DrumBeat: November 23, 2008

Russia president, warships to Venezuela to counter US

CARACAS (Reuters) - Warships, nuclear power, arms sales and perhaps cooperation on oil prices -- Russia's President Dmitry Medvedev is in Venezuela this week with an alarming sounding list to wave under Washington's nose.

The U.S. government dismisses the importance of Medvedev's visit on Wednesday to meet Venezuelan President Hugo Chavez and the deployment of several Russian warships for joint military exercises with Venezuelan forces in the Caribbean. It says Russia's weak navy is no threat and downplays its rivals' blooming friendship.

But OPEC-member Venezuela is Russia's first firm ally in the Americas since the Cold War and Moscow sees ties to Chavez as a way to answer U.S. influence close to its borders in the Caucasus.

Saudi cuts repo rate to boost liquidity

CAIRO, Egypt: Saudi Arabia's central bank on Sunday cut its key interest rate by 1 percentage point, and reduced banks' cash reserve requirement by 3 percentage points in steps aimed at boosting liquidity during the global credit crisis.

The move by the Saudi Arabian Monetary Agency follows particularly dismal performance on the country's stock exchange, which started the Saudi work week on Saturday with a 9.2 percent drop that dragged its benchmark Tadawul All Shares Index down to a five-year low.

The exchange — the Arab world's largest — closed down almost 3.8 percent on Sunday, continuing its fall on the back of slumping crude prices and overall economic gloom around the world. So far this year, the Saudi market is off over 61 percent.

Official: Russian companies interested in exploring for oil in Cuban waters in Gulf of Mexico

HAVANA (AP) _ Russian oil companies could soon begin searching for oil in deep Gulf of Mexico waters off Cuba, a top diplomat said just days before Russian President Dmitry Medvedev visits the island.

Russian oil companies have "concrete projects" for drilling in Cuba's part of the gulf, said Mijail Kamynin, Russia's ambassador to Cuba, to the state-run business magazine Opciones.

Kamynin also said Russian companies would like to help build storage tanks for crude oil and to modernize Cuban pipelines, as well as play a role in Venezuelan efforts to refurbish a Soviet-era refinery in the port city of Cienfuegos, according the article published this weekend.

Venezuela Calls for Million-Barrel OPEC Cut This Year

(Bloomberg) -- Venezuela will call on the Organization of Petroleum Exporting Countries to reduce oil output by 1 million barrels before year-end, Energy and Oil Minister Rafael Ramirez said.

The country, which pumps about 11 percent of the oil produced by the exporters’ cartel, also wants to ensure that all members are complying with the production cut of 1.5 million barrels a day that they agreed to Oct. 24, Ramirez said today in Caracas.

Venezuela May Revise 2009 Budget on Lower Oil Prices

(Bloomberg) -- Venezuela is reviewing its economic situation daily and may revise its 2009 budget in January or February as oil prices fall amid the global financial crisis, Finance Minister Ali Rodriguez said today in Caracas.

Total Chief Executive Margerie Expects Profit to Drop

(Bloomberg) -- Christophe de Margerie, chief executive officer of Total SA, Europe's third-largest oil company, said results will drop in this year's fourth quarter and the first quarter of 2009 after energy prices declined.

``We had a very good result in the third quarter because energy prices were high,'' de Margerie said on RTL radio and LCI television today. ``Prices have dropped, so the fourth quarter won't be as good, and so will the first quarter.''

CNY200 Billion Invest Needed For S China Sea Exploration -Cnooc Executive

SHENZHEN, China -(Dow Jones)- Around CNY200 billion ($29.3 billion) needs to be invested in oil and gas exploration in the South China Sea at water depths of 1,500-2,000 meters over the next decade, a Cnooc Ltd. (CEO) executive said Friday.

Global Trends 2025: A transformed world (excerpts)

"Global Trends 2025" is a striking 120-page document from the National Intelligence Council (NIC), a center of strategic thinking for the U.S. government, with input from the various intelligence agencies.

As the Guardian observes, it is a striking reversal from the triumphalism of the Bush years. It sees the future as multi-polar and roiled by shocks. Resource scarcity and climate change are highlighted. State capitalism in the style of Russia and China will challenge the liberal capitalism of the West. Even the possibility of a decline of the role of the U.S. dollar is mentioned.

Though the report has opened the door to reality, peak oilers will still find much to criticize. The term "peak oil" is still taboo, even though a transition away from oil is predicted as a near-certainty. The coverage of energy alternatives in more wishful thinking than realistic. For example, the report points with hope to carbon sequestration, hydrogen, and biofuels as possible responses. Chapter 2 on demographics will disappoint anyone concerned with over-population.

Even so, the National Intelligence Council has given us a lot to chew on. As a former technical writer, I appreciate the clear writing and organization.

Iran holds defence drills, warns on oil route

TEHRAN (Reuters) - An Iranian militia held civil defence drills on Sunday to prepare for any hostile air strikes and the military said it could close a waterway crucial for world oil supplies if Iran was attacked.

‘Shell’ reduces 50% fuel supply to PIA, Armed forces due to shortage of fuel reserves

ISLAMABAD: Oil supply company “Shell Pakistan Limited” has reduced 50% supply of JP-I, JP-IV and JP-VIII (Super Fuel) to Armed Forces of Pakistan and Pakistan International Airline (PIA) due to shortage of fuel reserves.

The reduction in supply by Shell Pakistan Limited also causes delay in Hajj Flights and disruption in the flights of fighter jets.

Wars that changed the world

Big or little, President Obama will have his war. President Bush had his, the Iraqi War and the War on Terror, the latter being a rather different business from the conventional war between states. Most US presidents have had to fight, and several of the handful of great ones were made so on the field of battle.

...This World War II world is unravelling. The global-financial- crisis-turned-economic-crisis is severely challenging the Bretton-Woods arrangement. The strengthening euro is challenging the US dollar as the currency of choice to run the global economy. On top of all this, terrorism has risen as a new global threat, the global environment is under severe threat from human action, and there is an emergent energy crisis.

The resentment rises as villagers are stripped of holdings and livelihood

The blackened tree trunks say it all. Three times in recent months these tracts of palm oil plantation have gone up in smoke, along with plants and machinery. The neighbouring coconut operation suffered the same fate, but there the Thai owners replanted. Here, the Malaysians had had enough and called it a day.

The sabotage is a testament to growing local resentment at the way land is being sold off to big foreign investors with deep pockets.

Fiji: So what exactly is the problem?

WE have recently been witnessing in the mass media, claims and their being countered that we are close to an energy crisis.

The Fiji Electricity Authority has said that low rainfalls and high diesel costs, amongst other things, are causing it problems. And it needs an increase in the electricity surcharge, which the interim Government recently granted, to cope.

Green Obama’s official limo is a gas guzzler

On the campaign trail, Barack Obama promised to get a million plug-in hybrid cars on the road by 2015. His own new presidential limousine will be far from green, however.

The Obamobile being prepared for the president-elect is said to be a monster gas-guzzler made by General Motors, the troubled car giant. It will look like a black Cadillac but is built like a tank. A spy photographer who tracks down future car models for magazines snatched pictures of the heavily disguised first-car-in-waiting when it was being road-tested last summer.

Iraq increases oil exports by 3.5 billion barrels

BAGHDAD (AP) -- Iraq says oil exports in October increased to 52.8 million barrels, up by 3.5 million barrels from the previous month.

The Oil Ministry says revenues in October were US$3.11 billion, down US$1.1 billion from the previous month because of the sharp drop in oil prices. Iraqi oil was purchased by 22 international oil companies.

Gas prices continue to fall

NEW YORK (CNNMoney.com) -- Gasoline prices continued to sink, falling for the 67th day in a row, according to a national survey of gas station credit card swipes released Sunday.

Buffett: Carmakers must change

OMAHA, Neb. (AP) -- Billionaire investor Warren Buffett said U.S. automakers need a new business model to better compete, whether it takes bankruptcy or a government bailout to achieve.

South Dakota district might be trailblazer

In Clark - and in Howard and Doland, Willow Lake and Henry - administrators, teachers and community members are contemplating the possibility of going to four-day school weeks, Monday through Thursday, and giving their teachers Fridays to become better prepared to educate young people for success in the 21st century.

...The situation is intriguing to national experts, who saw the four-day school week spring out of the energy crisis of the early 1970s, primarily in New Mexico, and spread to a little more than 100 school districts in 17 states since then. Marc Egan, a lobbyist with the National Association of School Boards, said he's surprised that transportation and fuel savings aren't driving the discussion about change in South Dakota these days.

Oil Prices Falling, But Interest In Alternative Fuels High

Even before heating oil spiked toward $5 a gallon last summer, businesses that sell wood and pellet stoves were busy. By early fall, some pellet and wood retailers were so flooded with calls that they stopped taking new customers.

Strapped consumers searching for cheaper alternatives to oil and gas were looking to supplement their heat with a wood or pellet stove.

Segway inventor touts island as an energy model

MYSTIC, Conn. (AP) — Energy independence is still only a hypothetical goal for the U.S., but the owner of a tiny island off the coast of Connecticut says he has already achieved that feat and is offering his work as a model.

New ideas could stop reliance on foreign oil

It’s been 35 years since then-president Richard Nixon set out to make the U.S. independent of foreign energy. At that time, the U.S. was importing only about 30 per cent of its oil; today it brings in almost two-thirds of its requirement.

In Canada, more than half of the oil consumed is imported, and imports have been estimated to rise by 23 per cent in 2008 from 2007’s volume.

Coal CEO calls environmentalists crazy

Don Blankenship, CEO of Massey Energy, the fourth largest coal company in the country, blasted politics and the press, comparing Charleston Gazette Editor James. A. Haught to Osama Bin Laden Thursday evening when he addressed the Tug Valley Mining Institute in Williamson.

“It is as great a pleasure for me to be criticized by the communists and the atheists of the Charleston Gazette as to be applauded by my best friends,” he said. “Because I know they are wrong. People are cowering away from being criticized by people that are our enemies. Would we be upset if Osama Bin Laden was critical of us?” he asked.

“Totally wrong. Nonsense. Absolutely crazy.”

Oil’s plunge threatens Gulf balance sheet

Oil prices have sunk close to break-even for Saudi Arabia, the world’s biggest oil producer, and are hovering at near half the level that Iran would need to balance its fiscal budget.

The development could usher in fiscal austerity drives around the Gulf, with delays to major industrial, infrastructure and energy projects subduing economic growth in a region that seemed well shielded from financial and economic meltdowns in the rest of the world.

But with crude’s descent to below US$50 a barrel on Thursday – a level last seen in early 2005 – that is clearly no longer the case.

Gulf markets lose $371bn since Lehman demise

Gulf equity investors have lost a staggering $371 billion (Dh1.3 trillion) since the collapse of the US Lehman Brothers bank in mid September, a daily loss of nearly $7.5bn, official figures showed yesterday.

Saudi Arabia's Tadawul, by far the largest and busiest bourse in the Middle East, emerged as the main victim, plummeting by more than $150bn.

Somali hijackers have international network

In an exclusive interview with the London-based Asharq al-Awsat newspaper, a negotiator for the pirates holding the Saudi supertanker Sirius Star off the Somali coast disclosed how some 40 hijackers seized control of the vessel.

Among other things, the negotiator said that the hijackers' "love" for Saudi Arabia—because it is a Muslim country—would reduce the ransom. He also disclosed that the pirates have help from informants in other countries who provide them with data about ships and their movements.

Islamic fighters vow to rescue hijacked Saudi tanker

Somali militants have vowed to rescue a Saudi supertanker that was hijacked by pirates a week ago, according to residents of a town where the pirates are believed to be based. The fighters told residents in Harardhere, Somalia, they would battle the pirates because the tanker -- loaded with 2 million barrels of oil -- is owned by a Muslim country and should not have been taken, Mohamed said.

In N. Dakota, Our Nuclear Past Eclipses Today's Harbingers of Doom

When you're surrounded by 150 Minuteman III silos, with 400-plus warheads, spread out geometrically across eight very large counties from the Canadian border to Interstate 94, you have an extremely clear idea of what the end of the world looks like. Kind of consoling, actually, in its lack of ambiguity.

Today is harder.

Today is more like the situation described by Thomas Homer-Dixon -- "systems that are kind of stressed to the max already, where policymakers are trying to keep ten balls in the air simultaneously and keep all the various constituencies satisfied as best they can. And then there's some exogenous shock on an already highly stressed system that produces a kind of overload situation." Homer-Dixon is author of "The Upside Down: Catastrophe, Creativity and the Renewal of Civilization."

Virgin America sees fuel hedge opportunity

SAN FRANCISCO (Reuters) - Lower fuel prices present a "unique opportunity" to hedge buying up to four years out, the chief executive of airline Virgin America said on Saturday.

Energy: How low can you go?

To take the heat out of global warming we must take radical action, learning to live on half the energy we currently consume. John-Paul Flintoff tries the low-watt diet.

Bush oil shale rules roil Mountain West

Seven weeks after a congressional moratorium on oil shale development expired, the Bush administration has issued rules that take the first step toward tapping an estimated 800 billion barrels of oil trapped in sedimentary rock in Wyoming, Utah and Colorado.

The new rules have highlighted a divisive partisan issue among western politicians, with Republicans ready to push forward with development and Democrats urging a more cautious approach. The rules establish a framework for how energy companies will lease federal land for oil shale mining. Opponents say oil shale mining uses so much water that it could threaten their drinking water supply. They also say its heavy consumption of energy could outweigh its energy benefits.

Indiana coal-to-gas project bucks industry trend

In the heart of southwestern Indiana's coal country, Duke Energy Corp. crews are building what the company's CEO calls the power plant of the future -- a $2.35 billion complex where coal will be turned into a gas, stripped of pollutants, then burned to generate electricity.

The project, one of the "clean coal" technologies supported by President-elect Barack Obama, will become by far the nation's largest coal-gasification plant when it goes online in 2012, generating enough power to light more than 200,000 homes.

But opponents suing to halt the 630-megawatt plant near Edwardsport, Ind., call it a colossal waste of money that will saddle the utility's Indiana customers with years of rate increases and release tremendous amounts of carbon dioxide, a greenhouse gas tied to global warming.

Army backs the hydrogen highway

In a side bet on "green power," the U.S. Army has awarded a $1.8 million contract to develop hydrogen filling stations for military vehicles, hoping it pays off with reduced fossil-fuel consumption and increased efficiency.

U.S., Brazil to speed up cellulosic ethanol research

SAO PAULO (Reuters) - The world's top two producers of ethanol, the U.S. and Brazil, will join forces to speed up research into cellulose-derived biofuels, which use inedible plant matter rather than crops as their feedstock.

Controversy erupts like Old Faithful

Imagine if the fastest, most efficient way to meet the nation's need for clean energy was to tap into its most treasured natural resource: Yellowstone National Park.

Self-proclaimed problem-solver Steve M. Green claims that the geothermal energy of the Yellowstone caldera could generate enough steam-powered electricity to power man's needs across the globe.

NASA scientist cites 'global-warming emergency'

Physicist James E. Hansen, director of NASA's Goddard Institute for Space Studies, said hundreds of millions of people will lose fresh water sources and hundreds of millions of others will be displaced by rising sea levels if fossil fuel emissions remain on their current course.

"We've reached a point where we have a crisis, an emergency, but people don't know that," Hansen told a packed Stanford audience Thursday night.

350 Parts per Million

The people of the Earth ignore the dangers of global warming to their peril. This ecological crisis is a moral issue.

Deffeyes: To The Peak Oil Community

Many of us are hoping that President Obama will be another FDR. If the oil trap snares him, he could be forced into the Herbert Hoover mold. Maybe Karl Marx was right.

Don't nobody tell, but Oil & Gas Journal (November 17, 2008) reports that Henry Waxman, the new chairman of the House Committee on Energy and Commerce, is an opponent of the hydrofrac technique. Frac jobs have been around a while; Hubbert and Willis published on frac physics in 1957. Anybody know where Waxman stands on water flooding and drilling mud? Don't ask, don't tell.

I promise not to relay the many postponement or cancellation announcements of energy project construction, drilling campaigns, or equipment manufacture. If the investors can't see the bottom of the oil-price drop, they won't put up the money. Matt Simmons, for good reason, has proposed a minimum support price for oil and natural gas. Forewarned is forearmed.

Gulf Stocks Decline as $49 Oil Restricts Government Spending

(Bloomberg) -- Persian Gulf shares fell as crude oil below $50 a barrel undermined investor confidence that regional governments, dependent on income from oil exports, will be able to offer financial help to ailing companies.

Iraq oil revenues hit by price plunge

Iraqi oil exports increased in October to an average of 1.7 million barrels per day (bpd), up from 1.64 million bpd in September, the oil ministry said, but a sharp fall in prices reduced revenue by more than $1 billion.

Exports are still several hundred thousand barrels lower than highs reached earlier this year, hampered by technical difficulties at the Basra terminal.

Iran could live with $5 oil - Ahmadinejad

Iran could live with an oil price as low as $5 per barrel, President Mahmoud Ahmadinejad was quoted as saying on Sunday, in comments at odds with the views of the IMF and economic analysts.

..."There was a time when the country managed on $9 a barrel. We can do it even if oil falls to $5," he told reporters at a media fair in Tehran, state television said, without giving detail on how his government would handle such a situation.

Palm oil famers hit by global financial crisis

The global economic slowdown has sent palm oil prices crashing, spelling misery for many Indonesian and Malaysian farmers.

Hundreds of thousands of farmers in Indonesia and Malaysia, which produce 85 percent of the world's palm oil, rely on the industry which has gone from boom to bust in just a few months.

Russia's Medvedev to discuss oil consortium in Venezuela

LIMA (Reuters) - Russian President Dmitry Medvedev will discuss the creation of a joint consortium to further develop the Orinoco oil field during a visit to Caracas on Wednesday, the deputy head of gas giant Gazprom said.

"The consortium will be the main theme (of energy talks in Caracas)," Gazprom's deputy head Alexander Medvedev told reporters on Saturday.

Sakhalin-II project to start LNG supplies to Japan in early 2009

LIMA (RIA Novosti) - Liquefied natural gas supplies to Japan under the Sakhalin-II oil and gas project off Russia's Pacific Coast will start in February next year, a Gazprom senior official said on Sunday.

"An official ceremony of filling the first tanker with liquefied natural gas is scheduled for February 19," said Alexander Medvedev, deputy chairman of the Gazprom management committee and head of Gazprom Export.

Ringed by Foes, Pakistanis Fear the U.S., Too

ISLAMABAD, Pakistan — A redrawn map of South Asia has been making the rounds among Pakistani elites. It shows their country truncated, reduced to an elongated sliver of land with the big bulk of India to the east, and an enlarged Afghanistan to the west.

That the map was first circulated as a theoretical exercise in some American neoconservative circles matters little here. It has fueled a belief among Pakistanis, including members of the armed forces, that what the United States really wants is the breakup of Pakistan, the only Muslim country with nuclear arms.

NJ Transit to stop buying compressed natural-gas buses

HOWELL — New Jersey Transit's nearly decadelong, multimillion-dollar trial run with low-polluting buses that burn compressed natural gas is over — for now.

...Instead, the agency is buying 1,145 new ultra-low sulfur diesel buses — representing roughly half its fleet, officials said. Their emissions are comparable to those from new CNG buses — yet they cost less.

G.M.’s Latest Great Green Hope Is a Tall Order

DETROIT — The Chevrolet Volt, a plug-in hybrid, will not arrive in showrooms until late 2010. But it is already straining under the weight of an entire company.

Wind turbines would need to cover Wales to supply a sixth of country's energy needs

An area the size of Wales would need to be covered in wind turbines to meet just a sixth of the nation's daily energy needs, according to a new study that has cast doubt over the Government's push for wind energy.

At a New York Seminary, a Green Idea Gets Tangled in Red Tape - Geothermal Energy Plan Delayed by Bureaucracy

Drilling a quarter-mile into solid rock was simple, said Maureen Burnley, the seminary’s executive vice president, compared with persuading government officials and agencies that had the authority to say no — or to simply do nothing and stop all progress.

“We had to answer to 10 agencies,” Ms. Burnley said. “It took three times as long as it should have. The left and the right hand did not know what the other was doing.”

Oil giants talk tax to kill environment

Evidence is mounting of a coordinated global oil industry effort to seize upon the international economic crisis as an opportunity to “rebel” against ecological controls and bludgeon concessions out of governments.

The assault on environmental and other regulation is being conducted under the cover of complaints about taxation.

Greener cars the price for automaker aid

As giant auto makers beg governments to bail them out of the economic crisis that has brought them to their knees, some authorities have named a price -- make greener cars to drive.

The Climate Purge: Coup d'etat at the powerful House Energy and Commerce Committee.

Henry Waxman moved to consolidate his coup d'etat at the powerful House Energy and Commerce Committee just hours after he was installed as the new chairman this week. It appears that the California liberal, with his customary subtlety, is plotting a night of the climate-change long knives.

Uncertainty, Climate Change, And The Global Economy

What will the climate be like in a hundred years’ time? The answer depends on both how human activity affects climate change and how a warming climate alters the economy’s productive capacity and human welfare. There is uncertainty about those links, but this column shows that, absent policy action, global warming will be a major problem even under very optimistic circumstances.

Another day, another drumbeat,another 86 million barrels down the drain. Really surprising to see the Iranian president saying we can survive on 5 dollar oil, can it really go that low? Unless the deflationary depression is truly epic, than 5 dollar oil would be relatively the same as 100 dollar oil.

The President of Iran said Iran could survive at $5 per barrel.
The rest of the world would not survive. He is blowing smoke anyway.
Russia, Mexico, Iraq, Venequela and others support most of their government operations with oil profit money. If profits drop, then their governments will collapse.
Low oil prices are good for the US since we are a 65% importer.
However, when the imports go to zero, the US will come to a standstill.
When we have other fuel sources in place, then we can survive on $5 per barrel.
If it really went to $5 now, consumption would increase substantially, which would cause shortages.
Prices would then rise back up.

RE: Gas prices continue to fall

Gasoline prices continued to sink, falling for the 67th day in a row, according to a national survey of gas station credit card swipes released Sunday...

Prices at the pump have been falling along with the price of crude oil, the main ingredient in all petroleum fuels. Crude investors have been concerned that as the global economy slows, demand for fuel will fade worldwide.

Oil prices on the open market have fallen more than 60% since mid July. On Friday, oil futures settled at their lowest levels since May 2005.

Thank God I did the responsible thing and bought a Prius. Gonna save me a ton of money (not).

you at least have a vehicle that is somewhat gas optional.
the price drop may be good for people who can afford it, but the reason the price dropped is not a good thing. it dropped because people are liquidating their energy holdings to pay bank margin calls on other things, though this doesn't change the fact that we still have the same supply situation as we did at $150~ oil so as the demand starts to rise watch the prices not only skyrocket but also have shortages.

Wasn't Iran pushing for cuts to keep oil around 100 us$ range a few weeks back?
Considering that most of the 'rainy day fund' has been depleted for populists policies, Iran would be in a very bad state with 5$ oil.
Mr. Ahmadinejad is a bit like Mr. Chavez in that they built their support at home on spending (quite wastefully) the benefits of expensive oil. Since neither of them bothered to have a functioning economy, when oil goes down, they go down too.

Even the usual sabre-rattling isn't working any more to push prices up.

From the Henry Waxman article: " Mr. Boucher has been a friend to the coal industry and hardly finds himself in a comfortable position now when his incoming boss supports a moratorium on coal-fired power."

The majority of Alberta's electricity is from coal-fired plants. We export some to the USA.

Given the recent news that electricity and gasoline use have slumped, it seems possible that the Democrats could get away with shutting down dirty coal, dirty oil, etcetera, for a while. The ecoonomic slump seems likely to last until at least 2010, so falling demand outpacing falling oil supplies will allow the Obama government the luxury of denying Peak Oil and getting away with it.

The problem, of course, is that once the economy recovers, so will the demand, and then where will they be? Green is wonderful, but it doesn't power all those air conditioners in southern USA, or keep the forced-air furnaces running in the northern states in winter.

If the Obama administration campaigns seriously against so-called dirty oil from the Alberta oilsands, they will probably get away with it for a while. We are still short of pipeline capacity across the Rockies to ship oil to China or India, but if there is no market in the USA, then the pipelines will be built.

Hah! They've got you fooled. The economy is not going to recover!

Seriously...I don't think Obama's really going to do much on the climate front. He'll have his hands full with the economy. He is clearly not expecting a recovery any time soon. It sounds to me like he's preparing the country for an economy that won't recover during his term.

Just imagine, on Friday afternoon the markets latched onto the rumor that Tim Geitner will be appointed treasury secretary, propelling the DJIA to a 7% run-up. The trivia allowed traders to disregard the impending implosion of the Big 3 automakers and Citigroup. The euphoria will surely be shortlived. Reality has a way of doing that. Geitner's appointment can't make those $1 trillion of Level 3 assets on Citibank's balance sheet somehow, magicaly go away; nor propel people to start buying gas guzzlers again.

Which leads us to the question: Where is homo economicus-- that rational, perfectly informed and self-interested actor who desires wealth, avoids unnecessary labor, and has the ability to make judgments towards those ends? He seems to have fled the scene, and without him, none of our regnant economic theories work.

But while our wise men--those lofty adherents to the Chicago School and Austrian School--can luxuriate in their ivory towers, other people must make do in the real world. CNN gives us a couple of poignant examples:



Leanan, Being a Canadian I am naturally part of the group that lies Democrats more than the other guys. However I think Obama supporters have oversold him in their own minds. It is great for the USA that you have elected a minority president, however I think a lot of Obama suporters are attaching messianic qualities to him that he doesnt have. The group of people he is surrounding himself with seem like they are recruited from the temple not the countryside. I don't see a Peter or James or John there but a lot might be closer to the twelth guy. Personally I think he is more of a normal politician and may sprout some feet of clay someday, perhaps soon. He seems more like a populist pandering to the biases and desires of the majority as opposed to someone willing to lead that majority in the correct direction. At the same time his advisers and appointees seem to show he is serving the same gang of robber barons that the bush crowd served so well. Time will tell and perhaps what he does on free trade may be a litmus test of it. Backtracking on his position on free trade will indicate he is still serving the corporate globalization view. At the same time it seems a bail out of the USA auto companies will be a bit confusing since part of it will likely look like anti-free trade as I can't imagine giving those guys 25 billion and still have the Canadian and Mexican operations being any more than symbolic if that. However the bottom line for him is the bottom line. He won't have much money to achieve anything that people expect. Even if I am wrong about him (hopefully), he is soon goung to run out of capital, political and otherwisw to accomplish anything. America was not ready for FDR until the depression was well established. They are not yet ready for another FDR and if that is to be it will probably be the next guy.

The group of people he is surrounding himself with seem like they are recruited from the temple not the countryside.

Definitely. It's all Clinton retreads. He's even sending his kids to the same school Chelsea Clinton went to.

He seems more like a populist pandering to the biases and desires of the majority as opposed to someone willing to lead that majority in the correct direction.

Yes, but to me it's not unexpected. That is clearly what he was, even during the primaries. I doubt he'd have been elected otherwise.

I am expecting Obama to be very conventional, despite the talk of change. Just the fact that he's black and relatively young is about as much change as the average American is ready to accept. He has to be very careful not to seem radical. More so than an old white guy.

It's another variation of "only Nixon could go to China."

It's like what was described in the book 'friendly fascism'. even IF obama was someone 'for the people', which is about as possible as being struck by lightning 5 times in a row in five consecutive steps. due to the system he has to appoint people fully invested in the political side of the elite class of this country so they would sabotage anything he would try to do for the people not in the elite caste of this country.

I think that the book "Friendly Fascism" was the most prescient analysis of US politics I've ever read.

There are some good online excerpts at "Third World Traveler"


US politics have been a matter of slow manipulation of the party system so that the people can choose between two fascist candidates, each appealing to different slices of the electorate.

How could it be otherwise?

"War is the only solution" for fascists. We are engaged in a single long war for full spectrum global dominance. The war will get dicier and more costly as time goes by.

Eventually, of course, the "victors" will inherit a bombed-out, depleted wasteland and toxic oceans which will be incapable of supporting human life.

Is there any chance that we can avoid such a scenario?

considering the times that the people have been given power in the political system and then turned around and given it up, i have come to the conclusion that while democracy is possible. since we are kind like herd animals we prefer less participatory systems.

Thus the greatness of George Washington. First command of the Army (many of whom wanted him as King), and then as the only unanimous US President after two terms.

Best Hopes for Pro Bono Publico,


you have to realize though, he did not do what he did for the common man. he did what he did so he and his upper class buddies were not under the thumb's of top dog elites.

The elite like to go with what works. Tony Blair worked well for them in the UK. So it's no surprise that a rash of young trendy Blair-like politicians and leaders have hit the scene since, dressed in whatever political colours best suit their respective countries.

Obama is just a vehicle to provide a veneer of public consent to the underlying policies of the elite.

The elite have been badly affected by the current crash and know things are going to get worse. They need to recover their wealth, power and position at the head of the table and Obama is the way they're going to do it. In the midst of a Depression its going to be very much of a zero sum game and their gain will be the middle and lower classes loss.

Obviously the losers will fight to keep what is theirs, so things might get a little rough as the elite appropriate what they want through the powers of the State.

I have come to the conclusion that the fall back position of all politicians and in fact TPTB in general is DEFER.

It gives one time to secure their objective and it is amazing how effective it is.

Obama represents the ultimate deferral candidate.

Even APEC bought into it. Indeed the world is on hold until Obama does...

In the imortal words of the current young generation,


Obama has yet to say "I feel your pain."

He's no Clinton, thank $DEITY for small mercies.

I'm just hoping he's not another Bush.

The CNBC talking heads this morning seem to think he is. They are practically wetting their pants over the Geithner pick. They seem to think choosing Geithner means continuation of Bush policies. They are now hoping that the Obama administration will change its stance on taxing the rich, unions, and NAFTA, and come around to Bush's positions on those things, too.

It's unreal. They still think tax cuts are the solution to everything. If Obama signals today that the Bush tax cuts will stay, happy days are here again. If not, Great Depression II, here we come.

"It's all Clinton retreads."

that will be an improvement.

America was not ready for FDR until the depression was well established. They are not yet ready for another FDR and if that is to be it will probably be the next guy.

Ah, but there are many "Americas."

There is the "America" that is made up of the fat cats from Wall Street, who gave so generously to Obama. And there is the "America" composed of the whites in the middle, the lower middle class and the blue-collar people, who also opened their hearts and wallets to Obama. Obama's coalition is a coalition built on natural enemies.

Obama thinks he can have it both ways. He can't. The financial and business elite really are like Freddy Krueger. They seem to have this uncanny ability to come back from the dead, and they take no prisoners.

It's unfortunate that Obama has to re-invent the wheel, that he can't learn from FDR's experiences. It was the school of hard knocks that taught FDR the true nature of the "financial royalists". I of course have no window into Obama's heart of hearts. Perhaps he doesn't want to learn. If so, this will be a sad betrayal of the millions of hoi poloi who converged on his web site, who gave him their votes and small donations of $10 or $20 or $50.

FDR's first response, not unlike that of Obama, was to try to play ball with the corporate elite. They stabbed him in the back, and it was from these bitter experiences that he finally came to dub them the "economic royalists." Frederick Lewis Allen explains:

The evidence was fast accumulating: the (Roosevelt) Administration's great experiment in 'business self-rule’ had come into full collision with the ingrained determination of business executives to hold down their cost of doing business, to push up prices if they could, and in general to run their companies as they pleased, come hell, high water, or General Johnson. Where they could turn the machinery of the NRA to their own ends, they did so--and it was they, not labor or the consumers, who held the initiative in framing the codes. Where they could not turn this machinery to their own ends, some of them complied; others fought the law or nullified it…

Intermittently throughout the year 1933 the Senate Committee on Banking and Currency, with the aid of its inexorable counsel, Ferdinand Pecora, had been putting on one of the most extraordinary shows ever produced in a Washington committee room: a sort of protracted coroner's inquest upon American finance. One by one, a long line of railroad and public-utility holding-company promoters, stockbrokers, and big speculators—had filed up to the witness table; and from these unwilling gentlemen, and from their office files, had been extracted a sorry story of pubic irresponsibility and private greed. Day by day this story had been spread upon the front pages of the newspapers.

The investigation showed how pool operators in Wall Street had manipulated the prices of stocks on the Exchange, with the assistance of men inside the companies with whose securities they toyed. It showed how they had made huge profits (which represented the exercise of no socially useful function) at the expense of the little speculators and of investors generally, and had fostered a speculative mania which had racked the whole economic system of the country--and this not only in 1928 and 1929, but as recently as the spring of 1933, when Roosevelt was in the White House and Wall street had supposedly been wearing the sackcloth and ashes of repentance. The investigation showed, too, how powerful bankers had unloaded stocks and bonds upon the unwary through high-pressure salesmanship and had made millions trading in the securities of their own banks, at the expense of stockholders whose interest they claimed to be serving. It showed how the issuing of new securities had been so organized as to yield rich fruits to those on the inside, and how opportunities to taste these fruits had been offered to gentlemen of political influence. It showed how that modern engine of financial power, the holding company, had been misused by promoters: how some of these promoters had piled company upon company till their structures of corporate influence were seven or eight stories high; how these structures had become so complex that they were readily looted by unscrupulous men, and so unstable that many of them came crashing down during the Depression. It showed how grave could be the results when the holding-company technic was applied to banking. It showed how men of wealth had used devices like the personal holding company and tricks like the sale of stock (at a loss) to members of their families to dodge the tax collector—at the very moment when men of humbler station had been paying the taxes which supported the government. Again and again it showed how men occupying fiduciary positions in the financial world had been false to their trust.

Naturally the composite picture blocked out by these revelations was not fair to the financiers generally. The worst scandals got the biggest headlines. Yet the amount of black in the picture was shocking even to the most judicial observer, and the way in which the severity of the Depression had been intensified by greedy and shortsighted financial practices seemed blindingly plain. So high did the public anger mount that the New deal was sure of strong support as it drove on to new measures of reform.

Frederick Lewis Allen, Since Yesterday

If Obama cannot resolve the conflict inherent in the coalition he has built, if he proves unable or unwilling to tackle some fundamental injustice in this country, if he just nibbles at the edges or strokes the symbolism, there will be a backlash. He will be a one-term president.

In this I am in agreement with Kevin Phillips:

Well, I think the Democrats have to figure on trouble. The Republicans have to figure on some opportunity for a rebound. But I think mostly they both have to think about that in a lot of ways they're a duopoly, a double monopoly that no longer has meaningful ideas but has entrenched interests. And if that's true again, and I think it could be, then Americans are really going to start to say, "How do we get something new in this country?"


I agree with a lot of what you say. The neocons are obliged to lower their profile right now and allow the "liberal" faction of the elite hold one of the reins. Both factions fear the "lower depths" (the rest of us), but Obama is likely to make at least some attempts at placating the masses. Should he incur excessive expenses (for the elite) in doing so, he'll find himself under sharp attack. At that point he either turns to the public and says get behind me in doing what we need to do (risking his butt) OR he caves (again risking his butt) and is one way or another gotten out of the way so that the "lower depths" can be properly dealt with.

But the FDR gambit is totally useless if based on the idea of returning to growth. Growth is gone, toast. The physical resources needed to permit it are in decline on all fronts. What's needed, nay, the only thing possible is a path toward radical retrenchment -- making those investments that allow us to live on a declining and much reduced budget of hydrocarbons and other resources, and one that stops (and reverses) further damage to our only real ultimate resources: soil, water, air, oceans, forests, etc.

But there is plenty to do in restructuring. We would not end up with more roads and bridges and heavy industry -- but we would end up with larger carless small towns close to agriculture and radically contracted suburbs with land returned to agriculture, parks and forest. Alas, there's no or little profit in any of this -- even though this is really the only place we can go and survive.

And of course looming in the background, just as it did with FDR, is war, which is but a variant of the growth option. But this time we'll be part of the Axis.

The easiest way to cut oil consumption in half is for Obama to come up with a new slogan, aimed directly at women. Maybe something catchy like "If OPEC's getting paid, you ain't getting laid honey!"

I reckon thats the root of the problem. If conservation and going green became sexy it would lead to drastic changes. Frugal is cool, waste is old school.

Leanan says;

It sounds to me like he's preparing the country for an economy that won't recover during his term.

Yeah, he's getting a limousine with five inch thick windows and ceramic armor.

This is the correct spot for your reply. Discussion is threaded here. Your reply won't appear directly under the post you are replying to if someone else has replied earlier.

To see the post a comment is in reply to, click on the icon that looks like a single speech balloon with an up arrow (the "parent" icon).

Don't reply to the wrong post just to get higher up in the thread. It's confusing enough trying to follow the discussion as it is.

Build the pipelines Dale. Sell to the chinese or indians. Don't wait for the US to pull its head out of it's ass.

We here in the US have such an excess of energy coming from so many sources that we have the luxury of picking and choosing how we will starve or freeze our kids over the next few years/decades.

Let's raise our cup to toast Blind Green, which is replacing Blind Greed, (sort of.. the Truth is, when there are shortages, the rest of us will pay for it, while the the Obamas and Waxmans's of the world will still be warm and well fed).

Give us a sign! If we see that Mr. Simmons as the ear of President elect Obama that would be enough for me to feel a bit more positive. If we are going to be lucky enough to have $5.00 a gallon gas Obama will have to give in to building more heavy oil refineries. Our new friends, the Iranians, will appreciate that also.

I don't think Simmons has the ear of Obama. In fact, he has said on more than one occasion that he sees no evidence that Obama understands much about energy, and has surrounded himself with people who don't have a good grasp. The truth of that statement can be debated, but I would agree there are aspects of his energy plans that look naive.

Pure speculation here...

The reason Robert Hirsch asked Peak Oilers to stop frightening the horses for the time being is that the Obama team has been in touch with him? Possible?

hmm, what about that Robert Hirsch - what exactly was he concocting?
check out my new video! http://www.youtube.com/watch?v=k7miU5s_tTg

Yup, what you said !

Thanks Kris.

Kris, I love you to pieces, but please consider the following:

"If the realization of peak oil along with its disastrous financial implications was added to the existing mix of troubles, the added trauma could be unthinkable."

Hirsch has managed to get WSJ to publish the words 'peak oil' and 'disastrous financial implications' not as "theory", but as an established fact! Not only does this confer a new level of legitimacy to Peak Oil debate, but it gives the US financial elite the feeling that they are part of the insider cognoscenti. Brilliant!

Errol in warm, sunny Miami

Errol -

I agree the intent is obvious and brilliant!

I also think it is important to do what Kris is doing in response. It would be a disservice to Dr. Hirsch's work and the work of TOD, ASPO etc. to not respond.

Well done!!

Regarding CNG buses is Stockholm investing in 500 buses that will be run on biogas that mostly will be produced in the sewage treatmet plants. A new small LNG harbour that will feed a small refinery in Nynäshamn and the remnants of the city gas network will be used as backup.

One would think that the recent shortage of fuel, especially diesel, would have made an impression on the good folks at New Jersey Transit. No, like all well meaning managers, they tend to look at the bottom line and make their decisions accordingly.

For NJ Transit, ultra-low sulfur diesel buses are more cost-effective...

The new buses cost about $330,000 apiece, or about $30,000 to $50,000 less than a new CNG bus...

OK, we know that today's price for diesel (and gasoline) has moved back to low levels. Any half wit might remember a time a few short months ago when this was not true and actually think about the future availability of diesel made from oil. It would seem that the lifetime cost of fuel didn't enter into their calculations.

They apparently have decided that biodiesel will soon be abundant and cheap too, perhaps without considering the fact that biodiesel availability is also a major concern, what with other people and groups also moving to biodiesel. Worse, their consideration of air pollution appears to ignore CO2 emissions, which would be greater with diesel than with CNG.

E. Swanson

They probably learned about this company and forgot to ask for other opinions to determine if algae diesel would be economical/feasible.


These types of shows are the primary reason the general public and most government officials have a hard time with energy reality. The interview implies that with just a bit more research our transportation fuel problem is solved. Yup, nothing to worry about. If CNN says it, it must be true.

Segway inventor touts island as an energy model

Kamen's energy plan began when the Coast Guard recently notified him that it was cutting off electrical service to the rocky island, part of New York state, because it was switching to solar energy to power a lighthouse.

"That can typically ruin your day," said Kamen.

Then he had an epiphany: Why not make the island energy self-sufficient and a showcase to the world.


Is that a solar powered helicopter in the picture?

It is. The helicopter employs rare valuable antique solar energy.

I admire some aspects of what Kamen does, but jeez what a self-promoter. This story was writ large in the Hawaii paper this morning as well.

Why is it an epiphany to use alternate energy if your regular energy is cut off? Wouldn't most first-graders think of it? I have a friend on an island off BC and he uses turbines and some solar panels, though it wouldn't have occurred to him to issue a press release about it.

The guy is an innovative technologist, but first and foremost he seems to be a promoter & fundraiser. Nothing wrong with that, but it shouldn't be newsworthy. This is meant more a comment about the news media's knee-jerk coverage than a disparagement of Kamen... then again, that knee-jerk coverage could be focused on peak oil just as easily.

Bring on the competition for the future cars...


The test program lease price is extravagant, but one would imagine that full production would lead to a more affordable price.

Hard to say.

Mr. Cole attributed much of the Volt’s higher cost to its lithium-ion battery, which he estimated initially would cost $10,000 to $15,000 a car. But he predicted battery prices could someday be one-third that much, prompting the car’s price to drop closer to $30,000, and generating more demand.

The key word in the above quote is "someday." Modern gas engines, transmissions, and drivetrains have dozens of years of development behind them. They also have dozens of years of production efficiency gains. I expect there will be several approaches to the design of EVs. It could take years for a consensus to develop. Only then will mass production of the EV systems be possible. It took five years for the Hybrid technology to move beyond the Honda Insight and Toyota Prius into other mainstream vehicles.

Dozens of years for gasoline try 100 years.

Also battery technology is notoriously difficult to improve and suffers problems during large scale manufacturing your general exploding batter problem.

Future high density battery designs are technologically as complex as microchips. Your talking about fairly narrow tolerance micro electrode stuff.

High capacity capacitors offer similar technical challenges. I actually think we will overcome these challenges over the coming decades and we should see battery power densities at least double.

What I don't see is it being cheap.

However cheap solar cells are are lot more likely via a number of approaches.

Its a bit surprising that people don't realize that the demand for expensive high density batteries has existed for a while now from the camcorder, mobile, laptop markets. These can afford to pay a premium for batteries. A ready market exists in the laptop world for batteries that could power a laptop for twelve hours. My opinion is this market is viable up to 400 dollars for a laptop battery.

The incentive is huge and price is effectively not and issue.

And we still don't have them.

The point is if the battery market had very expensive long lasting commercial batteries then I believe its finally reached the point that technology could filter into cheap high density batteries. Instead it makes slow advances and stays stalled for years as production processes are refined and prices come down. What I'm saying is we need a steady stream of real improvements in battery technology that trickle down to mass production. I'm sure despite the complexity some of these would result in substantial production savings.

And last but not least I think once we get over the hump of developing micro electrodes say about a decade after these become commercially viable I think we will have this sort of vigorous growth in battery technology that makes a substantially battery powered world viable. The same holds for high density super capacitors.

You can see this link


I'm saying thats the beginning of real progress in battery technology.

Growth in the Chinese housing industry is slowing. Chinese imports of metals and minerals continues to slow. Chrome refining units in South Africa were being shut down; forcing layoffs:


India credit markets are frozen, its stock market down, financial outlook grim:


Saudi Arabian credit markets frozen:


In the United States the government was buying new issues of stock of AIG and banks on the verge of bankruptcy in order to boost their capital instead of the traditional route of taking bankrupt stock for free, auctioning it off, and bailing out the depositers. The capital lending programs of the banks were too shaky to be fixed by huge short term infusions of liquidity. Banks took government money and tried to buy smaller banks with better balance sheets to try to fix their own balances. That put the better managed or better positioned banks under the authority of those with worse policies or worse positions and did not solve the recession. Citigroup is now asking for more bailout help.

As more people cutback and more industry slows or shuts down the need to energy may shrink for a time until markets might find more productive paths, else long term recession sets in. An economy based on only on war cannot profit all who take part in it.

Obama picks another of the "in-crowd"

Summers Is Said to Be Obama’s Choice for Top Economic Post

Nov. 23 (Bloomberg) -- President-elect Barack Obama will name Lawrence Summers to head the National Economic Council, one of the three top economic jobs in the new administration, a Democratic aide said.

He's got a rather large "controversies" section on Wikipedia.


Summers was a member of the Council of Economic Advisers under President Reagan from 1982-1983. He also served as an economic adviser to the Dukakis Presidential campaign in 1988.

Summers left Harvard in 1991 and served as Chief Economist for the World Bank (1991–1993) and later in various posts in the United States Department of the Treasury under the Clinton administration.

From 1999 to 2001 he served as Secretary of the Treasury, a position in which he succeeded his long-time political mentor Robert Rubin. In 2001, he left the Treasury and returned to Harvard as its President. Summers served as the 27th President of Harvard University from July 2001 until June 2006.

In 2006 he was a member of the Panel of Eminent Persons which reviewed the work of The United Nations Conference on Trade and Development or UNCTAD.


Summers is an ardent proponent of free trade and globalization, and frequently takes positions on a number of politically-charged subjects. This, along with his direct style of management, made him controversial as President of Harvard.

# 3 Controversies

    * 3.1 World Bank Pollution Memo
    * 3.2 Cornel West
    * 3.3 Anti-Israel attitude among academics
    * 3.4 Differences between the sexes
    * 3.5 Summers' opposition and support at Harvard
    * 3.6 The AIDS Drug Scandal with HSPH
    * 3.7 Support of economist Andrei Shleifer
    * 3.8 Other factors in the opposition to Summers

CNN adds

Summers' critics contend he played a role in the current financial crisis. They cite, among other things, his support for the Commodity Futures Modernization Act, which allowed many derivatives - like the credit default swaps that have rocked markets this fall - to go unregulated.

"The policies he promoted as Treasury Secretary and in his subsequent writings led to the economic disaster that we now face," wrote economist Dean Baker, a director of the liberal Center for Economic and Policy Research.

Thomas L. Friedman: We found the WMD

So, I have a confession and a suggestion. The confession: I go into restaurants these days, look around at the tables often still crowded with young people, and I have this urge to go from table to table and say: "You don't know me, but I have to tell you that you shouldn't be here. You should be saving your money. You should be home eating tuna fish. This financial crisis is so far from over. We are just at the end of the beginning. Please, wrap up that steak in a doggy bag and go home."

He warns that Obama may think he's starting at the bottom of the dip, like FDR did, but in reality, we could have a lot further to fall.

Friedman is: a) unacceptably late to this conclusion and b) melodramatic. The derivatives bomb has been ticking for a while. He and the NYT ignored it when ignoring it was convenient.

What we need, in addition to a new president and cabinet, is new pundits. The ones we have are as blind, and as compromised, as the bankers and the Detroit execs.

'Peak Rationalization'

Seems like we need to stay firmly entrenched in Iraq for the next 1,000 years after all.


Is our expeditionary deployment to bring peace and freedom and democracy to all the fine countries in the Middle East 'Too big to fail'?

Things take on a life of their own after a while...I guess all those contractors will be out of work and add to our unemployment rolls so we better stay a while...stay forever.

What, you say, does this have to do with Peak Oil?


We are sitting on the Iraq to control access to all ME oil. Any and all other explanations offered now, in the past, and in the future are crap.

You would bawl your eyes out if you knew how much oil has been burned so far in this fiasco. As for the EROEI/sunk energy install the various war machines themselves, don't even go there if you value your sanity.

What an inexcusable waste of our resources. And I am recently retired from the military.

I think the immigration raids have less to do with illegal's being in the county and working in jobs then being used as a scapegoat so a system can be set in place to deny employment to legal citizens. based on a similar concept to the 'no fly lists'. the economic elite caste of this country loves illegal immigrants. they can pay and treat them poorly and when they act up they can report them to the department of immigration. Once this 'no work list' is set up people who the system do not like will no longer be able to support themselves, a potent tool of control.

"There is a rising tide of environmental awareness and activism among consumers that is going to swell to undreamed-of heights in the 21st century," (Clay) Ford told Automotive News after being named chairman-elect in September 1998. "Smart companies will get ahead of that wave, and ride it to success and prosperity. Those that don't are headed for a wipeout."

On July 27, 2000, Jacques Nasser, then president and CEO of the Ford Motor Company, stood before a packed audience at the National Press Club and made a surprising declaration. Ford, he pledged, would boost the fuel economy of its SUVs by 25 percent within five years. Reporters scribbled furiously as Nasser spoke;...


Here is Ford's current great white hope for fuel economy:

DETROIT, Jan. 6, 2008 – Ford Motor Company is introducing a new engine technology called EcoBoost that will deliver up to 20 percent better fuel economy on half a million Ford, Lincoln and Mercury vehicles annually in North America during the next five years.

The EcoBoost family of 4-cylinder and 6-cylinder engines features turbocharging and direct injection technology. Compared with more expensive hybrids and diesel engines, EcoBoost builds upon today’s affordable gasoline engine and improves it, providing more customers with a way to improve fuel economy and emissions without compromising driving performance.

Note the last four words in the above paragraph.

The whole propaganda campaign article is here:

Let them all go under...re-allocate the resources to truly game-changing companies that offer a prospect of manufacturing and selling much more efficient vehicles.

Two million jobs at risk? Too bad, too sad...motivation to get on-board with change. President Reagan said that the US was the Shining City on the Hill and politicians too numerous to mention sung praises to the awesome, world-beating flexibility, innovation, intelligence, resiliency, and work ethic of the American Worker (I can almost see the 'Workers Unite' murals now).

Time for some creative destruction.

And I am a huge fan of trains...Alan From Big Easy for Secretary of Transportation!

I heard that American car companies made a go at turbo engines in the early 80s that didn't turn out too well. My current car is a 22 year old Saab 9000 (four doors, five speed, built like a tank, 85mph @ <4000 RPM, 30mpg, almost 170,000 miles). GM owns Saab and has had access to Ford's solutions (turbo and direct ignition) for years. What did they do with it? Turned a Tahoe into the 9-7, Saab's first gas-guzzling SUV. Save Detroit? Why?

At one time, Chrysler had built more turbocharged automobiles than every other manufacturer in the world combined. I've owned several, and in my experience they were well engineered, reliable and got 20 to 30% better mileage than the v6 engines with equivalent power. Why does virtually no-one understand that turbocharged engines can be significantly more efficient when driven sensibly? Simple. Sensible driving doesn't excite car buyers. So its been all about size and speed.

A proven formula for significant fuel economy improvement: smaller size, lower weight, much smaller engine displacement with turbocharging to make up for it. It was the wave of the future in 1984. Too bad it still is.

Some articles from the Time Magazine archives:
In Michigan: A New Fuels Paradise (describes a high-mpg contest in 1979- funny how little has changed)

Gee! The G24 (describes Chrysler's turbo sportscar platform for the Daytona/Laser in 1983; notes "Largely because of the G24, Chrysler, for the first time since 1978, will be recalling U.S. workers who have been on indefinite layoff." So, 2010 for the Volt isn't so long, I guess.

Add this to things we don't need to squander resources on:


Now from the 'Department of mixed messages Department':


Now for GM's last, best hope:


Sub-$2.50/gallon gas and the 'recession as new reality' will conspire to kill this off...but I bet those Rolls Royce's and Mustangs and Corvette ZR-1s and blazin-fast Nissan sports cars (see the 'mixed messages' link above) will somehow soldier on...

MoonWatcher -

I just came across a little piece of information in the paper the other day that I think perfectly reflects the current economic and class divide in the US.

In spite of the US auto industry going down in flames, the market for ultra high-end cars is doing quite well, thank you. As best I can recall from the article, Rolls Royce reported something like a 34% increase over last year, and Maserati enjoyed a 14% increase. However, Ferrari was a bit off, with a 2% decrease.

The autos at the far high end have generally tended to be somewhat recession-proof, as people with big bucks can always manage to scrape up the $200K+ for a new Rolls. It's the lower-end 'discretionary cars', like Mustangs, Corvettes, and the like, that will probably take a beating.

For example, Dusenberg, one of the all-time great American mega-cars, managed to continue production through the depths of the Great Depression and didn't go under until 1937. Despite bread lines and soup kitchens, evidently SOMEBODY was buying Dusenbergs.

I have no trouble picturing the automotive scene in the US circa 2020 as being not unlike that in the Soviet Union during the Cold War Era ..... large ZIL limos carrying party apparatchiks blasting down near empty streets and never bothering to stop for any pathetic pedestrian who might be unfortunate enough to be crossing the street at the time.


I am afraid you may be proved correct.

We can all note that there haven't been any visits from any of the CEOs of the top ten defense contractors (or even any of the smaller contractors) to Congress to beg for their company's existence...nor will there be. They already have been running the table for decades. Of course, their very existence depends on not only steady, but increasing (7.5% per year?) 'business' from Uncle Sam. The GS corps (now NSPS...National Security Personnel System...federal Civil Servants) who work in Defense-related organizations have been, and will continue to, sit fat, dumb, and happy as well (Our tax dollars not hard at work)! But hey, what is a little $700-$850 B/year (depending on how you figure it) to provide for our common defense?

The amount of talent and the number of person-hours of 'productivity' locked up in the Military-Industrial-Political complex is mind-numbing. I bet at least 25% of the commercial office space in the National Capital Region is devoted to Defense contractors....probably a whole lot more than that. And the number of air miles burned for people to fly back and forth for meetings about this and that...I bet that if defense contractors cut their travel/flying budgets by 50% a few airlines would be pushed over the edge.

Mis-placed resource allocation. I believe in national defense...but I also know that the waste and excess is way, way over the top.

Oh, and all this happy crappity-smack about the 'Big 3' being essential to US defense...

I have been in US national defense for 20+ years...the 'Big 3' are extreemely small potatoes...otherwise they wouldn't be in this situation. Last time I checked, M-1 tanks were made by General Dynamics, HMMWVs were made by AM General, military trucks are made by companies many people haven't heard of such as Oshkosh and many others.

I've recently entered the defence industry (as a career move: like you said, its a stable job market) and personally I can't beleive I get paid the amount I do (I think it's pretty good for a 22 year old, at least) to push pointless paperwork around in pointless, mind-numbing circles.

It's like Dilbert but without the humor.

And yes the Big 3 are small potatoes compared to Lockheed, GD, Raytheon, UTC, et al. But that doesn't mean they aren't starting to feel the pinch.

Hopefully I can find a job in the wind power industry sometime sooner than later.

MoonWatcher -

You are absolutely right.

I never gave any thought to the fact that defense contractors aren't hurting at all. They are not seeking a government bailout, largely because their very existence has been, almost by definition, one continuous huge government bailout.

The way the DOD spends billions of dollars like they're nickels makes me wonder whether the Military-Industrial Complex exists in some sort of economic parallel universe, with its own set of rules and even its own currency.

I had a friend who was once involved with an Air Force one-star general who was responsible for project oversight for some large defense contract. My friend requested a brief meeting with the general to make him aware of a possible design change that could potentially save several hundred thousand dollars. The general promptly dismissed my friend and snarled something to the effect, "If it ain't worth 10 million dollars, then it ain't worth 10 minutes of my time!"

I'm sure that type mindset pervades the whole DOD. Can you imagine all the fuel wasted by top brass using Air Force transports as their personal taxis for shuttling back and forth to Iraq to make a needless display of command.

Unfortunately, I think that no matter how badly the US economy tanks, the Military Industrial Complex will be just about the last entity to feel any pain.


Proclaiming Kentucky’s place as a national leader, Gov. Steve Beshear was joined today by Energy and Environment Cabinet Sec. Len Peters as he unveiled the state’s first-ever comprehensive energy plan, which calls for significant reductions in greenhouse gas emissions while creating some 40,000 jobs tied to energy production and conservation between now and 2025.

Iceland update...

Iceland protest ends in clashes

Protesters in Iceland's capital Reykjavik have clashed with police during a demonstration over the handling of the financial crisis.

Several hundred protesters gathered outside the city's main police station to demand the release of a man jailed in a previous demonstration.

Five people were injured when police used pepper spray to disperse the group after some tried to storm the building.

Iceland faces a sharply contracting economy over the financial collapse.

A picture of 16 year old girl peppersprayed in the demonstration in Iceland.


People are angry. The want elections due to the totally different conditions. The government doesn´t agree of course.

Situation in Iceland is bad. Lots of companies laying off people. The unemployment rate is still rather low or about 4,5%. Could go up to 10-20% in the next few years.

Thankfully the state was nearly free from debt before. It´s predicted the debt could in the next few years go up to 109% of GNP.

But life still goes on as normal for the most part. Iceland is still a very rich country.

Since the UK is the 51st state now, maybe Iceland would like to be the 52nd.

And get a BIG Bailout.

But Bjork would have to move to Switzerland.

Don\'t Get Depressed, It\'s Not 1929

All this historically inaccurate nostalgia can occasionally make you want to clock somebody with one of the three volumes of Arthur M. Schlesinger Jr.'s history of the New Deal. The credit debacle of 2008 and the Great Depression may have similar origins: Both got going when financial crisis led to a reduction in consumer demand. But the two phenomena differ substantially. Instead of workers with 5 o'clock shadows asking, "Brother, can you spare a dime?" we have clean-shaven financial-services executives asking congressmen if they can spare $100 billion. More substantively, the economic trauma the nation suffered in the 1930s makes today's woes look like a flesh wound.

By Daniel Gross, the author of Pop!: Why Bubbles Are Great For The Economy

List Price: $22.95
34 new from $4.79
21 used from $2.79 on Amazon now

There's disconnect here. Read Ilargi's (sun) http://theautomaticearth.blogspot.com/.

Or read today's (Sun) NYT, Ben Stein or Thomas Friedman. You won't believe what you read nor that you are reading it in the NYT. I've been talking to friends and family about a looming meltdown for several years now -- but things are now cracking apart far faster than I thought.

Money is credit. When the credit system goes poof, the very means of payment goes poof which means trade, transportation and production stop. Potentially far, far worse than the Depression because we (almost all of us) are much further from any possibility of surviving off the land. That's why there is total panic even among the elite. The only ones not in a panic (yet) are those of the common folk who have not yet been directly hit.

I've always been a pessimist. It's the secret to happiness -- things almost always turn out better than I expect. But twice I've had to recalibrate my pessimeter: 9-11 and now. But I'm having trouble recalibrating this time because I don't know if the scale goes down as far as I need to go.

I don't advocate getting depressed, but I do advocate becoming rapidly aware of what we are in the midst of, and extremity of what is at stake.

Nice post Dave. I've always subscribed to having a having a healthy attitude though the assumption of a negative result. I’d rather be surprised by things being better than I thought than the other way around, especially if I have already prepared for the worst. Where I live, rural south central Illinois, even the locals who rarely venture out of the area are starting to get worried. I strongly suspect this thing hasn’t even come close to hitting bottom yet as credit is far more important to the average Joe in today’s economy than in 1929. Fortunately, the farmers around me still remember how to subsist by traditional farming rather than relying on commodity row crops of beans, corn, and wheat. I’m glad the harvest is over (I work at a small county elevators) as I’m exhausted. Time to get my land in order before the cold really sets in.

Leanan, Just FYI the title of the Iraq article is 3.5 Million Barrels not Billion.

Solar panels on graves give power to Spanish town


Flat, open and sun-drenched land is so scarce in Santa Coloma that the graveyard was just about the only viable spot to move ahead with its solar energy program.

Hello TODers,

The following weblinks, which I consider good news in direct contrast to the gloomy tone of the articles, may indicate that eventually Tiger Woods and Nike may make more money by selling garden tools and O-NPK composting bins than golf clubs & golf bags:

Economic downturn impacts golf course care

The unofficial No. 1 topic at this week’s Carolinas Golf Course Superintendents Association (CGCSA) convention in Myrtle Beach was the sagging economy and its impact on the most expensive part of golf, course maintenance.

With play flat or down nationally and increased costs to keep courses running, superintendents shared ideas for coping...

Former Sylacauga businessman Taylor Pursell said it breaks his heart that fertilizer manufacturer United Industries Corporation, which bought his family’s business less than a decade ago, is closing its doors...

According to a published report in the Birmingham Business Journal, Pursell Industries supplied consumer fertilizer products to major lawn and garden retailers under the brand names Sta-Green, All-American, Best, Vigoro and Bandini at the time of the sale in 2001.
Have you hugged your bag of NPK today? IMO, the sooner the pointless suburban lawn and golf course get plowed into veggie plots, the better off we will be in the long run. Consider the alternative of a fast-crash to machete' moshpits everywhere.

I will probably cry with joy when I finally read of Obama inviting Tiger to plow the White House Lawn, then Augusta National is next on the plowing hitlist. I intend to be one the first to purchase a Nike/Tiger Woods signature garden tool to help jumpstart the paradigm shift. I hope other TODers have already emailed Tiger's website expressing a desire to own a Tiger hoe, shovel, pickaxe, etc.

This will be much better than a Nike/Tiger signature line of sniper weapons, machetes, bullets, armored vests, carbon-fiber crossbows and arrows, etc.

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

From Wikipedia:
"The UN estimates that golf courses use 2.5 billion gallons of clean water daily, enough to provide fresh drinking water for 4.7 billion people"

And that's just water. Any one knows how much land is wasted by golf courses?

Hello TODers,

The US-based International Centre for Soil Fertility and Agriculture Development (IFDC) has urged the Indian government to promote technologies for increasing the fertiliser use efficiency and lend policy support to encourage balanced use of soil nutrients.

Speaking to FE, the president and CEO of IFDC, Amit H Roy said, “The fertiliser products available today and application methods in use are wasteful. Growing plants generally use only 30% of the nutrients in the urea that farmers apply. This means that two out of every three bags of urea that a farmer applies are lost.”

He said IFDC had developed urea deep placement (UDP) technology and rice growers of Bangladesh were adopting this technology to reduce urea loss. UDP increases yields by 25% while using 40% less urea.

Roy also said the current manufacturing process was expensive. “The energy equivalent of about four barrels of oil is used to convert free atmospheric nitrogen to one tonne of urea. Further after leaching and atmospheric losses, the energy equivalent of about 2.5 of these 4 barrels of of oil is wasted for every tonne of urea applied Also important is the energy wasted in transporting more fertiliser products than plants actually need,” he said adding fertiliser industry needs to develop energy saving technologies.

Regarding phosphatic fertilisers, he said India imported about 95% of phosphates in terms of DAP, phosphoric rock and phosphoric acid. He said the world’s known reserve of phosphate rock which would last for only 200 years with the current level of technology and rate of use. The cost of exploiting phosphate resources would rise as we exhaust the more readily accessible deposits. Phosphates would be an area of greater concern than nitrogen or potash in the next decade. Therefore efficient technologies are needed for processing phosphate and utilising phosphate rock directly from mines, he said.
As regular readers of my postings understand: there is much that is correct and much that is terribly, misleadingly wrong with this article.

I would hope that India's UDP is not based upon a melamine process, but uses a sulfur process for more timely release and reduced nitrogen volatization. I would hate to read of lots of Indian babies with major health problems that repeat the melamine disaster of China's babies.

I am also glad to see this expert echo the earlier UN FAO warnings on future phosphate flowrates and distribution problems. IMO, most of the world has no idea how dangerously reliant we are upon the global I-NPK JIT supply chain-- most people have never read Borlaug's warning.

Let's hope that Southern Asia quickly moves to become the global leader in Peak Outreach [which includes family planning best practices], O-NPK recycling, and environmental protection to serve their Optimal Overshoot Decline trajectory.

Do you have a link for China's melamine contamination and Urea deep placement technology?
Also, could you select 3 or 4 "terribly wrong" points from Roy's article? Seems important, and I would value your explicit pointers.

Where the next crisis is going to occur,if its not already and I think some of it is already on the horizon,...where ? Ag.

Caveat: Unless of course the two current crisis brings relief by stifling the ongoing agriculture practices by making them moot, via the meltdown of the industries that create the upcoming ag crisis...namely ag industries that dictate farming methods..etc.

Here then is an excerpt from a freely available website that goes into great detail on this and other subject related to farming and its sisters,home gardening,etc. This is written by Steve Solomon whose book "Gardening When it Counts" I have been reading off and on for a while.

Here is the excerpt:
" American
agricultural science is motivated by agribusiness, either by direct
subsidy or indirectly through government because our government is
often strongly influenced by major economic interests. American
agricultural research also exists in a relatively free market where
at this moment in history, large quantities of manufactured
materials are reliably and cheaply available. Western agricultural
science thus tends to seek solutions involving manufactured inputs.
After all, what good is a problem if you can't solve it by
profitably selling something.

Here is the url:

The book I referred is mostly about taking care of the soil at a personal level.Something many here may be concerned with now or in the very near future,if your lucky that is.

The website is more general about soil health and related topics.

I encourage any who are unfamiliar with the subject to examine it.

As the author notes. No country or nation has long survived who have decimated their soil base. Or words to that effect. We can see the truth in this simple statement yet this is exactly what we are about in this country.

First oil(energy)..then finances(credit crunch) and then finally when all else is shot to hell...then we finish off with destuction of our country side and soil bases. Wow are we ignorant or what? Is this what our science has wroght? Where have all the wise men gone to?

My grandfather was not very well educated but at least he knew he lived by the soil on the farm. Manure was all we had. That and fallowing and rotating and cover crops.

Today I dug a deep hole in my garden to see if I had the dreaded 'hardpan'. I found none. Those who read the book will understand how hardpan begins and its effects. I am optomistic. Can't wait for spring and the soil to warm up. All of Solomon's solutions will be on my list of 'todos'.


Editted to add this further note from the same source:

"". . soil fertility is determined by biological factors, mainly by
microorganisms. The development of life in soil endows it with the
property of fertility. The notion of soil is inseparable from the
notion of the development of living organisms in it. Soil is created
by microorganisms. Were this life dead or stopped, the former soil
would become an object of geology [not biology]."

Also note that this work referred to was released in August of 2003
and some events have come to pass and some have not as yet. The total destruction of our soils is still happening and not yet compelte.It will happen though if we continue apace as we currently are.

Well said Airdale. Either we will learn the Circle of Life, or Ma Nature will remove us from participating further in it.

EDIT: like the British chap in Illargi's latest TAE video weblink--> I see dead people everywhere too.

Instead of a 25 billion$ bailout for the Big3 auto mfgs, I would like to see 25 billion$ spent on beehives, bird and bat houses and higher salaries to their respective biologists.

Thus my pessimism about turning much of Suburbia into mini-farms.

The topsoil (post-1970 or so) was routinely scrapped off, fill added, construction debris buried, bulldozer moved around and covered with concrete and asphalt. And populated by people without a clue.

Post-Peak Oil, orchards seem the best chance to extract some food from Suburbia (abandoned or not). But they take several years to first fruit and years more to full production. And there has been no research on how best to deal with Suburban orchards (residual herbicides, over fertilization, mechanically mixed soils, etc.)

Increasing the population of Iowa by x6 or x16 seems more likely than farming Suburbia (good soil is always a good place to start farming). Much more labor intensive agriculture. Perhaps see Grapes of Wrath for living conditions, but without the mobility. Or hopefully other social organization (co-ops that grow subsistence plus some specialty crops for market ?).


Alan, perhaps you would explain why you think that raised bed agriculture is impossible in suburbia.
It is hardly mechanised farming, and would be carried out by an ample labour force.
The materials needed are trivial, certainly in comparison to abandoning your house.


I have just read Steve Solomon's book. One of the best books on gardening I have ever read, combining science,experience and common sense, together with very detailed how-to advice. I drove by his small property near Launceston, Tasmania, a few weeks ago. Not a big allotment but he sure gets a lot of food out of it.

Bernanke Tells New Yorker He Underestimated Housing Meltdown.

Too bad guy, oh well, if you can't do, you can always teach!

You appear to be under the misapprehension that university professors work as teachers. Teaching is in fact one of the annoying things one has to do some of the time, and to a greater extent palm off onto one's grad students, whilst one is trying to do research, or possibly write books, op-ed pieces, etc. The big problem is that he has spent his career academic wargaming the Great Depression, which contrary to a lot of opinion, probably has/will have signficant differences with the current/oncoming economic situation. I'm surprised someone with such a narrow a research focus was appointed to the position.

You appear to be under the misapprehension that the powers did not know we were headed towards a depression when they appointed him. Anyway the above was, I admit, a weak and unfair sort of joke, but a joke nonetheless. If you wish to use it as a platform to explain why the quality of education is such that it is, be my guest. My own true opinion is that we live in an upside down society where teachers are held in low esteem, as you seem to suggest.

Who wants to be President when you get to make all the decisions and you don't need to deal with the press or the public-this incompetent must have mastered the Jeidi mind trick

Hello TODers,

It has already been much discussed here on TOD about how the Saudis are shutting down much of their agriculture because desalinized water is just too expensive to use for growing crops. Is this the next best thing for KSA's national security?

Will the Saudis Buy Gold and Silver Shares Now?

Saudi Arabian investors look set to emerge as the biggest buyers of gold and silver shares in the coming week as the leverage that these stocks offer to rising gold and silver prices becomes increasingly attractive.

The revelation of a $3.5 billion purchase of gold bullion by a group of Saudi investors about a month ago has stunned the precious metals community. But this came as the venerable old Perth Mint said it could no longer cope with demand and closed its doors to all new sales until January.

Both are highly significant developments in the normally quiet world of precious metals and suggest that something much bigger is afoot, and that serious price increases are almost upon us. Indeed, gold leapt $50 in late trading last Friday, or almost seven per cent. What lies ahead this week?

[Comment by Georealist]

I like your thinking..The Saudis would be VERY shrewd to buy gold..and silver..Physical gold and silver that is...my conservative guess is that they could transition from being the swing oil producer to being the only truly sound, hard money nation on earth...with profound investment and currency implications. It could well translate into a new oil transaction hub with the Saudis..in 20 years..replacing Swizterland as the worlds bankers and currency arbiters.
The logic of this move..and the timing..would make for financial history.
Of course, if I was the top Saudi ruler: I would be buying P & K mines because I believe P & K will always hold more intrinic value than gold; you can't eat gold, but P & K will always allow a chance for a Liebscher's Optima. Surplus food allows job specialization which allows gold to have any value at all. My feeble two cents.

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

Saudis buying precious metal and shutting down ag?

How smart is this really?
You can't eat metal.Yet they might hope that with phony money in some kind of trouble that they will be in the catbirds seat later.

I believe that Arabians and their kin have always prized precious metal.

Yet what can one really do with it in a totally trashed world economy when only something to consume matters. Ultimately that is.

Fer sure then they do not believe in the crunch that may be coming then.

Well they always said their grandchildren would once more ride camels instead of Lears...
Airdale-after all they live in a desert don't they

Peter Schiff & Aaron Task on TechTicker video
Peter Quote: "Gold will go ballistic!"

Citigroup Gets Guarantees on $306 Billion of Assets (Update1)

...The added capital and the asset guarantees are intended to provide confidence to investors that the bank has a big enough loss cushion to absorb bad loans as unemployment climbs and the economy sours.

Citigroup remains vulnerable to losses on loans and securities outside the U.S., said Peter Kovalski, a portfolio manager at Alpine Woods Capital Investors LLC in Purchase, New York, which oversees $8 billion and holds Citigroup shares.

The government plan “gives them a little bit of breathing room, but longer term, things may deteriorate and losses increase,” said Kovalski. “The Achilles heel with Citi is their exposure to emerging markets and what’s going to happen when emerging markets turn down, as they’re doing now.”

Farm’s Open Harvest Draws 40,000 in Colorado

“Overwhelmed is putting it mildly,” Ms. Miller said. “People obviously need food.”

She said she expected 5,000 to 10,000 people to show up Saturday to collect potatoes, carrots and leeks. Instead, an estimated 11,000 vehicles snaked around cornfields and backed up more than two miles. About 30 acres of the 600-acre farm, 37 miles north of Denver, became a parking lot.
I bet when the starving people in Zimbabwe & Haiti finally hear about this: they will think that this farm must have been Disneyland!

Something in the NYT today: "Pastor's Advice for Marriage: More Sex". The pastor (in Grapevine TX) encourages married couples to have sex seven days in a row. (He calls it the seven day sex challenge).

Apparently the minister (a man named Ed Young) conducts his sermon in front of a large double bed! When I read this I remembered the wacky scene from JHK's "World Made by Hand" where the leader of a group gets a couple on a stage to have sex before an audience of cheering fans.

The leader in JHK's book is openly trying to encourage procreation (there is some idea that fertility has been massively compromised by some radiation or poisons or something so that children are not being born in significant numbers).

Ed Young in Grapevine TX says the purpose of the "seven day sex challenge" is to strength marriages. But that is probably just a convenient cover for the real purpose: to increase the numbers of his flock through more babies being born.

I really wonder if he has indeed read the Kunstler book and got his idea of the bed on the stage from that. In any case, it is pretty irresponsible! Many people are having trouble feeding the children they have now, never mind having more of them!

In the longer run, one wonders if there will be a return to the old "fertility rites" or ancient rituals as the one depicted in the "DaVInci Code". Is Ed Young on the leading edge of this?

Don't worry about the preacher's preaching pi. He's in east Texas. They don't need any encouragement to make babies. Saw a number a while back: average age of new mothers in those parts was just under 17 you. The locals are way ahead of Young's curve.

the real purpose: to increase the numbers of his flock through more babies being born.

Why should he do any different than the Catholic pope, eh? Or many other religions until just recently.