DrumBeat: January 25, 2009
Posted by Leanan on January 25, 2009 - 9:57am
The Patch: Peak supply vs. peak demand
"There is a reasonable likelihood that OECD oil demand has peaked," Peter Davies, former chief economist at BP PLC, told Reuters this week. Antoine Halff and Veronique Lashinski, energy analysts at the U.S. brokerage, Newedge, said: "More and more analysts are sold on the idea that U.S. oil demand peaked in 2007. The market meltdown is likely to entrench current demand losses not only in the U.S. itself but in the world at large."That, of course, would be bad news for a growing oil producer such as Canada.
Yet the same market focus on shrinking oil demand to the exclusion of everything else is beginning to encourage another, just as powerful view: that oil supply is disappearing faster than demand is falling.
Randy Ollenberger, managing director of oil and gas research at BMO Capital Markets, said global oil supply could decline by as much as 20 million barrels a day over the next three years if the oil industry stops investing new capital, whether by building new projects or sustaining existing ones, because oil prices are too low. This would dwarf a decline in demand of about 2.25 million barrels a day over the same period.
Exxon, Hess Oil Feild May Hold 10 Billion Barrels, Estado Says
(Bloomberg) -- Exxon Mobil Corp., Hess Corp. and Petroleo Brasileiro SA’s BM-S-22 offshore block in Brazil’s so- called pre-salt area may hold as much as 10 billion barrels of oil, O Estado de S. Paulo reported, without saying where it got the information.The block operated by Exxon Mobil in Brazil’s Santos Basin may have more potential than the nearby Tupi field, which contains as much as 8 billion barrels, the newspaper said, citing unidentified people with access to results of some studies.
Algeria storms leave 8 dead, disrupt port
ALGIERS (Reuters) - Heavy wind, rain and snow in OPEC member Algeria have killed eight people and disrupted the movement of oil and gas tankers at the port of Arzew near the western city of Oran, newspapers reported on Sunday.Arzew port authorities were forced to halt oil and gas tanker activity until Saturday due to rough seas caused by 90 km-per-hour winds, but the storm had now calmed, daily El Khabar said.
Crude Oil Contango: West Coast Has no Relief from Gas Prices
The reason gasoline prices will stay firm on the West Coast regardless of all the crude oil price gyrations is that oil refiners have either cut back production, are having unscheduled maintenance problems or have brought their units down earlier than normal for the switchover to producing summer gasoline.
Nigeria arrests seven for stealing oil in delta
ABUJA (Reuters) - Nigeria's anti-corruption police arrested six Ghanaians and a Nigerian for stealing millions of dollars worth of crude oil in the restive Niger Delta, the agency's spokesman said on Sunday.The suspects were taken into custody after their vessel, carrying a cargo worth around 330 million naira ($2.2 million), was seized in Chanomi Creek in southern Nigeria's Delta state in late December.
Kuwait posts 9.82 billion dinars surplus
The Finance Ministry of Kuwait has reported a preliminary budget surplus of 9.82 billion dinars in the first nine months of its 2008/09 fiscal year, despite falling oil prices, official data showed on Sunday.Income mainly from oil revenues for the world's No. 7 oil exporter was 18.55 billion dinars at end-December, while expenditures were 8.73 billion dinars, the finance ministry said.
Behind the Numbers: Problems Loom for OPEC
So far OPEC has been relatively successful at cutting oil production and keeping oil prices propped up. Saudi Arabia is leading the charge saying, more or less, it’s going to do what needs to be done.They have been able to stick together, but how long can it really last?
Obama Has Opportunity to Reverse Mistake on Offshore Drilling
Campaigning in Florida last June as a presidential candidate, then-Senator Barack Obama blasted the proposal of his opponent, Senator John McCain, to open coastal areas of the United States to offshore drilling. Declaring that it "makes no sense at all," Obama correctly stated that such drilling would make very little difference in the price of gasoline, and supported a reduction of fossil fuel use through a stimulus program that would create "green jobs."But as gasoline prices soared past $4 a gallon and the Republicans campaigned on the issue of "drill here, drill now," the Democratic leadership softened its position. The end result was that a 27-year ban on drilling in coastal areas off the United States was allowed to expire.
President Obama now has an opportunity to reverse this mistake by re-instituting the prior protection of our coastal environment.
Green garbage dumps? Mexico City vows to try
MEXICO CITY - Mexico City wants to turn one of the planet's biggest and messiest waste management systems into the greenest in Latin America, if not the developing world.
Italian oil company Eni's chief says oil price turbulence unprecedented, bad news for industry
RIYADH, Saudi Arabia (AP) — The head of the Italian oil company Eni SpA said Sunday that the turbulence in oil prices is unprecedented and is "extremely bad news" for the industry.Paolo Scaroni, CEO of Eni, told a panel at the Global Competitiveness Forum that the time is ripe for the oil industry to look for ways to ensure more stability.
"Our sector is no stranger to cycles," Scaroni said. "But the turbulence we are currently experiencing — with oil doubling in the nine months to July 2008 and then losing two-thirds of its value in the following six months — is unprecedented."
"It is also extremely bad news for an industry like ours, where a five-year view counts as short term," he added.
Obama’s Vilsack Appointment: Not a Change We Can Believe In?
Obama’s ambiguity on corn-based ethanol has evoked apprehension in the scientific world. If he wants to remain consistent with his liberal agenda and goals of positive change, he will have to yield to the scientists in his cabinet—thereby removing himself and politically-tied Cabinet members from the energy-resolution process. But when Obama appointed former Iowa governor Tom Vilsack—with his partiality towards corn ethanol—as the new Secretary of Agriculture, it highlighted a potential for extremely worrisome energy policy.
Environmental Issues Slide in Poll of Public’s Concerns
A new poll suggests that Americans, preoccupied with the economy, are less worried about rising global temperatures than they were a year ago but remain concerned with solving the nation’s energy problems....In the poll, released Thursday by the nonpartisan Pew Research Center, global warming came in last among 20 voter concerns; it trailed issues like addressing moral decline and decreasing the influence of lobbyists. Only 30 percent of the voters deemed global warming to be “a top priority,” compared with 35 percent in 2008.
Productive stimulus: Fast-track nuclear power
I propose that Congress bankroll immediate construction of a dozen new nuclear reactors at existing nuke sites. This meets the common concern that infrastructure projects be "shovel-ready." Starting with existing nuclear power plant sites minimizes risk of undiscovered environmental issues. Local political acceptance is usually well resolved after years of "good neighbor" operation, not to mention the millions of dollars annually that flows into the local economy and government treasuries.
The Futility of Alternative Energy in the Midst of Hyper-Population Growth
But let’s return to the phrase, “…and keep our economy growing.” That means to keep our population growing in order to create more production, consumption and use of natural resources. What those politicians fail to tell you: our non-renewable energy resources dwindle while our population accelerates on its way to adding 100 million people in the next 30 years and six million added to Colorado by mid century.Nonetheless, everyone thinks alternative energies will take up the slack when the planet runs out of oil in the near future. How soon? The Hubbert Curve shows the planet hitting Peak Oil Extraction by 2010. From there, no matter how many wells we drill, the planet’s supply declines inexorably toward zero.
So, can alternative energies save our civilization? Let’s find out.
Blood of the Earth is about oil, “its birth, life, and approaching death,” as author Dilip Hiro puts it. The book provides an overview of the early exploration and production of oil, its centrality in our lives and geopolitics over the past century and the crisis that is looming as the world runs out of oil.
Home oil shortage hits dealers
UTICA - A recent cold weather snap and low fuel prices might be the reason why some area retailers had to travel to Syracuse for home heating oil recently.Some began commuting to Syracuse and other locations last week after they were told by regional distributors that more home heating oil would not be available here through the Buckeye Terminal pipeline until Wednesday.
Some consumers who use heating oil to warm their homes might have seen a short-term rise in costs as retailers tried to offset their traveling costs.
Kuwait investment company sets up oil and gas joint ventures with Russia's Gazprom
DUBAI, United Arab Emirates (AP) — Kuwaiti state news says an investment firm in the Persian Gulf oil producer is forming a pair of joint venture companies with Russia's Gazprom.Kuwait News Agency says Noor Financial Investment will join with the Russian oil and gas giant's Gazprom Geofizika subsidiary to form one venture in Russia and another in Kuwait.
Europe to Ask Wealthy Nations to Adopt Carbon Trading System
BRUSSELS — The European Commission was preparing an appeal on Friday to wealthy countries — and to the United States in particular — to adopt carbon trading as one of the main mechanisms for curbing greenhouse gas emissions.
Car-free Masdar City will run on green PRTs
Visitors to the future Masdar City will have no choice but to do what the Masdarans do – leave their cars outside the city and use PRT.Personal Rapid Transit automotives will be the only means of transport in the planned zero-carbon and zero-waste city taking shape just outside Abu Dhabi as one of cleanest and most environment-friendly habitats in the world.
When I first wrote about the Pickens Plan, as it is now known, he was putting his money where his mouth was, declaring that he was going to build a giant 2,700-turbine wind farm in West Texas costing upward of $10 billion. Nope, not anymore. The nation’s credit crunch has gutted the wind project’s financing, putting the whole project on hold. He’s also delayed work on a state permit to build 170 miles of transmission lines from West Texas that would carry enough wind energy to power 300,000 homes. “For now,” Boone told one reporter, “the wind stuff is deader than hell.”In fact, the whole Pickens Plan seems to be going, well, nowhere. In November, California voters resoundingly defeated a ballot measure he supported to put $5 billion in bond money into promoting natural-gas vehicles in the Golden State. (Pickens’s own company, Clean Energy Fuels Corp., the country’s largest owner of natural-gas filling stations, sponsored the plan and put up $19 million to back it.) What’s more, automakers have simply refused to embrace the idea of natural gas-powered cars. They are focused on building cars that run on electric power. Meanwhile, more skeptics have emerged to blast away at Pickens’ wind energy proposal. They insist, for instance, that the cost of transmitting electricity from Boone’s proposed windmill farms in the Midwest to the current power grid would be ridiculously prohibitive.
OPEC may meet early if oil drops below $40: report
LUANDA (Reuters) - OPEC could meet before March if Brent crude oil prices fall to below $40 per barrel, the group's president was cited by Angolan weekly newspaper O Pais as saying.Although Jose Botelho de Vasconcelos said he only expected the next gathering of the 12-member Organisation of the Petroleum Exporting Countries to take place, as planned, in Vienna on March 15, he added the group could meet sooner if oil prices suddenly dropped.
Am I some kind of dystopian? I believe in peak carbon, and I'm becoming a believer in peak debt. I'm very sympathetic to peak fish, and I'm agnostic on peak dirt: I haven't really looked into it. I generally avoid the peak-oil crowd, not because they make no sense at all but rather because they're so shrill. And I don't think much of the peak-dollar lot, including the goldbugs. But I clearly have peaknik tendencies, even though I have no eschatological leanings.My general attitude towards such things is that they are big drivers of the global economy, but not necessarily forces which will devastate the human race: I enjoy listening to Jim Kunstler, but I don't follow him all the way to his conclusions.
Opec Nations this week reached a decision of global import, delaying the onset of the Peak Oil Crisis at least until the price for crude goes back up to a profitable potential.This move comes on the heel of the traumatic discovery last year that consumers will not, after all, find a way to continue driving when they have no money to buy it. As the price for a gallon of gas rose above $4 last year, consumers fought back, and fuel purchases dropped to unprecedented levels.
Saudi Aramco, Total sign new Jubail refinery deal
(MENAFN - Arab News) Saudi Aramco and Total yesterday reaffirmed their resolve to complete the world-class Jubail refinery project that is designed to supply 400,000 barrels per day, the Saudi Press Agency said."The two companies signed a new contract to implement the project," the official agency said, adding that the new refinery would begin operations at the end of 2012.
New head of BP's U.S. unit silent on acquisitions
The incoming head of BP's U.S. operations said he's committed to developing ongoing projects on the continent but was mum about possible future oil and gas acquisitions in a volatile economy.
Gazprom hopes to sign gas contracts with Ukraine for 20-30 years
MOSCOW (RIA Novosti) - Russian energy giant Gazprom hopes to sign gas supply contracts with Ukraine for 20-30 years to ensure stable gas transit to Europe, Gazprom Deputy Chairman Alexander Medvedev said on Sunday.
French firm expands oil research into Colorado
When French energy giant Total recently signed on to a U.S. oil shale project, it became just one more element in the company’s global effort to pursue shale and other unconventional fuel projects.Total announced earlier this month it plans to acquire a 50 percent stake in IDT Corp.’s American Shale Oil LLC subsidiary. AMSO holds a 160-acre federal oil shale research, development and demonstration lease in Rio Blanco County, and a right to convert that to a commercial development lease covering about eight square miles upon meeting certain conditions.
Climate change could devastate Philippines: NASA scientist
Climate change could have a devastating impact on the Philippines, leading to widespread destruction of the country's flora and fauna and flooding the capital Manila, a NASA scientist warned here Friday.The continued melting of Arctic ice caps, brought on by climate change, could cause sea levels to rise by seven metres (23 feet), said National Aeronautics and Space Administration (NASA) physicist Josefino Comiso.
He said the country's fish stocks would be depleted and many species of plant and animal life would die because of the change in ocean temperatures caused by climate change.
Obama moves forward with plans to cut emissions
A cap-and-trade initiative would limit greenhouse gases and raise the cost of pumping more carbon into the atmosphere. Some fear it could also further hurt the economy.
Tweak gardening practices as the weather goes to extremes
As climate change brings weather extremes, hotter temperatures and increasing demand on a diminishing water supply, not only our gardens but our gardening techniques must be fine tuned.
But even if we bring the greenhouse effect under control, says a Tufts astrophysicist, the earth will warm up anyway, thanks to a completely different source of heat that we create ourselves.Over the next 250 years, calculates Eric J. Chaisson in a recent paper, the earth's population will start generating so much of its own heat - chiefly wasted from energy use - that it will warm the earth even without a rise in greenhouse gases. The only way to avoid it, he says, is to rethink how we generate energy.
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The economy is getting worse; there is no doubt about that. But just how fast are things getting worse? What is our rate of descent into this abyss? The unemployment rate is the key. As the unemployment rate rises and underemployment rises, this means less money people have to spend, which means that those still employed are losing the market for their products and services, which means more layoffs, which means……..
Anyway we all know that the official unemployment rate only includes only those who have no job at all and are actively seeking employment. Those desperate people who have accepted part time jobs, or those making only a fraction of their former wages, as well as those who, after months of job seeking, have simply given up, are not counted among the unemployed.
The not-so-governmental guide to the Unemployment Rate
The moral of this story is; things, less than six months after the big banking crash, are not as bad as they were in 1930, they are much worse!
Ron Patterson
Interesting, but I wonder how useful it is to compare now with 1930. It's a whole different world.
Did that 25% unemployment rate include women? Are today's two-income families more or less vulnerable?
Then there was that Boston Globe article, that argued a Depression would look different this time, because food and clothing is so cheap for Americans. Rather than ragged people lining up at soup kitchens, the new depression will likely involve daycare and health care becoming unaffordable.
The percentage of adults in full-time employment would probably be the most interesting statistic in that regard.
The 1930 USA government work force was tiny as a % compared to 2009. Non government employment in the USA might be near 1930s lows.
Elizabeth Warren says "worse." Much worse.
The issues in your quote are addressed directly by her in the video. The results are startling.
Two-income families today are much, much more vulnerable than even single-income families in the 1970s.
I know what Elizabeth Warren says. I'm the first person to post about her work here. However, other experts disagree on this issue.
In particular, I think if things get really bad, Warren's views may become less relevant. A house in a good school district? Who cares, if you can't afford food?
The competition between families that Warren points to as the driver of housing price increases may abate as well. If unemployment means the average family has only one income, that would eliminate a lot of the disadvantage of having only one income.
It seems quite plausible, considering the rapid nature of things going downhill so far, that things could get significantly worse. There are three things in particular. (1) Most workers today are just under-skilled drones, faceless in the corporate megastructure. When it comes time to make the decision between keeping a worker on, or spending that would-be salary on gas to take the Yatch for the weekend - the Yatch wins. (2) There are a hell of a lot of people in debt up to their eyeballs - beyond their eyeballs, and many more that are only in debt up to their ankle - but living paycheck to paycheck. They lose their job and they're instantly screwed - no savings to float them for a while. Instant screwage. (3) No one has "survival" skills anymore. Food comes from a grocery store, not a garden. If something breaks, few care to know how to fix something [or worse, it's simply unfixable]. Entertainment has been "outsourced" [go to movie, go out to eat, go to mall, go rent video, cable/sat tv] - when the money dries up the entertainment does too, and then people go crazy because they realize their life is meaningless.
I should probably also give a nod towards the un-necessary nature of many jobs. This is probably why a quick unraveling is likely. Simply put, there is a lot of employment out there that caters to luxuries - and I include "sit-down" restaurants with waiters, a large chunk of retail stores (electronics especially, but fractions of other stores as well like Kmart and Wal-mart since they contain as a subset electronics and other gadgetry), jewelry stores are pretty much 100% unnecessary, cinemas are not necessary but tend to be safe haven in bad times but I'm sure if it's between a few days groceries and going to a movie the groceries will win. There are more of course, but right there one can expect rampant unemployment in electronics, restaurants, jewelry stores, cinemas, and retail stores. That in turn puts more people out of work because of the lost income from those workers. With everything so intertwined and being a luxury not vital to life - I'm sure it can unravel extraordinarily fast.
Agree on many jobs being unnecessary: See the USG (U.S. Government) for the legions of folks who collect money for making Power Point presentations, many of which get dismissed out of hand because the the leadership already has the favored answer in his/her noggin.
Also, the word for a luxury sailing vessel/boat is 'yacht.' I have a plug-in for Firefox which highlights words it deems mis-spelled (ironically, Firefox is one of them), and which allows one to right-click on a word to link to on-line dictionaries and other useful reference tools.
http://dictionary.reference.com/browse/Yacht
It's technically pronounced "gin palace".
The mariner's definition is: "A hole in the water into which one pours money."
Perhaps. But there's a trend toward keeping workers this time, and getting the "yatch" money via furloughs and paycuts instead. Why? Because it costs money to recruit and train new workers when the economy turns around. You and I suspect the economy will not turn around, at least not for a long time, but business people tend to be optimistic. They wouldn't go into business otherwise.
I think it's the banks that loaned them money that are screwed. They'll declare bankruptcy and walk away from their homes. Their debts will vanish, and they'll get a new start (though at a lower standard of living than they'd like).
People learn quickly when they have to. And I'm not sure gardening is that much of a survival skill. I remember reading a study about "Victory Gardens." It found they didn't really help that much. The kinds of foods people grow in gardens don't provide very many calories. Rather, the benefit of victory gardens was in making people feel they were part of a larger whole, helping the troops, etc.
No doubt the transition will be stressful, but I doubt everyone will go crazy. People who are concentrating on survival don't really worry about whether their life is meaningful or not. Old people looking back on their lives often remember the days when they were poor and struggling as the happiest of their lives...because they were working together with their spouse/families toward a single goal.
Spell one little word wrong - yeesh. Yacht. Yàt? :P
There are people being retained, but that seems to be related to an expectation of a rapid rebound, and also seems to be predominant in manufacturing and other places where it would be difficult to recruit skilled workers "when" the economy comes back. Us doom and gloomers (or just long-term planners) are indeed less likely to set up a business - there have been a number of times I've thought it might be a good idea to begin making some things on a small scale and see if it grew, but after thinking about such things for a while, the legalities involved could doom someone to a life of misery.
With Obama, the day may have been delayed, but I gather the day will come when some laws are going to slip through (there are already some - can't recall the name though) essentially making "declaring bankruptcy" pointless because the debt will follow them. It might come in the form of taking a percentage of their paychecks for the rest of their lives, but there will have to be penalties for non-payment of debt or the whole system as currently set up will fail monumentally. If debts are guaranteed to be payed back through harsh laws there will be more confidence in the system.
And that's probably the biggest problem - when are they going to learn they have to?
Can't so much disagree there, but at least it's better than nothing - hopefully. Gardening is a humbling thing though, and gives you a perspective on things outside of your control (i.e. when the frost comes well after things have sprouted and spanks half of your plants).
Of course during that whole time I'm sure they bitched and complained. Life just isn't worth living if there isn't something to complain about. Watch for random acts of violence though, as people can't figure out how to channel "creative" (leftover) energy they would have spent playing WoW.
Speaking of how to
in hard economic times, this little article takes a humorous spin on it.
And a sense of humor will be a very valuable thing to have...
From Frugality Easier Than You Think
Re:Victory gardens - in WWII Victory gardens didn't "help" that much because they weren't needed - there were food surpluses, rather than the expected shortages throughout the war period. The kinds of food people grow in gardens can be calorie intensive, or it can not be - salad gardens aren't, root crops are. But Depression Gardens did seem to make a real difference in both hunger and nutrition - fresh vegetables are expensive, and one of the first things poor people cut from their diets.
Sharon
Here's an odd question...where do you get your seeds? Do you get them online, or at a local store?
And because it's Sunday...an even more odd aside: For a while I thought you were from Asheville. There's a local paper here called the Mountain Xpress (http://www.mountainx.com/) which is pretty good about reporting non-mainstream types of things important to the area. I could swear that there were articles in there fairly regularly written by you - but I can't find a single mention of them now. Pretty strange, eh? If your name were more common I could easily dismiss the notion, but it's rather uncommon. I'm 76.24% sure I'm not 100% loopy, too!
I remember the United States was shipping supplies to England and Russia during WWII. Those victory gardens may have made a larger surplus possible.
The United States needs to export as much was imported. If one spends more on gas going to the garden center than one can get in the value of produce out of a garden, it is fruitless.
A blight resistant chestnut tree, pecan, almond, or a peach tree in an area with few squirrels might be appropriate for some. The peach or nectarine is self pollinating. The tree requited topping and removal of some branches in the late winter to allow sunlight to all areas. The baby peaches must be thinned out in order for the remaining ones to grow to larger size. A wild fruit tree is of lesser value than a pruned fruit tree.
Beyond subsistence, a key need is to keep people busy, feeling productive, and hopeful. China is worried about feeding people, but it is fearful of the unemployed, as is Greece. Victory gardens help with all of that, as well as providing some nutrition beyond calories and some variety. Actually, the natural local cycle of planting, tending, and waiting for a harvest in season that I recall from my parents' garden was rewarding on many levels, and the anticipation as each garden product reached maturity was in many ways far better than getting bananas and peppers year round.
It's probably healthier, as a strong appetite year-round will encourage one to try new things that in season, while old favorites are out of season and unavailable or overly expensive.
We saw the same trend, towards keeping workers but reducing pay and hours or furloughing in the early stages of teh Depression as well. As John Commons writes in _The History of Labor in the United States 1896-1932_ initially the worst of the job losses were staved off with wage cuts and shortened hours. While unemployment increased, it was somewhat held back until the end of the 1930, when many of those who had been held on began to be laid off. Not that this is inevitable, but if we follow anything like the same pattern, we'll find that most of the people being retained get dumped in a massive dump later on.
Sharon
Yes, I am fully expecting that. I don't expect the economy to turn around any time soon, and many of these businesses will go belly-up, whether or not they keep their employees.
However, the tendency to keep workers at lower salaries might give people a chance to prepare. I think people who have their salaries reduced can see the handwriting on the wall just as clearly as you and I can.
I suspect in the UK the victory gardens provided a very valuable contribution to food. With many food shipments from the US (we are still grateful, honest! and other countries consigned to a watery end, locally grown supplies were extremely important. The older generations will still remind us that food rationing continued after the war into the 1950s, and allotment cultivation has maintained its core followers with public allotments dotted around most UK urban areas, and still very popular. My mother-in-law has worked the same allotment for over 45 years. About the size of a badminton court, she produces enough potatoes, onions, green veg and soft fruits, to keep her supplied for the bulk of the year.
Over the Christmas feasting, my mother reminded me that during the war they used to contribute food slops to a communal street collection, and as a result, all had 'shares' in the pigs that were bred from this.
Whole sectors will disappear in an economic rollback that you did not touch upon. In addition, the horticulture sector will be changing from a obsession for green lawns into functional gardening and to neutralize a huge industry. Then there are the expensive toys, ie campers, towed boats, winter sports. Remote communities will lose their support from outside capital due to building and tourism services.
It's time to start thinking about sectors that will survive and what kinds of activities will provide economic support.
I'm not sure childcare will be the critical issue, as those not working will be default care for the children, theirs and others, at whatever pay they can get.
I do think as wages drop, the crossover point at which a second income makes sense will shift. Gardening, cooking from scratch, shopping at sales, couponing, and other labor-intensive but money-saving skills will increase in relative value as work is harder to find and pays less but prices stay the same or increase.
If you can't afford activities and private school, the need for transportation goes down, and dropping a car (and all the related expenses) becomes more reasonable.
I expect to see a big shift in teenager transport, from nearly-new reliable cars common at my kids' school to the 10-yr+ fixer, more like what I saw in my middle-lower income town of my youth. Many more will do without, and "gas money" will be a common mantra for all transport. City kids these days don't much trade-out rides and gas money. When I was a kid it was a "given" that riders chipped in for the drivers gas, and often on longer trips the driver/owner didn't pay gas -- he covered wear and tear.
Right now many second incomes for the upper-middle class cover nice cars, private school, and expensive activities. These can go away quickly at the family level, but societally the school piece wont' save much money. My kids go to private school at my expense though I still pay property taxes for the public schools. If they revert to public schools, the community burden will grow even though my personal burden decreases. Ditto for transportation -- school bus loads will grow but my driving will decrease.
I think the first 20% of income and energy use cuts will go pretty quickly for the "middle class", though not painlessly for those vested in the status quo. After that it'll get harder. For the working poor it is probably excruciating already and will become much more so.
Leanan wrote:
And add in the falling percentage in the number of hoseholds with school age children (who also don't care about school districts)...
From a NYT real estate article (at the tail end of the article, where the real info hides):
http://www.nytimes.com/2008/12/28/realestate/28zone.html?_r=2
I think the interesting figure will become "percentage of households with elderly dependents" rather than "percentage of households with young children." The unfundedness of our unfunded mandates is likely to mean that many, many of us start caring for elderly parents and relatives ourselves - so no, good schools may not be the priority, but medical care, that's another question.... Good schools are replaced by "good hospice."
Sharon
You seem to have a very good head for details, so I'm sure you're not forgetting the core of her argument. It wasn't schools. That was just an example of things driving choices. The real message had to do with *how* we are spending our money and what percentage was flexible and what wasn't.
Her take was that the flexible spending areas were already pretty low while the the inflexible costs were much higher. Meanwhile, debt ratios were *much* higher, making it impossible for one income to support households AND, since both were already working, making it much less likely that a fallen spouse could be covered by the other taking the load.
I can find no flaw in the logic. (Not that I've tried much.)
Shouldn't there be an "eventually" in there somewhere? What about the meantime? LOL... seems what you are saying is, "Well, we'll all be equally screwed!"
Of course, this ignores that these are statistical musings and that in the real world the job losses will not be equally distributed. That means more chaos than the stats might imply.
Cheers
That pretty much sums it up.
IMO, that's a big reason the Great Depression wasn't worse than it was. Almost everyone was in the same boat.
There was a recent study that found most people would rather make $75,000 in a world where everyone else makes $50,000 than make $100,000 in a world where everyone else makes $150,000.
We are looking at a permanent lowering of our standard of living. It will be stressful. But perhaps not as stressful as we fear. It's all about keeping up with the Joneses, and if the Joneses are going broke, it doesn't seem so bad if we are, too.
Sure. Unfortunately, how we keep up with the Jones' is much, much more important this time around and is a limiting factor on several levels, as everyone here knows.
Cheers
I would contest the "all be equally screwed" idea.
A large percentage of the population is alive because of modern medicine.
If you are young and healthy, you start a post collapse world in a much better position. If you require daily intervention via medication or a medical appliance you are dead.
Forgive me, but doesn't this amount to a big, loud, "Duh!" ? What do absolute dollar values mean? Nothing. Please correct me if I am wrong, but in essence money = power, namely the power to make another person or group of people either give you a tangible thing or do something for you ("goods" or "services"). In a world where everyone has, say, a million dollars, who is going to get off their butt and build you a piece of furniture for $500? Probably no one. So, the price wouldn't be $500, it would be much higher. Likewise, if everyone's net worth was $1, $.10 would buy you a nice set of living room furniture. :-)
You can see this in microcosm with local property taxes, at least the way they are done here. The municipal council sets a budget, which determines how much money they need from taxes. That total is collected from all the properties in the municipality, apportioned according to assessed value. If every property in the municipality goes up in value by the same percentage, then everybody's taxes increase or decrease by the same percentage. You could have your assessed value decrease and the tax you pay increase, or vice versa (though the latter almost never happens!)
If you take the original question and replace "everyone else" with "the average income" then in essence the first question is pretty similar to today's financial reality. Would you like to make $75,000 per year now, when the average is $50,000? Of course. Now, after inflation has taken hold for a while and the average salary has tripled to $150,000, would you like your salary to have increased by only 1/3? Of course not!
Disclaimer: I have never taken a course in economics. That means that I am either
Or perhaps somewhere in between.
"The moral of this story is; things, less than six months after the big banking crash, are not as bad as they were in 1930, they are much worse!"
I'm with a lot of others here here. Not sure about that. There is still an awful lot of commerce. Needed to go to the mall for something or other last week and actually couldn't park and had to leave. Best Buy was bustling when I went there for a PC last week. Buying lots of tech stuff and what not for the biz. Sales are still OK. It just doesn't gel w/ what I have read about conditions during the depression as it advanced.
Matt
Matt:
You may be right, and I hope you are, but there are a number of factors at play.
- Just because the present does not match the cycle of the Great Depression does not mean things are better or worse, just different.
- The GD era did not have the same influence of consumerism so what you are seeing may just be "psychological inertia", or should I say "pathological inertia". If some consumers perceive that the downturn will be short lived and prosperity will return, then what you are seeing is a bull market on a consumer level. People tend to discount the future and and maximize immediate "perceived" opportunities.
- Activities of consumers, in the short term, have little to do with the fundamentals as is seen with the wild swings on the NYSE.
- You do not say where you are from, but local conditions may skew your perception. Some areas are cratering in big way.
Because of many unknowns, we are in a period of high volatility where there will be many winners and many losers but no one has a crystal ball so it is, for the most part, a crap shoot. I choose to conserve until signals are clearer, much clearer but I have always been risk averse.
In short, one observation does not a trend make, or in mathspeak, what is the slope of a single point?
To paraphrase Alan from NOLA-Best hopes for a strong economy, but hope doesn't pay the rent.
In 2009. most families living on 2 incomes cannot pay their mortgage on 1 income, and will lose their home.
The percentage of families with mortgages in 1930 was much lower than today.
In 1930 people lived in paid off homes or with family members in their paid off home (shack by today's standards). For example a family of 10 lived in a 2 bedroom house.
The main issue in 1930 was having enough food to eat. Food lines in cities were really long, but in the farm land areas, people had food, but no money to buy anything.
Today, most people do not know how to grow a garden. The government will bail out the banks and people as long as they are able, but there will come a day when the government itself will become bankrupt, and not able to help the people. The true financial effects will not be felt this year. Over the next 4 years, the economic problems will be met head on with the effects of "post peak oil". Peak oil is not delayed as the article said!!!!!! How can something be delayed when it has already happened and is now in the past. The financial crisis is linked to peak oil. People partied hard knowing that the end is coming.
The peak oil delayed article is a spoof. Don't take it too seriously.
I agree that many people will lose their homes. But that doesn't mean they'll be out on the streets. They could rent. (Rents are already starting to fall.). They could move in with families or friends. I think that option, unpalatable as it seems today, will look better and better as the economy worsens.
Who will they rent from, the banks?????
People who have spare bedrooms?????
Most homes in America are "single family dwellings"..........Ha Ha Ha.
6 bedrooms for 2 people.......
Maybe the banks can find a way to turn the mansions in apartments :)
They can be re-classified as the times change and people adjust to standards like in Russia.
Maybe. Some states are now requiring banks to let renters stay when a property is foreclosed on, which could lead to them going into the rental business.
Sure. Why not?
That makes it all the easier for people to move in with their parents, children, sister, brother-in-law, etc.
That is in fact what happened during the Great Depression. A lot of mansions were turned into apartment buildings.
There's this option too:
Squatters take over £6m Mayfair house
Leanan,
Saw a news story a few weeks ago about a service (Internet driven I think)that's actually putting home owners with spare bedrooms to rent and folks who might normally rent an apartment. The highlighted story: a young woman (student maybe?)renting a b/r from a family. She also paid a food suppliment and had all her meals there. A good deal for her economically. The family too: the husband had been laid off and they needed the extra income to stay afloat.
Not my cup of tea but if it helps some folks survive relatively comfortably the so be it.
Why don't the banks just rent the houses to the people that they're foreclosing on? If I hold you're mortgage, and you can't come up with $1800 a month to pay it, why don't I just rent you the house for $800 a month, and then re-start your mortgage if/when you can start paying it again. Seems less painful for everyone involved.
Banks generally don't want to get into the landlord business. It's a right pain, as anyone who's tried it can attest.
Also, the way mortgages were sliced and diced, it's often not clear who the mortgage holder is.
I keep hearing that, but for those people that are still paying their mortgages, the check has to go somewhere. Somebody knows that they should be receiving that money every month, right?
Money's easier to deal with. It probably goes into some account where they worry about dividing it up later.
$800 per month will still have the bank taking a loss. That's rent for an $80K property, while $1800 is the payment on a $250K property. Who says that person will EVER be able to afford their former payment?
The real goal should be to make it easier for people to move out of their houses and still get into houses they can afford. Of course this creates downward pressure on big expensive houses, but then that makes all the others more affordable, and any new houses built should be in the 'growth zone' of rental, multifamily, and low-end individual houses.
Rather than forgiving equity, the gov't might think about covering closing costs to increase the velocity of transactions. Perhaps some FM and FM streamlining and rate-cutting of clearly "affordable" loans -- those where the loan value is less than 80% and less than 20% of verified income, might help too.
Sure, not everyone could afford the rent on their house. But if I'm the bank, and my mortgage holder loses his job, it seems like it's better for me to let him stay in the house and pay half what he used to. Then, in 6 months or a year, if he finds a new job, he starts paying his old mortgage again.
The alternative of going to court to get an eviction, then trying to sell a house in this market, or having the house sit empty and having to pay the bills and make sure that scavengers don't get in and ruin it, seems like a bigger loss potential to me.
Seems that any way it's cut the housing market has not yet found its bottom. If rents in an area are in fact declining, it make non-owning a better bet (further reducing demand for owner-occupied homes). If unemployment is going up and total wages declining, demand drops still further. The ability to "mark-to-market" housing prices is limited as the real value of homes continues to decline (a mortgage backed security is today worth less than one year ago and will likely be worth still less one year from now, so what's it really worth right now?). This seems to be the source of toxicity in the banking system. Talking heads propose "stabilizing" housing prices, but that can only happen if equilibrium is reestablished between supply and demand. Demand only goes up if # of households grow, their incomes grow, and commuting costs go down (and stay down). A leading indicator would be higher rents. Can we bring supply down? Hire people to deconstruct surplus housing?
And job expectations may have to come down a notch or two as well:
I guess it depends on your base DS. In the oil patch welders tend to fall higher on the food chain. Truckers not as high but still respectable. And these are the jobs that are getting cut very quickly these days. It's going to be even tougher on the drilling floor hands. A hard working lot but relatively unskilled/uneducated for any other work. Tough to go from $25/hr to loosing out for a job at Burger Kill for a $8/hr.
In North Texas the drillers were paying new hands, right out of high school, $20 an hour and paying $1,000 kick off money and $2500 bottom hole money, if they were there for both. So a lot of those guys lost a lot more than just their salary. They did, however, tend to get hurt / injured with a lot more frequency than experienced hands. I expect that region - Cooke, Montague, Denton, Wise and Jack Counties - to see higher unemployment very quickly if they haven't already.
It may have been worse in the 1930's:
“I see one-third of a nation ill-housed, ill-clad, ill-nourished.”—FDR 2nd Inaugural Address ...
Some of the most destitute men hopped on freight trains or hitchhiked west looking for work to support their families (Woody Guthrie). They found seasonal work harvesting fruit and vegetables and other odd jobs. There were menial factory jobs that paid low wages. Labor was cheap. Some went into the hills of the west to dig for gold. Women had more household skills than today. They baked bread, sewed clothes, canned food, etc.
So far we have not hit bottom. One may have noticed they have been closing some banks and trying to bail out others. Credit card lenders have begun to report losses in addition to the ongoing residential and mortgage losses.
I saw on TV a commercial advising people to gather their gold jewelry and sell it for it is worth record prices.
Yeah, TV commercials for gold are always counter-trend. Record prices are not the same as future peak prices.
In the 1930's most people lived in rented accommodation. When they got laid off and couldn't pay the rent they were evicted. Just as bad as being unable to pay the mortgage.
"In 2009. most families living on 2 incomes cannot pay their mortgage on 1 income, and will lose their home."
Let me make a small correction...
"In 2009. most families living on 2 incomes cannot pay their mortgage on 2, 3, 4, 5, or 6 incomes, and will lose their home."
So many, many people bought houses using creative financing with teaser rates for 5x, 10x their income. It is inevitable that a minimum of 10 million homes will be foreclosed upon even with zero job losses.
The unemployment rate in 1930 included women who were employed but lost their jobs. It obviously did not include housewives who never worked, which in that time were, by far, the majority of women.
A depression today would look vastly different from the depression of the 1930s. In my opinion, it would be far worse. In those days we basically had an agrarian economy with about half the population living or working on farms. People grew their own food. They had chickens, cows and gardens. They canned food for the winter months.
Today it is less than 3%. During the Great Depression, there was actually a reverse migration back to the farm. Today that would likely be impossible.
So while we cannot compare most things with the 1930s, there are some things we can compare. The stocket market is one thing and the unemployment rate is another. And desperation and poverty looks pretty much the same no matter what the time period.
Ron
My Mother was raised on a farm during the great depression. Food but no money. My wife's grandmother was in Germany during the war, she looked in other peoples garbage for food - potato peels, coffee grounds, etc.
We are not the same society we were in the 30's - we are more vulnerable today.
I think we have a problem where too many people's job is selling stuff to each other.
This has been coming for a long time, we were lulled to sleep by cheap prices for goods made in countries with; lax(no) labor laws, lax(no) environmental regulation, incredibly cheap wages relative to US minimum wage.
How we replace our manufacturing base and reduce the scale(size) of business's I have no clear idea.
We need to make ball bearings, machine tools, clothing, appliances, etc.
I think we need to go bankrupt first. Basketball players are playing a "game" and it is not worth millions except in the advertising world we live in.
Darwinian, you are wrong.
"...as well as those who, after months of job seeking, have simply given up, are not counted among the unemployed."
What about all of the people whose benefits ran out and are not in the system anymore? The people that have given up?
They don't count anymore, right?
On a list of people MAKING CALIMS...no...that should be obvious.
If you are talking about whether they count as unemployed, you are just WRONG:
http://www.bls.gov/news.release/empsit.tn.htm
"The unemployment data
derived from the household survey in no way depend upon the eligibility for or receipt of unemployment insurance benefits."
http://www.bls.gov/cps/cps_faq.htm#Ques5
”Who is counted as unemployed?
Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.
What are the basic concepts of employment and unemployment?
The basic concepts involved in identifying the employed and unemployed are quite simple:
People with jobs are employed.
People who are jobless, looking for jobs, and available for work are unemployed.
People who are neither employed nor unemployed are not in the labor force.
http://www.bls.gov/cps/cps_htgm.htm
Your belief is the most common misconception there is about unemployment rates: That the rates are derived only by people who file claims and that those who are no longer in the system are no longer counted.
I'm curious how this works.
This refers to a survey having no connection to the unemployment office. It seems completely disconnected from reality. Also, what about under-employed, people who can only find part time work or work at a much lower pay rate (read: temps and contractors) than their usual rate? Seems pretty anemic to me.
Chris
You make an important point.
Here's a vivid anecdotal example:
How does the government make an accurate count of unemployed??????
They cannot even keep up with the number of illegal immigrants.
They cannot do it. Any gov't made up numbers are extremely misleading.
Government numbers often lag by 6 to 12 months anyway, and are not real time.
Most of their numbers are made up by looking at payroll taxes, which we know are not paid by everyone who works.
I am making my judgements based on what I see at the malls, stores, hearing people talk, and it is much more real. We were in recession for 1 year before the government realized that we had a problem!!!!
Puhkawn, nowhere did I, or the author of the piece I quoted, make the claim that unemployment rates are based on only those who file claims. And you must be in some system in order to be counted. Else how would anyone know you even exist? After all, you state:
Four weeks you say! What system tracks statistic? Why the US Department of Labor of course. Is that a system? If it has been more than four weeks since you simply gave up and stopped looking, you are not counted. From the article:
Ron
The unemployment data relies on a monthly survey of households. As you note, to be counted, one must be within some sort of "system". In this situation, that system is the group of people living in households. Also, the 1,500 interviewers must sample the 60,000 households in the sample, or 40 per surveyor. I've heard that the survey is done by phone (there is a note about a callback process for verification), thus households without dedicated land lines would likely be left out as well. And, if one does not live in a traditional "household", such as a camper, tent or cardboard box, one can't be counted.
Does this inspire confidence in the data as people lose their homes and/or have switched to cell phones or have no phones at all? I think not.
E. Swanson
In 1948 all polling was done by telephone. That was before even a majority of homes had phones. In fact, a lot more wealthy republicans had phones than poor democrats. Most farmers did not have phones. The polling data showed Dewey would win by double digits. Well, you know what happened next.
When people lose their jobs, the phone is likely be one of the first things to go. Homeless people have no phones. Also one of the questions would likely be: "Are you actively seeking employment or have you done so in the last four weeks?" If no, you would not be counted.
Bottom line, a whole lot of unemployed people are not counted.
Ron P.
I think they stopped counting white males too.
Robert Reich Excludes White Male Construction Workers from Obama Stimulus Plan
To clarify, when you hear that the U.S. lost X number of jobs--that's the establishment survey. Indeed, the unemployment rate comes from the household survey.
It's not just the U.S.:
College-Educated Chinese Feel Job Pinch
I guess Sebastian Mallaby would think that's just as well, since he thinks the financial crisis is all China's fault:
Mallaby offers a refreshing antidote to the Manichaean dual now playing out on the public stage, quite appropriately pointing out that neither side gets it right.
In one corner are the adherents of the Austrian and Chicago schools, monetarists like Michael Shedlock who point the finger at faulty monetary policy.
In the other corner are those who blame our economic train wreck on a failure to regulate. Barry Ritholtz is probably the leading blogger advocating this position.
(I was a little surprised to read the other day on Shedlock's blog that these two are good friends.)
Lost upon both of them is the point Mallaby makes. It's an issue Brad Setser often discusses on his blog.
But despite Mallaby's accurate assesment of the factual information--a far superior assesment than the ideologically blinkered ones offered by either Shedlock or Ritholtz--Mallaby then also falls victim to his own ideology. For if the United States was led before the guillotine of easy credit, it was certainly a willing victim. As Dialynas and Auerback pointed out:
Is the China as devil excuse open for Iceland to use? How about the UK? Maybe Spain can jump on board.
The UK.
Iceland won two naval wars already against the Royal Navy, Her Majesty invoked anti-terrorism laws against Icelandic banks and money transfers of all types (seen as a great insult), many Icelandic investments were in the UK.
The Chinese have a fascination with Iceland, a nation without people that still functions ! (300,000 does not count in their POV). State visits, etc.
Best Hopes for Scapegoats,
Alan
You need to ask where China got all this money. Did they just print it?
If not where did it come from? How did a relatively poor socialist state turn into a global export monster?
The answer?
American foreign direct investment. All the big American companies rushed to invest in China. Microsoft is there, Cummins is there, GM is there and makes and sells more cars in China than it sells in the US. You would be hard pressed to find a large US firm which does not have substantial investment in China.
Why did they invest in China? Two reasons.
1)They wanted to assure themselves of long term access to a future consumer market 10 times the size of the US. China was a virgin market. Hard to sell an American another TV when he already has three or four. But the Chinese need everything because they have next to nothing.
2) They wanted to use China as an export platform to supply the US and other markets. China offered low labour costs and low regulatory costs. So US firms closed factories in the US and moved the jobs to China. They built product in their US factories and shipped that product to the US. They profited and the Chinese were faced with a trade imbalance that was more than they could handle. How do you invest more in a country that is already undergoing a maximum rate of growth? So they ended up stashing the cash in the US. Now Mallaby makes nonsensical statements along the lines of: "China's cheap currency led it to run a massive trade surplus. The earnings from that surplus poured into the United States. The result was the mortgage bubble."
Cry me a river.
If this is the quality of US mainstream analysis then you Americans are well and truly f*#ked and really should consider relocating to Iceland.
QUOTE
Dreaded by competitors, the China price has become the lowest price possible, the hallmark of China's incredibly cheap, ubiquitous manufacturers. Financial Times editor Harney explores the hidden price tag for China's economic juggernaut. It's a familiar but engrossing tale of Dickensian industrialization. Chinese factory hands work endless hours for miserable wages in dusty, sweltering workshops, slowly succumbing to occupational ailments or suddenly losing a limb to a machine. Coal-fired power plants spew pollutants into nearly unbreathable air. Migrants from the countryside, harassed by China's hukou system of internal passports, form a readily exploitable labor pool with few legal protections. The system is fueled by Western investment and, Harney observes, hypocrisy. Retailers like Wal-Mart impose social responsibility codes on their Chinese suppliers, but refuse to pay the costs of raising labor standards; the result is a pervasive system of cheating through fake employment records and secret uninspected factories, to which Western companies turn a blind eye
END QUOTE
http://www.amazon.com/China-Price-Chinese-Competitive-Advantage/dp/15942...
And do not forget your local Walmart which made a niche out of displacing local enterprise and then offshoring all of its product sourcing to the lowest possible cost supplier. So you folks go around kicking your fellow Americans in the teeth but your next step is to beat up on the "uncivilized" Chinese.
Remember, Iceland has fish.
Blinder has a better analysis. And he does not mention China.
Blinder's analysis of how we got into this financial quagmire falls in the "fail to regulate"/Barry Ritholtz camp.
The first three "errors" he mentions--wild derivatives, sky-high leverage and a subprime surge--as well as the one you mention about the flight of production and jobs all fall under this rubric.
Blinder studiously avoids mentioning the problem with the current account deficit--the problem that Mallaby raises. How you believe that leaving out this important piece of the puzzle enhances Blinder's analysis is beyond me.
I too fall in the Ritholtz camp. I believe that clamping down on free trade with tarriffs and trade regulations and/or currency intervention plus more and better regulation of the financial sector would have prevented this problem. These are, however, all policies that those in the Austrian/libertarian camp eschew.
As to error 4--fiddling on foreclosures--I agree. However, I don't agree with Blinder's proposed solution. Blinder wants to interject taxpayer money into the process. I prefer letting the bankruptcy court write down the mortgages. In this way the banks take the haircut and not the American taxpayers.
Error 5 and 6--Letting Lehman fail and Tarp's detour--is pure partisan posturing. I don't think the Republicans, Democrats--nor do I for that matter--have a painless solution to the banking problem. Blinder favors the "bad bank" solution which is just putting a new spin on the government buying toxic waste from the banks at inflated prices. This amounts to a huge, no-strings-attached taxpayer gift to the banks; imposing no punishment, no penalty and no discipline upon the banks. Blinder has apparently never heard of moral hazard. What I favor is nationalization, or what's become known as "the Swedish solution," that would force the banks' management, stockholders and debt holders to share the pain along with the American taxpayers.
But let there be no doubt, there will be pain. Even though I disagree with the libertarians about how we arrived here, and how we might have avoided getting here, in this we do agree:
When I think of the US I am reminded of a comment someone once made on the key requisite for a successful career in Hollywood. Sincerity was deemed to be the essential quality; once you learned how to fake that you had it made.
Scratch the surface of the US and you find two Americas. There is the America that Airdale and others inhabit where community and integrity and character are essential aspects of life and there is the other America where once you learn to fake community, integrity and character you have it made. Learn to be a sociopath and you can go further in America than you can in any other society. I see no other way to explain Madoff, the obscene use of public funds to make multi-million dollar bank executive bonus payments, the degree to which the titans of American industry undertook actions which served to enhance their profits at the expense of their nation. Face it: there is no nation to be called America. There are vestigial traces of it around Airdale's place of residence but beyond that it does not exist.
The economic problems are severe and will have very negative effects. I do not wish to gainsay them. But they are symptoms of deeper flaws in the character of the people who live in the place some call America.
My own inclination is to assign the root cause to the fact that there now exist two classes of "persons." There are actual persons such as you and I, and there are "institutional persons" in the form of corporations. These institutional persons will arrange matters to suit their best interests regardless of the effect this may have on the well being of actual persons. Even worse, the "institutional person" is a form of collectivization which destroys individual freedom and mandates that participants surrender to the interests of the collective which is precisely the loss of freedom I understand Hayek to attempt to address.
But an institutional person always has an actual person behind it. A large institution is just leverage for human nature, whether caring or psychopathic.
Sociopathic leverage -- what an interesting concept!
Airdale is the one who pridefully boasted that people in his parts are paid minimum wage and "men" who wear facial jewelry are selected last from the work pool, if at all. Minimum wage has not kept pace with consumer prices, and he supports, executes or is complacent with prejudicial hiring practices. Airdale has the same "integrity" as a corporate executive but on a smaller scale: screw the little guy so the boss can make a bigger buck. If farmers would require hired hands to pass application tests and pay them $20 per hour, I am sure he could find some competent American workers and stop bitching about the knuckleheads. I knew an old orchard owner who complained about his workers in the same condescending tone while he was too cheap to pay them a decent wage. Greed drives the increasing disparity between income and earnings in America from the little boss to the big one.
Airdale can defend himself, I'm sure, but I can't help chiming in.
Facial jewelry: If you choose to make yourself unappealing and to make a statement, except people to make a statement back at you. In Boulder circa 2001 HR people used to joke that if you interviewed a candidate for a receptionist job and she didn't have facial piercings or obvious tattoos she'd demand stock options.
Minimum wage: Supply and demand is harsh, but that's the way things work. Wages are going to go down, and once it hits minimum wage it turns into "no job". Nobody's wages have kept up with price growth except the wealthiest -- that's a function of debt inflation coupled with higher energy cost.
Airdale is a "little guy". So are just about all of us. There is an overall lesser level of competence because laziness is tolerated in schools and life in general. Political correctness in schools has gutted the time spent on core subjects and the rest is increasingly "teaching to the test" rather than indoctrinating critical learning, logic, and reasoning skills.
No matter how much you get paid, you should do a superb job. That's how I was taught and I believe it. Plenty of people do this...and guess what, if you live that way, chances are very good you'll get paid MORE THAN MINIMUM WAGE before very long. There's long been a shortage at higher levels (probably fading now with the recession, though), and you don't get there by slacking and being barely-adequate.
I went to the site you linked; what is the calculation difference between U-6 and 'how the unemployment rate was calculated 80 years ago"? What other factors and/or different criteria were used then?
Unemployment in the 1930s was simply the "percentage of civilian labor force" who were unemployed. How they figured out what that percentage was I have no idea but the point is they counted everyone whether they were actively seeking employment or not. Hobos and beggers were counted as unemployed. They would not be counted today unless they had actively sought employment in the last four weeks. Also there would have to be some record of that attempt to find work or else you are not counted. There was no Department of Labor in those days and there certainly was no unemployment compensation.
Unemployment During the Depression
Ron Patterson
There is another issue here and that is the size of the illegal immigrant workforce in the US.
By some accounts a substantial portion of those working in the construction industry were undocumented immigrant workers. These individuals would not show up in the unemployment listings but the loss of the aggregate demand associated with these persons would have a negative effect on the overall economy. This would be true both for the US regions which had high utilization of undocumented immigrants and also for the countries of origin whose economies were bolstered by remittances from the US.
In the 1930's generally only one person worked in what we would call a regular job outside of the home, generally the man. When he lost his job, the family, which on average had at least two more children than today, was in deep doo doo, as there were no unemployment benefits. Today, the majority of families have both spouses working. When one loses a job, there is generally one child at home, and the non-working spouse collects unemployment for more than six months. Sure it is tough, but I do not think that you can compare to the 30's. In addition, food stamps, medicaid, rent subsidies, child care tax credits, earned income tax credits, income tax "rebate" checks, etc. simply did not exist.
Some Graphics Help Needed
Monday night I am attending a Barbeque at a private home in DC. I will be the Barbequee and 30 invited guests will grill me :-P Sarconol refreshments served.
As part of the presentation, I will invite the guests to do two thought experiments, Washington DC without DC Metro and Washington with 15 more Urban Rail lines.
I have a png map of the proposed lines, but I now realize that it shows too little detail and needs to be cropped (cutting off the ends of commuter rail). Limited graphics software with me in Baltimore and even more limited graphics knowledge.
My eMail is in my profile if anyone wants to help :-)
Best Hopes for the "Kindness of Strangers",
Alan
My proposed title for Alan's presentation: "A Desire Named Streetcars"
OUTSTANDING WT!!!!
The grillers are supposed to be a diverse set of energy policy wonks of very different types. Starts at 6 PM till 9 PM, or mid-night (depending).
My approach is to supply the diverse "building blocks" that I used to develop my concepts, (one block is DC without rail, DC as is (40+% commute by Metro) and DC with much more rail) and then how I brought together these building blocks together to a unified program that keeps the USA from becoming a 3rd World nation (see Argentina), cuts CO2 by -38% by 2030, oil consumption by -22% by 2030.
I think this approach (engage them on the building blocks, and then lead them into my conclusions, let them "retrace my steps") is the best way to handle policy wonks. I may well learn something as well in their in depth analysis/debate/grilling.
Title: Building Blocks to an Optimum Economic, Environmental, Energy and National Security Policy
Best Hopes for Medium Rare,
Alan
I am making some very strong claims !
This does not compute! I would think rail displaces oil (gas & diesel transporation), but not non oil CO2 emissions. So I would expect a much larger effect of oil, as on CO2. Am I missing something?
Also, I would avoid the double negatives. "cuts" implies a reduction. So a cut of 38% means a reduction, a cut of minus 38% means an increase. [Yeah us darned people trained in physics are really picky about this stuff]
Sounds like an interesting crowd you are running with. Feel free to ask for advice and opinions.
Measured against BAU, a combination of a push for renewable energy and Non-Oil Transportation (biking and walking increased modal share as well as Urban rail and inter-city rail).
Paper @
http://www.millenniuminstitute.net/
ATM, my eMail account is "acting up". WiFi that I bought service from in Baltimore is apparently over loaded. TOD appears to accept missing frames, (with degraded service) but not my eMail account :-(
Wait and try again later.
Alan
OK. So the source of the confusion was that rail was only a small part of a more diverse package containing a lot of non transportation changes.
Very witty. I like it... (Mind if I appropriate it? You will get credit whenever I use it of course.)
If you haven't yet been inundated with volunteers, I might be able to help. I've used Corel Photo-Paint to edit some graphics. My e-mail address is in my profile.
E. Swanson
Tweak Gardening....
Perhaps plants grow differently in FL , but the first nutrient deficiency is off. Nitrogen shows up as yellowing on the lower leaves, as it is mobile within the plant. Tip die back is usually Ca, B, or salt burn.
I did not read the whole article but given the major mistake on N I would not recommend it.
The link below provides better diagnostics. Leads off with Ca, N, then Mg( Magnesium - best source is Epsom Salts - Magnesium sulfate.) Plants respond well to sulfur, and iron -Fe the two important secondary nutrients in chlorophyll production (the dark green color you see).
Use this instead...
http://gardening.about.com/od/gardenproblems/a/NutrientDeficie.htm
best,
D
Peak Oil Delayed:
Could some one explain how to delay a past event?
If this is possible perhaps we can delay the new year.
Most people outside of TOD do not believe in peak oil, and if they do think that it is 20 years in the future. They have all been brain washed by the mainstream media, oil companies, the government, Yergin, etc..... They will not believe until the pumps run dry!!!
if you didn't notice, that article was a spoof.
Thanks: Perhaps I should read it.
"They will not believe until the pumps run dry!!!"
That will actually be a century or more because Peak Oil doesn't mean all the oil is gone, only that less and less is being produced, what is known as the long tail effect. The pumps won't run dry for decades.
As an example, Alberta conventional oil production peaked in 1976, plateaued for a while as superstraws were applied, and then fell off a cliff in the late 1990s. Today Alberta only produces one-third as much conventional oil despite three times as many wells. (Raw data is available at www.capp.ca) The sole reason our total production has increased is because of the oilsands.
I have royalty income on stripper wells that only produce a few hundred barrels per month. Those wells, first drilled in 1953, used to produce hundreds per day. They are still economical because the infrastructure has long since been paid for and servicing costs are minimal. That is why Alberta has so many wells producing small amounts, and which will continue to produce on the long tail of Peak Oil for decades to come.
My royalty income has stayed roughly level despite the slowly declining production of the stripper wells because the rising price of oil compensates for the declining production. Those who sell their mineral rights overlook this provision and only think of the declining production, and so decide to bail out while they have the chance. If you have a chance to buy mineral rights on small but producing wells, then take it. The royalties will give you a small but steady stream of income for decades because the pumps will not run dry in our lifetime.
One of the prospects I am about to drill is, for our part of the country, an elephant. It's modeled on a shelf-slope sandstone field which produced about 15 mb at a depth of about 3,000', and produced commercial quantities of oil for 50 years (of course, globally this really didn't approach rounding error status, a few hours of global consumption). We are drilling on an untested surface structure in a region where there is one dry hole in an area of 6,000 acres.
In any case, one of the exercises I have done is to generate net cash flow models based on long life fields with stable to slowly declining production, versus various post-peak (and especially post-peak export) oil price scenarios. As I have previously noted, an average annual oil price of $50 in 2009 would mean an overall 11 year rate of increase in oil prices of +12%/year--within in an actual and projected range from +45%/year (2000) to
-69%/year (2009).
WT,
Are you a public or private oil?
Small private joint venture group.
BTW, you might be interested in a little study I did. My premise is that most of the fields in West Central Texas that can be found with seismic have been found, especially since we generally have a thick and occasionally cavernous Cretaceous carbonate sequence at the surface and near-surface. Mostly what I am looking for are subtle traps--stratigraphic traps and a pinchouts on a structural nose. The most popular approach is to drill updip to a show well, but I have found that my biggest discoveries have come on prospects where I could not directly tie a preexisting (known) show well to the resulting discovery, which makes sense when one considers how many generations of geologists have worked mature plays.
In any case, my theory is that the majority of remaining one million barrel and larger undiscovered fields in mature Lower 48 plays do have not reported show wells adjoining the undiscovered fields. An associate of my funded a fairly recent new field discovery which had peak production of over 1,000 bpd, from an area of 400 acres. There was a dry hole (drilled in the Fifties), right at what turned out to be the OWC--no reported DST, but the operator did run a DST. He didn't report it, planning to get back to the prospect some day. He never did. If the DST had been reported, someone probably would have found the field years ago.
WT,
IMO private oils have a great advantage over the publics. All you need do is make a profit. The public have been driven by y-o-y reserve increases for so long many have forgotten about just making money.
I understand exactly what you're trying to do. I've screened deals for many folks who don't think a prospect is worth drilling unless there is seis control (especially if there's no amplitude anomaly). We both know that's not true. But we're often stuck with the "Golden Rule". My grad professor (Dr. Berg...Texas A&M) was big on the subtle trap. I work more on the development/reservoir engineering side of the fence far away from you crazy wildcatters. I was just getting ready to start pitching a horizontal redevelopment plays in some old coastal water drive oil reservoirs when the slump kicked in. I've shelved it till next summer. Hopefully by then folks will have changed their underwear and be ready again to look at oil deals.
I did not mean that all the pumps will run dry.
Some of them will run dry as less and less is produced.
Everyone will not run out at the same time.
Since we use more in the US and depend on others for imports,
we will run out first, and it will not be decades.
It will be about 10 years from now.
At that point, imports will be much less than today, and US production will only be 3 mbpd.
So, if we have 20 mbpd now (15 mbpd imports), then 75% of pumps will be dry in the US at that point.
It is not decades away.
dip,
Perhaps some are holding a view that I've been warming to: a plateau (perhaps with a long term downward slope) with periodic peaks and lows. A series of temporary PO's if you like. These aren't so much PO peaks as they are moments in time when demand destruction (as we are currently seeing) mitigates the negative effects of PO. Of course, when the economy rebounds those negative effects may come crashing in quicker then ever. This could then lead to another recession (and another round of demand destruction) leading to another period when many will think PO has once again disappeared.
We’ll likely keep having confusion between the technical definition of PO and the various economic conditions we’ll be roller coasting thru IMO.
Reuters (no link)
Here ya go:
Iceland commerce minister quits
Thank you, oh media maven of all things energy, environment, and finance....;-)
I'm looking for some help from this great community to help spread the word. I live in a city of 130,000 people in Ontario (Canada) and the city's planning department, long-range development plan, etc., are not taking into account the approaching peak oil/gas situation. Peak oil and gas is not on the radar of city council at all. So, I did some poking around and it looks like I've talked myself into a job to make a 30 min presentation on the subject to city council. I want to present the facts leading to a discussion on the probable risks of economic shock due to rapidly rising costs for oil and gas, including the possibility of physical shortages, and over what time frame this is likely to happen. My aim is to encourage council to put this to a committee for in-depth study leading to recommendataions for things such as revisions to the official development plan, new guidance for the city planning department, formulation of community contingency plans, etc.
What resources do you people recommend I consult in piecing together a 30 min PPT presentation on the world oil and North American gas outlook (Canadian in particular) over the near (5-10 years) and long terms (25 years)?
One question I am anticipating is "Why aren't we being told this by senior levels of government and industry? How do you know things these people apparently do not?" If my response is, "well, see, I read this stuff on the Internet...", you can imagine the credibility hit I could take in the eyes of non-experts. I'm just a "nobody" in the community, and not a professional in the oil/gas business either. I'm sure people will be suspicious of someone without official standing claiming "the sky is falling." Rest assured I'll present the material in a tone to minimize any chance of me being seen as one indulging too much in alarmist fantasy. But, despite best efforts, I can imagine my talk being seen this way by some. What would be the best response to this question? Any ideas?
My approach to such dicussions that might challenge a part of someone's belief system is to not challenge directly, as the reaction is often one of defence leading to countervailing rationalizations. Instead, I offer information in as clear and logical manner as possible and *guide* the person in a direction toward the conclusion, but let that person make the final step so the conclusion is theirs, not mine!
I'll be happy share all what happens in this little project for which I have volunteered myself.
Try the Canadian Association of Petroleum Producers Website at:
http://membernet.capp.ca/
Projections of oil are at:
http://membernet.capp.ca/raw.asp?x=1&e=PDF&dt=NTV&dn=145042
This should be a reasonably authoritative site for Canadian oil.
I look forward to seeing some recommendations as well. I am not hopeful TPTB here will ever acknowledge either peak oil or climate change, and I have been trying to sensitize our town of 22,000 in eastern Ontario through other means for the past two years. I organized a climate action group two years ago, and it has expanded the scope of its monthly public presentations to include peak oil. In April 2008, I donated a copy of The Post-Carbon Cities Guidebook (http://postcarboncities.net/guidebook) to the city in a one-on-one meeting with our mayor, and donated copies of that plus The Transition Handbook to our local library. This year, council has tried to minimize its legal obligation under the federal gas tax transfer program to undertake an "Integrated Community Sustainability Plan", even though it's not obliged to have a separate plan (AMO negotiated an exception for Ontario communites) but can append it as part its Official Plan, also underway in our community here. There has been one public meeting undertaken to develop a "community vision", and I expect no further council-driven discussion. I have also made presentations to our local food bank and mental health office, and will be meeting with our Health Unit nutritionist next month to discuss food security. My approach through all of this is to stress that there are mitigative steps that we can take to reduce the impacts on all of us.
I usually point out that Peaks Happen, even in areas developed by private companies, using the best available technology, with virtually no restrictions on drilling, such as Texas & the North Sea:
http://www.theoildrum.com/files/TexasAndNorthSea.png
Of course, in neither case did we stop finding new fields in 1972 and 1999 respectively. What we could not do is fully offset the declines from the older and larger fields. And BTW, Hubbert found, in 1956, that a one-third increase in projected URR for the Lower 48 only postponed the projected peak by five years, from 1966 to 1971.
Note that world crude production, from 2005 to 2008, looks a lot like the North Sea from 1999 to 2002. Based on the HL models, the world in 2005 was at about the same stage of conventional crude depletion that the North Sea was at in 1999.
I think the keys to making the case to "non-believers" are:
1. Show the discovery peaks.
2. Show the Lower 48 and US production graphs.
You might want to look at Matt Simmons site, he has PPT presentations up there that he gives. This could give you some idea as to layout:
http://www.simmonsco-intl.com/research.aspx?Type=msspeeches
Good luck Steve. An honorable but daunting task. Why aren't TPTB talking about the potential problem? I'd would reverse the question: The community should ask TPTB that very question. Why are TPTB hiding the facts from the people? Forget the Internet reference for sure. Simply: there are numerous studies and reports that point out the potential problems from PO. You will also be hit right between the eyes about the latest price drop just like the global warming folks get hit when a big blizzard blows in. Simple: the system is volatile. Short term highs and lows don’t change the long term trend.
I suspect you already know to avoid using numbers as much as possible. We throw numbers around TOD all day and we get the context. To the uninitiated I suspect you’ll loose them the instant you offer a number they can’t immediately absorb.
Good luck again. You’re a better man then I Gunga Din.
I think I can handle the latest price drop issue by discussing why price volatility is to be expected once oil producers lose the ability to manage the market through loss of spare capacity. Inelasticity of demand coupled with inability of supply to respond means huge price swings to maintain supply/demand balance. I can also show a graph of historical 5-year forward oil price, and show where Saudi lost control of the market. This would all turn the latest gyrations in price, including the latest drop due to collapsing demand, into *validation* of the peak oil scenario.
With regard to TPTB, I suppose I can simply say that getting us to switch away from oil in a big way threatens too many powerful interests vested in the current petroleum-centric economic order, so they'll be the last ones to raise the alarm. Is Exxon going to tell us they will be going out of business - not a good way to strengthen remaining revenue? Perhaps remind people of the connections to big oil in former the Bush administration...
Steve
A very useful resource is David Hughes. He used to work for the Geological Survey of Canada but I think he has retired. He is still very active in the dissemination of knowledge regarding Peak Oil and I think has an excellent grasp of the issues from a Canadian perspective. He is quite approachable and helpful. I think his email is dhughes@nrcan.gc.ca but it might have changed. I am working from home this morning and will check my contact list at work tomorrow and if the address is different, will let you know.
There also is an interesting 'episode' regarding CAnada and Peak Oil that is written by Rick Munroe,who represents the National Farmers Union for Canada that I think illustrates our government's attitude. It was published in the 21 Feb 2008 by Energy Bulletin and is called What is Canada doing about peak oil?
Good luck on your efforts. I have been trying to do the same, but with the medical community, mainly here in Alberta, and while the general concept seems to be grasped, nothing much seems to come of it in terms of planning, action, etc. My own inquiries with the government regarding peak oil were quite disappointing in that they didn't seem to be too concerned.
Don
Checked his email address. As of Feb 2008 it was dave hughes
Just in case you want to contact him.
Don
Thanks I'll send him a note for advice / pointers to resources.
The US Department of Energy commissioned a report on mitigating peak oil. The report is known as the Hirsch report after its author. A Wikipedia overview is here --->
http://en.wikipedia.org/wiki/Hirsch_report
The Wikipedia entry also provides links to the full report as well as an executive summary.
Steve,
The Energy Export Databrowser is designed precisely for folks like you. It allows you to graphically peruse the BP Statistical Review dataset and create charts that are ready to include in your presentation. Seeing is believing and the charts in the databrowser allow you to tell the story as you see fit.
Let me know if there are any special charts you might want that you cannot generate with the Databrowser. If they're based on the BP data I might be able to create something extra for you.
-- Jon
I've found that AJM Petroleum Consultants from Calgary (www.ajmpetroleumconsultants.com) do not use rose coloured glasses. They have very good powerpoints on their site (go to "our perspective" and then "presentations"). Dave Russem's in particular, are great. Good luck. I've tried the same here in Red Deer, but didn't even get as far as you have.
Hi Steve,
There are some excellent Canadian resources on peak oil and peak natural gas. First, track down David Hughes, formerly of the Canadian Geological Survey. Here is an interview with him where he lays out the Canadian situation very clearly:
http://globalpublicmedia.com/transcripts/827
He was Geological Survey. The Govt is trying to tell people this is happening. Why aren't people listening?
Also, here are the long term Canadian projections for natural gas production. They show a past peak (but shallow decline).
http://www.neb.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/ntrlgs/ntrlgs-eng.html
I really recommend using this chart from the 2007-2009 Short Term Outlook. It shows how drilling costs have more than tripled in a decade. The nice thing about approaching this as a rising cost issue is that it is easy for people to accept that if drilling prices keep rising that the total market that can afford gas will shrink. There are many examples of how high oil prices helped drive economies into recessions.
The report explains that the reason for the tripling is that wells are getting deeper and well productivity is falling. The 2007-2009 report appendix has graphs showing that production was expected to peak and decline, even with high prices. So again, the Canadian Govt is saying peak is real, it is now (or past tense for Canadian NG). You are blessed. Your govt still has some integrity.
For oil, my favorite chart is this one by Euan about the North Sea. It shows very clearly how small oil fields cannot make up for declines in large oil fields and will again lead to higher and higher prices.
http://www.theoildrum.com/story/2006/11/19/135819/75
For an abstract model of peak oil production that is easy to understand visually (no numbers) grab a graph from http://www.hubbertpeak.com/bentley/depletionOverview.pdf article page 204 (clipped from a much larger text).
Or use the one from the Energy Watch Group Oil Report.
That should be enough to get them started thinking about the fact that peak oil is real. Their own Energy Board is saying they are past peak in NG.
Good Luck!
Thanks! Some great ideas there.
Thank you all for your input. I'll post an update once I got all this figured out (it might be a while!).
Obama trying to add regulations to financial institutions to correct errant procedures:
http://www.cnbc.com/id/28840328
Amig@s,
The EIA just released data on US electricity consumption in October and November, and the data show a big drop in US greenhouse gas emissions for 2008. See details at:
www.setenergy.org
Onwards to sustainability,
Dennis
Inviting Disaster? - China complains about Obama Administration
German Magazine “Der Spiegel” is partnering with CNN, but I was unable to find related information on the CNN site. According to this article referring to the Chinese news agency Xinhua, the Chinese central bank is miffed about Timothy Geithner accusing China of manipulating its currency in order to support exports. “The accusations have caused immediate irritation in China and official media are seeing a clear turn away from the policies of the old administration” the article states.
Buffett says in NBC interview that US is in 'economic Pearl Harbor'
Hence he doesn’t mention an aggressor. Could the Dollar be the “pacific fleet” anchoring in the believed safe haven of Pearl Harbor?
This article in the Asia Times send some shivers down my spine this morning…
And here is what really scares me in this article…
Let’s hold the fingers crossed that the world keeps on “deeming this bill worth $ 100” or otherwise our economists may have a problem explaining their ponzi scheme of perpetual growth and how to pay for it without manufacturing.
Take “growth” out of the options! - Tom
Denninger talks a little about this:
He also lays out our choices on the bailout, and what their costs will be, to the economy and to the taxpayers. Obama and Geithner are talking a good game, about how there has to be more accountability, etc. But they're behind the bailout as it exists. And they're complaining about it?
You are exactly right, Leanan. Denninger’s approach is that you cannot defy the laws of mathematics by your own rulemaking. I am surprised that he is not mentioning PO, as IMO limits to growth of resources and energy are setting the limits to growth of earth-bound economies. This is what Chris Martenson’s Crash Course points out in a very clear manner.
I believe it will be important for President Obama to take a view from the “other side of the world” at our problems: In other words, if I go to see my bankers in order to ask them for another loan on top of those that I got already problems with in figuring how to pay them back, what will be the better way?
A. Bring along a bottle of “Veuve Cliquot” together with a business plan proving savings and values.
B. Kick his ass and tell him how I hate banks for all the mess they got me into by giving me all that credit and than, try to teach him his business.
Hmmm - Mr. Geithner may be in a more delicate position than he believes to be or is he trying to kick off the economic Pearl Harbor that Buffet has mentioned??
Careful!!
Just because you agree with Denninger on the financial crisis, doesn't mean he agrees with you on any other subject (peak oil, AGW, environmental laws).
http://market-ticker.denninger.net/archives/2008/05/25.html
Scroll a little over half way down to get his views, or search the page for "peak oil".
Thanks for that Bitter.
It surprises me that he hasn't done his homework, but rather falls back on basic market theories. He of all people should easily grasp the EROEOI model. Further, he is an exponential function messiah so to avoid or ignore the bigger picture built on the basic tenets he espouses is more than a little odd.
Lately, Denninger has made vague references about dwindling resources so perhaps he is more aware now.
He strikes me as one that doesn't take criticism well, or admit to mistakes so he may never acknowledge PO.
Bob aka GrumpyOldCoot
You are welcome, and I agree.
Which of course doesn't mean he is wrong on the financial stuff (or right).
Consider also the amount of time and energy it takes to create and maintain a web site on any subject matter. You have to have a pretty intense personality to keep something like tickerforum or the oildrum going. The personal energy requirement is enormous. Add into that equation the sycophants and detractors snapping at your heals, and your personality is likely to "evolution".
You're right. I should maybe cut him some slack. Personally, my econ is not strong enough to seriously challenge him, and what he says seems to make a lot more sense that anything Greenspan et al spew out.
I confess to being a little testy myself when I see someone posting absolute rubbish.
Cheers
I sent links of Nate's gpm interviews to Denninger and he replied that he hasn't got enough time to listen.
But he has enough time to rant just about every other day about the same things all over again.
Whatever. Overinflated ego produces interesting phenomena.
Beemer, good for you!
We may be time constrained but we should not be so constrained as to not at least look at new data or opinions. Otherwise, our thesis is inherently flawed or at least limited. "New" data may screw up your thesis, but it is better to retrench than be on record for being wrong. Knowledge is dynamic.
I have sent a couple of messages to him and have not even received the courtesy of an acknowledgment, not that he is is obliged to do so. Thank you for yanking me back to at least a mid point. I suspect that he subscribes to the theory that:
"When all you have is a hammer, everything looks like a nail"
(his) Economics is a descriptor for a small part of a given system, not an absolute and a system model is a descriptor of perceived reality, not reality itself. Reality will do whatever it will do, regardless of how we powerful humans choose to define it.
IOW, mathematics does not define us, it is just a way of following the plot when we don't know the outcome.
I am not religious, but the phrase "Man proposes but God disposes" seems appropriate.
Cheers
Take our $1 paper and give us $99 in change.
Do as we say not as we do.
We are above international law. We do as we want.
We reserve the right to attack anyone at any time for any reason at all.
Shut up and do as you're told.
If your government is not pliant enough and does not comply with our demands then we will replace it by one of our choosing.
Our way of life is non-negotiable.
How much longer do you think any reasonable person will put up with this?
Do you honestly expect "furreners" to fund it?
And you claim to be shocked?
Real estate was supposed to be a hedge against inflation ... the stock market was supposed to rise over the long term. What happened to NASDAQ? NASDAQ is at similar levels to what it was 12 years ago. It may triple in value and not surpass its 2000 Y2K high. Tech bubble, real estate bubble, commodities bubble, employment bubble. The hobos are the Spanish day laborers standing in front of the convenience stores all day long. Twelve to a two bedroom house in the Great Depression? There are yards full of cars of extended families who moved north to the Estados Unidos. More trabajadores are on the way. No hay trabajos aquí. Porqué está venido??
Re: Gone with the wind: Pickens Plan and Obama's Vilsack appointment up top.
As I have pointed out before Pickens is becoming more and more disconnected from reality. He has lost billions in oil and has committed to massive wind energy without the financing in place.
Now he thinks he can recover from the mistakes he has made. News flash: Boone Pickens is 80 years old and he doesn't have the time left to recover. I'm 66. When people get to be our ages, some can face reality and some can't. Pickens is one that can't. He thinks life goes on like the past and we do not lose our mental and physical abilities. It will bring him down if he doesn't get real.
I'm losing more and more respect for Stanford University and it's so called "science". Since when is anti ethanol a liberal policy? Obama is unquestionably liberal and been openly pro ethanol from the beginning. He is President now because of it IMO.
The article states that corn ethanol raises food prices. If it does it is by a small amount. Where's the science in that? Corn prices have recently fallen but food prices remain high. Science is suppose to look logically at evidence and not adhere to predetermined ideological positions.
Obama's position "switching" is nothing more than pablum to placate the anti corn ethanol jihad crowd. Cellulosic ethanol is a pipe dream that will not amount to much because of the bulky nature of cellulose. One estimate locally is that a semi truck load of corn cobs would have to arrive every 8 minutes around the clock to keep one of the local ethanol plants running. Fat chance of that. People fail to realize the concentration of energy and ease of harvesting and handling that goes with corn. The farm combines and bins and facilities are all in place. If switch grass is to be the new feed stock, all the current infrastructure has to be replaced or rebuilt wherever switch grass is. It ain't going to happen.
Chu will not be entrusted with the most important energy decisions of the Obama Administration. If he really said that ethanol is "a good idea for corn farmers, because they get subsidized, but not a good deal for the world" it shows that he is incompetent politically no matter his Nobel Prize. Chu is U.S. energy secretary not world energy czar. Obama is President of the United States not President of the World. I think Obama knows this.
Vilsack is the real energy power not Chu. Chu is a political novice.
He does not understand that subsidies to farmers are reduced by high corn prices. He does not understand that the main beneficiaries of ethanol subsidies are the blenders, not farmers. He does not understand that oil is heavily subsidized. He does not understand that sending money to foreign countries for oil is one of the factors in our current economic predicament.
Obama will listen to all sides of the argument no doubt. That is why Chu is there. But it is he as President that makes the big decisions about energy not Chu or Vilsack. I believe he will back Vilsack if he wants a second term.
If you can figure out how to make ethanol out of it I have the perfect feedstock "dog hair". I seem to have an infinite supply of the stuff.
I could challenge you on that. Cat hair! I contest that, pound for pound, cats have a higher HROFI (Hair returned on food ingested)
I have been meaning to talk to Hawking about this.
I believe that clothes dryers are connected to the universe at a quantum level. Socks, for some reason are able to pass, (in one direction only) into an adjacent dimension and then emerge as cat and dog hair. The system does have some leakage and anomalies though; cat and dog hair does appear in dryers and I have seen portions of socks emerge from the inside of some dogs.
I see no other explanation :-)
Cheers
Is this where all the TARP funds are ending up? My pension too?
Can we perhaps run the galactic dryers in reverse and recover some of these funds? Or do we just get dog food back?
Sadly, no. AFAIK it only works in the physical realm. Most of these funds (and more to come) are 180 degrees out of phase with reality, so never really existed in the first place, except in our minds. If we were able to reverse the dryers, I suspect that all we would get back is socks, and your dog might go bald.
;-)
Cheers,
I agree with aspects of the Pickens Plan. If he can't get financing now then we're screwed if people suddenly think it is a good idea five years from now. $40 oil has taken away the urgency. It's the fish head inside the lobster trap. Like the lobster we go deeper into the trap but find we can't back out.
Everybody including the automakers seems to think EVs, PHEVs and petrol hybrids will take over. I think they're wrong and cheap NGVs with not so many airbags and sound systems will be what people want. Here's a thought: if auto makers can see so well into the future how come they need bailouts?
Maybe this got posted already but I hadn't seen it. The Man who Made Too Much.....A short-trading hedge fund who agreed with Mish, Denniger, and the TAE crew, but actually made a few billion it:
I have a question that someone here might know the answer to:
What is the EROEI of a slice of bread (bought in a plastic bag at a supermarket) ???
I know it would vary greatly by location, type of bread, season.....but just roughly, does anyone know???
I'm trying to explain oil depletion to some people I know and I've been saying that the packaging and transport and fertilizer energy costs of the bread are much higher than the caloric energy delivered to the eater.
But how much higher? I think Richard Heinberg had this number in his book The Party's Over but I stupidly gave my copy away a few years ago.
The figure I always hear quoted is 0.1 (i.e. there are 10 calories of fossil fuel energy in one calorie of grain). But I don't have a reference handy. If I had to guess, I would say I got it from "Omnivore's Dilemma" or "Out of Oil". Maybe "Long Emergency".
The figure for grain to beef I believe is 7:1, so the EROEI of a hamburger would be 0.0143.
Nah, I don't think so. I takes maybe 3 gallons of diesel to raise 40 bushels of wheat. If you converted the "starch" of the wheat into ethanol you would get about 110 gallons.
Not much fuel involved in shipping the grain. I guess delivering the "loaves" of bread eats into it pretty good. Ah, I can't get interested. Never mind.
It's not possible to spend 3 gal. of diesel to get 110 gal of ethanol, as you 'hiddenly' imply .... you conceal the truth or wrap it up in rubbish ... Btw, how is the ethanol-mob doing these days, kdolliso ?
You are full of false statements deliberately presented as being true.
You are full of this falsehood, kdolliso!
Ethanol is a dead end.
A movement coming out of Colombia is urging "give the planet a rest" by turning off all your lights/appliances for 10 minutes this coming Wednesday, 28 January. Here in Pacific Time zone that would be 17:50-18:00, New York 20:50-21:00, etc. A symbolic act, to be sure, but one that has the potential to change people's attitudes if not behavior in perhaps measurable ways. Please forward.
An environmental sabbath?
Hmmm....it'd be funny if the off-on toggle caused surges that knocked down the grid and started the "great blackout". I wonder how tolerant the system is to synchronized nationwide pulses?
I would reply to your comment Paleo buy you've luckily caught me during my annual 10 minute SBASA* event.
*SBASA = Stop being a smart ass
Hello to any Texan-TODers,
ATTN: Rockman, F_F, Elwoodelmore, WT, JoulesBurn, and other TOD experts
I hope some SPE members can attend, then report back on TOD about Aramco's POWERS-II next-gen supersim for Ghawar. Recall that I posted a glimpse of this about 2-3 months ago.
http://www.spe.org/events/rss/agenda.html
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Society of Petroleum Engineers
Reservoir Simulation Symposium
The Woodlands, Texas
Waterway Marriott Hotel & Convention Center
Monday, 02 February, '09
11:30 SPE#119272 A Next-Generation Parallel Reservoir Simulator for Giant Reservoirs
A.H. Dogru, L.S. Fung, U. Middya, T. Alshaalan, J.A. Pita, K. HemanthKumar, H.J. Su, J. Tan, H. Hoy, W. Dreiman, W. Hahn, R. Al-Harbi, A. Al-Youbi, N.M. Al-Zamel, M. Mezghani, T. Al-Mani, Saudi Aramco
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It sure would be nice to see if we could get some next-gen graphics to see if this roughly matches the earlier computer sim that Stuart Staniford did. Even better if it reveals even more detail.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
About Obamas "opportunity" to repeal the repeal on the ban on off-shore drilling: The American creed seems to be "no, we can't". Such as
"No, we can't extract off-shore oil in an environmentally friendly way, the way Norwegians do."
"No, we can't build nuclear reactors on time and on budget, as the french, chinese and japanese do."
"No, we can't double the price of gasoline by taxes, as the Europeans do. Instead we must pay as just as much they do at the pump due to half the fuel efficiency."
and so on. The only ability Americans seems to be confident in, is that of their armed forces.