?

Pollan: No, I think it’s still growing quickly. The demand is still there.

What’s slowing the growth is that there is less incentive for farmers to convert to organic because conventional prices are so high. If you’re a wheat or corn grower you’re getting a real good price. Why would you endure the economic hardship of converting to organic farming?

It takes three years. You have to follow organic practices without getting the benefit of the organic label for your effort. It’s a big investment to make the switch.

That’s what’s slowing down organic growth.

The drying up of hope

The latest climate statement from the Bureau of Meteorology paints a picture of two rural Australias: the drought-ridden south and the well-watered north.

Bureau of Meteorology climate analysis head David Jones says the drought across southwest Western Australia, southeast South Australia, Victoria and northern Tasmania is longer and hotter than any before. "It is now very severe and without historical precedent."

Gas cartel could have a significant impact on Europe

As the secretary-general of Opec flew into Moscow yesterday to talk about oil, Alexei Miller, the chairman of Gazprom, was jetting out of Tehran after concluding talks about gas with Iran and Qatar.

We need not worry that Russia is about to join the oily club. Today's visit by Abdullah al-Badri is a formality, but the talk of a gas cartel is a different matter. A combination of leading gas exporters, no matter how tentative, could pose a serious economic threat to Europe. We should first discount the hoopla from Gholam Hossein Nozari, the Iranian Oil Minister, who proclaimed yesterday that the talks between Russia, Iran and Qatar had reached “a consensus to set up a gas Opec”.

No such thing is likely - we can forget any notion of horse-trading gas production quotas — but what we can expect, and what we ought to fear, is the exchange of information about prices, development schedules and investment plans. Mr Miller said as much: “We have agreed to hold regular — three or four times per year — meetings of the 'big gas troika' to discuss key issues of gas market developments.”

Why OPEC Won't Get A Bailout

LONDON - With oil prices tumbling below $70.00 per barrel on Wednesday, the pressure is on for the Organization of Petroleum-Exporting Countries to put a lid on as much production as possible. But even though the 13 member cartel has stepped up efforts to recruit non-OPEC members, such as Russia and Norway, don't expect these countries to offer a bailout with cuts of their own.

OPEC Risks Split on Cuts as Economies Reel, Oil Drops

Bloomberg) -- OPEC, founded five decades ago to unify oil producers, risks dividing members as the group plans to cut output and raise prices just as developed nations face their worst recession since 1983.

ConocoPhillips Profit Rises 41% on Oil, Gas Prices

(Bloomberg) -- ConocoPhillips, the third-largest U.S. oil company, posted a 41 percent profit increase, exceeding analyst estimates, after gains in petroleum prices more than made up for a drop in production.

Third-quarter net income climbed to $5.19 billion, or $3.39 a share, from $3.67 billion, or $2.23, a year earlier, the Houston-based company said today in a statement. Excluding such items as a divestiture gain, per-share profit was about $3.32, 13 cents higher than the average of 14 analyst estimates compiled by Bloomberg.

Big oil prospect in New Zealand, says Canada firm

Canadian oil explorer Trans-Orient Petroleum Ltd. said Wednesday it has found shale rock with the potential to contain billions of barrels of oil on New Zealand's East Coast.

The "world class source rocks" find in the East Coast basin region are "highly prospective for a fractured oil shale play," Trans-Orient Chief Executive Garth Johnson said in a statement.

McMoRan Discovery May Open `Frontier' of Oil Deposits

(Bloomberg) -- McMoRan Exploration Co.'s South Timbalier 168 oil discovery in the Gulf of Mexico may become a catalyst for finds in areas previously deemed too far below the earth's surface to hold large crude deposits.

The field, abandoned two years ago by Exxon Mobil Corp., is yielding crude at depths where only natural gas was thought to exist, said John Rogers Smith, a petroleum engineering professor at Louisiana State University. It's under shallow waters off Louisiana and may be drilled to almost 7 miles (11 kilometers) beneath the seafloor.

Proponents Push Fusion Power as Renewable Energy Source

The International Atomic Energy Agency and ITER, the International Thermonuclear Experimental Reactor Organization have signed a Cooperation Agreement, which aims to further the development of fusion nuclear energy.

How to Catch Evolution in the Act

Scientists are planning to take advantage of global climate change and catch evolution in the act. They hope to collect millions of seeds from wild plants over specific time intervals and, for the first time, document how individual plants adapt to changes in the climate.

Report warns of greenhouse gas leap

Beijing - China's greenhouse gas pollution could double or more in two decades says a new Chinese state think-tank study that casts stark light on the industrial giant's role in stoking global warming.

Russia may create oil reserve to influence prices

MOSCOW (Reuters) – Russia may create an oil reserve to influence global prices, the country's top energy official said on Wednesday, as OPEC's Secretary General prepared for his first ever meeting with a Russian president.

The resurrection of a decade-old idea of inventories comes as another sign of Russia's growing ties with OPEC, which has unnerved global consumers already worried by talks between Russia, Iran and Qatar to create an OPEC-style gas cartel.

"The Ministry of Energy is considering creating an oil production reserve, which would allow it to work more efficiently with prices on the market," said Russian Deputy Prime Minister Igor Sechin, who oversees the energy sector.

Oil falls below $70 on US recession fears

LONDON – Oil prices fell below $70 a barrel Wednesday as investors shrugged off a looming OPEC production cut after company forecasts suggested the U.S. may be headed for a severe economic slowdown that would crimp demand for crude.

Light, sweet crude for December delivery dropped $2.63 to $69.55 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.

The November contract expired Tuesday and fell $3.36 to settle at $70.89. Last Thursday, that contract had declined as low as $68.57 a barrel, the lowest since June 2007.

VTB Says $47 Oil Will Hit Refiners

Russian oil producers that have refining assets are likely to cut their planned investments if the price for Brent oil falls to below $47 per barrel, VTB said Tuesday.

Such integrated oil companies will break even at $28 per barrel of Brent oil, unless they take cost-cutting measures, the bank found in a research.

Petrobras May Extend Pre-Salt Investments on Crisis, Folha Says

(Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, may extend investments in the pre-salt oil area over a longer period of time because of the financial crisis, Folha de Sao Paulo reported, citing Chief Executive Officer Jose Sergio Gabrielli.

6 pipeline incidents occurred in B.C. in past 3 years

There have been six pipeline incidents involving hydrogen sulphide that meet Level 3 criteria — the highest — in British Columbia in the past three years, a spokesman for the B.C. Oil and Gas Commission said Tuesday.

Those six incidents include two in the Dawson Creek area, the region where police and other authorities are now investigating two recent explosions that appear to have been deliberately set.

ANALYSIS - Iraq spared worst of credit crisis, exposed to oil drop

BAGHDAD (Reuters) - By any measure, Iraq has had a terrible time since 2003. Yet when it comes to the global financial crisis, Iraq may for once be in a privileged position.

Tens of thousands of Iraqis have died in five years of rampant bloodshed. Much of the country's public works and infrastructure has been reduced to rubble. Educated Iraqis have fled the country en masse and reconciliation remains elusive.

But years of sanctions and isolation under Saddam Hussein's rule mean Iraq has not been woven into the fabric of a global financial system that is in the grips of its worst crisis since the Great Depression of the 1930s. "The good news, perversely, is that Iraq is not that tied into the international economy," an official at the U.S. embassy in Baghdad said, speaking on condition of anonymity.

Nigeria says not in its interest to cut oil output

ABUJA (Reuters) - Nigerian Oil Minister Odein Ajumogobia said on Wednesday it would not be in the country's interest to cut oil production as it would eat into badly needed revenues.

Russian Stocks Fall, Led by Lukoil, Rosneft as Oil Prices Slide

(Bloomberg) -- Russian stocks declined, led by oil producers OAO Lukoil and OAO Rosneft, after crude prices fell below $70 a barrel.

The Micex Index of 30 stocks dropped 21.09, or 3.2 percent, to 631.42 AS of 1:15 p.m. in Moscow, heading for the first decline in three days. The dollar-denominated RTS Index slipped 3.5 percent to 692.02.

Gazprom Net Reaches Record $10 Billion on Gas Prices

(Bloomberg) -- OAO Gazprom's first-quarter profit jumped 30 percent, as Russia's largest energy producer reaped record earnings from higher prices and greater natural-gas sales to Europe.

Gazprom Caught In The Crunch

LONDON - Frozen credit markets are making it impossible to borrow funds even for Gazprom, the Russian gas goliath that aims to become the world's largest company. Releasing its first quarter earnings on Wednesday, the Moscow-based company warned that the ongoing global liquidity crisis "could affect the ability of the group to obtain new borrowings and re-finance its existing borrowings," on similar terms to the past.

Jan Lundberg continues campaign against petroleum dependency

Jan Lundberg has been in the oil business a long time. For the last 37 years, the life-long activist -- who called Arcata home for 12 years -- has worked as both an oil industry analyst and in the nonprofit world, championing the campaign against society's dependence on petroleum and what he calls the “synthetic sea.”

”Some things have to change and it's not really about policies or better laws or identifying the criminal, it's more like what is our culture all about? Is it about bowing down to technology?” he said on the phone Tuesday from Portland, where he was scheduled to give a talk on the concept of peak oil.

Kunstler: The end of suburban life is coming

Americans had better get used to the idea that, one day, they'll live more like their great, great-grandparents than their parents.

A powerful combination of depleted oil fields, climate change, population growth and financial crisis soon will conspire to change the American lifestyle drastically, according to best-selling writer James Howard Kunstler.

And any hope offered by the recent dip in oil and gas prices is false hope, Kunstler, author of "The Long Emergency: Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes," said in a lecture Tuesday in the University of Georgia Chapel.

"Because the price of oil has gone down in recent weeks, the American public is once again going to get the false idea that we don't have a problem," he said. "We do have a problem, and it's a big problem."

Preparing for Peak Oil: Local Authorities and the Energy Crisis

"Global oil production is approaching a peak, followed by a permanent decline. It will radically change the way our societies are run: our transport systems, how we produce food, where we work and live.

There are a great many things that councils must do, and policies that need to be changed, if we are to have any chance of mitigating the economic effects of peak oil. On the plus side, some of these initiatives already exist (recycling, road pricing, etc.) but these efforts need to be significantly expanded, and there remain entire areas of policy that have yet to be addressed... "

Drilling rhetoric: Lifting the veil on four national energy plans

For many of us, conservation was always easy to resent. It represented all the stuff you wanted to do but couldn’t. Tied to land, oceans, and all that natural stuff upstream of the sawmill, conservation tells us to cool our consumption. That our motorbike isn’t welcome in this state park.

By comparison, “efficiency” (as in “marvel of”) is in blinding ascendance. Efficiency is for those of us downstream of the dam, where the power lines faithfully stream into our entertainments, lubricated motors, and chiming gadgetry. Efficiency doesn’t insist on self-denial, it promises technical patches that will allow us to do more with less. (Time will tell how far it actually goes toward shielding us from our high-waste lifestyle.) But the shift in rhetoric is as much to thank for today’s new energy debate as global warming’s conquest of Suburban Mind, the summer’s spike in gas prices, and Repub Swiftboater T. Boone Pickens’ rebirth as a new-style Energy Patriot.

Efficiency forever consigns Cheney’s Vader-like loathing to the afterword of the now-concluding Age of Oil. And it leaves the future open wide.

So, it should come as no surprise that all of the most significant national energy plans before us — those of Obama, McCain, Pickens, and Google — have efficiency, the smartest use of our generated electricity, at their core. Energy innovation is fast becoming our first stop on the road to the New Energy Economy, rather than gathering place of 4-cylinder weaklings. Obviously, the choices before us will require more than simply stopping the anticipated one-percent annual growth in energy demand. To eliminate the release of greenhouse gases, reduce our energy imports, and spur a sagging economy, will require much more than efficiency alone.

Energy: McCain and Obama share goals, if not strategies

WASHINGTON — John McCain and Barack Obama share remarkably similar energy policy goals, but they disagree on how best to achieve them.

Oil sands are model of development, U.S. official says

CALGARY - Canada's oil sands are a great example of responsible development of a natural resource, a senior U.S. energy department official said Tuesday.

Jeffrey Kupfer, acting deputy secretary of the U.S. Department of Energy, said he felt "invigorated" after visiting the Syncrude Canada Ltd. Oil sands project near Fort McMurray.

"It's a great example of developing an important natural resource, for Canada, the U.S. and the whole world, and doing it in an environmentally responsible way," he said in an interview.

Why Data Centers Can't Save Energy

The Department of Energy is asking for industry input on where it should place future research and development priorities in reducing data center energy consumption. It has much to learn--and much to teach.

For the immediate future, the DOE should de-emphasize improvements to facility technology as "the" solution. We already know a lot, and users aren't paying much attention. Working to make facility components marginally more efficient, when the driver of data center power consumption is the increasing numbers of servers and storage, misses the root cause of data center energy consumption growth.

Wal-Mart sees shifts in shoppers' buying habits

LOS ANGELES — Financial insecurity is forcing Wal-Mart shoppers to change buying habits, cut credit card use and live more paycheck-to-paycheck, the CEO of the U.S. division of the world's largest retailer said Tuesday.

Economic pain is leading to what Eduardo Castro-Wright termed "disturbing behaviors" among shoppers over the past few months.

...About 80% of shoppers cite "personal financial security" as their top concern in internal surveys, up from 65% just a few months earlier, he said. A year ago, the price of gasoline was the top concern.

Report: Toyota to post first sales drop in 10 years

TOKYO (AP) — Toyota Motor Corp. will post its first decline in annual global sales in a decade this year, hit by slowing demand worldwide amid the financial crisis, a Japanese newspaper predicted Wednesday.

Economy rocks China factories

Tao built River Dragon from a start-up with four employees into one of China's biggest textile printing firms in just five years. He had even grander dreams: He wanted to see his company's stock trade on Nasdaq alongside the likes of Microsoft and Intel.

The dreams are dead. River Dragon shut down on Oct. 7. Tao and Yan have vanished, leaving behind more than $290 million in debt and a lot of anger in this city 140 miles south of Shanghai in the Yangtze River Delta. The company's demise put 4,000 workers on the street and jilted hundreds of suppliers and creditors.

Tokyo leader berates countries on climate change

TOKYO (AFP) – Tokyo's outspoken governor on Wednesday berated world leaders for their "foolish" failure to halt global warming as major cities met to plan action on the climate.

Seoul turns to bicycles to combat global warming

SEOUL (AFP) – The Seoul city government has announced plans to build 207 kilometres (129 miles) of cycle paths over the next four years extending to all corners of the South Korean capital, according to officials.

The 120-billion-won (88-million-dollar) plan is based on a "road diet" programme, under which the number of lanes for passenger vehicles in major roads will be cut to create new cycle paths.

Data show U.S. riding out worst storms on record

More frequent and powerful hurricanes from the Atlantic Ocean and Gulf of Mexico since the mid-1990s have created one of the most dangerous and costliest storm eras in recorded history, a USA TODAY analysis of weather data shows.

Since 1995, there have been 207 named storms in the Atlantic basin, which includes the Gulf of Mexico — a 68% increase from the previous 13 years, according to statistics from the National Oceanic and Atmospheric Administration (NOAA). Of those storms, 111 were hurricanes, a 75% increase over the previous period.

Finance, climate crises two sides of same coin: experts

GENEVA (AFP) – The financial and climate change crises facing the world are interlinked and businesses can only tackle them through concerted, coordinated and coherent action, environmental experts said Tuesday.

"They can't be separated, they're two sides of the (same) coin and therefore the solutions have to be coordinated too," said Erik Rasmussen, head of a Danish think tank and member of the Copenhagen Climate Council.

OK. Good Morning!

Now, where were we? Oh yeah, bond/stock collapse imminent.

You can tell by contrarian CW. MondayAM all problems solved.
Is it too late to get in? Bottom's in, climb aboard!

Yesterday PM. Paulson to loan unlimited dollars to mutual funds
i.e. the US now owns another part of(isn't that everything?) of our financial system.

And why do the mutual funds need the bailout? Cash on hand for redemptions +stock to sell should be enough, eh?

Baltic dry Index, signal indicator for worldwide shipping rates
is Still in collapse mode, down 88% from July with not a single uptick.

Investment Grade Corporate Bonds. Is there still such a thing?

"There is a very real risk that this Treasury Issue could force GDP return on new debt below zero. If that happens then the stability of the monetary system disappears immediately and you will see instantaneous and very large fails in the Treasury marketplace."

Right now, only arrests at the very top can hold the center.

"an immediate and forced cut in all federal spending by fifty percent or more."

The Baltic Dry Index is "…an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain"

It also means that it does in part reflect the price of fuel (operating costs), which was at an all-time high in July. However I'm experiencing first hand the cargo market is weakening, especially for container feeders. I work for a crewing agency, furnishing shipowners with full crew services, which included flying seamen around the globe.

I remember reading last year, when the Baltic Dry Index was at its peak, that the shipping industry was fearing overcapacity, as lots of ships have been built recently. Shipyards had months or years of waiting lists.

Now with the drop in demand for shipped goods (oil, ore, Chinese toys,...) and the lack of credit for buying shipped goods, there is an over-overcapacity of ships.

Add the drop in fuel prices, and shipping prices are falling like lead in water.

Kudlow (CNBC) and his damned mustard seeds. Do mustard plants have any nutritional value?


Quite a bit more than Kudlow's metaphore:

cabbage, broccoli, cauliflower, turnip, rapeseed, mustard, radish, horseradish, cress and watercress.

If you click the Kunstler story the first thing I saw was this giant SUV ad. The counter argument not to buy such a thing is in the article below. Surreal.

Edit: clicking the 2nd time it's gone, but shows a furniture ad: "see what you can buy!"

It's like the old saying, 'Only Fox could air the Simpsons!'

Advertisements are often served by companies that search the article for keywords, then offer advertisements based upon the keywords found. Such is often the case at my site, where an article about colleting gold coins as a hedge against an inflating dollar often causes gold dealers to pop up in the advertisements.

~Durandal (http://www.wtdwtshtf.com)

One of the pro-transit/pedestrian/bicycle blogs I frequent (I believe it was streetsblog.org) once had a post pointing out a New York Times online article about a boy who had been hit and killed by a car, and how the article was surrounded by car ads, including one for the type of car mentioned in the article. Very nice how that "key word" system works.

My newspaper recently started an international version.

I consider this newspaper to be of high quality.

Latest headline: "Energy sector fined for fake green energy.

Dutch energy companies have been ordered to pay back 280 million euros in tax breaks they were given for green energy that was not actually generated from sustainable sources"


Summary of Weekly Petroleum Data for the Week Ending October 17, 2008

U.S. crude oil refinery inputs averaged 14.6 million barrels per day during the week ending October 17, up 447 thousand barrels per day from the previous week's average. Refineries operated at 84.8 percent of their operable capacity last week. Gasoline production dropped last week, averaging about 9.0 million barrels per day. Distillate fuel production increased last week, averaging 4.4 million barrels per day.

U.S. crude oil imports averaged 10.4 million barrels per day last week, up 239 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged about 10.0 million barrels per day, 5 thousand 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 nearly 1.1 million barrels per day. Distillate fuel imports averaged 181 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.2 million barrels from the previous week. At 311.4 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories increased by 2.7 million barrels last week, and are at the lower boundary of the average range. Both finished gasoline inventories and gasoline blending components inventories increased last week. Distillate fuel inventories rose by 2.2 million barrels, and are near the lower limit of the average range for this time of year. Propane/propylene inventories decreased by 0.1 million barrels last week and remain below the lower limit of the average range. Total commercial petroleum inventories increased by 9.5 million barrels last week, and are in the lower half of the average range for this time of year.

And here's what was expected:

NEW YORK - The Energy Department will likely report a 2.9 million barrel jump in crude oil reserves on Wednesday for the week ended Oct. 17, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

...Platts also expects gasoline stockpiles to rise by 3 million barrels, distillate stocks to increase by 600,000 barrels and refineries to increase capacity by 0.85 percent to 83.1 percent.

Price Elasticity of Demand ?
4 week avg and YTD 07 vs. 08

Finished Motor Gasoline   8,845   9,244     -4.3% -2.8%
Kerosene-Type Jet Fuel    1,447   1,593      -9.2%    -5.0%
Distillate Fuel Oil       3,949   4,191      -5.8%    -4.8%
Residual Fuel Oil           413     647     -36.2%   -17.3%
Propane/Propylene           904   1,159     -22.0%    -7.5
Other Oils                3,157   3,617     -12.7%    -7.9%

Total Products Supplied  18,716  20,450     -8.5% -5.0%


Late here...too busy to follow.

Closing our office and the moving truck arrives tomorrow.

BUT, look another down tick in Propane. Well, at least Distillates rose a bit.

What are going to do with all this gasoline?

Sorry, a little punchy...too many boxes to pack.

Hello TODers,

..“Fertilizer costs are expected to be higher in 2009 than they were in 2008. Pesticide prices may also rise, but due to the increased role of biotechnology it is not clear how much actual spending on pesticide will rise,” Francl said.

..The major worry facing crop producers will be continuing rising fertilizer costs.

“While you may see some moderation in fertilizer prices, there are no indicators of a serious collapse,” Young said.

Also, indicators point to falling corn prices in 2009. Young cautioned that cash prices for corn below $4 per bushel threaten farmers with a cost-price squeeze.
Recall my earlier weblink where another expert projects I-NPK prices to collapse--I have no idea who is right. Meanwhile, instead of ramping O-NPK recycling, we get this:

The Mother Of All Overflowing Toilets
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Rising inputs for farmers vs making a real profit:

To add to Bob's saga on NPK I had a discussion today with a farmer who is very very savvy as regards CBOT and crop prices. He farms an awful lot of land. Most rent or share.

He statement and I agree with it is this:

"Draw a line thru Champaign-Urbana in Illinois. Everything north of that line will grow corn. All south of that line will not grow corn."

Sounds a bit overblown so the reasoning is this. Up in that region they produce far greater yields than we do down further south of it.
The difference means you either 'make it' or 'break it'.

Farmers will not plant a crop that breaks even or less. Mostly less.

They will not be able to continue rotating corn with beans and wheat. They will essentially go soybeans only.

Its all about soil, weather, input costs and perhaps a few more factors.

So I said to him: "Well if so that would mean a massive decrease in the annual corn yield numbers for the USA!"

He said: "So what?"

Now one means of dealing with this scenario is to build your own grain storage bins and store your crop. Then you can avoid the 'basis' the graineries charge and thereby alter the bottom line on possible profits.

However runaway input costs might still deal that idea a deadly blow. Cost of installing bins is huge.

Another reason that further north in the corn belt they can handle corn is less insect infestation. As well as the fact that the corn remains standing lots longer than it does here. Blown down or wet corn due to weather reduces the yield quite a bit. Sometimes drastically.

We do have some blown down corn here due to the remains of Ike hitting us. As well as Southern Illinois.

So these are factors that are pretty much already in play and being analyzed.

We could in 2009 have a very very different corn yield in this country.

If so ? Goodbye to a lot of 3rd world economies and food.

The facts are falling into place. Just like dominoes. Of course it could all change and be a real good year...somehow I don't think thats in the cards..and lots of farmers are already living with a lot of risk.

Equipment and supplies are going thru the roof. Gas and diesel will likely come back higher than ever. Not for sure but who knows anyway?

Airdale-now back to putting up that next bin when instead I should be working on my 'lifeboat' instead of agriculture!!! I have to wolf my pizza for the storm front is approaching..and the bin must be covered or lose many thousands of dollars in one night...these are facts..this is life in the country

We own a wheat farm in WA (western australia) in the so called High rainfall region.

We have to make a decision about planting on next February. That means, whether we plant or NOT. If wheat prices (paper prices) would stay as low as they are right now, then in February we would decide NOT to plant anything. We are not willing to plant on a marginal basis.


One more factor that matters a lot is sunlight. Being farther north, they get more hours of daylight right when it makes the most difference.

Not to be too nitpicky, because I agree with what you're driving at, but the result of the south of Urbana not growing corn is an increase in the annual corn yields. Get those "marginal" 50-100 bu ac farms out of corn production, and the average US yield rises. The entire annual harvest, however, plummets.

I forsee falling ag land prices thru next year, and probably for some time after that based on these new costs, constraints-prebuy your fertilizer among others-and financial mess coinciding with low commodity prices. Folks will be going out of business, though I don't see that land laying idle. With world grain supplies the way they are, it's easy to see a whipsaw back. Your friend is smart to rent or share.

Wheat's well under 6 now. Hard to imagine that only last winter it came close to 25 for hard red, IF you could find it. People shake their head over oil's volatility, coming down from 147. Compare it to wheat.

The line is actually a bit south of Champaign/Urbana, and is in fact the terminal moraine of the Wisconsinian glaciation. Above the moraine was tall grass prairie, below it was mesic oak/hickory forest. Before I-NPK inputs the mollisols north of the line produced considerably higher corn yields than did the poorer soils below it. Interestingly, southern Illinois was settled & cleared earlier than the prairie to the north was, due to the difficulty in turning the prairie sod before the invention of the moldboard plow. The tall grass prairie ecosystem is virtually extinct today. A few depauperate vestiges of it in old cemeteries & abandoned railway right-of-ways is all that's left of it.

The line is actually a bit south of Champaign/Urbana, and is in fact the terminal moraine of the Wisconsinian glaciation. Above the moraine was tall grass prairie, below it was mesic oak/hickory forest. Before I-NPK inputs the mollisols north of the line produced considerably higher corn yields than did the poorer soils below it. Interestingly, southern Illinois was settled & cleared earlier than the prairie to the north was, due to the difficulty in turning the prairie sod before the invention of the moldboard plow. The tall grass prairie ecosystem is virtually extinct today. A few depauperate vestiges of it in old cemeteries & abandoned railway right-of-ways is all that's left of it.

J D Powers: Global auto market may collapse in 2009


And in related news on new housing starts; in the South, new single family housing starts are at their lowest since 1991.

In the other three regions (East, MidWest, West) new SFR starts are lower than they have ever been since statistics were first gathered in 1959. The worst in 50+ years !

The numbers for multi-family homes are "better" than SFRs (down, but not at record levels).

Statistics on building permits indicate that new housing starts will likely get worse next month.

Best Hopes for Aggressive Energy Efficiency Retrofits and TOD,


Consider that it costs about $50,000 per house to retrofit to super-insulated standards (R50 walls and R70 ceilings), that 2 trillion dollars Paulson and Bernake just sent to their wall street buddies could have retrofitted 40,000,000 single family homes. That is probably a large percentage of the total houses in the USA!
After retrofitting those houses would require little or no fossil fuels for heating and cooling.
That is a heck of a lot of fuel saved every year from then on (and no 10 billion per year to pay for the heating bills for the poor as they wouldn't need it).
Heck, if the government(s) would just eliminate the property tax increases on the homes that people retrofitted themselves it would be a big help.

No brainer, we think.

However, the "bailout" doesn't seem to be about saving energy.

Our Rep. David Wu finally wrote back to me with his explanation of why he ultimately voted for the bailout after all:

I understand the outrage of those who feel this recovery effort unfairly benefits the individuals responsible for our current economic turmoil. I share your anger and the view that greedy Wall Street financiers made reckless decisions that brought us to our current financial crossroads.
But the consequences of inaction would have widespread and lasting repercussions for each and every American household. We are in an unprecedented time of economic turmoil, and our window of opportunity to act in a meaningful way to reverse the course of economic catastrophe is truncated and immediate.
The flawed paradigm that enabled the current economic crisis has exposed taxpayers to an unacceptable degree of risk, and I am committed to ensuring that this regrettable scenario never again threatens the savings and livelihoods of American taxpayers.

True enough as far as it goes, but the underlying assumptions are: 1) That this is a first and necessary step in the right direction, not just more of the same easy-credit heroin; and 2) That any significant fraction of this bailout will go to citizens in need, rather than to hedge funds and the boards of the banks.

The fact is, by relaxing rules on transparency of their investments the Fed has allowed the banks to continue to lie about their net worth. Everybody knows it, so nobody is willing to lend to anybody for fear that the borrower will go claws-up tomorrow. Paraphrasing Ilargi, what can the Fed do? Frog-march the people at gunpoint down to the banks and force them to take out loans? Like the WalMart guy said, the people are choosing "disturbing behaviors" like not using their credit cards.


"-- Australia's annual inflation accelerated in the third quarter to the fastest pace since 2001, driven by costs for housing and food.

The consumer price index jumped 5 percent from a year earlier, the Bureau of Statistics said in Sydney today. Prices rose 1.2 percent from the second quarter, when they gained 1.5 percent. The median estimate in a Bloomberg survey of 16 economists was 4.8 percent and 1 percent respectively.

The surge in prices may limit the size of the central bank's potential interest-rate reductions in coming months. Governor Glenn Stevens cut the benchmark rate by 1 percentage point this month to 6 percent, the biggest reduction since a recession in 1992, to cushion the economy against a global credit squeeze that has roiled financial markets. "

Yep. That sounds like deflation to me.
Of course as one popular blogger says "Prices could go up but it would not be deflation...just like in Zimbabwe where prices are up 4 fold as I write this but since no -one has access to credit it is deflation..so there!

If the prices of goods go up faster than the amount of money you have to spend on them then I think you can afford to buy less - that is deflation of the economy, but inflation in the price of the goods.

Whether it is inflation or deflation depends on what you are talking about - there's a lot of confusion about this, just like peak oil!

House's Frank Calls for `Moratorium' on Wall Street Bonuses
2008-10-22 15:09:44.690 GMT

By Christine Harper and Alison Vekshin
Oct. 22 (Bloomberg) -- House Financial Services Committee
Chairman Barney Frank said there should be a freeze on Wall
Street bonuses until companies find a way to keep the year-end
payouts from encouraging excessive risk-taking.
``There should be a moratorium on bonuses,'' Frank, a
Massachusetts Democrat, told reporters yesterday in Washington.
``They have a negative incentive effect because they are the ones
that say if you take a risk and it pays off you get a big
bonus,'' and if it causes losses ``you don't lose anything.''
The five biggest U.S. securities firms paid out a record $39
billion in bonuses last year even as the credit crisis began to
affect investments in mortgage securities and leveraged loans.
One of the firms, Lehman Brothers Holdings Inc., went bankrupt
this year and two others, Merrill Lynch & Co. and Bear Stearns
Cos., were rescued in emergency sales. The two largest firms,
Goldman Sachs Group Inc. and Morgan Stanley, became bank holding
companies and are receiving $10 billion each of government money.
The moratorium ``ought to be for all firms'' and not just
for those eligible for the Treasury financial-rescue program,
Frank said. The halt on bonus payments should last ``until they
can get a better structure without that perverse incentive,'' he

This is priceless. The government creates moral hazard with its bailouts, showing there is little downside to making risky investments that turn bad, and now they complain that Wall Street shouldn't pay bonuses because it sets up a system where they get big bonuses when the bets pay off but don't lose when the bets lose.

Don't Cry for US, Argentina

Nate: I disagree. Supposedly the firms receiving the initial 250 billion will be paying out 70 billion in bonuses this year-if Paulson and the USA guv have the power to override the will of the populace and transfer the taxpayers' money to these firms to keep them afloat, the LEAST the taxpayer should expect is that their government would prohibit these bonuses as these are government supported entities (i.e. welfare babies).

...these are government supported entities (i.e. welfare babies)


So appropriate. They sure whine and cry like babies.

As always, it's welfare for the rich, and the middle finger for everyone else.

tin foil hat here. I know this sounds conspiracy-esque, but for all intents and purposes the world financial system is bankrupt. We have TONS of natural capital, but the markers used to represent this wealth are 'worth' more. Without growth, the debt of EU, Japan, US, can't ever be repaid. Basically we mine stuff out of ground, turn it into products that people desire, have babies, and generate dollars in our bank account. Now that can't continue. So I think its possible that all OECD currencies might peg to the dollar at some point. What's the alternative? Letting the dollar collapse - all countries know that this would mean war as US would not stand by and let oil be priced in something else while dollar plunged - that would mean we couldn't afford oil anymore (not that we can now -but the illusion is there of economic riches for everyone so they play the game)

Ergo, everyone moves away from dollar and there is war, or everyone moves towards the dollar for Bretton Woods III, and that works for a while (I doubt Russia or China would sign up). Iceland is a canary. IMF and other countries are giving them $6 billion to bail out banks. But many countries that are ponying up money are themselves 'bankrupt'.

I need to sort this out in my head, but the way the currency markets are moving, this 'fantasy' I've outlined above could happen in next few years. There is some breaking point in international fiat system where 'we' are the Bank of England and Soros is natural capital. I don't know when or where but something has to give. What are the alternatives?

Such a dollar link/Bretton Woods III suggests that the USA gets all the oil it needs and everyone else makes do with what is left over. Unlikely, IMHO.

Bi & Tri-lateral trade deals seem more likely.

Something like, Brazil buys machine tools from Germany, and sells coffee, orange juice and soybeans to an oil exporter. Brazil does not need oil, so they pay Germany with an oil transfer.

Unit of measurement for this trade ?

Likely not US$.


You realize that with tri-lateral trade agreements not priced in a 'currency' that the stock and bond markets will not exist. And the chaos that would ensue with that would require martial law or worse. So before there is a new international barter system there will be a new international currency. If it's not the dollar then there will be war for sure. We are in Iraq, Afghanistan, Pakistan, etc. over foreign oil and protecting economic hegemony, you think the US govt will stand passively by while the world trades in some other currency, leaving our costs to spiral out of control? ZERO chance of that happening without a large war. I wish it were otherwise.

To be clear, there are many other possibilities, even benign ones, but something other than US dollar as primary vehicle for international trade is not one of them, (unless US is kaput of course). In any case we can never predict the future with precision. Some unknown wrench always gets thrown into the works...

An investment advisor warned me years ago that as the dollar slides, the other fiat currencies would have to follow it down, or find themselves priced out of the biggest market in the world. Call it a gravitational peg - the dollar is "too big to fail!"

Nate -

You express fears that if everyone moved away from the dollar, it would mean war. Well, I think the question you must consider is: war against whom?

Sure, the US could try to bully a variety of weak small countries into staying with the dollar, but what is it going to if China and India start disengaging themselves from dealing in dollars - go to war against both simulutaneously? Are we going to invade Japan or Brazil if they go off the dollar? Take over the Saudi oil fields? (Oops ... that last one is probably already a complete plan just waiting for execution.)

Hell, the US has been fighting a war (or more accurately, trying to maintain a hostile occupation) simultaneously in two countries that are fourth-rate military powers, Iraq for 5 years and Afganistan for 7, and just look at how successful that excellent adventure has turned out.

True, two bankrupt people in various ways can pretend all they want to be bailing each other out, but that can never alter the underlying fact that both are bankrupt. It's becoming so painfully clear that the entire global monetary system is not just in trouble, but structurally flawed, probably fatally so. It's beyond me what's going to replace it.

Me too.
The smart thing to do is peg currencies to natural capital. But we don't access 'smart' when under stress, so that sort of arrangement will only happen after a war. I just don't know.

Best hopes for a positive Black Swan...

unfortunately the declining part of the hubbert curve will evoke a different set of attitudes & behaviors[as u would say-neuropathways] than the upside did.

i too have had the dollar problem on my mind a lot.

a couple of related sites/articles;

bataan death march is a summary.

& from BMW yesterday

"Indeed our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.)."


thoughts on these.

hoping for positive black swans!

One thing we really and truly do not have to worry about is that the U.S. Treasury will default on its bills, notes, and bonds. The Treasury is the spender of last resort (easy fiscal policy to stimulate the economy), but the Fed is the lender of last resort: No matter how big deficits get (one trillion dollars? Two? Even three?) the Fed will be there to finance these deficits with money made out of thin air. All this is legal, and it has happened before.

Hyperinflation? Maybe. Default by the Treasury? Never, or to be precise, not in the next forty years. My crystal ball fades out around 2050.

well in my former career I could have gotten you an up to the minute chart, but a 2 week old Reuters story will have to suffice. The Treasury Credit Default Swap (or odds that the US Treasury will default) was at 40 basis points - all time highs. I know it has gotten higher since - anyone with a new level?

(I agree with you they would never default)


per denninger today;
...That fact is treasury issuance.

See, to fund all this crap that Congress, Paulson and Bernanke have in the pipe (you know, the TARP, the newly-minted SIV that Ben announced this morning to buy commercial paper, etc) the treasury issue requirements will be north of three trillion dollars in this fiscal year.

Oh, and that's before Obama wins (and he will) and promises another $1 trillion worth of new spending without a nickel's worth of ability to fund it.

To put this in perspective the total amount of treasury securities owned by all foreigners at present is about $2.7 trillion.

Only a few months into this we're already requiring a crazy "tail", which is the amount of "goose" that has to be paid in order to get people to take down that debt. Its running around 20 basis points right now, and there was one disastrous auction that ran 40.

Historical norms are in the ~2-3 basis point area for off-the-run securities.

Now why does all this esoterica matter, you ask?"

nate i presume this is the same stat u are referring to?
i haven't studied the article yet.

from denniger above;

We must stop forcing money in the debt markets out of various portions of the market and into the "guaranteed" ones by removing the guarantees, or we will wind up guaranteeing all of it - an impossible task, as there is some $53 trillion of private credit in the marketplace and we don't have the money!
...We cannot allow a bond market dislocation. If one occurs we will suffer an economic depression.'

so this is his primary concern & he says could happen anytime. i remember leanan quoting nate that we should be more worried about the bond/treasuries market than equities.

well i'm over my head contentwise so i'll go back to popcorn & prepping & living!


thanks for the info. i don't think our creditors will 'stand by' as we print our way out of this. the dollar would be crashing too as this can't be hid well these days.

ben b. was grilled by one congressman earlier this year if we were already monetizing.

the second link is off re the process i agree but it raises the basic point of we are too, in debt & this is a crisis - likely already set in motion.

we have raided the henhouse we agreed to be in charge of for the world & this has created incredible global tensions.

Don -

I don't doubt that the Fed has the theoretical ability to run the printing presses indefinitely, but I think the question becomes: at what point will this massive inflation cause a total economic/political implosion in the US?

Picture, if you will, tens of millions of Americans with their life savings totally wiped out by hyperinflation and totally beggared as a direct result of the Fed. Would that be a politically stable situation? (And I am not just referring to people writing nasty letters to their congressmen.)

What I am suggesting is that in the real world the Fed does not have an infinite lattitude to print its way out of this mess without creating total political chaos and societal breakdown. At some point it will be realized that we can print so much but no more.

I'm glad to see that you are worried about inflation; we should worry about it. Also we should equally worry about deflation.

In my opinion we should try monetarism to avoid both inflation and deflation.

ok i bit; monetarism

1. A theory holding that economic variations within a given system, such as changing rates of inflation, are most often caused by increases or decreases in the money supply.
2. A policy that seeks to regulate an economy by altering the domestic money supply, especially by increasing it in a moderate but steady manner.


i gather per 2. we are going a bit fast right now re the inflation part[see denninger article above].

Don -


You speak of this almost in the passive tense. Inflation generally occurs because someone in power deliberately decides to inflate the currency, more often than not so as to lessen their burden of paying back money owed. It is theft upon people with savings, pure and simple.

I suppose that with your 'monetarism', as long as you have people running the show who are smart enough, prescient enough, and clever enough not to screw up, then you can fiddle the controls fine enough such that everything will turn out OK. I say it's all BS.

How are the perpetual bailouts and loose lending any different? Everything going on today penalizes the thrifty and benefits the risky.

I fully expect inflation to finish off the dregs once every major store of value has been systematically destroyed though borrowing or regulation fiat.


You misunderstand monetarism. According to monetarism you should increase the rate of growth in M2 at about the same rate as long-term real GDP growth.

Rules, not decisions by people, set the rate of growth of money under monetarism. You don't need any clever people to run it--just adherence to the monetarist rule for money growth. Monetarists despise dicretionary use of monetary policy and claim that it almost inevitably will make things worse than they would be under a monetarist rule for tracking long term growth (or decline) of real GDP.

Also note that monetarism would be a good prescription for an era of economic decline: If it turns out that our post-Peak Oil rate of growth in real GDP is minus three percent per year, then the rate of growth in M2 should also be about -3%.

monetarists are monetary economists divorced from the realities of the physical world. We need enery surplus to grow, unless we temporarily offset loss in energy surplus by efficiency or conservation. Hubbert recommended issuing certificates equitably based on net energy embodied in per capita throughput. I will have a piece explaining this on Friday.

I remember when Paul Samuelson (one of my favorite economists) said, "We are all monetarists now." In response, Milton Friedman said, graciously, "We are all Keynesians now." Out of the dispute between activists (Keynesians) and nonactivists (monetarists, classical, and neoclassical economists) came a new synthesis of ideas. Personally I'm an eclectic economist who picks up on good ideas wherever they can be found, whether classical (e.g. Thomas Malthus, Alfred Marshall), Keynesian, socialist, or steady state economics. I used to use a book edited by Herman Daly in my Environmental Economics class, and I have serious interest in steady state economics.

However, in my opinion, what the next twenty years of post-Peak Oil holds is two decades of economic decline based declining availability of fossil fuels--perhaps an average annual decline of about 3% in real GDP. What we need is an economics to deal with the effects of declining availability of oil. In my opinion, Friedman's recommendation of a negative income tax plus a monetarist rule is better than any other policy advice I can think of. In addition, I favor big subsidies to favor an increase in investment in wind power, nuclear energy, the conversion of electricity into hydrogen to make methanol, solar energy (especially CSP), geothermal energy.

When my daughter is First Empress of North America I shall advise her to put a stiff carbon tax into place--with especially stiff taxes on gasoline. Of course, there is no way in a demoracy that we can get stiff gas taxes in the U.S.

Yea, that worked great the last time we fully embraced it. Volker bowed to the St. Louis fed in the 80's, adapted Friedman monetarist policies, and just about put this puppy in the ditch!
Paul finally came to his senses, Reagan took pout the Military Credit Card, and Lord Keynes saved the day.
To be fair, Friedman left the velocity of money out of the model, but it was a interesting and wild ride, with huge delusions exposed.

I'll see your tin foil hat and raise you a top coat.

TPTB will make the world too complicated, to kaotic to allow the other countries to make a move to a new currency.

Money as a storage of wealth is coming to a end (if you are paying attention).
This discussion is like the Austrians in 1913 theorizing who their next Hapsburg ruler will be.
We need to open up the imagination here, or get left behind.

Things take time. We will unlikely go from this system, to a world without money in one fell swoop (I think).

Who knows? Maybe Dick Fuld = Archduke Ferdinand II ?

I agree, but the feedback loops at this point makes the possibilities endless.
This is not going to be a linear model of change.

Relax. Change to decaf. The war in Afghanistan is not about oil. My own opinion is that all of the wars the U.S. has been in since Vietnam have been pretty small potatoes, at least in terms of weighing the importance of the war to real GDP and to U.S. casualties.
I expect there will be wars in the future. Except for the hundred years between 1640 and 1740 the Western powers (including the U.S.) have periodically been involved in major wars. (I'm counting both the Crimean War and the American Civil War as major wars.)

Of course there will be future wars. What we do not know is whether these will be major wars. Back in 1957 when I bought my first survival kit and survival rifle I thought World War III was likely. Indeed, it was likely, but, we are happy to observe, it did not happen as a result of the Cold War.

I think that each year that goes by without nuclear weapons being used is a relatively good year. About 500 times on TOD I've seen predictions that a U.S. war with Iran is in the cards and about to happen (to help get McCain re-elected or just to go where the oil is).
Well, it has not happened yet and may never happen. I do recommend the film "W," especially for its dramatic portrayal of how decisions were made that resulted in the U.S. attacking Iraq.

By the way, I still have the survival kit I bought in 1957. It worked. I survived. With luck I'll live another ten years and die with my survival kit willed to one of my children and the rifle to another one.

Wouldn't it have been nice if Star Trek had been more specific about how they managed the cashless society of the twenty third century?

LOL. Post of day!

they were in the written material. it took a prolonged period of world wide warfare starting off with a huge nuclear war.

"Money as a storage of wealth is coming to a end"


Any talk of cutting back, more efficent, reductions, demand destruction, etc. translates to the bottom half of the economic food chain DIE, the upper half live.

The sooner we get off this merry go round the more chance WE have.

Trouble is TPTB are standing on the ground, spinning the merry go round faster and faster to see who falls off.

Ever notice how many playground metaphores their are?

Dollars - money - are a future claim on a real resource. I think you have it exactly right - that the future claims on the resources far, far, far exceed to sum of the physical resources. Furthermore, making increasing claims on resources, eg grinding up more forests and melting more glacial ice, decrease real resources - the source of the wealth. The bailout/plunder packages are essentially guaranteeing the bankers first place in line.

cfm in Gray, ME

Clinton ended "welfare as we know it" -- and began this substitution with a new variety.

The tradeoffs are becoming obvious.

Fiscal Cat 5 Hurricane Warning

Ben and Hank are going to produce the bond market dislocation that I have been warning about since earlier this year if he is not stopped immediately.

The base gambit is cute - force all this new Treasury issue out into the market before the election and Inauguration, when Hank is going to be replaced with someone who might not be nearly as charitable as Hank is to issuing Treasuries like a drunken sailor, and pray that the bond market tolerates his game long enough for the issue he needs to fund this abortion to clear into the marketplace.

The ugly is that there was a small inversion in LIBOR a week or so ago. That's really bad, as LIBOR normally never inverts. As Ben has played his games of late the inversion disappeared from LIBOR but moved over into the intermediate area of the US Treasury Curve, where it is far more dangerous.

From the article:

Those in the media who are chuckling at the folks stockpiling beans and rice will be begging for some of that stash if our government doesn't cut this crap out - and soon. . .

As I see no evidence that Congress grasps the serious nature of this threat and has refused to listen to those of us that have gotten this right from the start, including Nouriel Roubini, myself, Anna Schwartz and hundreds of other commentators and economists, you must prepare for this outcome - and remember who's responsible if and when it occurs.

I think some in the media are starting to get it.

Lou Dobbs was talking about it tonight, with a couple of Democratic and Republican pundits. Amazingly, they all seemed pretty much in agreement. The market drop over the past month or so shows that there's no faith in either Obama or McCain. Neither candidate seems to have a plan for what to do about the crisis. Their "economic plans" are basically the same ones they drafted last year. Neither candidate has a clue about how bad it is. The Republican suggested that the new president, whoever he is, should invest in ethanol (that is, drink heavily).

This is the basic problem. While Obama and most dems are different than the rethugs on workplace, women's, the environment, etc., at he core it is the suicidal economic model that is what needs to go, or as a species our future is dim.
Obama is a "Chicago Boy", a little more sophisticated that McSame, but still clinging to a superstition based economic model that we can expand indefinitely in a finite system.
While not quite as delusional as the Monetarist Model, any smart 10 year old can predict it's demise.

Both Obama and McCain are controlled by the same guys that caused this whole situation. Robert Rubin does Obama's economic thinking (check out Citigroup for the quality of Rubin's thinking)-it is a big mess indeed. The USA won't come out of this without a rebirth of the real (industrial) economy and you aren't going to get direction on that from Robert Rubin or any other moneychanger.

Brian - you misunderstand. I am not in favor of those bonuses being paid - I was just pointing out how screwed up the situation is and supposedly the House Finance Committee is steering us in the right direction when it's exactly the opposite.

We need Wall St to become a much smaller part of our economy and the worlds economy - all that ambition and brain power should/could be applied towards more important things that we need.

From Brad Setser's blog, The end of Bretton Woods?

Bretton Woods 2, as it evolved, hinged both on the willingness of foreign central banks to take the currency risk associated with lending to the US at low rates in dollars despite the United States large current account deficit AND the willingness of private financial intermediaries to take the credit risk associated with lending at low rates to highly-indebted US households.
The second leg of the chain collapsed before the first. And it collapse looks set to deliver a nasty shock to everyone – including the countries that supply the US with vendor financing.

He adds

At the same time, this story leaves out what to me is a crucial part of the story: the housing boom didn’t end when the Fed reversed course and raised long-term rates. The really risky loans were made in late 2005, 2006 and early 2007 – after policy rates had increased. Private institutions kept on lending – in part because they decided that it was safe, in a world of low assumed macroeconomic volatility – to take on more leverage and more credit risk to keep profits up.

Apologies if this link was posted yesterday but I didn't see it anywhere.
NY Times
Alternative Energy Suddenly Faces Headwinds


Makes the important point that many alternative energy systems have high capital start up costs at a time when capital is shrinking fast.

The price chart on the front page has not rolled over to December yet. Right now the price is $68.04 and it has gone as low as $67.93. Clicking on the chart takes you through to December.


Are we incapable of grasping what is at stake with global warming?

Last night, Frontline, The PBS Investigative series, broadcast a definitive special on Climate Change/Global Warming and the challenges that the world and in particular the United States will face in trying to tackle climate change. In one segment they show the USA shamed at the 2007 IPCC conference in Bali by developing nations who had agreed to “verifiable measurable limits” if the US would agree to climate action. The USA representative, after first declining to support the resolution (and being booed by hundreds of other nations) made frantic cell-phone calls to the White House and then relented and said the “US would support consensus”.

In the midst of unprecedented growth, the Chinese are clearly moving in the wrong direction. He visits Shenhua Energy, one of the largest and fastest-growing power companies in the world—a coal conglomerate with a huge carbon footprint. But its CEO, Ling Wen, tells Smith that he answers not to the public but to his shareholders. "We must create money, not lose the money," Ling says. "It's my responsibility as a CEO of this company." And when pressed whether he should make climate change a higher priority, Ling says that he would if his shareholders asked him. But, he says, "I'm afraid maybe all the shareholders, they cannot accept that concept." In the meantime, China continues to build two new coal-fired power plants every week.


What the program drove home was the unimaginable scale of the problem.

It was an excellent program. The interview with the CEO of Shenhua Energy was fascinating.

A few other observations:

1) a coal-fired utility (in Florida IIRC) with equipment all set up to begin carbon sequestration. They are afraid to start because of potential lawsuits.

2) looks like the nuclear industry will face all manner of challenges if they want to build near population centres.

3) the Bush administration blocking California's efforts to impose stricter emission standards for cars.

And the most memorable segment to me was:

A McCain/Palin rally where the crowd was chanting in unison - "Drill Baby Drill" - "Drill Baby Drill" - "Drill Baby Drill" ........

Unfortunately, human nature is going to be a much bigger problem than either geology or technology.


How are the tar sands holding up at 70 dollars per barrel?

We are noticing budgetary 'flexing' for operations in the North Sea for conventional oil drilling activity.

How are the tar sands holding up at 70 dollars per barrel?

Canadian dollar went from $1.06 US a few months ago to $0.80 this morning.

My guess on cost impact in $US terms
Labour - down
Royalties - down
NG - down
Heavy equipment - stable (Cat/Bucyrus)
Steel & pipe - ????

The big integrated mining operations are likely the hardest hit since they have multi-year timelines and need huge amounts of capital before there is any product flowing.

Small SAGD operations are likely doing better.

Connacher's CEO estimated that he can cover operating costs down to about $45 US/bbl. They have a "modular" strategy where they expand in 10,000 bpd increments.

Small players are worried about financing and big players are worried about their customers imploding.

Aside from that, everything is fine :\

A very interesting article from yesterday's Drumbeat worth re-posting here. I found it extremely informative. The tar sands won't be exploited willy-nilly for the benefit of the USA without a fight:


Oil hinders democracy and corrupts the political process through the absence of transparent reporting and clear fiscal accounting. ...

Neither Canada nor Alberta has a rational plan for the tar sands other than full-scale liquidation. Although the tar sands could fund Canada's transition to a low-carbon economy, government has surrendered the fate of the resource to irrational global demands.

From what I understand, tar sands production prices are around $30-40 bbl; Perhaps more now with USD devaluing over the past five years, but still significantly the $70 bbl spot price.

What will be interesting isn't the price collapse of oil in the face of a recession/market correction on its own, but the establishment of a new price floor after capital markets recover. There has been slow investment in high production price oil because everyone remembered when the asian financial crisis hit sending oil down to $15/bbl. I imagine that when investors are reassured that those days are gone for good even during a recession, there will be more investment in higher production cost oil and oil substitutes. The low price that oil reaches during the next two years will probably be the production price ceiling for new projects for the next decade.

Good point, but does anyone know what the spot price is for processed tar sand? http://www.upstreamonline.com/market_data/?id=markets_crude lists a variety of grades. When the tar sand is processed, which grade does it's end product most closely match? If it is a poorer quality substitute, does it's spot price reach $70 or just a fraction of that?


Unfortunately, human nature is going to be a much bigger problem than either geology or technology.

I think you're right. When I hear cornucopians talk about technology saving us I have to shake my head. Although I've listened to a lot of talk for the most part I see BAU as we continue whistling past the graveyard. Will we be able to halt global warming in the ten years that climate scientists tell us is all of the time we’ve got? Sounds like one of those old cliffhanger serials they used to run on Saturday afternoon matinees years ago.

Homo-sapiens happened upon fossil fuels and being an opportunistic species it really was too good to be true.

Take the story about a primitive tribe that hunts a local primate, either for food, or to sell as pets. They capture the monkey using a simple trap. They place a piece of desired fruit in a small box with an opening just big enough for the monkey to get his hand into. When the monkey grabs the fruit he is unable to get his hand out of the trap without releasing the prize. Even when the monkey sees the Humans coming to take him away and he screams in recognition that his life is over, his greedy nature will not allow him to turn loose of the fruit and save himself.

Humans, like that simpler primate, will be unable to let go of the treasure (fossil fuels). Greed is hardwired into our species.


One item in the program that caught my attention was when a representative of -- I believe Exxon -- was being grilled in Congress about the amount of many the company was spending on "renewables". The rep cited $100M, which the congressman noted was a drop in the bucket versus profits. I would consider a better comparison to be renewables R&D versus fossil fuel investment (exploration, exploitation, and R&D).

I wonder how much of that amount put towards renewables is actually directed towards marketing the notion that they are "investing in renewables research" -- in other words, investing in the perception that they are investing in renewables research. Of course, they might be appropriately accounting this under an advertising/marketing/PR budget, but given the track record...

I believe Exxon -- was being grilled in Congress about the amount of many the company was spending on "renewables".

In this narrow case, I actually have sympathy for Exxon. I don't think it is the business of Exxon to do renewable energies -or of the government to tell them to invest in other areas of energy. That is the decision of Exxon, as to what sort of opportunities are best suited to it. It is of course the business of the government to appropriately tax large corps, and if renewable energy is important to spend some of that tax revenue on it.

Now that I've said oil companies shouldn't be forced to become alternative energy companies. I am disappointed that they are looking at becoming users of renewable energy, there must be many instances where local renewable energy (I'm especially thinking of solar thermal, and/or stranded wind) might be a natural match for the energy needed to produce/process oil and gas in the field.

It was an OK program, but still hopelessly BAU when it comes to the demand side of the equation. The reality is that the energy, from whatever sources, simply won't be there to continue western (and especially US) levels of consumption, let alone extend them into the developing world. Nor can we have any hope of reducing our GHG emissions unless we reduce our energy consumption. Screwing in a CFL in place of an incandescent or trading in an SUV for a Prius doesn't even scratch the surface, people are going to have to make much more substantial, and maybe painful, lifestyle adjustments. IMHO, it is not being helpful to continue reinforcing the impression that we can make some technological changes and otherwise just continue on living as we have. People need to come to grips with the truth about this sooner rather than later.

The credit crunch hitting eBay?

Tom Voosen says he has operated an eBay specialty store selling large-size shoes and Halloween costumes out of his Phoenix home for seven years. He and his wife, who is disabled, have grossed about $25,000 a month in recent years, he says. "We're both in our 60s and this is our main source of income. It gave us a reason to get up in the morning and something to feel good about," Voosen says.

His store has been closed multiple times, he says, though his feedback ratings were high and he did not have customer complaints. When he tried to find out why, he was often stymied. "Satisfaction? Zero. They don't even have a toll-free number, and you can never talk to anybody except bottom-line desk help. You can never get to speak to any management people. Any e-mails that you get are boilerplate auto-responders," Voosen says.

Eventually, Voosen learned that he had been termed a "security risk" to eBay and its subsidiary, PayPal, because cash flow issues with the store had caused his personal credit score to deteriorate. His latest store shutdown, occurring just weeks before Halloween, left him with hundreds of costumes in inventory and 210 unhappy customers who had placed orders. Once a seller is locked out of an account, he can no longer access orders or shipping information, Voosen says, so he can't even contact his customers to apologize.

eBay and PayPal are quite dirty in their treatment of sellers. However, until there is a good alternative to the two, eBay will not care. I used to sell dozens of items on eBay each month, however I suspended selling anything on eBay, or half.com which they own. The sad part of it is, not only do they treat sellers badly, but buyers as well. I still buy things on eBay from time to time, but try to avoid it due to their predatory practices towards sellers.

One word:



Hello TODers,

Possible interconnected Strategies I haved outline in earlier postings:

1. Asimov's Foundations concepts of predictive collapse and directed Decline

2. Porridge Principle of Metered Decline

3. Optimal Overshoot Decline

Two weblinks below on what TPTB are doing in Haiti:

Haiti’s food crisis deepens after floods

..“This will take billions of dollars. This is not something small,” U.S. Agency for International Development Administrator Henrietta Fore told AP.

..“Even before the storms, we were hungry,” he said. “Now we are looking everywhere for food.”

With the currently ongoing global economic crisis: does anyone realistically think the world is going to come up with untold billions to rebuild and restore just Haiti alone?

Haiti: UN sends tanks, not tractors

On Oct. 14 the UN Security Council unanimously passed Resolution 1840 authorizing the United Nations Stabilization Mission in Haiti (MINUSTAH) to remain for another year, until Oct. 15, 2009. The international force, which began its occupation of Haiti in June 2004, has a maximum of 7,060 soldiers and 2,091 police agents. Its annual cost is now more than $500 million.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Not to seem like an uncaring sod, but what is the point of feeding a country that repeatedly cannot feed its own population? You can give a man a fish, or you can teach him to fish. Population levels in so many countries are at unsustainable levels, supported by paid imports, and humanitarian aid. It's like feeding the deer in the forest beyond what the forest can support. The population will increase until limited by the food supply, or the food supply must increase. So is humanitarian aid increased year/year through infinity, or do we realize the world is finite? The most humane way to regulate this is via birth control. While everybody wants birth control to be a voluntary issue, (or some people think it's an abomination,) it's quite likely the only way population overshoot can be controlled is through involuntary birth control. After your 2nd child, you and your partner are sterilized.

I'm waiting for the wailing and gnashing of teeth at such a statement, but the alternative is everybody starving to death, unless you subscribe to the idea that our world is not finite.

After your 2nd child, you and your partner are sterilized.

Sounds good to me. Actually given the situation I would recommend sterilization after child #1, at least for a few decades.

I'm really torn on this issue. It seems lowering the population would mean more resources for everybody if you assume resource levels are constant. Unfortunately, resource production is primarily done by the younger half of the population. If you consider the developed countries of Europe and also Japan - they are begging the citizens to have more children because they do not have enough younger workers to provide for the older citizens.

It's a tough problem and needs to be handled slowly. I'm still hoping this process occurs naturally as womens rights and birth control spread to every part of the world. Promoting these two things - rather than sterilizing people - is the better way to go.

Old people traditionally care for the grandchildren and look after the home while the adult children are out beating the bushes, but it doesn't show up as "useful" in an economic computation - In fact their role reduces GDP by eliminating paid daycare providers.

Washington state has a ballot initiative this fall that requires elderly care workers be state trained, certified and criminal background checked if compensation is given or they are not direct family (parents and children) Sounds like a good measure....till the effects of neighbors and friends are taken into the picture. "Could you stop in and check on Dad today, I've got to be out." "Sorry, I'll get arrested if anything happens."

"It's a tough problem and needs to be handled slowly. I'm still hoping this process occurs naturally as womens rights and birth control spread to every part of the world. Promoting these two things - rather than sterilizing people - is the better way to go."

That argument has been made for many decades and look where we are. Waiting, while the populations continue to explode. That message just ain't going to trickle down to ever work.

I thought 5, then 6 billion would be some kind of watershed for action. 6 was, ZPG disbanded.

Doug Fir--
The only reliable method of putting into place a declining birth rate is for women to truly have political and economic equality. When this happens (on trends toward, for example Western Europe) the birth rate declines to zero or negative.
Of course, religion needs to be eliminated or delegitimized, or this is a moot point.
I am not holding my breath.

I have no idea where you get the idea that religion would have to be eliminated to get to a low birth rate.
many of the countries with the lowest birthrates are Catholic, and rapidly falling birthrates have occurred in both South American Catholic and Muslim societies, such as Iran and the Mahgreb.

These are countries where ideology is ignored, and birth control and women's roles religion has condemned are embraced, with the desired role of women within the economic and political structure,
South America and Italy are models of this. The French long ago discarded Bronze and Iron Age superstitions for the most part.

Birth control is not against Islam, we are told by the societies in question.
Your brush is too broad.
You have to go to sects like the Amish and Orthodox Jews to find any support for your thesis.
It is not religion per se which mitigates against falls in birthrates, but particular variants of it in a few places.

Roman Catholics are in just a few places?

The fact that Catholicism rejects many forms of birth control is not in doubt, but you would be hard pressed to show much statistical influence on birth rates due to it, in for instance, Italy or Spain - or lately Brazil or Mexico.

As all theses countries reject dogma, jettison the superstition of their root religions, and embrace birth control and women's rights.

Its very simple:

God bothering societies = too many babies

Get rid of the god bothererers = solve the problem.

You have established no link at all to your basic thesis, equating rejection of birth control with religion as such.
There are plenty of ultra superstitious Creationist women in the States, for instance, who practise birth control.
And I repeat, Islam for a start does not reject birth control, so it would hardly be necessary for them to 'reject the superstition of their root religion'.
It appears that you are confounding two phenomena which you dislike, religion and opposition to birth control, whereas any case that you wish to make might be better served by arguing them separately.
It is clear that you disagree with the Catholic Church's opposition to birth control, but since it hardly appears to be effective that is perhaps of little import.
The Catholic Church's position in any case hardly represents all religions.

Let's get away from memes that replicate, sorry i brought it up.
If you want to go back to my basic thesis on women and economic and political equality, take a look at Birth Rate of Countries
You will see that it validates my analysis-- in all these countries, women are , at best, second class citizens.

Women being second class citizens is a totally different subject, and birth rates do indeed correlate well with a number of different indices, including education of women.

The thing that no one seems to mention is that by the time you develop the society with a sufficient standard of living that then seems to enable a culture to allow women their rightful economic and biological freedom, each baby they have uses 100 times more resources than the impoverished, "third world" babies they were having before.

This is what the "demographic shift" people seem to gloss over.

Point well taken--

Same song, second verse. While the record keeps scratching, we keep breeding.

No, I really think there's been a change. If not for peak oil, the population problem would solve itself. The population growth rate is dropping all over the world, including in the Middle East and Central and South America, despite longtime cultural emphasis on large families in those areas. It's actually negative in Japan and some parts of Europe.

I think we know now what causes people to choose to have fewer children: urbanization, empowerment of women, access to birth control. And also reasonable assurance that existing children will live, which means adequate food, sanitation, health care, and political stability.

Unfortunately, many if not all of those are likely to unwind in the face of peak oil.

We cannot reduce the impact of religion, and probably should not try. Religion will be more important than ever. What we need is a religion that encourages smaller families.

If you sit in my church, you'll see plenty of families with 4, 5, 6 or more children. As far as economics, these are college educated middle class folks.

The Pope still carries a lot of weight, at least in some circles.

I don't think its the old man in the Vatican necessarily.

Different forms of birth control are practiced by many US middle class, catholic, educated women. They time their families, and they want large ones. The bonds of mother-child are just about unbreakable.

As an anecdotal observation, I watch in our pastures the ewes, grazed and kept separate from the rams and whose offspring may be removed for different reasons. They group around their mother, many generations, lambs of their own, and years removed from nursing.

I don't know why Catholics, as individuals, would want larger families any more than anyone else. Does having six children mean that the mother has "more love" for them than someone that only has two?

That said, it is very, very clear as a matter of church doctrine that you should do nothing to impede God's will, and in fact you are obligated to go out of your way to encourage others to not impede God's will.

14. Therefore We base Our words on the first principles of a human and Christian doctrine of marriage when We are obliged once more to declare that the direct interruption of the generative process already begun and, above all, all direct abortion, even for therapeutic reasons, are to be absolutely excluded as lawful means of regulating the number of children. (14) Equally to be condemned, as the magisterium of the Church has affirmed on many occasions, is direct sterilization, whether of the man or of the woman, whether permanent or temporary. (15)

Similarly excluded is any action which either before, at the moment of, or after sexual intercourse, is specifically intended to prevent procreation—whether as an end or as a means. (16)

Neither is it valid to argue, as a justification for sexual intercourse which is deliberately contraceptive, that a lesser evil is to be preferred to a greater one, or that such intercourse would merge with procreative acts of past and future to form a single entity, and so be qualified by exactly the same moral goodness as these. Though it is true that sometimes it is lawful to tolerate a lesser moral evil in order to avoid a greater evil or in order to promote a greater good," it is never lawful, even for the gravest reasons, to do evil that good may come of it (18)—in other words, to intend directly something which of its very nature contradicts the moral order, and which must therefore be judged unworthy of man, even though the intention is to protect or promote the welfare of an individual, of a family or of society in general. Consequently, it is a serious error to think that a whole married life of otherwise normal relations can justify sexual intercourse which is deliberately contraceptive and so intrinsically wrong. (Link, the Vatican)

(emphasis added)

Pulling out early is a sin. I'm not saying it isn't done, but strictly speaking, as a Catholic, if you don't wanna have a baby you keep it in your pants, otherwise you leave it up to God whether or not you get pregnant.

We were told on Sunday to be sure to vote for the pro-life party, and then later that morning we prayed that the Supreme Court would decide to respect and honor all life. They do this every election season (and it's no coincidence that the "40 Days for Life" campaign happens in October).

Needless to say, there aren't a lot of Obama bumper stickers at our church.

In the context of this thread, any talk of adding birth control, even to save the planet, will have to win over just about 1.2 billion Catholics.

In my opinion, the most important factor in reducing birth rates (beyond reduction in death rates) is the education of women. After education women can become gainfully employed outside the home and have something other to do with their lives than have babies. I think that is what you mean by "empowerment."

Birth control devices can help, but motivation is the key. After all, oral sex was invented as a contraceptive device, and you don't need access to a pharmacy to practice that!

If, If, If. But, But, But. Always a new qualifier, anything to postpone, well, BAU.

Human nature hasn't changed, and certainly sexual drives haven't. I don't think a new Utopian world that eliminates poverty worldwide will ever arrive in time, a clause which presupposes a cataclysmic ending. So why even worry about it, it'll solve itself, adopt a save yourself attitude and forget it, right? No, the idea that humans are the sole arbitrator of habitats and species is preposterous.

I also think our arrogance in prescribing new social and cultural norms on the world is self deceiving at best. Much like purple fingers and inserting democracy over the globe doesn't produce the prescribed outcome.

And I question how well they work or will continue to work. Babies are a joy, a heralded, cherished event. I know many women who fit all of your above, yet choose large families, and so are their daughters behind them. They are not particularly religious, and see their financial well being as a justification for their large families.

middle west:
"If you consider the developed countries of Europe and also Japan - they are begging the citizens to have more children because they do not have enough younger workers to provide for the older citizens."

The question is - who is THEY?? Not the people of the countries [I'm in Europe].

Govs whine about falling birth rates because they need income taxes and GDP to pay welfare etc.

If Granny can't have a yacht after retirement, and has to live in her kids house, who gives a crap? Not me. The alternative - endless population growth, is exactly the same mindset as the financial industry [who are the same pool as the politicians].

Voluntary birth control cannot work because of evolution. It has to be unbiased genetically, so it has to universal [well OK, planet-wide would do..] and compulsory.

Sterilization is best done to yourself. It's the one time people are encouraged to run with scissors.

Haiti's problems are less about pop. overshoot and more about Corporate US Ag destroying this country's Family Scale Farming options. See link below.

Solar Dude: Try justifying that statement to a couple when their only child has died. What kind of society would you have? Not one I would be keen to participate in.

The thing you overlook is that the US and the West in general have prevented these countries from dealing with their own problems. It is preferred to have them on the dole, a small dole to boot, than to be independent and self-reliant. Agriculture in these countries has been destroyed by dumping, dumping by US subsidized agro-corporations. The donations to these countries are always conditioned to advantage the donor. One of the little adventures that got hardly any attention was when the US scooped up Aristide, the popular president (with the poor!) of Haiti and plopped him in the Carribean or Africa (I forget). Just like that!

You have no idea, not even a clue.

You're not uncaring, I suspect.. just underinformed. Uncle Sam WANTS YOU to be uninformed, after all.

One hand gives pennies, while the other one takes pounds of flesh.


The Destruction of Haiti's Agriculture

... A state-owned Haitian-U.S. joint venture produced sugar for export as well as domestic consumption and employed over 4,000 people. Henri said: "The Americans destroyed that. The [Haitian] bourgeoisie started importing sugar--they said it would be cheaper. We used to export sugar--now we were importing it." Once the Haitian sugar industry was destroyed, sugar became more expensive than before.

In the late 1990s, Haiti lost 25,000 acres of agricultural land after the U.S. sold Haiti agricultural chemicals that made the crops come up black, shriveled, and inedible and destroyed the land for further agricultural use.

Today, much of the agricultural production in Haiti is tied to U.S. corporations. People are forced to grow mangoes, coffee, and other crops for export while their children go hungry. Patrick, an agricultural expert from Haiti we spoke with, explained, "People have land, but not the means for production.... Farming could sustain a family of three, but give them a chance to do it. They need water, seeds, fertilizer, insecticide.... Instead, we get international food aid and this destroys agriculture. ...

Rice was once a major food crop in Haiti. Under pressure from the U.S., Aristide lowered import tariffs on rice. Haiti was flooded with rice from the U.S., which was cheaper because growers receive government subsidies. This drove Haitian farmers out of rice production and off the land. Haiti is now the fifth largest importer of rice from the U.S.

A Haitian activist told us about a rice farmer from the central department of Artibonite, the "breadbasket" that used to feed the country. This farmer can't make a living by growing rice in Haiti, so he has lived and worked in the U.S. for over 15 years. But every year he goes back to Haiti, plants rice, returns to the U.S. to work, goes back again for the harvest, then returns to the U.S. again-- "to take a political stand." Last year this farmer harvested 150 bushels of rice--but he has been unable to sell the rice. "Haitian peasants don't produce any more," the activist told us.

As a result of the destruction of Haitian agriculture over the last 30+ years, Haiti imports much of its food. So when Haiti's currency (the gourde) fell against the dollar, food prices stayed more or less pegged to the dollar. One Haitian activist told us bread that cost one gourde in 1994 now costs 15 to 20 gourdes. When we asked him what had happened to wages and salaries during that same period, he answered, "What wages? What salaries? There are no jobs any more!" ...

This isn't about too many deer for the forest, but too many ADM CEO's for the Forest. The 'Breeding' angle plays to unhelpful stereotypes, when the real criminals can stay safe and clean in their boardrooms.

True enough. Still, 50 million net resource-sucking primate humans are added to a finite blue planet every year, and the sooner that growth reverses, the less total suffering will occur in the future. If humans can apply organic polyculture, simple living and frugality, the downslope may be eased slightly, but there is no halting the reckoning - what goes up must come down. One need only place a chart of exponential human population growth on the other side of the room to see that.

Sure, but even within your response is this need for basic agricultural freedom. Whether its Haitians or Americans, the opportunity and the need to advance agriculturally active citizens is 'bad for business', and so regardless of population density it is being actively undermined by the Financial System taking the best spot at the trough. The big piggies have got to be shoved out of the way, put onto a diet so the rest can have some.

Again I contend that 'Third World Birthrates' is an easy distraction issue to keep us from applying much needed attention and regulations here at home on the Big Food Corporate Complex. (On a par with Gay Marriage, Gun Control and Abortion.. pure Red Meat, if you'll excuse the expression) They're well-dressed, wealthy, Polite and White. What could they possibly be doing wrong?

If you want birth control to work you'd better have a pretty convincing story about how folks are going to be taken care of when they get old. A main point about having six or eight kids is that it increases the chances that one or more will be willing to help out during the declining years.

Providing inexpensive, safe birth control methods to women is probably a good strategy since women seem to naturally opt for smaller families given a choice. However, it will take only one younger generation seeing an older generation die in misery on the streets to bring back the idea of large families as a good hedging strategy.


Lets debate this a moment.

First , yes be a sod. They need to take the punishment and realize that zipping up their pants is a free means of BC. If not then the devil will and should take their asses off. Yeah I feel soddish also.

But to debate. What we need, based on a huge dieoff in the offing, is more children. Not welfare case types but strong souls. Brought up correctly and with hard work to boot so that they are ready to be the remnant that survives.

Lots of aging hippies and class of '57 ers plus yuppie soccer moms and Joe Sixpacks are NOT going to survive for very long.

Youngsters who are taught survival skills and other areas are going to have to come up out of what we currently are. This will be like homeschooling only with a view to the future and what is necessary.

If I was of a lesser age and had a breedable wife I would most certainly wish to have some offspring that would carry on and train them well. No instutional schooling whatsoever. No governmental influence whatsoever.

This is the stark reality for the future. Young people with the right skillsets are going to be needed while the rest of us step aside, willing or not.

My take. Your turn.


While population IS an issue in the macro sense, this is not what knocked Haiti on its butt again and again.

It's always irresistible to tell people how many kids to have, how to raise them right and teach them right from wrong. What we can't seem to do is practice this same kind of Tough Love with our business leaders and AG Lobbyists. Our Tariff policies with Haiti have been quite simply murderous.

Birth Control is a distraction issue to upstage Trade Policy and Corporate Manipulation. As a Farmer, please look at the article I linked above to hear another side of this continuously misrepresented story.


I think Diamonds analysis of Haiti in Collapse is far superior to the torch the U.S. gov't and corporate buggers slant in the article. Haiti has been on a down hill spiral since the Europeans started the explotation in 16th century. Overpopulation and third rate governments have been key components of that downward spiral. Deforestation has exacerbated the ruination of its resource base which was marginal at best due to that half of the islands geography. Haiti is the poster child for collapse because so many things have been done wrong there.

I currently have no children. At this point in time, I don't want any children. It's plausible that in the future I might want them, and here is the reason..

In my not quite so humble opinion, it's the uneducated and careless people who are breeding in greater quantities than those who seem to be "awake" to the world. My hypothesis is that those who are "awake" don't want to breed, as they feel that doing so imposes upon the world, and their children.

So while I think that it is a burden upon the planet for me to have children from the viewpoint of resources, I also think that maybe I should have a child who will make a difference. Who knows...

Thank you for posting this. Your description of relentless evolution is correct.

Repeating myself:

Voluntary birth control cannot work because of evolution. It has to be unbiased genetically, so it has to universal [well OK, planet-wide would do..] and compulsory.

No problemo. Industry will cry "labor shortage" and replace your potential offspring with willing workers from some desperately poor high birth-rate country.

No guvment inflewince. You mean like respect for the rule of law or any sense of how interdependent we are as a species.

Birth control for the kleptocrats would be an especially good place to start.

Edward de Bono ("Lateral Thinking") suggested a persuasive plan for population control.

He pointed out that for many families it was important to have a son -- carrying on the family name, inheritance, etc etc. So he proposed that families could have as many children as they wanted, but they must stop when they have a son.

This has the advantage of preserving a 50/50 sex ratio (50% of first children will be female, 50% of second children will be female, etc etc), and because some couples will be childless or voluntarily limit their families, on average there will be fewer than 2.0 children per couple and the population will gradually decrease.

Are you referring to Haiti? Or to population in general? If you are referring to Haiti sending tanks first to restore order than perhaps someone could impose law & order so that a civil society and agriculture can proceed. Haiti is a basket case and a good example of what the lack of law & order and government and the ensuing poverty can do to one's peoples and the environment. Haitians have destroyed their environment; the countryside is denuded and not even much grass remains in areas. If you are too poor to afford kerosene or electricity or bottled gas then you make charcoal from every tree you can get your hands on. Hence there are no more trees unless they are inside courtyards or private islands owned by cruise lines. From the air you can see the line between the Dominican Republic and Haiti as clear as a line on a map. Trees vs. No trees.

But was it the Haitians who did this? or was it the "western governments" who continue to meddle with the indigenous inhabitants, sorting out their troubles for them! Look a little deeper into the history of the islsnd to see what realy is going on.

Just watched Zietgiest Addendum.

The original documentary does a reasonable job of explaining the evolution of religion, goes a little overboard with 911 but does expose a lot of what the after effects on democracy have been, how we are manipulated for the profit of a few, and ends a little bit utopian for my liking but over all a very usefull movie.

The addendum starts out doing a great job exposing the negative aspects of the monetary system and corporatism and again the manipulation.

THEN he announces the New World Religion that will save us all… Technology.

His section on energy is dangerously misinformed and tecnocopian.

Speaks of a continuous path of growth and development.

I love the future posited in the movie but IMO there is way too much blind faith in technology to bring it all about.

I do like most of what he calls for at the end .

None the less I for one am all aboard. ONE LOVE!

Your analysis is right on. I got the uncomfortable feeling that Lyndon LaRouche was a contributing writer of content in this presentation.
A peace and justice group I interact with lapped up this movie, but they are thermodynamically and evolutionary biology challenged.

Why do you guys get so hung up on the technical logistics of the movie rather than the message which I think has merit. To ask ourselves if we have the resources to make a sustainable planet rather than do we have enough money? A valid question and different perspective to give us peak oilers. It's pretty clear to me after reading TOD for as long as I have that the current profit structure works in opposition to sustainability, maybe we should just take that out. Of course this goes in complete opposition to our whole way of life and the current power structure but maybe that is a good thing.

....they are thermodynamically and evolutionary biology challenged.

yes agreed, but that is an under-statment. "their world" looks like an energy glutony beyond my wildest fantasies. But entertaining .... sure.
The Zeitgeist Addendum I just had to switch off when Mr Jacque Fresco "opened his mouth" 2/3rd into the movie, I simply could not take it.

For shoppers, cash is back in vogue

NEW YORK (CNNMoney.com) -- The latest fall style for credit-addicted Americans: paying with cash.

But that's not necessarily a good thing for retailers who are struggling to lift sagging sales.

What's more, industry watchers point out that a growing preference for cash poses a more direct challenge to online retailers - since computers don't accept cash just yet.

My wife does too much online shopping using her debit card. We have no credit cards but can shop online as long as there is enough in our checking account..

When I lived in the US I freely and unthinkingly charged up my credit cards and found myself purchasing all sorts of things which I really didn't want or need, just because the impulse was there....but then I moved abroad and credit cards were a hassle to use here, taking time to go through. So I switched to cash (most Japanese use cash anyway). Instantly my impulse shopping problem was reduced. I needed the money for the bus, the cash station was inconvenient so I couldn't spend it all now, I still had to save some to buy groceries, etc. There were a hundred reasons to leave the money in the wallet instead of spending it....this was a good lesson for me. I have since found that not buying something leads to saving more money later since you don't need a big house or apartment to store it in.

I'm not sure where to find the information, but the point in the US when fast food restaurants started accepting credit cards was some kind of turning point, I think.

Suddenly it was quite acceptable to spend $4 on a credit card; it used to be there was a 'minimum purchase' requirement just about everywhere.

Looks like more machete' moshpit action in India:

Police and protesters clashed in northern India on Wednesday, leaving 15 people wounded as angry mobs set fire to trains to protest attacks earlier in the week on migrant workers in India's financial capital, officials said.

Dozens of protesters pelted police with stones, wounding 12 officers before police opened fire on them, wounding three in Sasaram, 62 miles (100 kilometers) west of Patna the capital of Bihar state, said police chief A.K. Ambedkar.

Protesters set eight trains on fire at several locations across Bihar, stopping rail services in the state, said senior railway official A.K. Chandra.
I expect things to get much, much worse as we go postPeak.

As posted before: IMO, a little Peak Outreach could go a long way in Southern Asia. If the people could merely understand the future impact of burning eight trains...Oh well, I guess they ignorantly desire to purposely imitate the Zimbabwean worker carrying over 100 lbs of firewood by balancing the unwieldy weight on his head.

You are reading too much into it. This has nothing to do with the price of oil or fertilizer. India has always been this way. Riots and violent protests are fairly common. As a matter of fact by Indian standards this was a tame affair. No one got killed. It is not unusual to have Hindu-Muslim riots in which hundreds or sometimes thousands get killed.

I am wondering if anybody is familiar with this company "Royalty Clearinghouse" I have no idea who they are but if somebody has some infos it would be mighty helpful to me.


Are they legit? Friends of mine got approached to buy their mineral rights so just wondering :)


Indian Moon Launch

India launched its first unmanned spacecraft to orbit the moon early Wednesday, part of an effort to assert its power in space and claim some of the business opportunities there.

The Indian mission is scheduled to last two years, prepare a three-dimensional atlas of the moon and prospect the lunar surface for natural resources, including uranium, a coveted fuel for nuclear power plants...

The spacecraft will not land on the moon, though it is supposed to send a small “impactor” probe to the surface.

The launching of Chandrayaan-1, as the vehicle is called — roughly translated as Moon Craft-1 — comes about a year after China’s first moon mission.

NY Times - Indian Moon Launch

Additionally, mineralogy of the moon is yet to be understood in much finer detail. Similarly, the presence of Helium-3, said to be a relatively clean fuel for the future nuclear fusion reactors, is yet to be quantified on the Moon. And, the debate over the presence of water in the permanently shadowed regions of the moon's polar areas is not yet settled.

Indian Space Agency
Chandrayaan-1 Project

Europeans raced to grab the resources of the Americas, Africa, and Australia during the past few centuries. China and India seem to be starting a similar contest.

As to the issue of whether the Moon is a worthwhile destination, let me refer to Voltaire's opinion of Canada in the 18th century:

« Quelques arpents de neige » est l'une des citations de Voltaire par lesquelles celui-ci exprimait son évaluation dépréciative de la valeur économique du Canada et, par extension, de la Nouvelle-France, en tant que colonie au XVIIIe siècle.

"A few acres of snow" is one of Voltaire's quotes in which he expressed his dismissive evaluation of the economic value of Canada and, by extension, of the 18th century colony of New France.

From everything I have read...they are looking for Helium 3...not Uranium.

I think the first news 'journalist' heard nuclear power plant and _assumed_ uranium.

Important distinction thou.

But utterly insignificant in the worlds current climate...it is safe to say (IMO) that NO-ONE will EVER mine the moon. At least, no human.

Tales from the front...

Lately there's been a strange car loitering in my neighborhood in the mornings. It's not the kind of place where you'd expect random traffic, so I wondered if the driver was up to no good. Or perhaps he was waiting until no one was around to either dump trash in the dumpster, or search it for bottles to return for deposit.

I finally figured it out today. While I was watching, someone toting a briefcase and coffee mug came rushing out of a nearby apartment and got in the passenger seat of the strange car.

One of my neighbors has taken up carpooling.

I've noticed a few signs of carpooling, too. A few cars pass me every morning & evening with two or more passengers, I know these people personally, know they are neighbors rather than related, and know that they are heading to work. I started noticing more of these during the recent gasoline shortages.

I have also noticed a couple of cars that rendezvous at a church parking lot that I pass, and it is obvious that they are carpooling.

Still seeing most cars with one driver, unfortunately.

Another sign of the times - an older story that I don't recall seeing on Drumbeat, despite its obvious irony.

On October 11, the Mexican airline Aeromexico made its very last flight into Tucson, the same day that the airport opened its expensive new international wing, which henceforth would be receiving no flights...

Original story here.

Will they change the name of the airport now? Or just try and get someone else to offer an international flight?

No idea, but most probably neither. They can always count international charter and private flights. The main news interest relates to the exquisite timing of their expensive lesson in deglobalization - that the new terminal opened on the very same day that Aeromexico's last scheduled flight departed. The article states that this year they've already declined from 29 to 17 direct destinations, so the new teminal is hardly needed for other flights.

I really like this idea:

Downsizing to 100 square feet of bliss

CALISTOGA, California (CNN) -- Bill and Sharon Kastrinos practice the ultimate in minimalism. They've squeezed into a 154-square-foot home that looks more like a kid's playhouse than their previous 1,800-square-foot home.

With the economy crashing, the Kastrinos traded in their spacious kitchen for one that stretches barely an arm's length.

Unfortunately, it wouldn't work in much of the country, at least not without a long commute. Most communities around here have minimum size requirements for houses. Usually set to just larger than a standard double-wide.

a standard double-wide would be just fine, as long as it was just a scootch longer than the neighbors

No, no. You don't understand. It would ruin property values. We just can't have that kind of trash in our neighborhood!

These minimum size requirements really are an impediment to low-cost housing.

An acquaintance of mine got around them by building his house slowly. First he built the garage. In the dark of night, he moved a trailer home into the garage. He, his wife, and two kids lived inside a trailer home hidden inside the garage for three years, while he saved up the money to build enough of the rest of the house to meet minimum size requirements.

"NEW YORK, Oct 22 (Reuters) - Net payments of only around $5.2 billion were made to settle an estimated $400 billion in credit default swaps on the debt of failed investment bank Lehman Brothers, The Depository Trust & Clearing Corporation (DTCC) said on Wednesday.

DTCC clears the majority of trades in the $55 trillion, privately-traded market. Concerns had escalated ahead of Tuesday's deadline to settle the contracts that payments needed to settle losses would wreak new havoc on markets.

Analysts said these concerns were misplaced because large players in the market, such as dealers and some hedge funds, had both bought and sold protection, subsequently taking both gains and losses on Lehman's default that offset each other"

That actually sounds really nice comapred to what I expected.

Hmmm, only 1.3%. According to the Internets there is estimated to be about $600 trillion in derivatives, of which almost $60 trillion is credit default swaps. If all the CDS was settled at this rate, it would cost only $750 billion. The rest is mostly interest rate derivatives, whatever that means.

So is this good news or bad? The dollar is still going up and the markets are going down, but that doesn't necessarily mean anything.

Minimum size requirements are for the most part silly. They have been going up for years, it must be an attempt to keep up with the Jones's.
It also might be one of the reasons that we are in the present situation that we are in.

The move toward a more sustainable size of house might be forced apon us more quickly than than the general public realize.

Personally I think that the minimum size requirement is a product of myopic thinking. A person's needs are smaller that their wants!.

Minimum size requirements are for the most part silly. They have been going up for years, it must be an attempt to keep up with the Jones's.

My guess is that they've been going up because the size of trailer homes has been increasing.

Internal migration from Australia's drying areas to the rainy areas won't happen until it is past a crisis. People won't be able to sell their houses or dream of their kids having a well paid job in the same city. Moreover slumping Chinese demand for minerals could see people returning from the outback to the cities.

The first stage will be denial. On TV last night pundits looked at a tropical river valley and concluded it would be a pity to spoil it. The second stage will be non-solutions. I'm tipping that as food prices escalate conservatives will point to nearby national parks as a source of more food production. The third stage will be welfare and makework whereby city incomes will be pumped up to help pay for food and water. When that fails the last stage may be major relocation to the tropical areas. That's a decade away however.

Petrohawk announced a new natural gas shale formation disoovery in the Eagle Ford Shale, Texas.


Eagle Ford Shale Well Placed on Production at 9.1 Mmcfe/d.

United States natural gas reserves have been growing since large scale exploration of carbonaceous shale formations began. Some fuel switching from gasoline to natural gas might be possible as natural gas is cheaper per BTU and does not require as much refining as oil. Some city buses operated on compressed natural gas.

There is a simple conversion for a diesel engine to run on a mix of diesel and natural gas, using the diesel as the ignition source.



Clean Air Power - Demonstration of power cycle.

IMO bio-gas from digestion should be pursued instead of ethanol as part of a wider move towards using natural gas in transport (In combination with electric) If fuel cells ever become practical they will be fuelled by natural gas not hydrogen

I totally agree. A friend has had LPG (propane) assist installed on a Nissan diesel and it goes good. The tuning needs to be modified for CNG.

Apart from natgas and biomethane a compatible syngas could be made from garbage. The process would probably have to use plasma gasification followed by catalytic conversion to methane. EROEI perhaps as poor as corn ethanol but then you have a resilient and versatile fuel. Way post peak the starter diesel could be any of the Choren, hydrogenated or ester types.

The other plus of CNG is that cars may not need to shrink in size that much. The 220 bar tanks may need to be made from carbon fibre to reduce weight. If the liquid/gas mix was variable cars could find enough diesel on interstate routes if CNG filling stations were infrequent. I think future cars may split into battery runabouts (eg the Volt) and CNG highway cruisers. One hour commuters without public transport should use CNG cars.

Often there are blog arguments over hybrid vs diesel, vs CNG, vs plug-in, etc. To me, a diesel-CNG car is a better car than a dual-fuel gas-CNG car (you'd need a turbo or supercharger to take advantage of the octane of CNG for gas), and there is no reason you couldn't build a diesel-hybrid. Sure, it would be expensive, but the CNG-electric blend would work great around town, and diesel would do fine for the highway if you couldn't find CNG.

In any case, having a choice of several fuels will help survive spot shortages and price spikes for a few years at least.


As a New Zealander can anyone opine on the likelihood of feasible to produce oil from an off shore fractured shale rock oil play? I see from the article its being done in North Dakota (onshore I assume)


I do not believe it is economically feasible at this time.

I still find Jim Rogers investment advice intriguing:

In Times of 'Zombie Banks,' Buy Commodities: Jim Rogers

The fundamentals for commodities were not affected by government policies that are propagating inflation, Jim Rogers, CEO of Rogers Holdings

I bought more agriculture this week," Rogers told "Squawk Box Europe." "What's happening is that there will be less supply of everything if we ever come out of (the credit crunch). Nobody can get a loan for a zinc mine or, long term, increase crop production."

If history is any guide, things to buy are things that are doing fine right now like water treatment companies in Asia or agriculture, Rogers added.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke should resign for keeping alive "zombie banks" that should be allowed to fail, he said.

Republicans 'considering' Sarah Palin 2012 presidential campaign


Excellent news. Who needs Nehemiah Scudder when we have Sarah 'Moose' Palin?

Isn't the World supposed to end in 2012?

Now we know why....

Who knew the Mayans were into moose burgers?

I think the smarter GOP veep prospects knew McCain was a losing cause and didn't want their name associated with his in 2012. Palin was chosen because nobody else would accept the offer. I wonder if these are the same repugs who were promoting Condi Rice last year.

Investors Suffer as US Ethanol Boom Dries Up

Investors, such as Microsoft's Bill Gates, are sitting on billions of dollars in losses after buying into the corn-based ethanol industry that George W. Bush embraced as the answer to US energy woes.

Six of the biggest publicly traded US ethanol producers have lost more than $8.7bn (£5bn) in market value since the peak of the boom in mid-2006 and the beginning of this month, according to an analysis by the Financial Times. The boom followed a 2005 law requiring refiners to mix billions of gallons of the biofuel with petrol.


The losers in the ethanol investment frenzy, which some have compared to the dotcom mania of the late 1990s, include famous names, such as Mr Gates, Microsoft founder. His private investment firm has lost millions on its 2005 investment in a company called Pacific Ethanol. Mr Gates's firm, Cascade Investments, did not return calls seeking comment.


Investor losses come as taxpayers have paid billions to support the ethanol industry. More than $11.2bn has been spent since 2005 on tax breaks for companies that blend ethanol into petrol. Billions more have been spent on direct state and federal subsidies for US ethanol production.

"We're looking at an industry that's cost $80bn to get to this point," said Bob Starkey, a fuels analyst at Jim Jordan & Associates, a research group in Houston.

However, ethanol has disappointed many who saw it as a wonder product that could reduce the US's dependence on foreign oil while cutting down on pollution. Worse, a growing number of influential critics now say ethanol is helping raise the price of food.

The industry's supporters still defend ethanol. Bob Dinneen, head of the Renewable Fuels Association, the industry's main lobbying group in Washington, said the fuel represented an opportunity for Americans to invest "here at home" rather than continue to "haemorrhage money ... to the Middle East".

"I'd challenge you to find any energy resource today that isn't dependent on government support," Mr Dinneen said.

A byproduct from the manufacture of ethanol has been blamed for a spike in illnesses:


Ethanol producers trying to get a government bailout for the "fuel to nowhere."


It takes 62 gallons of water to make enough ethanol to go a mile. Not good for L.A. or Phoenix.


At last! A bit of good news about ethanol. And Bill Gates losing millions too :)

The losses in publicly traded ethanol companies are nothing compared to the losses in publicly traded oil companies such as Exxon whose capitalizations are many times larger. In any case, many ethanol producers are private or coop type companies owned by farmers with deep pockets.

The collapse of inefficient/poorly managed ethanol companies is nothing more than the periodic cleansing that regularly occurs in business of any sort. The result when it is over will be a more robust industry able to counter the next rise in gasoline prices more effectively. Some of these poorly managed companies bought corn futures hedges at the highs and did not cut their losses when the market went against them.

It was pure naivete and stupidity. Blaming the whole ethanol industry for the mismanagement of a few is silly. Those plants which are in trouble will be bought out by the more capable producers in most cases. Input costs for ethanol are dropping dramatically as is the price of ethanol itself. It will not be over until it is over, just as the rout in crude oil and refining also continues.

Leanan will scoop it up soon, but until then:

"Some Regret Locking In Price For Oil" from the NY Times


Who would'a thunk it?? (or, Gee, I wish I'd bought at $125...)

Is this the first mainstream forecast of this type?

Sadad Al-Husseini raises the prospect of total world oil demand falling in 2009. (temporarily before eventually rebounding)

Oil Demand May Drop to 83.5 Million Barrels in 2009

Oct. 22 (Bloomberg) -- World oil demand is expected to fall to as low as 83.5 million barrels a day in the second quarter of 2009, a Morgan Stanley consultant said.

Global demand, 85.7 million barrels a day in the third quarter of this year, will fall to 85.1 million in the fourth quarter and 84.7 million in the first quarter of 2009, Sadad Al- Husseini, a Morgan Stanley consultant and former head of exploration and production at Saudi Aramco, said on a conference call today.

``We are going to see a significant dip in demand that will be most severe in the second quarter,'' Al-Husseini said.

Is the Bakken Shale in ND still going to be drilled at these prices? Haven't seen many stories lately about "a millionare being created everyday in ND" lately.

I think this company called Continental Resources is a big player in the bakken. The company stock price is getting hammered (like most energy stocks)


RE Organic farming 'could feed Africa'

The key is markedly better management of severely degraded soils, not necessarily the whole of organic principles. This is a very complex, nasty problem because of its social and cultural aspects, such as land tenancy and education, as well as soil science.

Saving Africa’s Soils: Science and Technology for Improved Soil Management in Africa (pdf)

Restoring Soil Health in Africa

Fertilizer no substitute for good soil management blogpost on African Agriculture