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DrumBeat: December 2, 2008
Posted by Leanan on December 2, 2008 - 9:22am
Oil at 3-1/2 year low: Below $47
NEW YORK (CNNMoney.com) -- Oil prices continued falling on Tuesday, tumbling to 3-1/2 year low, as concern about the floundering global economy and falling demand again took center stage.U.S. crude for January 2009 delivery fell $2.32 to settle at $46.96 a barrel. It was the lowest closing price since May 20, 2005 when oil settled at $46.80 a barrel.
A day earlier, oil prices plummeted more than $5 a barrel in the wake of a spate of gloomy economic reports.
"People are worried about their jobs, about their ability to pay for Christmas," said Tom Orr, head of research for brokerage Weeden & Co.
GM’s November U.S. sales slump 41 percent
NEW YORK - General Motors’ November U.S. sales plunged 41 percent, while Ford’s dropped 31 percent, dashing hopes that the industrywide drop in vehicle demand might be easing as Detroit’s automakers prepare to state their second case for a federal bailout.Their overseas rivals posted abysmal results as well. Toyota’s November sales tumbled 34 percent, and Honda’s fell 32 percent.
Chevron May Sell Refineries as Demand, Margins Shrink
(Bloomberg) -- Chevron Corp., the world’s fourth- largest oil company, may sell some refineries as recessions in the world’s largest economies cut demand for gasoline and diesel, squeezing fuel-production margins.The San Ramon, California-based company wants to focus on higher-profit ventures such as natural-gas production offshore Australia and oil developments in the Gulf of Mexico and West Africa, John Watson, executive vice president of strategy and development, said today in a presentation to an energy conference in New York sponsored by Merrill Lynch & Co.
Qatar looks to grow food in Kenya
Qatar has asked Kenya to lease it 40,000 hectares of land to grow crops as part of a proposed package that would also see the Gulf state fund a new £2.4bn port on the popular tourist island of Lamu off the east African country.The deal is the latest example of wealthy countries and companies trying to secure food supplies from the developing world.
Other Gulf states, including Saudi Arabia and the United Arab Emirates, have also been negotiating leases of large tracts of farmland in countries such as Sudan and Senegal since the global food shortages and price rises earlier this year.
Ukraine asks Russia for more time to pay gas debt
MOSCOW (RIA Novosti) - Ukraine's national oil and gas monopoly Naftogaz has asked Gazprom to postpone the deadline for repayment of Ukraine's natural gas debt for September and part of October, the Russian company said Tuesday.The countries are currently negotiating payment of Ukraine's debt, which Gazprom earlier quoted at $2.4 billion. Some of the funds have reportedly been paid, but Gazprom has demanded full payment, and threatened supply cuts.
Canada oil sands seen as threat to birds
A coalition of North American environmental groups says the development of Canada's oil sands region threatens to kill as many as 166 million birds over the next five decades and is calling for a moratorium on new projects in the region.
Ford says it will accelerate electric car plans, CEO to work for $1 a year
WASHINGTON - Ford Motor Co. CEO Alan Mulally says he'll work for $1 per year if the automaker has to take any government loan money....The company also will accelerate plans to roll out electric cars as part of the plan it will present to Congress this week. Ford's plans call for an investment of up to $14 billion to improve fuel efficiency over the next seven years. The company said would improve the overall efficiency of its fleet by an average of 14 percent in 2009.
Petrobras Pre-Salt Region Profitable at $50 Oil, Santander Says
(Bloomberg) -- Petroleo Brasileiro SA, which discovered the Western Hemisphere’s largest oil find in three decades, may still be able to develop the region and turn a profit with oil prices at $50 a barrel, Banco Santander SA said.Osmond Coelho, the manager of the state-controlled oil company’s so-called pre-salt region, said falling oil prices won’t affect the timing for developing the fields, Santander analysts Christian Audi and Ana Browne wrote. They cited a meeting with Coelho in a note to clients.
Nigeria Earmarks $5 Billion for Joint Oil Ventures Next Year
(Bloomberg) -- Nigeria, Africa’s top crude producer, plans to contribute $5 billion to joint oil ventures with international companies next year, President Umaru Yar’Adua said.That estimate is based on a benchmark oil price of $45 a barrel, down from $53.83 a barrel for this year’s budget, Yar’Adua said today in a speech to parliament.
Malaysia to invest 5 to 6 bln dollars in Iran's gas fields
TEHRAN (Xinhua) -- Malaysia will invest 5 to 6 billion U.S. dollars in Iran's gas fields, according to the cooperation memoranda of understanding (MoU)s that the two sides signed on Monday, Iran's satellite press TV reported Tuesday."Malaysia will invest 5 to 6 billion dollars via buy-back contracts in two Iranian gas fields (Ferdous and Golshan)," Iran's Oil Minister Gholam Hossein Nozari was quoted as saying.
Those massive earnings sparked outrage among motorists and politicians. But as oil prices tumble in the wake of a reeling economy - they're currently around $50 a barrel - some think Big Oil's earnings rampage is done."I'm afraid to say those [profit] numbers are history," said Robbert Van Batenburg, Head of Global Research at Louis Capital Markets, a Manhattan-based brokerage. "Demand is collapsing, and the industry is infested with overcapactity."
Others say record profits will bounce back as soon as the economy - and oil prices - return to growth mode. Still others believe oil prices will surpass $150, but believe that profits will lag as expenses for the oil companies mount.
2008 – The year the economic climate changed
I am convinced that 2008 will go down in history as a turning point. While it may be tempting to return to the good old days of unrestricted free markets, the reality is that this would probably be short-lived.Unless capitalism reinvents itself in a way that ensures greater sharing of the fruits of globalisation, and shows it can be instrumental in tackling climate change – delivering the goods in both senses – governments will have no choice but to intervene more extensively. Experts familiar with possible future climate shocks see the financial recession as a small dress rehearsal for what could come. Just think of what a succession of floods or droughts will do to food prices and stock markets, and government response options.
The reality is that the 21st century will be what Richard Heinberg has termed “peak everything” – a time when the supply of many raw materials will go into terminal decline. Oil, gas and fish are at the top of the list. The old economic model of growth based on freely available raw materials and cost-free waste disposal cannot last. Climate change is giving us – and indeed compels us to develop – a sustainable growth model.
OPEC chief calls on Russia, Norway to join oil cartel
ALGIERS, Algeria (AP) _ The head of OPEC says he hopes oil producing nations like Russia will join the organization, or at least agree to output cuts to help spark a rally in prices.Chakib Khelil, who is also Algeria's oil minister, says oil producers such as Russia, Norway and Mexico should "express their solidarity" with OPEC, either by joining the cartel or by following its reductions of output quotas.
Mexico hopes risky project stabilizes oil flows
MEXICO CITY (Reuters) - Mexico's options for avoiding a dramatic decline in oil output are narrowing to a multibillion dollar gamble on the Chicontepec basin, where producing crude is so difficult it has been largely ignored since its discovery in the 1920s. Chicontepec, an onshore oil basin bigger than Luxembourg located in eastern Mexico, could hold more than 100 billion barrels of crude, but because of the area's fiendish geology only a fraction of this oil is believed to be recoverable.Mexico plans to spend $30 billion over the next 15 years at Chicontepec to help offset a sharp decline in output that threatens its status as the world's No. 6 oil producer.
State-Owned Oil Companies Advance Global Ranking of Oil Companies
The national league is beating the private sector in oil.State-owned oil companies now comprise 27 of the top 50 oil companies, according to a survey from Petroleum Intelligence Weekly. Not only that, the national companies are moving up in the ranks. Russia’s Rosneft is now ranked 16th in the world, up from 24 last year. China’s CNPC, meanwhile, passed up BP and Shell. CNPC is now ranked fifth on the list. ExxonMobil, ranked third, is the only private firm in the top five, right below NIOC of Iran and PDV of Venezuela.
BP fights self in phone booth, loses match
British Petroleum ranks as one of the lead members of the peak oil denial club. ASPO’s Colin Campbell and Kjell Aleklett both took BP to task for recent comments slamming the peak oil perspective, even denying its validity. (More on the latter point in a moment.)But it wasn’t always this way. Just over a decade ago, and as recently as 2001, one could fairly say that-based on at least two notable points made over a 5-year period-BP ranked as one of the more realistic oil majors when it came to looming world oil production limits.
Bolivia Shuns Fuel Control Silence
La Paz (Prensa Latina) Bolivia denounced media silencing of the successful Iron Fist plan to fight illegal fuel trade, confuse the people and affect the January 25 referendum....Iron Fist November 13 implementation involved hundreds of soldiers and police stationed at gas stations to control fuel sale and restored domestic fuel supply, which the polls confirmed as successful.
ExxonMobil: PNG LNG Project Protected from Credit Crunch
Exxon Mobil Corp., operator of the US$11 billion PNG LNG joint venture in Papua New Guinea, said it would be "foolish" to suggest the project was immune from the credit crunch but that Exxon's long-standing AAA credit rating provided "weather proofing" in the current conditions.
CNPC finds new oil, gas reserves
China National Petroleum Corp (CNPC) yesterday said it had made six major oil and gas discoveries this year, as the company has put increasing focus on exploration.
Vacaville fruit packer has sunny outlook with solar project
More than 5,800 skyward-tilted solar panels aligned like orchard trees next to the Mariani plant in Vacaville will generate up to 1.1 megawatts of electricity a year for the next 20 years.That's nearly one-fourth of the power Pacific Gas and Electric Co. currently supplies the company to process more than 100 million pounds of dried fruit a year.
Oil falls to 3-year low on bleak U.S. economic news
Oil prices fell to a 3-year low below $48 a barrel Tuesday as more bleak U.S. economic news and plunging stock markets darkened investor expectations for energy demand.By midday in Europe, light, sweet crude for January delivery was down 71 cents to $48.57 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, prices briefly fell to $47.36, the lowest since 2005.
In London, January Brent crude slid 54 cents to $47.43 on the ICE Futures exchange.
Crude Oil Prices May Fall for Further 12-18 Months, BP Says
(Bloomberg) -- The slide in oil prices won’t bottom out until another 12 to 18 months, according to Christof Ruehl, the chief economist of BP Plc.The world economy will stage a recovery from recession in 18 to 24 months, followed by “possible spikes” in oil prices, Ruehl told a conference in London today.
Petrobras May Borrow More Funds From State Banks, Folha Says
(Bloomberg) -- Petroleo Brasileiro SA’s Chief Executive Officer Jose Sergio Gabrielli said the company may borrow more funds from state-controlled banks to use as working capital, Folha de S. Paulo reported.
China gasoline, diesel stockpiles at record in Oct
BEIJING (Reuters) - Gasoline and diesel stockpiles belonging to China's two oil giants, Sinopec Group and CNPC, hit record highs in October, according to the OGP newsletter published by Xinhua news agency.
Russia’s gas output down by almost 4 bln cbm in November
MOSCOW (Itar-Tass) - Russia’s gas production reached 54.351 billion cubic meters in November as against 58.193 billion cubic meters over the same period of last year, the Prime-Tass business news agency said with reference to the materials of the central dispatcher control department of the fuel and energy complex.
Shell, Anglo American rethink coal-to-liquids project
SYDNEY (Reuters) - Royal Dutch Shell Plc and Anglo American Plc are rethinking development of an Australian project to turn coal into liquid fuel, saying it might cost too much.
Russian Ruble May Weaken 25% Next Year, Goldman Sachs Says
(Bloomberg) -- Russia’s ruble may fall as much as 25 percent in the next 12 months as the central bank seeks to conserve foreign-currency reserves amid declining oil prices, Goldman Sachs Group Inc. said.
Iran holds naval war games in strategic waterway
TEHRAN (Reuters) - Iran said it began six days of naval war games on Tuesday in the Gulf and the Strait of Hormuz, the strategic transport route for global oil supplies which the Islamic Republic has threatened to close if it is attacked.
Blackwater holding anti-piracy meetings in London
MOYOCK - Private security contractor Blackwater Worldwide is meeting with shipping and insurance companies this week to describe what the company can do to protect vessels traveling through the volatile Gulf of Aden.
British Airways in merger talks with Qantas
LONDON - British Airways PLC said Tuesday it is in talks with Australia’s Qantas Airways Ltd. about a potential merger, sending its shares soaring as it confirmed expectations of consolidation in the hard-hit aviation industry.
New Jersey entices carpoolers with more gas money
The state Department of Transportation, or DOT, is expanding its Carpooling Makes Sense program by offering $150 gas cards to new carpools of three people each, and $200 gas cards to new carpools of four or more people. The $100 gas cards for carpools of two people also are still available.
Consumers flock to firewood to cut winter heating costs
Americans are stoking their fires, shifting to wood-generated heat to save money."People are going back to the older days of living," says Mel Barley of Fired Up Firewood in Lubbock and Amarillo, Texas. Sales of piñon, mesquite and oak firewood in October were double the same month a year ago, owner Randy Hair says.
"They're trying to … save all the money they can," Barley says. "The more they save on fuel, the more money they have to buy other things."
The Energy Debates: Small Wind Power
The picture that wind power often brings to mind is that of giant turbines on wind farms, which produce megawatts of electricity using rotors up to hundreds of feet in diameter. Small wind power systems, on the other hand, use comparatively petite turbines to support individual homes.
Nigeria begins review of nuclear power plants legislation
LAGOS (Xinhua) -- Nigeria's quest to generate electricity from nuclear sources gained steam on Monday, with the inauguration of a committee to review the legal framework guiding the implementation of the national nuclear power program, the Punch newspaper reported Tuesday.
Brazil describes new plan to slow deforestation
SAO PAULO, Brazil – Brazil plans to boost spending and programs to significantly slow destruction of the Amazon rain forest by 2017, aiming to reduce global warming by slashing the amount of carbon dioxide emitted when trees are burned.The plan would reduce deforestation to 1,900 square miles (5,000 square kilometers) a year, an area the size of the U.S. state of Delaware, President Luiz Inacio Lula da Silva said Monday — setting Brazil's first-ever concrete goal to slow rain forest destruction.
EU car makers to get more time to meet CO2 cuts
BRUSSELS, Belgium – European Union governments and the European Parliament struck a provisional deal Monday that gives car makers more time to meet stricter limits on greenhouse gas emissions.The new rules encourage car makers to sell more small and fuel-efficient cars to balance out sales of heavier luxury vehicles that have boomed in recent years.
Italy threatens to veto costly EU climate change package
BRUSSELS (AFP) – Italy will veto ambitious European Union plans to tackle climate change unless changes are made to make the package less costly to industry and consumers, a minister warned Monday."If the climate package passes as it stands it will lead to a 17 percent hike in electricity bills for every Italian," Andrea Ronchi, Italy's european policy minister, told reporters in Brussels.
Ex-bad boy China praised at climate talks
POZNAN, Poland – Once global warming's bad boy, China is now winning praise for its upbeat role in climate talks, a turnaround perhaps brought on by the effects of carbon emissions on its choking cities, shrinking water resources and increasingly flooded lowlands.Sen. John Kerry recalls meeting the Chinese in the early days of negotiations in the 1990s on a treaty to control greenhouse gases emissions blamed for climate change. "Usually, we just stared at each other," said the Massachusetts Democrat.
"They just wouldn't hear of anything. They saw this effort as a Western conspiracy to prevent them from growing," Kerry said in a conference call with reporters last week.
That changed a year ago when China agreed developing countries would help contain carbon emissions — as long as the wealthy industrial countries gave them the needed technology and finances.
Kunstler: What Does Barack Know About Peak Oil?
The economy may go back up, but the decline in oil production can't be stopped. Does the president-elect know this?
FAO: Climate change threatens food security of Pacific island countries
ROME (Xinhua) -- Ocean warming, frequent tropical cyclones, flash floods and droughts are likely to bring a devastating impact on food production systems in Pacific island countries, the UN Food and Agriculture Organization (FAO) said on Tuesday.Climate change-related disasters have already seriously constrained the development of these islands, the FAO said in a new report entitled "Climate Change and Food Security in Pacific Island Countries."
Climate change fallout may cost annual $50 billion
POZNAN, Poland – Developing countries will need at least $50 billion per year to deal with the consequences of climate change, money that could be raised by auctioning off some rights to emit greenhouse gases, an aid group said Tuesday.Agreeing how to help poor nations adapt to conditions such as decreasing rainfall and harsher storms is a key challenge as negotiators from some 190 countries begin to thrash out details of a new climate change treaty to take effect in 2013.
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Oil hit $47.40 in overnight trading down $100 from an all time high of $147.50 in July.
A clear example that a)futures prices have small correlation with long term scarcity and b)that financial assets dwarf the commodities representing real assets. As Schlesinger said, "complacency or panic".
**EDIT** The Jan 2009 front month contract actually traded $148.65 on 7/11 (ironic date, yes) so has fallen over $101.5 from peak. I was mistaken.
CNBC is becoming intolerable. This morning they were going on and on about peak oil - and how wrongheaded it was. They wanted to call up T. Boone Pickens and taunt him. They're using the term "demand destruction" over and over again, not even realizing it's Simmons and his ilk who put that term on the map.
Its sad that they don't see the implications of this. There are now many more oil people than Simmons and Pickens who understand the clear and present danger low prices mean to long term flow rates. Each day we spend under replacement cost narrows the gap between natural decline and what we will observe in real time. At this point, the steepness of the decline rate in the next decade is going to be the name of the game.
And Peak Oil, though based on scientific tenets, will never be taken seriously again by mainstream. As global oil production drops, there will now always be a rationalization - 'if it weren't for the credit crisis...if it weren't for the depression....if it weren't for the _________ war, we'd have 100 mbpd of production', etc. Receding energy horizons are here to stay, but they will be viewed with skepticism likely forever.
One can hope that policymakers either understand these things, don't have TV, don't watch CNBC or all of the above.
If the policy makers are thick enough to give credence to CNBC anyway, they are certainly not going to understand the question in the first place.
Have you shot a moose today? :-)
I have found - so far at least - that an effective way of countering the "oil prices have plummeted; therefore Peak Oil is a myth" crowd is by pointing out the simple fact that this is because demand has temporarily dropped below supply due to the economic crisis. When I then go on to assure them that prices will spike again no later than when incipient economic growth leads demand to exceed (declining) supply again, I get no counter-arguments.
If properly executed, I think this line of argument could also have a substantial soundbite impact when deployed on the likes of CNBC, CNN, etc., by Peak Oil yay-sayers.
Probably because they are tired of hearing about it or think you are a crank, not because they agree.
The nature of this beast is that those who are correct about our long term energy predicament (and that would include the majority reading this site), will be incorrect until the moment they are correct. At which time they, nor the people they warned, will be too thrilled about it.
Actually, if it's at all heartening, I think that the argument was at least momentarily persuasive in all the settings in which I have given it in recent months. An added factoid that I would mention that gave it even greater force was that demand for oil in the U.S. was nearly a full 10 percent lower this late summer/early fall than at the same time a year before. That factoid has the effect of giving real force to the demand-drop side of the argument; I think that people connect the dots between the demand-drop and the causative price spike culminating in July of this year on their own.
The recent head line "US officially in recession for over a year now" confirms what I have been telling people for the last several months wrt demand destruction.
People were trying to convince me that Americans are getting "green" and cutting back out of concern for the environment and energy supply. To which I said “no, they are cutting back because they simply can’t afford it.
I now add that back at $4.00 a gal gas they couldn’t afford the high price of filling up but now things are so bad that at $1.90 they plain don’t have the money to fill up.
BTW this is a real conversation killer.
What stroke me most in the recent Petroleum Status Reports is the amount of jet fuel supplied to market - down 17.7% from last year!
It looks like Americans are mostly cutting back on flying instead of driving, compared to that gasoline demand is down only 2.8%. I'm wondering what is going on with the airlines right now and how are they holding up amidst such a demand drop; I would speculate that the recent oil price lows are somehow offsetting their losses but what happens if oil rebounds again, by, say next summer?
Basically, airlines are consolidating (e.g. NorthWest and Delta) and cutting back on flights to smaller markets. The age of permagrowth is over; we'll see a lot of things now going in reverse. Airports in smaller cities may eventually close down. I read somewhere that there was a cutback of 11% to 12% in flights since last year; perhaps the remaining reduction in fuel comes from more efficient ways of flying the aircraft (less idling on the ground, longer glides in to landing).
Another effect is flying newer, more fuel efficient a/c.
Vague memory says that a 737-300 uses 16% more fuel than a 737-700 with winglets (same # of seats in both, the -700 replaced the -300 in a major redesign).
737-200s, DC-10s, L-1011s and several more older, fuel guzzling types are gone from US fleets. The next generation is beginning to retire as well.
Best Hopes for the 787,
Alan
The 787 is way behind schedule with first test flight planned for beginning of this year and still has not flown. Airlines are cancelling orders as NW Air (now Delta) is reducing its order for the 787 because it is too expensive on a per seat basis. Read this yesterday, but cannot find the link.
I doubt US airlines will have capital to invest in buying many 787's unless the Feds pick up the tab, which is unlikely. The investment banks are maxed out and Boeing may not be able to take on more debt to finance these for the airlines. With oil at $50 or less per barrel I would be surprised to see the non US airlines fulfill all the orders for the 787 as international travel dwindles. Look at British Airways trying to merge with Qantas in an effort to regain financial strength. Airlines are feeling recession more than most industries (especially those foreign ones financed by oil revenues that have sunk by 60%) and first thing to go will be orders for new planes IMO.
Anyone know what the airline experiance was in the 70s when prices went up 10x?
Is this 'blueprint' for what might happen in the coming decades but on a much larger scale?
Regards, Nick.
One example of this is American Airlines is pulling in deliveries of its 47 new 737-800's from 2016 to 2009 to replace a portion of its fleet of aging MD-80s. Their ultimate goal is to improve their fuel efficiency by 20% over the next 12 years. Although the 737-800 is a much better aircraft in many ways, I will miss the nice roomy seats and 2-3 seating configuration (compared to 3-3 for the 737) of the MD-80.
The airlines parked the equivalent of the entire Northwest Airlines fleet in Arizona. Gives new meaning to "Twilight in the Desert".
Hello Wiseco,
'Wild & Crazy' Speculation?
All these planes parked in the desert will be a great future resource of light, hi-tech metals, and other items ideally suited for recycling into the Nike/Tiger Woods signature brand of postPeak 'Tiger Tools':
1. Hi-tech bicycles, cargo-tricycles, and E-bikes of various shapes & sizes.
2. Light, but very strong and long lasting, human-scaled, narrow-gauge locos & railcars [passenger & container freight] much improved than even this beauty:
http://www.monon.monon.org/sobendpixs4/03-26storyland-train2.jpg
http://www.monon.monon.org/sobendpixs4/03-26storyland-train1.jpg
3. Lightweight, but very durable farming [see kite-powered manure surfboard posting] and gardening hand-tools including many different wheelbarrow versions. Carbon-fiber and titanium scythes?
4. Again, lightweight & rugged, narrow-gauge SpiderWebBikes with quickly attachable/detachable, rechargeable 'Tiger-Spiders' to assist the pedaler up a brutal incline.
4. All of the above as the 'ribcages' to support the standard-gauge 'spine & limbs' buildout of Alan Drake's RR & TOD ideas.
Tiger really should hire me as his postPeak financial advisor as golfing goes belly up. :)
Consider Leanan's toplink on solar assist for Vacaville:
http://www.sacbee.com/129/story/1441106.html
If one mentally extrapolates this trend out: Tiger plowing up high-end golf resorts/hotels/communities should help keep them viable as the former 18,36,54-hole course layouts will now provide fresh foodstuffs so that they can continue to sell 5-course meals, fancy wines, and have fresh flowers in the lobby.
Tiger [or those working for him], as Champion-certified Master Gardeners could earn a good living personally leading resort guests through the flowers & herbs, grapefields, veggie plots, the winery, and so on. The guests, instead of golfing, would have their fun collecting the stuff that the chef would prepare for their dinner later that night, powered by solar devices on the resort roofs, animal sheds, winery roof, etc. IMO, walking or pedaling away, with a picnic of wine, bread, and cheese in a flower garden, sure beats chasing a little white ball.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
You might not be that far off. I understand that parts from the never-flown Soviet space shuttle Buran ended up being recycled into a hog feeder.
Hello WNC Observer,
If everyone on TOD has already emailed Tiger's website [please do if you haven't already]: I bet the Peak Outreach volume [80,000/month?] was sufficient that Nike and Tiger's managers got curious enough to read TOD, then search/download/copy every posting that has 'Tiger Woods' included. :)
Thus, they are probably now working out plans to benefit both themselves and Tiger financially postPeak [and I will probably never see a cent]. Plagiarizing my ideas may prove extremely profitable for some--such is life. Example: I vaguely recall some TODer making 7,000% in a month off one of my NPK postings.
Renting a bedroom in the middle of countless asphalt acres in the center of North America's largest desert doesn't strike me as the best long-term plan--I may eventually have to 'Fleam' too.
N0, no, the contrary is true:
As you can see on the image above
even more people people will fly -
however not in a plane,
but off the cliff...
Splat.
souperman2 oil prices rose during half of the time we where officially in a recession.
Lag time can be a nasty creature—it beats you when you have dropped your guard...
Gas only became "too expensive" toward the end of the run up though.
Many were very cavalier about 4 buck gas for a while acting as if it was no big deal as we are all just pre-rich anyway.
Many are still in denial or just have a $hit load of dough.
Now at 1.85 gal a lot of people just don't have the money (layed off) or are playing it close to the vest.
Don't get me wrong I am all in with your big picture Analysis I just think that the "real" economic pressures are greater than most acknowlege.
I've said a few times that the role of oil prices in this bubble was indirect. Not only did gasoline prices increase but because oil prices where increasing it caused a number of other price increase particularly in food. This indirectly lowered the amount of money people could afford for houses and also caused them to pause in there spending. This played a role in popping the housing bubble as discretionary income fell.
Understand that.
1.) VMT had been falling since 2005.
2.) The housing bubble and large parts of the economy started into decline in 2005 thus a increasing precentage of the population was having hard times.
3.) And official recession finally was called back in Dec 2007. We can assume that the economy was in bad shape several quarters before this. Regional recession where already occuring with job loss etc.
The price of oil continued to rise even as the demand destruction from a poor economy where already well advanced.
The conclusion is that the price did not fall because people ran out of money. Demand could very well have dipped to the point that supply was ample or far more probable the upheaval in the monetary system wiped out oil prices along with every other commodity and basically every single asset class.
Demand today would thus may be higher the same or at best marginally lower then what it was in 2007 and first half of 2008. Oil exports are almost certainly lower.
Now with that said even with the financial explanation we also have a very interesting year as far as oil supply. With a very large slug of what seems to be light sweet crude showing up from Saudi Arabia starting in October and just now ending. This was the last of a series of curious events in the oil supply starting second half of 2007. My opinion is that they were short term in nature time will tell.
Thus barring SPR releases in a matter of weeks or months at most will will find out the real nature of supply and demand. If I'm right then we will see a rapid rise in prices.
If I'm wrong then I really question if peak oil is going to be a huge issue. The economy esp globally really has not contracted all that much we have plenty of room for conservation etc. If these small contraction are all thats required to drop the price of oil then the economy should be able to readily accommodate peak oil. It won't be a lot of fun but its something that we can easily overcome. As the economy tries to grow oil prices will rise the growth will stop oil prices will fall. A few rounds of this along with a steady increase in base price from real depletion and our economy will naturally transition off of oil as needed. Theoretically this is possible because of the waste in the system we could theoretically do it. However in my opinion this is really dependent on if the current still fairly mild economic contraction was sufficient to cause enough true demand destruction to drop the price of oil.
As I said over the very short term the market is well supplied with oil have actually gotten a lot of oil during a traditionally slow period in the fall. It was actually enough to ensure the market was well supplied regardless of demand if you read the weekly EIA reports we are now in the top half of the five year range. Regardless of price or demand right now the market is well supplied based on the five year historical trend. If this was a short term condition then it will pass over the coming weeks and we will get a true picture.
If over the next few months the world continues to be well supplied with oil and the price remains low then we need to really rethink how peak oil will effect us and what we need to do to mitigate it. I will say at least from my market analysis that the current price is unstable and if low prices are real then we will head down to 30 a barrel. The other move is towards 70 which is another short term stability point. It could stay at 70 for a week a day or a month but is another stable point. If you watch the oil market I think you will see that its trying to transition from 50 to one of the other two stable points 30 or 70. If your right then we will see 30 dollar oil.
Hi Mike,
Thanks and can you possibly clarify:
1) Are you saying that:
"If these small contraction are all thats required to drop the price of oil then the economy should be able to readily accommodate peak oil."
is substantially different than
"Demand could very well have dipped to the point that supply was ample or far more probable the upheaval in the monetary system wiped out oil prices along with every other commodity and basically every single asset class."
In other words, are you saying that there is something about "the upheaval in the monetary system" that had effects above and beyond the "small contractions" (small contractions due to the price run-up, you mean)?
So, that the price volatility, such as that predicted by Deffeyes, is really not a bad thing, necessarily?
So, we don't really need a steady (unidirectional), presumably slow, rise in prices as the optimal price scenario for peak mitigation?
(Gosh, this sounds almost optmistic. :))
2) Could you possibly re-state, expand and/or explain this sentence further?
"If over the next few months the world continues to be well supplied with oil and the price remains low then we need to really rethink how peak oil will effect us and what we need to do to mitigate it."
Now memmel, a super doomer, is predicting $30 oil and saying that peak oil may not be a problem after all. I guess the much reviled Yergin is finally having the last laugh!
EDIT: Since the last oil bull appears to have thrown in the proverbial towel, maybe this is the bottom and it is time to invest in oil again.
The futures market in oil agrees with memmel's assessment, that oil prices will rise, as the further into the future you wish to buy oil the higher the price.
The argument I have seen presented is that it is hedge funds deleveraging which has led to the present price crash.
A few weeks ago Memmel's assessment was that the price of oil will be $160/barrel by end of this year. Now he is saying that $30/barrel is a possibility. With such a wide range, the prediction is practically meaningless.
It is pretty difficult to get the exact timing right.
But it is clear that memmel's central projection is that oil prices will rise shortly.
I'd be less certain, as it seems a race between depression and shortage to me, so you place yer money, and yer takes yer chance.
It is a bit like trying to work out whether we will get inflation or deflation.
Either way we are in trouble.
Whatever happens to oil prices in nominal terms then it must get less affordable as less is available, it is just unclear how much of that will be due to demand destruction and how much to the price going up.
The time frame for that is wider though, out to perhaps 2012.
Mike, this really seems like a stretch to me. Let's say there's a net export decline rate of even a very conservative 3%...you're saying the world economy will accommodate 10 consecutive years of that without the financial system entering a death spiral? 30% less oil to the importing countries in ten years?
I think you're expecting a very short term phenomenon to last much longer than is reasonable.
This YouTube video (http://www.youtube.com/watch?v=T7vGDwGLU7s) explains very briefly and very convincingly what is happening now with oil price volatility, and how it is caused by peak oil. It really is quite basic, and I find this video helps persuade a lot of people.
Basically, it involves a see-saw between supply decline and demand destruction. Many predicted this, on this website and others.
I hope I am not running too long repeating stuff that most of us know, but this is basically how I explain it to others:
As usual, the markets find an equilibrium or a solid trend line when viewed from the long-term perspective, but in the short term, you have swings from one side to the other anytime something in the supply or demand changes. The so-called "equilibrium" can only be achieved, in a shorter time frame, when conditions are very stable. The long-term equilibrium or trend line is actually only an average of the many and sometimes violent short-term swings.
Each spike back up in oil prices will probably reach a higher level than the last spike before falling back. This is because the most marginal uses of oil (the least essential and beneficial) get sacrificed first. These are the things we can afford to do without, relatively easily. But as oil becomes more scarce, it starts cutting into more and more essential uses of oil. Thus, the price premium we are willing to pay before pulling back, goes higher. Still, at some point that price "pain point" is reached, some sacrifice is made, and the price falls back again temporarily until supply declines "catch up" to the reduction in demand. Or, if the price falls enough, demand may pick back up until it hits the slowly declining supply limits again.
Our fast-paced and ever-changing culture reinforces short-term thinking. We see this in oil prices. "Gas is high. Somebody DO something!" "Oh, gas is lower now. Great! Back to BAU. All those peak oilers are cranks." But long-term thinking is something we have to really train ourselves to do.
Fortunately, I think an increasing number of people have realized that the low gas prices won't be here for too long. Still, every person I talk to has a different theory as to why. "They lowered the price because of the election." "It's the oil companies (or OPEC), they're manipulating the markets." But as is often true, the best explanation is the simplest: that supply and demand curves interact as shown in the video. People "get it" when I show it to them.
Another effect to note is that when demand falls faster or relative to supply a powerful counter signal is sent in both directions. To the producer 'hey cut back don't start new marginal production' and to the consumer 'hey consume more, oil is plentiful and cheap'.
If for some reason the signals aren't received or one or both parties can't respond the signal continuously gets re-enforced until one or both sides 'gets it'. I agree with many here who have said that a volatile tug-o-war (played with a giant bungee perhaps) in this area is a symptom of reduced cushion brought on by peak oil.
There probably will be a healthy price spike coming once the supply and demand curves do accelerate back tword each other. I'm not so sure the price has to go extremely high for very long in order for this to inflict significant pain on the consumption side this time round.
Yup. Which is pretty much how I figured it would go. That's why I never bought the "peak lite" / "political peak oil" / "above ground factors" thing. Above ground factors have always been part of oil production. You can't discount them, in the past or in the future.
Nah, that goes too far. PO made quite a bit of headway prior to the crunch. Admission of PO is not fundamentally antithetical to the interests of TPTB. Right now they're trying to sell a big juice-up, so it's inconvenient. But at some point they might want to sell war: "You want oil? There's a finite amount. We have to fight for it." That's been a subtext in some right wing propaganda all along.
Denninger has no sympathy for California.
Yup. It's going to be pretty hard to get people to take peak oil seriously.
I think his other comments are harbingers, too. People are going to really turn against immigrants, especially those of the illegal variety. And there's not going to be much sympathy for government workers.
I really was disappointed in Karl for this post--all the anti-immigration ranting just ruined it for me. Sounded like Fox News or Lou Dobbs. Kinda like Mish when he rants about Austrian economics...I just have to disregard it.
But, we may all be government workers before long.
Leanan, though the word "ilk" is really a synonym for "like" or "Simmons and people like him," it is used usually in a derogatory manner. I am sure that is not how you meant it however. Nevertheless, a lot of people, not realizing the true definition of the word, are likely to get the wrong idea.
Ron Patterson
Ilk merely means 'kind' in the type sense. The negative connotations come from those who have used the word pejoratively perhaps thinking ill-k.
It's from Old English ilca meaning same and from Scots usage 'of that ilk' meaning of the same place ,estate or name. The dictionary says usually derogatory, probably stemming from English derogation of the Scots. Bemoaning the loss of the original meaning is crying over spilled ilk.
Hi Petro (Leanan, Ron),
Petro, my take on what Ron is saying is not at all that he's "...bemoaning the loss of the original meaning."
He's trying to let Leanan know that she may have mistakenly chosen a word.
The word she chose, does - (from my POV and experience of common English usage) - have a negative connotation. Since we believe Leanan, in general respects, agrees with (and etc.) Simmons, Ron believes Leanan didn't mean to diss him, in other words.
Ron is trying to be helpful. Both to Leanan and to newer TOD drum readers.
CNBC is becoming intolerable...
I suspect this is the way it has to go down. Orwell called it MINITRUE or something like that. CNBC will remain firmly "on message", the facts notwithstanding.
CNBC is a never ending source of amusement… in case they haven’t noticed the wheels have come flying off the wagon of their much heralded “consumer driven economy”. Yet they can’t crow enough about the drop in oil prices.
I guess they also are having trouble connecting the dots that gas at $2.00 vs. $1.50 vs. $1.00 a gallon isn’t much going to matter to people who are FLAT BROKE and can no longer turn to the credit card as Plan B (because so many were already using it as Plan A).
Oh well as long as the CNBC propagandists can continue to fill up their Denalis and Escalades then this is a triumph of the “market” over some stupid science.
Party on CNBC dudes…
Many thought there was such a correlation when the bubble was inflating.
Well it can only be one or the other. High correlation or little/zero correlation (or I guess there could be 'medium' correlation of oil prices to long term scarcity but you know what I meant.) We have less oil in the ground than a year ago. Is $47 a better policy indicator of our long term supply situation or is $147? My point is that futures don't give lead time because they are dominated by people caring about this quarters or even this weeks, returns. As long as financial players can lever up and 'participate' in oil and gas trading, the prices will overshoot in both directions and cause energy decision makers to be hamstrung by indecision. I've written about this problem for over 3 years here.
A Closer Look at Oil Futures
Natural Gas - A Tale of Two Markets
Oil Price Volatility for 2008
Peak Oil and Reflexivity and Peak Oil
Hedge Funds, Hurricanes and Energy Markets
Dec 07 Global Public Media interview on global deleveraging sending oil back down to $50.
Not at all. The question is whether a large price spike is caused primarily by fundamentals or primarily by emotion (speculation...whatever). IOW... how much "bubble" is involved in the price?
That's just a variation on "oil is a finite resource". It always sounds great once you're already inside the "true believer" circle, but it adds nothing to the facts. Oil is finite whether the peak was last year or ten years from now or two centuries.
This started as a global margin call only peripherally related to oil. I wrote here about how the deleveraging has not just been in oil but in ALL financial assets. (Also, here near the bottom). If it was an oil bubble, oil would have sold off and everything else would have stayed roughly the same. As it stands for the 3 years prior to July 2008, commodities had small correlations with other asset classes. Since July there is a .9+ R^2 between oil, the Euro/Yen cross and hedge fund aggregate index.
It was a financial asset bubble. Oil got carried down with the rest. Because of that, the oil 'market' is now signalling that we needn't do anything urgent because gasoline is cheaper than any other liquid for sale. How can you not see that this is problematic for policymakers?
With respect... that's not really the case. You can't say there was no NASDAQ bubble just because the S&P fell too. They didn't run up to the same degree and didn't decline to the same degree either.
Similarly, you can't just look at the recent decline and correlate it in time to stock market declines... you have to look at the rise in commodity prices before hand.
Wha??
The last gasp rally in oil - perhaps the last 20% was due to some hedge fund and asset management players covering or so I've heard. Yes, speculation played A role in the last stages of the rally. But on the downside the story is NOT about oil but something greater, that is impacting all financial assets - currencies, corn, cotton, cocoa, oil, stocks, etc. So you are giving equal weight to the uptrade and the downtrade and it is not a fair comparison. It's like going up a mountain with the aid of an elephant and being chased down by a giant herd of mastodons. The situations were different.
As I've said, the oil cornucopians now have a couple years of respite (unfortunately that means Obama and others will be given wrong advice on energy). Only until after deleveraging is over and economy stabilizes will we see oils relative scarcity reassert via financial price mechanisms. Though there are many non-financial scenarios where this fact could prove out as well.
Never in the history of our financial markets have we seen the correlations and volatility of the last 3 months. This has been a once in an era event, with very complex causes. To sit here and say - 'see oil was in a bubble' doesn't help anyone. Today is the first day of the rest of our lives - are we going to waste it on analyzing what has happened or come up with some sort of coherent plan to make the future better?
We'll waste it, but analysis won't be the culprit, rationalizing will. We are going to spend the next few years trying to "get back to where we used to be" and will never even think to ask the question - is "where we used to be" somewhere we really want to go?
Of course, the Cornucopians are using price as a proxy for production, because they would rather talk about (falling demand driven) lower prices rather than basically flat crude oil production. The world will probably pay somewhere around a trillion dollars more for oil in 2008 than in 2005, for basically the same amount of crude oil. This is what the Cornucopians don't want to talk about.
In any case, as we all know, Hubbert analyzed the areas under production rate versus time curves, i.e., cumulative production. He pointed out that a one-third increase in URR for the Lower 48 only postponed the projected peak by five years. As noted up the thread, on a cumulative basis, i.e., in respect to the area under the curve, we have seen a deficiency between what we would have produced at the 5/05 C+C rate worldwide and what we actually produced--through the second half of 2005, through all of 2006 and 2007 and taking the EIA data at face value, through the first eight months of 2008.
We have seen a pick up in total liquids, which Simmons attributes to the dying gasps of several large oil fields as their gas caps are blown down. But the EIA data show two years of annual, and so far accelerating, declines in net oil exports, with Russia, IMO, joining countries like Norway and Mexico in entering the terminal decline stage of net oil exports.
Don't even look at oil the price of rice got hammered and last I checked people don't cut back substantially on rice consumption because some American banks are having problems.
The volatility in price must be unprecedented. The wackiness of the "bailout sequel #34" coming at us it seems like daily. I do not remember a time like this ever. Stability is not happening. I think we are headed for a "wheel coming off" situation, be it oil, finance, political unrest. The world leaders are in "reactionary mode", miscalculations are a given. The time for planning was before TSHTF.
I wonder if it's not another rear view mirror situation, where you look in the rear view mirror, see this wheel running along the road behind you and into the ditch and the bad feeling is only starting to creep into your gut. I fear we're into triage now. The revisions to state and local budgets are going to be horrendous. The
health caredisease insurance industry is going to implode when those budgets crash.cfm in Gray, ME
I vote we come up with a coherent plan, we will all vote on it, then we will sell it to the world. We will all get a soap box, take it to the town square in our respective cities or towns, then say: "Listen up people, here is how we are going to save the world!"
My point is Nate, it simply doesn't matter what plan we come up with, in the grand scheme of things it will be worth about as much as a bucket of warm spit. Lester Brown has a grand plan: Plan B 3.0: Mobilizing to Save Civilization This link takes you to the table of contents. He has covered about everything, including peak oil. Problem is Nate, the world has paid him not one bit of attention.
The world moves at the will of 6.7 individual people, the vast majority of whom are concerned with their own daily lives totay, next week and a few even plan for next year. No one is going to implement Plan B 3.0, or Nate's plan, or Ron's plan, or anyone else's plan.
We are but observers Nate. Of course there is something you can do, you can make plans to improve your own individual chances of survival, and that of your family. But you are not going to make the future better for the world. The world just is not listening, and never will listen.
Ron Patterson
In some ways I recoil at the fatalism in your post.
Yet in some ways I agree. There are Transition Initiatives (I like that effort very much), there is Plan C from the Community Solution, there is the Plan B 3.0 that you mention, and more. The point that I agree with you on is that no single plan is likely to gain enough mindshare to become dominant.
No one will ever agree 100% on anything.
But history shows great trends and movements do arise, usually almost spontaneously or in response to the times in which they occur. Perhaps at the right time, all of these "plans" and gathering awareness will make a collective difference even though no single one dominates. The times are changing, and like you say, in some sense (the macro sense) we can only observe. Yet we are part of the times. We may be swimming against the tide right now, but it may be that the tide will eventually come "our way". Soon, we may be swimming with the current instead of against it.
Will that "save" us in the way that most currently want? No but it may provide a way to a softer descent than many here foresee.
I might be more convinced if you could provide an example or two from history. Of what are you thinking when you say "history shows"? I'm having a hard time coming up with any examples on my own.
Great trends and movements?
I think history, at least what I have perused has shown that in times of severe famine that people will do anything to secure food.
I believe a good example is given by Eusebius. He recorded that one woman was so deprived that she slaughtered and cooked her on child.
Its nice to have this rosy outlook on events but when hunger strikes I would trust no one. No one. What each of us stores and holds for our own survival will be imperative and will not be shared IMO and should not. The wise one will seek to provide. The non-believers will wait until its far too late then expect others to provide.
Did not Katrina teach us anything?
As the police are not there to 'protect' you they also may resort to taking it from you. Power does tend to corrupt.
Airdale
Two that come to mind for me are societal attitudes towards smoking and towards drinking and driving.
Exactly! The problem with over-shoot is that there is no acceptable solution anyway (or else it wouldn't be over-shoot). Not everyone is going to get through the ensuing bottleneck. Those that do, will do so because they were lucky enough to be in a niche that was marginally more sustainable than the others.
Given the way the World is handling the global financial crisis, which is arguably within our power to solve, then there is little hope when it comes to the less solvable problems of Energy and Climate Change.
As individuals we can improve our chances, but as a whole we probably cannot.
What makes you so certain that the impending demographic bottleneck isn't going to close completely? All species eventually become extinct. Human extinction may not be an "acceptable" consequence of carrying capacity "over-shoot" but nature doesn't care what you or anyone else considers acceptable. Populations only some tens of percent over K sometimes collapse all the way to zero. What gives you confidence that humans are any different?
Doesn't matter, whatever comes, we're going to have to deal with it until we can't. Survival isn't guaranteed, but it doesn't alter the need to try and survive. All that individuals can do is try and improve their chances of survival by preparing for the worst whilst hoping for the best.
THE INTRODUCTION, INCREASE, AND CRASH OF REINDEER ON ST. MATTHEW ISLAND
So much for Rudolph. Merry Christmas.
LoL Your post inspired me to google the status of the St. Matthew's Island reindeer herd today, and the search led to a post by TOD's very own Totoneila, an exert from which is included here:
http://groups.yahoo.com/group/AlasBabylon/message/17650?l=1
You need to post such fun stuff on TOD more often, Bob!
EDIT: And BTW, the reindeer on St. Matthew's Island became extinct in the 1980s.
Yep, I have lots of posted speculation all over the web constantly hoping that those 'Smarter than Me' will come up with even better ideas for Optimal Overshoot Decline. Time will tell...
You're cool Bob. I enjoy your posts & share your concern over the fertilizer situation.
As gecko's graph shows, the St. Matthew's Island reindeer herd crashed from >6K to 42 in one winter. It did not crash all the way to extinction but this relict population idled along for a couple decades, never attaining anywhere near its former size, before going completely extinct. Similarly, I expect human population to crash during the early half of the 21st century, all the way to extinction in the northern hemisphere, with relict populations in the southern hemisphere persisting into the early 23rd century.
I found out about peak oil 117 days ago (yes, I've kept track) when I stumbled upon Matt Savinar's website. From there I found my way to Dieoff and from there to TOD. Along the way I have read Defeyes, Catton, Ponting, Klein, Taleb, Heinberg, Kunstler, Greer...and others.
I have not become reassured that we face anything but severe hardship. Because I am new to all of this, and because I have no formal training in any of the fields assessing or having impact upon this situation, I have assumed that most of this "hunch" I carry around is borne of my own internal framework. A lot of the discussion here on TOD helps to dispel my gloom because of its optimistic tenor. I truly need to hear engineers and other hard scientists discussing options as though it is possible for them to dampen the effect of "peak everything"
However, when I see my own conclusions in black and white and posted by someone else - I really sit up and take notice. (!!)
All I can say DD is: I reeeeaaaaly hope you're wrong. (and me too)
Regards,
Al
I'm with Greer. How can you plan for an unknown and unknowable future? Forget planning, and prepare to improvise.
Sorry, can someone tell me again why planning and improvising are mutually exclusive?
I don't think anyone's arguing that they're mutually exclusive. Just that planning is a waste of time. While examining the problem, as we do here, may not be. The opposite of what many people think.
In the military they have a saying: "No plan survives contact with the enemy".
The PROCESS of planning is useful, nevertheless.
Military planning is different. Greer spells it out in the article I linked to. He does think that planning is useful and effective when you have a reasonable idea of the situation you will be in. And I think most military planning falls into that category.
Yes, I hear that sometimes from my coaching clients. Please don't take this the wrong way but mostly that is a cover for being lazy or never having been through an effective planning exercise. I have never gone through a planning exercise that a client has said afterward was a waste of time. On the contrary, they always say they saw things they never saw before (i.e. they gained insight), they saw a clear pathway to accomplishing their goals (not a small thing -- it makes a big difference with motivation and effective use of time) and so on.
Among the things people learn while planning for energy descent are:
And if the planning process is facilitated by an experienced "planner" ("strategy consultant" is the more usual word in business), the facilitator will make sure to ask the probing questions that were never asked before. That's often when people experience "aha!" moments.
So my apologies if I don't give much credence to the view that planning is a waste of time. Reality may not line up with the plan (it usually doesn't) but the planning process will make a very large difference, in my experience.
Agreed. For example, there's a difference in lifestyles between those who planned for their retirement 30 years out and those who planned 5 years out.
My plan, based on my knowledge of Peak Oil (which I executed this year), was to move well within the city limits of my hometown, to a small energy efficient home, near public transportation. My home has a prefab fireplace, and I have plenty of wood. I plan on replacing my 60's era windows with energy efficient ones come spring, and put in an open loop geothermal unit. I also own a Prius (outright), and I plan on paying my mortgage down as soon as humanly possible. I have no other debt, save a student loan.
My friends have huge houses, in the burbs, with their Tacomas and ARMs for mortgages and are leveraged beyond belief so they can live the 'American Dream'.
They will be living the 'American Nightmare' soon enough, while I hunker down for the energy descent... Yes, planning does make a difference.
(Edit)And you know what? Even if things do go back to BAU, even if things are 'normal' again, nothing I have done has made me worse off regardless... In fact, it has made me *better* off. No matter the outcome, I will be in better shape...
The buddha in you is smiling.
Ah yes thirty years ago 1978; I started working on plan C of my retirement. Plan A was started back in 1960 on our first wedding anniversary that lasted about 2 years. Plan B went into effect and lasted about 18 years, Plan C lasted 5 years. Plan D is still going on as of today, how long will it last, I haven't the vaguest idea, I just hope it doesn't last much longer. My folks went through the Great Depression, and I have no desire to share that experience with them where ever they are today.
the old hermit
I've just activated Plan E, retirement-wise: die young. This is a direct result of the sudden failure of my medical plan: don't get sick.
Hi s,
Are you saying you are ill?
I hope you get well soon.
As I read it, Greer is not against personal choices that are based on our best estimates of the future. He is against, or rather, points out the futility, of PUBLIC plans in the context of an un-knowable future. Although such plans SEEM like a good idea, in practice they are quickly forgotten. See the energy-related municipal (and state and federal) plans made in the 1970's. It's more a statement about the dynamics of collective planning than about predicting the future.
My experience on Town committees is that they are set up by the local power-that-be as fig leaves, while TPTB do their thing ("development"). Documents such as "the town plan" are required by the state, and are popular with the volunteers who spend time writing them, but are ignored in actual decisions. By "actual decisions" I mean MONEY. Talk is cheap. And ANYTHING can be painted green.
This is why I am not enthused about efforts such as "Transition Town". While well-intentioned, I don't think they are meaningful unless and until TPTB steer money accordingly. Perhaps those efforts will impact some public money decisions (or decisions allowing money-grubbing "development"), but I have yet to see that happen anywhere. If anybody has examples, let us know!
I agree with your observations.
Planning does make you feel better. Greer clearly states that.
Well, if all you'll give me is that it makes a difference with a person's motivation, I'll take it :-).
Consider that your planning is based on a narrow range of future possibilities. Given that, it's possible to plan effectively. Regardless of what kind of planning/coaching you are doing, if the basic assumptions you base those plans on change, your plans may come to naught (or worse).
Greer's comments were in regard to planning what the future would look like, not that all planning is useless. I'm planning on being significantly less prosperous than my parents are now. I don't plan on being able to retire. I plan on having to increase my level of self-sufficiency. I plan on learning to grow much more of my own food. I plan on keeping my eyes and ears open, and to be ready and willing to embrace change as it comes.
All of these things are decent plans I think. But to plan on what society will look like, how various societal crisis will play out - that's absurd, especially in a time of such massive change. Where in the hell is my flying car?
Yes, that's correct. The context starts with "there will be a decreasing amount of energy available both individually and as a society. What will the impact of that be?" I don't spend time on mirrors in space, or huge amounts of liquid fuel from coal. If those assumptions are incorrect, the planning will be off. Wouldn't you agree that decreasing energy availability is a reasonable planning assumption? That shapes quite a few things.
How the crisis will play out is too difficult a picture to paint, for certain. But that's not necessary for a planning session to be valuable because the changes coming are so large. Start with the assumption that the status quo will no longer hold, then create from there.
Transportation: if you own a car, will you be able to get gas for it? Or will you rely on public transportation, a bike or a scooter to get to your job or purchase products?
Employment: do you provide a "need to have" service or a "nice to have" service? What would you do if the money stopped coming in?
Retirement: when does it make sense to stop planning for retirement?
Housing: will you be able to support the household you're in now, or will you have to join with family or friends for shelter?
and so on.
The point is that right now there are still options to shape a personal future, but that takes thinking, planning, then executing. But if people wait until events unfold beyond their control, they will wake up and realize that most of the good options are all gone.
Plan to improvise ... since nobody knows what the future will be you need more than one plan ... and plans that can be implemented very fast. Most people, including the 'talking heads', wobble through life from one crisis to the next all you have to do is be swifter than them.
For example, we don't know whether to expect inflation or deflation ... so you will need a plan to cover BOTH extremes ... the Government don't seem to have a viable plan A, let alone B.
Clearly something dramatic has occured economically worldwide (TOD readers know it is peak oil) ... if our Governments knew what they were doing we wouldn't be in the situation we find ourselves ... so make your plan on the basis that your Government is incapable of successful long term planning.
Our Governments are trying to return our economies back to 'normal' ... sadly, economically the last 200 years are anything but normal ... 'normal' doesn't exist so the Governments will fail, plan on that basis.
I believe you are mistaken here. We are living plan A. My guess would be that you don't view it as a plan because you disagree with it.
Huh?
What we are living is NOT what the Government planned and almost never is - I don't agree with it or disagree with it, it's just a fact of life ... any plans you might consider for the unpredictable future should take real world facts and provable data into consideration.
The Government has no more idea of how the future will pan out than you or I, they make the 'plan' up as they go along, reacting to fractal changing circumstances, there is no obvious plan B.
I think it is rather dangerous/naive to think that those in positions of power have no idea what they are doing. Whether you think this because you think they are "just like the rest of us" or because you just happen to disagree with what they are doing, I would argue that you are doing more to disempower yourself than you are "understanding" what those in power do.
In one sense, you are correct, the Government did not plan to have a massive and deep global recession. But that's a very narrow vision. Those with power have been using the apparatus of our government and other governments around the world to implement a specific design for a global economy. What we got may not be precisely what any one of them envisioned, but this is more a result of the ongoing power plays amongst them than it is the failure of a particular plan to be manifested. But back to the recession. If the current economic situation is a result of the type of global economy that those in power have implemented (and I believe its fairly obvious that is the case), than whether they would admit it or not, they planned this recession. If you know the lingo of project management, they accepted the risk of recession and when it was realized have pursued a mitigation strategy.
As for not knowing the future, this is obviously a matter of degree. Will the sun rise tomorrow? You can count on it. Will I awake in the morning? Almost as assuredly as I am going to bed healthy and secure. Will I drink coffee after arising? Do almost every day, why should tomorrow be different. Now, push those projections out a year and they become progressively less certain (perhaps I will have given up caffeine). Out ten years and even more so (perhaps I will become increasingly ill). But the differing levels of certainty don't mean that a plan is simply reactions to changes. When I go to the supermarket this weekend, I plan to buy coffee. That's a pretty good bet because I'm a coffee drinker. And that's not made up as I go along.
Regarding an obvious plan B - in our form of governance there is no value to a plan B on any grand scale. There are all sorts of smaller scale plan B's - like buying equity in banks rather than the plan A of buying up toxic assets. But on the scale of a design for a society, if your Plan A begins to fail, you won't have a chance to implement Plan B, you'll find yourself voted out of office (with the tacit consent of the real powers who are no longer bank rolling your political aspirations).
Hi Shaman,
re: "...they accepted the risk of recession and when it was realized have pursued a mitigation strategy."
Exactly so.
Many examples of people warning of risks of different kinds, take AIG's pollution record.
Or the "corporatizing" of water supplies around the world.
It seems to me to be an issue of "those with power", as you say, and the inability of "power" to listen. Or perhaps, we should say, to have any countervailing power. (To see the wisdom of some kind of balance and process.)
Although it seems to me, also, the current strategy is not really best described as "mitigation," since it seems not to really address the fundamentals to any real degree. More like, more of the same...
Yes. I think Greer's post made little sense, even if one takes a narrow view of "planning". A large part of planning is analyzing the context, and if the context is uncertain, plans should take that into consideration. I don't think anyone knows how this energy descent is going to go, but good planning would explore many options and even recognize that the plans won't get large chunks right.
It's hard to imagine how a plan that increased resiliency could be all wrong. Maybe for lack of that last little bit we fail to reach the technological singularity and miss fusion. Or the psychological singularity and fail to evolve beyond energy into spirit beings.
Plans might highlight the need to jump paradigms - rather than invest in electric cars, go directly to mass transit, for example - because resources won't support certain levels of infrastructure.
Not planning, I don't know, did someone slip something into Greer's well water?
cfm in Gray, ME
There are many win-win actions we can take, and most of them require some mid-range to long-range planning.
For example, California tightened building energy codes starting 20 years ago and continuing today. As a consequence, California buildings use 30-50% less energy than buildings in comparable climate zones in other states. Since they did not "forget planning", California has reaped and will reap significant economic and environmental advantages which would never have occurred via the "free-market" without planning.
Boulder, where I live, started a Transportation Master Plan about 20 years ago (I helped). As a result of that plan, Boulder has well-designed and nearly complete bicycle system. About 12% of Boulder residents travel by bike everyday. Absent planning, with only the typical car-clogged boulevards of unplanned sprawl, the percentage of residents enjoying healthful and economical bike travel would be much lower.
Similarly, Boulder's Community Transit system, carefully planned and designed, carries around 5X as many passengers as the previous ad-hoc system. Over 60% of employees in downtown Boulder do not arrive by single-occupant vehicle, as compared to 5-10% non SOV mode share in unplanned or poorly planned communities.
The list of successful planning is way to long too list. In times of uncertainty, failure to plan is basically panic. The real issue is the appropriate time scale for plans and I agree that trying to predict the distant future and plan for it is impossible. But there are so many short and medium term plans that can help individuals and communities plan for the future.
Even in Mumbai, those people who planned when and where to run, were much more likely to survive (and even be interviewed as the Brit who slipped away at the base of the stairs was). Those who panicked and failed to plan, even for the short-term, were much more likely to be victims.
Similary, individuals and communities that fail to plan for energy and climate transitions are much more likely to be victims.
Don't forget Boulder's open space plan. Without it, Boulder would be just a continuation of Denver like every place else on the front range. Boulder is one of the cities of any size where you can actually tell where it begins and ends.
Unfortunately California and Boulder both started to implement changes 20 years ago. We don't have 20 year left to do what they did. Not only is time short, but we will be forced to make changes with declining amounts of oil and gas along with a horrendous economy.
True, and it only underlies the point that the effective planning depends on an appropriate time frame. Communities that did not build bike facilities 20 years ago can still set up municipal car-pooling websites, relax zoning restrictions on mixed-use and building occupancy, modify ordinances to require safe automobile behavior around ped snd bikes (like Boulder County's 3 foot law,etc.), establish community gardens on vacant land, and take many other more short-term actions with zero/near-zero cost and immediate impact.
But those communities and individuals that say "forget planning" will not even make the simple, obvious short-term plans, let alone planning for the medium and long-term future.
I suggest all TODers look carefully at the narrow-gauge railbed in the webphotos in my other DB posting today, then consider Leanan's DB toplink yesterday on asphalt being $100 grand/mile.
As discussed in prior postings: the guts of a small ICE-engine vehicle, or even better, the guts of a Prius could easily locomote a long narrow-gauge train. Using the steel from the top 35 floors of a forty story skyscraper: I bet you could directly bolt much of this structural steel to a sidewalk to quickly and CHEAPLY provide many miles of suburban track. No building of elevated stations is required either due to the intrinsic human-scale of these minitrains; easy to step in/out. A small, sliding ramp extending from a flatcar would work for someone in a wheelchair.
In areas of heavy snow: would you rather hand-shovel clear a narrow-gauge gap, or an asphalt street many car lanes wide? I bet if a study was undertaken: very rarely does a street actually need huge construction equip. or big dump trucks. If they do: it is when they are repaving the damn asphalt. My feeble two cents.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hi Leanan,
1) Planning can save lives. Rehearsing something physically, for example. Some interesting ideas in Amanda Ripley's book.
http://www.amandaripley.com/
http://www.ashland.or.us/Page.asp?NavID=541
Also, I wonder:
2) If the US developed an energy policy that incorporated "peak oil", what would it look like in your view?
An example of planning: ag policy - more money into transition to organic (less FF input on the fertilizer side of it), education for ag careers, supporting organic and sustainable ag on a world basis. As opposed to current policies. Just as an example. Would this not count as something of a "plan"?
It was far more than that. It would be hard to say exactly how much until we see how far it falls. That will obviously be farther than the "correct" value but should give us some idea.
If the current prices are the bottom (and I don't see a reason to think that they are), then we can say pretty comfortably that when oil hit $80 and the industry said that it was speculation... that fundamentals didn't justify anything above $60/bbl... they knew what they were talking about.
There's a matter of degree that I think you're missing. If you take financials out of the mix, stocks simply aren't in the same ballpark as comodities.
But think about how that sounds. How is it different from every other bubble where the "true believers" couldn't accept that it was a bubble even after it fell apart? It's just a coincidence that the chart looks exactly like a speculative bubble popping? It's speculative on the way down but we won't accept that it was speculative on the way UP?
I can't see how that's true. The assumption that is wasn't a bubble permeated other decisions/assumptions.
Look - I don't mean to be combative, but we are speaking past eachother. I was one of the 'peak oilers' who said oil was likely to plummet in price, and that we would likely never see more than $200 a barrel due to demand issues. I even called the exact date of peak in price on FT Alphaville...:-)
The bigger points are twofold
1)Futures markets (and therefore prices), due to being small in comparison to fiat currency and credit (leverage) will continue to give oscillating signals necessary for proper long term investment in conventional public markets.
2)Demand is every bit as important as supply with respect to valuing the marginal short term barrel. The difference being that eventually, when demand has sufficiently returned, supply is going to be even more constrained than would have been the case had we not had the financial meltdown (btw your comment about removing financials from the mix is incorrect - the correlations would still be over 90%). The other salient difference being that humans reproduce on human time scales and oil does not.
Peak oil has always been about oil supply not being able to keep up with oil demand. Just like everything else though, we will 'borrow' from future to make today 'seem' better. Demand has dropped far more than supply for now, which means one day supply will fall much further than demand. If you are suggesting that the Peak Oil community, (broadly defined, including Simmons and Pickens on CNBC), contributed to prices going higher than they otherwise might have gone, I don't disagree. But the seeds for the financial crisis causing the selloff were laid before there was much of a peak oil community at all outside of Colin Campbell, Jay Hanson, Richard Duncan, etc. The seeds were laid when Glass-Steagal was repealed, investment banks were allowed to lever up 30x, no-doc loans were approved, FNM, FHLMC eased lending standards, record fed easing from 2000-2002 flushed system with tens of trillions of credit, etc.
Bottom line - Peak Oil is real but was trumped by the credit crisis, which has now made it 'realer'. It just doesn't seem that way right now.
*And decisions made under the assumption it wasn't a bubble, by and large would have been good decisions (other than low energy gain, high externality energy investments like corn ethanol)
**There is a CHANCE that the way it has unfolded may be the best of both worlds. Slowing consumption gives leadership more time to choose better social ends than conspicuous consumption and turning resources into dopamine and garbage (on average that is - there are quite a few products that produce longer term happiness with low externalities). We conceivably could now allocate resources towards renewable infrastructure and have less of a public outcry than we would have withouth the financial crisis - more jobs, secure energy future, etc.
Well and truly validated by entering 'peak oil' and 'credit crisis' in Google Trends:
http://www.google.com/trends?q=%22peak+oil%22%2C+%22credit+crisis%22
Nice find!
But that only validates that the perception of credit crisis trumping peak oil is well and truly valid....;-)
Hello Nate,
Interesting that the future Cascadia cities of Portland, Seattle, and Vancouver are the leaders in Peak Outreach... hope they are getting ready early if 100 million from the Southwest and Mexico start heading their direction...
Yo toto - We already got the plans to blow Siskiyou Summit pass, all the bridges on the Columbia river, and the three major mountain passes. Sentinels posted ASAP.
oops! did I type that out loud?
Never mind.............
Can you hold off a bit until I get there...? ;-)
Are you really planning on moving to the Pacific Northwest? That would be cool.
Thanks, I'm looking into it. I'll be up your way from December 16 through the 21st with two others. We are doing a tour of the towns and farmland.
Is it the consensus that there's no hope in any warm place?
Hello Aniya,
IMO, I don't think there is any clear consensus on a warm or cold area for long term survival as they both have pluses and minuses if minimal infrastructure still functions, but it seems pretty clear to me that if anyone is somehow caught in the 'absolute worst case situation' of being in an area of no water & lethal heat: you only have a few days, possibly a few hours, to get to an area where potable water can save your life.
Generally, in a colder area, loss of immediately handy water is not that dire as snow, rain, ice, and creek water is usually nearby. I don't know if you have ever experienced our summer blast furnace and how there is no surface water for miles and miles and miles.
Unfortunately, many illegals from Mexico have found this out the most painful way imaginable when their water ran out long before their hiking mileage. Waterboarding torture is a piece of cake compared to heat exhaustion, heat stroke, and lethal dehydration.
My interest in Oregon is: good topsoil, adequate water even after projected impacts of climate change (might even get wetter) and less population density. Also, several of the towns have a university campus. Not all campuses will survive but even if the institution disappears perhaps all the professors won't.
Hello Souperman2,
Just perfect your recipe w/curry for me. By the time I finally walk there on my 6'5" long-pig frame: I may be so damn tired, cold, and exhausted that I will heartily welcome the long, hot soak you will graciously offer me in one of your giant soup kettles, while your workers are adding potatoes and carrots...
"start heading in their direction?"
That migration has already begun - one reason that the Willamette Valley is one of the few places in the country where real estate prices have not collapsed.
And I can't put my finger on it right now, but one of those curious little tid bits I picked up would suggest that it won't just be people from the Southwest - While Florida continues to grow as the result of net inmigration, the extent of the outmigration has picked up dramatically this decade and the second most common destination after North Carolina is... Oregon.
Although I live in California I will say a lot of it was out migration of people from California moving to a number of surrounding state and for some reason Texas. A lot of people took there bubble winnings and bought McMansions in Oregon, Arizona, Texas and spec houses all over the place. In many cases they kept the California house and used HELOC money.
Lost of variation on the them with only a smaller number smart enough to pay cash for the new house using the price differential. The point is a lot of these people are not peak oil aware just various types of Real Estate speculators.
I think you will find that a lot of them won't stay either because their Real Estate empire crumbles or they lose there job or don't like the weather etc etc. And also a lot of the homes are just empty or being rented. I live in Irvine CA and work in SF so I know all the variants of the Cali Real Estate speculator personally.
I suspect you will find soon that the PNW is no more immune from these vultures ruining your Real Estate values then Arizona. Certainly there are a number of real bona fide people worried about the future I'm one of them planning to head to Oregon for this reason however I suspect we are a lot smaller group then the Cali specuvester crowd. Look at Bend Oregon on of the hot spot for specuvesters its crashing.
Bottom line is Willamette probably will crash at least back to the traditional 3x income level.
The only thing I don't like about it is most of these idiots bought huge McMansions on small lots just like they have in Cali.
Pretty good article on this crowd.
http://www.msnbc.msn.com/id/17791351/
Bush understands peak oil perfectly, and so does Obama. The problem is Bush was incapable and unwilling to initiate an energy policy based on peak oil. (Well, there is that little war in Iraq.)
Obama's challenge is to make real progress in dealing with peak oil. Hopefully by not fighting additional wars to control what is left of oil. Remember the rhetoric was building a few months ago about having to deal with Iran next.
Obama will need both political support and the majority of popular support to begin an appropriate energy policy. The odds of getting both in the next few years, in my opinion, are slim. That troubles me because we are running out of time.
Obama is more intelligent than Bush, still, because of political realities and popular opinion it is likely some of his proposals will be out of sync with what we know is needed. My sense is if anyone can pull it off it is Obama. Thank God McCain/Palin are not going to be in charge. It is impossible to imagine what would happen if McCain had to resign due to bad health or worse.
Obama is a good politician. He's got a real shot at pulling off something pretty intelligent.
I disagree.
The election of Obama demonstrates politics in America are just as bankrupt as business in America.
Hi Priority
How do you get it that Obama really understand "peak oil"? I mean, what are the indications? Or, do you know this directly?
Do you have "insider information"?
Last I heard, his higher level staff didn't get it at all.
Hearing that Romer, of NBER, is one of Obama's financial advisors left me with a sinking feeling in my gut. Whether Obama understands energy and resources or not, he's not going to play it straight and he's not going to level with the American people. Starting from "Step 1", we are not in this together. Everyone was counting on Obama lying during the campaign - because he had to do that to get elected - and it's starting to look like he did. People thought he'd break his campaign promises and be better, but it's looking like he's going to break them and be much worse. That surprises even me.
A government that is unwilling and unable to recognize and provide for the needs of its people is illegitimate. The outcome is corruption, a hollow-state and the stuff of which Robb writes at Global Guerrillas. Even a fascist state requires legitimacy and it's starting to look to me like this US nation won't even be able to muster that level of legitimacy - we will have been so plundered by our misleaders and the cancer economy.
cfm in Gray, ME
Then it should be stated loud and clear that the "great oil bubble" of 2001-08 was exactly what it was - a bubble fueled by loose monetary policy. It was not an expression of the "collective wisdom" of markets factoring in oil scarcity 20 years down the road. IMO long term developments like PO had just a peripheral relationship with the oil bubble, more specifically the absence of enough spare capacity prevented the possibility of producers flooding the market and breaking the speculative run. The price heights of summer 08 were just as much a "proof of PO" as much the current price drop is disproving it.
All of this does not mean that PO is not real, or it won't be a problem some time down the road. It just means that relying on markets dominated by speculators to give the appropriate price signal is just like watching the arrow for the seconds only, in order to figure out what time is it.
There is a pretty high negative correlation between the US dollar strength and the price of oil. There are multiple bubbles and anti-bubbles affecting prices-not everyone agrees that the USA dollar is destined to remain this strong despite the fiscal and trade mess.
Sure, the US dollar weakness was a contributing factor, but it was too on its side caused by the loose monetary policy. This fact has been known for more than a century now - that cheap money is creating asset bubbles and long term financial instability. It beats the hell out of me why the FED allowed it for so long, essentially creating the current mess we are in.
Here's a little historical irony: It was in the summer of 2005 that oil crossed the nominal threshold of $50 for the first time EVER. At the time, this was an alarming development to many; now, oil below $50 is considered to be unbelievably low. This contrast in attitudes alone indicates that we have entered an entirely new era.
Must it?
Or is it just the 70s and early 80s all over again?
It is not, for the following reason: In the 70s and 80s, there was enough supply slack in the oil reserve base to fuel sustained economic growth over the course of a quarter century. Now, IMO, there is no longer enough supply slack to fuel any more than a very short-term incipient recovery that will be quickly nipped in the bud by once-more skyrocketing prices.
And phenomena like the net export crisis, the closing down of high-cost projects, continued demand growth (albeit more modest) in East Asia, etc., imply there is a decent likelihood that prices could skyrocket again even BEFORE an incipient economic recovery ever gets off the ground.
That's really begging the question. In trying to determine whether it was a bubble on the way up AND down or peak oil driving prices up and market forces artificially driving them down... you can't start by assuming that peak oil has in fact arrived.
2005 was the first time that oil prices averaged more than $50 per barrel for a year. Of course, the average price in 2008 will be around $100. On an annual basis, oil prices in 2008 will be up about 20%/year since the $14 average price in 1998. On a monthly basis, at $50 per barrel, oil prices are up at about 13%/year.
In any case, the EIA data show world annual C+C production of 73.7 mbpd in 2005. So far in 2008, through August, they show an average rate of 74.1 mbpd, subject to revision. Consider the total amount of money spent by the oil industry worldwide that was necessary to produce what so far appears to be about a one-half of one percent increase in production. And on a cumulative shortfall basis, the industry has not been able to make up for the cumulative shortfall between what we would have produced at the 5/05 rate and what we actually produced. Taking the 2008 data at face value, the shortfall has increased slightly in 2008.
And BTW, the key reason to emphasize cumulative production is that this what the HL (Hubbert Linearization) method really gives us--an estimate of the area under a production rate versus time curve. And based on the HL models, the world in 2005 was at about the same stage of depletion at which the US Lower 48 started declining in the Seventies and Saudi Arabia was at about the same stage of depletion at which the prior swing producer, Texas, started declining. The world data are noted above, and notwithstanding a year over year increase in production Saudi Arabia is almost certainly going show three straight years of lower annual production, relative to 2005, at about the same stage of depletion at which Texas started declining--with a very large, around 700,000 bpd, decline in net exports relative to 2005.
Talk about expensive oil--how much has it cost to maintain basically flat crude oil production?
Of course, what really matters to producers and consumers is the monthly average and annual average price of oil--in the same way that what really matters on your income tax return is your annual income. Consider a salesman who makes a killing in July--getting a $100,000 commission, but $10,000 per month in the other 11 months. What matters more, the monthly peak of $100,000 per month or the annual income of $210,000?
We are of course also seeing a big drop in price on a monthly basis, and I am an surprised as most other Peak Oilers, but it's possible that the price decline in the second half of 2008 may not even show up on an annual basis--if the average price of oil in 2009 is above the average 2008 price.
But as you noted, none of this matters to the infinite growth crowd. Their world view is that we can have an infinite rate of increase in our consumption of a finite fossil fuel resource base.
I don't think too many people (Peter Schiff and a few apart) realized what a big house of cards the global economy was and how much waste was built into it. High oil prices I think had a role in bringing that house of cards down and we probably are not going to see $150 oil for the next 2-3 years given that demand is now falling rapidly.
My own thinking is that any attempt by the global economy to recover significantly is going to drive oil prices up and bringing back growth to the ground. Each such cycle will see higher average prices of crude till depletion reaches such a stage that the cycles get shorter and shorter and prices spiking and falling.
High volatility is worse than high prices per se. Investments are made when companies believe they can predict the future to some degree. If I am just not sure what will happen in 6 mths/1 year/2 years, then paralysis sets in.
I think we are in for a very rough time.
Srivathsa
The volatility argument is huge and seems to be downplayed. There is no way to operate enterprises at the global scale with the type of volatility in prices of inputs and outputs that is currently being seen. Either the volatility must reduce very quickly or many of these dinosaurs will die out. I would guess that they will be propped up as long as they can be by government funds, but the trend - as you mention - should be increasing price volatility with both increasing frequency and probably amplitude.
Smaller enterprises that are more maneuverable may be able to survive more effectively, but many of those will be destroyed by the volatility as well. The problem may eventually be one not so much of price, but reliability of supply. The only ones that will have ample protection will be those producing something with a relatively fixed input cost - like zero off farm input agriculture.
Otherwise times are going to be very, very tough indeed for any enterprise to stay in business. It will literally shake the economy to the ground a little bit at a time.
Agreed, these oil prices are a future disaster. Personally, I've tended to take a rather dim view of the most extreme doomers, but I'll admit I've grown gloomy myself these past two months. An economic system which determines that oil in 2008 is worth only $48 / bbl is clearly broken, and that's really bad news for the future. The signals being sent to oil's consumers is obviously entirely wrong, and the decisions they're making based on it are locked in for the liftimes of some very long-lived "assets" (ha ha). Reading the Rogof paper on the history of government debt defaults is very depressing. http://www.economics.harvard.edu/faculty/rogoff/files/This_Time_Is_Diffe...
I've often wondered if there isn't a deliberate plan in the markets to make mutual funds much slower to react to market upsets than one would expect. If one were to grant the hypothetical existence of some formless TPTB insiders, it would make so much sense to do that. eg. last out in a crash looses most, etc. etc.
Welcome to the downward spiral! Oil prices fall as a result of a weakened economy. When the economy begins to recover, prices return to previous highs, sending the economy back into recession.
It matters not whether this particular recession was the result of high energy prices or not (I tend to think so), it seems fairly clear that we are now in that cycle.
The only questions will be: 1) from the perspective of the growth worshipers, will the next "expansion" achieve the same level of economic activity as the previous, and 2) from everyone's perspective, how many of these cycles do we need to go through before we "get it" and start to do something about it?
Well, oil prices have yet to send the economy into recession.
Let's see. The recession started a year ago right about the time of peak price of oil per barrel. I can see how that caused demand destruction several months later.
This tells me that high priced liquid energy supplies have a significant impact on our economy, that lower costs now inhibit needed replacement, and depletion while slowed still continues.
Thanks to TOD I've been paying attention. Network talking heads have not.
The Itar-Tass "article" on shrinking Russian NG production is very meager. Would like to see the reason explained.
They probably don't want to explain. 2009 will be a very interesting year for Russian oil and gas production--and for exports.
I agree. If Obama shuts down the European missile shield, Russia will loose one of it's excuses for slowing oil exports as payback. They will simply be exporting less without a geopolitical reason.
If I were Russia, I would start making other excuses for cutting-off the west from my oil, by playing war games with Venezuela or helping Iran's Nuclear... Oh wait...
Oh my the poor dear west is always so wronged by all those evildoers beyond its borders. Give me one shred of evidence that Russia is "cutting the west off". As for Venezuela, get a grip. The context is the August greenlighting by the US of its Georgian puppet to attack civilians in the middle of the night. When Russia starts "cutting the west off" it won't need any excuses.
Don't forget that DEMAND is down for Russian gas. Although Russia will have supply problems by 2020 with natural gas, that does not mean it has supply problems in 2008.
Up top : http://www.bloomberg.com/apps/news?pid=20601072&sid=aG1RG..r2V2s&refer=e...
How on earth can an oil boss say anything like this ? Oil price will fall for 1 - 1,5 years from now - wow. Has this Ruehl ever heard of OPEC and does he not understand that another 2-4-6 mb/d cut will drive the oilprice wherever OPEC wants it to be .
Oil very easily could fall for another 12-18 months. It's priced at the margin. Not saying it will-but demand and supply play synergistic roles. I think recent events suggest that one needs to look at both, and also leave a pretty large uncertainty wedge open for unknowns too.
From a conspiracy perspective, if oil DOES decline for another year, it would lock in a handful of oil companies that sit on behemoth high energy gain reserves found and developed in prior decades an oligopoly on the non NOC oil trade. Smaller companies that have high priced drilling prospects and can't fund operations from cash flow will go out of business - so it would be great way to 'grow' reserves (from perspective of individual companies like BP, not from global social perspective)
Where are those????
They certainly aren't low cost today.
You are either Aramco or Kuwait National, or you have stuff that carries a $20 barrel lifting cost or a $20 barrel development cost from where I sit.
The ones to go first have both.
FF
I meant higher energy gain than the rest of public companies, not compared to NOCs. Clearly the IOCs will reach energy break even first. And this has pretty big implications.
If demand drops 10-20% (which I assume it would have to for oil prices to continue to go down for 18 more months) *(Note this is not MY prediction), then new oil drilling would stop, and the majors and perhaps a few mid-majors could continue pumping at the margin, and still make a profit, thereby consolidating the industry into fewer, bigger players. This probably happens in any case...
But that's my view. In the view of BP chief economist, perhaps decline rates won't be as steep or he has special inside econometric model that I wouldn't understand.
Could,would, should .... and so on.
The slide in oil prices won’t bottom out until another 12 to 18 months, according to Christof Ruehl
That is an affirmative statement, as in this will happen, and IMO a shot in the dark. And frankly quite a silly statement.
When oil was at $140 a barrel we all thought it would go higher. Very few, if any, of us realized that a deep recession would cut deep into demand and drive prices back to $50 a barrel. But we have learned our lesson, I hope.
If the recession gets worse, if we have another Great Depression (worldwide), oil demand could drop to 50 million barrels per day and the price could easily go to $30 a barrel or lower regardless of what OPEC does.
Ron Patterson
I think it's the other way around. Peak oilers have been predicting a "Greater Depression" for years now. It was the cornucopian types who were going, "Nyah, nyah, where's the recession? Our economy is more efficient now, so we can tolerate high oil prices."
Well, here it is. It just took longer than expected.
Good post Leenan.
If supply driven demand control doesnt work in this manner, how does it??
FF
Leanan, I am not arguing that point. My point is most of never realized the devastating effect the recession would have on oil prices. Yes, we all predicted a recession, then a depression, caused by a declining oil supply. And that is exactly what is happening right now. We were right about the economy but wrong about oil prices. Now we know better. A depression, caused by peak oil, could cause oil prices to drop even lower. That is my argument.
The tragic point is that the cornucopians have no idea what really caused the current recession.
These oil prices are stated in US dollars so hopefully the Great Depression will in no way weaken the value of the USA currency which will throw a monkey wrench in the reasoning.
I dunno. I think many of us were expecting deflation, including in oil prices.
And I, for one, was expecting volatility in both directions. A lot of people laughed at me when I put up that last poll, with a range of $85 to $160. Hah.
I, too, was expecting extreme volatility--the price response to whale-oil scarcity pointed in that direction. I posted a number of graphs pertaining to volatility, trying to make sense of how oil prices might respond.
Looks like the idea of "higher highs and higher lows" might have been a bit too basic. Higher highs maybe, but equal, perhaps sometimes even lower, lows look to be the reality that is unfolding. Imagine a world where prices spike into the hundreds, then plummet to $10-$30 bbl again, repeated several times. This might be the pattern seen when looking back at a price history from the vantage of 2028.
-best,
Wolf
I think Darwinian has the right of it. I can't speak to your own position (and I'm not doubting you), but that hasn't been my experience in this debate over the last few years. Most who advocated that far end of the peak oil curve were certain that, yes, it would clobber the economy... but that prices would continue to rise as supply fell faster than demand destruction.
You're talking as if the "market" caused this deflation. It wasn't the "market", or oil, that caused it. It was Fed policy that caused it, when the Fed started tightening money supply late last spring despite the financial crisis, because of the inflationary effects of high oil prices.
I never expected Bernanke to do this, because he has made such a big deal about being a student of the Great Depression. Even when I saw him tightening, I didn't think he would tighten to this point. What he did was deliberately choose a massive debt deflation, despite knowing how much damage it would cause, rather than use the inflationary effects of high oil prices to stimulate investment in energy efficiency and thereby keep the economy functioning in the face of $60 trillion in credit default swaps run amok.
If the "market" had been allowed to function, I don't think we'd be seeing oil prices this low. I think we'd be humming along at high prices and making serious investments in efficiency.
This is a situation caused by big players, not free markets.
You are 100% right. That tightening was the ignition point towards deflation. This caused the disaster we are in now. And that shows, that he was dead wrong.
In yesterdays speech he admitted, that the housing/credit crisis started at the end of 2006. But why did he tighten in spring 07????
Always is. I pounded the table at Kudlow's now defunct comments section when Bernanke went over 4% that he was guaranteeing us a serious recession. The Fed did the same thing in 32'(?)
Price movement and inflation/deflation aren't the same thing. Deflation causes price movement, but they aren't the same thing. The collapse on oil prices significantly preceeded and assumed contraction in the money supply and was thus far more "market" than "deflation".
Depends on how you use "caused". If I prick an overfilled baloon with a pin, what "caused" the pop? Was it the needle or the filling of the balloon? IOW, oil prices were in a speculative bubble just waiting for something to pop it. Certainly excessive tightening sparked expectations of economic contraction which got the ball rolling... but it would have been something else eventually.
There is no such thing as "free markets" and never was. It's a fairy tale.
(Also hate to break it, but there's no Santa Claus either.)
There are "big players" though. Them is the people with the armies and the guns and the bombs.
Yup. I don't remember many posters on these PO blogs warning back in the summer about the fall in oil prices we've seen since then. Sure, volatility was predicted & a re(de)pression was warned of sometime in the vague future, but no one called anywhere near the degree of price decline that's occurred. If anyone did make that call they were scorned or mocked. Seems like the closer people are to an issue the more easily blindsided they are by the unexpected. This is the reason no one should place much value on the prognostications made on these blogsites. Anyone who bases investment decisions on the opinions of posters on TOD or similar sites is a fool. As they say on AE, the contents of this blog should be read for entertainment interest only. Heck, just today we've been shown how AGW is nothing to worry about, because fossil fuel depletion will occur before atmospheric CO2 accumulation will impact mean temps significantly. So cheer up, folks!
Even after prices had fallen significantly and economic contraction was a certainty... the polls here were pretty firm in favor of prices jumping right back up.
I remember. I had a few "-25" scores at the time and more than one person accused me of being a hired shill for big oil for even suggesting that oil prices could collapse. I was told that there were never bubbles in base commodities.
Mea Culpa PP. I thought you were daft. I might have even "piled on" to give you a -25.
In my defense though, I am a geologist, not and economist. My main complaint about mining engineers has always been that just because they are good engineers, doesn't mean they know jack about things outside their area of expertise. I guess that counts for me too.
Each of us is an "expert" inside some tiny pigeon hole of our vast and complex civilization.
Very few are smart enough to step back and see the big picture.
That's what I like best about TOD, guys like Nate and others who can point out the bigger picture for the rest of us bird brains.
Price has a lot to do with how much people are "willing" to pay and how much they are "ABLE" to pay. When times are good and people have more money, better jobs, etc. then they are willing and able to pay more for oil/gas. When times get bad, they are not "ABLE" to pay more due to no income. Therefore the price falls to what people are "ABLE" to pay. Price has nothing to do with how much oil is left at this point.
An example - how much would someone pay for a typewriter? If there is only one left and no one has the money or desire to buy it, then it becomes worthless. When oil is no longer needed to run cars, then it will drop to the bottom even though there is not much left.
My advice is to invest in new technology, and not in oil.
I think actually, many Peak Oilers did realize that demand would be destroyed and prices fall back. However, that thought seemed not to be highlighted very much in the literature and presentations. Instead, to make the case, these sources always showed how the demand trend was up, up, UP, while the supply was starting to stall and fall back. You've seen the graphs with the growing "gap" between supply and demand. The point that was being made is that the situation was unsustainable. Point made, and still valid.
In the back of our minds we all knew that "gap" could never exist. That is, actual demand (actual use) can never exceed actual supply. Though demand destruction was clearly implied by Peak Oil, too few of us spent enough time thinking about what it would look like. Now we know what it looks like in its initial stages at least. A quick fall in demand (relative to supply) killed prices.
I agree that many of us were surprised by how much the prices have fallen, though. Still, it has taught us that there are more things at play than just Peak Oil; the world is a very complex place. Speculation, and a "flight to safety" by financial institutions and hedge funds, did have a part to play too. The biggest other cause has been the debt bubble, which has been inflating to unsustainable levels for the last 20-30 years. It was bound to pop sometime. Perhaps the high oil prices triggered it a few years earlier than otherwise, but it was on an unsustainable trajectory of its own. I found a few blogs to be very helpful in getting a better big picture view of where we are. Here are two: http://www.generationaldynamics.com, http://www.suddendebt.blogspot.com.
There are many possible outcomes ahead of us. (Or there may actually be very few, but none of us are smart enough, or have enough information, to narrow them down with 100% accuracy.) However, it's safe to say that a return to BAU is not one of them, whether from a Peak Oil perspective or a financial perspective. Nevertheless, in pondering the changes in the last few months, where we are going, and where we have been, it shook me out of a pretty solid doomer's perspective. It may still be that the "die-off" scenarios, or the collapse-of-civilization scenarios, will happen. We know it has happened before.
But there are also plenty of cases, such as World War II, where we dealt with severe sacrifices and cutbacks, and pulled through. In this case, not back to BAU, clearly. "Perma"growth is over for good. But a slower and more gradual energy descent, to a more sustainable level of energy and resources consumption, seems more likely to me now than a few months ago. We humans can be resilient in a pinch, and many sacrifices can and will be made without necessarily leading to a collapse in civilization. There is still enough oil, and its descent will play out over a long enough time period, that if we use it properly, we can conceivably build enough renewable energy infrastructure to continue to have a moderately technological society. No guarantees this will happen, nor that it will be a smooth ride, but I see it as completely within the realm of possibility.
This is not a "Cornucopian" point of view, to be clear. If anyone equates it with such, they are not paying attention. It's a view that it is still possible to have long descent to a lifestyle of much lower but sustainable energy and resource use, and to a world in which exponential growth is no longer considered "normal." I know, to hard-core doomers anything less than the total collapse scenario is Pollyanna-ish, Cornucopian.
My experience living in a third-world country backs me up on this, though. I have seen that people can make do with much less and still be happy, not to mention survive. People can live off the land in a localized fashion. It's going to be a radical lifestyle change for many in the developed nations, but nowhere do I see that total collapse is inevitable, unavoidable. Big changes, yes. We haven't made the necessary changes in society at large, because we haven't been forced to. But we soon will be forced to make many changes.
The most likely "really bad" scenario I see is not total collapse, but a world war. That seems to me to be very likely sometime in the next 20 years.
Drat, I'm almost sounding like a doomer again.
Related to surprise at how much prices have fallen, at least in my case, is surprise at how much DEMAND has fallen. Nearly 10 percent here in the U.S. year-over-year, for example. Who'da thunk this, say, two years ago, when e.g. demand for gasoline seemed so rigidly inelastic in the face of relentlessly rising prices? But obviously, drastic reductions in demand for oil go hand in hand with the drastic reductions in price that we have seen.
I think price elasticity wrt petroleum price is elastic in the sense of an earthquake fault. The pressure builds slowly, inexorably, and unnoticed... and then, boing! A new meta-stable state or relation is found.
I think a lot of complex things work like that, including climate change. Over the real long haul you can draw nice smooth curves, but the real feedback loops seem to have this buffer in them, or maybe hysteresis is a better word. You can dump acid rain into an ecosystem until one day its buffering capacity is exhausted, and bang! All sorts of negative effects start showing up.
There are so many feedback loops going on, positive and negative, that we just don't understand or are simply not aware of. And yet societies (as well as individuals) try to use their fairly recent past as a guide to "plan" for the future...
The concept of tipping points comes into play here, and there's always your Black Swan waiting in the wings...
We have yet to see how much MORE can demand (in the US) easily drop. The drop thus far can be explained by just two things:
* elimination of most of the construction industry, and
* airlines paring down their flight schedules.
What's going to be cut next? I think Americans will cut a lot of other expenses before they cut back on their personal driving. Only the unemployed will be driving somewhat less.
One possible near-future trajectory: diesel shortage, gasoline glut.
My first post here....
There is one lesson from the 80's that we may see re-learned. When prices fell in the 80's, countries that had already increased spending based on the previous oil price began to cheat on OPEC quotas. My guess is that if oil stays close to where it is, OPEC will find it very difficult to reduce production and in fact we may find a glut of oil in the next 12 months. Not saying it will happen, but this has happened before...
As for driving the price "wherever OPEC wants it to be", there is still that pesky correlation of economic ills and the price of energy. If OPEC drives the price too high, then it will, again, kill the economy, and prices will, again, drop.
We should use this opportunity to proceed with making a shift in our energy mix - solar, wind, ocean, etc. while we still have the carbon-based fuels to back them up, and make a transition. This would slow the impact of price increases while we are waiting for supplies to drop off of a cliff, and the transition will be meaningful.
Two years ago, on another blog, I opined that the prices would cause a recession / depression, which would give us a chance for some catch-up in developing supplies while we made such a transition. If we miss this particular opportunity, we will get more, but energy has the world's attention right now, and this is the best time to get started. A part of that post was a hope that the financial hard times would not be so difficult on Joe Six-Pack as this one apparently will be. I've been broke before, and for those here who haven't, it is not fun. Another part of that was to be explicit that such a transition might not be in my best interest, as an oil and gas producer, but it would be from the standpoint of being a member of society.
Earlier in the year, we had a thread about what would happen once oil hit $1,000 a barrel. It still will, it is just a matter of when and still about what impact it will have. The cancellation of projects and delays of others virtually makes it certain that it will still happen. I'd love to see an update of that scenario.
There's an article in today's NYT about government support for smaller car companies:
Small Players Vie for ‘Green Car’ Loans
There is a brief mention of the startup company EcoMotors, which is working on a design for a high efficiency diesel engine. Here's a link to a web page with a graphic of their concept. Their opposed piston design is a variation of older concepts which have been used in large scale applications for decades. They were used on submarines and even German aircraft during WW II. Such an engine coupled with a hybrid CVT system could produce a vehicle capable of more than 100 mpg, IMHO.
E. Swanson
Miami Activist Moves Homeless Into Foreclosed Homes
"If you build it, they will come." - Field of Dreams
I wonder how The Law will respond to this phenomena as it gains momentum across the country... storm troopers combing suburbs and city neighborhoods looking for "terrorists" ???
At what point, if ever, will it become clear to the population that the military build up here at home has nothing to do with a fear of "weapons of mass destruction" - the same canard Bush used for the invasion of Iraq.
As for the citizens of the USA, "The greatest threat" is our own federal government.
(sorry if posted previously)
"As for the citizens of the USA, "The greatest threat" is our own federal government."
And that is the reason for the Second Amendment. Or so others have said repeatedly who have studied it in depth and I agree totally.
It was the militia,the backwoodsmen,the mountain men and homegrown squirrel hunters who supplied the means to stop the British.
For instance "The Battle of Kings Mountain".
Or the War of 1812..which my GGGrandFather fought in.
I know I will garner negatives for this comment. I don't care.
This from WikiPedia:
"The Second Amendment (Amendment II) to the United States Constitution is the part of the United States Bill of Rights protecting the pre-existing individual right to possess and carry weapons (i.e., "keep and bear arms") in case of confrontation.[1] Codification of the right to keep and bear arms into the Bill of Rights was influenced by a fear that the federal government would disarm the people in order to impose rule through a standing army or select militia,[2] since history had shown taking away the people's arms and making it an offense for people to keep them was the way tyrants eliminated resistance to suppression of political opponents.[3] Self-defense is a central component of the right enumerated in the amendment.[4]"
Airdale
I own guns and am all for the 2nd Amendment. But I always get a kick out of the idea of beer-bellied "patriots" armed with shotguns & deer rifles going up against the US Air Force! Thanks for the laugh, Airdale. ;)
If our military adventures have proved anything, it's "boots on the ground" still is supreme. Flyboys get the PR, grunts win the war.
Okay. If there are any so-called "patriots" left alive after the air strikes, the Marines can mop up.
That approach does not seem to be working so well in Iraq. If it works like you say, shouldn't we already be victorious?
That depends on whether the government has any interest in leaving anyone alive. If the government were as evil as it is said to be, then matters could be settled by using dirty nukes, with some supplementary sprayings of nerve gas or biological agents. As War Nerd points out, in tribal wars extermination was the goal, but modern governments imagine that they can batter people into loving their system, so the insurgents can never be eradicated. I assume that tax revenues also play a large part in this.
The problem here is that a civil war in the US would be like a war in Bosnia or Iraq; the tax base to pay for an air force might quickly collapse, and that leaves only pro-genocide forces, tribal militias, to fight it out atrocity to atrocity. Are the people of Iraq better off now because they had enough personal firearms both to fight the US invasion and their own neighbors? It's hard to separate the two.
I don't see it. The US Air Force bombing American targets would "win"? Not to mention destroying our own inferior-structure. Corlateral damage maybe? With the amount of weapons here in the states that could be a civil war that lasts decades. I think folks would get more resolve against the government if the Air Force was used against civilian targets.
I see more "on the ground" or "corvert" types fighting the non-conformist crowd. Best disarm us first. I bet Hillary as Secretary of State gets us into some sort of international agreement to disarm the law abiding Americans. Makes things a whole lot less of a mess. That's the end of the American republic experiment right there.
That's what I see as the brave new world. Those in power with more and unyeilding power and the middle class gone forever. A few "haves" and a whole lot more "have nots". That is most of human history anyway. Nothing new there. "National Emergency" will erode our rights even futher. Right on this site are all kinds of "plans" that consolidate power. We have done a great job of that in the past. One size fits all fits no one.
I like the discussions about growing your own stuff, solar power on the property, etc. here on the site. That all assumes we still have property rights. Either the money changers, the government or people in need will distroy your right to "your" land. Disarmed there is not much you can do about it in those cases.
http://en.wikipedia.org/wiki/Battle_of_Blair_Mountain
Militias, like all other human organizations, have to be judged by their intentions and actions. Hitler's brownshirts were a militia until 1933. So was the KKK. So were (are) the death squads of Latin America. So were the secret organizations of white South Africans who threatened (unsuccessfully) to punish any attempt to compromise apartheid. So are all sorts of groups in Iraq right now, some of which are funded by the US. So were the murderous armies of the Balkan wars. So were the Hutus in Rwanda. What is the difference between a militia and a government and a genocidal tribe, anyway?
The "people" can be fantastically evil. More evil than the governments they overthrow.
Personally, I can't help but notice that no one in America who embraces the word "militia" has any good things to say about human equality, social justice, black people in general, homosexuals, or the right of the poor to a revolution. A lot of those people do have good things to say about theocracy, patriarchy and taking the vote away from people different than themselves. The people who I would want to form militias are in fact outgunned by the people who form militias.
It is not a sure thing, but to my way of thinking it does make a difference in whether or not the "militia" (or whatever you want to call it) is under the command and control of legitimate local government authorities. It has sometimes happened that very evil things have still been done under such a scenario, so this by itself is not a sufficient check. However, it does preclude "DIY" violence, and requires a certain degree of cooperation and consent amongst a large percentage of the local community. You listed many of the bad examples, but there are good examples as well; the Swiss Army, for example, has had a generally excellent and honorable reputation across many centuries. While you will find some militias under local government authority within your list of bad guys, I doubt that you will find many examples of "ad hoc" or "irregular" militias amongst the good guys list.
All of the relevant comments from the founding era need to be viewed in context. Colonial militias ALL operated under the authority of local governments. The American Revolutionary war was a fight of these organized local militias against what was viewed as an imperial government tyranny; it was not (very much, anyway) a case of individuals grabbing their guns and fighting on their own initiative. There IS a reason why the 2nd amendment includes that strange-sounding language about militias in there, and this is touching upon it.
It was central in the Framers mind to allow individuals to protect themselves from the power of Federal authority. However, most people fall short in determining the Framer's true intent as people have come to accept gun legislation, which is infringement. The Framers intended for individuals to maintain the "same arms" as the Federal Government, implying no restrictions in ownership of munitions. The Framers were wise beyond years as they set a "Grand Bargain" with the American populace known in this day and age as "The MAD Doctrine" (Mutually Assured Destruction). The Framers knew that if the Federal Government had to worry about the internal populace that they would be less likely to fall victim to entangling foreign policy. It is my belief that until the 1930s, when the Feds enacted gun legislation to counteract the bootleggers firepower, the 2nd amendment had not lost its original intent. It is my contention that Government's legislation of what one could do to themselves (drink, smoke, gamble and do drugs) was the indirect downfall of the 2nd amendment. In essence the 2nd amendments principles were sold out a long time ago.
PS I might have to study Washington's response to the Whiskey Rebellion to see if gun legislation or militia legislation was compromised.
See my comments above. The Whiskey Rebellion is a good example of the "irregular" or "DIY" violence of which I disapprove. Washington was quite right in putting it down - as would any and all governments.
http://blogs.reuters.com/great-debate/2008/12/01/bleak-outlook-for-us-oi...
From X's link:
The U.S. petroleum economy is highly unusual in that it is tilted towards consumption and production of gasoline. The United States consumes almost two gallons of gasoline (1.97) for every gallon of diesel; the European Union consumes only 0.40 gallons and China consumes 0.48 gallons.
Until recently, that led to a mutually beneficial trade, with the United States exporting surplus diesel, while Europe and China exported surplus gasoline (https://customers.reuters.com/d/graphic s/REFINEPRDS1208.htm).
But U.S. refiners now face the problem that in the fastest-growing parts of the petroleum economy (China, Asia, the Middle East and Africa) the marginal demand is for diesel, while their marginal supply is gasoline, for which demand is stagnating.
The global economy now faces a structural surplus of gasoline and a structural shortfall of diesel. By implication, the world has too much capacity for producing gasoline (much of it concentrated in the United States) and not enough capacity for producing diesel (especially in Asia).
As a result, U.S. refiners face increased competition in their domestic market from imported gasoline, while they struggle to produce enough diesel to sell abroad. This mismatch explains why U.S. diesel exports have risen much faster in the past year than gasoline, even though it is the domestic gasoline market which is most oversupplied.
The United States now has too many refineries for its increasingly ethanol-based economy, and they produce the wrong product mix for a dieselised global economy.
I thought this might be of interest to Alan and the other EOT folks:
David Clemow: Better electric trains start with cutting overheads
The place to start would be nations with electrified mainlines and non-electrified spurs (i.e. about half of the nations of the world). Run an electric loco with capacitors on the mainline overhead, and switch to storage for a few km down a non-electrified spur line.
Until I see these proposed locos in service in New Zealand, Sweden, India, Chile, Russia, South Africa, etc. and get "real world" data on their usefulness, lifespan and limitations, I do not think the USA should seriously consider them as an alternative to the 100+ year technology of overhead electric wires.
If I were a Kiwi, I would steer clear of making Auckland commuter rail dependent upon a "paper" technology.
Best Hopes for Proven Technology,
Alan
The following refers to light rail, not mainline locomotives, but arguably this is a more difficult operating environment (frequent charge/discharge cycles):
From page 126, Railway Gazette International, March 2008:
You can find info directly from Bombardier at their web site.
I have no connection with Bombardier, I'm just reporting on one particular system which has had quite a few years of trials and seems to be on the verge of commercial use.
Supercapacitors are nice, but the absolute best store less than 1/10th the energy of a lead acid battery for a given amount of weight. Without major improvements they aren't a real candidate for energy storage for transportation.
Capacitors have a place where rate of discharge/lb and # of discharges/life are needed.
In the given Auckland example, IN THEORY, capacitors would be better than lead-acid batteries. Fill up capacitors at start. Accelerate & go 6 km, (45% discharge) regenerative brake for 700 m (partial recharge) and fully recharge at next stop. Accelerate again & go 7 km ...
I support R&D and demonstration programs for this technology, but it is just not ready for "prime time" yet IMO.
Best Hopes for New Proven Technologies,
Alan
Please see the post just above. :-) Not only are they a real candidate, they are really actually really being ordered to really power real light rail vehicles. Really.
Well, according to the Railway Gazette International article, anyway.
With the ability to go 500 m on energy stored in the capacitors, I'm thinking there may even be light rail systems built in the future where vehicles recharge at stops only - no wires or ground-based systems required, for the entire system. This could completely avoid one of the objections many people raise wrt urban light rail.
Only rarely are overhead wires a real issue. Mall area in DC, Manhattan, and ??? in the USA.
The classic double row of three lamp supports on Canal Street in New Orleans are quite beautiful :-)
Alan
Interesting study published recently on biodiversity in Antarctica, with implications for the impact of warming on marine life. Apologies if it's already been posted; my workplace has started a recruitment freeze, so I'm much busier and can't check TOD as often as I used to. :(
Antarctic seas richer in life than Galapagos Islands, study claims
A European-style tax?
I dunno. While a tax on consumption could be a good thing, this would basically be a national sales tax, and thus fall most heavily on the middle class.
Which would be contrary to this:
Middle-class tax cut may come soon
We will not pay for our deficit -- ever.
TStreet-
We will pay for our deficits with the ultimate payback tool...hyperinflation - the secret tax.
Along that vein- apartment dwellers: buy your home now while it's cheap. The biggest winner in hyperinflation is the real estate owner, the biggest loser is the renter.
Historically, the reason for real estate price appreciation is wage inflation (generally)-hyperinflation will not necessarily raise the value of most USA real estate without accompanying wage inflation.
Agreed. IMO, this is an example of how planning can come back to bite you. If things don't work out as you hope, you could be really screwed.
I think Stoneleigh is right on this one. Avoid debt. If you can buy a house outright and have money stashed away to pay the taxes, fine. Otherwise, you're probably better off renting.
Of course, she could be wrong, too...
have money stashed away to pay the taxes,
Yes, that's the issue. Localities are going bust. What will they do to raise money? It's happening already.
The exception I might make is productive property -- a plot with water and arable land. And even there I'd be nervous. Ok, I'd be nervous in any case.
That's why it's not a bad idea to move out of the city limits and into a near-by rural township. Even small cities may have committed to grand spending plans, debt, and likely already have a lot of expensive infrastructure to maintain (that everyone takes for granted - until it starts costing them far more than they can afford, or stops working entirely).
If you get lucky, you can get a small farmette that needs some TLC, with wells, septic, a few acres of land and the 1 or 2 mile walk to town - and in some cases cut your taxes by 1/2-2/3, avoid higher tax increases than the city will experience.
And if you are really lucky, you might find a way to use your few acres to grow food exclusively for the town's food pantry.
One reason I'm not rushing to buy anything. I'd like to see over the next year or so which way various towns and cities go. We should find out fairly quickly who drunk to much kool-aid. I'd not be surprised to see some pretty insane tax policies get put in place of the short term. Or the Fed is going to be bailing out every single broke town in the nation.
I think that's probably wise (not rushing into any purchase). I would also pay attention to the ability of tax collection agencies to actually do their job. There are lots of different ways that property taxes are collected, but if the agency that collects taxes is part of a government that is financially stressed, their ability to collect taxes will be impaired. (e.g., if the tax collector is dependent on the county sheriff's office for enforcement and the sheriff's budget has already been cut to the bone...).
It's fairly easy to tell right now. I was speaking with an auditor that does several hundred towns in Maine and he could tell. Largely it's bonding and capital plans. Those are a small subsection of the financial statement. A new, huge town hall with debt payments is a liability. Town clerks that work out of their homes - inconvenient as it may be - are not.
cfm in Gray, ME
If the price of some items (e.g. houses) can be separated from others in an inflationary environment, then perhaps the same can happen to other items (oil?), and even in a deflationary environment? What I'm saying is that it is quite possible that oil prices will "bottom out" a lot sooner than "12-18 months" even as the prices of other things (houses) keeps falling. That is, as soon as the true supply/demand picture becomes clearer, perhaps overwhelming the effects of forced selling of paper.
European VAT (value added tax) is not the same on all items. It goes from 6 to 21%, according to use. For example, for home renovations, you have 6%...which was nice for my air-air heatpumps. Although the rules varies from country to country, for some, first necessity items such as bread are also submitted to a lower VAT level. Which means that "rich" people wanting luxury items pays more than the "poor" who make with the minimum. In Belgium, this spring and summer, there were lot of debates of people asking for that 6% for oil derived products. Of course, if warming is a definitely a first necessity, there are better means than a lower VAT on heating oil...
'Fish technology' draws renewable energy from slow water currents according to work done by an engineer at the University of Michigan, read article here.
The machine is called VIVACE. A paper on it is published in the current issue of the quarterly Journal of Offshore Mechanics and Arctic Engineering.
Blue Is the New Green
Remember the recent gnashing of teeth over a supposed lack of new refineries? Now read this:
http://blogs.reuters.com/great-debate/2008/12/01/bleak-outlook-for-us-oi...
Looks like the end of the world as we know it. Protests in Thailand, India and Pakistan at each other's throat, and even boring Canada is on the edge of a parliamentary coup-d'etat.
Political Crisis in Canada
http://primordial-blog.blogspot.com/2008/11/political-crisis-in-canada.html
The Conservatives have lost their grip on power straight out of the starters gate. Rising unemployment and uncertainty in the manufacturing sector in Ontario amid declining contracts in the oil patch of Alberta is making for some testy public and parliamentary relations in the Great White North.
I mentioned quite a while back that Stephane Dion was going to go down in the history books as the first Liberal leader in well over a century not to be Prime Minister. Now, through a quirk of providence, that prognostication may have been premature. He may just get the top job with only 76 seats out of a chamber of 306. Only in Canada.
The unease this situation is causing is palpable. As the primodial-blog says, "Stay tuned, it could be a wild ride."
Agreed fellow Hoser. Like the election I don't see anything good on either side. No benefit to this other than Westerners and rural Ontarians going ape-poop seeing a Torontonian silk suited socialist, Montreal academic and a Separatist traitor offering to lead the country. Could there be a better combination to drive the oil patch mad? The U.S.A. may see significant additions to it's oil reserves in the near future.
Oh give it a rest. You Harrisites are such a bunch of hypocrite wankers. Thanks to your idol Harris Toronto is subsidizing the rest of the province when it comes to education. That is Harris socialism for you. The rest of Ontario does not subsidize Toronto. Local property tax payers support welfare and the TTC (unlike just about every other jurisdiction in Canada and the USA). There is a net tax transfer out of the city to the rest of the province and the rest of the country via the provincial and federal governments. Harper's regime is a Harris transplant with many of the same people in charge (e.g. Flaherty, Clement). Just like with Harris and the deadstock scandal we have the Harper listeria outbreak. Clearly, meat inspectors cost hundreds of billions of dollars and Canada cannot afford them. Meanwhile, fossil fuel producers can be spared billions in taxes because they simply cannot afford to pay them unlike all the fat cat Torontonians.
Dissident, you have to admit the neo-liberal wankers who highjacked the Tory party have set the country up for one bizarre coalition government: an urbanite party in the middle of a leadership contest, coupled with social democratic lefties, all propped up by Québec separtists. Meanwhile, the Harper government has announced its intentions of going all out to keep the wolves at bay and hold on to power by any legal means possible. If it comes down to a vote of non-confidence in the House next Monday night, the Governor General will be handed the ultimate bag of poop: call another general election or hand the reigns over to Larry, Curly, and Moe.
This is raising genuine anxiety across the land: the fractured political landscape has introduced serious instability precisely when the country begins to front casualties in the wake of the international economic tsunami coming ashore. The animosity and disrespect shown by the present political leadership and its willingness to denigrate the other for partisan advantage has left the citizenry disillusioned like never before. The voter turnout of this fall's election was in the toilet. Another election right now would flush it into the sewer. Heaven help us if the Conservatives somehow manage to govern by fiat. Heaven help us if power is handed over to the checkerboard opposition. Heaven help us if the electorate is handed the job of reading the entrails of another campaign.
The last time Canadians were saddled with a coalition government was 91 years ago when a conscription crisis and the worsening casualties of the Great War were ripping the social fabric of this country apart. It took several decades of Melba-toast sagacity under the quirky leadership of William Lyon Mackenzie King to begin the heal the wounds of that debacle. The omens this time round are just as bad.
Who said I was a Harrisite? I can't stand Harper and his neo-con lites. But I hate separatist more. My point was two idiots got in bed with a traitor whose ultimate goal is to separate from the country just to get in power. Talk about selling your soul. I would take socialism or conservatism, that can always be fixed. Breaking up a country can't be fixed.
IMHO this was just a matter of time-Harper had/has a minority government and managed to get away with behaving as if he was the leader of a majority government (until now).
Yeah Harper sure didn't demonstrate any intelligence with the moves he pulled. It was a cheap shot at pulling the political money. I agree with that law. It can do a bit to keep the special interest away from political parties. How was his mentor? ..... Joe Clark?
I'm trying to follow this story from here in the states - at least C-Span was good enough to carry "The National" last night, maybe they'll continue to do so while this unfolds.
I'm wondering if the Governor-General would really accept this bailing wire, duct tape and twine coalition, or wouldn't she just call a new election?
WNC Observer, either option (coalition or dissolution)is fraught with danger. Part 3 of the CBC radio programme, 'The Current', provides a good review of the discretionary role of the governor general as the guarantor of parliament. May help give readers some insights into what may be coming down the pike in the coming week:
http://www.cbc.ca/thecurrent/2008/200812/20081202.html
Meanwhile, last night's episode of 'The National', "At Issue" panel, can be found at:
http://www.cbc.ca/national/blog/video/at_issue/a_coalition_coalesces.html
Or Rex Murphy's take on the unfolding drama:
http://www.cbc.ca/national/blog/video/rex_murphy/alll_politics_no_govern...
The politics of this reeks to high heavens. Without exaggeration, I can tell you, the Canadian public is not amused.
It's a cold start to autumn/winter here in the UK. Even colder for some.
Kelso gas users face three days without supplies as temperatures plummet
Tough Times Strain Colleges Rich and Poor
The financial crisis is affecting colleges just like it's affecting other businesses. Many endowments had negative growth this year, just when more students than ever need aid. The frozen credit markets make it hard to borrow. Many students are lowering their sites and applying to cheaper public universities...but even those are pretty expensive.
CNN had a story about a high school senior who saw his college money go up in smoke. His parents were planning to fund his Ivy League eduction with hundreds of thousands of dollars worth of Intel stock options...which are now worthless. 529 plans only allow changes once a calendar year, so many parents could do nothing while their investments implode.
Then there are the children of failing companies like the auto industry. They were going to college on company scholarships. Or their parents can no longer pay their tuition because they were laid off. Or they fear they'll have to quit school and work full time to support retired parents who have lost their pensions.
Maybe some of that bailout money should go to student grants. (Forget loans. The kids will probably never be able to pay it back.)
Hello Leanan,
Thxs for the info. I would require any young adult getting a grant to repay it by joining a budding Earthmarine gang as opposed to them joining a typical gang like the Bloods, Crips, MS-13, et al. The Gov. of Cali could do much with this idea...:)
http://en.wikipedia.org/wiki/Arnold_Schwarzenegger
Their first high school, trade school, or college course would saturate them with Peak Outreach. As they continue their education, their 'service time' would not include stupid gang activities such as painting graffiti or toilet-papering frontyards, but instead: unscrewing or unplugging outside lighting, then leaving a copy of Jay's Thermo/Gene Collision with attached list of Peak books and Peak websites. Recall my earlier posting showing the planet's dark side fully illuminated...
Imagine a Cali-neighborhood Earthmarine gang called the 'Terminators', fully promoted by the Guv in the MSM, giving them legal trespassing rights as long as they cause no harm [No busting of lightbulbs, etc.]. This gang, while in school, may be learning to become trade electricians-- safely and securely learning how to unpower a circuit is critical before repair-- their neighborhood 'raids' would enhance this essential safety skill. Picture a polite kid knocking at a homeowner's front door to give him the printed info while other kids are unplugging the Xmas lights, unscrewing or removing the landscape lighting, removing the porch lights, etc. These kids then later graduate as installers of PV systems, HVDC grids, etc.
Those Cali-kids hoping to become postPeak plumbers; later installers of solar hot water systems: they would join the 'Pumping Iron' gang. This could be real important if climate change and drought hammer CA. Their legally protected task would be to disable sprinkler systems for lawns, golf courses, resorts, car-wash equipment, etc. A simple task they could initially do is disconnect the garden hose, then unsolder the hose bib, then cap off the pipe. Thus, if a homeowner wanted to wash his car--> he will save greywater for this task, or park it in the occasional rain passing thru to remove the microlayer of dust.
Those kids getting grants for agro, food & nutrition, or physical training, would join the 'Stay Hungry' gang. They would rip up pointless lawns and unedible plants, then plant veggies, or shepard sheep through parks, or build compost pits, etc. They would share the harvest with the homeowners....
The 'Conan the Barbarian' gangs would be the future social workers/ psychologists helping the downtrodden have a less barbarian existence. They would be building solar-tech community baths, laundry, kitchens so the poor can be clean and fed. The poor will help keep these facilities usable by exchanging some labor time.
The 'Raw Deal' gang would be the future doctors/nurses. They would knock on doors asking the people inside to voluntarily sterilize
themselves and/or limit reproduction, plus explain in detail the impact of the Thermo/Gene Collision and Catabolic Collapse. A handbook with details of starvation, death by diarrhea, gangrenous machete wounds, smallpox/ebola, radioactive death will be handed out. If the other gangs mentioned above have already visited this neighborhood: the task of the 'Raw Deal' gang will be much more readily received.
The 'Predator' gang can always be formed later for 'counting down the digits' if our keystone predators, other lifeforms, and vital habitats start disappearing much too fast.... "show me your exosomatic hands!"
Using his other film titles: what other Earthmarine gangs could the Guvinator initiate for Optimal Overshoot Decline?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Edward Abbey. "The Monkey Wrench Gang." Foreman. Blowing up mountain passes farther upthread, Taking out the bridges over the rivers. This, of course, is why the military is upping the ante from the 500 man brigade to 20,000 soldiers stationed for "domestic" purposes. Perhaps the Earthmarines will be the reprise of the colonial militia? Liberty, equality and fraternity - with nurses and barefoot doctors.
Overnight, the 5000 mile caesar salad will be history. There are few days left for preparations and planning.
cfm in Gray, ME
Looks like those cheap public schools may not be so hot of an option:
For College-Bound, New Barriers to Entry
Their Budgets Squeezed, State Schools Cap Enrollment, Weigh Tuition Increases; Fears for Lower-Income Students
http://online.wsj.com/article/SB122826544902474353.html
Nice sentiment about grants as opposed to the new class of student loans, but I doubt it will happen.
Story somewhere today (here?) on a Cleveland suburb that is looking for 100 million bailout, saying they are just as worthy as auto companies. I got the impression it was a top school system swamped by enrollment increases. Everybody moving to the burbs?
The parents who bet their son's college money on Intel stock options are certifiable idiots. Even if you make money playing the stock casino you don't keep it there.
There needs to be a contraction & consolidation in the higher education industry just as much as it is needed in the auto industry. It is NOT true that EVERYONE can benefit from a college education. First, the student needs to be capable of cutting the work, and not all can. There are lots of students that start out in college and drop out or flunk out because they just can't cut it - they can't write a coherent paragraph, or read college-level materials with comprehension, or do college level math, etc. Some colleges try to help them with various remedial programs, but there is only so much they can do. Others try to help them by dumbing down their curriculum and by grade inflation. That is a really bad route to follow, it ends up hurting everyone, including the competent students that attend that college. What is worst of all are the debts that the failures end up carrying.
Then there is also this issue: just how many jobs for highly educated people can our declining economy really provide, anyway? We've discussed this here before. While there will probably still be some demand for some people with college educations, that demand is probably going to be declining along with the general economy for many decades to come. Thus the old mantra that college diploma = better paying jobs might no longer hold true for most people; it is more likely that for all but the best and brightest, a college diploma = overqualified and unemployable.
I continue to believe that for all but the academic elite, community college is probably the best option. Community colleges invest more resources and generally do a better job of providing remedial assistance to students, so those who are iffy wrt their capabilities have a better chance of actually making it through with something worthwhile to show for it. Community colleges put a lot of effort into learning what types of skilled labor the local employers are going to need, and of offering vocational programs that will provide employers with the labor force they need and students with jobs when they graduate. Best of all, community colleges are an inexpensive option; their tuition and fees are very low, and most students should be able to continue to live at home and commute a short distance rather than having to pay for a dorm room. Many classes are scheduled for nights and weekends as well as daytimes, opening up the possibility for the student to hold down a part-time or even full-time job while going to school. Many community college students are able to complete their two-year program incurring little or no student loans.
If the community college student proves themselves capable of doing well with academic work, they can then transfer to another college or university to complete their four-year degree. Most community colleges have negotiated articulation agreements with most universities within their state to assure that their course credits will transfer, and many private colleges will accept community college credits as well. In addition to the financial advantages of this approach, many students will benefit by being in smaller classes taught by experienced instructors during those first two years; I am sure that many of us who went to universities can remember the huge lecture halls or the sections taught by TAs, and it has only gotten worse since we were there.
What this all means is that the future looks promising for the community colleges, and it will remain OK for the very elite, selective institutions if they are well-managed (not all are). Most state universities are going to have to downsize considerably; they are too important to their states to be allowed to fail completely, so they will all probably be eventually forced by their state governments to make the painful adjustments necessary to survive. The ones that will be really hurting are the mediocre private colleges. The truth is that most of these do not offer very good value for the money. Expect to see a massive shake out amongst these over the next decade or two.
Hello TODers,
I was thinking about all the planes parked in the desert, and all the unsellable cars piling up in dealership lots and seaports. If a venture-capitalist [Simmons? Rainwater, Pickens?] was serious about jumpstarting a narrow-gauge minitrain factory: those millions of seats in the planes and cars could just be unbolted, then rebolted down to the mini-flatcars, thus eliminating the need for building mini-passenger railcars. This obviously would be a huge energy & cost-saving strategy, and the passengers would be much more comfortable and safe. The fold-down tray [plane seat] and cupholders would be an additional plus!
Compare to the Cambodian bamboo train where the passengers had no seats whatsoever. No fun constantly getting splinters in your butt while at the same time getting leg cramps from sitting cross-legged for long periods.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Of interest Bob; I rode the cane train in Fiji back in 1999 while on a vacation there. Same affect, had to pick the cane points out of my pants when we got to town.
the old hermit
Thxs for the accurate, butt painful report.
Who decides who gets the BMW seats and who gets the Civic seats? Additionally, how does bolting car seats to "mini flatcars" (where are they?) eliminate the need to build rail cars? And why are they mini? I say we just take all the world's remaining oil, fill all those cars and planes with it, and blow it all up! Then we could move on with our lives.
Here's an attempt at an oil price forecast, updated for the demand numbers released in the IEA OMR Nov 2008. A long term indicative price trend is shown by the dashed green line. The recent oil spike in July 2008 to almost $150 WTI and now the drop to about $50 indicates that the oil markets are being over-influenced by factors such as excessive leveraging, followed by deleveraging.
click to enlarge
For a further discussion please refer to http://www.theoildrum.com/node/4792/439777
So that +/- delta is related to the time-derivative of a spike in credit? (i.e. positive slope on the upswing followed by a short flat plateau and then a negative slope until it subsides)
That would indicate that price is essentially some slowly time-varying element related to supply and demand plus some potentially rapidly varying effect due to credit availability?
Maybe for now. But real shortages are not too far off in the future so the relationships will change.
WHT,
Price is forecast based on the gap, between forecast demand and forecast supply, using a price elasticity of demand ratio to calculate price. I attempt to allow for deleveraging of credit which appears related to the time-derivative of a spike in credit.
I'm also assuming that financial deleveraging is slowing, demand destruction has just about ended and the US dollar rally which started in July 2008 is ending soon which implies that $50 oil is a floor. If some of these assumptions are wrong, it could take much longer for the oil price to return the long term oil price trend, shown in dashed green.
For further explanation of the forecast please read
http://www.theoildrum.com/node/4792/439777
and
http://www.theoildrum.com/node/4419/397187
It's nice to be able to read a graph and make sense of it.
Yet, should we perhaps see other oscillatory fluctuations along the upward trend?
Maybe due to aperiodic supply-demand lag feedbacks? I suppose these are impossible to predict and so the upward trend is all that remains.
The forecast price oscillations will probably be much more extreme than I'm forecasting.
The future oil price volatility may end up resembling the volatility of whale oil prices, just after peak whale oil production.
source: Gail's post http://www.theoildrum.com/node/4672
But ace, what happens to both the demand line and the supply line if the financial system does not "recover" and the credit crisis continues indefinitely... with more and more industries, states and city municipalities lining up for a bailout.
Is this a Collapse-in-progress, just another 'recession', a depression.... ???
I think we will know The Collapse is Official when the NFL goes BK.
Until then, most people will remain in denial.
If the financial system does not recover, then both supply and demand will be adversely affected. Demand could fall faster than supply leading to sustained low oil prices. However, given the coordinated actions of the world's central banks using both easy monetary policy and fiscal stimulus packages, I hope that the financial system at least stabilises.
The chart below indicates some recent recovery in US M3+credit+govt debt growth rate.
click to enlarge
http://www.nowandfutures.com/key_stats.html
My gut says the dollar starts to fall sometime between Inauguration Day and the beginning of Spring. That would push oil up, right?
Cheers
It appears GE is pulling the plug on its incandescent lamp business and cancelling its HEI (high efficiency incandescent) R&D, in response to rapidly shrinking global markets and various legislative bans/restrictions.
Source: http://www.cleanbreak.ca/2008/11/26/ge-suspends-development-of-high-effi...
Presumably the familiar A19/GS incandescent lamp will be replaced by something similar to it, but utilizing an inner halogen capsule and multiple IR coatings (same great light quality but roughly 30 to 40 per cent fewer watts).
Cheers,
Paul
That's great news, since incandescent bulbs waste so much electricity. Will give another push to increasing GDP/boe.
Hello TODers,
Are the Chinese now done with losing BIG money in vapor companies like American banks?
http://www.google.com/hostednews/ap/article/ALeqM5gD9J9UD7Yp9X0GGbS9mE0j...
-----------------
China reluctant to invest in foreign banks
The remarks by Lou Jiwei, chairman of the $200 billion China Investment Corp., represent a new blow for ailing banks that were hoping the Chinese government investment fund would use its deep pool of cash to bail them out.
Lou said that he was unwilling to invest in foreign banks amid so much turbulence and uncertainty. Confidence in financial institutions is lacking because foreign governments seem to be changing their policies every week, he said.
"Right now, we do not have the courage to invest in financial institutions," said Lou, speaking on a panel discussion in Hong Kong at a conference organized by former President Bill Clinton.
He added, "We have to wait for the time when there won't be massive collapses of financial institutions."
-------------------
Will the Chinese now invest heavily in real asset, real value, commodity companies like P & K miners POT, MOS, and other global I-NPK & seed companies? I have no idea myself, but these companies are much cheaper than their previous highs.
Or will the US & Canadian governments prevent this kind of takeover investment on national security grounds similar as to when CNOOC tried to buy Unocal a few years ago?
I wrote a short post about my thoughts which Oil Drum readers might enjoy, and please comment if you'd like.
It's about how the price of energy might actually have created the financial mess we're in which has in turn created the demand destruction.
Here's the url: http://polartics.blogspot.com/2008/12/oily-chickens-and-eggs.html