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DrumBeat: January 5, 2009
Posted by Leanan on January 5, 2009 - 9:45am
US drilling outlays soar to $226.4 billion in 2007
-- US oil and gas drilling expenditures soared to a record $226.4 billion in 2007, more than doubling the previous record of $109.8 billion a year earlier, the American Petroleum Institute said on Jan. 5.API said the Joint Association Survey of Drilling Costs for 2007, the latest year for which figures are available, showed that records also were set in average costs per well and per foot.
Average costs per US oil well grew 82% to $4 million in 2007 from $2.2 million, while per foot costs climbed 78% year-to-year to an average of $717 from $412, according to API. It said that average costs per domestic natural gas well rose 105% to $3.9 million in 2007 from $1.9 million in 2006 as average costs per foot grew 74% year-to-year to $604 from $348.
Total oil well expenditures jumped 94% to $72.3 billion in 2007 from $37.3 billion in 2006, while gas well expenditures grew by nearly 101% to $119.1 billion from $59.3 billion, API said.
Credibility Freeze - Russia’s gas cut-off will damage further its credibility as a supplier
For five days argument has raged, tensions have risen and millions in southeastern Europe have shivered. Russia’s abrupt shut-off of all gas supplies to Ukraine echoes the pipeline row of three years ago. As in 2006, winter is adding urgency to a commercial spat that has become a political confrontation. The argument should strengthen the resolve of all Europeans to lessen their dependence on Russia for vital energy supplies.
Backyard bliss may soon be a memory
THERE are two Sydneys of the future. In one we build on empty paddocks 45 kilometres from the CBD, where workers wake before dawn to spend hours in traffic driving to work.In the other we abandon the McMansions of Kellyville - and our cars - in favour of high-rise apartment living and subway transport.
Peak Oil And The Century Of Famine
Depletion of oil and other fossil fuels will greatly affect food production. In terms of its effects on daily human life, in fact, the most significant aspect of oil depletion will be the lack of food. “Peak oil” is basically “peak food.” There will be severe problems with transportation (e.g., shortages of diesel fuel and asphalt) and communication (e.g., sources of electrical power), as well as with more immediate aspects of getting crops to grow (e.g., the use of fertilizer and pesticides, and the availability of irrigation). Crop yield-per-hectare is far lower in societies that do not have fossil fuels or modern machinery. Maize production, for example, declines by about 80 percent in the absence of modern technology, as David Pimentel notes in “Food and Energy Resources.” We should have no illusions that several billion humans can be fed by “organic gardening” or anything else of that nature.
The Sun will Continue to Shine...
To summarize, a few felt that it is already too late, doomsday is destined to come, and maybe soon. A few more are reconciled to a lower standard of living. Some believed that monumental changes might still be possible, but we need inspired leadership and major structural adjustments to government. My latest response to one such input follows:
Couldn't decide whether the oil prices are high or low?
For peak oil camp, the production peak has already been arrived or is about to arrive. So the price catastrophy is very close. We should get ready to see high prices.IEA’s chief economist Fatih Birol, however, claims that prices of $50 per barrel is too high. This is five times the average production cost per barrel.
Coal plant project threatened by partnership breakup
A coal-fired power plant project that Georgia environmental advocates are trying to stop in court may fall victim to a business decision....“The development landscape has changed significantly since we agreed to enter into the development joint venture,” Dynegy President and CEO Bruce Williamson said in a prepared statement. “Today, the development of new generation is increasingly marked by barriers to entry including external credit and regulatory factors that make development much more uncertain.”
Auto sales plunge again in December
NEW YORK (CNNMoney.com) -- The nation's six largest automakers all reported December sales declines of more than 30% Monday, capping the industry's worst year since 1992.Of the major automakers, Chrysler LLC took the biggest hit in December. Sales fell 53% from year-ago levels, worse than the 46% drop forecast by sales tracker Edmunds.com.
Saudi Arabia announces discovery of eight new fields of oil, gas
SAUDI ARABIA. The world's top oil exporter Saudi Arabia said on Monday it had discovered five new oilfields and three gasfields in the Eastern Province, the state news agency SPA reported.Four of the oilfields were on land and one was offshore, Oil Minister Ali al-Naimi said in a statement carried by SPA.
He named as the wells as Jaouf-11, Ramthan-9, Nayashen-1, Jarid-11, Jarid-101 and Khursaniya-114. In test drilling the biggest producing wells were Jaouf-11 at 2,551 barrels a day and Nayashen-1 at 2,076 bpd. The three gasfields, Arabiya-1, Rabib-1, Hisbah-16, are all offshore, he said.
...The recent decline of crude oil prices as well as the increased investment in exploration and new field finds has pushed industry analysts to re-think global peak oil, or the idea that global production is near an apex after which it will decline sharply.
Oil settles above US$48 a barrel on unrest in the Middle East
SIOUX FALLS, S.D. - Israel's ground offensive in Gaza and a dispute between Ukraine and Russia over gas imports pushed oil prices above US$48 a barrel Monday, but some analysts say there's more than just unrest in the Middle East behind the rally.Light, sweet crude for February delivery rose $2.47 cents to settle at $48.81 a barrel on the New York Mercantile Exchange.
China plans to exploit weak energy markets
Beijing: China will take advantage of falling oil prices to boost imports and build up its fledgling oil reserves against supply shocks, a top official said in a rare disclosure of energy strategies in the wake of the global economic turmoil.Zhang Guobao, head of the National Energy Administration, said in remarks published yesterday that China would actively push forward construction of the second phase of state strategic oil reserves, having largely completed the first.
Chavez Says He’ll ‘Protect’ Dollars Amid Drop in Oil
(Bloomberg) -- Venezuelan President Hugo Chavez said he’ll take steps to save dollars as a tumble in oil curbs the South American country’s export revenue.The government reduced the allowance given to each citizen to buy dollars for travel abroad at the officially pegged exchange rate on Dec. 31, in part because people would illegally stage fake vacations to obtain foreign currency, Chavez said in comments broadcast by state television.
As oil and economy tank, Russians become fearful
There are many oft-quoted indicators of Russia's suffering economy — the nation's international reserves have fallen by more than 25 percent since August; the major stock indices recently plummeted by 70 percent; and the ruble has been sliding — it's now selling at exchange houses for about 30 to the dollar, compared with 23.5 five months ago.Beyond those figures and the analysis of financial experts, however, on the streets of Moscow — a city that has known much tumult during the past century — there is for many Russians a deep sense of fear, a feeling of being underneath a gathering dark wave of hard economic times.
Analysts think Exxon Mobil will buy Royal Dutch Shell
Exxon Mobil is sitting on a massive pile of money.Thanks to record oil prices over the last few years and a cautious investment strategy that drew fire from critics, the company has nearly $40 billion in cash reserves. It has another $225 billion in repurchased stock tucked away for a rainy day.
That's enough money to pay a nearly 60 percent premium, in cash, for every share of its next largest competitor - Royal Dutch Shell.
Japan Geothermal Projects Pick Up After 20 Years: Report
TOKYO - Several Japanese firms will kick off new projects to build geothermal power plans this year for the first time in nearly two decades, the Nikkei business daily reported on Saturday.
Citgo pulls out of low-income heating oil program
BOSTON (AP) — Citizens Energy Chairman Joseph Kennedy says Citgo has suspended its free heating oil program for low-income residents.Kennedy said Monday the Venezuelan government's Texas-based oil subsidiary cited falling oil prices and the world economic crisis for forcing the company to reevaluate all of its social programs.
The goal that the Venezuelan basket of crude oil and derivatives averages USD 60 in 2009 in order to balance public accounts somehow appears highly unlikely to meet in this fiscal year, when a new election, inflation rates spiraling up and the sacrifices typical of a lean period are expected.After the weekly average price exceeded USD 126 per barrel last July, the Venezuelan crude oil has plummeted. This is a matter of concern for financial authorities, but particularly for Venezuelans in general, as they know that a belt-tightening period follows when oil prices starts to plummet.
Pdvsa refining capacity tumbled 5.6 percent
State-owned oil company Petróleos de Venezuela (Pdvsa) processed less crude in the domestic and international refining circuits. Based on the operational and financial report released by the holding, the total volume stood at 2.41 million bpd of oil between January and September 2008.The figure represents a 5.6 percent drop compared to the same period in 2007, when it was 2.55 million bpd.
UBS downgrades 10 oilfield service names
(MarketWatch) -- UBS on Monday downgraded 10 oil service stocks to buy from neutral, leaving six buy ratings of the 23 stocks it covers from the sector. UBS cited lower rig counts, scarce credit and lower day rates.
Honda Says U.S. December Sales Declined 35% as Industry Plunged
(Bloomberg) -- Honda Motor Co., Japan’s second- largest automaker, said U.S. sales fell 35 percent in December, dragging the company to its first annual decline in the market since 1993.Sales dwindled to 86,085 cars and trucks, from 131,792 a year earlier, a spokesman, Chris Martin, said today in an interview.
Ford’s U.S. sales dropped 32 percent in Dec.
DETROIT - Ford’s U.S. sales dropped 32 percent in December, the automaker said Monday.
Petrobras: 1 worker dead in offshore accident, oil production halted
RIO DE JANEIRO, Brazil — Brazil's state-run oil company says an accident on an offshore platform left one worker dead and halted production.
Behind the Russia-Ukraine Gas Conflict
Economics and politics drove Gazprom's decision to shut off gas to its neighbor.
Canadian consults Norway on oil wealth
EDMONTON, Alberta (UPI) -- The provincial minister of finance for the Canadian province of Alberta is seeking advice from Norway on handling billions of dollars in oil revenue.
Calls to use oil as weapon in Gaza fight fall flat
DUBAI, United Arab Emirates — The call to use oil as a weapon against Israel's friends once would have echoed in capitals across the Middle East and struck fear in the West's heart. But even as the crisis in Gaza deepens, threats of an embargo by some officials in Iran and Bahrain are falling flat.Key Persian Gulf producers like Saudi Arabia and even top officials in the countries behind the calls are keeping quiet, mindful that the latest Mideast flare-up is just one of a number of global conflicts on jittery traders' minds.
The shift — plus low oil prices in recent months and memories of the sharp drop in demand after the last Arab oil embargo — reflects a realization that angering key Western customers could endanger regional hopes for continued development.
Putin orders further cuts in gas pumped via Ukraine
Russian Prime Minister Vladimir Putin on Monday ordered gas giant Gazprom immediately to cut gas pumped via Ukraine to Europe in response to Ukraine's alleged siphoning from pipelines."Start reducing it from today," Putin told Alexei Miller after the Gazprom chief informed him of a plan to cut volumes of natural gas shipped through Ukraine by amounts equivalent to those Moscow has accused Ukraine of stealing.
RCMP investigate fourth pipeline bombing in B.C.
The site of what appears to be a deliberate explosion was discovered on Sunday after Encana gas line workers located the partial destruction of a metering shed at a well head site near the community of Tomslake, B.C.
In light of the important and serious changes in the global economy today, wide-ranging views and expectations surface and vary on oil market trends in 2009. On the one hand, there are those who believe that bad and serious news has quickly piled up in the end of 2008, and that the situation is likely to improve in the coming 12 or 14 months, i.e. in 2010, thanks to the quick measures taken by the concerned governments and central banks. This group seems optimistic that oil markets and prices are going to improve in the foreseeable future. On the other hand, there are those who believe that we are ahead of an entire collapse of the global economic system, and that the mammoth solutions ratified quickly vis-à-vis the past, will fail to stop the crisis' effects from lasting for many years. This means we will continue to suffer from their consequences until 2014 at least.
Chesapeake Sells More Assets, raises $412 million
NEW YORK (Reuters) - U.S. natural gas producer Chesapeake Energy Corp said on Monday it raised $412 million from the sale of gas output and assets in the Anadarko and Arkoma basins to investors of Argonaut Private Equity....Chesapeake, which became the largest U.S. gas producer in 2008, has announced budget cuts four times in recent months as the steep selloff in gas prices and its aggressive land purchases forced the company to raise cash.
OPEC Will Make Planned Production Cuts, Official Says
(Bloomberg) -- OPEC is likely to make all the oil production cuts promised at its last meeting, causing global crude stockpiles to fall this quarter, an official from a Persian Gulf member of the group said.Full implementation of the 4.2 million-barrel-day reduction in supplies will send inventories below their five-year average, said the official with direct knowledge of OPEC’s deliberations, declining to be identified by name because he isn’t authorized to speak publicly. It’s unlikely the group will meet before its scheduled meeting on March 15, he said.
Sagia: Oil price drop will not hinder Saudi development
A declining oil price will have little impact on development plans for Saudi Arabia this year, according to a senior executive at the Saudi Arabian General Investment Authority (Sagia).
Iraq is the war that everyone wants to forget. Unfortunately, it is too important for the United States to do so. Because of Iraq's location amid the Persian Gulf oil fields, its long-term stability remains a vital interest of the U.S. Moreover, everything else that the United States must accomplish in the Middle East requires stability in Iraq. If Iraq collapses back into civil war—unfortunately still a very real possibility—it will undermine every other American policy initiative in the region and could exacerbate the global economic crisis by sparking another oil shock.
Gazprom plans to sue Ukraine for breaching gas transit contracts
PARIS (Itar-Tass) -- The Russian gas giant Gazprom intends to sue Ukraine in order to make the country fulfill its liabilities for Russian gas transit supplies, Deputy Chairman of the Gazprom Board Alexander Medvedev said here on Monday.
Russia Pushes To Grow Gazprom's Reach, Control
Three years after Russia shut off natural gas supplies to Ukraine and raised fears of an energy crisis in Europe, the same thing has happened again. The crisis brings renewed attention to Russia's huge state gas monopoly, Gazprom, and its role in the Kremlin's foreign policy.
Swedes may help resolve Ukraine's gas bill
STOCKHOLM, Sweden (UPI) -- The dispute between Russia and Ukraine over a natural gas bill may be headed to a Swedish arbitration group, reports said.Two German newspapers reported Russia's state-run energy company Gazprom has said it was willing to settle the dispute through the Arbitration Institute of the Stockholm Chamber of Commerce, Swedish news service Tidningarnas Telegrambyra reported Monday.
Russia's gas monopoly Gazprom supplies one quarter of Europe's gas needs.This is how the gas gets to Europe from Russia and some of the new pipeline projects aimed at bringing more Russian gas to Europe and diversifying supplies.
The Law of Unintended Consequences: 20th Century and Beyond
The pundits concluded that oil reaching $147 a barrel was due to speculators. Once the speculators were forced out, oil prices collapsed. Their view is that this temporary crisis has passed and life will go back to normal. American oil demand declined by 13% in September 2008, but Chinese demand grew by 28%. Auto financing at 0% for five years on SUVs will prevail and all will be well. The ignorance of the true facts by our leaders will lead to a future crisis that will make the current financial crisis seem like a walk in the park. The current economic downturn which has temporarily decreased worldwide demand will end. Oil demand will resume its upward slope, while supply has likely reached its peak. The facts based on exhaustive research by Matt Simmons are:● 60% of the world’s oil is consumed by 10% of the world’s population.
● America represents 5% of the world’s population and consumes 24% of the world’s oil.
● Middle East oil use is growing more rapidly than China’s.
● China now uses 8 million barrels per day versus 3.5 million barrels per day in 1997.
● China now consumes 2 barrels per person versus 24 barrels per person in the U.S.
● The U.S. has 220 million automobiles for 305 million people. China has 32 million cars for 1.3 billion people.
● Peak supply of 86 million barrels of oil per day has been reached. Demand will grow to 115 million to 125 million barrels per day in the next 20 years.
The price of oil is now dangerously low. There are large amounts of untapped resources in non-traditional places. These include oil sands in Canada, oil shale in the Western U.S., and deep water oil. At $40 a barrel, the cost to extract oil from these sources is greater than the revenue that can be generated. Therefore, all projects in these areas will be stopped or delayed indefinitely. Drilling rigs are being shut down, employees are being laid off, and all expensive deep water projects are being abandoned. Supply has topped out at 86 million barrels per day. Mature oil fields throughout the world are in decline. Projects can take decades to bring on-line. Projects not started today will result in supply shortages in the future.
Oil Curve Steeper Than '99 Shows Possible Gain in '09
(Bloomberg) -- The steepest plunge in crude prices on record may be setting up oil investors for a rally this year, if history is any guide.The so-called forward curve of futures contracts traded on the New York Mercantile Exchange suggests oil will rise 28 percent to $60.10 a barrel by December. The curve looks almost the same as 10 years ago, after Russia’s default and the collapse of the Long-Term Capital Management LP hedge fund raised concerns that a global economic slowdown would reduce energy demand. Crude prices fell 25 percent in the final quarter of 1998, the steepest drop in seven years.
The good news behind lower oil prices
Call it the petroleum industry's Christmas gift to the world.The collapse in crude prices is causing a lot of financial misery in Alberta and every other oil-producing region. But the benefit to energy consumers -- individual and corporate -- is huge. This massive reduction in energy costs will be a major contributor to recovery from the global economic recession.
EU reports no major disruptions
KIEV, Ukraine (AP) -- The European Union says that there have been no substantial disruptions in natural gas supplies through Ukraine from Russia.The European Commission says that there is no immediate danger of shortages for end consumers and that industry is also still receiving gas.
Kuwaiti official says no plan for OPEC meeting in February
Iran's OPEC governor Mohammed Ali Khatibi said Monday that the producers' group would meet in Kuwait in February to assess the impact of the latest production cut. He had earlier mentioned a possible date of February 19 for the Kuwait meeting.But the Kuwaiti source said OPEC would most likely wait for its next scheduled meeting due to be held in Vienna on March 15.
Eni says Nigeria break cuts oil output by 12,000 bpd
(Reuters) - Italian oil and gas group Eni SpAsaid on Monday the closure of a pumping station in Nigeria following a spillage incident had reduced oil production by 12,000 barrels per day. "The overall amount affected (by the incident) is 12,000 barrels per day and Eni's share of that is 2,400," an Eni spokeswoman said.
Alaska: Refinery's struggles cause for concern - If it ceases operations, the railroad and the airport would be hit hard
Flint Hills, part of Kansas-based Koch Industries Inc., has indicated its aging refinery is struggling financially because of last year's record high prices for crude oil used to make such products as jet fuel, heating oil and gasoline.
Exxon: Waiting for the tiger to pounce
The company is sitting on a pile of cash, and some think it may soon buy another major oil firm.
Exxon Apostasy: A Closer Look at the Oil Giant's Real Valuation
I invite you to spend some time with XOM’s annual report. You’ll find that volumes of production and reserves in all its segments have not moved much since 2003. In many cases, they declined. So the magic behind all that growth over the last five years had little to do with XOM’s operating performance but was totally driven by commodity prices and share buybacks.You might say that XOM is at only nine times earnings, and there’s not much growth built into the stock. Keep in mind, however, that XOM only trades at that valuation if it can earn what it earned in 2008 when oil prices were between $85 and $150. Unfortunately for XOM, fortunately for rest of us, oil prices are making five-year lows, revisiting the mid-30s.
Richards Bay Coal’s 2008 Exports Fell on Rail, Eskom
(Bloomberg) -- South Africa’s Richards Bay Coal Terminal, the world’s largest coal-export facility, shipped 6.6 percent less fuel last year because of derailments and increased competition from local power utility Eskom Holdings Ltd.
India Plans to Deregulate Retail Fuel Prices, Ahluwalia Says
(Bloomberg) -- India plans to free retail fuel prices from government control and link them to global crude oil, the prime minister’s top economic adviser said, indicating gasoline and diesel costs may be cut for the second time in a month.
Pakistan: Diesel shortage hits public transport
LAHORE - Diesel shortage has adversely affected public transportation services, with a significant reduction in service duration at night, provided by the local operators as the provincial government fails to ensure fuel supply to these operators.As long queues of vehicles at different filling stations in the city tell the tales of the on-going fuel crisis across the country, commuters are really feeling miserable when they have to wait for hours to get on a public transport vehicle in intense cold weather.
India: Trucks go off roads, food supplies may be hit
New Delhi: Over six million trucks went off roads across India in the early hours of Monday, a day after talks with the government over their demand to reduce prices of diesel and tyres failed. Traders voiced fears of food shortages as the indefinite strike started.
Geopolitical Energy: Centered on the Caspian Sea
I’ve just finished reading a fascinating book authored by Lutz Kleveman entitled The New Great Game. The book is about Kleveman’s visits to all countries surrounding the Caspian Sea and to the countries involved in actual and proposed oil and gas pipeline routes required to bring Caspian Sea energy assets to the world market. He interviews an amazing cast of intriguing characters along the way.
Lawrence, Kansas reviews progress on 2007 goals
The Mayor’s Task Force on Sustainability is meeting regularly to come up with ways to make the city more environmentally friendly. Commissioners also formed the Peak Oil Task Force after some residents expressed concern about the city’s lack of planning for higher fuel prices and possible oil shortages in the future.
Attaining sustainability on Kaua‘i
Kaua‘i is an island furnished with natural resources, year-round warm weather, fertile soil and bountiful rain. What better recipe could be concocted for maintaining a sustainable food industry?Glenn Hontz, coordinator and director of the Food Industry Program at Kaua‘i Community College, already thought of the idea long ago; well before oil prices were increasing and our reliance on imported food reportedly grew to nearly 90 percent.
Prime Numbers: The Nuclear Option
After a decades-long slowdown, nuclear power once again dominates the global energy debate. Dozens of countries are vying to join the nuclear power club and hundreds of new reactors are on the drawing board. But despite the hype, it will not be the miracle cure for energy dependence or global warming that boosters promise.
Nissan Motors believes it has found a solution to the growing problem of fuel cost and shortage for internal combustion driven automobiles. Simon Sproule, Corporate Vice President of Nissan Motors in Asia says the most viable alternative is to go electric.“While developing other alternative fuels is still on the R&D of Nissan, we believe that electric cars are the way of the future for automobiles,” says Sproule in an interview. Nissan believes in electrification of cars because it is the most common of all alternatives.
Lead for car batteries poisons an African town
The dirt here is laced with lead left over from years of extracting it from old car batteries. So when the price of lead quadrupled over five years, residents started digging up the earth to get at it. The World Health Organization says the area is still severely contaminated, 10 months after a government cleanup.The tragedy of Thiaroye Sur Mer gives a glimpse at how the globalization of a modern tool — the car battery — can wreak havoc in the developing world.
Sorry, Climate Change Wouldn't Hurt America's Economy
If you do buy into the theory of man-made climate change, the next logical move would surely be to do nothing that would slow growth and technological advancement in rich countries -- such as a cap-and-trade regulatory system or onerous carbon taxes -- and do more to accelerate growth in poor ones through free trade and the exporting of democratic capitalism.
Bill McKibben - Think Again: Climate Change
Act now, we’re told, if we want to save the planet from a climate catastrophe. Trouble is, it might be too late. The science is settled, and the damage has already begun. The only question now is whether we will stop playing political games and embrace the few imperfect options we have left.
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I haven't been around for a few weeks, and I was just wondering: What happened to the comments rating system? Why is it gone? Speaking for myself, I had grown rather fond of it.
It's just down temporarily. SuperG did a huge upgrade on Christmas Eve/Christmas Day, and had to turn off some features while he irons out the bugs.
Had to do with a recent software update. Apparently it's temporary.
Edit: See above.
Thanks for both notices above. As long as we're on the topic, let me take this opportunity to report that, in the past, the ratings system often moved several ticks at a time for me rather than just one (say, from -1 to +2, or from +1 to +4, or from +1 to -1).
Because someone else was also voting when you cast your vote, most likely. You sent your vote in, and the server responded with the current vote tally.
Or not.
Yes, that's it. You don't see the current vote total until you vote or refresh the page, so it might look like your vote is counted more than once (or not counted at all). In reality, it's just that other people have voted between the time you loaded the page and the time you voted.
I am happy to hear that the rankings are coming back. One request: would it be possible to put them at the top of the article? I scan the comments and only look at posts above a certain threshold (or by certain authors). I just don't have time to look at them all. And when the rating is at the bottom, I often have to scroll back up to read longer posts that I discover are favored.
After reading the site for years, I finally created an account, just so I can make this request. Perhaps I will post real substance in the future. Thanks to all for the great discussion.
Not sure if this was previously posted.
New research shows Great Barrier Reef growth slowing since 1990
Here's another ... Climate change leads to 'Super Wildfires' in the Siera Nevadas:
http://www.sacbee.com/741/story/1436736.html
Concerning the Yellowstone Supervolcano:
I created and played around with a theoretical model this weekend. My opinion is that there's a low propability that it will go off in one huge explosion.
More likely: it will start as an average volcano... except that it'll keep on going... and going... for years... then decades... maybe even centuries. When enough ash is vented my model breaks down since I don't know how the dome's collapse would happen (might seal the vent... or open new ones). I don't have the geological data to model a collapse.
Impossible! That is, it is impossible for a supervolcano to erupt as an average volcano. That is because of the size of the magma chamber. The pressure per cubic meter is no greater than that of the average volcano, perhaps evens less, but because the magma chamber is several hundred times as massive, once the cap is breached all that pressure would be released at once.
The last supervolcano, Toba, erupted about 74,000 years ago and almost wiped out humankind. There is no evidence of any supervolcano erupting as a regular volcano and lasting for decades. Again, it is because of the enormous size of their magma chamber. When a supervolcano goes, it goes suddenly.
Anyway, Yellowstone has erupted at least three times in the past, probably more. Every time it erupted as a supervolcano and left only a caldera. Why on earth would you expect it to be different the next time?
Ron Patterson
Re: Toba eruption: Depends on how you define "humankind." My contention is that by virtue of wiping out competing central Eurasian populations of Homo erectus & H. neandertalensis, Toba facilitated the diaspora of African H. sapiens. So if you include our congeners in "humankind" your statement that Toba "almost wiped out humankind" may have some validity. But if you only count our own species as "human," Toba did us a big favor.
If you get enough ash thrown out over a long-enough period it'll screw up anyone's day... probably worse than a one-time explosion.
I would imagine that any super-eruptions will have destroyed much of the evidence for normal eruptions if there had been any.
Not so! It would have destroyed the cone of course but not massive lava flows that extended beyond the caldera. There are none around Yellowstone. We could expect, from a magma chamber that is about a thousand times that of a normal volcano, enermous amounts of lava flows if it erupted as a normal volcano. That simply did not happen.
Ron Patterson
Some volcanoes produce magma flows... other produce ash. It depends on the magma.
The eruption of Thera blew the volcano into oblivian and covered the island in ash. Krakatoa was a phreatic explosion instead of the less viscous flows characterized at Kilauea
A dome collapse would pretty much destroy the structure of the volcanic cone. I think that the physical collapse of Thera and Krakatoa probably did as much - or more - to bring on the tsunami as any internal explosion did.
Yellowstone erupted spreading ash over hundreds of miles. If it were to erupt again it might precipitate an ice age.
http://www.solcomhouse.com/yellowstone.htm
Concerning SOLCOMHOUSE link:
I stand educated about the post-collapse sequence, but I still think the PROBABILITY of a "rapid" magma depletion is OVER-exaggerated. Personally, I think it MORE PROBABLE that a "slow" lomg-term magma depletion is what initiates the collapse; something like a decade's/century's long Mt. St.-Helens-type event.
Not mentioned in link: largest volcanic dome in US is under the Adirondack Mountains in New York State. It just never erupted, so nobody's paid any attention to it... except some geologists. It's a fairly young feature; some estimates put it close to 5 million years old.
Adirondacks... "Young mountains, old rocks"
Darwinian,
AAAaaa, but if the volcanic tube is long enough - and RELATIVELY narrow enough - (think Reynold's number) then the pressure gradient over the magma chamber will be slight enough that you wouldn't get the sudden pressure drop that everyone seems to assume.
Now, if an asteroid hit the dome, that would be another story.
Haven't all the eruptions since 600K years ago been "normal" eruptions? The rhyolite fields that cover Yellowstone today were from the latter eruptions, 70K years ago, were they not?
From Wikipedia, both sorts can happen:
I thought that Yellowstone was caused by a crustal hot spot similar to the Hawaiian Islands. All you have to do is follow its path west to the lava flows in Idaho and Washington. Maybe the hot spot is on the move east again.
Such "hot spots" are convection plumes in the mantle. They don't move laterally, the crust moves over them.
to the east of yellowstone are the absaroka mnts which were created by another volcanic event during the cretaceous.
I created and played around with a theoretical model this weekend
Nuff said.
You obviously have me confused with some economist.
In recent posts, Denninger has been harping on the exponential function, and on the fact that it inherently limits growth as a matter of mathematical necessity. Perhaps this represents an opening for some people to try to gently persuade him of the reality of Peak Oil, given that the Peak Oil concept is merely a particular application of the very mathematical reality he has been harping on?
Why would anybody care if he does not get peak oil? BTW: I am sure he gets it, but doesn't want to admit, because given peak oil, there is no hope for BAU. Except if USA every year buys higher share of the whole pie, but this can't go on indefinitely. But basically he prefers to do this. And he wants to drill drill drill too. Let's prolong the pain for a month or two. Yaaaawn.
Everyone is OK with the end of BAU, as long as it ends the year after they have died.
"Apres moi, le deluge!" - Louis XIV
Investors dump $89B in U.S. securities in historic fire sale
Denninger has been going on about exponents recently, sounding remarkably like Albert Bartlett. However, I'm not sure he's following it to the inevitable conclusion: that it's not just Paulson and Madoff that are unsustainable, it's our entire economic system.
I've noticed that the talking heads on CNBC lately are no longer saying, "Hang in there for the long haul." They're saying, "Traders can make money, but this is no market for an investor."
Not sure if that means the apocalypse is upon us, or if it's a contrarian signal and we should all jump in. ;-)
Everything on CNBC screams we're on CrashTrac (Jesse's Cafe Americain).
Everytime "growth", "bottom is in" is mentioned.
P&G at 50 by March.
Denninger:
"In fact, CNBC has their anchors around the desk this morning arguing that this was a "great scam"; that absent the downturn in the market he would have gone to his grave without having to give up his secret.
Well, perhaps, but eventually it would have been exposed, and the bottom-line reason is not due to the market crash this last autumn - it is the inevitability of the power function that always brings down Ponzi schemes."
And speaking of Jesse, here she is today:
"Privatized Social Security, Italian Style
Here are a few lessons which can be learned from the Italian experiment with privatized Social Security:
1. The average person does not understand, and is incapable of understanding, the relationship between higher return and higher risk.
2. The average Banker apparently does not understand this either, so we ought not to be too hard on the average person.
3. High risk investments are always and everywhere inappropriate investment choices for an investment plan for retirement with near term payment goals.
4. When the going gets tough, everyone expects to be bailed out, sometimes shamelessly.
5. This article is somewhat disingenuous as the US did not avoid much of anything. Wait until the tab for the State and private pension plans starts hitting the table.
6. Whatever pension plans are promoted for the public and MUST include all government workers, especially the Governors and Legislators to have any hope of success.
7. Whenever the private financiers 'help' the legislators with a troublesome problem the losses are sure to be especially heavy."
http://jessescrossroadscafe.blogspot.com/
Debt cannot be created except by growing energy.
The financial crisis was the trigger that exposed the problem. If a Ponzi scheme is backed up by a sound investment strategy, which just happens to be temporarily doing poorly, there is a chance it would make it through. My guess is that many (most?) Ponzi schemes get started this way, someone thinks they have a brilliant investment strategy, but have to fake results to cover for initial bad results, soon the scale of the coverup/deficit gets out of hand. In any case Charles Ponzi, thought he could simply take the money and make enough profit by arbitraging postal coupons to make everyone whole.
Ponzi was just copying the big boys.
Robert Rubin will go down in history.
The exponential function sure is fun to play with. I bought a programmable calculator about 18 years ago and wrote a little program to increment a number by a fixed percentage, then show the new value on the display. After a short delay, the next increment was displayed. As Denninger points out, a continuous exponential growth is impossible for most measures (excluding paper dollars). Do the math he suggests for the population of the U.S. after 100 years of 2% annual growth.
Lots of fun, but what politician has any clue or cares? After all, look at India and China, where there have been efforts to limit population growth. Here in the U.S., the Fundamentalists still get all bent out of shape with any suggestion of legalized abortions. And, half of our population growth is from immigration..
E. Swanson
And that immigration is not because TPTB really care about huddled masses yearning to breathe free. It's because they need more people coming in at the bottom to keep the pyramid scheme going. Slowing population growth is seen as a problem, not as a solution.
Yes, because the US has been soooooo welcome to new laborers coming to maintain our standard of living. We're really pulling in the suckers, aren't we. Give me a break. Immigrants see and got a better life for them and their family by coming to the US and working rather than staying home. We didn't lure them by any way, shape or form to maintain our "pyramid" scheme. And slowing population growth is not a problem for industrial countries, decling population can be seen as one though, assuming the old retirement model remains. If we go back to days when you worked as long as you could, productivity need not decline faster than desired consumption.
I didn't say we "lured" them, did I?
A pyramid scheme invloves a predetermined end of collapse involving an undetermined when up until you have no new investors. Immigration didn't stop because immigrants "caught on" to the scheme, it stopped because there stopped being benefits to coming to the US. The final immigrants weren't left holding a bag of no value that they invested in, they were left with a simple loss of new income, which they knew was never guranteed. They weer investors who lost out because the product wasn't marketable anymore, not a non-existant product.
No, you didn't say "lured", but a pyramid scheme by its very nature is meant to "lure" through unreasonable promises of fortune. Thus, calling immigration a pyramid scheme is incorrect.
I didn't call immigration a pyramid scheme. I called our economic system a pyramid scheme, that needs to be fed by a constant flow of new "investors" at the bottom. That means population growth. Whether that comes via born citizens or immigration is irrelevant to TPTB.
What I meant was that those in charge have little incentive to stop immigration. There's a lot they could do, but don't. Social security numbers are required to get a job...but the IRS and other government agencies do nothing, even when there are dozens of people sharing one social security number.
Alan Greenspan has actually said that all the US growth of the past twenty years is due to immigration. And blamed Europe's more restrictive immigration policies for their slower growth.
That's what I mean when I say TPTB see population growth as a solution, not as a problem.
I think the credit boom resembled a pyramid scheme because the real value is so opaque now, but underlying all these financial structures, there is still real value. The exponential increase we saw over the last 5 years was imaginary, but the houses and products bought on credit weren't. I think for a system to be truly a pyramid scheme, the real value has to be gone by the time the last investors are left, because it was their money that went to feed the ones who came before. The last investors in this case still have assets, but nobody has yet to find the real value of them, so panic has induced many to assume there is "no value".
Absolutely, and now our brilliant financial wizards have created the derivative black hole as a counterpoise to the Fed's ability to create money. No longer do we have just a fiat money source but we now have a fiat money sink. Now the Fed can create all the money it wants to get the economy growing and not worry about inflation since whatever they create will eventually end up in the derivative black hole. Now money can be truely recycled!
Now if somebody would develop a financial throttle we'd be all set.
"We didn't lure them by any way, shape or form to maintain our "pyramid" scheme."
Businesses "lure" workers from south of the border all the time. This is well-known to anyone with any experience with Latino immigrants. They advertise jobs on Mexican radio stations and distribute flyers. So far as I know, mainly construction and agribusiness.
lilith
And keeping the scheme going is why I my Grandmother had tales of the government encouraging childbirth in her youth and why you can find wack-jobs with signs saying abortion means 20,000 people a day who won't be paying into social security.
Legalized abortion -- exponential inflation eroding the value of life.
The allure of the U.S. to the illegals may be wearing off. I am seeing stories about how some of them are going back to their countries of origin as they can't find work up here any more.
It’s more fun to do that exercise on XL.
You can run 20 different exponentials in columns to infinity in no time. Or an amortization schedule on a loan quickly.
Or do population exercises on every country in the world.
Someone recently posted a thought exercise on here, regarding the exponential function.
It was basically that if we increased our oil production by 2% per year, when would we run out of oil, assuming that the entire earth was made of oil. The answer I got IIRC was year 2428.
In the year 2525
If man is still alive
If woman can survive
They may find........
In the year 3535
Ain't gonna need to tell the truth, tell no lies
Everything you think, do, or say
Is in the pill you took today
In the year 4545
Ain't gonna need your teeth, won't need your eyes
You won't find a thing to chew
Nobody's gonna look at you...
Looks like we made it all the way to 9595 - for better or worse - perhaps a bit optimistic?
Maybe the song needs an update spacing in a hundred years instead of a thousand.
Pete
Or ten years. It came out in 1969, only four decades ago.
Of course, going the other way, net oil export declines tend to show accelerating decline rates, which is worse than a simple exponential decline rate.
He said many times that the crowd will run over anybody who is in favor of sustainable policies when the living gets hard and in that regard I agree with him.
No matter how much right peakoilers are, the problem is there are no good solutions. Given that, even though the study of peak oil is very interesting, I just can't see peakoilers to determine policies. OTOH, they (or should I say we) can predict what the policies of those who decide, will likely look like.
Global car sales fall by double digits
Well, I'm glad that's settled... Now, if the economy can declince just as fast as the supply of oil, prices should remain nice and low...
One of the CNBC anchors is bragging about buying two huge, loaded SUVs. He said the price was so good, he had to buy two.
Why not? That's an unique possibility in history to drive a SUV. I for one, drive a SUV. Not to brag, but I feel safe in it. With many crazy and drunk drivers, I am not about to apologize for doing it. When I bought in 2006 I had in mind that soon there will be massive layoffs, people will be angry and will drive even more recklessly.
Of course, I will get rid of it when it gets politically incorrect to own one. But this is still some years away, I guess.
Thanks for noting that your behavior is a function of what is PC.
Well, I am just trying to adapt to this crazy world. Once I wanted to change the world, now I merely try to understand it. It is going to be my first and only SUV, FWIW. My next car will be lean and slow and I will be extra cautios to drive something so that I will be able to find spare parts.
Seems like I've heard this before...
"Well, if we're going to run out of oil anyway, can't we just use as much as we like until it's gone?"
- my wife's first response upon my confronting her with "peak oil."
To her credit she has come around quite a bit, but is still having difficulty translating that into her everyday life.
You remind me of this poster from Despair.com
"No single raindrop believes it is to blame for the flood"
One of the primary arguments for buying an SUV is safety. It does not mean you are less likely to have an accident; in fact you are more likely to do so for a number of reasons, including things like rollovers and intertia. No, it just means that in a crash between an SUV and a car, the number of injuries/fatalities for the SUV occupants will be considerably less than for the occupants of the car, especially the small car.
Thus, SUV drivers are killers waiting to happen as they cause a disproportionate amount of deaths.
The response is that, well, in that case, everyone should drive SUVs, a tragedy evoked by externalities not borne by the SUV driver. Also, of course, the car driver is taking more risks in part because he/she is willing to assume the additional risk because of concerns about externalities.
The seemingly logical result of all this is pretty absurd and unfair. Why should I, the Prius driver, be forced to take on much greater risks than the SUV driver when I am the one that is being socially responsible.
Another extremely unfair feature is that in no fault states, the SUV driver does not have to pay higher premiums even though they are causing greater damage to cars than cars are causing to SUVs.
The fairer result and one better for society is that SUVs be banned. If not banned, there should be a law where all bumpers have to be the same height. This would reduce the risk of serious injury or death.
Start the banning process by banning SUVs from HOV lanes. Short of banning, extremely high ownership taxes should be charged based upon all the damages to other cars and the environment that SUVs cause.
The rules of the game are set up to punish socially positive behavior.
Well said. This is worth repeating.
I know you're talking to the comment at hand, but you are aware of the practicality of SUV's for alot of people (towing, ride height for off road use, commercial use for people that work out of their vehicle).
And unless you're going to mandate car weights, a 5000pound SUV hitting a 3000lb pound is no worse than a 3300lb car hitting a 2000lb car in regards to the deceleration applied to the occupants of the lesser vehicle.
I don't agree with people who think traditional SUV's are "safer". They sit higher and have cruder suspension geometries, making them more likely to flip in accidents or just cause the driver to lose control. At the same time, being farther off the ground gives the driver a false sense of slowness, encouraging the driver to drive faster. and they have worse blind spots closer to the vehicle, making small people and animals harder to see. I don't think people consder all the safety negatives of SUV's before they immediately turn to bigger is better.
However, talk of banning the SUV is rediculous IMO as the unintended consequences would be incredible.
I agree.
I think one compromise might be to implement speed limiting devices such as used in Europe currently for larger commercial trucks. If the off-road capabilities, towing or practical uses are so important to the user then customers wouldnt mind. It would have the benefit of reducing fuel consumption on highways too.
SUVs (especially the largest kind, H2 and Excursion) are using legal definitions to their own advantages. So for example when tax time comes around its a commercial vehicle therefore its a deductable expense for a "basket weaving" business. Likewise many neighborhoods have bans on 6000lb commercial vehicles but somehow the H2/excursions ride on without a glance. The owners of these vehicles are not paying the full cost considering the increased loads on the roads and the pollution. If we dont have the appetite to tax them then the appropriate response might be to slow them down and "bore" them back into cars.
After all the real reason so many drive them has nothing to do with practicality and everything to do with Fashion. Mini-vans are practical - You dont see people rushing out to buy up cheap minivans. SUVs wouldnt be so trendy if they were slow.
Good points. Maybe forcing everyone who drives such a vehicle to get a commercial driver's license would add to the disincentive. Especially if getting such a license meant actually taking a real test in basic mechanical and physical principles plus putting the cost at over $2000.00 Which would still be comprable in price to a regular license in say Germany.
I agree.
I mostly drive my pickup because I need to haul stuff - hay, firewood, etc. I sure don't think it's safer.
For different kinds of trips, we drive our Subaru Outback. Where we live, we NEED 4-wheel-drive and a bit of clearance.
What the heck are you going to do in a few years when the permanent fuel shortages begin?
Eek. Scary.
I think this is actually true in most states. But, enforcement is rare to nonexistent. Of course low bumpers make the original purpose for the SUV (the ability to travel on very gnarly terrain) impossible. But 95% of all modern SUVs have long ago given up on this possibility.
Even for the occupants SUVs are often not safer, many rollovers are a result -not a cause of the accident. But of course SUV is really a standin for bigger and heavier than the other guy.
Research by the insurance industry showed that children were 50% more likely to be injured in a SUV than in a smaller car.
Well, this one has been coming for a while. By many accounts there has been an excess in car production capacity for years now. In the U.S. people were sending cars to the junkyard long before the engineering lifetime was over with - I think those days are over.
My wife was saying they had a report on the radio this morning about how repair businesses of all sorts are experiencing increased business..
Oil price rises on Gaza conflict
Why? Are (Is?) there any pipelines or other infrastructure affected?
The only threat I see is a 1973 style embargo - is that a real possibility? Talk about political cover for lowering production.
The only threat I see is a 1973 style embargo - is that a real possibility?
Egypt and the KSA could experience coups at anytime now.
All "moderate arab states" (receiving $$$ from the US to toe the line)
are in jeopardy.
And Iraq is not stable, in spite of what the US says.
This is a case of journalists coming up with an explaination for something which is essentially random noise. It is done all day every day, e.g. 'U.S. Stocks Fall on Earnings Concern'. The truth is unless there is a really large movement, it is just random fluctuations with no single cause.
However, the same rise happened in July 2006 during the Hizballa-Israel war in Lebanon - with a fall shortly thereafter. Coincidence? Maybe.
I suggest you read "Fooled by Randomness" by Nassim Nicholas Taleb
I hope to get to him soon.
Every attribution of a change in the price of oil is speculative. Even the people on the NYMEX trading floor lack the ability to tell you the definitive cause, let along reporters who pretty much resort to a magic 8-ball.
That said, the increased risk of Mideast turmoil causing coups in the KSA/Iraq/Iran is something the market has to price in.
More sea ice problems
http://www.dailytech.com/Article.aspx?newsid=13834
Didn't see any mention in the article about ice thickness. Coverage might indeed be back up to 1979 levels, but is thickness? Is it actually the same amount of ice in total? The article linked was short on details.
Almost surely not the same thickness but big impact on albedo and thickness is increasing more rapidly than normal.
Link? (Rhetorical request: you don't have one.)
This is a blatant, possibly truthful, lie. GLOBAL is the key word here. The Arctic and Antarctic sea ice are somewhat separated from one another's short-term changes. But Arctic sea ice is nowhere near 1979 levels. Antarctic sea ice? So? IF, and it's a huge if given the total lack of links, it's THAT high.... who cares? It is well known Antarcitica is largely immune from the changes in the north as yet.
Just to be clear: global ice extent means diddly squat.
Another point:
A: 2005? New record.
B: 2006? Rebound! Yay!
A: 2007? New record.
B: 2008? Rebound! Yay!
C: But not much of one.
B: Oh. Well. Yay?
Sawtooth: Know it, love it. It is your life on the ice. And of itself means nothing.
WHY? (Why lie?) This has already been discussed ad nauseum. I do not appreciate this lie being refitted and set out again as significant when it is a LIE. (Not telling the WHOLE truth is LYING.)
It is due to the WATER being so warm. I'll leave the rest for you to find. Consider it a test of your veracity.
Here's some TRUTH for you:
http://nsidc.org/data/seaice_index/daily.html
At current, as opposed to the blatant lie posted above, the Arctic ice is at the same level as last year at this time. Deniers need to avoid foolishness where fools should fear to tread. This is one of those places.
BTW, the Antarctic ice is currently between the long-term average and last year's extent, and diving hard downward.
Oh, and last summer? Antarctic sea ice was ALSO well below either avg.
Cheers
Nobody cares about Dec 31st extent anyways. That is about the least useful arctic sea ice metric available, which is why it was the one used in that article.
The author of this piece doesn’t understand what’s happening with Arctic sea-ice. The minimum extent at the end of the melt season has set records the past couple of years, continuing a trend which has been underway for more than a decade. At the other end of the yearly cycle, the maximum extent (usually in March) has shown a much slower decline, since winter’s are still very cold in the Arctic. The latest data from the National Snow and Ice Data Center indicates that the extent is tracking below the long term average and is almost identical to the progression seen last year at this time.
E. Swanson
You mistake the intent of the author.
I believe he understands quite well.
He just wants to fool the rest of the people.
the graph in the article link, was gotten from Cryosphere Today. If one goes there, and sees Antartic ice extent, there is a lot to be concerned about. Also, Artic ice extent is turning downwards also. (Orig.) article author is lying with data. http://arctic.atmos.uiuc.edu/cryosphere
Good morning Leanan and Happy New Year all TODers,
It's a new year, with new possibilities...
I've searched the site looking for primers in investing in oil futures but haven't found one specifically... can anyone point me to some useful/applicable tips on the subject? I'm planning to take the plunge and would like to invest with an eye to cashing in 10-20 years from now when oil is back up in the stratosphere.
Thanks
George (no longer in Vermont - but can't figure out how to change my handle without using a new email address).
I wish I shared your confidence that there will be a market 10-20 years from now.
1) Buy a large and leak-proof tank
2) Bury said tank in yard
3) Fill tank with gasoline or heating oil (but do not tell authorities)
4) Repeat until you run out of money
5) Sit back, and watch everyone else go cold/without gas
6) Sell (or barter) said fuel OR keep said fuel and use it for personal use
Double-line that tank or it will corrode. See current gas station operations for a good example. In fact, many gas stations are already out-of-business. Buying one and building a wall around it may be cheaper than installing tanks in your yard.
Don't forget both anode and cathode protection or both tanks will be gone PDQ.
Oil will be back in the stratosphere within 10 to 20 months. In 10 to 20 years most of us will be dead. I had a great holiday season.
"In 10 to 20 years most of us will be dead."
I think you are wrong there. In ten to 20 years nearly all the folks in my age range will be dead in ten to 20 years.
Glad you enjoyed the holidays!
I'm 45, so the 10-20 year timeframe is what I'm looking at to reap some financial benefit, if that's possible, of being peak-oil aware.
I'm familiar with the need to be prepared in the other areas discussed here as well (community, food security, etc.). I'm just wondering if there are financial instruments one could put one's money into (other than buying an oil well :-) ).
Nobody invests in oil futures. You're talking about speculation.
There are (so far as I know) no futures to speculate in 10-20 years out. So either you wait a few years or you speculate on a shorter time frame. In the meantime, you could do something else with your money like investing or helping your fellow man.
Be wary of schemes such as USO: you may not understand what they're actually doing.
Regular futures and options are easier to understand and are arguably more appropriate for long-term speculation.
I have invested in DBO. Personally, I think that this is the way to go. I'm not an expert, though.
I find individual futures trading intimidating, and DBO can be purchased in your regular brokerage account. Its an ETF that is long WTI futures. It looks cheap to me right now, I just doubled down the other day.
DBO is also long treasuries. And it's cashing in and out every month (I think). This may or may not be something you want your money to be doing in general but it's particularly poor choice right now IMHO. It looks cheap for a reason: it's losing money on the contango.
I don't mean to argue or to question your judgment: I'm posting this in a (futile) attempt to protect the innocent.
Question my judgment all you want, that's why I post here. Why wouldn't DBO do well if oil prices go back up? Better off buying individual futures? Dec 2014 is trading around $75.
$47 sounds cheaper than $75 but there's no free lunch. Consider that February is currently about 4$ cheaper than March... it would take only 7 months to get from 47$ to 75$ at that rate.
If DBO loses as much money on the difference between contracts as it gains from a slow recovery of the price of oil, then it won't do well. And if people keep expecting a recovery that keeps getting postponed for the better part of the year, DBO is going to lose a lot of its value.
Maybe it's going to do well and maybe it isn't. What do I know? Just don't expect it to perform anywhere as well as physical oil in the current environment.
Not futile. Thanks.
"I've searched the site looking for primers in investing in oil futures but haven't found one specifically... can anyone point me to some useful/applicable tips on the subject?"
I don't invest in oil or any other commodity futures. They are too volatile and you WILL be hurt sooner or later. If you buy futures directly, you are gambling pure and simple. It would be better to take your money to Las Vegas. You'll still lose it there, but at least they give you free drinks and a floor show.
I have been investing in private equity petroleum start-ups. Conventional oil only, which can still make money at $20/barrel, as opposed to oilsands or offshore projects which need $75/barrel. I have never bought publicly-traded stocks because they are too susceptible to panicky traders. Private equity doesn't have liquidity, but on the other hand the stock value equals book value, not what a bunch of hysterical ninnies on the TSX or NYSX think it is.
I have invested in various futures for the past 20 years on a very infrequent basis and believe it or not have made a little money. I actually was holding DEC 2008 crude oil back in 2003 or 2004, but sold it within a few months. Where I cashed in nicely was holding oil stocks, which I sold after the Katrina spike.
As others point out, furures are volatile. I try to play long or short at extremes, but as the quote goes “The market can stay irrational longer than you can stay solvent” (Keynes?) Just remember the NASDAQ in 2000 trading at P/E of 250 and not half of those companies no longer exist.
Anyway, oil prices are extremely volatile and I correctly anticipated the current oil crash because I was expecting the financial crash; however the spike to $147 wiped out my short position and I am at a loss on this trade. So you can be right about the outcome and still loose money.
Oil futures only extend out about 6 years, and long dated oil is in steep contango, with distant dates trading over $100. Trading far out is dangerous because of the severe illiquidity. See
http://futures.tradingcharts.com/marketquotes/
I would recommend buying something with long life reserves, like BPT. This stock may face downward pressure when it lowers royalty payments. COSWF also has long life oil sands reserves, and is highly leveraged to oil price. LINE and AETUF have decent life reserves but are 50% gas.
An upturn in commodity prices, especially copper, has traditionally signaled the bottom of market cycles for the last 100 years.
I believe natural gas will turn up before oil. Look at the charts and see the cycle periods. Also, think about supply and demand of gas and the rig count being like a predator-prey relationship / Lotka–Volterra equation.
Thanks very much Paul, and others.
Good luck in 2009.
George
The History Channel has just started "Armageddon Week" with all sorts of scary sounding programs. Last night they talked about Nostradamus and prophecies about TEOTWAWKI in 2012. For some reason people seem to find this sort of thing interesting.
Not a peep about anything like Malthus or LTG, but I gather they will have a program on later this week about asteroid impacts. That's the extent of the science in this discussion...
Maybe we can convince Leonard Nimoy to host
In Search of.. REAL Science Programming!
They did mention resource depletion, climate change and economic collapse as leading indicators of TEOTWAWKI. It would be nice if they mentioned overpopulation as the underlying cause of all this misery, but what difference would it make. Pass the viagra.
The CNBC talking heads are crowing about "Obama the Republican":
Obama: $300 billion in tax cuts
It sounds like the rest of his plan might be put on the backburner for now.
I'm kind of surprised there's not more talk about bailouts for states.
Seems that the states and feds get "bailed out" by reinstating the estate (death) tax and returning to the progressive income tax structure circa the Clinton years. By modifying fed tax structure, the states that use federal taxable income figures for collecting their own income taxes will be in a better place without painting the governors as tax hikers. A small portion of households pay a large portion of both state and federal income taxes.
Sarcasm On - WOW!!!!!! $500 a year!!!! That is $10 per week!!!!
Almost like getting a child's allowance.......
Sarcasm off - Does he think $10 per week is going to revive anything?
It may revive the beer and liquor industry through increased sales of $10 per week per person.
Yeah. If getting people to spend money is the goal, it seems like giving lump sum checks like Dubya did would be a better idea.
Maybe they're hoping people will spend it without noticing it...
The scary thing is they don't even appear to understand how to re-inflate a Ponzi scheme. The most important base for the scheme is housing prices, so logic would say that a tax cut would be designed to elevate these. What they should be doing (to re-inflate the scheme) is immediately give a 300% income tax writeoff (for 2008 tax year and forward) for principal residence interest expense. This would flow the money directly to the big borrowing homeowners, the weak link in the pyramid.
I think this guy is right. The government simply does not have the power to prevent a collapse.
That's one hell of a sobering line of thought from that fellow Leanan. Thanks for sharing. Though very concerned about everyone else, I can take great personal comfort from his words. At 58 yo and born poor my paranoia of dying poor led me to a pure cash position long ago as well as reducing debt to nothing more then my mortgage (currently less then one year's take home pay). Two months ago I bought a new car and shocked the finance guy by paying cash. An easy choice: the good side of low CD rates these days: my lost income is considerably less then the interest cost would have been. Add that to the deflation in auto prices and color me pleased.
My biggest concern is an 8 yo daughter. But hopefully in 14 years, when she graduates college, the economy will have recovered. Very sad to think that it may take that long but his comparison to the Japanese gov’t effort to “save” their economy to current efforts by our gov’t does make me wonder if 14 years will be long enough.
I don't think 14 years is enough. As the article points out, for Japan, it's 18 years and counting.
And that's not including peak oil. I think there's a very real possibility that peak oil means the economy will never recover. They'll never actually say that, of course. They'll keep stringing us along. "As soon as we pass this new stimulus plan." "As soon as we build these nuclear power plants." "As soon as we win the war in Iraq/Iran/Venezuela." It will always be jam tomorrow.
That is my assumption - not a "V" or a "U" or even a "|_________|", but rather an "L" . . . to be followed some time later by another "L", and then another, and yet another, all the way down the staircase.
The USA's fate, and the fate of its citizens, is to become poorer - much poorer. The sooner people adjust themselves to this reality, the better it will be for them.
I think we may do better at this than many expect.
It's all about keeping up the Joneses. If the Joneses are poor, too, then Americans won't mind so much.
In my view, Leanan is correct. I think we'll experience a few years of Greer's catabolic collapse but eventually the system will fail completely, much like a patient that slowly gets worse until a tipping point is reached and the system stops completely. The same occurs in indeterminate structures, which are structures (buildings, stadia, etc.) with sufficient redundant members that it is impossible to resolve the equations without approximation and iteration. My degree is in civil engineering, btw, which might also explain why I keep pointing out that we must pay attention to our basic water and sewer systems or life will become very unpleasant very quickly.
In any case, here is how I see things playing out:
To me, the complete collapse failure mode seems to be a property of complex systems and they are everywhere in nature. True, they can be resilient — to a point. Once that point is reached, sudden failure occurs.
TOD has several excellent articles on the "brittleness" of complex systems.
It appears that many here have the same view about this sort of descent. And I am not going to disagree. But I would encourage all here to remember that such charts, models, etc., are only measuring a material aspect of life we have come to worship as more important than all others. Replace that worship with the worship of something else and Leanan's projection above - that we might do better at being poor than some imagine - just might come true.
Perhaps, but I wonder if something so complex as human society has just ONE tipping point. Might it possibly be that the system contains a whole bunch of tipping points. Flipping any one does not crash the whole system, but it does force it down to a lower level before it stabilizes. This in turn might lead to the next tipping point being flipped, and so on in a slow-motion, intermittent cascading failure. This, perhaps, might help explain our stairstep model.
The staircase metaphor is a little misleading, though, because there is no guarantee that each and every step will be identical in duration, or that the "risers" will all be the same. For example, might the descent speed up, with each drop being more severe and each interval between drops becoming shorter and shorter? Quite possibly. We just don't know. Nor can we know in advance where the system finally stabilizes and we level off.
Hi, WNC.
True about the timing of each step...perhaps I should write "notional" somewhere to make your point clear.
And your point of cascading failure is also well taken...I wonder if there is a practical way for me to put it in my checklist.
The conversation between Martin and Jack was extremely interesting. Yet it totally misses the point of peak oil. For example, Kunstler is predicting a loss of value of the US$ this year of 40%. (See his predictions for 2009). The point is that oil depletion or competition for scarce oil will send higher prices through the system (especially food & energy) and erode currencies' purchasing power and this will probably happen as early as this year, maybe starting now (see rising oil prices recently).
At ShadowStats John Williams is also predicting massive weakness for the dollar and the US economy--he sees things very differently from Martin and Jack. They see the US as relatively better off than other world economies, but both ShadowStats and GEAB see the US as much more VULNERABLE relatively. I guess this is due to its oil dependency.
Interestingly, GEAB sees some sort of horrible new stage in the systemic collapse occuring this coming March and I personally believe this could be a currency--particularly a US$--crisis, or some sort of version of something like that, disguised as a bond market problem or run on some banks. Anyway the problem will expand and enlarge and having massive stores of worthless paper in whatever currency will be a losing proposition.
Martin and Jack say "sell everything"--art, real estate, etc. and turn it into cash and buy US Treasuries. No no, a thousand times no. If you have something that has some intrinsic value you should keep it. It will always be prized whereas the currency you choose may not be---probably won't be, in fact.
Yesterday I bought some very delicious strawberries at a roadside stand and I was fortunately able to use the currency currently being used in this country. But I'm well aware that the woman who took my money in exchange for the delicious strawberries won't be so accommodating next year, or perhaps it will take until the year after that. For sure it will happen, the day when you have cash and it's just useless for acquiring the things you want and need. Martin and Jack and those who followed their horrible investment advice will be out of luck then.
Try this as a mental exercise: imagine you are buying something at a shop and the clerk just looks at your money and shakes her head "no, we don't take that now anymore here." Because that scene is about to become reality---I don't know exactly the timetable but for the US$ it's pretty early compare to the others in my opinion.
It seems odd to say this...but oil depletion may not be an issue for quite awhile. If the economy ends up as bad as many fear, demand could fall faster than supply.
Even Stoneleigh says the dollar will end in hyperinflation...but when is the question. It may be decades, if Japan is any example. As Denninger points out, European banks are even more leveraged and even more opaque than ours.
I don't see our oil dependency as making us weaker than other countries, at least not right now. We waste a lot of oil...which means we have a lot of room to cut back before it really hurts.
I think it's the opposite. I think next year, you will be able to buy those strawberries for a fraction of what you paid yesterday. Ditto real estate, art, baseball cards, and any other "collectibles" you may have now.
That's what happened in the Great Depression. (Which did hit the US harder than other countries.) People who had cash were able to buy real estate, jewelry, antiques, etc. for pennies on the dollar.
Well, people don't "need" baseball cards, jewelry, etc. so they might try to raise cash and find there aren't many buyers so they lower the price. But food & energy (e.g. strawberries)..no, I think you're wrong, because of the energy inputs needed (and lower and lower EROI from peak oil) the price won't be lowered, instead the quantity made available will be lowered...and lowered...and lowered.So in all likelihood the strawberry farmer won't be there next year. (By the way they had a big green house covered with plastic sheeting and used trucks, plastic bags, boxes, fertilizer, lots of FF inputs). They will find it more profitable to grow a small amount for their own consumption and to trade among their friends. The city people in cars who are their customers (we took a bus) will decline and it won't be worth it to run that stand from the demand standpoint as well. The govt will "stimulate" the economy to make up for this loss of economic activity (multiplied by gazillions) and instead spur massive inflation as more currency units chase the decreasing numbers of strawberries, loaves of bread, apples, pork chops, etc.
Look at Tyson, the chicken packager, facing lower sales, they lower the product available, perhaps even going out of business. Where will people find chicken after that? They're going to bid up the scarcer supplies left. The people who have the money from the bailouts and who have power to direct funds their way (ie the elite) will have the ability to compete to buy the precious food that will be scarcer and scarcer.
By the way, I said "things with intrinsic value"---nice paintings, perhaps real gold or silver jewelry, land (value is diminished if there's a shut-down mall on it that will have to be removed by hand labor), sturdy shoes, mittens, bags of rice, soap, etc. I don't inlude baseball cards in the category because they're kind of kitschy, gimcrack, basically useless kinds of things, more like homages to days past....yet a small market may well remain so maybe I will include them after all. OK I'll go out on a limb--yes I would take good baseball cards over currency this year.
Yes, I said this year, the situation is not like Japan 12 years ago. It's much worse. Energy availability per capita on a worldwide basis is much lower now. Japan had it good back in post bubble era. Because of still high EROI and high energy availability (actually Japanese bubble burst at the same time as per capita energy availability worldwide went on a downturn, around 1990). (Not a coincidence by the way!!) Per capita energy availability was still high all through the 1990s (just not as high as it had been before that) but now we're plunging off a cliff vis avis per capita energy availability worldwide. That is why I'll take good baseball cards over currency this year although as I said, rice or farmland or strawberries will be much better than baseball cards.
But that is what they were talking about when they said "Sell everything." They weren't talking about strawberries. People don't invest in strawberries. They don't keep very well.
I don't think so. I think the massive amounts of debt will to be too great for the government printing presses to deal with. They're trying to empty the ocean with a teaspoon.
Pork chops and apples may well be scarce, but if things are that bad, people who can afford to buy them will be even scarcer. (And the government is likely to subsidize farmers. They do even in good times.)
Or the people who have money because they cashed out now. :-)
IMO, what you are describing is deflation. Farmers who can't sell their food because no one has cash to buy it - that happened during the Great Depression.
I keep seeing the 'L' model with oil prices going up $150 >> $200 >> etc.
This assumption is that oil goes scarce slowly over a period of years. Comparitvely, this is of minor consequence for those who are awake and have time to adjust.
The giant Black Swan here is complete cutoff of ME crude. Can't happen? I think it did happen. Any terrorist worthy of the name should be able to figure out how to do it. Even a Gooney Bird size airplane could sink a supertanker ... empty shelves in a couple weeks.
Question: What is the SPR filled with? Light sweet or Heavy sour? Or a percentage of each?
http://www.spr.doe.gov/dir/dir.html
Duh! Google? Thank you Leanan.
And it's all light.
Before hyperinflation takes off, the world has to collectively get rid of 400 to 500 trillion leveraged in the derivative black hole. How long do you think the government money printing press will have to run for that to happen?
Deflation is happening in the short run, but it won't happen in the long run.
See Ben Bernanke's faomus "printing press" speech:
http://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm
The printing presseses are running overtime. You want to be holding hard assets financed with borrowed money. That includes oil and gas stocks and/or futures contracts.
My take on what is happening in the real economy is deflation, and that is going to continue for quite a while. Since we haven't really started sliding down the depletion slope yet for oil or other non-renewable resources, and since global labor is competing all the way down to the bottom, we have no cost-push inflation. Because all economies around the globe are on the ropes, we have no demand-pull inflation. We do have massive deleveraging. Thus, in the real economy we have deflation.
The confusing thing, though, is that we are going to have this overlay of monetary inflation. Governments, and especially the US Government/Fed, will inflate their money supply. They will do that because that is about the only thing left that they can do - monetize national debt, and then spend the proceeds.
Thus, we have this monetary inflation overlay, and this underlying real economy deflation. No wonder so many people are confused.
What does this mean?
Don't let the monetary inflation distract or fool you. The real economy is deflating. Liquidiate your debts ASAP, and forget about earning any real capital gains; the game for a very long time will be avoiding real capital losses. That does not mean that all capital assets are bad. PRODUCTIVE capital assets that are going to continue to produce for you a stream of income or an avoidance of expenditure are still very much worth having. Assets that just sit there and lose value are not worth having.
However, don't be totally blind to the danger of inflation either. The US$ is being seen by much of the rest of the world as a safe haven AT THE MOMENT. That might - and probably will - change. While other countries may have problems as bad or worse than ours, they might also be led by people that are actually going to put their long-term national interests first, and do what is best for their country and their people. Sorry, Obamaniacs, but I see no evidence that our next Prez has surrounded himself with anthing different than the same sort of crew that has gotten us into this mess over the past couple of decades. The reality is that our government and corporate fat cats have arranged to get the US painted into a corner. I have no confidence that they will lead us out painlessly, because there is no good way out. This reality is really going to sink in and hit home very soon. I see no way out of a very substantial monetization of US national debt, and a massize reduction in the purchasing power of the dollar internationally through inflation. It might take a year or two before we see this, but see it we will. This being the case, I am not convinced that a 100% US$ cash/treasury position is necessarilly the very best longer-term strategy either. Some diversification internationally might be prudent.
I have a similar problem with the "sell everything" advice. Suppose you sell your house or something else having real value. Now you sold it but somebody else bought it. The same holds for many others that followed the advice. Seen from above the only impact is that you have assisted in driving the price further down. All houses are still owned by somebody. So please, where's the point?
They are expecting the price to go down anyway. In a deflationary environment, you don't want to be in debt. Because suddenly, you own $200,000 on a house that's only worth $100,000. (Which is actually happening right now, in some places.)
Sell now, and maybe you can buy your house back in a few years...for much less than you sold it for.
Being debt free, I welcome deflation but the implications are staggering for most, especially the US Govt.
If the deflation is significant, credit defaults will really take off and tax revenues will drop. In this scenario, I can't see how the Federal Debt could ever be paid off.
The only way out is debt forgiveness, as has been suggested in Japan, or default. I'm not an economist (thank god) but I believe that this would guarantee inflation a la Argentina.
If the government prints scads of cash, then inflation would rise significantly, increasing the numbers and making existing debt more manageable.
So, it seems to me that inflation is inevitable, but what do I know?
Perhaps some more economically savvy readers could help me out.
Agree with pi
For the past 8 years all US "growth" has been financed through debt by virtue of China and other nations investing in US T Bills.
If all the nations of the world are now faced with deflating currencies and fighting to invest and stimulate demand in their domestic markets then where does the cash come from to invest in T Bills and find the 1 trillion Obama plan?
The US can of course just print the bills. Bur why would you buy T Bills at 0% interest when you know the host country is reducing the value of your capital? Perhaps the losses in T Bills are less bad than the losses in any other investment. But in this environment would it not make even more sense to invest in your own country? Clearly there will be villages, towns, firms, people who will need assistance. Does it make sense to ignore their needs and keep your capital in a T Bill account at 0% and with a declining capital? I think not.
I think we see two shifts. The first is that energy becomes the new "reserve currency" as energy underlies all life forces and is essential to all activity. Net exporters of energy will have strong currencies. Green and sustainable economies will have the next strongest currencies, profligate wasters of energy will have the weakest currencies. The market will then force energy efficiencies on the wasteful.
The second shift is that the move of funds into US T Bills slows and then stops and the US is forced to offer higher prices (higher interest rates) to attract buyers. This will have knock on effects on the US domestic economy and force a further downward spiral of bankruptcies, foreclosures, layoffs and plant closings.
Be careful; Martin Weiss was predicting a stock market collapse at the end of 2002 and we had a great bull market for the next 5 years. People who bought the put options he recommended lost a lot of money. He was also recommending gold mining stocks at that time and most of them have not performed very well. I don't think anybody knows how the financial markets will perform. After watching oil fall from $147 to $33 in 5 short months, I have lost faith in everyone - including the stalwarts at TOD with their impressive graphs, equations and models.
If the behavior of complex systems could be reliably predicted we'd all be rich and never caught out in bad weather unawares. We would understand ecosystem dynamics and know beforehand the consequences of the introduction or elimination of any given species. The space shuttle wouldn't have disintegrated upon reentry and the twin towers would still be standing. The fact that such systems are determinant yet extremely dependent on initial conditions which are themselves stochastic doesn't keep 'educated' people from playing with Excel, as they learned to do in school. But don't criticize such activity too severely; it keeps them occupied & out of real trouble.
But the consensus view on TOD was that the price of oil was a relatively simple matter of demand and supply with demand being considerably inelastic and supply being in permanent decline. No one, absolutely no one, predicted a 75% drop in price in 5 months. Now that so many people here were so wrong, I guess we can blame it on the inherent difficulties of modeling "complex systems".
Remember all the complicated analysis that "proved" KSA was in terminal decline ("Nosedive in the desert", anyone?). KSA was able to increase both production and exports in 2008 after two straight years of decline.
I am not criticizing or blaming anyone. All I am saying is that I have lost faith in everyone; no one has the ability to predict the future. I don't think there is anyone who "gets it". All we have are a sea of opinions, beliefs and wishful thinking. Sometimes someone gets lucky and things turn out to be the way they predicted them, which lends credibility to their opinions for a while.
That's the time to quickly start publishing an investment newsletter for which you charge big bucks!
Even a stopped clock is right twice a day.
Actually a good number of people DID predict just such a thing, or in the ballpark anyways - very few of them frequent this site however.
No, we can't.
On Stuart's "Nosedive" post, in March, 2007, I suggested that we would see a future Saudi increase in production, as the Saudis brought on new wells to partially offset the decline at North Ghawar and elsewhere--although the size of the Saudi rebound surprised me. In any case, Saudi Arabia is going to show three straight years of annual production below their 2005 rate, at about the same stage of depletion at which the prior swing producer, Texas, started declining.
While it is true that the Saudis are showing an increase in net oil exports in 2008, over their 2007 rate, they are probably going to be at least 700,000 bpd below their 2005 net export rate. Sometime this year, the cumulative shortfall between what the Saudis would have (net) exported at their 2005 rate and what they actually exported will be in excess of a billion barrels of oil.
Our middle case is that Saudi Arabia has already (net) exported about one-fifth of their post-2005 cumulative net oil exports, in only three years.
Regarding year over year increases in production and net exports in general, I have cited the example of Indonesia, where their 1998 increase in net exports, to a level only 9% below their 1996 net export rate, resulted in Indonesia shipping more than one-fifth of their post-1996 cumulative net oil exports--in one year. In other words, increasing production and increasing net exports mean that exporters are increasing their depletion rate. Party on Dudes!
You are, of course, correct, that you cannot really trust anyone when it comes to forecasting oil prices. Hopefully, you didn't lose too much money learning this hard lesson. Now, maybe someone can forecast prices within reason. That is always possible but unfortunately I don't know who that person is.
IIRC, virtually everyone also has said, for years, that volatility in prices would be the hallmark of the period from Peak until decline is unambiguous.
Also, there was a lot of talk about what demand destruction would do. That is where the error was, imo. Demand destruction has been much higher than virtually anyone predicted. And THAT is a consequence of the economy tanking faster than the vast majority expected.
Ain't chaos a 8I+@#?
Your criticism is a bit too simplistic and reactionary, if you ask me.
Cheers
Your criticism is a bit too simplistic and reactionary, if you ask me.
I thought I made it abundantly clear that I am not criticizing anybody or anything.
I just don't trust anybody's analysis of the future anymore, that is all.
All those fancy graphs and equations and reams of data make us feel like we understand what is happening and what is going to happen in the future even when we don't.
That damn sure is a criticism, I'd say. However, the graphs and equations are not at fault, it was your assumption that what you read was in any way gospel. Anything other than a fact is opinion, pretty much, especially wrt the future. So, I agree: don't "trust" anybody - trust yourself. But listen to any who have something cogent to say. Listening does not equal following or trusting.
Cheers
I think that we are discovering that demand for oil is more elastic than we originally supposed.
As for supply, we still haven't really started down the depletion downslope. We are still in peak plateau territory.
One must distinguish between market fundamentals (supply and demand) which drive long-term trends, and short-term speculation, which interacts with other things going on in the wider economy, and is sometimes driven by sheer mania.
While I didn't make a specific prediction wrt prices, I have been consistently posting this warning over and over again:
"Oil is a commodity. Like all commodities, its price goes up and down. The only thing we can know with any certainty, given the realities of peak oil, is that over the long term it will have more ups than downs, and the ups will be up more than the downs will be down."
There is nothing that has happened to prices over the past couple of years that would seem to contradict this; indeed, it appears to me to be confirmation.
"Oil is a commodity. Like all commodities, its price goes up and down. The only thing we can know with any certainty, given the realities of peak oil, is that over the long term it will have more ups than downs, and the ups will be up more than the downs will be down."
Yeah, we all agree on that. But the crux of the matter is the magnitude of the decline (75%) and the speed (5 months) with which it happened. I bet no one, not even you, expected that.
There is nothing that has happened to prices over the past couple of years that would seem to contradict this; indeed, it appears to me to be confirmation.
I don't think so. The peak price in 2007 was $100/barrel. The bottom in 2008 was $32/barrel. Oil crashed through all the supports with ease and made multi-year lows. No peak oiler expected this. This goes way beyond normal volatility. I would have agreed with you if the price had found support around $80.
Beer and liquour industry will be very much needed to calm down angry masses.
Someone further up the thread wanted to go long oil over a 10 to 20 year period. I would say go long beer or whiskey. If the price drops, it will be up to you to drink a lot, cause a shortage and the price will naturally go up. My beer/whiskey economic model is probably better formed than the model of the Yellowstone Cauldera above. :-)
If I lived in Corn country I would buy one of those bankrupt coal-fired vehicle ethanol factories. It should be pretty easy to raise the standard to 'human consumption' since the government will allow me to regulate my own cleanliness standards as with all modern food factories. Distilled drinking alcohol will sell for a lot more than $1 per gallon. And like all other non-energy products the EROEI is irrelevant.
The tax credits we had before accomplished nothing. Why would these be any more effective, especially since we are in a liquidity trap? Even if this increases consumption, it will mostly go overseas. Enough with the tax cuts, already.
This will have as much affect as the reduction in UK VAT from 17.5% to 15% had -NOTHING.
$300 Billion could buy an awful lot of research, more local redundancy in foodstuffs for emergencies -a whole host of useful things. Instead it will be used to buy one more plastic Chinese tat or pay 2 weeks back-pay on some condo flippers 'didn't get out in time' mortgage b4 the inevitable foreclosure. Sad.
Nick.
Iran announced a February OPEC special meeting:
http://www.google.com/hostednews/ap/article/ALeqM5gN9cKMaXst0UibGlOHCApr...
There is no confirmation on the OPEC website.
From a NYTimes.com article: Kidnappings in Mexico Send Shivers Across Border http://www.nytimes.com/2009/01/05/world/americas/05mexico.html?hp
This is troubling to those of us in border states (TX for me), not that it isn’t for others. It would be interesting to track social disturbances (patterns?) by country/region that are linked to the converging events of natural resource depletion (energy, water, land fertility), climate change (including air pollution), food production and transport and population growth.
I was talking to a neighbor up the road – we live in a rural setting with water wells and septic systems – while I was helping her change the sediment filter, which was so dirty that the pressure dropped, said she takes her clothes into town to wash to save water (old washer). She rents and the landlord recently installed a new pump. Another neighbor said she finally went next door to yet another neighbor, requesting that they stop watering the lawn, which is St. Augustine grass. These are people with money and a suburban lifestyle mindset.
More people, whether from births or immigration, are the last thing this area needs. Years ago there was a murder of a rancher by an illegal immigrant. I fear it is only a matter of time until those kinds of stories start popping up as the pressures begin to mount. I feel like I’m alone in my thoughts out here.
My partner, who I’ve mentioned works for a large international company, is busy writing year end reviews for his staff… several are being put on ‘improvement tracks’ as the co. performance declines. Pretty sure some territories will be collapsed into larger ones, staff reduced and the pressure increased. I really have to temper my doomer talk with him.
Happy New Year! Happy Monday!
Tejas is a rebellious Mexican state, much like Taiwan is a rebellious Chinese province. Just exactly WHO is the "illegal immigrant" - the Hispanic Mexican national or the late-coming Anglo-American insurgent? I live in New Mexico and prefer Hispanic immigrants to yuppie Californian or east coast refugees. The entire US Southwest was stolen (Gadsden tract excepted) from Mexico in an unprovoked act of territorial aggression, much like the invasion of Iraq. Let Tejas, Nuevo Mejico, the Arid Zone & Alta California go back under Mexico, I say. And Russia can have Alaska back too. All the xenophobia & concern over immigration issues is little more than thinly disguised racism. We're ALL immigrants to this hemisphere.
darwin,
Wouldn't it be more appropriate for the areas you mention to be returned to Spain since it was they who discovered and developed those regions originally? That, of course, ignores the original inhabitants but since they were effectly killed off it wouldn't be practical to consider their interests.
Note that "effectively killed off" seems to work long-term, while "occupation" and "resettlement" does not. As resource wars begin in earnest, I imagine the "old ways" are likely to return.
Perhaps so Paleo. It's still hard to imagine those times actually happening but we know that a great many folks expressed just such doubts before both world wars. I still recall the statement of some long forgotten general who stated that we would never see another conflcit such as WWI. His ratonal: now that nations have the means (air power) to inflict devastation directly upon civilian populations, no country would ever take such a risk with their citizens. WWII pretty much proved the folly of that thought.
I'm sure many out there beleive those same genes which led to over 100 million deaths during WWII have long since left our collective pool. Yeah....right.
First they came for the Palestinians.
Ha!
That makes as much sense and "First they came for the Jews"
What I'd really like to see is the great mesic deciduous forest dominated by chestnut and shaded by vast flocks of pigeons once again. Or the tall grass prairie covering the upper Mississippi watershed being grazed by millions of Bison. Prairie dog towns stretching hundreds of kilometers across the Great Plains, with every kind of raptorial bird soaring overhead. Mammoths browsing amongst Sequoia groves. Beaches loaded with nesting sea turtles. The playa lakes of the Great Basin alive with cranes & other waterfowl... Instead, what I see is an entire hemisphere so badly impacted by the ultimate weed species that it's enuf to make one cry. It's all gone. There's no returning.
Bad hair day, Darwinsdog?
Here's something to cheer you up:
Arthur Schopenhauer: On The Suffering Of The World
http://encarta.msn.com/sidebar_762529649/schopenhauer_on_the_suffering_o...
It has been said that any species has the ability to run amok and breed uncontrollably, decimating its own ecosystem in the process. I do not know about that.
Yet "the ultimate weed species" is not one uniform people. There are and were cultures that thought that tampering with nature mightn't be such a hot idea. For example, Native Americans, among others.
Hopefully we will learn our lessons as we see giant abandoned skyscrapers, dark malls, vacant parking lots, etc. Already people are sounding pretty humbled in the financial press. I have seen changes in my family members too, more humility and more caution.
Paint a rock and what you have is a thin coat of paint over a thick rock. Similarly, culture is a thin veneer over the thick rock of human biology. And don't be taken in by the romantic idea that aboriginal Americans were all a bunch of innocuous nature mystics. They were and are profound ecosystem disrupters. Who do you think did in the mammoths & mastodonts, the horse, giant ground sloth and glyptodont? Give an "Indian" a rifle, chainsaw, herbicide applicator... and he will do as much damage with it as any white man will.
I respectfully disagree! You have it backwards, I think. The "rock" is biology. Any species will be reproducing to its limit. But CULTURE does profoundly affect the way the limits are defined. That's why other countries use less oil than the US and have more farmers as a percentage of the population. And Native Americans strongly resisted the White Man, partly because they disagreed with the world view they saw underlying the European culture.
I'm pretty sure they strongly resisted the white man because whitey frequently allied himself with one tribe aganist another, switched sides advantageously and killed lots of the game that the indians hunted, along with continuous encroachment of settlers looking to farm in indian territory. Also, white man brought disease which devestated indians populations so it was prudent to protect indian society by keeping white man away. They say smallpox killed more indians than guns.
A clever metaphor, but not one that explains much other than your own belief system. Especially since it is the paint that decides what a rock is.
You say all that like its a bad thing. I don't believe nature has an inherent "right" to non-disruption from another species. Humans, if it is within their power, may try and preserve nature as we know it because it is aesthetically and academically useful to us, but if it was merely a nuisance and it was in our power to survive and build without it, there is nothing practically objectionable with scorching the earth to a crispy chip to suit our goals. In reality, though, doing such would probably hurt our growth potential. And if a comet comes and "wipes" us all out? Why, we have no inherent "right" to live beyond that moment. It simply happens.
I expect people to be cultural determinists. It's been the dominant paradigm of the middle to late 20th century that our teachers, and hence ourselves, were educated under. Fortunately, it's a paradigm that has just about finished shifting, at least among the biological cognoscenti. George Williams in the 1960s initiated the shift by demolishing group selectionist thinking, then a decade later Ed Wilson furthered the process by publishing his "Sociobiology" while Dawkins deciphered William's ideas to the popular readership. Meanwhile, behaviorism died. Slowly but surely modern evolutionary biology, cognitive psychology & neurology, and cybernetics prevail over the reactionary rejection of early 20th century eugenics, which was in turn based on a poor understanding of heredity. We're way beyond all that now, or should be. Old ideas die hard, however, so defense of cultural over biological determinism comes as no surprise.
I think, while we do have a greater understanding of biology's affect on culture development now than we did in the early 20th century, there is a tendency to overreach and reach conclusions long before we've thoroughly resolved all potential academic disagreements. Using biology to explain culture, or even worse, to try and drive humanity to some "desired" end point, however, I believe is doomed to failure as we contain much more complexity than anything we've created and can therefore model. I could be considered a biological determinest, but not to the point of believing my understanding of biological indicators would give me any profound insight into cultural development, much less an understanding of how to "save" or "fix" humanity as the eugenicists (read: maniacs) believed. Science is and should always be a tool carefully wielded and jealously guarded from anyone who would proclaim "absolute faith" in any particular finding.
I'm not sure what "dominant paradigm" you are talking about. The social sciences of the 1960s were preponderantly behavioralist. Prior to that there really was no central dominating paradigm. The contemporary idea of culture was only introduced on a broad basis didn't even happen until the 1950s and would not really impact the academic world until the late 1970s at least with the resurrection of Levi-Strauss by the structuralists. Even the dominant influence of the french post-structuralists, various interpretive literary criticisms and postmodernism of the 80s didn't really impact the broader pedagogy of american universities until it had all but run its course (in terms of being fashionable). The big burst of sociobiology occurred pretty much at the same time as the move to interpretive moves, primarily because both were filling the void left by the failure of behaviorlism.
But definitively, cultural determinism was not at the core of any of those movements. Indeed, the only "methodology" within the social sciences outside of anthropology that made culture the center of its focus is the cultural interpretation approach championed by Clifford Geertz. And that was most decidedly not a cultural determinism of the sort you allude to.
Me too.
Actually, even the revered EO Wilson (one of my personal 'living idols'), has returned to more of a multilevel selection stance. In the most excellent paper, Wilson, David Sloan and Edward O.Wilson. "Rethinking the Theoretical Foundation of Sociobiology," The Quarterly Review of Biology: December 2007, which I assume you've read, the main conclusion is:
"Selfishness beats altruism within groups. Altruistic groups beat selfish groups. Everything else is commentary,"
So the thickness of the paint and its commensurate attributes, depends on whether it is surrounded by other rocks.
And remember these critters vanished several thousand years ago, at a time when the population of native Americans was a tiny fraction of what it was in 1492. They also took at the fearsome predators like the short-faced bear, and the saber-tooth tiger! Even a low population density of primitive humans can have a large impact on the ecosystem. When Europeans came to California Yosemite valley was open not heavily forested as we see it today. I remember hearing the claim, that the Indians were careless with fire. But, more likely they were managing the envirnment via fire -presumably to maximize game.
Darwin's ignoring lots and lots of science to definitively claim it was human-caused extinction. This was already discussed, so he's either not open to science or... well... he's not open to science. To wit: the people he would blame ALSO disappeared for about a thousand years.
Curious, that.
Cheers
Or, it was a comet
Seems just as likely that it was a comet that did in the mammoths and other large species.
Darwinsdog sez:
"It's all gone. There's no returning."
But on a very small note I see more and more 'cane' growing once more in Ky. At least in my region.
Its delightful to once more be able to find nice long stalks and cut a few to hang in the barn for fishing poles next summer.
Apparently some distortion in the ag-chem-kill-orama has missed that species of late. I see it everywhere and transplanted some just yesterday on the edges of my yard or what was my yard and soon to be my berry-patch with elder plants thrown in. Mercy!a
But nothing stops feeding the maw of the pulp/paper/chip mills. Nothing.
Except possibly real Power Down.
Airdale
Darwinsdog plays the race card. Coming soon: Reductio ad Hitlerum.
End of thread. Godwin's Law, innit?
It's not clear to me how raising the possibility of racism is the same as invoking Hitler comparisons (Godwin's law). Seems to me that you are the one partaking of the reductio and of introducing Hitler.
And frankly, while it may not be precisely accurate to call it racism, Darwinsdog is correct about the thinly disguised bias. On what basis does one argue that "they" should not have what "we" have? Whether it be race, ethnicity, nationality, or just locality, the end result is the same - an exclusionary bias against the "other" and a presumed "exceptionalism" for the "self."
I fail to see what's biased about protecting oneself against acts of aggression.
Who is committing the aggression? And who is having the aggression committed against them?
And before answering, consider that you must defend how you construct both subjects. And more, please be sure you are considering structural aggression as well as mere physical aggression (e.g., I might slug you in a fit of rage, but if that rage is generated because you have willfully stolen my job and only means of supporting my family, where did the aggression start?)
Godwin's Law isn't a law.
"Tejas is a rebellious Mexican state, much like Taiwan is a rebellious Chinese province. Just exactly WHO is the "illegal immigrant" - the Hispanic Mexican national or the late-coming Anglo-American insurgent?"
Bravo!! Uprate +10
I agree with your preference. Hispanics are, like me, willing to do the physical work. Or at least the ones with whom I have experience. Since I have no children, my land and all will go to my partner, my estate or his. I'd just as soon leave it to a young hispanic couple with child, who are willing to help me work the land now and care for me/partner when the time comes.
Many in my situation (childless) face similiar futures. I, like many others, believed my wealth at the end would carry me through. That wealth is rapidly evaporating with only land remaining. And that I need to live off of the rest of my life, one way or another.
Wow it must be big as the port of Newcastle Australia at one time had 163 ships queued up to load coal.
I suppose if Newcastle was a little larger there would be less ships in the queue.
It seems the Australian government agrees because they have approved expansion of export loading capacity from 250 million tonnes a year to 300. I guess coal doesn't create greenhouse gas when furriners burn it.
The 1-page article (linked above) proving that nuclear is not the answer is unusually silly. "Electricity use will double by 2030" and that's a lot of nuclear power stations, therefore it can't happen. Well it has to be a lot of something. The key to making a lot of anything is to move up to a meta-level. Instead of making chairs, we make machines that make chairs, etc. If we come out of this slump we'll be doing different things than we did going into it. Plan B is to not come out of this slump.
I have no idea why people (especially good publications like FP) publish crap like this. What was the point of that article? Testing out new desktop publishing software?
I especially like the part where annual greenhouse gas emissions are supposed to double by 2050. Unless they're talking about cutting down the Amazon, that ain't going to happen.
The Amazon shrank by about 20% in the past 30 years, and deforestation is accelerating so there might not be that much left by 2050. Borneo's (and most of South East Asia) forests will be gone before 2050 at current trends.
The Amazon is chopped down mainly for cattle land, while South East Asia is for palm oil. Both of which are then shipped to the richer parts of the world.
Hello TODers,
I wonder how long before a US Senator feels the need to duplicate this I-NPK act by a Zimbabwe Senator:
http://www.herald.co.zw/inside.aspx?sectid=2133&cat=1
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Senator accused of diverting fertilizer
Seke-CHIKOMBA Senator Gladys Mabhiza allegedly connived with a Dema councillor and fraudulently diverted to the illegal parallel market 30 tonnes of fertilizer that was meant for approved farmers under the Government’s Operation Maguta.
-----------------------------
Have you hugged your bag of NPK today? We will do anything for NPK--> recall the weblinked PDF yesterday where sphincters tightened until people got back to their hometurf...o-NPK-->O-NPK
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hello TODers,
In my continuing effort to bring you my latest perceived trends from the leading, bleeding edge of postPeak machete' moshpits & Optimal Overshoot Decline:
Most long time readers of my postings realize that I am prone to occasional spasms of "Wild & Crazy' thoughts, that may [or may not] have geo-strategic merit as the postPeak goes rolling along...
If one recalls my too brief extrapolations of Asimov's Foundations for predictive collapse and directed decline; the harnessing of SpiderWebRiding, human biometric limitations, and Innate Territoriality for O-NPK Recycling, Earthmarines and Biosolar Habitat protection; the Porridge Principle of Metered Decline; Moroccan Phosphorus, Piracy, and Sealane control; recovered sulfur control for industrial constraints; New Rhodesia; plus my numerous Antarctic details and recent O-NPK IcebergRiding posting-->Let's move on to Mad-a-gas-car:
http://www.google.com/hostednews/afp/article/ALeqM5iAAAFho9FSMtNoh1BfnqW...
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Global trends driving 'land grab' in poor nations: activists
..In one of the biggest deals, South Korea's Daewoo Logistics said in November it would invest about 6.0 billion dollars to develop 3.2 million acres (1.3 million hectares) in Madagascar -- almost half the size of Belgium..
"We will build everything from ports and railways to markets on a barren and untouched area.."
----------------------------
This seems to be an understandable trend IF one expects a postPeak China to sweep much of their neighboring opposition away, Ghengis Khan style [with wheelbarrow logistics bringing up the rear--see prior postings], as the resource wars get earnestly underway. If I was a Korean elite, I too would want a survival refuge to retreat to, while the Korean peasants did their best against the unstoppable, onrushing Chinese Army tide.
Furthermore, Madasgascar is ideally geo-positioned, and quite bio-diverse for the coming traverse through the Dieoff Bottleneck. Earthmarine specie protection of this habitat could have a dramatic effect on the Undershoot Phase depth and duration time as this island is sometimes labeled by ecologists as the "Eighth Continent". Remember, I should hope we can somehow muster the desire to shoot for the idealized best gap between Jay's terrifying Fast-Crash and Greer's slow, maximum agony of the Catabolic Grind.
http://en.wikipedia.org/wiki/Madagascar
If Israel really starts getting postPeak pressured by its neighbors towards a Final Solution: instead of resorting to the Masada option, or the other option of its full dispersal of its nuclear arsenal, perhaps they might be amenable to a more modern, updated, humane, and just version of the Madagascar option. Could full-on Israeli Peak Outreach logically convince them to be a vanguard Earthmarine force?
http://en.wikipedia.org/wiki/Madagascar_Plan
It would be fascinating if the Koreans and Israelis teamed up with the Malagasy people to make this island have the best-in-class practices for Optimal Overshoot Decline.
[Note: I heavily edited for brevity, but perhaps I will expand on this more in future postings. Most of what I would write would be intuitively obvious to this bright crowd anyhow if you consider my prior postings.]
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Toto,
I really love to read your rants and they are well put together and of great value but unappreciated I think.
So Thank You and can you pass me a bit of what your smoking?
Airdale-peace and pipe and whatever turns your clock, to me its smooth bourbon and good black cavendish...but I want some of what you got as well.
Perhaps it's not too late for Obama to have you give the addendum to the inaugural address. Or perhaps you should be appointed the national poet as I find your prose to be poetry. Like Airdale, I look forward to your posts and make sure that I always read them from top to bottom --- no skimming or skipping like a lot of the posts from some others.
While I still think we are doomed, you somehow make the descent into oblivion seem like so much fun.
You're on it, Toto
Madagascar has some good surf I hear. Optimal overshoot decline tonite, surf tomorrow!
I'll see if I can find some info for your future musings. Pretty much all the uncharted barren spots (with surf) have a pretty good network of dudes with boards traipsing thru them.
And, I'm so sorry for the PC incorrectness, but uncrowded line ups (surf talk for out in the water waiting for waves) are guaranteed, because as they say, "Charlie don't surf".
If I remember correctly, Daewoo Logistics said they would bring workers from South Africa to take care of the land, and export most of the products will be shipped out of impoverished Madagascar -- where the World Food Programme still provides food relief.
So much for cooperation. And somehow, I find it hard to believe that there's 103,000 square kilometres barren and untouched.
Either they're chopping down forests, or they'll have to evict lots of small farmers, which probably don't have any written proof of ownership of their land. Madagascar has already quite a few problems because of deforestation (lots of erosions and land slides).
As far as I know, most people in Madagascar aren't too happy with the deal.
It seems that Africa is going to become colonised once more.
What a profoundly depressing head in the sand view of reality.
Such a statement could only have been made by profoundly ignorant Politicians, Economists and Engineers. They really need to talk to some Biologists, who actually understand something about complex ecosystems, once in a while. Don't get me wrong, we need to find ways to live sustainably and applying science and technology to allow us to live in harmony with our various ecosystems is something we must all strive for. However the statement above just reeks of stupid same old, same old BAU.
Imagine for a moment if we landed a robotic rover on a distant planet and discovered but a small fraction of the life forms that exist on this supposedly barren land in Madagascar. I can only imagine that we would describe it as a most wonderfully complex web of highly evolved life forms. But it being in our own back yard and we being unenlightened technocrats all we see is weeds and useless creatures?
They took all the trees
Put em in a tree museum
And they charged the people
A dollar and a half just to see em
Don't it always seem to go
That you don't know what you've got
Till its gone
They paved paradise
And put up a parking lot
Joni Mitchell Big Yellow Taxi
The Samson Option
http://en.wikipedia.org/wiki/Samson_option
Heres an interesting video for anybody who supports Obama. http://www.dailymotion.com/mychannel/paricilas/video/x7bqmm_barack-obama...
And the conflict in Gaza, heres an interesting picture. No parents?
![]()
http://i460.photobucket.com/albums/qq323/MischeviousChimpy/iSRAELIcHILDRENWRITINGONBOMBS.jpg
As those kids put their names on the bombs they are being dropped on other children just like them.