DrumBeat: December 18, 2008

Oil drops 9 pct as demand outlook overshadows OPEC

NEW YORK (Reuters) - U.S. crude prices dropped more than 9 percent to $36 a barrel Thursday as slumping demand and swelling U.S. inventories offset OPEC's record supply cut agreement.

The Organization of the Petroleum Exporting Countries on Wednesday agreed to cut output by 2.2 million barrels per day from January to counter oil's collapse from record highs above $147 a barrel in July.

"Following OPEC's announcement to cut so aggressively, market participants are (assessing) the degree of this move as being indicative of just how weak demand is globally for crude oil," said Chris Jarvis, senior analyst at Caprock Risk Management.

The January U.S. crude oil contract settled down $3.84 at $36.22 a barrel, after earlier hitting $35.98, the lowest price since June 2004. London Brent settled down $2.17 at $43.36 a barrel.

A Holiday for Oil: Are we running out of oil?

Hanukkah is all about oil—and a miracle that purportedly stretched one day's worth of oil into light for eight days. The question is: will modern society have to do the same?

Our world relies on oil for everything: fuel, plastic even food. And with prices now plummeting one might predict a return to the age of abundant, cheap fossil fuel.

Not according to the International Energy Agency, which now predicts “peak oil” as early as 2020. Peak oil is the point at which the world's oil producers are drawing as much oil out of the ground as they will ever be able to. Paired with continued growth in demand from places like the U.S. and China, that's a recipe for much higher oil prices.

Coal Poses Climate Catastrophe as "Peak Oil" Approaches

When will oil production peak and begin to decline? Scientists, engineers and economists have debated the point for years, on the assumption that emissions of carbon dioxide into the atmosphere will decline when less oil is burned.

Not so, says Ken Caldeira, a climate scientist with the Carnegie Institution in Stanford, Calif. That assumes society switches to low-carbon fuel. But there's a good chance society will jump to the most abundant fuel around: Coal, which emits 25 to 50 percent more carbon dioxide per energy unit than petroleum, according to the Energy Information Administration.

The Peak Oil Crisis: Parsing Obama's Remarks

In his first paragraph of his remarks, the President-elect got right to his key point; "the future of our economy and national security is inextricably linked to one challenge: energy." He then said "All of us know the problems rooted in our addiction to foreign oil - it constrains our economy, shifts wealth to hostile regimes, and leaves us dependent on unstable regions. These urgent dangers are eclipsed only by the long-term threat of climate change, which - unless we act - will lead to drought and famine abroad, devastating weather patterns and terrible storms on our shores, and the disappearance of our coastline at home."

These are words that the peak oil and environmental communities have been waiting for many years to hear. Not only did the President-elect finger the vast quantities of imported oil that keeps American running, he said it is urgent we do something. The juxtaposition of need to reduce imported energy with the longer term, but potentially more serious, threat of climate change shows that the new administration understands both the relative urgency and long-term importance of these key issues.

More vandalism at British Columbia gas wells

VANCOUVER, British Columbia (Reuters) - Police are investigating vandalism at more energy facilities in northern British Columbia, but said on Thursday they do not believe it is related to three bombing incidents.

Several natural gas well sites near Fort St. John, British Columbia, had valves tampered with or were hit by gunfire in the incidents last week, the Royal Canadian Mounted Police said in a press release.

Timing is perfect, but money woes plague electric car maker Think

AURSKOG, Norway (AFP) – Despite a winning and timely concept amid global climate concerns, Norwegian electric car maker Think may see its dreams come to a screeching halt due to a lack of financing.

Only two months after it launched production of its hitherto sole model, the Think City, the company has decided to temporarily lay-off more than half of its 200 employees until the end of January.

It is in dire need of cash to pay suppliers, who are exercising caution and demanding up-front payment, and has asked the Norwegian government for either a line of credit, loan guarantees, or a capital injection in exchange for a stake in the company.

But to no avail, so far.

Netherlands to strengthen flood fortifications

The Dutch government on Thursday unveiled a multi-billion dollar plan to reinforce dykes and the coastline and augment fresh water supplies in the face of rising sea levels due to global warming.

Two-thirds of the Netherlands lies below sea-level and the country is increasingly worried about the threat of devastating floods.

Economic meltdown prompts protest in Ukraine

KIEV, Ukraine (AP) -- The currency has lost half of its value, tens of thousands face layoffs, residents in the capital are bundling up in winter clothes as the heat sporadically goes out and Russia is threatening to cut off gas supplies.

It's going to be a tough winter in Ukraine.

"I could understand if this were a village, but for the capital of a European country not to have heating, water and gas - how can this be?" asked Tamara Osipova, one of about 1,000 angry protesters outside the Kiev mayor's office on Thursday.

OPEC Loses Its Muscle

Why is OPEC's reputation taking such a hit? The market views it as having let things get out of control when prices were surging. Now the cartel can't seem to contain a downward slide, either. "I don't think they even have compliance on [the cuts] they've already done," says John Hall, a London-based analyst attending the conference. OPEC adopts production quotas for each of its members, but it rarely adheres to them. OPEC delegates reckon the 1.5 million- barrel-per-day cut announced in October reduced production by only 1 million barrels—nearly all of it from Saudi Arabia.

2009 will be challenging for Canada's oil, gas sectors: Bennett Jones

CALGARY -- Next year will be a challenging one for Canada's oil and gas sector, Bennett Jones LLP said in its 2009 business forecast.

Major oil sands projects will continue to be delayed or downsized as companies wait for the return of US$100 a barrel oil and easy credit, necessitating the renegotiation of supply arrangements, the Calgary-based law firm said to its clients. Smaller oil sands developers, meanwhile, will continue to look for a way out.

Natural gas extraction method may be subject to more rules

There's a move in Congress to impose tighter regulations on a key process used to recover natural gas in the Barnett Shale.

Hydraulic fracturing uses a mix of water, sand and chemicals to create tiny cracks in the rock and release the gas. But it's been under fire for years from environmentalists who question whether the chemicals are safe.

Venezuelan oil refinery idled by power failure

CARACAS, Venezuela (AP) -- Venezuela says one of its main oil refineries has halted operations because of a failure in the refinery's electrical system.

Experts detail the 3 rules for technological fixes

TEMPE, Ariz. – Technology can do great things, but it also can be over sold as panacea for a host of social ills. A better use of technology can be gained if those who guide technology policy, and thus investment, are clear about how to apply it and know what to expect from their efforts.

This is the conclusion of an opinion piece in this week's (Dec. 18) Nature magazine written by Daniel Sarewitz of Arizona State University and Richard Nelson of Columbia University. Sarewitz and Nelson describe three rules that can help technology and science policy makers become smarter about where to apply technological fixes and what to expect as a result.

Climate outcome 'hangs on coal'

Some commentators have argued that falling reserves of oil and gas will automatically limit CO2's rise.

But at an American Geophysical Union meeting, researchers said reserves of coal dwarfed those of other fuels.

It was even possible oil's demise could trigger an acceleration in emissions through more coal use, they added.

Oil Falls Below $38, Lowest Since July 2004, on OPEC Doubts

(Bloomberg) -- Crude oil fell below $38 a barrel for the first time since July 2004 on speculation that OPEC hasn’t trimmed production enough to bolster prices as demand drops.

Futures have tumbled 74 percent from a record $147.27 on July 11 as inventories increased and consumption declined. The Organization of Petroleum Exporting Countries agreed to cut output by 2.46 million barrels to 24.845 million barrels a day at a meeting yesterday in Oran, Algeria.

“Even though OPEC announced a substantial cut yesterday, the market doesn’t seem to have any confidence in their ability to manipulate the market,” said Tom Bentz, senior energy analyst at BNP Paribas in New York. “Even if they make the promised cuts, it will be a long time before we see evidence of it here.”

ANALYSIS - Oil prices can rise if OPEC delivers cuts

LONDON (Reuters) - OPEC must deliver fully on its promise to tighten supply by a record amount if oil prices are to stabilise above $40 a barrel and eventually return to much higher levels.

The 12 members of the Organization of the Petroleum Exporting Countries vowed on Wednesday to remove 2.2 million barrels per day (bpd), starting in January, to halt a $100 price collapse from a July peak.

"The proof of OPEC's pudding this time really will be in the eating," said Simon Wardell of Global Insight. "If OPEC can implement the cut it is promising, then oil prices will recover over time. If not, then it is quite a different scenario."

T. Boone Pickens comments on OPEC decision to cut oil production

“This is in line with what I predicted would happen last week. OPEC’s decision will likely lead to an increase in oil and gas prices in America and proves the point that we must reduce our dependence on foreign oil. This is further evidence that OPEC’s interests are not aligned with ours. You can’t fault them for trying to maximize the value of a commodity they have, but you have to fault us as a nation if we don’t move fast in the next Administration to significantly reduce our dependence on foreign oil and the threat it poses to our national security and economy. We have the domestic resources in wind, solar and natural gas to get the job done on energy and transportation, so let’s use them.”

OPEC losing game of dare with consumers

For now, the consumer has replaced OPEC as oil's boss. It'll take a dramatic jump in demand to get the market to reverse course, said Rob Giegel, energy market specialist with MF Global Canada Co.

"This year everyone actually acted upon their musings of the past, and we saw a huge shift in consumer behavior in terms of more fuel-efficient vehicles, people starting to walk to work, people taking public transit," said Mr. Giegel, based in Calgary. "We have seen demand extinction, because a lot of these people will never go back."

BP’s Thunder Horse fully online, finally

BP’s star-crossed Thunder Horse field in the Gulf of Mexico has begun full production now that its third and fourth wells are flowing, the company said today.

The field is pumping more than 200,000 barrels of oil equivalent per day. A nearby field, Thunder Horse North, is set to begin producing within in the next six months.

Richard Heinberg: Surviving a reduction in social complexity

Complexity costs energy, and so complexity emerges only in societies that have energy to spare: at a minimum, agricultural surpluses, but better yet forests to cut or fossil fuels to mine or pump. One of the reasons that returns on complexity begin to decline is that growth in exploitation of energy sources cannot be sustained: soils erode, forests disappear, or—could it really happen?—fossil fuels deplete.

Because fossil fuels have given us such an enormous energy subsidy, we industrial humans have been able to elevate societal complexity to an art form. It takes a little perspective to appreciate this, because we take it so much for granted.

...It takes linked systems of money creation and distribution, manufacturing, transportation, resource extraction, and regulation to keep all of this going.

And it all costs enormous amounts of energy to maintain.

As energy becomes more scarce and expensive, society will simplify itself. This much is clear. The questions that bedevil us: How will that simplification occur?, and, How simple will society become?

Mexico To Benefit From OPEC Oil Cuts Without Chipping In

MEXICO CITY (Dow Jones)--Oil-exporting Mexico stands to benefit from the Organization of Petroleum Exporting Countries' 2.2-million-barrels-a-day oil cut without turning off its own spigots.

Mexico, along with other non-OPEC exporters Russia and Norway, worked closely with OPEC during the 1998-1999 price crash. But this time the world's sixth-largest producer has made clear it won't shut in any producing wells.

"Pemex and Mexico will, undoubtedly, benefit from OPEC production cuts as Pemex maintains a strategy of production independence," said Gianna Bern, president of Brookshire Advisory and Research Inc., a Chicago-based management consulting and energy-economics research firm.

Huge Siberian Field to Produce 1MM Tons of Oil, Boost Production in '09

The oil company Verkhnechonskneftegaz, developing the Verkhnechonskoe oil and gas condensate field, one of the largest fields in Eastern Siberia, is going to produce 1 million tons of oil in 2009 and raise its annual production of hydrocarbons up to 7-8 million tons by 2014, Igor Rustamov, General Director of Verkhnechonskneftegaz, said to journalists on Tuesday.

The volume of oil production in the Verkhnechonskoe field in 2008 will amount to approximately 150,000 tons. Oil will be supplied to the Eastern Siberia – Pacific Ocean pipeline, to which the field was connected in October 2008.

Kenya: Vandals to blame for oil shortage, says national distributor

The national oil distributor has blamed a fuel shortage in various parts of the country on vandals who destroyed the fibre-optic link to its various pumping stations, causing a communication breakdown.

Speaking to The Standard yesterday, Kenya Pipeline Company’s (KPC’s) Managing Director, Mr George Okungu said the vandals also cut Kenya Power and Lighting Company (KPLC) cables around Jomo Kenyatta International Airport (JKIA), causing a blackout in various parts of Nairobi that also affected the oil distributor’s sub-stations.

Caltex warns of petrol shortage in Queensland and New South Wales

MOTORISTS can expect fuel shortages across southeast Queensland and northern New South Wales following a fire which shut down the Caltex refinery in Brisbane.

Caltex said some of its service stations would run short of fuel in coming days, following the fire last week.

New driving habits create new budget problems

About 58 percent of the Idaho Transportation Department budget comes from the mostly gas-tax filled Highway Trust Fund, the federal government's primary source for financing highway, bridge and transit projects. That's more than in most states, including many of Idaho's large Western neighbors.

The next largest source of cash for state roads? Idaho's own gas tax, which makes up 23 percent of the budget.

Both revenue sources are declining as cars become more gas-efficient and as people stay off the road.

John Michael Greer: Why dissensus matters

Civilizations, like speculative bubbles, have promoters who insist they can keep on going forever; just as with bubbles, announcements of that sort have historically been a clear sign that serious trouble is not too far off. It’s a safe bet, in any case, that every bubble will pop and every civilization will decline and fall. Those who are heavily invested in a particular bubble or civilization will of course insist that it’s different this time, just as their predecessors did; those claims have been wrong so far, and the evidence isn’t favoring them this time, either.

It’s quite possible, in turn, to predict the kind of things that will happen as industrial civilization lurches down the uneven slope of decline. Plenty of civilizations have done that before, and the common features stand out clearly from history; some of these features are already visible in the present case – it’s educational to page through Spengler or Toynbee and note how many features of a declining civilization had not yet appeared in their time, but have shown up on schedule in ours. What nobody can know in advance is just how these trends will work out in detail.

Exxon Mobil to pay $6.1 million fine over air pollution

WASHINGTON (CNN) -- -- Federal officials have fined Exxon Mobil more than $6 million after it violated a three-year-old agreement to decrease air pollution at four of its refineries.

Methane Hydrates: What are they thinking?

What is the next energy source that will give us what oil, coal and natural gas give us today? You may be surprised to hear that it may be the other hydrocarbon fuel. A Great many scientists, industry leaders and governments throughout the developed world believe that will be methane. More specifically they believe it will be methane hydrates.

Iran to halt fuel oil exports in Q1; eyes winter

DUBAI/SINGAPORE (Reuters) - Iran, a regular exporter of fuel oil, will halt spot exports in first-quarter 2009, as it looks to meet domestic demand for power generation during winter, giving more support to a recovering Asian market, industry sources said on Thursday. The National Iranian Oil Company (NIOC), which typically exports around three to four fuel oil cargoes monthly between January and March, will offer spot cargoes only if domestic requirements ease.

"We cannot offer spot cargoes because we have to manage our requirements for power generation in Iran during the winter," a source familiar with the fuel oil export programme said.

Costs rise despite economic slowdown, analysts say

HOUSTON -- Despite the global recession, construction costs for upstream oil and gas facilities have reached a record high, as have those for the design and construction of refining and petrochemical projects, say IHS Inc. and Cambridge Energy Research Associates (CERA) in their most recent upstream capital costs index (UCCI) and downstream capital costs index (DCCI).

Nepal faces severe power cuts

KATMANDU, Nepal — Nepal's government announced Thursday that consumers would face 10 hours per day of power cuts after declaring the country's utilities in crisis.

Nepal produces only about half its electricity needs, in part because of unusually low levels this year in reservoirs that feed the country's hydroelectrical plants. The amount of power that Nepal imports from neighboring India is not enough to make up the shortfall.

An energy crisis fades

No worries here, folks. Gas is cheap, relatively speaking, once again, and might even get cheaper. Like that crazy talk about human activity being responsible for global warming, all that worry about a dwindling supply of oil was just liberal fear mongering. Why, the supply of oil is probably replenishing itself underground as we speak.

The promise of fusion

With rising oil prices, concerns over greenhouse gas emissions and dwindling fossil fuel reserves no one could fail to be aware that the world is facing an energy crisis. Whilst many sustainable energy technologies such as wind and solar power show great promise, it may be hard for them to meet the entire global power demand especially in countries with limited space and low levels of wind and sunshine.

In bridging this gap, the low greenhouse emissions of conventional nuclear plants has made them an attractive power generation option to many nations. Especially since they are compact, create large amounts of power and operate day and night. Offset against this is the concern over the storage of nuclear waste products many of which will be deadly for thousands of years.

But it doesn't have to be this way. There is an alternative nuclear technology, fusion, that has the potential to offer the best of both worlds: vast amounts of power with no greenhouse emissions.

Russia's Gazprom threatens Ukraine cutoff over debt

MOSCOW (Reuters) - Russian gas export monopoly Gazprom geared up for a new confrontation with Ukraine on Thursday, saying it would cut off its neighbour from January as Kiev was unable to meet its arrears by the end of the year.

The company's deputy chief executive, Alexander Medvedev, told a news conference Gazprom understood Ukraine was able to pay only $800 million of arrears of more than $2 billion.

Gazprom executives said they would warn European customers about the risks of gas transit via Ukrainian territory in view of the dispute over debt payments.

Oil hovers near 4 1/2-year low despite OPEC cut

Oil prices hovered near 4 1/2-year lows Thursday as persistent investor pessimism over global crude demand outweighed the news of OPEC's largest-ever production cut.

Light, sweet crude for January delivery edged up 47 cents to $40.53 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Earlier, it fell as low as $39.19 — a level not seen since at least July 2004.

Overnight, the contract fell $3.54 to settle at $40.06 a barrel, after touching $39.88.

The Nymex contract for February delivery, which analysts said better reflected oil price trends, was up 82 cents to $45.43 a barrel.

Energy agency: Oil imports, demand slowing

WASHINGTON – U.S. dependence on foreign oil will drop dramatically over the next two decades as Americans are expected to confront rebounding oil prices, use more biofuels like ethanol and drive more fuel-efficient cars, the Energy Department predicted Wednesday.

...It is the first time in more than 20 years that petroleum demand in the United States is projected to be essentially flat for years to come, said Howard Gruenspecht, the EIA's acting director. It "breaks this trend" of steady annual petroleum demand increases dating back to the 1980s, he said. The reversal began this year with U.S. petroleum use expected to decline by a million barrels a day, or about 5 percent, compared with 2007.

Biofuel Industry Won't Meet Government Production Targets After All

The United States will not be able to meet the mandate to use 36 billion gallons of biofuels by 2022, reported the U.S. Energy Information Administration Wednesday.

The country could meet that goal by 2030, with most of the biofuels coming from corn-based ethanol, the EIA said in its preliminary annual report. The report looks at the country's generation and use of energy, from electricity to transportation fuels from 2007 to 2030 (see EIA charts).

China Slashes Fuel Prices as Economy Enters Slowdown

(Bloomberg) -- China cut fuel prices for the first time in almost two years after crude oil slumped, seeking to reduce costs for companies and factories as the economy enters its deepest slowdown in almost two decades.

OPEC Cuts, Oil Falls: Something's Not Sustainable

My advice to the cartel: to stop trying to manage supply, let oil prices fall as they may; cheap oil will stimulate the world economy and you guys will be able to make more money in the long run. My advice to America: cheap oil is not sustainable; we need to either start developing alternative fuel sources now or start preparing to fight China, Russia and India for the world’s dwindling supplies.

Russian oil output will decline as demand falls

MOSCOW (Reuters) - Falling global demand for oil and gas will lead to a natural decline in Russian production, Russia's Deputy Energy Minister Anatoly Yanovsky told a news conference.

Venezuela to slash oil output by 189,000 barrels per day under new OPEC cuts

CARACAS, Venezuela (AP) — Venezuela says it will slash oil output by 189,000 barrels per day under new OPEC production cuts.

Venezuela's Energy Ministry announced the figure in a statement Wednesday after the Organization of Petroleum Exporting Countries agreed to a historic 2.2 million-barrel-per-day reduction.

Many in denial over rising population

The United Nation's Population Fund is concerned population growth in Asia averages 1.1 per cent a year. Australia, as a First World country, should have a much lower growth rate. It does not. By the end of the Howard era, our annual population growth had risen to a stunning 1.5 per cent: almost off the First World scale and high even for Third World countries. (Indonesia's, by contrast, was then 1.3 per cent, but has recently come down, with much effort, to 1.2 per cent.)

Under the Prime Minister, Kevin Rudd, our rate has increased. According to Bureau of Statistics figures, it is now 1.7 per cent. Both natural increase and net migration continue to rise. At this rate, one which many are determined to maintain or increase, our population will reach 42 million by 2051. By the end of the century, it will pass 100 million.

This is far above any credible estimate of the population Australia could hope to feed.

Bartlett pushes legislation for flex-fueled cars

A Republican congressman who has pushed for energy conservation is supporting legislation that would require all automobiles sold in the United States to be able to operate on gasoline, ethanol, or methanol.

Representative Roscoe Bartlett (R-Maryland) has been leading efforts to change U.S. energy policy to address the challenges of what he calls "peak oil." He says U.S. oil production peaked in 1970 and is in permanent decline.

Peak Moment TV's Economic Meltdown Sale: Peak Oil DVDs at Bargain Prices

The summer’s gas prices may have gotten us hopeful of real change – but even as our economy melts around us, collective amnesia already seems to be settling in. But not everyone forgets. From protecting your money in a declining economy through backyard permaculture in Oregon to Matt Simmons’ warnings that the oil crunch will dwarf the financial crunch, the folks at Peak Moment TV have been a valuable resource for information about peak oil and what we can do to adapt. But even they are not completely independent of our current economy – so they’ve decided to hold an “economic meltdown sale” on all DVDs. Read on for some of the great titles you can purchase at up to 40% discount. With the IEA Chief Economist warning about imminent peak oil, these could make perfect last minute holiday gifts for the oiloholics in your life.

Slovakia to build new nuclear plant with Czech CEZ

BRATISLAVA, Slovakia – The Slovak government has chosen the Czech Republic's main power utility CEZ AS as its strategic partner to build a new nuclear power station in Slovakia.

CEZ spokesman Ladislav Kriz said Wednesday the two planned to establish a joint company next year that will build and operate the plant by 2020.

Study tracks disasters, odds of dodging death

Rural areas, coastal zones with bad weather and the South were among those areas with the greatest death risk. Those places are more prone to natural hazards and significant population growth, the researchers say.

Meanwhile, the Midwest and parts of the Northeast had the lowest rates of mortality.

Cutter says severe storms and tornadoes in the South, mixed with feeble structures like manufactured homes and a lack of emergency radios, can bode poorly for rural residents.

Glut of hot years a coincidence? Fat chance

Thirteen of the hottest years since records of global temperatures began in 1880 have clustered in the last 17 years. It is tempting – and it sure makes good headlines – to blame it on climate change. But does science support such a claim?

According to new statistical research, it does. The recent glut of unusually hot years is incredibly unlikely to happen in a stable climate.

Re: Glut of hot years a coincidence? Fat chance

I looked for the report mentioned by looking at the AGU web site, but it is "in press", so I haven't found it as yet. Sounds interesting though.

E. Swanson

Does the low probability of a glut say more about climate change or the quality of the model/modeller?

Hard to say, since I've not seen the paper (I'm working on it). Could be that they used a statistical model, not a climate model??

Here's the full title from Zorita's web page:

E. Zorita, T. Stocker and H. von Storch. How unusual is the recent series of warm years?

Here's link a I just found for folks with access to the AGU site:


EDIT: Yes, they used statistical analysis, not GCM type climate models. Steve McIntyre will have fun with this one!!

E. Swanson

Black Dog, are you up at the AGU in SF this week?

No, although I wish I had the opportunity after looking at the program and reading a few abstracts. I'm on the other side of "flyover land". If you have some direct thoughts, my e-mail address can be found from my profile...

E. Swanson

Freight car loadings week of 12-06-08

Coal cars week Y on Y up 7,500 5.3%;
Coal cars year Y on Y up 152,500 3.6%
Total cars week Y on Y down 27,500 -8.5%;
Total cars year Y on Y down 240,500 -1.5 %
Coal is now 50% of car loadings.


The shipment of coal is the only bright spot for the RR's right now. All other commodities are down by large percentages, trailers and containers down about 9%, wood and wood products down near 20%, scrap metals down around 30% and automobiles/auto parts down around 30%.
As factories are shuttered, people loose jobs and can't pay high electric bills, and more homes are unoccupied due to foreclosure, electric power use will decrease with less coal used. I would not expect much more than 2 or 3% drop in coal carloads as recession proceeds. Only thing that can significantly reduce coal carloadings (and coal use) is converting coal to syngas for piping to power plants or converting to renewable fuels. Adding nukes would not decrease coal use for at least 8 years.
Positive effect in fewer carloadings is most Amtrak trains across the US now are running on time - a first for many years. Fewer cars means fewer trains, but also layoffs for the RR's.

This might have important implications for the price of oil...

U.S. currency slides to a 13-year low

The dollar fell to 87.14 yen, the lowest since July 1995, before trading at 87.45 yen as of 3:51 p.m. in New York, from 89.05 yesterday. It depreciated to $1.4437 per euro from $1.4002 and traded at $1.4366, the weakest since Sept. 30.

...The dollar is likely to decline “longer term,” analysts including New York-based Ashraf Laidi at CMC Markets wrote in a report... The Fed’s debt purchases will cause the dollar to weaken to $1.4860 per euro, analysts led by Robert Sinche, New York-based head of global currency strategy at Bank of America Corp.

I believe we were at $1.58 per euro in July when oil was $140 a barrel. Not that the current price is reflecting anything based on reality...

The decoupling of the relationship between the value of the dollar and oil price is the wrong thing to look at, IMO. I think a better thing to look at is the price of oil in each currency as a reflection of that country's economy. In this case, the price of oil dropped even more in Europe, and nothing happened.

Wow, not the effect at first that I would expect-I'm seeing $38 a barrel on the graph here?!?


Do I hear half a Yergin?

Come on people, if FOMC can bring it all the way down, so can we.
The fundamentals are sounding off.

oil is cheap! long live expensive oil!

there WAS a strong neg. correlation between dollar and oil. But not now. Now there is correlation between oil and container shipments and dry goods indexes...i.e. expected lower oil use.

And even the most stalwart conventional economists should now 'get it' that the marginal barrel pricing system does not give us accurate info regarding scarcity.

As a thought experiment, ceterus paribus, even if oil were to surge to 150 dollars a barrel in price by tomorrow. Due to deflationary pressures (the net contraction of money and credit combined) and lack of bank credit availability it is quite possible that big projects can't get financing even in a high price environment. The companies would have to be reliant on cash flow.

Low oil prices are actually extremely harmful. It's like at each possible glimmer of hope, humanity gets whacked into complacency before it can change it's erroneous ways.

My opinion is that oil is down for January delivery because the number of Paper contracts outstanding doesn't match up with the reductions in oil output due to both the economy and OPEC cuts, and all the other usual reasons.

This is a trading abberation that's not supported by the Feb and later contracts nor the price of Brent.

Once the paper contracts and the physical delivery match back up, you'll see the prices "adjust" again. Take a look at the February Contracts and you'll see what I mean. Currently up at $42.25 and January has expired.


Now is the time to pile in with all that cash in your mattress. You can buy USO and sell Feb just out of the money calls for a 8-10% gain and either you'll be assigned in four weeks or you can sell the calls again.

My 3 cents worth..
USO will continue to get killed because of rollovers. lets say the pessimists are right and we have a really bad depression and oil is at $40 in May 2009. If the current 5-6% per month rollover goes on USO will be down another 80% from here even though oil prices will be the same. This level of contango is is going to be a killer for USO.
Would rather buy some oils service stocks. Many trading below liquidation value with decent long term contracts.

And even the most stalwart conventional economists should now 'get it' that the marginal barrel pricing system does not give us accurate info regarding scarcity.

Those stalwart yeoman of olde. Or ... is it stalwart yeahmen?

Look at things through the 'wrong' end of the telescope; the petroleum 'god' is tryiing to stimulate the economy. Here's a stalwart right now!

"The Petroleum God is not doing any better than the Fed! Maybe he should try harder and lower prices to zero!"

But ... if petroleum products are more expensive, even fewer people will buy them, so higher prices won't 'stick' ... why not let prices drop and hope economic activity will fill the 'vacuum' so to speak?

"Beacuse energy use does not have a 'fractional reserve' multiplier effect of its own. Also, one usually has to go into debt in order to gain control of energy; even though controling itself does not carry an 'interest charge', the financing of control is subject to today's more stringent risk/reward calculus. Therefor, any price must have added the credit cost of gaining control of it. Also, since the suppliers are demanding other currencies than dollars, the currency fluctuations are making the effects of strong/weak dollar less useful to producers; the currency cost must be added to the credit cost. In a venue with shrinking demand, these hidden costs become great and their effect powerful."

I keep hearing that energy has a high equivalence to money, I don't see how cheap fuel could not stimulate enough economic activity by the increase of its use ... which would stimulate demand which in turn would drive prices higher. The higher prices would then be 'priced into' fuel- related products and services which would increase demand for more worker- hours, in turn increasing wages and earnings. The deflation cycle would be broken.

"If this was true, Saudi Arabia would already be an idustrial superpower having built factories and imported workers, becoming in the process the workshop of the world. Right now, the only country that has taken large domestic energy reserves and made itself into an economic power equivalent to its resources has been the United States. The other powers either had little resources of their own, like the Europeans, Chinese and the Japanese, or are petro producers with little other economic activity. There are other factors besides energy availability that causes countries to become economic powers. The production of goods and services has a cycle, from the tranformtion of raw materials into goods and then marketing them. Even the US is stepping away from wealth- generating production, which also carries higher costs including energy costs ... preferring to claim the retailing, marketing and gatekeeping parts of the product cycle, which carry lower costs."

So ... you don't think marketing and retailing require that much energy, overall?

"I didn't say that, what matters is that energy price inputs matter more at the production end because a greater percentage of energy is needed there than at the other parts of the cycle. If there is a multiplier it is because the people - the all important customers - are ignoring marketing. This deleverages the entire cycle. This is why the Chinese suffering is disproportionate; the effect of no marketing hurts them more than than the effect of no marketing helps the consumers. At the same time, lower costs including energy is less useful to the Chinese or other producers since without customers, there is no need for production regardless of input cost. At some level there is support for production without marketing or gatekeeping, but that would be at a far lower level of commercial activity than exists now. Perhaps too low to support any industrial forms of production which rely on economies of scale."

Then, it's possible with the unbalanced nature of the product cycle, there is really no bottom to the price of petroleum?

"The only way for prices to climb would be for petro producers to start manufacturing and selling products for and to themselves. Even then, there are no guarantees. There are other factors besides price that causes economies to become non- functional. In the 1930's the US was both producer and market ... but nobody bought anything, even at rock bottom prices. Of course, we now think of 1930's prices as being cheap, but to people then, they were higher than they should have been."

How would you gauge the price level, then?

"Maybe, you ought to make a chart that links petroleum price levels to the whether there will be a deprssion or not ... or rather, how people view themselves econoomically.

$100 oil means the recession is over.
$80 oil means the US Establishment is serious about financing new energy sources and will support the higher price.
$60 oil means OPEC has regained control over production.
$40 oil means a long recession.
$30 oil means large producers like Russia to small producers like Ecuador and Indonesia will wind up imploding.
$20 oil means 'Great Depression II'
$10 oil means US- style capitalism is probably finished and a new method is underway. This could be beneficial, since it would reflect a sharp decrease in demand for energy resources which would certainly have more value in the future than they would near- term at $10.

A rapid rise in price to anything over $100 a barrel means America has become the 'Weimar Republic of America'. A change in use- context would also effect prices. If oil was priced as a 'cancer cure' rather than 'motor fuel' it would be far more valuable."

Petroleum is not a cancer cure.

"Neither are the other cancer cures."

I guess the low Fed rates are indicating a depression as well; that the Fed cannot price credit any better than OPEC can price petroleum.

"One would think the diminishing returns would be obvious, but ... I am not an academic. In the long run, we are all dead, but bad ideas are like vampires, they live forever."

Thank you.

Good post as far as a energy super power well Europe became a super power off of wood first local then from the colonies. Then it expanded on coal only when oil became important did the US surpass Europe as a super power and one could easily argue that Europe went through two world wars because of the lack of local oil resources.

I like your take on cheap oil it got me to think everything I can figure out shows that oil is now set up for a huge spike in price it simply needs a trigger.

Well I'd say that 20-30 dollar oil has a really good chance of imploding one or more of the major oil exporters governments. Mexico, Venezuela, Iran, Russia or Nigeria or one of the Stans.

Next my take on the matter is pretty simple at some point someone will run low on oil go to buy on the spot market and have to bid the price up to get delivery this will reignite the bidding war and up goes prices.

The third possible case is the long term one which I think most people are now expecting and as usual if the majority agree then its the one that wont happen.
That is that prices will remain low and that produces will flood the market seeking cash flow and also investment in oil will drop off. Eventually the economy will turn around and the lack of investment leads to another probably more prolonged spike. Notice that this is a repeating cycle i.e it seems to be the one we have been in for some time. I.e price drops investment drops price increases and then investment increases economy stumbles rinse and repeat. If peak oil is real then in say 2-5 years or so then we simply won't get the supply response.

And last but not least this is the big one Great Depression II we won't pull out its tough to say what happens to producers I assume some will collapse as above but demand should be diving so fast that even collapse won't really result in any price spike. One could readily say if this is true then the price of oil is the least of our problems if you look around right now that seems to be the case cheap oil is really not that important it seems.

GDII could certainly be on us now but I just don't think so. Given we have fiat currencies now and the Government can print as much money as it wishes its really hard to see us ending in Deflation. And give that we are a debt based/ fractional banking system based on inflating the currency slowly a deflationary collapse because of default seems unlikely. Indeed the Government is simply printing like mad and buying up distressed assets. It will continue to do this as long as it can. This could well cause a currency collapse but a collapse of a currency is really just instant hyper-inflation so its really just a really fast form of inflationary collapse. The point is there is simply no intrinsic reason in a fiat fractional banking regime for the system to end in Deflation. One then has to consider how long Deflation could last. I'd argue that it would be tough for our economy to withstand deflation for even a couple of years without collapse. This means that the printing presses have to run full tilt and the economic forcing has to be steadily and dramatically increased to force the economy out of deflation at whatever cost. If this means taking the interest rates to zero and offering 200k to people to buy homes and cars then it will be done.

The problem is a deflationary collapse is almost impossible since it implies that money is becoming more valuable vs goods and services and in general that interest rates are dropping. This implies that the government can print at will with zero negative side effects. This crazy result is of course exactly what is happening right now. For it to continue for all that long is really impossible. A few years at best. I'm sure the US government will enjoy the ability to print money with no bad side effects and I simply can't see how this trick is possible for long.

In the case of Japan its a bit different since their printing presses simply resulted in a carry trade forming as cheap japanese yen coupled with a very restrictive import policy simply made the inflation happen elswhere i.e the recent credit bubble was in a big part driven by the Japanese failing at printing their way out of deflation.

One could imagine that it might well be possible for the US printing presses to result in a similar result i.e we export dollar inflation via a sort of dollar carry trade but given the size of the US economy its really hard to see how this will not result in at least price inflation in the US.

For oil at least since its currently priced in dollars one would expect regardless of what the printing presses do to the internal US economy dollar denominated assets outside the US will inflate. I could see a semi japanese result in that assets that are not liquid or exportable land/housing etc continue to fall in price despite the ever weakening dollar purchasing power. Others such as food for export may see inflation in prices. This would for the US be offset by inflation in import prices esp oil.

Anyway liked your post.

Thank you, Memmel, I am crawling though the musty old library, looking for ... 'Dow Theory:

Trends exist until definitive signals prove that they have ended.

Right now, the trend is deflationary; a bear market in all goods priced in currency will decline in value relative to currency.

How can this be so, when there is a tsunami of currency? Two reasons; one is the currency is not in the production/consumption cycle being held in banks because the banks can deposit the currency (that they borrow from the Fed) with the Fed and earn interest! Free money! What is the value of a scam? The currency becomes worthless, which is not inflation but its transformation into another product; it is valued like the other products relative to 'something else'. Right now, it's not clear what the something else is, partly because all goods and currencies are overvalued with the relationships shifting constantly. Perhaps there is a general revaluation in economic terms of all human activities! In that case, all goods and markers for them would carry very low nominal 'prices' and nobody would be that interested in them, regardless. The overall re- or devaluation of goods and the 'something else's' are not likely to follow such a philosophical trajectory, but it is clear what most persons consider investments or safe havens ... are not. This is another characteristic of deflation; it cannot be hedged, since no investment outperforms any other, not even short selling. (Because to few own the security in question or will freely lend it if they do. Puts cannot find counterparties, etc.)

Another reason is a result of the currency not being in the production/consumption cycle. If the currency were to magically appear in circulation, the items priced in that currency would rise - supply to inventory ratio - but demand would fall since there would be fewer and fewer customers at the increasing prices. Because of institution biases, currency would flow first to business interests closest to the Fed and their proxies; this trickle- down of liquidity would affect goods prices before wages. To some degree, this is happening now in sectors such as construction that have access to liquidity. Once liquidity manifests itself in this way to the degree of imbalance then it is useless. It may as well not exist at all. This shunning of liquidity is sensible, it's also deflationary. The Fed considers business activity as something mechanical, like flushing a toilet. Banks cannot compell persons to borrow.

Liquidity is another one of those things that doesn't exist unless people believe. Right now, all participants in the world economy are becoming atheists.

Thats true and dont disagree with what your saying however what people don't realize is that changing the money supply i.e deflation and inflation may not be a big factor in oil usage.

My thesis is that the problem when a economy starts suffering either monetary inflation without growth or deflation is that the velocity of money slows. In the recent past the housing bubble primarly lead to rising prices and a lot of large debt transactions. Two of these increased to velocity of money in the growth sense home HELOC's and actual construction.
Most of the other transactions simply increased the size of the transaction and actually worked to reduce peoples spending power i.e buying and expensive used home thats well outside of normal guidelines for cost.

In any case one could argue that the depenency between oil and the economy is number of transaction/btu's I.e how much oil was burned per transaction. If the transaction rate is high i.e velocity is high then the economy makes more money with less energy. As the transaction rate retracts certainly you see the absolute number of btu's decline how much is a matter of debate but the real problem is the transaction/btu number declines i.e the efficiency of the economy declines. In fact one could argue in many cases btu itself increases. I.e the sales person drives a lot more for less sales. The delivery guy does the same route and delivers less etc. So past a certain point transactions continue to decline but btu's can actually increase or at the minimum decline a lot less.

In a lot of ways this is what happened during the great depression many transactions that took a lot of energy where executed for minimal profit. We have seen in past recessions a actually sharp bottom to VMT and other measures the oil usage declines at first reaches a certain level then starts increasing even though the recession is still running. This is this problem of simply having to work a lot harder to make money.

A simple example is I've seen many flights that are not 100% full airlines are having to expend more energy per the remaining transactions.

I believe we were at $1.58 per euro in July when oil was $140 a barrel. Not that the current price is reflecting anything based on reality...

Not that the prior price was reflecting anything based on reality. The current price may only be a little low (which isn't to say it can't fall even farther).

Dollar down, doesn't matter. Venezuela craters? Doesn't matter. Mexico and Russia run by turds? Doesn't matter. There is a huge glut of oil. Oil to the moon. Oceans of oil. Oil in tanks on land, oil in tankers at sea, nowhere to put it all. A tsunami of oil.
Oil goes to $10 in 2009-10. That's reality. Glut is the reality. Glut.
If demand for crude falls by 10 percent (and I hope the demand drop is limited to that percentage), we get 9-11 mbd excess supply on the market 2009. So OPEC cuts 2 mbd. So the dollar sags. So what?
Glut, gluts, glut-a-rino. Jeez, this is so obvious maybe even Yergin will get it right (for the first time in 20 years).

How about some facts to support your opinion?

At $10 tar sands are shut down, stripper wells get shut in if not immediately plugged and OPEC can probably run the price up several multiples of $10 by cutting a small fraction of their production.

Did you factor in any decrease in supply in your forecast? If so how much?

How much supply in total? Supply from where? How much demand? Demand forecast by country?

Opinions are like assholes. Everyone's got one.

But it doesn't have to be this way. There is an alternative nuclear technology, fusion, that has the potential to offer the best of both worlds: vast amounts of power with no greenhouse emissions.

And I await the 'no it won't cause global warming' 'yes it will' debate.

I'll start it off with 'Yes it does' because the conversion of matter to energy is a heat producing reaction and that heat will be within the earth envelope.

eric blair -

As there is absolutely no indication whatsoever of nuclear fusion becoming a commercial reality in the foreseeable future, aren't questions regarding its impact on global warming just a bit academic at present?

But to briefly address the question: yes, there will be waste heat from nuclear fusion, and that waste heat has to go somewhere. However, that is true of all other power-producing systems, most of which also generate greenhouse gases which further add to the problem.

So, it would appear to me that if commercial nuclear fusion ever became a reality, its global warming impact, though not negligible, would still be far less than any of the fossil-fuel based systems it would replace. Therefore, it would definitely be a positive step.

In any event, don't hold your breath that commercial nuclear fusion will come to pass anytime soon.

In any event, don't hold your breath that commercial nuclear fusion will come to pass anytime soon.

But, But the anitdoomer says its just around the corner.

Antidoomer isn't the only one on TOD that can't see the difference between a research project/proposal and a real world solution.

Eventually there may be adequate sustainable solutions to our food and energy problems, but none yet - we already have a safe fusion reactor, the sun ... and the earth receives far more energy from it than we need.

We need much more R&D, but just because we need a solution to some problem doesn't mean one exists.

From a pure science perspective, we already use and are totally dependent on fusion. Fusion is what powers the Sun. Without it, we are totally out of business.

Now we need to find a containment vessel that will allow us to use fusion on a smaller scale ... Unfortunately, although a lot has been learned about this in the past 50 years, none of it has been particularly encouraging.

More to the point of the above post, extra heat released within the biosphere will not contribute to noticeably to AGW. If CO2 emission is limited, the extra heat will be radiated into space, as is all heat already. It is a matter of balance. Fusion on Earth will not upset the balance - not even setting off thermonuclear weapons as fast as we can make them. And setting off thermonuclear weapons is really a self-limiting activity!

Maybe fusion is theoretically possible, and maybe - given enough time - we could have solved the technical challenges. Unfortunately, we are out of time. We are still too far away from solving those technical challenges, and from here on out, R&D budgets are going to have to be cut and directed only toward those things that are most likely to result in a quick and reliable payback. Fusion is too far off to make the cut.

Because there is only one big R&D budget and it is centrally controlled ? Everything would short term investing ?

$26 trillion or so to be spent on energy infrastructure over the next 20 years. How much on R&D and what should it be spent on ?

$24 billion DOE annual budget

Renewable energy investment $148 billion in 2007. Research & Development: Research & Development spending on clean energy and energy efficiency was $16.9 billion in 2007, including corporate R&D of $9.8 billion, and government R&D of $7.1 billion

VC for 2009 projected at about $27 billion

Angel investment about $26 billion

IEC (Inertial Electrostatic confinement) Bussard Fusion- completed peer review of last Navy funded ($2 million) experiment. Positive verdict. Likely to get follow up funding.

Tri-alpha energy - colliding beam fusion funded for $40 million. Targeting 2013-2018

General Fusion completed proof of concept - Acoustic wave magnetized target fusion. Raising $8 million for a net energy device over four years.

Dense plasma focus - focus fusion - has $620K for two years of validation experiments

If each of the current round of experiments work out, about $100-500 million to scale up commercial versions.

So hundreds of billions of R&D money for energy and a tens of millions committed to proving out some promising fusion power projects and then 1-2 billion if they work.

There are options in case a workable fusion solution proves too costly initially. Can be used for transmutation to help fission achieve clean burn. Fusion/fission hybrid possibilities for energy. Fusion for space access easier target than fusion for electricity. Fusion for explosive detection and for medicine. Money making opportunities to fund working out the technical details.

In case you haven't noticed, we're having a little bit of a problem with the economy - some people are already calling it the Greater Depression. I am not optimistic about all of the above R&D projects continuing to receive funding at current levels, or R&D budgets remaining uncut. Short-termism? Yep, but that is what happens when times get hard enough.

So you are predicting there will be total collapse of funding for R&D ? What percentages ? What dollar figures ?

I say venture capital and angel funding hold up better than during and after the internet bust. At least $5 billion each. And probably $10-30 billion each in 2009 and 2010. Which is enough to fund thousands of ventures and even dozens of larger efforts that need hundreds of millions for a big deployment.

probably $10-30 billion each in 2009-2010

There will be continued funding of clean tech, most likely, but not anywhere near the levels you are predicting. At the risk of sounding impatient, did you even look up how much is being spent now before throwing out those numbers?

The Cleantech Group, who also happens to be speaking at the Oil Investment Summit 2009, will lay out all the nitty-gritty there, but in the meantime here is what they have to say:

In 2009, however, we see a slight decline globally in venture investment in the cleantech space, down from the 8 billion or so we project for 2008, to 7 billion in 2009. We also see more private equity players entering venture capital, yet perhaps a bit of a retreat for the hedge funds, which were starting to dabble in cleantech quite actively. A number of the private equity players are going to be attracted by the valuations they are going to find in cleantech a little further upstream, as well as the linkage between innovation capital and infrastructure financing. In other words, they will take the best of current emerging cleantech companies and help scale them into infrastructure markets.

Yes, I looked up the overall VC and angel investment numbers. Not the only cleantech numbers. How the VCs and angels choose to pick what they invest is separate. WTC was making the case that there would be no money available

To my knowledge, the only significant funding of fusion research has been government money. The government has been generous for about 50 years with experiment after experiment. Each round of experiments failed to produce the predicted results and instead identified a new problem. And still the government funders pushed on. The government has shown a persistence on this issue that is absolutely unheard of in private enterprise, even in the best of times. And these are not the best of times.

More money is probably not what is needed. There only a few people who are technically qualified to work on controlled fusion, and they are all gainfully employed already.

I specified what I think are promising funded nuclear fusion projects with qualified people working on them. There is a larger level of academic and government research from many countries.

General fusion update (government research on magnetized target approaches)

IEC fusion (Japan and other US researchers also working on this)

tri alpha energy

Dense plasma focus

Lots of government money on laser ignition, on the path to laser ignition. Gov funding of laser ignition is for weapon testing and design.

In re. IEC fusion: the explanatory video contains an electromagnet configuration with magnetic lines of force it is supposed to produce. There are computer programs that compute lines of force for a magnet in exquisite detail and accuracy, and then generate beautiful displays. These lines of force are free hand. This is not even quality marketing of their project.

Whatever work is going on will continue whether I respect it or not, so it does the world no harm to say I don't respect this.

How pretty the pictures are in the presentation are the deciding factor in whether something gets your support as a potential energy solution ? It does no harm for me to say that I do not respect that position.

The 18 million spent over the last 15 years on this particular version of IEC has gone into the technical work. It has been operating on a relative shoestring.


The WB7 project work has confirmed and improved upon the WB6 work.

WB-6 showed 1/10 of loss coefficient of WB-4, and ran as a deep well Polywell at 10-12
keV, producing DD fusions at 2.5E9 fus/sec [2.5 billion fusions per second]. This is 200,000 times higher than the early work of Hirsch/Farnsworth and a world’s record for such IEF devices at same conditions.

Bussards video presentation at google was made during an unfunded lull.


Brookings report on trends in Vehicle Miles traveled. Also an embedded interview, in which the gas tax revenue impact is discussed. Good question asked: are the projects being added to the stimulus package the projects we actually need as travel patterns shift?

No, for the same reason why armies and navies always continue to procure the weaponry they need to fight the last war.

Denninger is underwhelmed by Obama's SEC chairman pick.

Well, let's just keep it simple - she's a top brokerage regulator - a former CFTC head and FINRA CEO. How did Madoff manage to get under her radar, specifically, as CEO of FINRA?

Nor does it stop there. It appears that Shapiro appointed one of Madoff's sons to a position that oversaw disciplinary actions made by FINRA!

So there you have it. The hand-jobs under the table in politics have certainly not changed with the election of a new President.

Tragically the "new" credit card rules Denninger references will NOT take effect for about a year. No help for folks who are struggling now. BAU,BAU. John

I am underwhelmed by Denninger in general.


I direct that query not just to you, 710, but to anyone else who agrees that Denninger is underwhelming. I must say that I enjoy his rants, because he seems to be both knowledgable about finance and morally principled - which is a relatively rare combination. But, as someone who personally is NOT knowledgeable about finance, I am certainly open to learning about the man's liabilities.

He recently leveled an ad-hominem against The Oil Drum, the whole site, because one of our knowledgeable posters here disseminated oil price predictions from Simmons and Hirsch on the boards at Market-Ticker.

Aside from that, it's not just that he doesn't seem to comprehend peak oil, he seems actively hostile to the idea. Being that finance is only a part of the complex energy-matter equation, and that we are imminently leaving the plateau of oil production, this does not bode well for people relying on his advice.

Also, the other poster was banned, and the thread I started about the issue was "bilged". I'm guessing he also doesn't like my username. :)

A lot of birds will be happy when humans go back to Olduvai Gorge.


No, the gorge will be bad for birds.

1) the feeding done now will stop.
2) Birds will be killed and eaten in large numbers as humans work to stay alive.

I do sometimes wonder what% of northern winter birds are subsidized by all the home bird feeders. I know we go through several hundred pounds of sunflower seeds each winter for cardinals, chickadees, nuthatches, woodpeckers, grosbeaks, sparrows, squirrels (not a bird), juncos, mourning doves, etc. There was shortage of seeds this past fall due to frito-lay buying most of smaller seed crop for oil - though they are cheap now. A removal of industrial concentration of bird food might have pretty big consequences.

Not to mention pet food. Over 70 million dogs and 75 million cats in US. You let all those cats outside to forage and bird populations would plummet. One cat can kill an amazing amount of birds -and thats when they aren't hungry. (I wonder how many cats and dogs there were circa world war II, when times were tougher..?)

There was shortage of seeds this past fall due to frito-lay buying most of smaller seed crop for oil

Was unaware of that. I've gotten in a stock of really small seed - teff and am going to try growing some of that. (bout 1/3 the size of poppy seeds)

Best thing to feed wild birds are black oil sunflower seeds. Even the small passerines can crack & eat them. Smaller seeds like teff & hemp & sorghum aren't as nutritious and are often wasted. I obtained a quantity of camolina seed for free & brought it home for the bird feeder. The birds didn't seem to like it & it took awhile for them to empty the feeder. A gallon of sunflower seeds, by contrast, are gone in a day.

One has to wonder about the next step as well. When do all those feral dogs and cats become food?

Not to mention the possibility of severe outbreaks of rabies, once these critters are eating in the wild and no longer getting vaccinations. I would think that feral dogs and cats would very quickly become targets for elimination in a major health campaign after the first outbreaks of rabies...

E. Swanson

That's right - get rid of all the cats. That will assure a nice build up of the rodent population to host the next wave of bubonic plague that comes along.

I doubt it would be that simple. Cats (and dogs) living with people would not likely be a target. But, if things get really bad and the vets and pet meds disappear, the fleas will live on all the furry critters. Domesticated as well as feral dogs and cats would be home to lots of fleas. I've just gone thru a summer with a severe flea outbreak. I tried all sorts of treatments for fleas on my dog. He died, perhaps as a result. My neighbor shaved his two long haired golden retrievers, then used 2 flea collars and bombed his house. My tenant's dog had a serious problem with flea dermatitis. The local rumor is that Frontline and Advantage don't work anymore. I killed a rabbit and the poor critter was loaded with fleas. The past few winters haven't been cold enough to kill the fleas outside (maybe from AGW?).

Now, fast forward to a world without flea control...

E. Swanson

I hate that poison stuff. Makes my eyes burn. But this year I had good luck keeping fleas down by giving my cat a good combing with a flea comb every day. It's takes about a half hour a day, and I almost dispared in October (very long, warm, dry fall) but we're over the hump now.

Fleas on dogs or cats might possibly serve as carriers of Yersinia pestis, but it is rodents serve as reservoir hosts.

I understand there is a resurgance of bed bugs. Nasty things. There have been a few exposes in the newspapers about bed bugs-- they are so bad that some landlords are walking away from rental properties because of the cost of erradication.

Sleep tight...

Not to mention Hanta Virus...

We live in the high desert above Reno and there are lots of quail around here. Last week I counted 70 or so quail and doves plus a bunch of little birds for the afternoon feeding.

Now here's my plan ...

You let all those cats outside to forage and bird populations would plummet. One cat can kill an amazing amount of birds -and thats when they aren't hungry.

When I lived in the UK 1995-1998, there were periodic and raging wars of rhetoric between the national cat societie(s) and the national bird societie(s) over this issue. Each pumping out (opposing)white papers showing the effect of the cat population on the bird population.

In the story-telling business, they call this foreshadowing. :-)


This is just evolution at work. When the bird and rodent populations are decimated by cats, the cats will die off. Some random few will survive from each population because of some trait or strategy they possessed that just happened to be useful in the world lacking human stewardship. Those few will create populations that will slowly revive and then be exploited by some other parasite. Just like every other species. Ours too. Nature is crueler than any eugenics program.


ng in storage dropped by 124 bcf for the w/e 12-12-08, we haven't even seen the effect of the latest alberta clipper.


Now that the price of oil has hit $38/barrel, do we the people at TOD owe an apology to Yergin?
He was mercilessly ridiculed here when oil was climbing. Oil at $38/barrel is nothing short
of awesome. Teaches humility, if nothing else.

Only if it stays at a low price. More importantly look at the production curve for C+C; it's going to plummit! So the big question is when/if a recovery occurs, will a new peak in oil be reached above the current 2005-2008 plateau or will Crude oil never again attain such high production figures?

CERA/yergin = Peak oil 2040-never

TOD = Peak oil some time soon.

Winner takes nothing home.


Specifically what would I be apolgizing for suyog?

Is Yergin owed an apology? No.

Yergin's prediction was in the context of rising demand and a supposedly bouyant economy.

Yergin owes the world an apology for his unrepentant cornucopianism. The ignorance that he nourished does nothing but exacerbate the depth and breadth of the unfolding world-wide misery.

Of course, he and most of his ilk won't feel the pain. Shoe-shines and servants are likely already declining in cost.

Humility is a two-way street, and payback is a bitch. So when it goes to $380, we should expect a written apology from Yergin?

Only if Yergin ridicules and attacks TOD when oil is cheap.

Thats a difficult one because he knows all eyes are on him. He doesn't want to divert peoples attention to us! By even acknowleging us in this way, without directly debunking peak oil, he would actually draw more attention to peak oil. Rather the masters and puppets he serves wan't to hear oil will last for ever and if not the alternative will allow smooth transition.

after the economy of the world started to collapse at $147, i doubt we will ever see $380. who could pay that??

Well, for one thing, the world economy did not collapse because of $147 oil, it collapsed because of $350,000 "starter homes" and the financial flim-flam it took to sell them.

Who would pay it? Oh, I don't know, maybe people who realize that $380 oil is far cheaper than taking a huge hit abandoning a monstrous, impractical home in an exurb. Maybe people who would rather heat their home to 45 degrees (F) than let it freeze.

Who would pay it? People who make $350 in less than 15 minutes.

Why? Did he predict a global economic meltdown would lead to lower oil prices? You must be thinking of Stoneleigh.

I believe he discussed how irrationaly high oil prices caused economic distress which caused oil to crumble for years, and how it could happen again, yes.

Yergin's prediction, in 11/04, when he predicted a long term oil price of $38, was that increasing production would outpace increasing demand, leading to lower oil prices.

Since 2005, we have seen lower net oil exports, flat crude oil production and a slight bump upward in total liquids--which Simmons attributes to the dying gasps of many large oil fields as their gas caps are blown down.

We are back to One Yergin ($38 per barrel), but it is because of falling demand. Yergin predicted, in 11/04, that oil prices would be back to a long term price of $38 by 11/05. If we use US oil prices as an index for comparison purposes (of course, different grades of crude sell at different prices in different places), Yergin predicted that the world would pay on the order of $3 trillion for oil in 2006, 2007 and 2008, inclusive. The world actually paid on the order of $6.5 trillion as declining net oil exports and flat crude oil production forced prices up to balance supply and demand, and then of course the bottom dropped out of the economy.

From Forbes, circa November, 2004:

Digital Rules
Capitalism's Amazing Resilience
Rich Karlgaard, 11.01.04, 12:00 AM ET


. . . Yergin is pretty clear about his predictions. He says oil demand will rise, yet prices will drop. How can this be?

Answer: capitalism's amazing resiliency. Oil prices rise--oilmen become innovative. They work, they invest, they put their heads to the task, they apply technology, and pretty soon they'll discover how to extract oil profitably from oil sand. Or open wells in deeper water. Or scour the planet for new sources using scanners thousands of miles in space. As Yergin reminds us, oil output is 60% higher today than it was in the 1970s. Not many sages from the 1970s would have bet their reputations on this development. The opposite sentiment prevailed back then; experts said the planet was running out of oil. Wrong.

Yergin says he's always asked when oil will run out for good. He shrugs. He's willing to say the world will need 40% more oil in 2025. Hard work and technology probably will find a way to meet the demand.

And if this is what "falling" looks like, then I guess the World Trade Center fell over on September 11.

Yergin is out with fresh predictions today, on CNBC. At around noon Eastern time, Yergin said that global spare capacity was set to grow strongly over the next few years, and he said that we were likely to have 7 Mb/day in spare capacity by 2011-2012.


gregor -- Didn't catch that press release. Did he specify the net increase in capacity would be the result of new production coming on line or due to demand destruction?

Thanks for the update

Our best case is that the top five net oil exporters will be down to net exports of about 18 mbpd by 2012, versus about 24 mbpd in 2005 (and versus 22 mbpd in 2007, with probably a slight year over year increase in 2008, to a level well below their 2005 rate).

Gosh, Westexas. Context, facts, analysis - you've taken this discussion beyond the reach of Yergin's apologists.

IMO, what remains pernicious about Yergin's pronouncements is that he is--in effect--encouraging the auto centric, high consumption suburban way of life, basically Party On Dude!

As I have said, I am not surprised by price volatility, but I am surprised at how far oil prices have fallen, but the ELP advice, especially the Economize & Localize part, works as well at $140 oil as at $40 oil, in the context of a sharply contracting economy.

Unfortunately, consumers are getting precisely the wrong price signal about future food and energy prices, while the feds are basically doing everything they can to maintain the high consumption auto centric suburban way of life.

As I have said, I am not surprised by price volatility, but I am surprised at how far oil prices have fallen

Really not fair to call it "volatility" at this point. If the price had fluctuated wildly between $100 and $175 with higher highs and higher lows, you could clearly call that "volatility" and even say that it's what was expected by some.

But it's really become a cop out at this point. You've obviously admitted that it was way outside of your expectations, but it's surprising how many people here now claim that this is all part of the track they always knew we were on when it's really nothing of the sort.

In order to write it all off to "volatility" prices have to go back up to the highs (or close). Unless/until that happens it was volatility until (guessing) about the 60s on the way up and then it was (insert less confrontational word for "bubble" here) on the way up and then down below that point. IOW, a single sharp rise and even sharper fall isn't "volatility", it's a collapse.

but the ELP advice, especially the Economize & Localize part, works as well at $140 oil as at $40 oil, in the context of a sharply contracting economy.

Perhaps not taken to the extremes I sometimes see here, but much of it is simple age-old wisdom in any context.

Really not fair to call it "volatility" at this point.

Actually, we're seeing extraordinary volatility.

From FT.com:

The [recent] buying of call options ... is also an attempt to manage extreme volatility – the measure of how rapidly and strongly investors believe prices can move – which this week hit a 22-year record high of 114.41 per cent. Volatility traditionally stays below 40 per cent.

“The last time we saw volatility as high as today was during the Iraqi invasion of Kuwait in 1990,” says Raymond Carbone, of Paramount Options in New York.


From under $30 in early 2004 to nearly $150 in mid-2008;
from nearly $150 in mid-2008 to under $40 near the end of 2008:

You're saying that this does not meet the definition of volatility????

In the strictest sense, of course it does.

The problem is that the usage doesn't match.

If, for instance, oil had never collapsed... but just kept running up to $200/bbl. That, too, could be called "volatility" because the price wasn't stable. It would also, however, be quite misleading since what you really had was a rapidly appreciating asset.

When people said they expected volatility in oil prices, they meant that they could climb or fall $10 in a single day and it wouldn't surprise anyone... that this was a long-term bull market that might suffer some corrections. You could even see a 30% pullback without worrying that you had shifted from a "bull" to a "bear" market... because it wasn't such a shift, it was just "volatility".

This is note merely "volatility", it was clearly a collapse.

The same thing could be said for the stock market. This hasn't been volatility in an ongoing bull climb. It was clearly a shift into a bear market.

Put more simply, "volatility" does not imply market direction. Those who predicted volatility when oil was rising into triple-digits were clearly saying one thing and not the other. Going back later (after market direction replaced volatility) and trying to retroactively apply a broader usage is the "cop out" I was discussion.

I should make clear that I was saying the poster clearly had NOT taken such a course (clearly admitting this isn't what he expected), but that many had.

From under $30 in early 2004 to nearly $150 in mid-2008;
from nearly $150 in mid-2008 to under $40 near the end of 2008:

You're saying that this does not meet the definition of volatility????

I think he predicted higher price the last time.

No wonder they went down...

He did. Several posters wondered if that meant oil was going to crash. And sure enough...

RE: Methane hydrates article.

Given that methane is such a potent GHG, and the danger of a runaway "Venus effect" feedback loop, it would be a very good idea to try and find a way to capture as much as we can of what would otherwise be released into the atmosphere. Better to burn it so that merely CO2 is released rather than CH4. I can't even begin to imagine the technical challenges that would have to be overcome to do this, but I do know that - given the stakes at hand - that this probably needs to be one of humankind's top priority R&D projects.

I am not at all sure that it is a good idea to mess around with deposits that would otherwise remain intact if not disturbed.

The same could be said for the methane gas bubbling up out of landfills.

An oil spill makes a ecological mess, but a massively sudden methane hydrate release w/ subsequent subsea landslide makes an instant disaster:

Scotch Cap Lighthouse, Unimak Island, Alaska, 1946 & Hilo tsunami:


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

For newbies, google Blackhawk Landslide in California: world's largest air-hockey puck ON LAND. An airborne, multi-square mile landslide moving over 200mph...

Why mess with hydrates? Get more feed lots under tents.

Cowboys and horses in contamination suits?

Methane only stays in the atmosphere for about 10 years, so the scope for damage is limited.

Methane only stays in the atmosphere for about 10 years, so the scope for damage is limited.

But if we had a large rapid release, it could be pretty nasty for a decade or two. And atmospheric methane oxidizes to CO2, which although a much less potent GHG, resides in the atmosphere for a very long time.

"...so the scope for damage is limited..."

..only for those safely inland. Those on the beach may want to be more careful:


The Storrega subsea slump sent seawater very far inland [with cool graphics]:

The Storegga Landslides: Catastrophic Underwater Natural Methane Explosions

The Storegga landslide complex is a world-class geographic feature and one of the largest areas of known slope failure anywhere in the world...

..The complex consists of three very large underwater landslides known to have taken place during the last 100,000 years. The landslides departed from the destabilized slope and “flowed” into the deep ocean crevasses below. The Second Storegga Slide was large enough to have caused a megatsunami around 7,100 years ago that triggered widespread coastal flooding in Scotland, Norway and other coastlines bordering the eastern North Atlantic and North Sea...

Cracks hundreds of kilometers long occur off the Carolina coast, running parallel to the edge of the continental shelf. If these cracks ever "let go" and all that overburden slides down the continental slope, the Atlantic coasts of Africa & North America will be devastated by the ensuing tsunamis.

Hello TODer's

A few drumbeats back a link was posted to South Australia's Report on Peak Oil. It's an 81 page PDF Report and very detailed.

They talk about curbing population growth and limiting/ stopping mining growth.

The amazing thing is, this report gotten no press!!

It's really strange to think that in many OECD countries you can't cross a street without the little green man letting you or people complain if the train is 5 minutes late, where on coffee cups warning labels are given to inform people that the coffee is hot and where at nearly every step of the way big brother is there to look over you, "protect you",where city planning ensures buildings can only be a certain height and you can't water your garden at certain times, where streets are cleaned and made pristine every day that the twin challenges of climate change and peak oil are so readily ignored.

:-) What a peculiar world. So much planning, management and execution must be going into such routine tasks and yet...NET energy??? Peak Oil??? Climate what??? doesn't it just boggle the mind?

This is key, isn't it? We miss the forest for the trees. We look for the lost keys under the lamppost (because we can SEE there). We tiptoe around the elephant in the living room, making more and more rules to help us feel safe, because we don't feel safe and we won't pin down why that is.

That pdf is too big for my slow internet though I'm getting satellite in January. South Australia (where I'm from) could have 25% of the world's easily mined uranium yet they are resolutely anti-nuclear. They are desperate for new water supplies and something to replace their natural gas baseload. By the end of 2008 a tiny outback town was supposed to be lit up by Kalina geothermal technology but the bugfixes are proving difficult. I hope that report has a chapter 'Peak Oil - the denial option'.

VK,thanks for that link.That report escaped me as well.
The reason why it got very little coverage is probably because of the anti-growth message,particularly on population.You should have realized by now that this is a taboo subject in Australia.
There are some organizations,such as Sustainable Population Australia,which are pushing the message.Many in the science community,such as Ian Lowe and Tim Flannery,are on board.Mark O'Connor and William Lines have recently published "Overloading Australia".If you want a copy Email -
Leanan has linked to an article in the SMH today by Mark.

Sad to say,it is like shouting in deep space.With clowns like Chris Evans(current Immigration Minister) and Peter-Baby Bonus-Costello (and have a third for the country)in the driver's seat what can you expect?

It's just absurd...really really absurd. But than again, so is our monetary system, the situation with banks at the moment. Australia has experienced drought for a number of years but the planning and management of the crisis was so efficient and well done that you couldn't really notice it in the cities.

Thanks for the e-mail link. BTW K Rudd was elected for his platform on climate change as much as anything else, the token 5% cuts just seem so silly. It makes a mockery of those who supported him.

VK,yes, absurdity is a polite word for it.I don't know how much of Australia you have seen during your time here.It is easy to be optimistic about Australia if one stays in the cities or just travels in the green East coast fringe.I was born and brought up in rural inland Queensland and I have traveled or worked in every state and territory.
Australia is a very hard country - ancient and impoverished soils in the main,a climate of wild extremes.And the white man has done it no favours.The degradation and devastation I have seen breaks my heart because it was such a beautiful country.In some places it still is.

There are many who are conscious of all this and more however they have not yet reached a critical mass in order to influence outcomes.With the exception of Bob Brown,Christine Milne and their Green colleagues there are few,if any,in politics who are aware.The greater part of the population,including industry leaders,are in a doze.


Well I live in Melbourne, have travelled around Victoria quite a bit, Perth, Goldcoast, Sydney and Cairns. So have seen the cities mainly and the green fringe as you describe. I missed out on the interior, maybe another time. The cities are pretty fantastic though I am biased towards Melbourne. Everything is catered for, everything works, everything is mostly on time, it's clean and shiny - Like living in Disneyland! No wonder depression rates are soaring! A bloke needs to struggle a bit too build character.

People are in no way prepared for whats coming. It's scary...

That's why I enjoy living in a third world country at times, you have to struggle a bit, doesn't matter how rich you are. Lived through economic slumps, a near civil war, water shortages and electricity outages. Don't know what the future holds thus can only speculate but the adjustments too peak and the economic slump are going to be quite a shock.

Reading The Age sometimes can be a bit fascinating and perplexing, just the other day there was an article about how much money men are now spending on waxing themselves and on laser surgery. And how beauty products have become a god given human right...??

Makes me scratch my head. What I find is that life is a bubble here, a breeze. The coming hits of peak oil, climate change and economic slump are going to break that bubble. We are quite literally killing ourselves with this growth mantra.

2008 temperature summaries and spin
Filed under: Instrumental Record Climate Science — gavin @ 1:56 PM
The great thing about complex data is that one can basically come up with any number of headlines describing it - all of which can be literally true - but that give very different impressions. Thus we are sure that you will soon read that 2008 was warmer than any year in the 20th Century (with the exception of 1998), that is was the coolest year this century (starting from 2001), and that 7 or 8 of the 9 warmest years have occurred since 2000. There will undoubtedly also be a number of claims made that aren't true; 2008 is not the coolest year this decade (that was 2000), global warming hasn't 'stopped', CO2 continues to be a greenhouse gas, and such variability is indeed predicted by climate models. Today's post is therefore dedicated to cutting through the hype and looking at the bigger picture.

Continue Reading Here

a question for the climatologist types.

given that '08 was a record or near record for melting of polar ice, doesn't that result in a cooling of the oceans(at least on an annual basis) ?

Can't make ice cream without adding rocksalt to the ice to make it melt faster.

Don't know what the heck that means wrt ocean temps but it just popped into my head when I read your comment.

given that '08 was a record or near record for melting of polar ice, doesn't that result in a cooling of the oceans(at least on an annual basis) ?

If there was a fixed (i.e. cannot change) total heat content for the ocean/ice system, absolutely. But the total heat needed to melt the ice is small compared to other fluxes (when averaged over the global ocean), such as solar energy absorbed by the oceans, heat lost from the oceans due to evaporation etc. It is possible that in the arctic increased absorption of solar radiation due to lower reflectance of open water versus ice might be sufficient to supply the needed heat of fusion of the ice. In general the oceans are warming, absorbing heat, as they are a large slowly responding thermal reservoir whose temperature increase lags the air temperature by a couple of decades.

No. By simple logic we can see that ice, if melting, is warming. The warming is partly due to warmed water. Warmed by sunlight. So the net of warmed water and melted ice, which would, as noted below, lower the water temperature in a static amount of water with ice added to it, is warming.

You have to note the ice is not added to the water, but is formed from it and returns to it, so no additional cold is brought in from an outside location.

A simple way to look at the effect is this:

water --> ice --> water takes energy to accomplish. Less ice = less energy used = less heat dissipated from the water = warmer ocean = less ice = .....

Oh, and while it was the second lowest ice extent, it was THE lowest ice mass. That is, it was the lowest total amount of ice since records began. This is an important point that gets not nearly enough attention. It means the ice next year is that much more likely to melt away because there is less of it, i.e., it's mostly thinner overall.

Extent is important in terms of albedo effect; mass is important in terms of ice build up over the winter and likelihood of melt the next summer.


I do not think that 2000 is part of this decade. If year 1 was 1, then 10 was the last year in the first decade. And by brilliant higher math, year 2000 was the last year of the 200th decade.

Zero is a number.
We start at Zero. Between zero and one is time. Do you think you were born at age one?

Re: Huge Siberian Field

A million tons of oil per year, depending on the grade, is about 25k barrels/day.

He reminded that the oil price was expected to be at the level of $50-80 per barrel at the time when the company started industrial development of the field. Rustamov explained that the company will start using its anti-crisis program if the oil price drops below $50 per barrel.

To be more accurate, you've got to put a tap on the side of that bucket - opened up full, and draining it out fast.

On Heinberg’s “Surviving a reduction in social complexity.” link

The brief article makes an implicit link between societal complexity, and it’s opposite, simplicity, with the use of fossil fuels or what I would prefer to simply term ‘growth’.

Quibbling about where the ‘growth’ comes from is not the subject to be addressed here - it might be the invention of the plow, or other actions leading to more productive agriculture, or the growing use of better notations and organization of ‘stored value’, or a new social schemes which permits taxation, pooling of resources, and ambitious projects; or a willed change in childbirth-cum-marriage patterns; or the acceptance of slavery; a visionary leader who acts with a strong fist.

Or any one of dozens things. (I take it for granted that exploiting the environment for energy is the no. 1 candidate.)

Rather, the difficulty is that complexity and its presumed opposite, simplicity, are never defined, and the dimensions that might be looked at in detail - such as communications, rigidity or flexibility of custom, laws and their enforcement, the means of production and ‘best practices’, the room for innovation, the power relations in a society, the decision making processes, calculation of who takes what from where, etc. aren’t even mentioned as possible defining characteristics of complexity. Or only vaguely, with words like “linked”, “interconnected”, etc.

It is all up in the air. Scientists should appreciate the desperate dearth of definition(s).

The assumed correlational relation appears to be:

Complexity is an outcome of surplus (resources, energy) and leads to ... what exactly? Riches, comfort, sophistication? Beyond the stereotype of the potentate, the poet, the priest, the scientist, (etc.) who lives off the labor of others and has leisure to develop new technology, science, law, etc. which does encapsulate history in a way, the relation seems empty.

The caricature is a shambling dirty human living off the land as best as can-can (the simple life, the savage, say, without hot water or flat screens or Barbies) as opposed to the human in an interconnected world who has all those. Btw, that only applies to the ‘west’ - the Congolese don’t have cars or Barbies and don’t order books from Amazon. And they are not living life as in 2000 BC ...

Complexity is riches, hubris; simplicity is poverty, being frugal, living with less .. How has this ridiculous meme become topical?

Tainter (mentioned in the article) starts out counting artifacts. A simple society has fewer artifacts. Are artifacts the only element of complexity? Of course not. They're just an easily measured element.

And no, he does not argue that complexity is riches. He points out that people often live a lot better after a collapse. (If you measure in terms of health, longevity, access to food, etc. This can be read in the bones left behind.)

The problem is that a lot fewer people can be so supported. (Population drop of 80-90%.)

The people who LIVE might live better. The many infants who died before age one and who were burried under a rock, away from camp and beyond the archaeological dig perimeter, didn't have it so good at all.

The odds against organic evolution on Earth, against complex evolution, against mammals, against humans, and against any individual even being conceived aren't so good at all, either.

The odds against organic evolution on Earth, against complex evolution, against mammals, against humans, and against any individual even being conceived aren't so good at all, either.

The probability of anything may be infinitesimal until it happens, at which time the probability attains unity. But I'm not so sure that the probability of the evolution of complex organic redox systems characterized by auto-catalysis & self-replication is all that low, given a planet with a reducing atmosphere & surface ocean and where water can exist in all three phases. Under these circumstances the evolution of "life" may be highly probable. How many such planets exist in the Milky Way is anybody's guess. I agree that the evolution of multicellularity, of metazoan organization, of mammals, of humans, of any given individual... is fortuitous, contingent & improbable to the utter extreme. But there may be plenty of wet space rocks infested with autotrophic microbial biofilms.

The probability of one's two parents meeting, factored with the the probability of the exact throw of the dice you received, gamete-wise, is outrageously infinitesimal. And yet, it's happened over 6 billion times!

That a particular outcome happens has a low probability. That SOMETHING happens is a certainty ;-)

Heinberg is making a flatter version of the argument I often make about complexity. Riches alone don't make complexity - a hunter gatherer is very wealthy in resources, for example. Complexity comes from organization around the energy, transformity, filling of niches - essentially the construction of an eco-system. It so happens that humans have built their eco-system on fossil energy and are displacing the living ecosystem - radically simplifying the latter while making the former more complex. Odum addresses the issues of complexity - for my mind - much more clearly than Tainter. Tainter looks more at the diminishing returns.

Complexity does not require surplus. Consider that in nature, nothing is wasted. There is no surplus. That is a human POV.

the dimensions that might be looked at in detail - such as communications, rigidity or flexibility of custom, laws and their enforcement, the means of production and ‘best practices’, the room for innovation, the power relations in a society, the decision making processes, calculation of who takes what from where, etc. aren’t even mentioned as possible defining characteristics of complexity.

All of those are not so much measures of complexity as they are expressions of complexity. They represent ordering as in emergy, entropy and transformity. The Crystalline Lattice of Star Trek or our money system. It seems to me the sense in which complexity will fail is the ability of a lower energy society to support "higher level" functions - like an internet paid for by advertising and pornography. The life of a hunter-gatherer is very complicated and difficult - but not so complex in the sense of energy hierarchy. In the case of a hunter-gathererer, there is the eco-system and the hunter-gatherer. In the more complex society, there is the eco-system, the hunter-gatherer, the police, the laws, the DEP, DDT and Wal-Mart. Just for starters. Does that make sense?

cfm in Gray, ME

I read Heinberg's essay and I, too, thought of Odum. The missing link in Heinberg's argument is Odum's idea of organisms and ecosystems organizing themselves to maximize energy flow through the system. We (humans) are part of the larger ecosystem(s) in which we live and natural selection has pushed us to use complexity to increase energy throughput. This is why complexity in biological systems evolves, not just in humans but in other organisms and ecosystems. It is adaptive (too adaptive for us, thats the problem).

But Tainter's point is that complexity is a double edged sword. It is useful because it allows us to increase energy flow but history teaches us that 1) increased complexity requires an increased energy surplus and 2) when societies reach limits on the flow of energy, no one has figured out how to intentionally reduce complexity. Rather, the solution to problems up to this point has been to increase complexity so why not try that again. But returning to Odum, what we are really up against is natural selection. Quite the prisoner's dilemma.

no one has figured out how to intentionally reduce complexity.

Incorrect. We know how. What we don't know is how to get people to agree to do it. (Of course, if you count getting people to do it as part of the how, then the statement is correct.)


Liked it so much I put it on my blog.


Tainter points out that some societies have intentionally reduced complexity, with good results. He points to the Byzantine Empire as an example.

However, it does require sacrifice. Among other things, they gave up literacy and literature. You can see how this would be a difficult choice for a society to make.

It doesn't make sense to me. It is the same error that Heinberg and Tainter make in their valuations of both complexity and collapse. To make a judgment or evaluation of a different social arrangement from the perspective of your own is to presume all sort of things that you simply have no factual basis for.

Westerners have done this in their political thinking ever since Hobbes declared he knew what the "state of nature" was. Fact was, he never even traveled outside of NW Europe and all his knowledge of "savages" was second hand from sailors and soldiers who did not understand (ok, truth is, they didn't even have a clue about) the peoples they had killed, conquered or enslaved.

A "hunter-gatherer" society is far more complex than simply a posited relation between the individual and the ecosystem. Indeed, in some ways the "so-called" primitive has a far richer life world because his/her relationships with the eco-system, with each other, with the ancestors, with the gods, with the plant spirits, etc., are alive and constantly being re-created. (Check out Jack Goody's work, especially "The Logic of Writing and the Organization of Society.) Much of our life world has been reified by the very sorts of things you note as implying complexity (especially laws), making our interactions "once removed" from the relationship.

Even the use of the term "hunter-gatherer" belies the problem in this line of argument. It emphasizes the material aspects of our lives. But people in societies labeled "hunter-gathering" typically spend only about 20% of their time on providing for their material well-being. And the other 80% isn't spent just laying around.

In the U.S., what 5% of the population works in agriculture and produces the food. This is very different arrangement than 100 years ago. First it has to be grown and then packaged, transported, sold, etc. I would call this new arrangement more complex.

There are also 6.5 billion of us on the planet. For an initial stab, I would define collapse as follows: if in 2109, there are only 2/3 of us (4.2 billion), half of us are farmers, and our net energy has dropped to 2/3 of todays per capita value, then we have globally collapsed.

Yes, you would call this more complex. Precisely my point - YOU call it more complex because you are measuring what is important to you. But what if I don't care about packaging, transport, etc.? What if I call more complex an intimate knowledge of where food comes from? The "modern" gets food from the grocery store, but the "primitive" likely has a wider number of foods in his/her diet and knows where they all come from (and not just theoretically, but the actual place it comes from). I might call that more complex.

Same goes for your collapse. By your standards, you define and describe a population and energy consumption collapse. But there are other things to measure other than population and energy consumption. And there are even things you can't measure that might be important, too.

What if I call more complex an intimate knowledge of where food comes from?

I grow almost all of my own food. That is nowhere near the complexity of the industrial food chain in the sense Heinberg and Tainter use. It is "simpler". And no, I am not suggesting "easier"; it's actually a lot more work because it has to be done in a lower energy regime.

I'll see if I can find in Tainter or Odum a definition of their use of "complexity" when I get home. That seems to be the point of confusion. Just because something is intricate, demanding and difficult does not make it "complex".


"Complexity is generally understood to refer to such things as the size of a society, the number and distinctiveness of its parts, the variety of specialized social roles that it incorporates, the number of distinct social personalities present, and the variety of mechanisms for organizing these into a coherent, functioning whole. Augumenting any of these dimensions increases the complexity of a society. Hunter-gatherer societies (by way of illustrating one contrast in complexity) contain no more than a few dozen distinct social personalities, while modern European censuses may contain overall more than 1,000,000 different kinds of social personalities." (Tainter, p23ff) [He then goes on to write about heterogeneity, inequality and hierarchy.]

cfm in Gray, ME

That is nowhere near the complexity of the industrial food chain in the sense Heinberg and Tainter use.

Precisely my point. They have predetermined what system is going to be defined as most "complex" by assuming that they live in it. They envision "progress" on a straight line with themselves at the top (they aren't alone in this, all economic based theories of "development" do the same).

I don't have any desire to get into the "complexity" of the industrial food chain, or any other modern "system" as doing so privileges the presumption that the separation of a set of tasks into discrete steps each performed by a different person or organization is somehow more "complex."

The passage you site from Tainter doesn't really help. Clearly complexity is not size. So we are left with number of distinct parts, specialized roles, social personalities (whatever that might mean) and the variety of mechanisms. But the assumption made is that each distinct part, each role, each personality resides in a separate place (being or organization). So the argument essentially comes down to complexity is the division of labor into distinct specialized roles, each one performed uniquely. This is, of course, utter nonsense because we change roles all the time, in modern societies as well as in "hunter-gatherer" societies. Indeed, the notion that there are only a few dozen distinct social personalities in "hunter-gatherer" societies only demonstrates a distinct lack of understanding of how such societies function - one person could, themself, play a couple dozen social roles.

Now, when you get into hierarchy, then I think you are really talking about the place where modern societies are weakest (prone to collapse), but this is not due to complexity but due to lack of flexibility.

Standard dictionary type definitions of the word complex do indeed include ideas like "intricate," "demanding" and "difficult." But you are right that they are not the central piece of the definition. What is the central piece is the number of interconnected parts or the involved arrangement of those parts. It is a mistake to confuse volume with the interconnectedness. So once again I come back to my earlier thought. I society in which one person might be many of those parts can be argued to be more complex than a society where many people play one part.

So, even though I said I wouldn't, I'll return to your growing your own food. And I would argue that if you are growing organically, building your on compost, saving your own seed and intentionally building your soil, than, yes, you are involved in a more complex food system than the industrial system (even if it has more layers than your home garden).

As I understand what you write, that is, the energy flow from the sun thru an ecosystem back to deep space, the energy flows such that all energy sources are recycled to the highest possible entropy. But, to claim that nothing is wasted in a natural ecosystem is to ignore the basic fact that some of that energy is stored and that's why humans have been able to tap into oil and coal. Also, the methane clathrates are (in part) the result of anaerobic processes and the methane so produced is trapped in a way which prevents it's use by the existing ecosystem, both on land and under the oceans. Anaerobic bacteria in lakes and bogs also produces methane which enters the atmosphere and is thus not available for further biological processes although natural chemical reactions in the atmosphere do eventually destroy the CH4.

To be sure, almost all the available energy is used by various life forms on land, but not all. Of course, as a writer pointed out years ago, maybe man's ultimate "purpose" is to rectify this situation and return all that stored energy in the form of fossil carbon to the surface and atmosphere, then dieoff to initialize another round of evolution...

E. Swanson

But, to claim that nothing is wasted in a natural ecosystem is to ignore the basic fact that some of that energy is stored...

I've seen the sentiment expressed on TOD before, that reduced carbon deposits somehow represent "excess" or "wasted" carbon. The mindset behind this sentiment is foreign to me. There are different nested timeframes to the biogeochemical cycling of carbon - from a CO2 molecule that gets incorporated into glucose during the Calvin-Benson cycle then immediately "liberated" via glycolysis & oxidative phosphorylation, to deposits laid down in the Carboniferous that won't be oxidized until subducted sometime in the distant future. I've even seen it expressed that the biomass of an ecosystem represents "wasted" potential energy - rather then being the diverse & complex habitat it truly is. I guess that I shouldn't expect to understand the anthropocentric technocopian mindset or to expect people to think in terms of "deep time." But sometimes it seems like the engineer or "economic ecologist" types who post on here don't even understand basic thermodynamics or biology. Given the quote above, I guess that storing food is the same as wasting it, then.

In a sense, one could use the economics concept of 'velocity of money' and apply it to the eco-sphere in terms of 'velocity of biomass/energy'. The tropics, for example, have a high velocity of biomass/energy whereas the cooler regions have a slower velocity. The velocity would be a variable (more or less) independent of the amount of biomass/energy available in any given system. Just looking at the amount misses this important factor.

The idea of waste in nature is a spin off of intelligent design. To have waste you must, I think, identify the true purpose to which the flow should have been applied, and then see that it was not applied to that true purpose. Such thinking doesn't seem like good science to me.

To attempt an analogy to a economic concept is different but hardly better. There is no money in nature.

A major tenet of Darwinian natural selection is that natural activities has consequences, but not purpose, as in 'the purpose is the glorification of God' or 'the purpose is the consumption of all the energy'.

Why does the methane have to be used? Trapping it - from Gaia's POV - is exactly the right place for it. Storing or withholding something is a legitimate "use". Plutonium, excessive CO2, etc....

And yes, mankind probably is initiating just such a destructive pulse, whether "purpose" or not.

The Collapse of Complex Societies, Tainter, 1990.

Collapse: How Societies Choose to Fail or Succeed, Jared Diamond, 2005.

Sync: How Order Emerges, Stephen Strogatz, 2004.

Chaos: Making A New Science, James Gleick, 1988, re-released 2008.

The Tipping Point, Malcolm Gladwell, 2002.

I'm still looking for a good, accessible read on "complexity" specifically, but Gleick's "Chaos" is still the best introduction to dynamical systems, the butterfly effect, bifurcations, the players involved and their insights, and why the linear, piecemeal science of the past few centuries was inadequate.

It's also a good introduction into how extremely simple systems may exhibit complex behavior.

As for my own explanation of "complexity", here's the best technical approach I can muster.

When we say a system is complex, it will have the following properties.
1. There are multiple individual elements which interact within the system.

2. The rules and responses of interaction will be based not only on the states of the elements, as in xt = f(xt-1), but also on the rate of change of the states, as in xt = d/dx f(xt-1).

3. The system will exhibit behavior as a whole, which is not discernible or predictable from analyzing individual elements alone. For instance, it is not immediately predictable from analyzing elemental carbon, hydrogen, nitrogen, and oxygen that they may combine to form organic amino acids. This may be known either as "emergent behavior" or "unintended consequences".

4. Slightly altering individual elements within a complex system may yield wildly varying results. This is known as "the butterfly effect" or "sensitive dependence upon initial conditions". Most people understand this phenomenon as "luck".

5. Complex systems may self-modify, that is the system may receive as input something from its output. This is also called "feedback".

6. Complex systems may receive matter, energy, or information flow from the outside while remaining internally consistent. Also called "self-organized".

7. This is rather significant: the measured output of complex systems does not always follow a Normal or Gaussian distribution.

8. Complex systems may explode or fail abruptly without a significant period of decline or breakdown.

9. Complex systems may exhibit auto-affinity across scales and/or time periods, meaning that the patterns will resemble each other and repeat, but never quite exactly. Also known as "self-similarity".

Check out John Holland's "Hidden Order." I wouldn't call it "accessible," but I think it is the most revealing look at complexity available.

I'll look into this, Jeff. Much appreciated.

I found "The Collapse of Chaos: Discovering Simplicity in a Complex World" by Jack; Stewart, Ian Cohen a fascinating read, though perhaps not very accessible.

Thanks, Bob. I'll check this out as well.

Beat me to it. I highly recommend the Stewart & Cohen book, and it is quite accessible, even entertaining.

Nice list, 710.

The most simple and powerful explanation of complexity is this: "the whole is greater than the sum of its parts". If people really understood this our society would organise itself very differently - but like most cliches, because people have heard it before they think they understand it.

I would add to that, "The whole has holes in it ... that the parts of the whole don't see until after they fell through."

If people understood that, they would be afraid, very afraid.

Picture to the right shows a part of the holey whole who was skiing along just fine and thinking to himself all the while:

"It's always worked before. And after all, THEY say history repeats itself. Ergo I will continue to stay on top forever because I've stayed on top so far. Those who warn of pitfalls are just Chicken Little doomer gloomers."

I doubt if he was skiing, given that he is wearing a backback. Quite possibly wearing snowshoes, though.

Close inspection of the footprint behind his left shoulder shows you are correct.

Thanks, NZ, long time no see. I like that explanation, but you're right about it being clichéd, it needs tweaking or some kind of modifying narrative.

From the Reuters article above: "Falling global demand for oil and gas will lead to a natural decline in Russian production, Russia's Deputy Energy Minister Anatoly Yanovsky told a news conference."

I can't seem to follow the logic of this piece. Either Reuters was wrong in reporting or the Minister sounds peculiar.
I would think natural decline occurs regardless of the rate of production bar no production. A fall in demand can only slow natural decline; it doesn't lead to it!


I don't think you're reading that correctly.

A fall in demand does "naturally" lead to a decline in production. The confusion is over the multiple uses of "natural".

One of the big 3 announced they were going to stop making cars for a month next week. If people stop buying cars, it's "natural" that they would make fewer. That doesn't mean that they can't make more, just that it would be stupid to.

(oversimplified)If you have a well that you can operate at $50/bbl, you're going to turn it off somewhere below that line. That's "natural".

I stand corrected.
Although, I must say that the author could be more clear simply by saying that a fall in demand will lead to a fall in production.
Voluntary or involuntary production decline is more interesting IHMO.


Cinch -- there may be another explanation. The most relevant case I can offer is the NG production in the US. Granted it's probably the extreme example of the feed back system but it's easy to describe. The NG production rate in the US has been bolstered the last few years by the unconventional NG plays (shale gas, titer sandstone reservoirs, etc). When NG prices rose these plays became viable. Increased drilling led to improved technology which improved the economics which led to even more drilling. But there is a down side to these plays: the wells decline very rapidly….sometimes as much as 70 to 80% in a couple of years or so. Anticipated strong NG prices led operators to increase drilling activity greatly. But now, with the economic down turn and the presumed decline in NG demand, these UNG plays are quickly being cut back. I consult for one of the major UNG players in the country and we’ve just cut our 2009 budget from $1.4 billion to less then $700 million. We’ll be releasing about 40% of our drilling rigs in the next couple of months. The decreased drilling efforts combined with the rapid decline rates will produce a significant drop in maximum NG production rates in the US as a direct result of decreased demand.

With a general cut back in UNG drilling across the board we should see a decline in production capability that will shock many. This won’t be evident this winter but by the next 2 winter seasons it should become very noticeable. We may actually see a significant increase in NG prices in the face of continued demand destruction. And that will bring only more pain to those already suffering. Thus a decline in demand will lead to a decreased production capability that is not the result of operators reducing production from existing wells. In fact, during times like this, operators have typically done everything possible to increase cash flow from their wells. Perhaps the statement refers to a decrease in Russian productivity due to a decrease in capital expenditures combined with “natural” decline rates. Major Deep Water projects, because of their long time lines, won’t show such a sudden reversal. But if prices stay low for a couple of years these mega projects and others will also began to show increased delays as well as some abandonment.

As some difficult reservoirs are too expensive to produce, drilling slows or stops, existing wells continue to pump, new wells cannot be drilled to offset natural declines. In Russia oil export tariffs are so high there may be no money left for new drilling, workovers, etc.

If you stop drilling, oil production goes into a decline mode. Current oil inventories are high. The industry has always been cyclical. Some peak oil panic investors ignored the cyclical nature of oil production.

Ministers linked to theft of relief aid
IMO, these chiefs are just building their personal 'Federal Reserve Banks of I-NPK & Seeds': they don't even bother with worthless Zim currency anymore; they are moving to real assets.

***Please see photo of children and their parents pick up single corn kernels spilled on the road side by trucks ferrying imported maize corn. It appears that they can't even afford a small whisk broom and dustpan to improve their EROEI!

Cannot be much fun to get up each morning, then multi-mile carry water & firewood balanced on your head, then spend the rest of day hand-picking seed by the side of the road.

Will the First World do any better? Or are we Thermo/Gene destined to replicate Zim everywhere?

Madoff just Ponzi-stole money--the real wealth to be postPeak accrued by a future mastermind will be in I-NPK, seeds, and foodstuffs.

Have you hugged your bag of NPK today?

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

Bob I always liked your idea of hoarding NPK however I have noticed that most of the commercial fertilizer I buy has somewhat limited shelf life especially if it gets opened. It tends toward being quite hygroscopic and breaks down to a wet dust over a fairly short period (2-3 years) Maybe that is less of an issue in the desert but in the sunflower state we have enough humidity to enable this breakdown. Do you have any storage tricks to extend the shelf life?

EIA Annual Energy Outlooks shows progress on emissions and oil demand. More needed in the years ahead. See details at:

Onwards to sustainability,

My apologies to Yergin.

To atone for being one of those who has ridiculed him, I award him the "stopped clock is right twice a day" award.

Excellent! :)

World Coal Reserves Could Be a Fraction of Previous Estimates

Old news here, but maybe Dave Rutledge is presenting it to a new audience, American Geological Union annual meeting. Comments below the article are interesting, getting usual flame reactions either from the peak-whatever deniers, or AGW deniers - indicator of what's really out there in the cultural mindset.

A new calculation of the world's coal reserves is much lower than previous estimates. If validated, the new info could have a massive impact on the fate of the planet's climate.

That's because coal is responsible for most of the CO2 emissions that drive climate change. If there were actually less coal available for burning, climate modelers would have to rethink their estimates of the level of emissions that humans will produce.

The new model, created by Dave Rutledge, chair of Caltech's engineering and applied sciences division, suggests that humans will only pull up a total — including all past mining — of 662 billion tons of coal out of the Earth. The best previous estimate, from the World Energy Council, says that the world has almost 850 billion tons of coal still left to be mined.

"Every estimate of the ultimate coal resource has been larger," said ecologist Ken Caldeira of Stanford University, who was not involved with the new study. "But if there's much less coal than we think, that's good news for climate."

The carbon dioxide emitted when humans burn coal to create usable energy is primarily responsible for global warming. Leading scientists think that the stability of Earth's climate will be dictated by how the world uses — or doesn't use — its coal resources. And the thinking has been that the world has more than enough coal to wreak catastrophic damage to the climate system, absent major societal or governmental changes.

So the new estimate, which opens the slim possibility that humankind could do nothing to mitigate carbon dioxide emissions and still escape some of the impacts of climate change, comes as quite a shock.

Rutledge argues that governments are terrible at estimating their own fossil fuel reserves.

i've been reading alot about opec honoring their cuts recently. with oil prices at $36 / barrel (good grief!), i'm pretty sure they will honor that cut with everything they've got.

i like to speak from personal experience, no i am not an oil producer. but i sell ipods to the EU and take advantage of the EU/USD rate. when the exchange rate was at $1.50, i was selling 10x a day at USD$50 profit per unit. but since the USD has rallied, my profit margins has collapsed, so i just dont sell any. why would i eat that loss selling to the EU when i can just keep the inventory and wait til the Euro rallies again?

probably an apples to oranges comparison but not a direct correlation, but i think opec would rather shut off their valves then operate on break-even or even eat a loss.

the spec dummies shorting oil right now are really really really gonna get hammered.

Not a bad analogy billy but can you still pay your bills and feed yourself while hanging on to your inventory? Some of the OPEC political leaders are hanging on to control by their finger nails. They've kept the locals docile by supplying them with their wants and needs. Start cutting back and trouble could grow quickly. OTOH, what do you do if you're Mexico: oil revenue generates 40% of the gov't budget. But you're also quickly running out of oil. Do you sell all you can now and then end up with nothing in a few years? Or do you decrease production while (big maybe) keeping your income the same or maybe a little better due to higher oil prices? This will stretch out the inevitable a little longer as a bonus. Essentially we have a world class game of chicken at hand for many of the OPEC countries.

Irrelevant, really,and probably just more denialist propaganda.We have already well and truly overshot the carbon dioxide level which would have resulted in minimal damage.

In my state (Queensland, Australia) there is more than enough readily accessible coal that,when burnt(not if)will be ample to put the atmosphere in catastrophe mode.

Coal, not Oil, is Climate-Change Culprit

SAN FRANCISCO — Maybe your old truck isn't responsible for destroying the planet after all.

New climate change scenarios quantify the idea that oil is only a small component of the total global warming problem — the real problem is coal.

If the world replaced all of its oil usage with carbon-neutral energy sources, ecologist Kenneth Caldeira of Stanford University calculated that it would only buy us about 10 years before coal emissions warmed the planet to what many scientists consider dangerous levels.

"There's an order of magnitude more coal than oil. So, whether there is a little more oil or a little less oil will change the details in, say, when we reach two degrees warming, but it doesn't change the overall picture," Caldeira said Wednesday at the American Geophysical Union annual meeting.

Many of the efforts to "green" our world's infrastructure have focused on the importance of changing the world's transportation systems. Indeed, one of the images of environmental destruction is the car-choked freeways of Los Angeles — and hybrid vehicles like the Toyota Prius have become a badge of environmental pride.

But as the latest projections show, when it comes to global warming, oil is a bit player on a stage dominated by the massive amounts of coal burning, particularly in the United States and China.

"If we want to change the overall shape of the global warming curve and instead of having it go up, stabilize and eventually go down, we need to deal with coal," Caldeira said.

The real global warming culprit — as James Hansen and his colleagues at NASA's Goddard Institute for Space Studies have long argued — is burning coal to generate electricity.

Good point Dick. I wish I had retained the referrence but many years ago I read a report stating that more GH gases were generated by third world farmers buring their fields then by all the autos on the globe. That may just be another urban legend or a fact. Hopefully we'll have some knowledgable types tell us here shortly.

...many years ago I read a report stating that more GH gases were generated by third world farmers buring their fields then by all the autos on the globe. That may just be another urban legend or a fact.

Burning stubble or stover of an annual crop represents a C turnover time of <1 yr. Even if scrublands or forest is being cleared the turnover is only on the order of 10^1 - 10^2 yrs. Oxidizing fossil C in autos represents a turnover timescale of 10^8 yrs. The significance is in the differing timescales relative to human concerns & interests. Is it the annual oscillations on the Mauna Loa atmospheric CO2 accumulation graph that interests us? Or is it the net upturn since the beginning of the industrial revolution that's pertinent?

Yes of course. There is satellite sensing that can even see the CO2 uptake over the large agricultural regions as it happens.
Some natural and agricultural carbon stores, however, are bigger than others. Soil carbon is significant. See also a recent paper in Nature referring to forests.

Luyssaert et al. Vol 455,11 September 2008, "Old-growth forests as global carbon sinks"
Half of the primary forests (63108 hectares) are located in the boreal and temperate regions of the Northern Hemisphere.On the basis of our analysis, these forests alone sequester about 1.360.5 gigatonnes of carbon per year. Thus, our findings suggest that 15 per cent of the global forest area, which is currently not considered when offsetting increasing atmospheric carbon dioxide concentrations, provides at least 10 per cent of the global net ecosystem productivity8. Old-growth forests accumulate carbon for centuries and contain large quantities of it. We expect, however, that much of this carbon, even soil carbon9,will move back to the atmosphere if these forests are disturbed.

It is estimated that when the Icelandic forests were disturbed (cut down and turned into sheep pasture), they released 6 billion tonnes of carbon, at least half from the soil.

Best Hopes,


Earthquake near Santiago, Chile. Magnitude 6.1


The so-called BRIC group of nations has made great strides over the last decade. Still, contrary to what their political leaders and some economists are saying, the purchasing power of consumers in these countries remains too limited to counter the current global economic decline.

Jim O’Neill, the London-based Goldman Sachs Group Inc. chief economist who coined the BRIC acronym, recently said: “The BRIC consumer is going to rescue the world.” The remark reminded me of other experts who predicted that emerging market economies would “decouple” from the troubled economies of developed nations and maintain their fast growth.

While the U.S, the E.U. and Japan are responsible for 66 percent of the global gross domestic product, Brazil, Russia, India and China account for only 12 percent, according to 2007 data by the United Nations.

In other words, if the three most advanced economies contracted by, say, 2 percent next year and all other non-BRIC countries had zero growth, then the four BRIC nations would have to grow an unrealistic 11 percent in 2009 to avert a global recession.

Global Growth

The idea of BRIC consumers saving the world seems even more far-fetched given that households in BRIC countries represent only 10 percent of world consumption, while those in the U.S., Europe and Japan account for 68 percent.

VK - I do not have any particular insight. However, I am pretty good at practical anaylysis. When somebody says that China used more cement last year than the rest of the world combined, then I assume (flying in the face of the "bean counters") that they have more of the world's GDP than what is reported. Did you see the Olympics that tracked the marathon runs and the bicyle races? It is not a tiny pocket of wealth. I believe that the top 200 million citizens in China (in terms of income - purchasing power in China) are better off than the top 200 million US citizens. Remember, for those citizens, it is cash for their cars, cash for their houses, cash for their living - they do not have a credit card economy. I leave it to the reader to go through the essential list of commodities that an industrial country needs - oil, coal, gas, lumber, computers, cell phones, cement, steel, copper, zinc, nickel, gold, silver, etc. and show where China ranked in 2007 compared to every other country. After that, tell me that China is that much lower in GDP (not per capita) than the US. I read an article that said that China's exports are only 10% of their economy. But, I do not know much, certainly not what the experts know, so ignore this post. But, you might want to ask Jim Rogers.

I believe China's exports are around 40% of GDP.

One has to remember that China has built its stability and prosperity on growth. No growth = No Stability. Already we are hearing of protests and riots throughout China. If the economy was doing so well, than how do we explain the 60% decline in stock prices, the slowdown in reported growth numbers, some have even suggested that the last quarter will see China enter into a recession. There would be no need for the Government to spend nearly 600 billion dollars on fiscal stimuli if the economy was well. Already we have seen them devalue their currency slightly. This is just the beginning of beggar thy neighbour policies.

2/3rds of China's toy factories have shut down in one year. Export growth is negative YoY. Chinese banks are as opaque as the wests, we do not know how much of a hit they have taken. Real estate prices are falling as well.

From the South China Morning Post

More than a million Chinese college graduates unable to find work could make coping with unemployment harder now than it was during the Asian crisis, the head of China’s largest vocational training organisation said

…“The employment situation may be worse than the 1990s … This time, college graduates are not finding work, and there are so many of them,” Mr Chen told Reuters. In the late 1990s, China’s government weathered mass unemployment as the Asian financial crisis and bankruptcies of state-owned enterprises slowed the economy to a crawl.

Many college graduates now lacked the skills needed to compete for jobs in a fast-changing economy and were unwilling to take less respected jobs, Mr Chen said. More than six million students will try to enter China’s workforce next year, half a million more than last year. Up to a quarter could have difficulty finding jobs, the Chinese Academy of Social Sciences said on Monday.

Millions of workers are returning to rural areas from urban areas as well. This is creating a lot of pressure on the provincial administration. How to feed these people? Where will they work?

Also there is the question of China's demographic crisis - An aging population and a BAD male/female ratio. Angry, unemployed, young horny men...Not good.

"U.S. crude prices dropped more than 9 percent to $36 a barrel Thursday" that's the Jan contract which has already expired on my platform. Feb is holding above $40 currently.

I've covered all my shorts now. This move down has become too extreme IMO.

"I've covered all my shorts now."

In the stock market sense or in the underpants sense? First one then the other?

From the 'If you liked Clinton, you'll love O'Bama' department:

Obama Picks Pro-Ethanol, Agribusiness Ex-Iowa Gov. Tom Vilsack to Head Agricultural Dept.

President-elect Barack Obama has officially nominated former Iowa Governor Tom Vilsack to head the Agriculture Department. The pro-ethanol Vilsack will manage a staff of more than 105,000 and a budget of more than $95 billion. We discuss Vilsack’s nomination with Ronnie Cummins of the Organic Consumers Association and Brian Moore of the National Audubon Society.

Shunning Environmental Groups, Obama Taps Colorado Sen. Ken Salazar for Interior Dept.

We continue our look at Obama’s latest cabinet nominations. Colorado Sen. Ken Salazar has been tapped to head the Department of Interior. Obama chose Salazar despite a campaign by many environmental groups who were pushing the President-elect to choose Arizona Congressman Raul Grijalva


In his first paragraph of his remarks, the President-elect got right to his key point; "the future of our economy and national security is inextricably linked to one challenge: energy." He then said "All of us know the problems rooted in our addiction to foreign oil - it constrains our economy, shifts wealth to hostile regimes, and leaves us dependent on unstable regions. These urgent dangers are eclipsed only by the long-term threat of climate change, which - unless we act - will lead to drought and famine abroad, devastating weather patterns and terrible storms on our shores, and the disappearance of our coastline at home."

Don't listen to what he sez. Watch what he does. Then, get your shoes ready ...

First off, I voted for Obama, but probably had my eyes a bit more open than many. Many voted for O because they thought he would be transformational. I doubted that then and now the evidence is coming in supporting my view. Having said that, I still want to give him a chance.

I believe that the loss of the wars in Iraq and Afghanistan will be signature legacies of the Obama administration. He and Gates are getting their Afghanistan surge together just as the budget is fixin' to pop.

who are we fighting there, and why? i forgot.

last i heard it was WMD, then it was democracy, but i haven't heard about democracy for a while.

there's a consensus among people i know that it was all about bush turning a quick buck for his buddies.

once obama's in office, i wonder what the new reason will be.

Stoking intertribal hatred is still on the agenda:


He's going to be the president for awhile so it is in all our interests that he succeed. It just doesn't seem that he has the administrative horsepower to move anything off top dead center.

Administrative horsepower ='s less Clinton retreads. Hillary Clinton is a reason to throw the television away.

the long-term threat of climate change, which - unless we act - will lead to drought and famine abroad

Idiotic. Absolutely idiotic.


O'Bama is never going to experience a famine. He's never had to overcome any adversity in his life, only look pretty and not scare the horses.

America has Paris Hilton for the president.

Hello TODers,

An interesting book [144 pages], published online by the World Bank, discusses Strategic Reserves of I-NPK [excerpt below]:

Fertilizer Use in African Agriculture
By Michael Morris

[Page 92] Some of the problems encountered with strategic grain reserves could be overcome by setting up strategic fertilizer reserves along the following lines...
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Transcript: Bret Baier Interviews President Bush

PRESIDENT GEORGE BUSH: There was a-- a meeting in the Roosevelt Room, which is right outside the Oval Office. And Chairman Bernanke and Secretary Paulson were there briefing me on the state of the economy. This is after we had made, you know, some serious decisions like on AIG and-- Freddie and Fannie. And they said the market's just so frozen that if we don't do something-- the-- the upcoming depression could be greater than the Great Depression. In other words, there is a chance that if we don't move, the economy could really go in the tank. And-- I vowed then and there that I wasn't gonna let that happen under my watch.

I vowed then and there that I wasn't gonna let that happen under my watch

(Thought balloon over Bush's head: "January 21st, on the other hand? Heck, let 'er rip!")

A recent study ranks cellulosic ethanol as the least efficient renewable energy resource:


Wind power battery electric cars were ranked first.

At least the Sociopaths, I'm sorry, CEO's are being creative:

I heard that they're paying bonuses in $50 denominated gold eagles- worth $1000 each. It's the biggest tax evasion scam in history.

This is actually legal. A dual money system exists in the US. The courts have said that these old US coins are still legal tender at face value.

So that's where all the gold coins went.