DrumBeat: January 20, 2009

Rebound in oil prices could be years off

Long time oil bulls have been bucked right out of the ring after having had the ride of their lives as oil prices peaked at US$150 per barrel last summer. With oil prices languishing below US$40 per barrel recently, peak oil theorists argue that the next commodity cycle will be even more severe than the last because spending is being cut so hard in the current recession. That may be true, but a rebound in oil prices could be years off.

...The global economy will come out of the gate slowly in 2010 and trade will remain soft. Oil demand will not pose a problem for rising capacity for some time. Even if peak oil is upon us, so what?

Survey: Scientists agree human-induced global warming is real

In analyzing responses by sub-groups, Doran found that climatologists who are active in research showed the strongest consensus on the causes of global warming, with 97 percent agreeing humans play a role. Petroleum geologists and meteorologists were among the biggest doubters, with only 47 and 64 percent respectively believing in human involvement. Doran compared their responses to a recent poll showing only 58 percent of the public thinks human activity contributes to global warming.

"The petroleum geologist response is not too surprising, but the meteorologists' is very interesting," he said. "Most members of the public think meteorologists know climate, but most of them actually study very short-term phenomenon."

Statoil calls for offshore debate

StatoilHydro head Helge Lund said today the government needs to revisit debates on industry access to the Norwegian continental shelf.

Farmers should re-think energy needs: FCC

Even with oil now trading below US$40 a barrel, down from US$147 last July, Canadian farmers should prepare for higher energy costs in the longer term, Farm Credit Canada warns.

Forget "peak oil", West's demand growth peaking

LONDON (Reuters) - Oil demand may never return to growth in the United States, Europe and parts of Asia, easing the strain on long-term supplies and prices as emerging countries burn ever more fuel.

The surge in oil to a record near $150 a barrel last year heightened concern the world will run out of crude and supply will start to dwindle -- a theory known as "peak oil".

Now a deepening recession and oil price collapse have raised the issue of whether demand, not supply, is nearing its peak.

Canada's oil sands giant Suncor slashes spending

Suncor Energy Inc., Canada's second-largest oil sands operator, slashed its planned 2009 spending in half Tuesday and shelved major expansion projects with crude prices in free fall.

Russia's outlook weakens as price of oil stays low

HONG KONG: The Russian economy may not grow at all this year as it feels the impact of the financial crisis, and the government will probably increase support for banks to ensure their liquidity, its finance minister said here Monday.

Oil patch braces for layoffs and spending cuts

CALGARY -- Layoffs, spending and dividend cuts and disappearing profits are expected in Canada's energy sector, which starts reporting fourth-quarter earnings Tuesday, led by oil sands giant Suncor Energy Inc.

After years of expansions and record profits, the full force of the global economic downturn and falling energy prices will translate into the worst financial results in years, analysts said.

The key themes will be: "Worst cash-flow-per-share and earnings-per-share declines (year-over-year and sequentially) in years, driven by plummeting commodity prices," UBS Securities Canada Inc. analyst Andrew Potter said in a research note Monday. "Downstream results range from weak for Imperial Oil Ltd. and Petro-Canada to horrible for Husky [Energy Inc.] and EnCana [Corp.]."

Saudi Arabia and the need for $75 oil

Not long ago, when oil prices were at historically high levels, there were calls from within the Organisation of the Petroleum Exporting Countries for production cuts to keep them there. These efforts failed, and Saudi Arabia was responsible for unilaterally increasing supplies to try to calm the market. In fact, the Kingdom saw that while extremely high oil prices may be good for the short-term budgetary needs of oil producing states, they are not good for the global economy. Oil prices have fallen dramatically and oil consumer nations should recognise Saudi Arabia’s long-standing defence of “fair” oil prices and stable production, and realise that just as unrealistically high oil prices are unadvisable, so too are unrealistically low prices. The Kingdom has called for a “fair” price of $75 and, considering the global economic climate, that is an appropriate number.

U.S. Refinery Margins Fall After Russia-Ukraine Gas Agreement

(Bloomberg) -- Refinery margins narrowed the most this month as OAO Gazprom’s resumption of gas shipments to the European Union may have reduced demand for heating oil.

Gas flows entered Slovakia early today after Ukraine and Russia resolved a dispute on gas prices and transit. Heating oil, a competing heating fuel to natural gas, fell as much as 7 percent, the biggest decline since Dec. 24.

Fiat takes 35% stake in Chrysler

MILAN (Reuters) -- Italy's Fiat will take a 35% stake in U.S. car maker Chrysler LLC - valued at zero by its part-owner - in a deal aimed at helping the pair survive the worst crisis to hit their industry in decades.

North Slope Producers Do Better Than Expected in Sustaining Production

North Slope oil operators did better than expected in sustaining production last year, but the decline rate is expected to steepen this year.

Production from the Slope declined 3.9 percent over a 12-month period of 2008, compared to the same months in 2007, figures provided by the Alaska Department of Revenue indicate. The state revenue department had forecast a 5.8 percent decline.

Production performance on the North Slope was aided by high crude oil prices over the two years, which stimulated operators to step up the pace of drilling of new production wells and to push enhanced oil recovery projects.

If Detroit Builds It, Will Buyers Come?

The car market is terrible, but new models can boost sales. This could be a good time to bring out the new stuff to try to grab every sale possible, or it might make sense to hold off until business improves.

One thing is certain: Auto executives are facing a terrible dilemma. The same companies that are delaying or canceling some new vehicle programs are also forging ahead, hoping that other new models will jump-start business.

Bulgaria to Power Up a Soviet-era Reactor

Few developments highlight the specter of looming energy shortages like the decision by Bulgaria this month to switch on Soviet-era nuclear reactors after supplies of its main source of fuel for heating — natural gas from Russia — dried up.

Australia: Nats push for diesel price investigation

Nationals Leader Warren Truss has written to the Australian Competition and Consumer Commission, requesting an immediate investigation into the retail price of diesel, which he says is out of sync with unleaded petrol.

Mr Truss says a growing number of consumers are complaining about "the increasing disparity in the price" of diesel, which until recently has traditionally been substantially cheaper than unleaded petrol.

Indonesia: Fire to cost Pertamina dearly

State owned oil company Pertamina has conceded losses from a massive blaze at the Plumpang depot in North Jakarta could continue to rise.

Pertamina said Monday the fire that razed a storage tank of Premium gasoline had also affected fuel in two nearby tanks.

“Our rough estimation [of losses] is around Rp 15 billion. We have not included the future costs of contaminated fuel, largely caused by the water and foam used by firefighters to extinguish the flames, in our calculations,” Pertamina’s marketing and trade director Achmad Faisal told reporters.

Rwanda: Gov't Suspends Fuel Rationing

Kigali — The government has announced the scrapping of fuel rationing; an ad hoc measure that had been taken to ensure distribution due to the shortage experienced by the East African region in the past two months.

Speaking to The New Times yesterday, the Permanent Secretary in the Ministry of Trade, Commerce and Investment Promotion (MINICOM), Antoine Ruvebana said: "we have lifted the fuel rationing and we are currently trying to inform the general public that everybody can have any quantity of fuel they want."

Oil and Gas leaders pull together to reduce the cost of Energy

The current economic downturn is hurting everyone, the cost of energy is doubling as recession looms.

Questions have been asked? Was the Oil and Gas industry to blame? Accused of limiting supply to increase demand made prices rise to $140+ per barrel, leading to small businesses failing, which then hit asset prices factoring to the crumble in the financial world.

But with its multi-billion pound infrastructure can the Oil and Gas sector lead the economic turnaround?

Nigeria military denies rebel claims

Nigeria’s military has denied killing civilians and destroying homes during a raid on a suspected militant hideout in the oil-rich Niger Delta.

The Movement for the Emancipation of the Niger Delta (Mend) alleged in an email sent on 18 January that a joint operation by the army, navy and air force on 17 January resulted in an unspecified number of “casualties.”

Lieutenant-Colonel Sagir Musa, a military spokesman, told Bloomberg no civilians were killed and no homes were destroyed during the operation.

Nigeria, Dubai $16B Deal Eyes Gas, Oil and Power Investment

A huge infrastructure deal between Nigeria and Dubai will target $16 billion worth of investment over the next decade in oil and natural gas drilling and the country's dilapidated power sector, Nigeria's state petroleum company said Monday.

The deal, many details of which have yet to be hammered out, could be a boon to the impoverished West African nation where past and present governments have long been unable to meet its population's basic development needs, like reliable electricity supplies.

Saudi sailor from hijacked tanker returns home

RIYADH, Saudi Arabia: It was a sunny November morning with a calm sea. Saudi sailor Hussein al-Hamza was napping after his night shift on the brand new supertanker Sirius Star, loaded with two million barrels of oil as it crossed the Indian Ocean.

But the sound of the alarm shook al-Hamza awake, and he rushed to join his fellow sailors on the deck.

"I looked down and saw eight Somali pirates in two boats, each about 18-feet-long," al-Hamza told The Associated Press in a brief phone interview late Monday, a couple of hours after his return to Saudi Arabia following the pirates' release of the ship on Jan. 9.

Canada must work on image, envoy says

The increasing perception of Canada as both "foreign" and a "purveyor of dirty oil" is a challenge for the country with the new Obama administration, says Canada's ambassador to the United States.

On the eve of the inauguration of President Barack Obama, Michael Wilson yesterday told a luncheon crowd it's something his embassy staff must work to change with White House officials and members of Congress.

'Peak wood' gives a history lesson in Abu Dhabi

Prince Willem Alexander says our aim should be "nothing less than revolution" with regard to tackling climate change and weaning ourselves off oil.

He also does a bit of history teaching himself, claiming the Roman Empire came to grief partly because it deforested Europe.

The Romans apparently ignored "peak wood" forecasts and used up all their primary energy sources! Well, I have learned something unexpected today.

Jan Lundberg: Peak-oil activist approach for the coming change in culture

Peak oil is something to heed more today than ever, no matter where crude oil and gasoline prices go or what they may do to oil consumption. Peak-oil awareness has risen greatly in recent years, but this has not resulted in wide understanding of energy in our fast changing world of mounting crises and distractions. Even among those knowledgeable about peak oil there is confusion about energy and oil, based on old assumptions. Kinds of peak-oil awareness can be based on levels of knowledge or worldviews -- some of which are seen as obsolete in the last several months: “Peak money” has passed, both from the private sector and government spending. Oil costs were a major factor leading up to the economy's meltdown marked by peak money.

George Monbiot: If the state can't save us, we need a licence to print our own money

It bypasses greedy banks. It recharges local economies. It's time to think seriously about an alternative currency.

Green-collar economy taking root in Chicago

The lot where Isaac Wright Jr., ex-con, tends vegetables next to abandoned railroad tracks and across the street from a boarded-up house is the intersection of social justice, environmental righteousness and economic prosperity.

He is part foot soldier, part guinea pig in a movement that starts in the Englewood garden and may reach all the way to the Oval Office, although he may not fully appreciate it. "I'm not going to lie to you," Wright said one crisp morning while working a row of radishes in a greenhouse. "I needed a job. Long as I was plugged in somewhere, that was OK."

StatoilHydro Says Kristin Gas Field Still Down

Norwegian oil and gas producer StatoilHydro said on Monday its North Sea Kristin gas field was still down after a lifeboat problem and declined to give guidance about a possible start-up time.

Sudan to Inaugurate a New Oil Field with Capacity of 50,000 B/D

Sudan announced today that a new oil field will begin production in the Upper Nile state with a capacity of 50,000 barrels per day.

The field named 'Qamari' will be opened in March by Sudanese president Omer Hassan Al-Bashir, the director of exploration at the Ministry of Energy and Mining Azhari Abdullah told reporters today.

Roubini Predicts U.S. Losses May Reach $3.6 Trillion

(Bloomberg) -- U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.

“I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

...Oil prices will trade between $30 and $40 a barrel all year, Roubini predicted.

“I see commodities falling overall another 15-20 percent,” Roubini said. “This outlook for commodity prices is beneficial for oil importers, it’s going to imply that economic recovery might occur faster, but from the point of view of oil exporters, this will be very negative.”

Crude Oil Falls Below $33 a Barrel on Dollar, Contract Expiry

(Bloomberg) -- Crude oil fell below $33 a barrel in New York as the strengthening dollar reduced the appeal of commodity investments at a time when demand is declining and stockpiles are rising.

At Cushing, Oklahoma, where the benchmark oil for New York futures is stored, inventories have climbed to 33 million barrels, the highest since records started four years ago. The February contract will cease trading today, so traders have to sell futures or accept the barrels at a time of falling demand.

“Traders are rolling over to the next month to avoid delivery and the dollar is rallying,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “All this against a background of falling demand and easing geopolitical tensions.”

Pemex Oil Output Declines at Fastest Rate Since World War II

(Bloomberg) -- Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.

Pemex last year likely extracted 2.8 million barrels a day, down about 9 percent from the 3.08 million a day pumped in 2007, representing a total of $20 billion in lost sales, according to data compiled by the government and Bloomberg. The Mexico City- based company, which had revenue of $104 billion in 2007, plans to report annual production figures tomorrow.

Falling output is leading Pemex into deepwater exploration as state-run peers Petroleo Brasileiro SA in Rio de Janeiro and Ecopetrol SA in Bogota invest billions to boost production. Costs are rising at Cantarell, Pemex’s largest field, after declining pressure reduced output in the past five years. Oil tumbled 77 percent from its July record to $34.08 a barrel in New York.

Pemex’s “biggest problems have yet to come,” said Alejandro Schtulmann, head of research at Empra, a political- risk consulting firm in Mexico City, in an interview. “The fall in oil prices and lower production is going to make expensive exploration projects less attractive now.”

Russia restarts gas supplies to Europe via Ukraine

PISAREVKA, Russia (AP) -- Russian natural gas began flowing into Europe on Tuesday after a nearly two-week cutoff that left large parts of the continent shivering and underscored its vulnerability and dependence on Russia's energy.

But a higher price Ukraine now has to pay for the Russian gas will further cripple an economy badly hurt by the financial crisis and could set the stage for another gas dispute with Russia. The office of Ukraine's president has already criticized the deal, saying it hurt the nation's interests.

ExxonMobil tastes oil at 'mega prospect'

US supermajor ExxonMobil has notified Brazilian regulatory authorities that it has detected hydrocarbons on a deep-water pre-salt prospect that is billed as the biggest yet in the emerging Santos basin province.

Sunoco seeks oil sands supplier

CALGARY - Just as several projects in Alberta's oil sands are being shelved, Sunoco Inc. is looking for a partner who can deliver a steady stream of heavy crude to one of its refineries.

Lynn Laverty Eisenhans, Sunoco's chief executive, said Monday the Philadelphia-based company was search for a partner for its refinery in Ohio.

TNK-BP Restricts Its Gas Production on Gazprom Curbs

(Bloomberg) -- TNK-BP, the Russian joint venture of Europe’s second-biggest oil company, said natural-gas production is below expectations because of OAO Gazprom-imposed curbs.

Gazprom, Russia’s gas monopoly, today resumed gas pumping to Europe via Ukraine, ending almost two weeks of supply disruptions because of a price dispute. Domestic gas demand has declined because of the economic slowdown, Gazprom Deputy Chief Executive Officer Alexander Medvedev said.

Canada offers to back Mackenzie gas project

Canada's federal government has offered financial support for the Mackenzie gas pipeline, a multibillion-dollar project that has been held back by regulatory delays and cost overruns.

Jim Prentice, the federal minister in charge of pipelines, would not disclose Monday how much federal money is on the table, telling reporters that formal negotiations are still under way.

No need for state gas reserves - German energy lobby

BERLIN (Reuters) - Germany, which was cushioned from gas supply disruptions during the Russia-Ukraine dispute partly due to privately owned storage facilities, does not need to build up a state reserve, energy lobby BDEW said on Tuesday.

Germany has 46 underground gas storage units which can hold 20 billion cubic metres or a quarter of annual consumption, and 15 more such sites are planned or under construction, BDEW's managing director Hildegard Mueller said.

Coal shortage may trigger power crisis in W Bengal

KOLKATA: West Bengal may face long hours of load shedding from March onwards if the state does not receive a tapering (read temporary) linkage from the union coal ministry soon, as coal production from its captive block allotted some times in 2002 can start production only by 2011 due to a delay in receiving environment clearance.

DOE buys oil for reserve

WASHINGTON — The U.S. Department of Energy (DOE) has awarded contracts to purchase 10.683 million barrels of crude oil at a cost of $553 million for the Strategic Petroleum Reserve (SPR). Deliveries of the oil will be made from February to April 2009.

The awards made to Shell Trading and Vitol are the first direct purchases of crude oil for the SPR since 1994. Revenues from the 2005 Hurricane Katrina emergency sale were used for the purchase.

The reasons why crude oil could double this year

Adequate supply plus stagnant demand equals $35 oil. So why is the December 2010 oil contract trading nearly 80% higher at $61.80? What could possibly happen between now and December 2010 that would cause oil to go up 80%?

Only a matter of time for higher energy prices

A number of peak oil theorists also see oil going higher. Geologist M. King Hubbert advanced his theory, which became known as peak oil, in 1956 when he postulated that at some point the world would have found and exploited all the Earth’s available energy reserves. At that time, output would be maximized and going forward, the supply of oil would begin to decline and prices would rise.

Noted "peak oil pundit" Matthew R. Simmons became famous for the 2005 publication of his book "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy." In the book, Simmons argues that Saudi Arabia’s oil supplies are much more limited than everyone thinks. Fortune reported that Simmons believes it’s possible that we will see oil climb into the $500 a barrel range — which would make gasoline a little more expensive than the best bottled water at around $10 a gallon.

Dramatic shift lies just ahead in oil production

A Saudi oil geologist named Sadad I. Al Husseini who was head of exploration and production for the state-owned oil company, Saudi Aramco, discovered in the year 2000 that output would be leveling as early as 2004 - that upbeat forecasts for future production were wrong.

He had long been skeptical of the oil industry's upbeat forecasts, and in the mid-1990s he began studying data from the 250 or so major oil fields that produce most of the world's oil. He calculated how much crude remained in each field and how rapidly it was being depleted. Then he added all the new fields the company hoped to bring on line in the coming decades.

Once he tallied the numbers, he realized that where mainstream forecasts showed output rising steadily each year in a great upward curve that kept up with global demand, output was actually leveling off. Also, he calculated that the production level would last 15 years at best. Then the output of conventional oil would begin a gradual, but irreversible decline.

Time to spread resilience message

With climate change affecting our weather patterns and peak oil limiting our capacity for economic growth, combined with the credit crunch, it is surely time to look at the resilience of our towns.

It is all very well having new supermarkets being built, but they do not add to the food and energy security for a community that resilience implies.

Oregon: The End (of Oil) is Nigh

If you’ve had your fill of hope after Tuesday’s inauguration, you might try washing it down with an hour of fear at the Bagdad Theater the next night.

John Kaufman (pictured above), a senior policy analyst with the Oregon Department of Energy will be talking Wednesday, Jan. 21 about peak oil and its implications. Peak oil is the idea that oil production already has or will soon begin to diminish. Combine slowing oil production with increasing global demand, and the future starts to look pretty scary. (Unsurprisingly, it's a subject that has a good deal of traction in Portland.)

Wanted: babies and immigrants

A good reason to try to develop the population, economy, and essentially the wealth of New Brunswick over the next 20-plus years is that there are world events, many of which are already unfolding, which we cannot control but will have significant detrimental impacts on us, just as they will worldwide. The recent financial troubles which originated on Wall Street and quickly spread like an offshore oil slick across the global economy is a good example of how things far outside Fredericton's control will affect Victor Boudreau's budget.

Two big changes that are expected to hit us hard over the next generation are peak oil and climate change. These are big enough to make the economic crisis of the past few months seem as mildly inconvenient as discovering you've run out of fabric softener after the grocery store has closed for the night. Being more self-sufficient may not mean no support from Ottawa, but it might help mitigate the ill-effects of these changes.

Abu Dhabi to keep investing in solar energy despite crisis

ABU DHABI (AFP) – Oil-rich Abu Dhabi said Monday it will press ahead with plans to develop solar energy, shrugging off a huge drop in oil prices which is cutting the emirate's revenues.

"The current economic situation has no impact on Masdar's intended and planned projects," said Sultan al-Jaber, chief executive of Masdar, the government-owned Abu Dhabi Future Energy Company charged with developing clean energy.

Expansion of Suncor's Ontario ethanol plant to be delayed for at least a year

Suncor Energy Inc. is delaying a $120-million expansion of its Sarnia, Ont., ethanol plant by more than a year to save costs, it said yesterday. Suncor spokeswoman Shawn Davis said work may not be complete on the expansion until 2011, as Canada's No. 3 oil exploration and refining firm seeks to cut costs and delay spending to cope with the downturn in oil prices. "We've deferred some construction," Mr. Davis said. "We have had to make some ... decisions on fiscal responsibility and living within our means."

Hong Kong's economic growth spluttering on filthy air

HONG KONG (AFP) – In recent years, a thick haze originating from factories in southern China has enveloped Hong Kong for large chunks of the year, blocking views of its famous harbour and raising health fears.

Combined with the city's home-grown pollution, scientists and business leaders say it presents a serious economic risk to the financial hub, both for its ability to attract and retain talent and the associated health costs.

Pork producers sue EPA over new emissions rule

DES MOINES, Iowa – The National Pork Producers Council said Monday it is suing to challenge the Environmental Protection Agency's requirement that livestock farms inform communities about estimated emissions.

The rule is scheduled to take effect Tuesday. It requires livestock producers to call state and local emergency response authorities to inform them of estimated emissions and to notify them in writing.

EPA to regulate mercury from cement plants

TRAVERSE CITY, Mich. – Federal regulators have settled a lawsuit with environmental activists and nine states over standards for mercury emissions from cement plants, the plaintiffs announced Friday.

Antarctic ice shelf set to collapse due to warming

WILKINS ICE SHELF, Antarctica (Reuters) - A huge Antarctic ice shelf is on the brink of collapse with just a sliver of ice holding it in place, the latest victim of global warming that is altering maps of the frozen continent.

"We've come to the Wilkins Ice Shelf to see its final death throes," David Vaughan, a glaciologist at the British Antarctic Survey (BAS), told Reuters after the first -- and probably last -- plane landed near the narrowest part of the ice.

Harvests could be interesting this year. Was chatting with a beekeeper who said all 25 of his beehives turned up empty last year...

Read Rowan Jacobsen's "Fruitless Fall"; he talks about the phenomena of the honeybee's decline.

The bigger the operator, the more problems they seem to have. Most of the small backyard beekeepers like myself and other members of my local beekeepers club are doing OK.

IMHO, the model of big monoculture orchards pollenated by big migratory beekeepers has just about run its course. Diverse food crops grown locally in and around each community and pollenated by backyard beehives dotting the landscape is the only sustainable way to go. We need to start working WITH nature instead of AGAINST it.

Most of the small backyard beekeepers like myself and other members of my local beekeepers club are doing OK.

Not so much farther North. People up here are still taking wicked losses every winter. Mites and a New England winter seem to be too much for bees from Georgia. But local strains are showing promise. Who'da thunk that bees from Vermont would do better in Vermont.

Local bee keepers in my area are doing pretty good. We don't migrate hives too much.

Yet they tell me there is an arc north of us where lots of losses are occurring..like in Illinois and Indiana , in the mid to southern portions I would guess.

So my plans are full steam ahead with a nuc hive and then grow out from there.

As I recall NCSU had excellent research on bees and a big display over near the fair grounds in Raleigh.


Aren't honeybees from the Old World? I recall that the Americas don't have any native honeybees. They do have native bees, but they're not honeybees.

As far as pollination of crops is concerned, native American bees might do fine though. But I don't know if there are any beekeepers of native American bees (or other pollinators)

Native pollinators don't live in huge hives; they pollinate, but not in the huge numbers that you need for large monocrop harvests.

I'm one of those beekeepers "farther up North" and I lost my hives this year. First time ever I had winter kill.

1) Did they have enough food?
2) Did you do anything to treat for Varroa mites?

The advice I am hearing at my bee club is that you have to do those two things to make sure your bees have a fighting chance of making it through the winter. Non-chemical treatments for the mites are OK to try, but no treatment at all risks a winter-killed hive. You've got to attrit the little pests at least a bit before the hive goes into winter.

Read the two links I posted above. There are many causes. The mite treatement might stress the bees even more.

Gotta talk to someone who knows about bees, my hive which I just had a look at is empty, nothing was coming out for winter flights. They did leave me with about 50 lbs of honey so I figure that at least they didn't go harbouring hard feelings.

Google "Colony Collapse Disorder"

Possibly, but there were no capped brood, just the honey. Maybe they just found the neighbourhood a bit declasse, I will have to ask Nate if he figures that would be the case.


Where are you? If you're up Nate's way, there shouldn't be any brood of any sort in December or early January.

Thanks for the information but would that rule out Colony collapse? The little buggers were still doing well till it got frosty in early November. Is that ailment solely an angst in summertime thing for keepers of bees?

If you're up Nate's way, there shouldn't be any brood of any sort in December or early January.

Nathen Whipsnade, my good neighbour, said he has not eaten my brood and swore on a stack of bibles, so I guess we can rule that out.

Anyone seen "Defiance"?

total peak oil survivalist doomer porn, and an interesting look at how things could play out for some people in some places.

Spending the Deficit

I can remember a news item, just a few years ago, “The budget this year will hit, for the first time, one trillion dollars.” Now mind you, that was the entire budget not the deficit! Now this year the deficit will hit 1.2 trillion dollars. How much is 1.2 trillion? Here, from the list, are just five of the things 1.2 trillion would buy:

3. Everything produced in Canada in one year.
4. Purchase Exxon Mobil, General Electric, Microsoft and Wal-Mart.
5. Fund the entire education system, Kindergarten through college, for one year.
6. Pay for the entire War in Iraq twice over.
9. Pay back all the money we owe to China and Japan.

Let us not forget that when Clinton left office eight years ago, we did not have a deficit but a surplus. And to think there are a few people running around who think going back to a Clinton style of government would not be change.

That is not to say that Obama will take us back to the Clinton era. No, he will take us back to the Roosevelt era in an effort to get us out of this damn mess Bush has gotten us into. And I have my doubts that it will work.

Ron Patterson

Well, the Clintonistas are moving back to Washington, down to Socks the Cat.

But are you seriously expecting improvement on the budget front? Bill Clinton deserves credit for many things, but not for the budget surplus. That was the combination of a Democratic White House and a hostile Republican Congress. They couldn't get anything done. Which was probably a good thing for the country. ("No man’s life, liberty or property is safe while the legislature is in session.")

In any case, it's a vastly different world now. Obama is going to ignore deficits and spend like crazy, the Democratic Congress will support him, and any other President or Congress elected in this environment would do the same thing.

In addition to Leanan's comments, Mr Clinton's administration had the benefit of affordable and available energy.... I think the range of oil prices in his ten years in office was $10 to $25, and nat gas something like $1.50 to $4.00 per mmbtu (at a guess).

Furthermore, the banking system was solvent (or at least appeared to be.....).

... plus a brand new technology to be exploited in the form of the microproccessor and the Internet.

clinton inherited a debt that was increasing at the rate of $350 billion/yr at the end of bush 1's term. oil and gas prices were about the same as during bush 1's term, except for that brief period in 90 and 91 when that 1st glorious affair was being conducted in iraq.

and on that basis (increase in national debt) clinton's last full fy ended 9-30-2000 saw an increase of $ 21 billion, same as one day under bush (nov. 22,2004) and about any average day during calandar q4 '08.

Oddly, the only items both parties seemed to agree upon is that financial restrictions were old-fashioned and out-dated, that leverage was your friend, that trade imbalance was harmless, and that debt is the same thing as productively for GDP growth. They also agreed on changing how to account for inflation, right?

Denninger is still hoping Obama will end the bailouts. Americans don't want more bailouts; they think it's not working and don't want to waste any more money. But Obama is expected to bail out the financial system and spend money like never before. The bond market is already pricing it in.

Ouch. Dow down 300 points. Below 8,000.

I think Nov 20th of last year was the only lower close since 2003 -- but that was way down to almost 7500.

That was a short honeymoon.

I think it's panic over what's happening with British banking, not anything to do with Obama. Obama is supposed to give a speech about the financial crisis in the next few days. He may get a honeymoon from that.

The best line I've heard lately was from a generic talking head:

"Things are going to get worse before they get worse."

I saw a graph showing the rise of Obama's popularity in direct opposition to the fall in the markets. Coincidence?

my model for the last 8 years is called "looting of the treasury"

Ron, you're usually a reasonable guy. Clinton successfully inherited the tailings of military spending draw-downs and the first few years of the financially-driven windfall GDP-growth (debt) proceeds. He also ushered in most of the regulatory changes that got us where we are today - an era of imploding mega-bubbles. There is a lot of multi-year lag in our economy, and cause and effect tend to cross over election boundaries.

Of course Bush owns the wars that drove defense spending up and he did nothing to address the effects of massive finance-industry and easy-money bubbles, despite seeing one pop in 2000-2002 as a warning.

Both share blame, and both had similar financial principles. So does Obama, so I expect the economy will continue going the same direction -- worse -- in the long term with significant bumps up and down as policy changes have their immediate and delayed impacts.

This whole political process of stamping halos and pitchforks on each person does little to help, and a lot to divert attention from the truth: both parties are more alike than they are different, both have no clue how to put the economy on stead footings, and both like the idea of a big powerful gov't than can promise anything to anybody.


I suppose I come from about as far on the other side of the political aisle from you as is possible. But in this comment I am in total agreement. The bankrupting of America was very much a bipartisan endeavor.

Kevin Phillips is the author to read: Bad Money and Wealth and Democracy.

you left out a detail or two. bush also reduced taxes while attempting to occupy two counties and the trickle down, or on, from that is working out real well now isnt it ?

Yes, but in my view cutting taxes is no sin, as long as spending cuts are at least as large.

The whole notion that "tax rates must always go up" is yet another bit of blatantly obvious unsustainability, yet my house taxes, sales taxes, state taxes, and fed taxes mostly tend in that direction, and politicians at every level seem to thing their portion of the pie is too small.

Here are two question I think we all need to consider, and that in my experience there is much inherent agreement even between fiscal conservatives and social liberals:

1) Why should we expect to be able to spend more than we make at any level of gov't?
2) Why should we expect to import more than we export, dollar-wise, as a nation?

I mostly understand the Keynesian growth model, but to me that doesn't adequately answer either question. In my opinion, any gov't action that puts the nation further in debt or that further imbalanced trade is a bad solution that will only make things worse.

fiscal conservatives and social liberals:

Why do you compare apples to oranges ?

Shouldn't it be, in this case, 'fiscal conservatives and fiscal liberals' ?

Or do I HAVE to stay in-the-box ?

In my (limited) personal experience the social liberals are the ones that engage me in discussions as soon as I say "I'm a conservative". I don't think I know anybody who considers themselves a "social conservative but fiscal liberal", and few social liberals seem to worry too much about the cost -- they just say "raise taxes" if pressed.

My point, though, was a social/fiscal liberal who wants to spend on on social programs and tax to match is somebody I can deal with -- let's figure out how much we're going to tax, and then argue about what we'll spend it on, or let's argue out what we need to spend and then figure out what to tax. The logical inconsistency in our personal lives, in business, and in gov't today is that we decide spending plans and funding plans independently, and use ever-increasing debt to bridge the gap. It's our way of having our cake and eating it too.

Except it's really our children's cake, and our old-age retirement cake, and Chinese cake, and Japanese cake, as we strive to maintain our dollar value while consuming cheap imports. Of course those countries have their own version of the game, driven by a desire to keep down their currency value while maintaining export income.

Here is an interesting thought experiment: If the US were to simply cancel all individual debt with a one-time payout of new dollars, what would happen? Would we each immediately buckle down to a sustainable lifestyle? Or would we immediately take out new loans? At what point would we as individuals "learn to be frugal" with new money?

If the US were to cancel (renege upon) all foreign debts, would China cease selling to us? Would they buy more bonds again, happy for a stronger dollar and a growing local manufacturing base?

I'm not sure I can see much difference in the China/Japanese/OPEC trade agreements and a militarily-forced tribute. They send us all sorts of valuable stuff and all we give them is colored pieces of paper, or other pieces of paper than promise to give them colored pieces of paper at some date in the future. Is a fiat currency used as a reserve standard just a an "economic imperialism", as a relic of WWII domination?

To self-identify as fiscal liberal is a bit like putting a bull eye on your back, so in the real world it's camouflaged by other political aspects.

Your thought experiment is an interesting one. In my view to 'learn to be frugal' only occurs under duress and the most effective duress is physical pain.

You're probably right. I would say most of the people I know are social conservatives, fiscal liberals, though they would not identify themselves that way.

Ever been to New Hampshire? "We don't care what you do, as long as you don't ask us to pay for it."

That is a lot of text to put on a license plate. I think they shortened it some to fit.

Pretty much how I feel about things. Maybe I should consider moving to New Hampshire. The drugs addicts here protesting that they should get *more* free housing just makes me sick.

i dont know why anyone: individual, city,county, state, nation or corporation thinks they can live beyond their means.

and i think that glorious affair in iraq would never have been engaged in if the american taxpayers were required to pay as they go. imo, a tax surcharge to actually pay for it would have brought about an end a long time ago.

And if the Army had been raised by the draft, there would have been the committment by everyone of something much more valuable than their dollars, and a much harder look would have been done at the reasons for the war and what it was expected to accomplish.

EE, you hit that one right on the head. Richard Nixon, for all of his faults, was true to his philosophy, and convinced Congress to pass a surtax which increased the maximum marginal tax rate to 77% at the time. That is what accomplished the goal to end the war in Viet Nam, not protesters. Of course, it did bring about an economic hit, and Carter had to deal with that, as seen in his single four year term.

Yes, but in my view cutting taxes is no sin, as long as spending cuts are at least as large.

I think you completely missed the gist of Elwood's post. Bush cut taxes, (on the rich but left middle class taxes right where they were), while dramatically increasing spending! Any idiot should have known you cannot cut taxes and wage two wars at the same time without going deep, deep in debt. No one would argue that cutting taxes is not a good thing as long as you can afford to do so. The problem was Bush had absolutely no concept of what the Iraqi war would cost.

Well hell, did he have any concept of anything that was going on?

Ron Patterson

I think Paleocon agrees that Bush was wrong to combine tax cuts with increased spending. The problem is, the real conservative movement is not ultimately about less government, it is about the amplification of inequality to bring back an idealized feudal past (plus cell phones and Big Macs). The successful Republicans have transferred as much power as possible to the parts of government and big business that are inherent enemies of equality (the military/industrial/prison/police complex and the investors) and taken it away from everyone else. One of Reagan's staffers admitted years after his job that they intentionally cut taxes and raised war spending to explode the national debt so as to force future America to destroy programs for the poor. In other words, Reagan's game was class war. Whether he was after the destruction of the New Deal coalition or he really believed that creating El Salvador-like levels of inequality and injustice would usher in a meritocratic utopia, he got what he was after and we're living in it.

Read Naomi Klein's "The Shock Doctrine" to see how free-market dogmatists are easily seduced by murderous tyranny as a way to exterminate critics of inequality. Was Gen. Pinochet an example of big government or small government? The answer is no, he was an example of plutocracy.

Any idiot should have known you cannot cut taxes and wage two wars at the same time without going deep, deep in debt. No one would argue that cutting taxes is not a good thing as long as you can afford to do so.

Don't forget that Bush, Cheney and the other neo-cons did in fact have a funding plan: they were going to pay for the cost of invading and occupying Iraq with the country's oil revenues! How clever! (Maybe we should try that in Iran, or Saudi Arabia?)

Dick Lawrence

IMHO, the Laffer curve was probably right, but I suspect that the income tax rate that produces peak tax revenues probably is 50%. While cutting income tax rates that exceedrd 50% probably did actually produce more tax revenues, the cuts below 50% have not. This is something that the right wing/Republican promoters of endless tax cutting as the sole solution to everything have failed to acknowledge or mention.

I am sure that is a curve, but I think you need to include all taxes, not just income. At some point the utility of the dollar is worth less to the individual than the marginal effort required to earn it. That point will differ for each person, so the aggregate curve would be we a conglomeration of the behavior of a populace.

I am square in the "tax less" camp, but as part of the "spend much less" perspective; however, if we decide we're going to spend more we SHOULD tax more. That's the feedback mechanism we need. People who are over-taxed choose to work less, or barter more, or figure out ways to cheat.

The mechanism of bulk national debt short-circuits that feedback loop. I think it leads to bankruptcy on an international scale, and the banking fiasco is just a very large canary in this coal-mine. Or maybe it's a parrot, that the gov't must keep animated and pining for the fiords.

If I were given a free hand to construct a new national tax system, I would have a flat federal income tax at a high rate, but never to exceed 50%. There would be a tax credit (NOT a deduction) for all other taxes paid (state and local income, property, sales, etc.) so that the the total effective tax rate never exceeded 50%. Maybe put some type of upper limit on this credit so that jurisdictions couldn't just run their tax rates up to extreme levels.

I would also tax all income, including capital gains, at the same rate. The only break that capital gains would get would be to index basis to inflation.

Instead of a corporate income tax, corporations would pay a withholding tax that would pass through to shareholders. Shareholders would be liable for income tax on their proportionate share of total corporate net income, whether distributed as dividends or not. In other words, all shareholders would get something like the K-1 that Sub S and Partnership owners get now.

For the poor, I would provide a flat per-person tax credit or exemption. The bottom 20% of the population in terms of income distribution should pretty much end up paying no taxes at all, or maybe even get a little bit back in the form of a negative income tax. The effect of this credit or exemption would be to make the effective tax rate for each person progressive as they went higher on the income distribution scale.

I would eliminate virtually all other deductions, exemptions, and credits. There are other, better methods to promote important social goals, the purpose of the tax system is to raise taxes, so let's keep it simple and understandable to everyone.

I like:

Negative Income Tax: $6,000 payment, 20% rate. 40% bubble rate for $2MM-$10MM; 80% Bubble rate above $10MM

WTF are you talking about the median income in the U.S. is roughly $48,000 per family. Spend $20 on a Tax Cut or some other canned software. Run the nums your tax liability is $300 at the median income if you contribute something like $2000 to and IRA. That ain't crap. You people get on here day after day crying about the poor paying to much tax BULL HOCKEY they don't pay any tax except S.S./Medicare and chances are they won't be paying that much longer. Taxing income is the wrong way to go. Tax consumption and everyone pays not just the honest people that follow the rules. Reduce the consumption tax on food and medicine if you feel so inclined.

how 'bout eliminating the employement of illegal imigrants, that would result in a living wage, then they would be capable of paying taxes.

KC, Sales taxes are the single most regressive form of taxation, although Oklahoma and some other states allow a credit against income taxes for sales tax, and some are refundable. By regressive, I mean that the poor are paying a larger portion of their income for those taxes than higher income folks. After that, and it used to be nonsensical due to the high limits, are payroll taxes like social security and medicare, with employers taking a hit on unemployment taxes and the matching portions of social security and medicare, which hurt small businesses pretty hard as well. the taxes paid by employers impact what they can pay employees, so it is an indirect tax.

A lot of folks do not contribute to IRA's or 401K's, and spend a higher percentage of their incomes on items subject to sales taxes. Increasingly, local governments are having to look to sales taxes to meet their revenue requirements, and the overall situation is getting worse.

In addition, consumption tax plans usually rely on deductions for businesses at least with respect to production costs, and that is where the problem lies with respect to enforcement. It is not without its own cans of worms.

I am square in the "tax less" camp, but as part of the "spend much less" perspective

We are spending nearly $1T on our bloated military/industrial/security complex. The problem is conservatives know "the US should be strong" polls well, and use it to frighten the liberals into supported ever higher defense expenditures. Until we change our national outlook towards being just one nation among others, we won't solve this problem.

I guess that's where the second point of my argument comes in, and you're cutting to the neocon/Reagan camp of "determine what we need to be safe, and then figure out how to pay for it". That's OK by me (whatever the majority wants) IF we then manage to pay for it. Obviously we didn't.

We could be a nation of industrial-armored Spartans, focusing only on defense readiness, and still have a balanced budget. Or we could be like some EU countries and spend a ton on social programs and nothing on defense, but pay as we go. Or we could do a bit of both, and still muddle through with a balanced budget.

Our mistake, in my view, is wanting to have it all (social services and big defense) and pay for none of it. That's the problem at every level -- failure to prioritize our desires and then to adequately manage funding for the resulting commitments.

So what do you get once you have an indentured populace working hard to service debts held by foreigners? I'd bet you get nationalism -- which is why I think debt default is not such an unlikely prospect, in the longer term.

Remember Herbert Hoover had an obsession with balancing the budget and made the depression a lot worse. In this situation there is no time to worry about fiscal rectitude. Plus in a depression a deficit is easy to finance, since interest rates are low and people see government bonds as a safe haven.

Refinancing existing high-rate debt would make sense, but I do not yet see how incurring more debt will necessarily help (granted that spending less could possibly hurt).

In other words, I know you can't get something for nothing, but I'm equally positive you can end with nothing despite giving something.

In other words, I know you can't get something for nothing, but I'm equally positive you can end with nothing despite giving something.

At least in the near term, the Keynesian deficit spending stuff works. We didn't need it during the early 80's Reagan recession, because we started with very high interest rates. The preferred way to stimulate out of a recession is to cut interest rates. But ours are already virtually zero, so plan B is to spend your way out.

I've been trying to drum up support for spending that has a chance of paying for itself. I.E. it spends to build something that will be owned (possibly in part) by the gov, that generates revenue. It can either be sold, or the revenues collected to pay down the debt. Because the govt. benefits from the economic externalities (fewer unemployed, those employed by the stimulus paying taxes etc.) the net cost to government of ordinary spending stimulus is roughly fifty cents on the dollar. But half of a couple of trillion is still pretty darn big, especially considering we are starting from already high levels. Of course any stuff built by the gov, can hopefully be sold back to the private sector once the economy recovers. We don't want to become a socialist (or mixed) economy long term. But, it seems that short term (say 5years) that may be the least painful approach.

The difference is, the crimes of Bush were blatant and forseeable.

How else can we explain the chilling accuracy of this satirical story from The Onion in 2001?

Bush: 'Our Long National Nightmare Of Peace And Prosperity Is Finally Over'
January 17, 2001 | Issue 37•01

So is there anything here that did not happen?


Niall Ferguson says he believes that by studying financial history perhaps we can avoid repeating the financial mistakes that have been made in the past. I'm not sure I agree with this, or even that this is the purpose of studying history, or art, philosophy or theology.

Kevin Phillips toys with the idea of the inevitable rise and fall of empires, and one of my favorite bloggers of all time, John Michael Greer, has developed this line of thought--the cyclical behavior of civilizations--to an even greater degree in a recent series of posts.

I suppose in the Age of Reason this is heresy, but the more I learn about the ebb and flow of human affairs it seems that, despite all our efforts to the contrary, the hand of providence is inexorably at work. Perhaps Tolstoy got it right:

But let us assume that the people of Europe under Napoleon's leadership had to advance into the heart of Russia and there to perish; then all the self-contradictory, senseless, cruel actions of these people--the participants in the war--become intelligible to us.

Providence compelled all these men, striving for the attainment of their own personal ends, to combine in the accomplishment of a prodigious result, of which not one of them (neither Napoleon, nor Aleksandr, still less anyone taking part in the actual fighting) had the slightest expectation...

The soldiers of the French army went to kill the Russian soldiers at Borodino not because of Napoleon's orders, but by their own volition. At the sight of an army barring their road to Moscow, the whole army--the French, Italians, Germans, Poles--hungry, ragged, and exhausted by the campaign, felt that the wine was drawn and must be drunk. Had Napoleon then forbidden them to fight the Russians, they would have killed him and would have proceeded to fight the Russians because it was inevitable.

When they heard Napoleon's proclamation offering them as consolation for mutilation and death the tribute posterity would accord them for having been in the battle of Moscow, they cried: "Vive l'Empereur!" just as they had cried "Vive l'Empereur!" at the sight of the portrait of the boy transfixing the terrestial globe on his toy staff, and just as they would have cried "Vive l'Empereur!" to any absurdity that might have been told them.

--Leo Tolstoy, War and Peace

You may be interested in The Rise and Fall of the Great Powers (Paperback) by Paul Kennedy.

He outlines the links between past great powers and the reasons for their fall. The common thread is "imperial overstretch" where the nation invests less in productive capacity (schools, research) and spends more on unproductive pursuits (Iraq, Afghanistan).

See the Amazon reviews for more:

Kennedy pretty much sets out the scenario for present day America. Pretty good for a book first published in 1987.

Even more apt is Kennedy's treatment of cycles. It's amazing, really: I'm the only person I know of who seems to have noticed he even talked about it in that book. Everyone remembers the overstretch, nobody the cycles.

They were roughly: agrarian/groups, militaristic/towns and cities, intellectual/industrial and acquisitive. Then fall. Start again.

Any of that look familiar? Say, the fourth?

I might have some of that mixed up. I don't have a copy of the book and read it many years ago.


I have to dig out my copy. Forgot about the cycles detail but he did lay out a scenario that has been repeated several times and which forecast US decline. I went back to it a year ago and was amazed at the correspondence with the present.

I've owned the book since college. For me the big question is, why didn't America have its current crisis back in 1991, when Kennedy and many others expected it? At this site many would say it was because oil was cheap. I think Kennedy discussed the way that Britain had gotten bailed out of its own imperial crisis thanks to the industrial revolution, allowing it to create a second empire based on exploitation of Indian peasants and the selling of opium to China. I've come to think America was bailed out by the computer revolution of the 1990s - or at least the grossly inflated selling of shares in companies that were supposed to benefit from that revolution. The collapse of those shares, which should have forced us to sacrifice the artificial prosperity they created, was converted by Greenspan into new bubbles that put off the inevitable but made it far worse.

Britain certainly got a longer bailout from technology than we did.


I haven't read Kennedy's book, but it seems to be a pretty universally held belief amongst historians that imperial overstretch, insofar as it refers to war, has played a preeminent role in the downfall of just about every empire.

But the dilema still remains: Why do empires, knowing this, continue to make the same mistake over and over again? Certainly we at this very moment find ourselves going down the very same road to ruin that every previous empire has gone down.

And we of all people! Our entire economic paradigm is constructed on a model of human behavior that requires decision making to be the exclusive domain of logic and empiricism. But it is now dawning on us that the very creators and advocates of that model--Von Hayek, Friedman, Nozick--were themselves about as illogical and anti-empirical as it gets. Human beings just don't operate according to their prescriptions, and the clear, concise, and simplistic conception of human nature their neoclassical theory presuposes is a fiction. As Etzioni wrote:

[P]eople typically do not render rational decisions. (italics his) They brush their teeth but do not fasten their seat belts; they continue to smoke twenty years after the Surgeon General's report; they purchase costly, unsuitable life insurance and pay stock brokers for useless advice, and so on.

--Amitai Etzioni, The Moral Dimension: Towards a New Economics

So there's clearly something going on here besides reason, rationality, logic and empiricism. And I am personally at a loss as to how to turn man into the homo economicus that our current reigning paradigm demands that he be.

It could very well be that local environmental destruction FORCES empires to overstretch. If the local forests have all be burned, then there is no other option but to import pottery, iron, steel, glass etc. (or soils and food production). Standards of living must fall unless you invade and take surrounding resources. Those areas eventually are plundered and the whole empire falls.

Saying it more compactly, perhaps overreach is not a "mistake" but the inevitable outcome of a wealthy area exploited in an unsustainable manner. The choices are limited to "collapse" or "overreach and then collapse".

Hmmm. Actually, it kind of reminds me of fungi sowing spores. Perhaps the point of overshoot is to spread the local genetic material before collapse, so as to increase the odds of survival of the genes. So the choices are really "collapse" and possibly extinct the local genes or "overreach and collapse" and thus put lots of soldiers all over the empire who settle and marry and when the center collapses have a higher chance of survival?

While the world was fairly empty, this would have been pretty effective at spreading to fill the whole thing. Maybe it is "more rational" in a very long term sense? I don't know. Interesting to think about.

As a corollary, I recall reading that England became most interested in the North American colonies as they found that they were running short of tall, straight trees to use as masts for their sailing vessels. And, they apparently were also experiencing a crisis in firewood, which then caused them to turn to coal, of which there was quite a bit available. But, the coal was underground and they could not mine it without pumps, thus the invention of the first steam engines. So, here we are, burning the last of the oil and wondering what to do next. At least, we know how to make sailing masts of steel and sails of Dacron...

E. Swanson

Yeah, worst comes to worst it would be fun to race a sailboat loaded with tea and spices across the pacific. (Or at least profitable and exciting!) What a huge advantage it is to sail at such a high degree up wind!

I just did Panama City to New Zealand in 39 sailing days. With port calls it actually spanned 9 Nov to 11 Jan. Fun? Some bits were fun for sure. But there were also days of ennui, anxiety, and depression. Living by the wind is not a picnic.

England became most interested in the North American colonies as they found that they were running short of tall, straight trees to use as masts for their sailing vessels.

Finishing up reading Deforesting The Earth by Michael Williams. England was already importing lumber from Norway and Sweden for shipbuilding long before America came into the picture. This amazing book is due to the recent refinement of Pollen analysis:

Analysis of the distribution of pollen grains of various species contained in surface layer deposits, especially peat bogs and lake sediments, from which a record of past climate may be inferred. Because the lake sediments accumulate over time, a core of the mud will show that the mud at the bottom will be the oldest and the mud at the top will be the newest. By separating the samples of the core, we can get a record of how the vegetation around that site has changed.

Deforestation—the thinning, changing, and wholesale clearing of forests for fuel, shelter, and agriculture—is among the most important ways humans have transformed the environment. Surveying ten thousand years to trace human-induced deforestation’s effect on economies, societies, and landscapes around the world...

What is interesting is the discovery that simultaneously with the receding glaciers 14,000 years ago human societies began to exploit the expanding forests. In America the myth of the "noble savage" living in harmony with his natural environment is exactly that...a myth. The biggest boost that the "new world" forests got was the collapse of native human populations due to European immigration in the 1500's. (as much as 95% due to pandemics) By the late 1600's the North and South American forests had made a dramatic resurgence due to the absence of human exploitation.

Europeans soon made up for that though!

As far as "burning the last of the oil" I think we'll run out of healthy air to breathe and potable water to drink long before we run out of fuel to burn.


If you're interested in this sort of thing, check out:


which is a review of the book "The Pristine Myth" by Charles Mann. There's a link near the top to an interview with the author, as well.

To thoughtful students of history, history doesn't seem to offer many answers:

"It is certain," wrote the French historian Jacques-Auguste de Thou in 1604, "that empires, like men, have their beginning, their growth, their decadence and their end; and that Providence has fixed certain bounds which neither force nor prudence can cross." By the end of the sixteenth century there were many who believed that Spain and its empire had passed their peak and had started downwards on their inexorable decline...

An extravagantly ambitious foreign policy, which took no account of the country's capacity to bear the cost, had undoubtedly taken its toll on Castile. The burden of taxation, especially in the last years of Phillip II, had been crippling; and the whole character of royal finance had helped to distort the Castilian economy and to stunt the opportunities for increasing the national wealth. The high returns on juros or credit bonds to service the royal debt had lured private capital away from more hazardous but potentially more useful investment in agriculture and industrial enterprise...

If Castile's imperial adventures placed her in a class by herself, many of her problems were common to the Mediterranean world as a whole. The population of this world had by now drastically outstripped the capacity of the region to provide it with food and work. It had perhaps doubled over the course of a hundred years--from some thirty million in 1500 to sixty million in 1600. Although this increase was part of a wider, European, phenomenon, it created problems which were felt with particular intensity in the Mediterranean lands. The Mediterranean sun was hot, and much of the land was mountainous and arid. Transport, irrigation and land-exploitation all presented challenges to ingenuity and determination which tended to be harsher than comparable challenges in the more temperate climates of Northern Europe. Whether these challenges could ever have been met from the limited resources of sixteenth-century technology is open to doubt. But conservatism, self-interest and a fatalistic outlook may often have prevented the inauguration or completion of projects which were not themselves hopelessly beyond the range of contemporary technical expertise... It seems as if a mental revolution was needed before the resources of nature could begin to be systematically harnessed by men... Against the dead weight of tradition in a still largely illiterate society, and the self-interest created by exaggerated notions of property, there was very little possiblity of introducing change.

--J.H. Elliott, Europe Divided: 1559-1598

It sounds pretty interesting. He does describe an overshoot situation. So the question in my mind is which would have had a higher (or more rapid) return on investment: Investing to try to eek out a marginal improvement by investing in irrigation, etc. Or attempts at conquest. (Could they have been suffering from a blight of Net Present Value accounting?)

Interesting. I thought the Mediterranean was Europe's prime real estate. In the North the harsh climate often made growing adequate food difficult. Crop failures and famines were common. The south being balmy by comparison. The failures must have been cultural, as the article alludes.

Kennedy's explanation was, I recall, similar to what you're talking about, but phrased in terms of local entanglements.

He was writing about trading empires, which rarely overthrown large territorial governments, but infiltrate their port cities and become their lenders until the lawful rulers are rendered puppets. The problem he observed was that the British or Dutch corporations would sign "treaties" with these wretches, then find that they were obliged to protect them from neighboring enemies, which would require more and more troops, which led to greater resentment from the natives.

The comparison to what you're saying is that the traders want to suck the local resources dry, but don't want to weaken the puppet state such that it falls to invading armies. A businessman wants all the profits of rule and none of the responsibilities, and fiends like the East India Co. accomplished this for a while. When the inevitable rebellion of the impoverished locals occurred, the businessmen went to their own governments for a bailout, in the form of official invasion and conquest, but that meant that Britain (for instance) now was stuck with the costs of satisfying the locals or the costs of perpetually butchering them. Which meant that it had to either increase exploitation of local resources to collapse, or take a loss on the deal. My guess is that Britain didn't make much money off of India after 1900.

You can imagine how in the past a lot of wealth would be generated by these companies. Then as revolutions or other issues threatened the "investment" they would request assistance. Because money = power, they would get the help they needed.

I think we see a very similar thing going on now with ethanol and the oil industry. Because ag and oil have such giant money (and energy) flows, they have the power to bend society to pay some of the overhead. Wind has a much higher EROI but it does not have nearly the same sized flow, so they don't wield the same political power.

It made sense to me that Margret Thatcher could break the back of the coal unions because peak coal had so badly reduced them. If British coal was still climbing the peak, I doubt she could have done it. It may well be that the fossil fuel companies will be unstoppable for another few decades. What will seem like political shifts will really be energy shifts underneath.

But the dilema still remains: Why do empires, knowing this, continue to make the same mistake over and over again?

'Cause we're special! Can't happen to us! Nope!

Just try talking to people about collapse: it always happens, it always has, but golly, can't happen to us!

Literally. People think it's impossible. Not implausible, but impossible.


Yeah, but they didn't have Google, and airplanes, and MRI's back then...so it can't happen to us. Idiot. /S85

Someone said to me the other day. Now that we (society) has cell phones we will never go back-- never live in a world without them. We will never lose the knowledge on how to make a cell phone. We argued- but this person was convinced that there are some advancements that are now foundational and can never be taken away.

Good question.

My hunch is that there is a wealth effect that results in a new social group completely out of touch with the reality experienced by ordinary folk. In place of that they deal with "theoretic reality." They think that if they pull the right levers and spend a massive amount of their children's wealth that all will be well in the world.

Essentially their world view is wrong. But they grew up with it, it gained them their position of power, they are not going to easily let it go.

I once had a cat - a very smart cat - who would sit on the kitchen table and watch the birds hopping aound in the garden. Transfixed, he would become more and more excited, whiskers quivering, until he started to chirp and then - BANG! - into the window he'd fly, headfirst. The birdies would scatter, he'd stagger back, wincing from his owie, but then the birds would circle back and he'd be off to the races again.
I watched him repeat this sequence for an hour one day, wondering all the time if my behavior looked exactly the same to some other species with a broader view than my own.
That cat knew what a window was, he knew from painful experience it was there, and he wasn't attempting to penetrate it. He just couldn't help himself.

We may be collectively smarter than yeast - maybe - but smarter than cats? No way.

Cf. The Scorpion and the Frog

Some cats are smarter than others. My cat does the same thing, except for the jump into window part. Best hopes for smarter cats and human beings as well. We just got rid of one dumbass cat (Bush) who has been replaced by a new, improved model. We shall see.

My cat does the same thing against the aquarium glass. I don't think that cats are stupid, it's just that indoor cats go stir crazy.

He was an indoor/outdoor cat, and he could've gone out to the garden at any time, but he was so taken up in the moment that he would forget all else.
This guy was so smart he'd get into "Made ya look" contests with his sister, to see who could get the human to respond quickest.

We had an indoor/ outdoor cat when my wife and I lived in Tesuque NM. Seemed like every other day I was having to put a wounded bird that she caught, out of its misery.

My wife insisted we put a bell around her neck to prevent this "slaughter" (her words).

I walked her out to the edge of the arroyo near where we lived at about sunset one day and said "hear that, AAAooooooooooouuuu? That’s Coyotes and they would love to have dinner announced with a bell.

The logic didn't stick and we somehow "lost" the cat so if anybody has seen a dark Persian feline please call.

Belling a cat doesn't work too well because birds don't associate the bell with danger, at least not until they see the cat. I like cats but the toll they take on the avifauna is extreme. My cat was born in the bosque but she is no longer allowed outside. She would love to go out but I don't want her killing birds & native rodents. Also, as pointed out, coyotes and other predators are afoot. I once lost a cat to a great horned owl, of all things. The bobcat that ate my grey goose last summer would surely make a meal of a little house kitty.

Amitai Etzioni posits that we need to modify current orthodox theory to recognize that man acts morally as well as rationally:

The neoclassical paradigm does not merely ignore the moral dimension but actively opposes its inclusion...

[N]eoclassical economics seeks to determine the mechanisms (mainly, price) that will make for the most efficient allocation of resources, the allocation most able to satisfy people's wants. However, it tends to see these wants as centered on self-happiness, and to be clearly ordered and expressed in one over-arching utility (pleasure). The finding that people have several wants, including the commitment to live up to their moral values, and that these wants cannot be neatly ordered or regulated by prices, provides a starting point that is fundamentally different from that of the neoclassical premises...

The Age of Reason advanced the image of a rational person, who chooses means on the basis of evidence and logic, free of the bondage of the superstition, prejudices, and biases that dominated early ages. Homo-economicus, rationalistic, isolated, and preoccupied with self-interest, is but one offspring of the Man of Reason; the offspring has a neoclassical psychological sibling. The sibling, too, is largely reactive, driven by inputs, is without personality, hedonistic and egotistic, a-social, devoid of affect (or emotions). Moreover, the sibling's value judgments are locked away into a forgotten compatment.

We are wiser now, at least we ought to be. The bloom is off our collective infatuation with the power of science and technology, and the bloom has also faded from our hope that reason will conquer all, replacing emotion-based and value-laden judgments with the conclusions of careful deliberation. As we grew familiar with the modern, reason-dominated person, the cardinal significance of moral commitments and the positive role of affect has been rediscovered.

--Amitai Etzioni, The Moral Dimension: Toward a New Economics

Greer pretty much builds on Spengler's cyclical theory. I'm not sure I buy that as anything inevitable. More likely, it is simply the case that getting a civilization going is something very difficult to do (it has only been accomplished a handful of times throughout history) and keeping one running indefinitely is an EXTREMELY difficult thing to do - nobody has gotten it right so far.

Give Clinton some credit. He didn't piss away the budget surplus like a fool. And I'm sure Al Gore would have been more proactive on the house bubble. The housing bubble may have started under Clinton - but it was hard to discern as a bubble when he left, while it was obvious by 2005 or later, but the Bush administration was ignoring it.

After all the whole Bush era was essentially non-governance. As long as the right people were becoming wealthy it wasn't a problem. Remember Katrina? Even Enron? (noted in that PBS special). Fema was praised under the Clinton Administration.

This is much like the old debate of the Vietnam war. People now push much of the blame off of LBJ and Nixon, onto Kennedy (and even Eisenhower) for starting the war (with "advisors").

In my humble opinion, putting the blame on Kennedy, Eisenhower and Clinton is basically saying that the system is a failure. That whoever gets the ball rolling on something major (something supported by the status quo?) gets as much (or in some circles) more of the blame.

I'm in the camp that the escalators are more of the problem (Bush, Johnson) - because the problem could have been severely minimized if more abrupt action was taken. People like Ed Gramlich at the Fed voicing his alarm over lending practices early on (2001?). But it seems that can only be done in times of "crisis" - like 9/11 or the Credit Crisis we're in now. Or the Great Depression.

If you read the most recent goofiness on the WSJ opinion page - they blame Greenspan (and vindicate Bush). Hahahah!

I think Bubba would have spent a lot more than he did...if he could have gotten it past Congress.

And the housing bubble is as much the Democrats' fault as the Republicans'. You might argue that the Democrats' motivations were different. They wanted everyone to own a house. While the GOP wanted everyone to make a profit.

But I don't see how you can give Clinton and the Democrats a pass, when Clinton's people were among the architects of the current financial mess.

I think it's also unwise to give a pass to the Fed, since nobody there really works for you and me.

Perhaps deconstructing the Fed is one necessary step toward ending the crisis someday?

The $1 trillion deficit might prove to be wishful thinking.

From the story above Roubini Predicts U.S. Losses May Reach $3.6 Trillion in combination with the following:

Banks likely to head back to the trough

Large financial institutions are expected to need more capital later this year. But after TARP money from the government runs out, where will the cash come from?


It appears the government may blow through the second half of $350 billion in TARP funds by the end of the first quarter, and then the government will have to pony up as much as another $1 trillion to keep banks afloat through the next three quarters of 2009.

$350 billion remaining of TARP I
$1 trillion of TARP II
$825 billion stimulus package

All borrowed.

Let's hope the rest of the world has very, very deep pockets and, as Niall Ferguson of The Ascent of Money fame said, "continues to take that view that it doesn't mind piling up great mountains of American government debt." Short that, as he warns, "we will discover the real meaning of financial crisis."

However it plays out, one thing is for sure, and that is that we are no longer captian of our own ship. We have lost our autonomy, not only in finance but in other areas, like geopolitics, as well.

Despite the fear of banking collapse and massive budget deficits, the dollar surged this morning (resulting in oil prices falling). It's like they said...this isn't a beauty contest, it's a least ugly contest. And as ugly as the dollar is, other currencies are even uglier.

Too true. But . . .

One of those "Uglies" may turn out to be a Cinderella in disguise. Then watch all of the world's money gallop away from the dollar in favour of the Cinderella economy. I'm going to have to dig out the DVD and see how this movie ends. :-)

One of the financial taking heads advised people to put everything in cash and prepare for deflation. But also to be prepared to move quickly when inflation rears its head. It might be in six months, it might be in six decades, but inflation will return.

Maybe there won't be inflation but just excessive taxation. It accomplishes the same basically - people have too much money today as it is.

There is still a lot of people who are not in debt, they are just not as loud as indebted.

Rome had inflation and excessive taxation. We could, too.

Some of the bailed bank execs were contributors to the most expenisive inauguration celebration in history:


Bailing out bank execs responsible for billions of dollars of losses is like giving charity to the rich. The bank execs did not earn such high compensation in allowing their banks to become illiquid. It was like they were asking for funds they did not earn or work for. In 2007 it was reported The income inequality between rich and poor was the worse since the Great Depression. Currently it is the worse financial crisis since WWII. The recovery occurred during peace time, not by stoking the engines of war.

Sometimes it's illuminating to look at gold prices too. Sometimes gold moves with oil -- as the dollar strengthens, gold and oil goes down. Sometimes, though, it moves opposite, rising with the dollar.

I assume that gold is the "last stop" after the train leaves the dollar station. For the past few months gold had been trending down from its peak earlier in the year, but the last few weeks it is up again, as it is today.

I know Stoneleigh and Ilargi foresee a long deflation, and during that time the dollar will likely remain quite strong and gold prices will be tempered. Oil too, if demand continues to fall. Perhaps we'll see more of the "oil down, gold and dollar up" when foreign nations suffer, "oil and gold down, dollar up" as deflation here worsens, and then a new brief period of "gold up, oil and and dollar down" as we hit the end of bond-debt borrowing, and after that "dollar crashing, oil up, gold way up" as inflation finally takes control?

I've given up trying to determine exactly when we'll stop deflating and start inflating. I'm just hoping we have a long, slow slide, as from by viewpoint that's the best we can get, and at least that gives some time to make lifestyle changes.

And this is why I think Stoneleigh might be right...

The challenge of enforced idleness

Accountancy firm KPMG took the radical step this week of urging its 11,000 staff to take up the offer of partially-paid sabbaticals or moving to a four-day week in an effort to cut its employee costs.

It's just the latest in a clutch of firms, large and small and on both sides of the Atlantic, that are looking at shorter working weeks and reduced hours as a desperate alternative to redundancies.

Many of the big automotive giants, including GM, Honda and BMW have been bringing in reduced hours or even, in the case of Honda, temporarily halting production at some factories.

It's not just big manufacturing firms that are taking this step, either. In fact, according to the U.S. Bureau of Labor Statistics, the number of employees who normally work full-time but were now doing fewer than 35 hours a week because of the tough business climate climbed by nearly three quarters in the year to November, from 1.49 million to 2.57 million.

Those mostly-working people should be considered "partially unemployed" for the national numbers, too. Partially employed, part-time jobbers, and under-employed people definitely contribute to the economic picture, yet appear to be largely invisible.

If I lose my $80K job, get a new job at $40K, and take on a second job to pick up $15K more, how employed am I?

Except for TOD effects, I find myself working more while I can, anticipating a time when I'll be in one of those under-employed groups, so I guess I'm a "worried over-employed" guy now.

If you take any job, under the present statistical format, you are not unemployed at all. And, worse yet, if you are not drawing unemployment, you are not unemployed either. For much of the last 4 years, when the extended unemployment benefits were eliminated, that fact distorted the statistics, messing up the hisotorical record for years to come.

This is one area where information technology could easily give us realistic numbers. It used to be difficult, now it would just be more number crunching, integrating tax, benefit, unemployment and other databases - if you don't get any income you are unemployed. It could be made statistically more realistic than the current system, and might pay for itself in increased taxes from unreported income.

Clinton never had a budget surplus. Show me one year where the national debt was reduced under the Clinton admin. In 2000 it was really close, but FY 2001 (started Oct 2000 under Clinton) the defecit went up. The economy was already starting to falter in the last FY of a Clinton admin. What did happen under Clinton years is that excess inter-gov't holdings (Social Security taxes) did buy t-bills (as required by law) and reduced the amount of public debt...but surplus, there was none.

Clinton balanced the budget and created a surplus, after the Republicans took control with Bush, they argued about how to spend the surplus. They had no legislatoin to reduce federal debt, instead the greatest deficits in history were incurred. No Republican president in my lifetime ever balanced the budget. Clinton also balanced the Arkansas state budget when he was governor. We have not heard Hillary wanting a balanced budget, nor Obama, nor McCain. Some individuals would be in better fiscal condition if they had balanced their own personal spending in line with earnings. It is hard to pay back during times of layoffs and reduced tax receipts.

I have no argument that the Bush admin was a complete failure when it came to spending and defecits. That said, I still contend Clinton never had any surplus. The accounting the feds use are on par with the games that Enron and Worldcom were playing, only Bernie Ebbers is in prision and Clinton gets to run around talking about his "surplus." If the feds were required to abide by GAAP the Clinton years wouldn't look nearly as peachy as they do today...as well the current economy would look one heck of a lot worse.

I think aquapura is right. Take out the Social Security surplus and the best Clinton did was about break even.

Amazin' whut we spend on edumacation, ain't it?

Please tell me if I'm missing something, but it seems to me that all the economic stimulus proposals that I've heard about are all targeted to (re)stimulating the overheated parts of the economy (i.e., cars, housing, etc.). (To oversimplify it,) We're just going to make more of what people don't demand right now.

There also seems to be a push to centralize economic activities (through mergers and takeovers)... exactly what one doesn't need in a reduce economy of scale.

Am I missing something?

Consider the irony. If the government were to be successful in stimulating (using borrowed & newly created money) the demand for new houses and autos, it would also cause an acceleration in our rate of consumption of a finite fossil fuel resource base--roughly equivalent to Thelma & Louise pushing down on the gas pedal, as they drive toward the edge of the canyon.

Thank you for letting me know that I'm not crazy...

but now it scares me, because - if true - this means that I know more more than the people who are in charge of this recovery.

Believe me, I wouldn't want me in charge of any recovery effort.

I think that I have reduced our net export predicament down to one sentence: "At a net export rate of about 20 mbpd, our middle case is that the top five net oil exporters are shipping about one percent of their remaining combined cumulative net oil exports every 46 days."

(Middle case of 92 Gb of post-2008 cumulative net oil exports, from mature basins, & 20 mbpd X 46 days = 0.92 Gb)

I estimate that Mexico is currently shipping about one percent of their post-2008 cumulative net oil exports every six days.

Well thanks westexas, that looks like a pretty sure bet I will outlast Mexico and not bad odds on beating out the the 'top five' but what I would really like to know is, up here in Canada, will I eventually end up in Lakota territory, with the sands in my joints?

Stewart chose the Lakota name for the brand he founded because of the powerful image of the Plains Indian - a symbol of the collective knowledge and wisdom of all Native North Americans.

I wonder if he spends time at any of the reservations ?

Do you actually use the product or was the link just a rhetorical device ?

Do you actually use the product or was the link just a rhetorical device ?

I'd bet that the closest that product has got to an Indian or me is likely some ad agency in New York. We stole their country and use them for rhetorical devices and product promotion.

Actually there was a question buried along side that Indian, I wanted a prognosis on the health and longevity of that ailing, hopefully dying devil, the Tarsands. See if this devil would, by any chance, outlive that one.

BTW who the hell is this, Stewart, that doesn't sound like any kosher Indian to me.

who the hell is this, Stewart,

Allrightythen - so it was just a link you pulled off the web to make a Lakota connection.

My 'Stewart' quote was a different page from your link.

Ignorant, WT and Alan if he's around,

I'm curious about this report, which was (last I heard) not verified - (Burton was asking for help in locating the article).

"Expensive oil means end of roads - why include them in stimulus?
Robert Burton, Energy Bulletin
PROBLEM: The Highway Department in Los Angeles concluded that once the price of oil passed $50 per barrel, the roads could no longer be maintained, even if all government money was diverted to maintain existing roads."


What I wonder: This seems like such a simple way to assess the effects of "peak oil." And bring the message home regarding the need for urgent and comprehensive action, including "contingency planning" and "emergency planning."

Is this analysis being done by anyone? Or, (I guess I should ask) - why isn't it? Each Highwway Dept., each basic sector...

What you're missing is that they're trying desperately to return to the economy we used to have. That means housing has to be re-inflated. Nothing else will have any effect. They're going to do everything they can to re-start the housing bubble.

That was what I found interesting about the Kirby Daley interview I posted yesterday. He may not get the resource issues underlying the economic problems, but he understands that this is a permanent change. We are going to have lower standards of living, and it's not a temporary thing. The housing market cannot be re-inflated, and the continuing attempts to do so are a waste.

I agree with you. It's like trying to re-inflate a leaking tire with 5,000 psi air; if lucky, it'll just cause the leak to open up even more (if UNlucky, it'll blow up). It's just going to hemorhage the ecomony.

Leanan, I tried to edit my bee comment (second comment down at top) and it (highlighted the screen and) just seemed to delete thte entire comment, so I added a new comment. Did I do something wrong?

Not sure what happened. There are still a few bugs with the recent upgrade.

I think it's more like a clown with custardy trousers being filled by other clowns - he has holes at the bottom so it leaks out - do we add more clowns when we should be thickening the custard ?

ps. stupid analogies don't help

I am reminded of some advice my then boss gave in 1988, as were attempting to cope with the decline in oil prices, following the Saudis' decision to increase production in 1986--regarding personal consumption, if he couldn't eat it, he didn't buy it.

That covers quite a bit of ground...........ha!

To paraphrase Benjamin Franklin, "Hunger is the best seasoning."

(I believe the exact quote is that "Hunger is the best pickle," pickles were apparently used as seasoning at that time. At least this is something I dimly remembered from high school).


He probably meant pickle as in pickled condiments, i.e. Relish, Chutney etc, not Pickle as in the modern US vernacular, which is used to describe a pickled vegetable (onion, gherkin etc).

This may resolve a strange image you had as an adolescent of an old man eating his meals with a jar of pickled onions.


Or to quote my grandma: "Hunger's good sauce"

Updated to address her generation of picky eaters :D


This attempt to reinflate housing just demonstrates defeat; they have no idea how to ignite or reignite any other form of production that would contribute to GDP or growth. I would say that we have had a gross misallocation of resourcs into the housing and financial sectors. The tough question, though, is where should we reallocate resources since, apparently, we are incapable of successfully producing anything else. We pick on housing because it is less susceptible to foreign competition, at least with regard to the direct labor portion.

The emperor, not having any clothes on, comes to mind. Thoughts as we approach the inauguration.

Well put Leanan. And I can postulate that our current batch of politicians are not ignorant of the position you put forward. No more then the oil patch believes the development of unconventional NG or Deep Water oil fields will change the eventuality of PO. We make those investments because they allow us short term profits while doing nothing for long term stability. Current oil patch management are grey hairs just like me. Thus long term concerns, from a perspective of self-interest, aren’t too relevant. Perhaps TPTB see the same opportunity: short term political gain (they have the same grey hairs as oil patch management) with no long term goal. Provide immediate solutions (or at least the appearance of the same) and let the future generation deal with the problem in their time.

Or as it was put to me decades ago: what politician wants to push for the tax increase to build the much needed bridge if he won’t be there to eventually cut the opening ribbon?

There are no more heroes at the top of our food chain despite the many among the masses.

There also seems to be a push to centralize economic activities

I don't think you are missing anything in fact I think you have identified a major part of the problem. For the past 20 years economies have grown more interdependent and alike. Instead of multiple solutions to the same set of problems every nation sought the identical solution. Now the global economy is in trouble and there are no independent "islands" and few examples of alternate methods and solutions.

The reasons for this are varied: 1) the global elite are exactly that and share views and positions aquired at Davos and elite education institutions; 2) There is limited input from "real people;" 3) Media increasingly present the same views so there is little, or declining, variance in media coverage; 4) there is probably a 4 and a 5 and a 6 but they do not immediately spring to mind.

TOD is an interesting example of a countertrend - a media outlet dedicated to a variety of viewpoints, problems being addressed not by the dictates of a conforming elite but by interactive discussion amoung ordinary people with widely divergent viewpoints, economic and education backgrounds.

The Obama "solutions" are built out of the same structure that created the problems. I doubt there will be real change until the attempted fix fails.


Thanks for the feedback. I still can't fully accept the level of disconnect in cultural perspectives, but that may be the root problem.

I'm just laughing at the irony.

I doubt there will be real change until the attempted fix fails.

Perhaps Alan Drake will be the replacement Secretary of Transportation.

LOL - you are a fruitcake :)

To my American friends, my best wishes to you all on this the inauguration of the 44th President.

There is a lot of good will and excitement outside the United States for Obama. He does offer a ray of sunshine amid the doom and gloom.

It won't last. It can't last. My advice, enjoy and celebrate it while it does.

Good luck and godspeed, Mr. Obama!

Godspeed on the devils thunder, that is

Less than 90 minutes until George Bush becomes the happiest man in the world. A few months ago, someone speculated about Bush invoking martial law, trying to hold on to power. My response was that if George Bush invoked martial law it would be during a national emergency on election day, in order to make sure the polls were open, so his successor could be elected.

GWB's theme song today:

Shine on me sunshine
Walk with me world
It’s a skippidity do da day
I’m the happiest boy, in the whole U.S.A.

LOL - you are a fruitcake :)

I resemble that remark.

BTW, in the 20 year period between Bush 41 entering office and Bush 43 leaving office, I estimate that the world has consumed about 482 Gb of crude oil (about 142 East Texas Fields, the largest Lower 48 oil field)--a little less than half of all crude ever consumed worldwide.

And did you expect anything different?

How much do you think will get used up during the next 20 years?

The big O has just been a prez for about an hour now, notice anything different?

Will we ever?

I think maybe the crowd at the inaugural made the decision on what GWB's song would be today. As Bush was leaving the inaugural, the crowd began spontaneously singing the song "Na Na Hey Hey Kiss Him Goodby" which was audible on most TV channels. The crowd put a strong emphasis on the word "By".

The song might have been started by Chicagoans in the crowd. For those of you not from Chicago...here's what Wikipedia says about the cultural meanings of the song in Chicago.

From Wikipedia:

The song was transformed into a stadium anthem during the 1977 Major League Baseball season. Chicago White Sox organist Nancy Faust had played the song many times before when opposing pitchers were relieved or when the Sox had clearly won the game, but without much reaction from the Comiskey Park fans. During a critical series with the Kansas City Royals, however, the crowd began singing along with the tune, and a tradition was born. Since then, the song has become a staple of many sporting events. The song's familiar chorus of "Na na na na / na na na na / hey hey hey / goodbye" is often chanted by fans near the end of a contest to signify that victory is all but assured. This is sometimes accompanied by the gesture of holding up keys. Other versions of lyrics sung by the crowds at sporting events can be interpreted as "Na na na na / na na na na / hey hey hey / Start the bus," in reference as to its time to just leave town now.

It is also frequently used at basketball games when a visiting player fouls out, or especially if they are ejected from the game.

The song remains a favorite of White Sox fans. Today it is used when opposing pitchers are pulled, when the White Sox hit a home run, and when the Sox win a game. It was also played by Nancy Faust during the White Sox World Series victory parade on October 28, 2005. Fans at Soldier Field and other Chicago sports venues are also known to sing it when victory is certain.

Here's another fine Chicago tradition to go along with their utter lack of class: Corruption.

Harper wants joint Canada-U.S. policies on energy, ecology

The Harper government is planning to propose the harmonization of goals for using bio-fuels such as ethanol, fuel-efficiency standards for cars, and targets for so-called "low-carbon" power plants - which, over time, might push the United States into buying more Canadian hydro to replace its dirtier coal-generated power.


Brazil is in a recession after two quarters of negative growth. Job losses were being reported.

China sees rising unemployment.

The India Stock market dropped more than two percent today.

Suncor a leading Canadian oil sands miner reported a 24 cent loss for Q4 2008 and its stock dropped more than ten percent in early trading.

Just a thought: Why do we talk about negative growth but not positive shrinkage?

From Mish today. Related to many commnents above, but probbaly deserves it's own achor comment - so here 'tis.

May to share the blame how about Open Letter To Congress On Sharing The Pain

President Obama has called for sacrifice and sharing. I wholeheartedly agree.

However, before sharing the pain, and before working towards a solution, we must understand the problem. To date, many mistakes have been made because Congress, the Fed, and the previous administration did not attempt to understand the problem and the role everyone played in it.

Let him take the pain.

I have seen enough and he has been waltzing around in the PoliticoWorld. That's a world of make believe. Let him come to the real world then. Let his hair get that white tinge of aging. Wrinkles in his face and lose that grin. What the hell is so funny I wonder?

He wanted it and now he got it. He had better perform and stop the bleeding or he will not even make it to the ash heaps of history.

He's got one good shot. Better he take a very fine bead.

Bush is out. Now we can shut up about him. We can turn our focus on Obama. Its his turn in the barrel. I hope he pulls it off.


Why does "sacrifice" mean "the masses sacrifice their savings and income" while "sharing" means "bankers share their gambling debt but keep their bonuses"?

I watched the TV coverage. Both Bush and Obama have aged ten years since the election. W looked older than his father does and Obama sure didn't manage 'boyish'

Actually, I thought Bush didn't age too badly compared with Clinton. Clinton looked about 30 years older when he left office. He went from mid 40's to mid 70's.

The increasing perception of Canada as both "foreign" and a "purveyor of dirty oil"

The above quote is from Canada's Ambassador to the US, a man who is clearly out of touch with reality.

May all Americans please note that Canada remains an independent foreign country. This is demonstratble fact and not just a "perception" as stated by a very misguided, grovelling supplicant, of the Canadian government.

Canadian oil is as clean as anybody elses. However, the primary production is from tar sand which is absolutely filty, does unremedial damage to the environment, causes harm to human beings in the vicinity, and results in a massive discharge of CO2 which is going to render the planet uninhabitable for your children.

Don't buy our muck, or our Ambassador's BS.

One thing I never understood: then-PM Pierre Trudeau made European French the official 2nd language of Canada in order to recognize the French-Canadians. But.... When in familiar company.... Most French-Canadians speak Quebecois (the pre-French Revolutionary language that's mixed with some colonial English and Native American words).

How come they didn't make Quebecois the 2nd language?

When up North I kept hearing endless jokes on this matter.

Yes, the French spoken by québécois is not French French, but joual and variations thereof.


The French spoken by les acadiens is yet another regional variation and is, in some ways, as different from joual as it is from parisien.

French is the second official language of Canada, which for international purposes is considered French French, but in commonplace application, let's say for street signs in Quebec stays pretty close to local useage. For example, Stationment is the standard issue instead of the anglicized variation often seen in France, le parking.

The québécois are far more sensitive to the creeping of English into their speech than the French because in large measure they have to be. That's the peril of being a linguistic community of six million in a sea of three hundred million English speakers.

Quebec is a strange anomoly. They should heve converted to English ages ago insted of bieng indulged in their seperatness.

Why should they have converted to English? Can't they speak whatever language they want? You know, freedom?

"Strange anomaly" is redundant. Anomalies are strange, by definition.

And in any case, English doesn't seem to be your first language:


Five spelling errors in two sentences, but at least you got "their" right.

How should one spell have? The Quebecois have been a pain for so long I think English speaking Canadians must be saints to put up with them. I am surprised bilingualism didn't produce a revolt. I wouldn't be bilingual for anyone. Mind you at least French does less damage to the throat than Spanish would.

The Quebecois have been a pain for so long

N'avez-vous pas mangé la poutine? Ne jamais marcher dans les rues de Montréal? Jamais porté de pantalon custardy? Sans le Québec, il n'y aurait pas au Canada. Cela est vrai.

May all Americans please note that Canada remains an independent foreign country. This is demonstratble fact and not just a "perception" as stated by a very misguided, grovelling supplicant, of the Canadian government.

Despite what you may have read in the media about the quality of geography students in American public schools, at least eight out of ten would be able to figure out that Canada is, in fact, not part of the United States.

...and I suspect the ambassador has little to worry about. We like you guys and your products. Really. Especially Tim Horton's, Canadian Tire, and Molson.

A friend in Calgary bought a new vehicle in Montana a couple years back and ran into a big hassle at the border trying to get it into Canada. The border agent told him "We aren't the 51st state." Ironic since I've heard far more Canadian's joke about being the 51st state than American's. I think the vast majority of American's could care less about Canada so long as their oil keeps flowing south.

Don't buy our muck, or our Ambassador's BS.

BOP, well said.

Big problem, the Harper government is perched atop a minority Parliament facing mounting problems in both the Alberta oil (now tar) patch and the Ontario manufacturing (now rust) belt. Looks like the big boys in Ottawa are waiting to join the line up to suck on the great U.S. bailout teat.

Faust, anyone?



I'm learning a lot from Denninger. The problem is, people - (how should I qualify this? "*Most*" people? "People I encounter randomly on the street?" Or, "people who come from the proverbial all walks of life?") - Anyway...

Most people don't know what he's talking about. At all. They "hope the economy will get better", to quote a highly educated member of the medical profession. Actually, similar recent quote from a research scientist, now that I think about it.


Public works will take time to aid economy

WASHINGTON - It will take years before an infrastructure spending program proposed by President-elect Barack Obama will boost the economy, according to congressional economists.

And this is the garden-variety roads and bridges. Green infrastructure like railways and renewable energy will take even longer, because there's no blueprint for those yet.

Still, other elements of Obama's $825 billion economic recovery plan, such as $275 billion worth of tax cuts to 95 percent of filers and a huge infusion of help for state governments, will be distributed into the economy more quickly. But Republicans are poised to attack the bill for spending too much.

My guess is renewable energy will be thrown overboard, and the focus of the stimulus will shift to bailing out state governments.

Call me cynical, but I seriously doubt that much of the infrastructure bailout money will ever make it to the little people that would benefit the most from it.

Rather, I see an army of corporations, developers, contractors, lobbyists, bureaucrats, and other parasitic middlemen lining up to get their pound of flesh.

The little people will be lucky to get a few bones and some marrow out of this boondoggle.

Actually, there is sort of a blueprint for railways. Just start relaying the tracks on the old right of ways until we get back to the way the railroads were at the end of WWII.

That's not a blueprint. That's an idea for the beginnings of a plan that might one day be a blueprint.

Obama wants to fund projects that will be contracted out within 120 days. With a "use it or lose it" provision attached. If they aren't shoveling dirt in four months, you lose the money for the project.

Me! Me! Pick me! Micro-energy Build-out vs. the Grid!!! Pick meeeeee!



Looking around the read I get is that most of the "shovel-ready" projects are typical BAU such as strip malls, tract housing, road construction, etc.

As JHK is fond of saying, we're going to continue with BAU until we can't.

I talked to a local county utility dept. here in Florida the other day....they are now talking about taking our plans for extending a water line for a new development that has stalled, and permitting it themselves. When pressed, they stated the reason was they thought federal money would be forthcoming.

Of course, this water main is going to a basically undeveloped ex/sub-urban area 50 miles from Tampa.

I'm sure the same thing is happening all over.

I don't post to or read this site often these days but here is a story that is spilling out into a lot of economic sites. I read through the posts here today and didn't see anything about it so here it is:

'All hat and no oil'...What a strange site to find an oil story.

'Traders Turn To Offshore Tankers As Oil Stockpiles Brim
LONDON (Dow Jones)--With storage tanks filling up onshore as global oil inventories soar, traders are turning their sights to oil tankers, floating at sea, as an alternative.

At least four new deals to charter large oil tankers as storage facilities in the U.S. Gulf of Mexico were struck Thursday, according to shipping and trading sources. The deals were fixed at a rate of about $70,000 a day.

The prices were markedly higher than average December traded levels of around $56,000-$58,000 a day, although buyers were said to be paying more because they wanted prompt delivery of the vessels.

As oil futures fall in line with sliding global demand, oil storage facilities in industrialized nations are bulging, widening the difference between the front-month and more expensive contracts for delivery further in the future. This opens up a profit-making opportunity for traders, who can buy crude oil on the physical market today while simultaneously selling it at a higher price in a forward contract. Holding oil in a tanker for a month would cost less than $2 a barrel, while it is possible to buy crude for about $40 a barrel for February delivery and sell it in June for $12 more.

But practitioners of this relatively straightforward trading strategy are running up against infrastructure constraints. Last week, the amount of oil in Cushing, Okla., the delivery point for New York Mercantile Exchange crude futures, hit a record 32.2 million barrels, and there is anecdotal evidence that other storage hubs are brimming as demand falls due to a faltering global economy.'...snip...

It appears that this activity is being constrained by lack of credit...and if you read the entire article you will see that old oil price manipulator, Philbro LLC, pops up. I wonder who Citigroup will sell Philbro to? It would be like selling the family jewels!


Had to post this again as got a DRUPAL error that stated TOD was offline

What happens in June if the price is below %30 a bbl? Do al those owners ot tanker storage suddenly decide to liquidate? Does this dump more oil on a market suffereing from lowered demand due economic contraction? Does this drive the price of oil down toward $10 a bbl? Does this new pricing kill off a lot of high priced production i.e. tar sands.

Wish someone would put together a Global Megaprojects chart showing the removal of production at different price points. At under $30 a bbl I think we loose 1.5 million bpd from the tar sands and the economic bloodbath that follows will be similar to 1986, 1987.

Does nayone really think young people will be attracted to work in an industry that whipsaws like this? And if they are not attracted then who will be around to staff up future E&P?

Datapoint on tar sands production:

“They're talking mid-$30s operating costs for Suncor, and then if you layer on top of that sustaining capital of, let's call it $6 a barrel, you're talking a round number of $40” to produce a barrel of oil, said Will Lacey, managing director of institutional research at FirstEnergy Capital. “Compare that to where the crude contract is right now – it's a tough business.”


Also a prior post spoke of companies moving to a 4 day week in place of layoffs. In my past searches for work I ended up buring a lot of gas - out for interviews, out to biz parks to check out a company, out to the nearest location etc. My demand for gas increased. But if there is large scale move to a reduced workweek then this brings with it an immediate drop in demand of around 20%. Alberta will be hurting now. KSA will be in pain in six months.

Now the gas is flowing through Ukraine again and said to reach consumers within 48 hours can anyone expand on the issue with relighting and flushing supply pipes ?
I seem to remember it being a serious issue when discussed in the light of possible gas rationing a few weeks back but hadn't heard it mentioned in the current context. I'm struggling to think how it could be accomplished safely . surely if you don't flush and ignite you gate air/gas mix and if you do flush where does the flushed gas go ? outside via a rubber hose ? seriously ?

WAY off topic: What does it mean when the new president so completely screws up his oath? Is that like crossing your fingers or something?



Edit: listening so far I hear what sounds like Barack B.A.U. Obama. So far real issues and real actions have gotten about one sentence. The environment? One phrase.

Our way of life? Not to be apologized for. Our growth? Not to be ended.

He could not have given a more vapid address. (Does he do a State of the Union, or does that wait till next year?)

Gods help us, every one.

Cheers. Or is that tears?

Actually the new president did NOT screw up the oath, it was the Chief Justice, Obama laughed because he knew Roberts screwed it up.

That's what I thought.

Me too.

Hmmm... all the more scary. The conspiracy nuts (the ones that believe in the conspiracies that don't exist, not the ones that do) will probably try to claim he's not really president and that Roberts intended it that way.



By law, he became President at Noon ET, whether he was sworn in or not. The ceremony is just that. Not a legal requirement.

Did not know that.

Learn somethin' new ever'day.


Actually, it is a Constitutional requirement - Article II, Section 1:

Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation:

"I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States."

However, given that any dispute about the validity of the administration of the oath would have to be ruled upon by the Supreme Court itself, I suspect that this will be nothing more than a footnote to history, at most.

Ah. That's what I thought.

Unlearn somethin' new ever'day.


Cid Yama,,

Man that's an id from the past? Been away?


Robert's incompetence is a parting shot from the GW Bush era. Sadly, that part will carry on for years to come through the Supreme Court.

If you can't imagine a more vapid speech, you have an awful short memory. Thankfully, youtube is replete with Great Moments in Presidential Speeches courtesy of W.


...our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

You know how most people step over doggy poo...?



My fav part of the speech was this:

Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

I consider this the new Antidoomer creed :)

Sounds like suispeciecide to me. Or is that suigenocide? Can you call it genocide if you're killing your own?


AD - you go boy!


I haven't forgotten - but then again, neither have I forgotten that those who went before us had a lot more resources to work with than we now have.

"...the sun, the wind, the SOIL..." He's a good orator and he may know history, politics, the law... But he doesn't know ecology. I don't even think he knows basic biology. The things he knows are contrived, arbitrary, artifacts of human hubris. If the problems he faced were political or ideological I think he might rise to the occasion. But they aren't. They're biogeochemical. Those he's surrounded himself with for advice on these issues are all invested in BAU. He's in over his head and will flounder.

This would mean that he has Information..but not necessarily Understanding nor Wisdom....

Understanding Information from the well of Understaneding leads to Wisdom. Its not automatic from reading some books or sitting in classroooms but those can be the start of Wisdom.


Agree totally.
If he were really aware---bioenergetically aware-- he would use Tainter and Greer as the basis for his philosophy of govt and scale down the whole (overly complex and overly costly) Fed. govt system--at the cost of his own power. He would dismantle the whole system slowly and in a controlled way, leaving safety nets and safety nets for safety nets.

He would then later become known as the American answer to Mikhail Gorbachev, who also bowed to the inevitable and avoided real chaos.

Chances of this happening??? Near or at zero I'd say!

I wouldn't call his address vapid, but it was surely BAU. And as a not-so-religious guy, I felt Warren's invocation was way over the top.

The "way of life not to be apologized for" and "return to growth" bits left me cold, too.

But it was an Inaugural Speech, a celebration, not a detailed policy statement. He had been in office for about 2 minutes at that point - I'm willing to give him at least a week to fix everything and make it all better ;-)

And as a not-so-religious guy, I felt Warren's invocation was way over the top.

For what it's worth, as a religious guy, I don't feel Warren's invocation was way over the top... I know it was!

There are moments when I feel really, really sorry for God. Heaven spare us from over-enthusiastic cheerleaders.

And stupid rote prayers,memorized before hand with lots of ego thrown on the pile. "Look at me and my amazing religiosity,,aren't I great?"

I hear it every Sunday that I do attend the service. Its enough to make me want to vomit in the aisles.

Airdale-yet somewhere in each service is something real and worthy..hard to find sometimes..so I go sometimes...expecting it and its getting harder and harder...and the preacher preaches more on Tithing which means in codespeak "I want more money."

airdale, your comments remind me of the definition I once heard of "ego": it's an acronym for "edging God out."

I want more money.

Airdale, are you channeling George Carlin now?

I think George was from my generation. I watched him on sometimes. He was a bit rough for my countryfied tastes but he had a good grasp of comedy and schtick.

Airdale-I never put anything in the collection plate because the church is paid off and all the rest long ago. The preacher lives for free in the parsonage and all expenses paid. He gets retirement from where he worked before so why does he need to be rich?

Answer: Older preachers preached because they were called. I don't recall that 'calling' to include personal enrichment beyond normal bounds. Its a lazy persons job IMO. This is what has been giving religion a really bad reputation.

We had a preacher who came to our church back in Mo. We needed one and he happened to be fully employed by Chrysler. He said "ohhh I don't need a salary.",,,,so we said..."ok..no salary.."...he later said he no longer felt "called"......we kept him though and later found he was skinnydipping with a members wife in their backyard above ground pool and a member lived right next door and saw all this.
He got the wife's husband a job on the night shift so he could mess with the guys wife. I see this a lot in churches. They don't realize that they will get a millstone put around their neck for their trip to the Lake of Fire.
I hate bogus preachers but I love dedicated righteous men..and women.
So rare though.


"We will not apologise for our way of life, nor will we waver in its defense" To me this sounded very similar to "The American way of life is non-negotiable", but maybe I read too much into it.

"each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet."..... "We will harness the sun and the winds and the soil to fuel our cars and run our factories" A lofty ideal, let's see how it gets put into practice.

"all deserve a chance to pursue their full measure of happiness." I suspect that measure might be subject to deflationary forces

and the soil

Deep, deep poo, if you ask me.


"We will not apologise for our way of life, nor will we waver in its defense"

The Empire is alive and well.

and all the negative connotations that goes along with it.

P.S. I can not believe how much BLIND hope there is around this event. I am more discouraged than ever now that I have witnessed how people are so willing to toss out reality and facts for a GREAT pep-talk.

"We will not apologise for our way of life, nor will we waver in its defense"


If an Iraqi or Afghani were to act out of the same belief he would automatically be labelled a terrorist and a lurking F-17 would drop in to bomb his village.

Peak oil and peak demand are nonsense put forth by con artists with books to sell.

If oil gets expensive, we switch to coal, natural gas, hydrogen or what ever. The high prices slow the economy and encourage conservation, which naturally brings down the price. Once the price is low again, most people lose interest in alt fuels and start wasting oil again. It's econ 101.

Imagine going to the supermarket and beef is $20 a pound. Most people will buy chicken. Later on chicken will be up on the increased demand, and ranchers will have cattle they can't sell. Beef will soon be $3 again. That's how markets work.

Oil will be expensive again, once China and India pull out of recession. It will be 20 years before alt fuels will make a difference in the equation.

Thanks for posting that. I get confused by all the data points and never can tell if I should go with the chicken or switch to the beef. Even worse, I am never sure if I should wear custardy pants when out shopping for sardines.

As I posted above it's quite plainly custardy trousers.
Although one may be consequent to the other.

"Peak oil and peak demand are nonsense put forth by con artists with books to sell. "

Translation: "I disagree with the notion of Peak Oil."

Really, people. Why is it that when folks disagree about anything here, it's "nonsense" and "idiots" and "con men". Seriously, the arguments around here have been getting fairly ad hominem.

"Imagine going to the supermarket and beef is $20 a pound. Most people will buy chicken. Later on chicken will be up on the increased demand, and ranchers will have cattle they can't sell. Beef will soon be $3 again. That's how markets work."

Imagine going to the gas station, and gasoline is $4/gallon. Most people will buy... whoops! No substitute! Gotta get to work, just suck it up and buy gas, and make fewer unnecessary trips.

Your analogy is idiotic (whoops!) and the markets can't make something from nothing. As if there are free markets anyway.

Or are you an idiotic nonsensical con man trying to sell ethanol or something?

Darn, I did it again!

"Peak oil and peak demand are nonsense put forth by con artists with books to sell. "

so you are saying that the finite earth has infinite sources of oil and coal and natural gas? hydrogen? - wow


may I recommend you perhaps do a little more research on the subject? Or (more likely) you can grasp with greedy hands onto the (near) religious belief system in "THE FREE MARKET", and ignore reality - but it's ok, reality will catch up to you whether you believe in it or not

I'm sure the Classic Maya civilization was just SURE the Gods favored them above all and nothing would allow the collapse of their culture - a shame that free market didn't substitute something for the missing food and water that kept all those people alive
And I imagine Romans believed they were an invincible empire - right up till the barbarians sacked Rome

but I'm sure you are right, the free market can overcome everything, physics, geology, extraction rates, energy return on investment - none of these are anything more than "nonsense" put forth by clever authors making money off their books....we'll just substitute our problems away, keep adding people to the earth and feeding them, and keeping them hydrated and warm (or cool) and transport them with market substitution! Hooray for the Invisible Hand!

I'm not biting......

the smartest of the replies to the troll du jour

I agree. Alas, I succumbed to the troll myself. Felt good at the time, but now I regret it ;-)

Ah yes, a guy who has been reading con artists who are selling text books about economics. Another guy who doesn't understand thermodynamics or engineering, I suspect.

Supply and demand graphs explain everything, according to Masnkiw. Got one of his books? He's written several flavors for the Econ 101 classes. Not a word about the environment or absolute limits on resources. No mention of population density or growth rates or what happens when there are more people than the available food supply. And, he loves fractional reserve banking, it "creates" so much wealth by building debit. So, what happens when it's time to pay back that debit? How about Royal Bank of Scotland or National Rock?

Among the main U.K. banks, Royal Bank of Scotland is seen as the most likely to follow mortgage lender Northern Rock down the path of full nationalization.

Shares in RBS lost around two-thirds of their value Monday after it also warned it may report a loss of up to 28 billion pounds for 2008 -- the largest in U.K. corporate history...

Barclays has so far avoided taking government money directly, but Lloyds is now 43% owned by the government following its acquisition of HBOS. Another capital boost for Lloyds could therefore see it become majority-owned by the state.

How about Countrywide Finance? Lehman Brothers? City Group? It ain't over yet...

E. Swanson

Hi Mkkby,

Here are a few articles on past energy conversions and why peak oil will be an issue.

Energy Transitions Past and Future

Energy Grades and Historic Economic Growth

You should also read the Department of Energy's Hirsch Report (pdf)

You're assuming, of course, that there is a ready substitute out there which can replace oil in the marketplace. How many electric cars do you actually see out there? How many hydrogen or coal fired cars? Energy Quality and the tranportability of the medium are other factors too. BTW- Hydrogen is not an energy source. It's only energy storage. Humans have no natural repository of burnable Hydrogen. We have to make Hydrogen, which involves large amounts of energy inputs. If you understand, or can learn, the laws of Thermodynamics, you'll begin to understand why Hydrogen won't ever be the panacea it's cracked up to be.

Chicken and Beef are substiutes because they are both readily digested by our bodies. They are both in sufficient supply and availability that they can serve as substitutes. What ECON 101 fails to recognize is that coal, oil, and nat gas are fossil fuels, thus non renewable. Beef and chicken are renewable and need just the plants which the sun grows. (That is leaving out the FF used in the Industrail Agriculture).

So you're analysis seems a bit simplistic and over-generalized to be applicable to the real world of limits that we inhabit.


Two days ago in the NYT (in the Style section) there was an article about how QUIET NYC is getting. Nobody around. The bustle gone. Well, around here for example in Tokyo it's the same thing. No noise from construction, not so many cars running. Projects cancelled and spending cut everywhere. Airports around the world are quieter now. Highways are emptier.

What is going on???

It's energy being withdrawn from the system. We (the yeast) were used to energy increasing in supply but that has stopped and now we are watching our petri dish go quiet and slow.

Toyota cut 2009 auto production to half of last year's but they pobably won't even be able to sell half of THAT (witness Nikkei tanking sharply as banking crisis picks up steam again.) No one is buying condos or appliances here and the layoffs are mounting. The govt is really concerned.

Peak oil isn't nonsense at all. The system that depended on ever increasing amounts of energy was the nonsensical---the really irrational---thing.

Irrational. Yes. (As in 3.1415....etc.) :)

Ditto that for SE Michigan.
During the summer and fall many posters here claimed they could tell demand for gas was down by the lack of traffic, notso here, roads were as crowded as ever.
"Were" crowded that is.
Daytime traffic is WAY down.
High gas prices didn't do it, low employment did.

Peak oil and peak demand are nonsense ... If oil gets expensive, we switch to coal, natural gas, hydrogen or whatever.


That sounds most eminently like sound logic.
You must be right.

But of course the concept surely extends to its logical extremes:

If life gets expensive, we switch to death, natural extinction, after-life or whatever.

Ah, the beauty of substitution theory.

Forget "peak oil", West's demand growth peaking

This is partly true and partly false. It has been shown in the past that a very large increase in price and a corresponding huge increase in drilling did not reverse peak oil production in the US. So peak oil is mostly independent of price (much to the annoyance of the economists among us).

How Much Oil and Gas Will Increased Drilling Provide?

However peak demand is also partly true. As the energy sector consumes ever more resources, net energy delivered to the wider economy peaks and the economy is forced to contract. (Or, I would also suspect, as the rate of increase slows it can also throw the economy into recession).

EROI and the Discretionary Economy

I tend to think of the energy sector as a tiny car trying to pull a big truck (whole economy) with a bungie cord (price as the only prediction tool). The two are always stretching apart and then banging together.

Congratulations to my American friends for their 44th president!

That was a great speech.

Really? Lordy... I thought it pretty much useless.



You gotta be kidding me.

It appears that Obama has somehow set some unattainable expectations:

“Now he is president we will get food and jobs,” said Ben Ochieng, as he danced to the traditional music that replaced the planned show.

“It is right that when people get power they look after their family, so we know that Obama will build lots of good things for us, like schools and roads and clinics,” said George Opiyo...

Maybe being a "candidate for the world" has some downsides, when even Kenyan commoners expect salvations?

  • http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections...
  • I just heard a guy on CNN proclaim him "King of the New world".

    Well, we know how that movie ended.

    I think the other TV dude had it right: It's going to get worse before it gets worse.

    It was a great sounding speech. But did it mean anything?

    Does it really matter? Obama was chosen by the real rulers because he can motivate people.

    Our rulers need us to work so we don't think of bailouts too much. If you believe in change, you will pray, work hard and hope for a good outcome of this mess.

    You have to admit - they chose the right man to do it.

    Yes we can.

    I sort of have to agree with you. He seems like he'll secretly make all the elites happy while telling the poor people they're important and they have to support his policies and be patient.

    Hey I'm a bit confused about the 'why' of those two cut crystal spittoons the Obamas have been presented with! Maybe they are meant to go with the meaning of that speech you wonder on Darwinsdog?

    Perhaps no smoking in the White House but he could 'dip'.

    Or was it a country thingy..like we see in Country Living magazines.

    How haute is a crystal spitoon. They have breached a new level of chic.
    George doesn't get it.


    Ok, ok... I was jut trying to be positive and optimistic for once!

    Khebab, don't be too self-critical of your positive and optimistic standpoint. Your original assessment was shared by no less a critical thinker than James Howard Kuntsler,

    The new president's speech was strong and straight, and there's no need to parse it here.


    Just that TOD has a hard edge to much of its commentary and is a harder audience to please. We're not known for "standing on ceremony" -- figuratively or literally.

    Someone mentioned Kunstler's recent CFN post. Said it sounded as if he was trying to get himself nominated to a cabinet position.

    I don't know about that, but Kunstler's posts seem to be going in two seperate directions lately ((A)we're all hopelessly screwed up & (B) but there's hope). Sounds like a drill-instructor's prep talk to me. (He hasn't talked much about the PO field in a while.)

    We need a Sec of TrashTalk.


    Thanks, airdale.


    "Author Ron Carlson was watching the president's syntax. "What courage," he said, "to use a complex sentence talking to a million people! By expecting the best of us, he just might get it.""

    Writers praise Barack Obama's inaugural address

    no no Khebab, the speech itself was really great. Remember speeches are just words and words can sometimes come in the purest of lyrical forms. Speech was great inform and content !

    Now, back to reality, the reality that TODers and Obama has to face.

    New Energy for America .... is this

    The Obama-Biden comprehensive New Energy for America plan will:

    *Provide short-term relief to American families facing pain at the pump
    (solved already by financial meltdown)

    *Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future.
    ($15 billion per year, how much were these rescue packages again ??)

    *Within 10 years save more oil than we currently import from the Middle East and Venezuela combined.
    (possible, due to a blockbuster called ....... umhf ... Peak Oil)

    *Put 1 million Plug-In Hybrid cars -- cars that can get up to 150 miles per gallon -- on the road by 2015, cars that we will work to make sure are built here in America.
    (1 million PlugBrids cars by 2015, oh yeah that will help ... given your 300 million cars/trucks/lorries/busses ... already in place)

    *Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025.
    (yeah yeah ... hmhmhmh ... hmhm ,said with "Beavis or Butthead" voice)

    *Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050.
    (yeah yeah ... hmhmhmh ... hmhm , also said with "Beavis or Butthead" voice. 80% CCS, means put everything back where it came from .....yeah yeah ... hmhmhmh ... hmhm)

    This program is &&&%¤##"##¤"& ! IMO

    This said, Congrats with the very best of President you could pick from, and I believe that Obama actually can understand PO and produce actions when grasped ...... but firstly give him some quality energy-studytime.
    Remember you USAians, in order for him to become elected President, he had to express the idea that he understands the whole-wide-universe , obviously he doesn't, but he sounds willing and humble enough to me, to learn. ( as for Mc Cain ... ? I doubt it...)

    Yea, Obama's energy policy is far less than what we need to deal with peak oil.

    OPEC currently has an agreement to trade international crude oil using U.S. dollars presumably because the U.S. is its largest customer. If the U.S. is successful in nearly eliminating its crude oil imports, at some point OPEC will stop using the U.S. dollar. Since the U.S. lacks manufacturing, I think the link between the U.S. dollar and crude oil, a commodity, is the principal thing that gives the U.S. dollar value. Since we at TOD generally advocate switching away from the use of crude oil, how do we protect or cushion the U.S. economy from the delinking of the U.S. dollar and crude oil?

    If the economists who advise the leaders have a great fear of this delinking, then all renewable energy policies actually implemented will likely fall short of the rate of decline in production of crude oil. Economics may guarantee the U.S. is the last country to switch off of crude oil.

    Thank you

    I wasn't as impressed by the speech, and I'm not sure the new guy will be able to do much for us as a nation - but I have to admit I'm very very happy to see the old guys fly away.

    I, for one, am glad the inauguration went off without a hitch. I am very glad there were apparently no serious security issues.

    I am glad they had "the party". For our nation overall, and especially for the 10% who share an African-American heritage, it is truly historic .

    It is good to have a well-spoken orator for President, if just to be able to get past presentation style to the meat of the substance.

    Is for as hope and change, I do hope Obama proves to be smart and resourceful. Although I'm skeptical of his appointments to date, I'm less worried about "change you can believe in" than "change you can't avoid, however desperately you try".

    I hope it doesn't take him long to understand that we're not actually in a Keynesian world.

    Thanks Khebab. I thought it was a terrific speech and Obama is ready to kick some arse and take some names.

    He left out the best part......
    That he is sending Hillary on permanent assignment to Afghanistan.

    I think he did a great job, considering who-all he knows is in his national audience, so I don't think you need to apologize for a moment of optimism. I think the familiar attitude around here that 'being positive-minded is a weak and irrational position' is actually just a form of very deep distress which refuses to hear anything hopeful or encouraging. We are in deep doo-doo, and the President has clearly shown that he realizes this.

    Even if he doesn't have the right answers to everything right now, I think he is able to ask, recognize and learn, which is something the previous crowd was immune to.

    Yes, he's mainstream. Surprise, surprise. and No, Kunstler is not part of the cenral planning committee. Surprised again.

    The 'Way of Life' comment may be code for something entirely different than 'Three big trucks and all the burgers you'll ever want' .. it's more likely code for 'Democracy and Education for Girls', if you look at the paragraph it came with.

    We'll see, but I don't think he's the absolute sellout that others on this list are proposing. To get from here to where we want to be, or have to be, there will be intermediate steps, and we have to look at this strategically. It doesn't start with 'abandon all roads projects and demonize the automobile' .. That's too hard a turn for something this big to make, no matter how much we REALLY NEED to do it.

    Chin Up. It's a good day to die!

    Another missed opportunity for mass transit in Ontario. Metrolinx report leak shows its failure to grasp


    Oregon's precarious budget: Is help on the way?
    Oregon's skyrocketing unemployment could create a $750 million budget hole in the last five months of the budget year that could threaten funding for schools, The Oregonian's Harry Esteve reports.

    Gov. Ted Kulongoski's office says the state government itself can't absorb such a deep hole, ...


    How quaint, to think of a quarter of a thousandth of a trillion dollars as a "deep hole."
    Lessee, $42 billion/33,871,648 = a $1240 per capita "ho" in CA, vs. $750 million/3,700,758 = $202 in OR.

    You probably meant three-quarters of a thousandth of a trillion dollars. Sounds much more imposing, really.

    The EU may need to double windpower by 2020 to decrease dependence on imports of oil and gas:


    Oil production from Ghawar field in Saudi Arabia is not likely to increase as efforts to try to maintain existing supply capacity are more feasible. Will fracture stimulation of tight areas yield more oil? Current oil prices are causing development projects to cancel or shutdown rather than accelerate production.

    Total and Shell oil may investigate oil shale recovery in Colorado:


    May I ask what happened to that survey we had quite some time ago? If I remember correctly it was said the results would be presented after the holidays. Did I miss something or weren't they released yet?

    Hasn't been released yet.

    Whitehouse.gov has been updated for the Obama administration. Here is the energy and environment page for reference:


    Oh what a difference a day makes.

    Can one assume that faith-based muzzling of Hansen and other scientists soon shall cease?

    We are all saved, concentrating solar just got cheaper:

    The article says nothing about PV though, just a cheaper way to make trough reflectors -presumably for solar thermal.

    interesting link - I would like to see solar thermal ramp up quickly in the Mojave desert, and if this makes it cheaper to do so, I welcome it.

    Yeah! and as an added benefit we are creating more desert area as we speak so this is truely the exponential solution.

    that's what I love about this place - I'm the big doomer in my family - but there is always somebody on TOD to make me look like a techno-cornocopian.

    I don't know how much I would trust that article. They can't seem to decide if they are talking about Solar Thermal or PV.

    Yeah, I think the reporter was confused - seems pretty clear to me we are talking about cheaper collectors for solar thermal - which I think is very interesting. If only the media would do a little research....

    Hello TODers,

    State of mining is bad, but it could get worse
    Tens of thousands of mining jobs cut; more signs that worse is yet to come
    If you recall my earlier postings: since there are No Substitutes to the Elements phosphorus[P] and potassium[K], eventually this turns around when untold thousands will be hand-digging and wheelbarrowing in the P & K mines. Afterall, that is precisely how this industry started so long ago. Remember, it is not the size of the reserves, but the flowrate that is key.

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

    Can anyone confirm this claim that Warren Buffet has been buying energy companies?


    Entertaining speculations on the linkage between oil price volatility and misbehavior by the financial industry are posted at:


    Text from the post include:

    "The non-linear regression trend in oil price volatility is isolated in Figure 4. From this it can be seen that volatility based on the calculation approximately doubled between yrs 2000 and 2004 and then approximately doubled again between 2004 and 2006. What happens next is an interesting question ? A clue to this might come from a smaller bump in volatility occurring during the 1990s (see Figure 4). Based on this pattern it is speculated that the current exponential rise will flatten as time proceeds and eventually becoming a second bump, albeit of higher amplitude than that occurring during the 1990s. After completion of the current bump, one imagines that a rise and fall in volatility has the prospect to occur over again. Cycling variance in oil price could be a stomach churning ride.

    Hello TODers,

    This seems like a pretty good read for those that want to learn more about the different types of potassic ferts, especially those with sulphur added:

    Fundamentals of Potash
    You may be seeing more I-NPK going to a full NPKS ratio printed on the bag, such as:
    • Single Superphosphate (0-16-0-12S)
    • Ammonium Sulphate (21-0-0-24S)
    • Ammonium Phosphate-Sulphate (20-20-0-15S)
    • Potassium Sulphate (0-0-50-18S)
    • Potassium Magnesium Sulphate (0-0-27-22S)
    • Various Micronutrient Sulphate Salts
    Potential new products:
    • Ammonium Nitrate-Sulphate (26-0-0-14S)
    • Urea-Ammonium Sulphate (40-0-0-9S)
    The above is sourced from this 10-page PDF:

    Correcting Sulphur Deficiency for High Yield: Global Perspective

    From the Rebound in Prices Could Be "Years Off" article, linked uptop:

    Even if peak oil is upon us, so what?

    Nate criticized me for asserting that there is a fundamental difference between the Peak Oil Point Of View and the Peak Exports Point of View. I submit the preceding quote in continuing defense of my assertion that there is a big difference between the two. Of course, the conventional wisdom is that we can have an infinite rate of increase in our consumption of finite fossil fuel resources.

    Hello WT,

    Don't worry. At some future Thermo/Gene tipping point: we will have real problems importing both oil and I-NPK [44% import reliance and rising for nitrogen alone, source: USGS]. Aircraft carriers moving rock back from Morocco, with a southern detour to Trinidad for urea?

    Have you hugged your bag of NPK today?

    Greetings, Bob,

    I'm wondering about something...

    What do you know about O-NPK, manufactured (so to speak) on a commercial scale?

    I'm curious about what the inputs are, energy costs, and etc. (Is there a "secret" and if so, what is it?)

    If this works, why the need for "I"?


    Seems there's a non-profit; I'll have to look into it.


    Interesting, as I was looking around, I also found this from December 2008.

    But a state investigation caught the Salinas-area company spiking its product with ammonium sulfate, a synthetic fertilizer banned from organic farms.


    Hello Aniya,

    I am certainly not an expert on Mfg O-NPK as far as costs, energy, etc. But generally, for the topsoil punch/ton applied: O-NPK is weaker and much more bulkier than I-NPK, but the added tilth or mulch, extra trace nutrients, and microbes is a big plus that I-NPK cannot ever provide.

    This beneficial bulkiness is what energy-limits the effective distance that many manures or composts can be transported. There may be plenty of specialized organic farmer exceptions, but I doubt if many typical commercial farmers will pay to have cow manure moved more than 150+ miles from a feedlot to their farmgate. It is also a lot more energy costly/sq foot to spread than I-NPK.

    Potting soils are the home gardener exception: an 2nd floor apartment dweller needs some soil base to start with as you can't just plug seeds into a bag of potent I-NPK, then add water, then expect results.

    Sad to see your linked article on the adulterated O-NPK. By themselves, the industrialized nitrogen and sulfur elements were not the problem [although a definite violation of organic intent], but the chemical filler/binders/coatings might have been melamine or some other chemical molecules not normally found in normal O-NPK.

    As I am increasingly finding out: this I/O-NPK, topsoil, and photosynthesis business is enormously complex and inter-related with energy in so many different ways.

    Thanks, Bob,

    This helped me get a picture.

    And, could you possibly keep my question in mind, as you do your reading and research? I'd be interested in anything else you might learn.

    Thank you Bob-- I always read your NPK updates thoroughly and find them very informative. I sit in an Agronomy Dept and one of the profs recently gave a talk which did include the terms "peak P." He is working on breeding soybean to absorb more P. Problem is... there is still a limit to what the soil can eventually give up.

    Whichever of you is right cannot be determined from that page of faith-based innumeracy. It clearly expects the decline in demand will cut both production and exports back to the lowest cost producers. Export land will then be too broke to increase its own consumption.

    Wow. Some really sobering commentary over at TAE by Ilargi.


    I think I'm going to go fix a drink and go to bed.


    Man, he really hated Obama's speech. I didn't think it was great, but "least inspiring in decades" seems a bit strong.

    Yeah,,it was really inspiring. The dow dropped about 330 points!

    'She's goona blow Captain.'

    Yes Ilargi is right. We are dropping like a dead possum outa tree.


    "You don’t give me nothing to believe in. We need truth. Not just because we like it that way, but because it's the only way to get out of the mess. You have two weeks."

    It's a rant. If it were really down to two weeks, then thanks for pinning it all on one man who just got in the door.. and all because the Inaugural address didn't bolster the Markets? The fricken' ship's on fire, but Ilargi is playing the same game as the headlines that give us, "Crude Down on news of Cat up in a Tree"

    If Obama can figure out a way to avoid the 'Blame Game', can we? I don't mean THEM.. I mean you, and me.

    (And what's with the language thing? "You don't give me nothing..."?! am I supposed to avoid noticing this?)

    Man, he really hated Obama's speech. I didn't think it was great, but "least inspiring in decades" seems a bit strong.

    I was thinking about what was delivered vs what was expected.

    As for the timeline, two weeks: Britain is falling so fast this week that time looks to be running out over here as well. Despite the trillions injected in banks, or by now perhaps because of them, confidence in the system is diminishing at a rapid rate.


    Interesting to read about the 2 weeks time for this rapidly diminishing confidence. There is a ripple effect of this impact- those at the center will (are) feel it immediately. But hopefully for those of us farther away, there will be some time yet before the wave hit us. And since I live in a rural ag area with many poor and elderly, hopefully that will buy us some time to get the fruit trees planted, the gardens tilled, the food storage in place and some solar hot air heaters in our three senior centers (warm rooms for the daytime).

    Best to you for all your writing and work spreading the word.

    Now we know why Jim Rogers moved from NYC to Singapore (or is it Shanghai? I'm not clear on where in Asia exactly he is living now). He must have seen this US banking crisis that Ilargi is describing coming and he wanted to get out way before the fun started. I agree it's very frightening.

    But I don't think that anywhere on planet earth will be untouched if the US banking system-( --and the US$???) goes down.

    So I'm looking into other galaxies for available farmland!

    I think he's in Singapore. Hong Kong is too polluted.

    But I wonder if he might not be dead wrong on China becoming the new world financial power.

    I think he'll be right in the longer term, but he's extremely premature to be moving to take advantage of that now. China is moving rapidly into depression, and that part of the world is going to be a site of considerable conflict for at leas the next couple of decades I should think. I wouldn't want to be a foreigner over there right now.

    My view is that China will be the next hegemonic power, but not until after a long and bloody interregnem.


    The slide in sterling has turned "disorderly".

    We can argue over whether or not the first phase of devaluation acted as a shock-absorber for a badly mismanaged economy, providing a cushion against debt deflation and the housing crash. But the latest dive has a very malign feel.

    For the first time since this crisis began eighteen months ago, I am seriously worried that British government is losing control.

    The currency has fallen five cents today to $1.39 against the dollar. It is now perched precariously on a two-decade support line -- the levels tested in 2001 and 1992. If it breaks that line, traders may send it crashing down towards dollar parity.

    The danger is blindingly obvious. The $4.4 trillion of foreign liabilities accumulated by UK banks are twice the size of the British economy. UK foreign reserves are virtually nothing at $60.6bn. (on this, more later in a piece I'm writing today)

    If the Government is forced to nationalise RBS and perhaps Barclays with their vast exposure in dollars, euros, and yen, it risks being submerged. It is one thing for a sovereign state to let its national debt jump in a crisis -- or a war -- perhaps even to 100pc of GDP. It is another to take on foreign debts on such a scale with no reserves. Yes, the banks have foreign assets as well to match the debts. But how much are these assets really worth?

    We're going over the edge...