DrumBeat: December 21, 2008

Shadowed by $200 oil

It’s not too early to talk about the prospect of $200 oil.

That may sound crazy, because crude is trading more than $100 a barrel below its highs from the summer, when it peaked at $147.

I recently spoke to a group of local energy economists, though, and they weren’t worried about how low prices would go, but how high.

The market, too, is more focused on how much prices will rise in the coming year.

Gas prices continue to slip

NEW YORK (CNNMoney.com) -- Gasoline prices dropped for their second day in a row after four straight days of increases, according to a daily survey of gas station credit card swipes.

Downturn Will Test Obama’s Vision for an Energy-Efficient Auto Industry

His writings and speeches on the auto industry suggest a keen interest in finding ways, including new technology, to improve the fuel efficiency of the cars and trucks that Americans drive.

But with Detroit in a fragile financial state, it is unclear how many compromises he will have to make in pursuing his agenda for the auto industry, as he juggles other priorities like providing a stimulus program for the broader economy. The United Automobile Workers union, which backed Mr. Obama, will want a say in the changes he envisions for the automakers.

Canada Agrees to Its Own Auto Bailout

OTTAWA — Moving to pre-empt a possible shift of auto production to the United States, the governments of Canada and its Ontario province offered the industry 4 billion Canadian dollars in emergency loans on Saturday.

OPEC's President Vows to Cut Output until Prices Stabilize

The Organization of Petroleum Exporting Countries' president vowed Friday to cut production to boost sagging prices, setting it on a possible collision course with consumer countries relieved at crude's slump from record highs.

Chakib Khelil indicated the group's desire to protect prices by continuing to cut output until they even out, two days after OPEC agreed to cut output by 2.2 million barrels a day.

"We will continue this reduction until the price will stabilize," Khelil told reporters on the sidelines of a meeting of 27 oil producing and consuming nations in London.

Gulf bourses plunge on weak oil

Most Gulf Arab stock markets fell on Sunday as plunging world oil prices worsened already negative sentiment.

Dubai's bourse fell the most, tumbling 5.58 percent, with Emaar Properties losing 9.93 percent. "Oil prices have dropped severely and that has exacerbated negative sentiment across the GCC," said Rami Sidani, head of Mena Investments at Schroders Investment Management.

E.P.A. Ruling Could Speed Up Approval of Coal Plants

WASHINGTON — Officials weighing federal applications by utilities to build new coal-fired power plants cannot consider their greenhouse gas output, the head of the Environmental Protection Agency ruled late Thursday. Some environmentalists fear the decision will clear the way for the approval of several such plants in the last days of the Bush administration.

'Forgotten' lake shows South's tough drought

STARR, S.C. - A decaying highway, plunged deep underwater after Lake Hartwell was dammed in the 1950s, sits exposed once again across what remains of the bay outside Big Water Marina.

It's a depressing reminder of the toll from a stubborn Southern drought that only recently began to abate with replenishing rains this fall. Much of the region has recovered, but a ring stretching from northeast Georgia to the western Carolinas remains stuck in "extreme" drought.

Expansion of Biking in Parks Is Proposed

DENVER — Mountain bikers, now barred from most backcountry areas in national parks, could have thousands of miles of trails opened up to them under a rule change proposed Thursday by the Interior Department.

The proposal raised tensions between hikers and bikers, who face off against one another on dirt byways all over the country. Each group is burdened with a stereotype that is part true and part myth: thrill-seeking gear heads on one side, plodding leaf peepers on the other, each group accusing the other of not fully appreciating the great out-of-doors.

If I'm not a consumer, who am I?

Both the Reuters and Wall Street Journal stories conclude that buying and consuming have become part of the national culture and offer people an identity-the identity of a consumer, which many will now be forced to abandon. Additionally, shopping has become a way for countless individuals to cope with their emotions. Not only do the things we buy allow us to feel good momentarily, but the disease of consumerism has become so pathological that in many instances, people have come to believe that they are what they buy, and the more expensive and coveted brand or product makes a statement about who one is. This is enormously significant because there's obviously more than "survival panic" going on here.

Is the U.S. Rig Count about to Enter Freefall Territory?

Barely a month ago, Wall Street analysts became concerned about a drop in the U.S. rig count due to weakening commodity prices, and in particular natural gas prices, and the impact of the credit crisis on producer access to capital. The talk initially was about whether the rig count would fall by 100-200 rigs or experience a more severe correction of 300-400 rigs.

As soon as investors began to focus on the impact of the larger drop, market conditions worsened with crude oil falling to the $50 a barrel level in response to weakening global oil demand. Falling oil prices and a further tightening of credit markets caused analysts to begin to think that the rig count drop might be even greater than they had been thinking.

Recently, the view began to target the potential for a 600-rig drop during the seasonally weak early months of 2009. Last week the prospect of a 700-800 rig drop emerged as a possibility and as that view began to gain some traction, the oilfield service stocks began to dive. The Philadelphia Oil Service Index (OSX) fell Thursday by 11.06 points to 104.14, a decline of 9.6%. Intraday the OSX dropped 13.47 points to 101.73, a fall of 11.7%. It dropped further early in Friday’s trading (to the 98 level) as crude oil plunged into the $41 a barrel range.

Asia refiners bracing for possible supply cuts from Mideast

SINGAPORE: Middle East crude oil producers may be pushed next week to cut term-contracted shipments to customers in Asia, even though demand for high-sulphur or “sour” grades is perking up.

After the Organisation of Petroleum Exporting Countries signed off on its biggest supply cutback this week, the five Middle East Opec members bound by output quotas will be under pressure to toe the line on policy.

The Good, the Bad, and the Inaccurate Oil Forecasts

Here's the good oil forecast: back in the fall of 2005, I predicted oil prices going back down to $35.

Here's the bad forecast: I said it would happen by the end of 2006.

Right price target, wrong time span. So what went wrong?

Capitalism, ‘decreasing’ and ecosocialism

Climate change is much more than one ecological problem among others: it is the chemically pure expression of the fact that the irrepressible capitalist logic of accumulation is leading humanity to destroy the environment in which civilizations have developed for six thousand years.

Pakistan: KESC admits it lacks funds for furnace oil

KARACHI: Karachi Electric Supply Company (KESC) is going through a major financial crisis, as no funds are available to purchase furnace oil for the power plant, said KESC Chief Executive Officer Naveed Ismail.

Kenya: New twist in biting fuel shortage

The fuel shortage crisis is set to deepen after the Government contracted a company in financial distress to import the crucial commodity for this month.

Triton Petroleum Company, which on Friday was put in receivership over a Sh1.6 billion debt, imported 56,000 tonnes of crude and refined oil against the country’s monthly demand of 80,000 tonnes. This partly fuelled the shortage.

However, it’s now unable to meet its contractual obligation owing to the financial crisis it is facing. The latest development has sent shockwaves in the struggling energy sector already constrained by supply predicament.

Chevron Picks Site for Proposed Australia LNG Project

Chevron Corp has chosen a production site in Australia for its proposed Wheatstone liquefied natural gas project, the company said on Friday.

After narrowing its search to three locations, the oil and gas major said it preferred to build the project, potentially one of the largest of its kind in Australia, at Ashburton North.

Sawdust shortage seen

MEADVILLE -- Animal exhibitors would be wise to pack their own bedding material for the Crawford County Fair in 2009.

The mounds of sawdust that fair officials have provided at no cost have been shrinking in recently, thanks to higher demand for a material once considered waste.

Barclays sees drop in oil, gas spending in 2009

NEW YORK (Reuters) - Global spending on oil and gas exploration and production will shrink 12 percent to $400 billion in 2009 as the steep slide in energy prices and tight credit markets reverse a six-year trend of rising budgets, analysts at Barclays Capital said on Friday.

Spending in the United States is expected to show the sharpest drop, falling 26 percent to $79 billion from the 2008 mark of $106 billion, Barclays analysts James Crandell and James West said in their semiannual report based on a survey of oil and gas companies.

The List: The World’s Largest Untapped Oil Fields

In a world running low on oil, several countries are still sitting on massive supplies. If only they could get to them.

LNG carriers idling on project delays in Qatar; rates decline

Singapore: The world’s biggest liquefied natural gas tankers are idling because delays at projects in Qatar, including that of Exxon Mobil Corp, have pushed down freight rates.

Kuwait earns $4.6 bln in Nov, lowest in 8 months

KUWAIT (Reuters) - OPEC-member Kuwait posted an income of 1.254 billion dinars ($4.56 billion) in November, the country's lowest monthly earnings in its 2008/09 fiscal year, on lower-than-expected oil prices, official data showed on Sunday. Revenue in the world's seventh-largest oil exporter was 1.95 billion dinars in October and 1.69 billion dinars in September, the government data showed.

In calculating the budget, Kuwait has assumed its crude, the country's main revenue earner, would fetch $50 a barrel over the year to March 31.

But Kuwaiti crude plunged to $35.62 on Friday, after peaking at $135 in July, according to state news agency KUNA, amid a gloomy global economic outlook.

Even OPEC is powerless to stop the plunge in crude oil prices

HOUSTON — To understand why OPEC’s largest single production cut ever failed to lift oil prices, look no further than today’s headlines.

OPEC and other oil-producing countries can’t cut production fast enough to stay ahead of plummeting demand as millions of people lose their jobs and stop driving, factories shut down and the world settles in for the worst economic slowdown in a generation.

In other words: Even if OPEC talks about cutting the supply of oil, those cuts are nothing compared to the way the slumping economy is pushing demand downward. So prices keep sliding.

Russia and Ukraine again face New Year gas showdown

MOSCOW (AFP) – Russia is heading towards another New Year's showdown with the embattled Ukrainian government over its failure to pay off gas debts amid apparent deadlock in negotiations, analysts say.

Talks between Russian gas monopoly Gazprom and Ukraine's Naftogaz have failed to reach any breakthrough and Gazprom has warned it has no obligation to pump the gas if the debts are not settled.

Iran planning bourse bailout

Tehran: Iran is considering a $300m financial bailout plan for companies listed on its weakened stock market, a newspaper reported, as share prices falter for businesses hurt by sagging oil and commodity prices. According to a report in the daily Kargozaaran, the chief of the Tehran Stock Exchange is pressing the government to put up cash to stop the collapse of the stock market, which has dropped to a five-year low since oil prices began plummeting this fall.

Don't destabilize Russia, Putin warns foes

MOSCOW (Reuters) - Prime Minister Vladimir Putin warned Russia's foes on Friday against trying to destabilize a country facing broadening economic crisis, Russian news agencies reported.

Putin did not specify who might pose a threat to Russia's stability. But in the past, he has often blamed Western security services of trying to destabilize the country using opposition groups and non-governmental organizations as their instruments.

So is this really the great new idea - saving the gas-guzzler?

Why should public money be used to protect an incipiently archaic business which, iconic or not, is run by India's Mr Tata? Who, though he may be concerned about manufacturing jobs in the Midlands, has just agreed to slosh some of his corporation's vast profits in the direction of Ferrari's Formula One team? Which, with our date with peak oil now fixed for 2020, would appear to be almost as unedifying a use of cash as would be our own, to guarantee the continued production of Land Rovers and Jaguars. We know better, after the rescue of our still unreformed banks, than to expect the government to demand improved standards of competence and responsibility in exchange for civic support.

Gwynne Dyer: International Energy Agency says peak oil is coming sooner

As the cities grew, even more horses were needed and the problem grew steadily worse. One writer in the Times in 1894 estimated that in 50 years, the streets of London would be buried under three metres of manure.

In fact, within 35 years the streets of London were almost completely free of horses, and filled with automobiles instead. They created a different kind of pollution, but at least you didn't step in it.

The same fate is likely to overtake oil-fuelled vehicles in the next 35 years.

Utah energy exploration lease sale deal reached

WASHINGTON (Reuters) - The Interior Department has reached an agreement with environmental groups over the controversial sale of energy exploration leases for 100,000 acres of land in Utah scheduled for Friday.

The lease sale will proceed as planned, but the Interior Department's Bureau of Land Management will not finalize any sales of leases on 80 parcels of environmentally sensitive land for 30 days, giving a judge time to issue a ruling on the lease sales. The 80 parcels of land include areas adjacent to national parks.

Amazon pollution case could cost Chevron billions

LAGO AGRIO, Ecuador – When the sun beats particularly hot on this land in the middle of the jungle, the roads sweat petroleum.

A Rhode Island-sized expanse of what was once pristine Amazon rainforest is crisscrossed with oil wells and pipeline grids built by Texaco Inc. a generation ago. And for the past 15 years, a class-action lawsuit has been winding its way through the courts on behalf of the more than 125,000 people who drink, bathe, fish and wash their clothes in tainted headwaters of the Amazon River.

Biofuel Development Shifting From Soil To Sea, Specifically To Marine Algae

ut of the ‘70s oil crisis came U.S. government funding for research evaluating the prospects of new fuel sources derived from terrestrial plants such as corn and soybeans, as well as algae. But when oil prices plummeted in the late 1980s and ‘90s, interest in such biofuel programs waned and support dried up. Now 21st century gas prices—which bolted upward to $4.50 a gallon in California earlier this year—have sparked a renaissance in the search for new biologically based energy solutions.

Promoters overstated the environmental benefit of wind farms

The wind farm industry has been forced to admit that the environmental benefit of wind power in reducing carbon emissions is only half as big as it had previously claimed.

Give your garden a global-warming makeover

Home gardeners can do a lot to address global climate change. Options include everything from choosing self-reliant plants that need less water and fertilizer to reducing energy use by trading in mowers and blowers for rakes and hand clippers.

Purdue Study Suggests Warmer Temperatures Could Lead To A Boom In Corn Pests

Climate change could provide the warmer weather pests prefer, leading to an increase in populations that feed on corn and other crops, according to a new study.

Warmer growing season temperatures and milder winters could allow some of these insects to expand their territory and produce an extra generation of offspring each year, said Noah Diffenbaugh, the Purdue University associate professor of earth and atmospheric sciences who led the study.

Water vapor's effects on atmosphere are debated

WASHINGTON — Ron Ace's idea to cool the planet by evaporating water could provoke controversy because it collides head-on with a concern of environmental scientists: that water vapor is a potent greenhouse gas.

A recent Texas A&M University study, based on satellite data from the National Aeronautics and Space Administration , warned that if water vapor levels in the atmosphere continue to rise, it "could guarantee" an increase of several degrees Celsius in the Earth's temperatures over the next century.

Against the runway: It would soon be a white elephant

And so we come to air transport and Gordon Brown's imminent decision over Heathrow's third runway. Although only making up 2% of the global CO2 problem at present, this is a rapidly growing sector and one that will resist decarbonising. The technology of low-carbon air flight is still some distance away. Long-haul flights for meetings can be minimised, for example, through the use of the uncannily realistic broadband video conferencing now emerging. But there will be continued public demand. Short-haul flights, however, will become increasingly phased out as they face better competition from rail, including high-speed rail, and the penalties of CO2 pricing, as the EU cap and trade process morphs into a global process aimed at diminishing emissions.

Rising Seas, Severe Drought, Could Come in Decades, Says U.S. Report

The United States could suffer the effects of abrupt climate changes within decades--sooner than some previously thought--says a new government report. It contends that seas could rise rapidly if melting of polar ice continues to outrun recent projections, and that an ongoing drought in the U.S. west could be the start of permanent drying for the region. Commissioned by the U.S. Climate Change Science Program, the report was authored by experts from the U.S. Geological Survey, Columbia University's Lamont-Doherty Earth Observatory and other leading institutions. It was released at this week's meeting of the American Geophysical Union.

Many scientists are now raising the possibility that abrupt, catastrophic switches in natural systems may punctuate the steady rise in global temperatures now underway. However, the likelihood and timing of such "tipping points," where large systems move into radically new states, has been controversial. The new report synthesizes the latest published evidence on four specific threats for the 21st century. It uses studies not available to the Intergovernmental Panel on Climate Change (IPCC), whose widely cited 2007 report explored similar questions. "This is the most up to date, as it includes research that came out after IPCC assembled its data," said Edward Cook, a climatologist at Lamont-Doherty and a lead author of the new study.

With a big fiscal stimulus package in the works, I thought it would be interesting to propose some ideas of my own, mainly around energy efficiency:


In particular, the US could help US air quality, decrease diesel use, and boost the US manufacturing sector, all by embarking a crash program to replace/convert all diesel school buses and transit buses to CNG. There are 400,000 school buses alone, and converting all of them would knock out 50,000+ bpd of diesel use. Converting all buses might double that figure. The best part is that this can be started immediately, as all of the technology and manufacturing processes are already in place.

Reverting to the one room school would almost eliminate the yellow bus elephant walk, Taj Mahal youth wharehouses, thousands of Parkinsons Law Administrators and by decentralised control actually cure ignorance instead of lowering all to the lowest common denominator.

School dist could by up forclosed homes and renovate them for schools and Moms could walk their kids to school again.

9 block districts like the old 9 sq mile districts in the country used to be with school in the center.

We are so far from that ideal... Here in Boulder we have "open enrollment" which means you can apply to have your kids go to a school far from home within the school district. Some of the most creative, wonderful schools are "open enrollment only" and attract families from all over the county. Driving my kids to our Waldorf-inspired public school I was spending about $150/month last spring. Public transportation was inconvenient for that particular 6 mile route. Biking with a 3, 6 and 8 year old was beyond my level of devotion.

By middle school (and even sooner), things begin to segregate along child ability/income lines and I would imagine that makes the system more resistant to change, although a law mandating a maximum achievement level gap between schools could do the system in.

Then again, if society collapses, chances are everything will become a lot more local. Some of the unemployed among us may teach each other's kids in informal ways - anywhere we find. In a first step, private school enrollment is down in places like San Francisco, intensifying the competition for the most popular public schools.

Schooling (6-13 or so) has to, and will, become more localised.

First, because travel and busing etc. will beome more difficult, or impossible. Second, because parents will want/need very local schooling, will go for community organisation, even only for safety etc. considerations.

Third, it is likely that State Corporatism, as is current in the US and France, China as well, but that is another can of worms, will come to a stop.

The US has a clumsy scheme with schools funded largely by local taxes, ie. it is class run; social advancement no longer exists, hasn't for a long time, and it has *bad* teachers, I say bad, as individuals they are not to be blamed, the teachers are trapped too.

France shows a different pattern of extreme centralization and rigidity also with ‘poor’ teachers. These systems will simply collapse and are doing so as I write.

The US today job-wise has a few growth, if one can even talk about ‘growth’ sectors: Education, health, Gvmt (military, weapons research, etc.) Education is the most visible, demands and funding grow. At the same time, ppl check out and leave.

and it has *bad* teachers, I say bad, as individuals they are not to be blamed, the teachers are trapped too

You contradict yourself, so it's hard to understand what you actually think of teachers in the US, but you are repeating unfounded scapegoating. As a teacher, let me tell you that most teachers are competent. They are not going to change the world, but they are competent. I know, because I talked to them every day for four years and watched them teach so I could become a better teacher (while teaching myself). Yes, the Bell Curve applies, but it applies to many (most?) things we do.

There is nothing wrong with teachers that strong communities and stronger parents won't fix. In fact, students who are motivated to learn (whether intrinsically or extrinsically), will. Period. It is **NOT** a teacher's job to teach your child values, diligence, hard work or beliefs. It is YOUR job.

Can we train teachers better? Of course. Are they the problem? Rarely. During my entire schooling K-12, I had exactly one truly bad teacher. He was the head football coach teaching math, and couldn't have possibly cared less. The rest were "normals", and I had exactly four teachers I thought excellent. But most were competent. That is, they did not **prevent** learning like the above math teacher did.

I am not uncritical of our schools or our teachers. A lot of them mail it in, and I am **not** a fan, but as a percentage, the numbers are low. Hell, even those mailing it in are mailing in what they were doing as a young, motivated teacher, so their work is actually not horrid.

What should be the case for training is that every new teacher have a mentor that they work closely with for years, not just a semester, and that not just being observed once or twice. But what they really need is funding, parents that give a damn and make their kids do their homework, and neighborhoods that are supportive, stable places where kids are raised to be responsible, participatory and motivated (allowing for kids being kids, of course.)

I've never even heard of, let alone read, a paper that attempted to nail down why American schools don't deliver. If you've some proof other than the repeated, un-sourced BS that teachers are the problem, please link it.


There is nothing wrong with teachers that strong communities and stronger parents won't fix.

Get upset when someone insults teachers but have no problem insulting parents and everyone else eh? :-)

It is **NOT** a teacher's job to teach your child values, diligence, hard work or beliefs. It is YOUR job.

This is undeniably true. It is also true that the educational establishment does not believe that.

I know of many exceptional teachers in our schools who take their jobs very seriously and for whom it is a true calling. That is not, however, the norm. We can blame a culture that doesn't value education as it should (and thus doesn't pay good teachers what they are worth), or we can blame the teachers unions... or any number of other things... but the simple truth is that we do not send our best and brightest back into our schools.

Of course there are exceptions (may their tribe increase!), but those who elect to major in education are close to the very bottom of the college barrel (in terms of grades and test scores). Those who graduate with education degrees have some of the very lowest GRE scores (second only to "public administration" IIRC).

I've never even heard of, let alone read, a paper that attempted to nail down why American schools don't deliver.

Try Dumbing Us Down: The Hidden Curriculum of Compulsory Schooling and The Underground History of American Education by John Gatto. The second is viewable online at http://www.johntaylorgatto.com/chapters/index.htm

Get upset when someone insults teachers but have no problem insulting parents and everyone else eh? :-)

I think my take on teachers was pretty balanced. They are, by and large, competent. You have said no differently here.

It is also true that the educational establishment does not believe that.

Who is this establishment? I've met not one teacher that wanted the duty of raising your children. (My post was about teachers, no?) Teachers have to, which is not the same as want to.

exceptional teachers... is not, however, the norm.

As I stated...

but the simple truth is that we do not send our best and brightest back into our schools

We don't send anyone. It's a self-selecting group. And it matters not a whit. First, there simply aren't that many people who are the cream of the crop by definition, so expecting our schools to be filled with them is about as pie in the sky as we can get. And, you don't need the best as teachers. It has been my experience that, much like parenting, a single teacher of true excellence along the way can be enough to set a student on a particular course. Excellence is a moot point.

Those who graduate with education degrees have some of the very lowest GRE scores

Sure. And? Hey, we used to make fun of the Ed. majors, too. And I was a psych major! But the fact is, the avg. person is capable of very competent work, and can build themselves into excellence. Many teachers do this. Face it, teaching isn't rocket science. It has more to do with managing a class than the actual act of teaching. Even a truly avg. IQ can handle a decent lesson plan and consistency with behavior modification, and that's 90% of a good teacher.

Try Dumbing Us Down...

Guess you missed my reading comprehension class. I said paper.


Trust me: when the kids in the school are going home to good homes and good communities, your teachers will look like geniuses. Then you'll actually find out who your bad teachers are, because the there will be no excuse for the avg. student to be relatively good. (I always think of the beautiful letters of Civil War soldiers when I think of how far our typical American intellect has fallen... So many of them must have been barely educated, but, lordy, what prose!)


I think my take on teachers was pretty balanced.

If it's "balanced" to say "the problem is the parents and communities".

Who is this establishment? I've met not one teacher that wanted the duty of raising your children.

They largely belong to teachers' unions. Ever read some of their positions? Ever review some of the case history of the fight (barely 2-3 decades old) for the right to homeschool? There is most definitely a position that government (through the schools) should play a central role in raising your children.

We don't send anyone. It's a self-selecting group.

Sure. And when you double taxes on one fuel and subsidize another the people who switch are "self selected"... but that doesn't mean that we didn't push them there. Public policy plays a big role in who decides to go in to teaching.

First, there simply aren't that many people who are the cream of the crop by definition

Perhaps I didn't make my position clear enough. I'm not saying there are few "cream of the crop" teachers. I'm saying that a large percentage of them are of unacceptably poor quality but are protected by unions that defend incompetance.

Sure. And?

Just demonstrating that our "best and brightest" are going somewhere else.

the avg. person is capable of very competent work

Yet is given no economic reason to do so even if "capable". There is little compensation (or even job security) difference between excellence and sub-par. So the return is the satisfaction of a job well done. People who respond to that generally excel in other areas too (like college performance).

Guess you missed my reading comprehension class. I said paper.


I believe one of those books is made up of a number of individually published works, but I could be wrong. Regardless... can you disregard it simply by labeling it?

Trust me: when the kids in the school are going home to good homes and good communities, your teachers will look like geniuses.

I agree... but all that demonstrates is that our teachers don't make a whit of difference in the main. Hardly worth the $10k/child/year we throw at the establishment... and one a key reasons we homeschool.

So many of them must have been barely educated, but, lordy, what prose!)

Barely institutionally educated... but that just proves my point. I could produce a pair of vocabulary lists... one from 100+ years ago in a 4th grade reader and the other from a recent SAT. The 4th grade reader is clearly the harder list (and of course the SAT gives you multiple-guess for answers).

If it's "balanced" to say "the problem is the parents and communities".

That is not what I said. I said it is all three. Of course, there are other issues that you are attempting to expand my point into that are issues but that do not negate my point in any way. That is, you keep trying to discuss education while I made one point and one point only about what actually happens in the classroom. I think this is clear, so I don't understand why you persist.

That I choose not to bring up or discuss ALL the issues in American education does not tell *you* anything about my positions on them. I am well aware of the effects of unions, of the No Child Left Behind policy, funding and how it is done, the number of students per class, top down management, home schooling, tech in the classroom, etc., etc., etc., but I am not interested in discussing education. Feel free to take it up with those in this thread that are.

Your bias is clear: blame the teacher. It is a foolish stance. (Go ahead and construe that to mean we disagree on all the points you raise. I suppose it would surprise you to know you are largely preaching to the choir, but you have an agenda and are not listening.)

My point stands. I have laid out the logic, and it is based on long years of experience as a teacher, as a student, as a person actively involved in professional development and, finally, as a teacher trainer. Additionally, having taught in US public schools and in foreign public schools, I suspect my perspective is far broader than your perspective.

Teachers' skills are not *the* problem, nor one of the primary problems. Disagree? OK. Take it up with those that think there's some use in discussing it, but know you are barking up a tree and doing nothing more than repeating boring, old, pointless and useless canards.

As for the books: not available where I am.


This kills me - it's one of my worst nightmares. I like your scenario and that is exactly one of the options I would like to see at least considered for my community.

Our locale voted in favor (just barely) last month to build a brand-spanking new, giant white elementary-ed elephant on the outskirts of town.

Why ??? Because it would fit in nicely with bussing routes to the new HS white elephant, a mile or two away, and also on the outskirts of town. This is "normal!" and "Common sense!" I am told.

On the bright side, they could act as "SuperDomes" during a crisis...

Same all over. Astoria school district just about killed the schools with their consolidation and bussing schemes. The people fought it, but the administration won, as usual. Now, they can't afford the busses, and the kids are spending 2-3 hours on busses in some cases, everyone is cranky.

One room schools produced some of our brightest people. Back to the future, I say.

Proper use of the internet for the creation of decentralized structures for education and manufacturing (you can send instruction, and specs around over the web) would take care of the need for bussing and transportation.

It can be done by getting the school administrators to realize that they can, uh, control and command the work to be done without having to bear any of the costs.

This sneaky way of manipulating the administrators is easily accomplished by letting them keep their administration budget while jettisoning the physical plant budget, for a lower total budget cost.

We eliminate all costs of the fixed location, land acquisition costs (and recurring costs such as taxes taxes,) fixed cost physical plant, the school buildings, the custodial staff, the building maintenance and (and recurring costs like upkeep and supplies,) in one fell swoop.

The cost is negative and therefore beneficial to the school, the community and the student body.

A combination of podcasting and tiered access (free but uncredited and unsupported; cheap with email support; full cost credited with teachers using tele-presence technology for submitting papers and a bi- ,or tri-annual trip taking tests,) would result in a better educated populace.

There are two things to consider. The student environment and the teaching environment.

The student environment: You probably have space in your home now to operate virtual learning. If you need to standardize equipment beyond a web browser and web cam, the OLPC (One Laptop Per Child) initiative can come to the rescue and provide a single platform for support.

The teaching environment: One high-powered fiber internet connection. If teachers want/need to actually see the students and teachers have/need to have them see them, web cams on the students' OLPCs and a high-def web cam on the teachers' apparatus

We have not done away with the need for class rooms entirely, but we have been able to time and place shift them so that occasionally using a single unspecialized, non-purpose-specific large hall would be acceptable. (Building a congregation hall where students and teachers can gather twice or three times a year for testing purposes, and which can be used by anyone else for other events such as sports etcetera, would be an adequate way to spread the costs of maintaining such a cubic space event hall.)

I thought the point of schools was a a key component of the sanity of the stay-at-home parent (restricted school hours (8-3) do not work very well for households with two earners, anyway, though they do take care of a good portion of the 8-5 problem) ; >

we can debate whether the internet consumes too much energy, but nobody can deny that the internet requires "always-on" energy. anything that depends on the internet is useless in a brown-out or a blackout. i think most of us can agree that we can expect a lot of those as energy production winds down.

the internet also depends on cheap networking gizmos made in china, full of copper and extremely pure silicon, etc. i doubt those will be available forever, either.

Well, I don't know, my power has been out since about 5:00pm. Phone lines are down as well. We're under a "Blizzard Warning" up here and it's howling. If they have any sense the power company has pulled the trucks off the road for safety, Whiteout conditions, and windchill around 7 above and expected to get worse before it gets better. Expecting thunder snow as well. Getting to be a weekly thing up here, just barely got some folks back on after the ice storm.

My internet is just fine, Sat modem draws 20 watts, dell laptop configured for long run times. Very kewl how the LCD cuts back when not on plugin power. Battery bank had a week to top off after the ice storm. Throw another log on the fire, pour a Jim Beam, and see what's happening at TOD. It all depends on how you plan.

I'm not really looking forward to the cleanup though.


Don in Maine

Here in central NH, we got a foot of snow Fri/Sat, and another foot today. The wind is just now starting to crank up. We got creamed in the ice storm, and good honest snow is a relief. Power still on for the time being, but it doesn't matter - we lose power all the time, and we're used to it. Plenty of wood for the woodstove, plenty of water put by for when the pump doesn't work. Lots of candles.

But lots of digging out for tomorrow...

Got that right sgage, cold enough so it shouldn't be too hard to shovel, at least hopefully, blowing pretty good here now. Classic nor-easter, I always chuckle when I see the white line up the north east side of the trees. I just love that. Right now I can only see one tree that is close to the house, everything else is white. Good healthy weather is so much fun. Hunker down and have a good night.

Don in Maine

Hi Don,

I trust the worst will be soon over for you. Our winds are starting to pick up and are forecast to reach 100 to 120 kph overnight (currently ESE at 50 78 kph, gusting to 63 96). The snow which had been coming down steadily all evening is now turning to freezing rain as temperatures continue to rise, and our lights are flickering from time to time, perhaps foreshadowing what is yet to come (we have a backup generator and can operate our boiler on emergency power if it should come to that, so I'm not overly concerned at the moment).

Update: Environment Canada's severe weather warning tells us "[s]uete winds are forecast to occur early Monday with gust up to 150 km/h likely." Power is also becoming more tenuous by the minute.... might be time to duck under the covers.


Hi Paul, I actually enjoy weather extremes,not complaining at all. Goes with the turf. I suspect you know the feeling as well. Sitting inside something you designed and built,while all holy heck breaks loose, always quite a rush. I've got the old freight train winds right now. Doing your planning well, as I do know you do, is sublime. Grin.

BTW love the heat pump info, not really an option for me when I started, so I ended up going a little lower tech. Not really enough solar or wind to drive one here and I choose to plan for not having the grid eventually. State of the art was not quite the same 30 years ago. Chuckle.

Always enjoy your posts!

Cheers back at ya.

Don in Maine

Thanks, Don; much appreciated. It was a truly wild night with fallen trees and tree limbs scattered everywhere. As expected, we, along with 100,000 other Nova Scotians, lost power. Ed and I have been checking in on our neighbours, supplying them with hot tea and grilled cheese sandwiches and extending an open invitation to come stay with us. No one is quite ready to abandon their homes as yet, but with winds still in excess of 100 kph and temperatures holding at -5C, they're starting to get uncomfortable (there's one elderly couple we're going to forcefully evict, as they're fiercely independent and lovingly stubborn, but lack any means to stay warm). We're running the boiler on secondary power one hour at a time to conserve generator fuel, just in case we're in this for the long haul, but we can always switch over to the propane fireplaces, if need be.


But you can improve your football team's chances with a big high-school. That's the whole reason they don't split up high-schools here. Of course smaller schools would let more kids play and fewer just watch, and you'd have more nearby teams to play as well. This has long been a pet peeve of mine.

Of course you also get better depth and breadth on advanced/gifted classes and special ed as well, plus more electives. Those all become "wants" not "needs" when time get harder I guess.


Fiscal stimulus looks good on paper. The question is, does it work? You write on your site:

Most economists agree that some form of government stimulus is necessary to prevent a deflationary economic environment, and to improve economic sentiment.


True enough. But most economists might be mistaken. At any rate Tyler Cowen at Marginal Revolution would agree to differ. Cowen writes:

The bottom line is this: we are being asked to believe that a big, trillion or even multi-trillion fiscal stimulus can boost the current macroeconomy. If you look at history, there isn't good reason to believe that. Any single example, such as the Nazis, can be knocked down for lack of relevance or lack of correspondence to current conditions. Fair enough. But the burden of proof isn't on the skeptics. It's up to the advocates of the trillion dollar expenditure to come up with the convincing examples of a fiscal-led recovery. Right now we're mostly at "It wasn't really tried." And then a mental retreat back into the notion that surely good public sector project opportunities are out there.
So what you have is the possibility of faith -- or lack thereof -- that our government will spend this money well.


That's the $64000 question. If Obama, like all US presidents, reverts to type, this 'stimulus' is going to get the pork-barrel treatment -- business as usual, and overindebtedness 'cured' with yet more overindebtedness.

Look forward to lots of moolah going up in smoke on such projects as bioethanol promotion.

The next 4 years will be like a kid going to the old county fair. He leaves with 5 dollars and comes home with a white ribbon in his pocket and a 5 cent dish.

It is hard fo find a credit crisis that has been resolved by fiscal stimulus. By credit crisis, that is one that has its roots in the solvency of the entire system, rather than a money panic caused by one or two failed institutions.

An example of a money panic caused by a bank failure would be the Panic of 1907 which was rooted in the failure of the Knickerbocker Trust Co. A brief outline of this crisis can be found here:


The United Stated did not have a central bank at the time; financier J. P. Morgan along with the Treasury Department and a number of other large banks pooled reserves and supported the weakest banks, many of whom had speculated in stocks of dubious companies. Stimulus was not an issue in that damage was largely confined to the banking sector.

When the current crisis began last summer, it appeared to casual observers that the problems would also be confined to the banks, the mortgage business of banks, specifically. Because of the decline of real estate prices in the US and the resulting loss of collateral (paper) wealth, the Congress voted a $150 billion stimulus package in the form of $600 tax rebates.

It was clear to some participants at that time that economic conditions were beyond the matter of confidence in the banking and finance sectors; the context was of sharp reductions in bank lending rates by the Federal Reserve and large injections of liquidity. Previous post- war money panics did not require stimulus; the 'Savings and Loan Crisis' required the takeover of many home loan banks at an estimated cost of $500 billion to the taxpayer, but this was more of an administrative requirement to facilitate the servicing of loans for still- valuable real estate assets rather than an outright need to support the economy as a whole. Similar rate cutting and liquidity maneuvers were sufficient to quell panic during the 'Dot Com' and oil- related crises post- 1975.

The track record for stimulus where it has been called for is poor. Japan spent a large part of its GDP to support its economy after the real estate and stock related crash beginning in 1990. It built miles of highways to nowhere and bridges, overpasses and other public works and remained mired in deflationary recession for ten years. Stimulus strategies in this country beginning in 1930 failed to reduce unemployment below 14 percent for any period during that recession and was generally much higher. Other tactics such as currency devaluation and 'going off gold' also failed. Many persons feel that the war years marked the end of the Great Depression; the US had a command economy. The government controlled wages (making them higher to ensure a content and productive workforce - making wartime goods) and prices. Resource- based goods were rationed. Persons with property that could be easily confiscated were imprisoned in concentration camps, which served to instruct others of the seriousness of the scheme.


It is hard to see where stimulus had any effect on any solvency crisis as it is simply a rearrangment of worthless- or near worthless assets. The government does not possess any source of wealth distinct from that which is in circulation. In a solvency crisis, it is the worth of the currency itself - or its substitutes such as credit - that is questioned, not the availability of it.

The next step in 'our' crisis is a monetary collapse/default. After that will come the command economy. Be watchful as command economies are often accompanied by concentration camps and property confiscation. The government will require both wealth and obedience. After the command economy fails (which all do, eventually) there will arrive either a hard- currency regime or chaos.

The solution to this crisis is to put more valuable money into the pockets of working people - who are actually productive, give them safe places to invest and to allow a reasonable return on those investments. All else is folly ...

nice post & history review; even though i am betting some[ i might would take that bet back but it was down 70% so i leave it] on one more bubble/inflation- commodities- & then financial collapse/war/command economy.

At the level of indebtedness/stimulus proposed and in- process either inflation or deflation will be fatal. Inflationary pressure from liquidity that equals a third or more of GDP would make the (dangerous) inflation of the late 1970's child's play. That annual inflation was on the level of 8 - 12 pct with wages increasing 7 - 9 pct. There is a good paper on this period:


What has been suggested is more along the lines of this:

I lived in Brazil during the 1960s and 70s, so I have an idea of what ramplant, uncontrolled inflation can do. At its worst, the currency was losing about 30 to 40% of its value each month. This explains how 1 = 1 came to be 1 = 0.00000000000000001, or whatever ...


This was caused by a large flow of investment capital into Brasil which makes this form or monetary inflation similar to that experience by Saudi Arabia and Kuwait earlier this year.

Another version is what happened in the Weimar Republic in the 1920's:

The flight from currency that had begun with the buying of diamonds, gold, country houses, and antiques now extended to minor and almost useless items -- bric-a-brac, soap, hairpins. The law-abiding country crumbled into petty thievery. Copper pipes and brass armatures weren't safe. Gasoline was siphoned from cars. People bought things they didn't need and used them to barter -- a pair of shoes for a shirt, some crockery for coffee. Berlin had a "witches' Sabbath" atmosphere. Prostitutes of both sexes roamed the streets. Cocaine was the fashionable drug. In the cabarets the newly rich and their foreign friends could dance and spend money. Other reports noted that not all the young people had a bad time. Their parents had taught them to work and save, and that was clearly wrong, so they could spend money, enjoy themselves, and flout the old.

The publisher Leopold Ullstein wrote: "People just didn't understand what was happening. All the economic theory they had been taught didn't provide for the phenomenon. There was a feeling of utter dependence on anonymous powers -- almost as a primitive people believed in magic -- that somebody must be in the know, and that this small group of 'somebodies' must be a conspiracy."

When the 1,000-billion Mark note came out, few bothered to collect the change when they spent it. By November 1923, with one dollar equal to one trillion Marks, the breakdown was complete. The currency had lost meaning.

This latter episode was not caused by in influx of foreign exchange but rather a weak government trying desperately to maintain employment to avoid a takeover by Communists. It printed money because nobody told it to stop doing so.

The common element to all inflationary scenarios is rising wages. This will not happen in the US because of anti- worker bias both in government and in private business. Business is blind both to the need for customers with means and for non- fiat investment funds. Both are only obtained from a highly- paid middle class. Cheap credit from the Fed and the reliance upon it by the investment community has been the greatest cause of the current credit debacle. Another component has been deficit spending by the government. So, kiddies ... what is the prescription for solving the crisis caused by cheap credit and overspending by the government?

As for stimulus, there is another good article about the current situation:

“A psychology of bad times is becoming the mindset of the public,” says Andrew Kohut, director of the Pew Research Center, a survey operation.

This psychology is realistic. Only idiots are optimists at this point, another deflation indicator since in bear markets the bears are right!



I was about to cite Brad DeLong too, but you got there first. Full marks to you.

Carolus, I think he gets cited here a lot along with Mike Shedlock and Doug Noland.

It would be nice if these people had the ear of the incoming Administration. I don't think the current situation is dire enough. The old dinosaurs still command too much 'unearned credibility'.

Paul Krugman was on the radio on Thursday speaking before the National Press Club, (heard on C-Span) making his pitch for a big stimulus package. Nobody asked Mr. Krugman any tough questions such as, "How exactly will any stimulus work?" or "How will the US avoid bankruptcy?" The bulk of Krugman's had so many hedges and modifiers as to be useless. I think stimulus is 'easy policy' since the alternatives require confronting the objections of the political class's supporters.

It makes me wanna beat my head against a wall or something ...

It makes me wanna beat my head against a wall or something ...

Others share your frustration. You might be interested in Ilargi's latest post over at TAE: The Last of the Affluent, the Carefree and the Innocent. It's one of his best.

It is nicely written, as always. I certainly agree that transparency is crucial. The idea that limited liability companies should have the privacy rights of individuals is insane. The price of limited liability should be substantial transparency. But the way he (and Mish) talk about money as if it was real stuff makes it all incomprehensible to me. What does he want to see happen in terms of how real assets are deployed and in terms of what work people actually do? It seems clear to me that we are in a period when there is still enough cheap energy to build substantial new infrastructure, if we can only make a rational decision about what infrastructure to build.

Ariz. police say they are prepared as War College warns military must prep for unrest; IMF warns of economic riots


International Monetary Fund Managing Director Dominique Strauss-Kahn warned Wednesday of economy-related riots and unrest in various global markets if the financial crisis is not addressed and lower-income households are hurt by credit constraints and rising unemployment.

U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that might even require a declaration of martial law, the two noted.

U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that might even require a declaration of martial law, the two noted.

State and local police in Arizona say they have broad plans to deal with social unrest, including trouble resulting from economic distress. The security and police agencies declined to give specifics, but said they would employ existing and generalized emergency responses to civil unrest that arises for any reason.

“The Phoenix Police Department is not expecting any civil unrest at this time, but we always train to prepare for any civil unrest issue. We have a Tactical Response Unit that trains continually and has deployed on many occasions for any potential civil unrest issue,” said Phoenix Police spokesman Andy Hill.

Is this comedy or what? This is more of the disconnect from reality that makes we wonder how these people get these jobs in the first place. Don't you have to pass a test to become Treasury Secretary?

There is a strange dichotomy in the country right this second; there are millions of people preparing fot the inauguration and trying to find a happy place for themselves in the center of it. There are millions upon millions more sitting down with their families and friends discussing the most likely road for the country and doing so in a very fearful and serious way.

Left hand ... right hand.

CNG buses have a proven, and VERY poor record, as transit buses.

Maintenance costs over double diesels (I have been told at APTA meetings) and MTBF of less than a third for diesels.

Why not spend the money instead on Urban Rail ?


Best Hopes for Electrified Rail,


Odd, the local biogas buses seems to do ok.

I did not realize the RMA (Reliability, Maintainability, and Availability) issues with CNG buses.

What about smaller electric buses? It seems that this would obviate the expense of the rail infrastructure and would provide more flexibility for changing routes with the ebb and flow of demand.

Why not forget busses and centralized schooling? Let us return to neighborhood schools. Consolidation of schools and bussing of kids has produced social problems, increased general ignorance, removed parents from participation in education, increased costs, decreased school effectiveness, and made lots and lots of money for administrators, bus companies and construction companies.

Bigger is not better.

Hi Alan ~

Here in rural Oklahoma we (and by "we," I mean my family) are brainstorming on this "Obama infrastructure thing." I mean, here we are in this town that measures six blocks by six blocks, population two hundred fifty one souls. We have a public school, built in 1926, that is in real jeopardy due to diminishing student enrollment. I doubt that a rail system would help. What's a poor farm community to do?

I put this question not necessarily to just Alan, but to the TOD thinkers at large. How can small rural areas best make use of the coming "public works program?"

I am packing ATM and doing one last addictive check on TOD. I will think about what you said.

Please repeat after 25th.

Best Hopes for Peace on Earth and Good Will towards Men and Women,


Alan ~

Best holiday wishes for you and yours. I'll get back to you :)

Hey Misfit;
It's a great question, as Maine also considers and acts on a new burst of school district consolidation, to save on Admin. costs among other things. Small Towns which were once Mill, Textile or Forest Products based will be forced to devise a new livelihood first, and then I think there will be more answers available regarding schooling.

It makes me wonder if there isn't a good model using some Homeschooling approaches, some of the classic 'One-room Schoolhouse', and some "Tele-learning", where students can access more specialized topics through Internet/TV/Radio.

I used to hear that isolated towns and farms in the Australian Outback had used TV-classrooms to have some connection with Educational sources. Anyone know how that actually played out 'on the ground'?


Hey there Jokuhl ~

I was talking to my nephew (he's the president of the school board) about this, and he fears the worst. Just as you said, the school districts will likely consolidate to cut costs. This will necessitate more bussing, larger classrooms, and will accelerate the degradation of smaller rural communities. I think this will be counterproductive in the long term.

On the bright side, Obama has expressed interest in helping the education system. My fingers are crossed...

Australia has had Distance Education for many years.It is the only way to educate kids in remote areas without using expensive home tutoring or sending the youngsters to boarding school - cruel and expensive.Kids with behaviour problems in normal schools are also eligible.
The various Distance Education facilities in each state are subsidized by government.In the early days 2 way radio was used and telephone where available.
The advent of the Internet,wireless and satellite broadband has opened up new ways for student/teacher,student/student,parent/teacher interaction.It is possible to go to year 12 in this system.
BTW,Australia has also fallen into the trap of closing small primary schools,often against community wishes,and transporting children long distances.Common for some kids to spend hours in the bus each day.
A lot of the centralized schools,particularly high schools(often over 1000 students) are so large as to be unwieldy and impersonal.Just a breeding ground for social problems.
Here's hoping for less factory type education.

How can small rural areas best make use of the coming "public works program?"

I don't have an answer, but maybe we should think about the economic reasons for having small (or large) towns. In the case of a large number of distributed small towns I think the answer was that a significant part of the economy was supported by economic production that was distributed somewhat evenly across a lot of land (farming and ranching mainly). Technology has been decreasing the number of employees needed to operate our agricultural infrastructure (particularly the distributed parts of it (farms). Network effects, and economies of scale for many sorts of enterprises have favored large concentrations of population, cities. On this basis, I think that the survival of anything like the historical density of small towns requires an increase in the workforce that must be distributed throughout the country.

I can think of a few things that might help a little, but I doubt they are manpower instensive enough to completely stem the tide. Distributed renewable energy (wind farms, solar power stations, biomass collection and conversion to energy/product) come to mind as one way to partially accomplish this. Changing modern farming to make it more sustainable, which implies fewer external inputs (such as fossil fuels, and chemical fertilizers) might also increase the number of jobs per square mile of agricultural land. But, this is not something that can be easily answered by a blog commentator, more intensive study by rural residents and economists would probably be required.

Thxs for this info. Too bad they can't even afford to pedalize these rail contraptions: it would be a more efficient use of human calories... and now they are being totally forced off using the tracks. In comparision, the Cambodian bamboo railway is much more advanced.

How efficient is NG vs Diesel? For instance, if a bus gets five miles from 130,000 btus of diesel, how far will it get on 130,000 btus of nat gas?

If you use nat gas in a diesel engine with enough disel fuel to light the fire, the miles will be about the same. The primary parameter in compressionn engine efficiency is the compression ratio. Diesel engine comversions to natural gas are available.

The use of natural gas as a transportation fuel is a "no brainer". It is domestic and plentiful. T Boone has it RIGHT.


Have you read user Rockman's cautions ?

Have you read user Rockman's cautions ?

Could problems using NG as fuel be because we just don't have enough experience with it, and all the parts and syetems have been optimized for diesel just won't work well with it? Would an engine and supporting systems designed from scratch to burn NG do much better? Of course is the answer is yes, that might mean that trying to fuel switch existing trucks, and buses doeesn't make sense.

Way back when, the 50's and 60's we ran most of our tractors on LPG and the local gas utility ran all their pickups and a large part of their car fleet on natural gas. The set ups on gasoline engines was pretty much the same for the two. A large, heavy pressure tank in cars located in the trunk to take the place of a gas tank and the same in the bed of the pickup truck-taking the place of the tool box you see in many pickups. Benefits were pretty much the same, extremely clean burning fuel. Fewer oil changes, spark plugs were never fouled and lasted long times. The life of engines increased dramatically. The trade offs were less power and fewer miles per gallon plus the cost of conversion not to mention a trunk that lost most of its usefulness. Filling up a NG or LPG tank isn't a simple or particularly easy thing with heavy high pressure hoses and quick couples that require more than a bit of strength and skill to engage. In those days both NG & LPG were so cheap that when filling we would vent the tanks to the atmosphere; a practice that the EPA would not allow today, which would necessitate and extra return line of high pressure hoses.
On the farm we also purchased tractors that were designed for LPG/NG from the get go and if there were a large enough market I would imagine auto makers would oblige. Hope this helps.

One other thing, I can't see NG/LPG ever taking the place of diesel trucks as it lacks the BTU's to give the low end torque and MPG's that diesel provides.

How much do we use now? How much would we use if we ran, say, 30% of our trucks, buses, and farm tractors on it.


You wouldn't need the expensive lightweight carbon fibre tanks on a farm tractor. However a crunchy incident at 3000 psi (220 bar) wouldn't be good as the shark in Jaws found out.

Furthermore I predict that after wasting billions of the bailout money on PHEVS auto makers will find people want the range and roominess of NG cars. Within the GM stable the Opel Zafira turbo CNG looks more appealing than the unproven Volt.

Throwing billions @ Jaguar isn't a done deal:

Mandelson rules out early rescue for Jaguar
Ned Temko
The Observer, Sunday 21 December 2008

Peter Mandelson threw cold water on prospects for an early government bailout of Jaguar Land Rover last night, saying that the company's Indian owners must "look to their own resources" and "pass tough tests" before any rescue would be considered.


At the same time, it's not off the table. Perhaps when it is clearer to the various governments (Euro - US - Canada - Japan - China - India - Russia) that trying to bailout the current economic mess is a failure on its face and will destroy what is left of government credibility and credit.

I love the way the British-speaking news readers all say "Jag-yew-wah".

Sorry, that's wrong! It's 'JEg - yew - wahr;'. This is how the high- toned auto dealers referred to it in commercials. If you own one - an olde one, made in Coventry - it's a 'Jag'. If you own a newer one, it's a 'Taurus' or a 'Piece of Crap'.

"If you own a newer one, it's a 'Taurus' or a 'Piece of Crap'."


Haven't seen a new oil price poll in quite some time. Are they no fun any longer since the price is going down instead of up?

The price is so volatile that we were blowing through the limits on the polls in only a few days. We just don't have time to keep putting up new polls every two or three days.

We're thinking about putting up some other kind of poll, but haven't really had time to work on it. It's a busy time of year, and we all do this in addition to job, family, etc. (A lot of the staff are academics, and so very busy with the usual end of semester madness.)

You mean like: Bloomberg NG

New York City Gate Spot $12.67 up $5.49 up 76.46% in one day

and henry hub is down about $0.21.

i'm thinking we will have a 250 bcf drawdown of storage for the w/e 12-19-08, double the w/e 12-12(125 bcf), which was about double the w/e 12-5(63 bcf).

and another alberta clipper is soaking the country in fridgid temps right about now.

it will be interesting to what imports from our near northern neighbor are.

dipchip and elwoodelmore....I also noticed the NYMEX NG price of $5.33 down .21 last Friday while the NY Spot was up $5.49 to $12.67.

It's normal for there to a slight difference between the two this time of year but a $7 difference seems like a lot.

I realize that Friday was options exp. day and that it was also the last day for Jan to be the front month contract.

Still...can either of you, or anybody, offer some ideas for the wide divergence between NY spot and Henry Hub futures price?

sorry, i dont know. i'm just watching the temp fall and ng fall along with.

i believe noaa is forcasting a normal (10 yr)winter. while the farmer's almanac forecasts a "numbingly" cold winter. and as far as i know noaa uses the southern oscillation index(el nino) while farmers almanac hints that they base their forecasts on sunspot activity.

Thanks for responding elwoodelmore. I wasn't sure anyone would see my post and respond with this threading system.

NY prices are especially volatile as del system is short on pipes(reduncies).

The price is so volatile...

Yeah. Weather-forecasting language is appropriate, IMHO: "Periods of volatility mixed with periods of calmer prices." :-)

Leanan, thank you for DrumBeat. I am always amazed at how you come up with fascinating and thought-provoking links day after day. Very greatly appreciated.

The 2008 average oil price was up at +20%/year since 1998. The current average futures price of about $50 for 2009 would be up at about +12%/year since 1998. Over the 1998-2008 period, GM stock has fallen at around -30%/year.

re: the list (of giant undeveloped fields)

that is probably the poorest written article i have ever seen on the subject. this jerome chen character uses the terms proven reserves, reserves, extractable oil, and oil deposits more or less interchangably. is his objective to muddle ? or is he just plain clueless ?

imo, journalists should stick to journalism (that would include the governor of alaska).


What was Al Gore before he was 1st elected to Congress and then became one of our leading energy experts according to Tom Brokaw??


The son of a senator and an indirect beneficiary of fortune of Armand Hammer? And he did hoe tobacco.

inventor of the internet ?

A reporter for the Tennessean.


well, that proves my point. if al gore had stayed in journalism, maybe we wouldnt be > $ 10 trillion in debt. i.e. maybe the dems could have ran someone in 2000 that could win his home state.

and john porretto (re: opec powerless) is just as clueless, imo.

Interest Groups and Light Rail north of DC


IMHO, this type of conflict is created by the "Ration by Queue" system of the USA.

Over 20 years ago a little used freight line was bought by the State of Maryland to connect both legs of the DC Metro Red Line (a "U"). The Red Line was the first DC Metro Line and was busy almost from Day 1 and connecting the legs between two major Suburban hubs always made sense.

20 years of sprawl has increased development, the route was "temporarily" turned into a bike & jog trail, people have spent decades advocating one position or another.

Meanwhile, a multi-billion freeway in the same basic corridor gets built.

Best Hopes for Faster Decisions,


Meanwhile, a multi-billion freeway in the same basic corridor gets built.

Are you referring to the Intercounty Connector (ICC)? The ICC is being built quite a few miles to the north of the defunct rail line that goes between the two ends of the Metro Red Line. During the 2002 midterm elections, deep-pocketed developer interests managed to convince the electorate in Maryland that the ICC would relieve local traffic congestion -- but the Md. Department of Transportation even said that was not the objective of the ICC. The truckers were pushing for it as a bypass around the Beltway, and I think the federal government favored it as part of the military base realignment that's taking place in the D.C. area.

Our Maryland state representative told us at her annual constituent barbecue that the ICC deal was basically done on behalf of Kingdon Gould III, the developer of Konterra, and a long-time acquaintance of pugnacious Republican former Md. governor Bob Ehrlich, who was itching to stick it to the tree-hugging liberals. The road's going to cost billions, and is cutting through a big swath of forest and parkland. I see the construction every day on my bus ride down Georgia Avenue. And Maryland is facing a budget deficit in the billions. It will be completed just in time for the terminal oil crunch -- but who says that TPTB know what they're doing....

Hopefully the whole country won't become like Detroit:


And hopefully we will not have to suffer rampant vigilantism:


But the good news is that making garbage is good for us!


Remember that corny B.S. 'feel-bad, feel-good' movie about global garbage and pollution called Wall-E? Brought to you by: Disney-Pixar...Yes, Disney, the same outfit that is partnering with Waste Management Corp. at EPCOT to show America's youth (and those adults with a stunted IQ) how making garbage is the American way!

But don't despair, we can all boycott Disney and save oil to boot by taking our kids to one of these wonderful, all-American local theme parks soon to be in every mall near you:


The Defense Industry will be the last one standing. Ike is spinning in his grave. Unless we all collectively grow a brain and throw off the yokes of 'yellow ribbon' 'support the troops' propaganda, the military-industrial-political complex will drive us off the cliff to a 'Mad Max' future.


Weblinks that sum up quite well our collective insanity. Sad.

EDIT: regarding your last link, it would have been interesting to know if the Dept. of Agriculture debated the Dept. of Defense over this multi-billion funding; ie, teaching children-to-garden vs teaching children-to-kill.

I expect future recruiting centers to combine the DoD & DoA for full desensitivity training: kids will be conditioned inside a combo livestock slaughterhouse/military extravaganza.

"Hey kids, let's have some real fun. Select your weapon from this rack, then imbue it with special powers by naming it and saying a prayer: we got swords made from GM Tahoes, machetes from Mazda Miatas, and very sharp "Britney" spears by Toyota. We are going to play pinata with this cow. Please pay special attention to the starving masses arriving on the giant HDTVs hoping to grab some meat. Your hosts will simulate protecting you and your kill as we go full-auto, full metal jacket on this mob. Don't forget your spatter glasses as the real cow and the HDTV screens both will spray blood and guts everywhere. Then we go to lunch in the cafeteria where the crematoria films of Auschwitz are featured. Bonus T-shirts to any kid who wants a temporary #119198 forearm tatto, but free full-camo gear to any kid who wants a permanent #119198!"

Thanks for these links. Sometimes, sitting in my TV free, mall free, Disneyland free life, with the local organic vegetables, I lose track of what is going on exactly out there. Then whenever I catch up with the news, I am dumbfounded.

I have three boys. Somewhere along the way of enduring morning sickness, labor pains, endless sleepless nights, and thousands of afternoons of their homework, I opened my heart to these children and don't understand how anyone can send their flesh and blood - or that of others - into harm's way. I am doing my best to gently brainwash mine on a daily basis so they won't spring any surprises on me at age 18. My 9 year old knows about post-traumatic stress disorder.

But it is a losing effort. Just having a computer opens one up to internet games, even if we don't have Wii and X-box, whatever that is. The movies, Star Wars and Teenage Mutant Ninja Turtles and Avatar and Power Rangers are just repetitive fighting themes as far as I am concerned. It's almost like this aspect of humans (I know aggression is a natural impulse) has gone runaway out of control and is taking over the world. It certainly pervades my house, anyway, despite considerable effort on my part.

I was a stay at home dad and managed to raise a very sweet boy, he turned 9 on 12/5. I had it all figured out when I took over from my wife as the primary, no toy guns, no tv, no glorification of war blah blah blah. Well when he was about 3.5, he and a neighbor were running around being crazy while I was doing the dishes. They were heading for the door as I caught them and asked if they wanted bananas. They enthusiastically said yes. They took them outside and started using them as imaginary pistols, I knew at that point I had no chance. For his ninth b-day we had about a dozen boys over, they cut cardboard boxes into riffles and pistols accessorized with duct tape, string and markers and played war. They had a ball, I had a beer

For his ninth b-day we had about a dozen boys over, they cut cardboard boxes into riffles and pistols accessorized with duct tape, string and markers and played war.

Growing up as a boomer youngster we were raised on WW2 movies. Despite the protestations of my parents, we played guns. I remember having hundreds of toy soldiers, and tanks and spending many an hour staging play battles. Never wanted to here any of the admonitions from my parents about how bad war was (those are real people, not plastic soldiers etc.). But when I grew up, I made sure to keep a lot of distance between myself and the military. So I don't think it is hopeless after all.

I remember a comment by a mom who banned toy guns from her house. So, her son took his sister's Barbie doll, turned the arms down at a right angle and used Barbie as a toy pistol.

Yep.... been there.

We're not religiously opposed to gun toys... we just never had then around the house.

Didn't matter. Anything longer than it was wide became "This is a shooter... I am shooting you". Anything wider than it was long was turned sideways first. :)

My wife calls it the "boy search-and-destroy gene".

I have a boy too, soon he'll be 5. He loves all sorts of superheroes and whatnot, makes guns out of yogurt containers. This is who they are, boys. Leaf through the history books--visit castles in Europe or forts in the US or castles in Japan: war images, war narratives aplenty. Museums are full or armor and old weapons and portraits of men in battle regalia.

You don't need to fight it (no pun intended). Indeed you probably cannot. Industrialization and high tech brought war into a new horrible realm but it was always horrible to begin with. Look at history, ghastly, grisly, unbelievable.

La condition humaine I suppose is the vague way to summarize it. What can you do? I see war and aggression as a universal international pyschological issue like smoking or alcoholism, and you know men are more prone to these things too. But it's not their fault, I know it sounds weird but there must be some background story that we're not fully aware of. The best you can hope for---what I hope for---is for my son to grow up and be sane about cigarettes (not smoking) about war (not getting involved) but now he likes those little chocolate cigarettes and making guns out of sticks and rubber bands. It's play. As long as he plays it out of his system and grows up to scorn it then I'm happy.


I am raising my kids like you describe, as best I can. Every once in a whiel I wonder if I am doing right by them in light of the future that probably awaits humanity. My uncle, a psychologist, talked about how his German immigrant father was harsh and cruel. I've heard that about many old time German parents. He said that having been raised by parents who lived under a dictatorship, they had to teach their children absolute obedience in order for them to survive. He says that parenting reflects the social system and what children need to survive.

We're in a very emotive environment- for example the Pres. of our university suggests reading the book "Emotional Intellegence"- that's how I'm raising my kids.

But occasionally I fear that the shock of a harsh future will be extraordinarily hard on these tender hearted boys. I wrote about this here


Best hopes...

Speaking o' Detroit:


It's not just New Orleans.

Oil and economic contraction.


This is a good article but what a lot of people are not thinking about is how this relates to oil usage.

The saturation of big box stores and strip malls means that right now a lot of people need only drive a few miles to get to any store. As these stores close customers will have to drive more and probably will buy less. This is of course offset to some extent by less product being manufactured but one could readily argue that having a truck make less deliveries has less of a impact then 1000 customers driving twice as far.

The main point is that changes in energy use as the economy contracts are complex not simple right now the oil markets are making a very simple calculation that ever % drop in GDP creates a equal drop in oil usage it almost certainly does not work that way.

In my opinion I think we will find that drops in oil usage for goods manufactured will actually be more than offset by increases in oil usage in other areas as consumer drive further and buy less. transactions/btu will begin to increase as the world actually becomes less efficient in and attempt to keep the transaction rate up.

Counter argument:

Ppl, as in the US ‘middle class’, or more accurately those who shop in malls (not cancer patients, probationers, unemployed single mothers, illegals, struggling teachers, underwater on mortgage ppl, the challenged of various kinds, etc. etc. ...) will soon realize that they do not need a 10th frothy blouse, number 34 Barbie doll, a designer bag, scented soap, a new coffee machine, a mahogany stool, a cactus beribonned with tinsel and Jesus, food for nails, crystal dishes, new widgets or saws, sex toys, tea towels with Obama beaming, etc.

Once they don’t go shopping, they won’t miss it.


You underestimate the American consumer they will go and buy the blouse at 50% off.
Or one set of tea towels per trip as they economize. Instead of all the crap you mentioned in one trip.

Basically we have to hit at least 1970-1980's level spending in my opinion before we begin to see serious declines in oil usage. And I mean the same for home prices etc.

The important point is that if Americans quit buying overpriced homes and cars they actually have plenty of money. I personally don't buy either cars or homes so to be honest outside of trying to purchase either a car or a home I really don't need near the salary I make.

All I'm suggesting is that if people stop buying homes and cars and are reasonable with expenses then they will be in the same boat as me I don't buy a lot of stuff but even the little bit I do spend results in a good bit going for gasoline.

My salary is high enough I don't care that much but I'm suggesting that as Americans become more prudent gasoline costs per transaction will increase.

I'd say offhand that gasoline is easily 5-10% of my total expenses and I work at home and only drive a little bit. The grocery store is 0.3 miles from my home for example.

I'll admit that we drive to a mall about 5 miles from the house and hang out if you will this is where the gasoline expense comes from. I easily burn 5-10 times as much gasoline per purchase as other Americans. Basically my only gasoline expense is going to the mall.

Hey TOD'ers,

RE the EPA ruling that greenhouse emissions CANNOT be considered in the process for building new coal fired plants...

My take on this:

This is direct evidence that TPTB have a firm grasp on the coming periods of energy scarcity. TPTB are only in power because they control the fractional reserve money system. Without that control, they lose everything. This move is all about keeping BAU in the economy. By making it easier to make coal fired electric plants, they are hoping to get more energy to the failing economy, to replace that lost by oil. In order to do so, you have to ignore the environmental effects. Economies run on energy. Period. As a rule, an economy based on fractional reserve lending MUST perpetually grow to remain healthy. They lose their power if the economy can't grow. Ergo, they need more energy.

TPTB have made their choice and have revealed their values. They want to retain power and will sacrifice anything, even the habitability of the planet, to keep it.

As painful as it would be for the masses, I think the only way for them to lose their power is for a complete economic/financial collapse. That would provide a clean slate to build a sustainable economy from the ground up.


As painful as it would be for the masses, I think the only way for them to lose their power is for a complete economic/financial collapse.

... and therein lies the rub, to coin a phrase. And, to ice the cake, the masses would rather labor under the present system -- however dysfunctional -- than "give up their lifestyle." Go figure.

...the masses would rather labor under the present system...Go figure.

Sigh. You express surprise. But really, where is the surprise? What's their alternative?

Do you seriously expect anyone but a few eccentrics to volunteer for the impoverished life of unremitting, pointless, mind-numbing toil and misery frequently proposed by would-be reformers around here? Are you kidding?

I'm hoping to see Al Gore standing in front of the bulldozers. But more seriously, the "government" is making an illegitimate decision. Sooner or later it will turn to obvious physical, person to person violence - call them the earthmarines, Hamas or Al Quaida. [It already is violence against our life systems themselves - but few seem to recognize that.] The energy and resource crunch is starting to delegitimize governments around the world. Belgium, Greece, the US and CA. Leaders like Evo Morales, OTOH, understand the need for another path. The powers that be in US will continye to squander resources - transfer wealth into the pockets of the wealthy - and wreck several layers of possibilities for everyone. That will end up with the rich running the armies or run over by the tumbrils; the questiong is which side the people in US will identify with - the exploiters (probably the boomers will pick this side) or the exploited (maybe everyone outside the political class). Don't hold your breath. “Those who make peaceful change impossible will make violent revolution inevitable,” - JFK It's not just about the "depression", but about resources and LESS, about distribution and scale.

The planetary ecosystem is crashing the human economy. Gaia dances with Shiva.

cfm in Gray, ME

$1.6 billion went to bailed-out bank execs

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

if you did not expect that to happen you have been living under a rock for too long.

The reason oil dropped in price is because of the deflationary reaction in the world economy caused by negative growth.Hyper inflation is about to wipe out the USD completely and peak oil is the reason all these events are transpiring.It seems few understand the real reason for the current depression, and things are going to happen so fast, those who do not comprehend PO right now may never understand the true culprit of the world wide economic collapse taking place right before our eyes.....

Have the ecotopians picked up on this incident?

Underwater communications cable gets snagged by dragging anchor. If that happened to an HVDC cable you'd also get fried boat owners. There is a proposal is to build vast solar arrays in Morocco and transmit electricity under the Mediterranean to Europe. Problem one is that it is vulnerable as we see. Problem two is that without strict regional carbon caps Euro lignite will end up powering Africa. This is what happened in 2006 when the Basslink 400kv HVDC cable joined mainland Australia to Tasmania. Before then Tasmania relied wholly on hydro and gas peak power but just two years later the grid is 20% coal dependent and growing. Incidentally the cable contains an earth line to reduce the damage problem both from ships and oil rigs. But perhaps we should not let facts get in the way of a good fantasy.

New Report: Worldwide Bankruptcy Wave About to Hit

...According to Euler, 28,000 businesses went bust in the U.S. in 2007. In 2008, that number increased nearly 45 percent -- to 42,000 insolvencies. Chapter 7 liquidations, Chapter 11 reorganizations, and Chapter 13 filings for individuals all showed dramatic increases in 2008; the only decrease came in the area of Chapter 12 filings, a chapter of the U.S. bankruptcy code usually reserved for family farmers and fishermen. (Who knows--maybe we'll all be farming or fishing six months from now.)

In 2009, Euler estimates that an additional 62,000 U.S. companies will become insolvent. If accurate, those numbers would mark the largest increase in corporate bankruptcies since the U.S. recession of 1993.

The situation is just as bad in Europe...

H/T to the climate denialist nutjob who otherwise provides a fine service over at WRH.

Just thought I'd cheer you all up.



No one talking about the EPA ruling giving a green light to new coal plants. This is a big problem for a number of cases being adjudicated right now. We need to do whatever we can to slow down the process till some these rulings can be reversed in the new administration. Some of the top environmental leaders are now calling for civil disobedience to stop new coal plants. We don't need any new coal plants, both for the obvious (to most) global warming reasons, and because electricity use is declining and will continue to do so for some time given the direction the economy is taking.


If the economy regenerates itself quickly (not a good bet IMHO) I'll bet you we'll see the greatest expansion of coal-fired electrical generation over the next 15 years then we've seen for many decades. And it won't matter who's running the country. Not a pleasent thought for sure. But I've yet to see anyone offer a practical alternative approach. Economic recovery will require energy. And if oil/NG is too expensive or not suffciently available, then coal seems to be the only viable alternative at this time.

I think that it's more likely that we'll see a huge expansion in natural-gas-fired electrical generation... particularly with an Obama administration.

I've yet to have anyone tell me why this wouldn't work.