DrumBeat: January 26, 2009

Facing the Oil Problem: A call for an energy policy that would spark outside-the-box basic research, end dependence on foreign oil, and reduce death and destruction on the nation's highways.

U.S. government agencies have recently come around to the view that conventional oil supplies are likely to peak worldwide sooner rather than later. Although U.S. supplies peaked as far back as 1970, the government has long denied concern about the availability of oil to fuel future world growth. But Hard Truths, a 2007 report issued by the U.S. National Petroleum Council, an advisory group to the Department of Energy, included assessments from both the U.S. Government Accounting Office and the U.S. National Energy Technology Laboratory regarding the likelihood that world oil is peaking. Both Hard Truths and the 2008 International Energy Agency study World Energy Outlook include data and graphical evidence of the global peaking of conventional oil, especially in non-OPEC areas. Outside OPEC, oil fields everywhere are in decline. Even the huge Ghawar field in Saudi Arabia may have reached its peak rate of output of easy oil. Meanwhile, pushed by high economic growth rates in China, India, Brazil, and elsewhere in the Third World, demand continues to rise.

Peak oil? Global warming? No, it's 'Boomsday!'

Yes, population is the core problem that, unless confronted and dealt with, will render all solutions to all other problems irrelevant. Population is the one variable in an economic equation that impacts, aggravates, irritates and accelerates all other problems.

Supply-driven oil production will mean continued high prices

It looks, then, as if the extreme prices of last summer were a result of a peak in credit, not oil production, and that market pricing mechanisms have temporarily restored market equilibrium. Some oil is now being conserved underground for future use, allowing more time for the development of alternative transport technologies.

That, at least, is a conventional view. “The theory that we will hit a brick wall of declining oil production is grossly exaggerated,” says Jeremy Nicholson, director of the Energy Intensive Users Group, a consortium of large manufacturers. He is sceptical of the predictions of ‘peak oil’ theorists and believes that, in future, more investment in unconventional oil sources such as oil sands, along with investment in other energy sources, will cushion the problems created by the decline.

...Peak oil experts, on the other hand, state that the potential of relatively easily accessible resources is declining, that most oil fields are past their peak and that 97% of the globe has been explored for oil. To dismiss their arguments would be illogical; hydrocarbons are not renewable, therefore their exploitation will peak if the world economy continues to desire oil. That fact is demonstrated by the Oil Market Consultancy Service’s Dr Mahmoud Salameh, who has aggregated figures from various sources.

It is not a bomb!

I have gone to this length to demonstrate that the global economy is on its knees today not primarily because of the collapse of the financial system but because of the energy crisis-Peak Oil, the inability of the petroleum producers to meet the growing demand for energy, particularly from the emerging economies.

For the global economy to recover the world has to either address the basic problem of supplying energy to its traditional economies, using alternative sources of energy, or change its perception of economic development.

Sources: Clinton to name climate change envoy

WASHINGTON – Secretary of State Hillary Rodham Clinton on Monday will appoint a special envoy for climate change as the Obama administration moves to restore America's credentials in environmental policy, U.S. officials familiar with the decision said.

Clinton will name Todd Stern, a former White House assistant who was the chief U.S. negotiator at the Kyoto Protocol talks in her husband's administration, to the post, the U.S. officials said. The officials spoke on condition of anonymity ahead of a planned midday State Department ceremony where Clinton will announce the appointment.

Petrobras Reserves May Double With 3 Offshore Fields

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, will probably more than double its reserves when it declares three offshore oil discoveries commercial in the next three years.

Tupi, a 5 billion- to 8 billion-barrel field that’s the largest discovery in the Americas since 1976, along with the Iara and Parque das Baleias finds, may together hold about 14 billion barrels of oil, company officials said today on a Webcast. Iara has 3 billion to 4 billion barrels, while Parque das Baleias holds 1.5 billion to 2 billion barrels.

Anger at priest kidnap in Nigeria

The Roman Catholic Church in Nigeria has condemned the kidnapping of a missionary in the oil-producing south.

The Archbishop of Abuja, Most Rev John Onaiyekan, head of the Christian Association of Nigeria, said the kidnappers had made a "grave mistake".

GM to lay off 2,000 workers, cut production

DETROIT – General Motors Corp. said Monday it will cut 2,000 jobs at plants in Michigan and Ohio, and it will halt production for several weeks at nine U.S. plants over the next six months due to slow sales.

Chu's Green Energy Agenda

As head of Obama's Energy Dept., physicist Steven Chu intends to draw on smart ideas from America's green innovators and entrepreneurs.

Europe pins hope on Nabucco pipeline to end dependency on Russia - but project faces hurdles

BUDAPEST, Hungary (AP) — Beyond cloaking parts of Europe in winter's icy grip, the two-week cutoff of Russian gas to Europe has exposed another chilling threat — Russia's strategic energy clout and the West's limited options.

That is adding urgency to Tuesday's summit of European leaders and non-Russian gas suppliers meant to kickstart construction of the European and U.S.-backed Nabucco pipeline and lock in non-Russian sources of gas to pump through it to Europe.

Ultimately, pipeline backers' choices may be limited to a difficult one: between Russia and Iran.

Citigroup Crude Storage Tanker Leaves Orkney for U.S. Gulf

(Bloomberg) -- An oil tanker hired by Citigroup Inc.’s Phibro LLC to store crude off Scotland’s Orkney Islands left for the U.S. Gulf, a port official said.

The 1-million barrel Ice Transporter left Scapa Flow late Jan. 23, Captain William Sclater, operations manager at the port, said today. The vessel is headed for the U.S. Gulf, according to Sclater. Jeffrey French, a Citigroup spokesman, declined to comment.

Petrobras to Cut Costs to Free Funds, Limit Debt Rise

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, will seek to cut costs by as much as $4 billion annually to prevent debt from swelling after the company announced a $174.4 billion five-year investment plan.

Reducing costs by that amount in the next two years will be a “big challenge,” Chief Financial Officer Almir Barbassa said today at an event in Rio de Janeiro. Petrobras will seek to keep its investment-grade debt rating after plans to spend 56 percent more than the previous five-year plan through 2012.

Obama to let states set auto emission rules

WASHINGTON (CNN) -- President Obama signed an executive order Monday requiring the Environmental Protection Agency to reconsider an application by California to set more stringent auto emissions and fuel efficiency standards than required by federal law.

If the EPA grants a waiver allowing California to set its own emissions standards, the nation's largest state will be allowed to require automakers to produce trucks and cars that get better mileage than what is required under the current national standard.

Thirteen other states could take similar action.

"It will be the policy of my administration to reverse our dependence on foreign oil," Obama said.

Obama and emissions: Right vs. smart

NEW YORK (Fortune) -- Government-guaranteed loans for General Motors and Chrysler are getting most of the attention in Washington right now, but President Obama has an opportunity to do something far more important for the future of the auto industry on Monday.

The question is whether he will do the right thing - or the smart thing?

Australia: Petrol prices soar as refineries cut production

SOUTHEAST Queensland motorists will be paying $1.15 a litre from Thursday as Singapore refineries cut back production to increase profits.

The strategy will put unleaded on a parity with diesel fuel, which has dropped in price as demand from the manufacturing sector falls due to the economic crisis.

Over 25 millions Kenyans face starvation

An estimated 17 million people are in need of emergency assistance while over 25 million others face starvation in the Horn of East and Central African regions.

In a report released Monday by Oxfam, an international Aid agency, Kenya has nearly 10 million people faced with famine due to the poor rains and the escalating food prices.

Kenya: Climate change to blame for food shortage says Diplomat

Climate change is a major cause of the current food shortage facing the country and is a clear warning of how climate volatility can affect countries like Kenya.

Addressing a seminar on Clean Development Mechanisms (CDM) at a Nairobi hotel Monday, British High Commissioner to Kenya, Rob Macaire, said that droughts, floods, temperature and rainfall pattern changes can hit countries across a range of sectors.

In addition to agriculture, public health, water availability, energy use, infrastructure and services like tourism are also affected by the current drought.

Mexicans Protest Fuel Price Hike

Mexico (Prensa Latina) Mexican fishermen on strike since Jan. 1 announced on Sunday they will increase the protest campaign if their demands are not met by the government.

The union demands a fuel price freeze since they cannot longer afford to pay for the diesel for their boats.

India (Heart) China

Cooperation is the key because both countries are hungry for resources. "There have been a few instances where India has attempted to acquire oil assets, like in Angola, and the Chinese maneuvered their way and beat the Indians out," says Michael Klare, author of "Rising Powers, Shrinking Planet." "Now they have signed an agreement to notify each other ahead of time."

The world gets nervous at this vision of India and China coming together to gobble up resources. But [Bill] Emmott says India and China can actually be part of the solution to the quest for new resources. "We need more investments in exploration of oil, water supply and food. India and China have the capital to expand and invest in Africa and Latin America."

Saudi Arabia postpones Jizan refinery bids

Saudi Arabia has postponed to September a bidding round for building an oil refinery with a capacity of up to 400,000 barrels per day on the Red Sea coast, a newspaper reported on Monday.

'We are in a (global) recession crisis, therefore thinking of building a large project like this one requires more prudence,' Al-Watan newspaper said citing an unidentified oil source.

Pakistan: National Refinery also ceases fuel supply to Pepco

ISLAMABAD: The National Refinery Limited (NRL) on Saturday dropped another bombshell on the Pakistan Electric Power Company (Pepco) when it stopped the supply of furnace oil to thermal power stations of the state-owned company, a senior official in the Ministry of Petroleum and Natural Resources told The News.

A day before, the Attock Petroleum had ceased fuel supply to Pepco.The decision of two refineries will deprive the government thermal powerhouses of 85,000 to 90,000 tonnes of furnace oil per month.

Pakistan: Urea shortage intensifies in Talhar

TALHAR: During a survey conducted by The Regional Times, it was learnt that the shortage of urea has intensified in Talhar and its adjoining areas due to which growers are facing many hardships.

While talking to newsmen, the local growers said that the each sack of urea is being sold at rupees 850 by the traders, whereas the concerned authorities have not taken any step in the matter despite of their several complaints.

Norway dips into oil fund for NKr20bn stimulus

Norway on Monday unveiled a NKr20bn ($3bn, €2.25bn) fiscal stimulus package as it starts to use its massive oil wealth to boost growth and employment in its struggling economy.

The Nordic country of just 4.7m people has amassed $370bn in oil revenues – the world’s second largest sovereign wealth fund, after Abu Dhabi’s – and is now starting to use it to soften the effects of an expected recession.

Kuwait sovereign fund takes stake in Gulf Bank

KUWAIT (Reuters) - Kuwait Investment Authority KIA.L, the oil-exporter's sovereign wealth fund, will own 16 percent in troubled Gulf Bank after the lender completed its capital hike, an official said on Monday.

In December, shareholders in Gulf Bank approved a rescue plan ordered by the central bank to raise 375 million dinars (936.6 million pounds) in a 100 percent emergency rights issue to cover derivatives losses of the same amount.

BP jumps; traders cite talk of bid for Chesapeake

LONDON (Reuters) - Shares in British energy group BP rose more than 3 percent on Monday as traders cited market talk that the company was planning a bid for U.S.-listed group Chesapeake Energy.

Petrobras expects to raise $18bln-$19bln for 2010

RIO DE JANEIRO (Reuters) - Brazilian state-run oil company Petrobras said on Monday it expected to go to capital markets to raise $18 billion to $19 billion for its 2010 investments, budgeted at $35 billion.

TNK-BP adds 460m barrels to reserves

Russian oil company TNK-BP, half-owned by oil major BP, said today it added at least 460 million barrels of oil equivalent to its estimated reserves in 2008 due to geological exploration alone.

TNK-BP, Russia's third-largest oil producer, published the information in a corporate bulletin on its website.

Russia's king of crude

Lukoil, the country's largest independent company, has become the face of Russian business abroad. But can it be the next Exxon?

Peak oil investment verities

This doesn't mean we shouldn't try to plan or prepare or even invest. Humans are planning animals. But what they are really good at is improvisation. That's why careful attention to what is right before us rather than what we imagine for the future is of critical importance. The kick in the pants that all those who followed the peak oil investment paradigm received last year (including me to a minor degree) is a reminder that we ought not to allow our fantasies of the future to dominate our every action in the here and now.

Workers urged: Go home and multiply

TOKYO, Japan (CNN) -- Even before one reaches the front door of Canon's headquarters in Tokyo, one can sense the virtual stampede of employees pouring out of the building exactly at 5:30 p.m.

In a country where 12-hour workdays are common, the electronics giant has taken to letting its employees leave early twice a week for a rather unusual reason: to encourage them to have more babies.

Carolyn Baker: Dystopians On Estrogen

This past week the New Yorker published "The Dystopians" by Ben McGrath, by whom I was interviewed back in October and who allowed me to make an appearance in the article with a brief mention of my forthcoming book. Sitting with this piece for the past seven days has been unsettling, not because I personally wanted more air time, but because of the article's paucity of references to the female perspective regarding the collapse of civilization. Although I greatly admire Dmitry Orlov and James Howard Kunstler, and while I feel camaraderie in particular with my friends in the Vermont Independence movement, Rob Williams and Thomas Naylor, I found "The Dystopians" to be an appallingly white male extravaganza.

...My complaint is not about some notion of "equal time" but rather the consequences of omitting a uniquely female perspective from the discourse about collapse and the construction of a new paradigm of life on the planet. Despite my caveat, I know I will be accused of proclaiming the superiority of the female gender, but that is absolutely not my intent. In fact, quite the opposite. The conversation requires the distinct characteristics of both genders, and without it, only half the landscape of collapse can be viewed.

A house of straw that won’t blow down

Holistic Habitats uses other building materials as well — it recently completed a room addition using concrete forms — but its focus is on straw-bale construction, Matesi says. True to its name, the company also takes into account the setting for a home, positioning it to take advantage of natural runoff patterns and prime garden spots, while retaining wildlife habitat.

The increasing demand for more environmentally sustainable homes has allowed Matesi to create a successful niche in straw-bale construction. What began as a one-man operation in 1993 has since grown to a thriving small business with five employees — a construction manager, an accountant, a design manager and a client relations specialist. The company also employs a range of contractors, from excavators and carpenters to plumbers and well-diggers, each of whom brings in his or her own crew of two or three workers.

NZ's chance to influence the wind of change

New Zealand needs to sign up to a new international energy agency that focuses on renewable sources, writes Gerry Coates.

People are increasingly aware that, along with global warming, an energy crisis looms, with oil and gas soon reaching the peaks of their production and discoveries.

The question is how we bridge the gap between our growing energy needs and a dwindling supply from conventional sources.

Is Oil’s Future Sustainable? If Not, What Are The Consequences? (PDF)

(New presentation by Matt Simmons)

Ruble May Drop 25%, Break Widened Trading Band, Citigroup Says

(Bloomberg) -- Russia’s ruble may weaken as much as 25 percent, breaking the central bank’s widened trading range within two months, as declining oil prices weaken the economy, Citigroup Inc. said.

The currency, which is managed against a basket of dollars and euros to limit swings that hurt exporters, may slide to 42 against the mechanism by the end of March, from 37.5196, Elina Ribakova, Citigroup’s chief economist in Moscow said today, reiterating a Jan. 20 forecast. Further depreciation to as low as 50 against the basket is a “possibility,” she added.

Petrobras Investment Plan May Have ‘Disappointed,’ Itau Says

(Bloomberg) -- Petroleo Brasileiro SA’s capital expenditure plan may have “disappointed” investors in Brazil’s state-controlled oil company who were seeking more conservative investments as oil prices fall, Itau Corretora said.

“Shares will probably suffer in Monday’s trading session,” analyst Paula Kovarsky wrote, citing the company’s plan to spend $174 billion between 2009 and 2013, about 10 percent higher than she expected. “This plan had a major political component, with Petrobras effectively becoming the pillar of the government’s anti-cyclical-investments speech, and this is certainly not good news.”

Repsol Discovers Gas at Three Fields in Sahara Desert

(Bloomberg) -- Repsol YPF SA, Spain’s largest oil company, found natural gas at three fields in Algeria’s Sahara Desert and said they produced more than 1 million cubic meters of the fuel a day in tests.

Despite potential, Maine lags offshore wind power race

Along the some 3,500 miles of Maine coastline, offshore wind power isn’t easy to tap because the continental shelf drops off precipitously about three miles from land. So drilling turbine masts into the seabed, as Delaware plans to do, isn’t feasible here. Because of the deep water, as well as financing and permitting ambiguities, there are no offshore wind power projects in Maine. The deep-water challenge here does, however, come with a uniquely shiny silver lining, in that the wind power in the Gulf of Maine is some of the most powerful in the world, whipping at average winter speeds of 21 miles per hour, and capable of producing at peak up to 100 gigawatts of electricity, equivalent to the power output of 100 Maine Yankee nuclear plants, or 10% of the entire nation’s electricity needs, according to Dagher. With potential this great, it’s no wonder some of Maine’s most entrepreneurial minds are chasing ocean wind — besides Dagher, Matt Simmons, a summer resident of Rockport and former energy advisor to former President George W. Bush, has established the Ocean Energy Institute to study offshore wind; former Harvard University business professor Wick Skinner, who resides in Tenant’s Harbor, and Island Institute President Philip Conkling are involved with OEI; and, of course, there’s Maine’s former governor, Angus King, whose speech calling for regulatory and business support to make the state the “Saudi Arabia of wind” has been presented to business audiences around Maine in recent months, including at Mainebiz’s energy symposium in October. And, in a state this small, it’s also no surprise that those minds all know each other, that they’ve converged in each other’s living rooms to discuss the issue, and that their respective plans to move the state toward offshore wind development all look the same.

OPEC Achieves Cuts in Output, Halting Price Slide

After months of gradually closing the oil spigot, members of the OPEC cartel have managed to stop the slide in oil prices — at least for now.

Showing an unusual degree of discipline, members of the Organization of the Petroleum Exporting Countries have slashed their output by more than three million barrels a day in recent months as they sought to put a floor under oil prices, which have fallen by $100 a barrel since last summer. That is about 75 percent of the production cuts pledged by members of the cartel since September.

The cuts have been led by Saudi Arabia, the world’s top exporter, which has trimmed its production to eight million barrels a day this month, down from nearly 10 million barrels over the summer.

In September, OPEC producers vowed to reduce their output by 4.2 million barrels a day, or about 5 percent of global production.

“Compliance has been extremely high,” said Kevin Norrish, an oil analyst with Barclays Capital in London. “Most OPEC countries have done most of what they’d pledged to do.”

Ecuador sees oil at $55 per barrel in 2009

QUITO (Reuters) - OPEC member Ecuador sees oil prices averaging around $55 per barrel this year, Oil Minister Derlis Palacios said Monday.

"Ecuador has restructured its 2009 budget with a WTI (West Texas Intermediate) price of $55 per barrel ... we are talking about around $40 for our oil," Palacios told a local radio station.

Russia’s Ruble Weakens Against Dollar, Basket as Oil Declines

(Bloomberg) -- Russia’s ruble slumped for a second day against the dollar and weakened versus the central bank’s target currency basket as declining oil prices spur bets against the currency.

Canada delusional about oil

There is this Canadian delusion that the Alberta oil sands will give us special influence with the new Obama administration, that energy is our trump card in the Canada-U.S. relationship because, it's argued, the United States desperately needs our oil. It fosters the false belief that we can get concessions from the U.S. in other areas by producing more oil.

Shell profits to tank as oil price nears $40 a barrel

Analysts estimate Shell's fourth-quarter profits are likely to be in the region of $4bn (£3bn), which may force the world's second largest non state-owned oil company to rein back investment in new projects and hiring this year.

Shell declined to comment on the possibility that job cuts may be announced when the group reports its full-year results on Thursday.

Valero to shut Texas City refinery during 40-day work

NEW YORK (Reuters) - Valero Energy Corp (VLO.N) said Monday it will shut its 245,000 barrel-per-day refinery in Texas City, Texas during a 40-day planned maintenance on crude unit and a coking unit due to start this week.

Spokesman Bill Day said Valero decided to shut the rest of the refinery, including two other crude units and the gasoline-making fluid catalytic cracker complex, due to other minor work and for economic reasons because of weak gasoline margins.

Growing stocks of unsold cars around the world (photo essay)

Carmakers around the world are cutting production as inventories build up to unprecedented levels. Storage areas and docksides are now packed with vast expanses of unsold cars as demand slumps.

Oil spill in Russian Far East kills hundreds of birds

MOSCOW - A fuel oil spill off Russia's far eastern island of Sakhalin has killed hundreds of birds in a wildlife area of international importance, Russian news agencies reported on Monday.

"Hundreds of birds have been killed, including ducks, guillemots and divers," the RIA Novosti news agency quoted the head of the Sakhalin diving centre Vladimir Bardin as saying.

Imported biofuel a risk to wildlife

AUSTRALIA is contributing directly to the widespread destruction of tropical rainforests in Indonesia and Malaysia by importing millions of tonnes of taxpayer-subsidised biodiesel made from palm oil.

Imports of the fuel are rising, undermining the Rudd Government's $200 million commitment to reduce deforestation in the region - a problem that globally contributes to 20 per cent of the world's carbon emissions.

Green-Light Specials, Now at Wal-Mart

At the time, Wal-Mart was the target of a well-orchestrated assault focusing on its labor practices and environmental record. It was also straining to keep its legendary growth on track. Mr. Scott, hungry for ways to protect and transform his company, began to see environmental sustainability as a way to achieve two goals: improve Wal-Mart’s bottom line and its reputation.

So he presented his colleagues with a radical option — the “choice” that gave the meeting its name — encouraging them to adopt a sustainability program to remake the entire company, from the materials used to build stores to the light bulbs stocked on its shelves. Although participants were conflicted, a vote on the initiative was unanimous: Wal-Mart, the world’s largest retailer and biggest buyer of manufactured goods, would go green.

Peak Oil Production in Russia Suggests Worldwide Supplies on the Brink

Russian oil production decreased for the first time in 10 years according to Vedomosti, a Russian newspaper. The decrease was only 0.7%, while exports were reduced more dramatically year over year, down 6.2%.

The fall in Russian production may be a major turning point in worldwide crude oil production. While OPEC nations such as top producer Saudi Arabia get the attention of most speculators, it is important to note that Russia is the second largest crude oil producer and exporter in the world. In fact, by itself, Russia almost matches the total exports of the third, fourth and fifth top exporting nations combined (Norway, Iran and the United Arab Emirates).

If Russian oil production has indeed peaked, it leaves the world with only three major exporters that are still supposedly able to continue to increase production: Saudi Arabia, Kuwait and Iraq. Given the massive oil consumption needs of the United States, that leaves America in a particularly vulnerable position at a time when the United States is facing a financial crisis.

Lower gas prices send buyers after big cars again

NEW ORLEANS — Gyrating gas prices are playing havoc on auto industry planners, who've been adding small cars to their lineups, even as customers are showing more interest again in bigger vehicles.

New Chrysler small cars expected from a deal with Italy's Fiat hatched last week won't arrive for up to two years, says Chrysler President Jim Press, but even if they were showing up now, it wouldn't matter much.

Press says the company's full-size Dodge Durango SUV is in the shortest supply among all the vehicles sold by Chrysler. Yet the automaker decided last year when gas prices were high to phase out the product out of fear buyers would shun it.

The turnabout "shows the fickleness of the market," says Press, speaking after a J.D. Power and Associates conference here for auto dealers.

U.S. Retail Gasoline Rises to $1.86 a Gallon, Lundberg Says

Bloomberg) -- The average price of regular gasoline at U.S. filling stations rose to $1.86 a gallon as refiners shut units for maintenance and repairs and OPEC output cuts.

The motor fuel gained 8 cents, or 4.3 percent, in the two weeks ended Jan. 23, according to oil analyst Trilby Lundberg’s survey of 7,000 filling stations nationwide.

Oil industry lifted by falling costs

Costs in the oil and gas industry have begun to fall for the first time this decade, bolstering the profits of companies hit by the steep drop in the price of crude.

The shift could add to pressure on oil prices, which had been supported by soaring production costs. Analysts have argued that those costs put a floor under the oil price, because if the price fell below production cost, projects would be cancelled and oil supply would be cut.

Resignation of Catherine Hughes triggers fresh doubts about future of BP's oil-sands project

Doubts are surfacing over the future of BP's £5.8 billion project to squeeze crude from the oil-rich sands of northern Canada after one of the chiefs of Husky Energy, its joint-venture partner, resigned unexpectedly.

Catherine Hughes, vice-president of oil sands for Husky, based in Calgary, left the company last week amid speculation that the project may be delayed after a collapse in the price of oil.

Halliburton Profit Falls on Oil’s Plunge, KBR Case

(Bloomberg) -- Halliburton Co., the world’s second- largest oilfield-services provider, said fourth-quarter profit fell 32 percent on a plunge in crude prices and costs to end U.S. investigations of alleged bribery by a former subsidiary.

Japan's Idemitsu eyes doubling oil export capacity

TOKYO (Reuters) - Idemitsu Kosan Co, Japan's third-biggest oil refiner, aims to double oil product export capacity in the next few years in hopes that rising oil demand in other parts of Asia will offset falling domestic consumption, two senior company officials said.

The officials told Reuters the refiner wants to double export capacity to 6 million kilolitres a year, or 103,000 barrels per day (bpd), to respond to the expected higher oil needs in the future from China, India and other Asian nations, which they regard as key markets for growth.

National oil groups' shares hit harder by downturn

The global downturn has hit national oil company share prices much harder than their international oil company counterparts, according to a study.

Research by PFC Energy, a US consulting group, warns that the sharp decline in share prices could lead to a perilous shortfall in investment for some of the world's oil and gas-rich nations.

Iraq slashes 2009 budget amid low oil prices

Iraq's cabinet has slashed its draft 2009 budget, the second time in three months that plummeting oil prices have forced it to chop spending when it desperately needs funds to recover from war.

Iraq to seek bids for refinery deal

BAIJI, Iraq: Iraq will ask foreign companies to bid on a more than $1bn contract to build and install a fluid catalytic cracker (FCC) at the country’s biggest refinery, Baiji, a refinery executive said.

The FCC contract is part of efforts by the war-torn country to increase domestic output of gasoline and other fuels to meet rising local demand and allow for exports of refined products within five years, the refinery’s general director, Ali al-Ubaidi, said.

Brazilian-made oil semi-sub platform begins production

Brazil’s government managed oil and corporation Petrobras announced that the first semi-submersible platform built entirely in Brazil, went on stream Sunday, beginning the production of well MLS-99, in the Marlim Sul field, in the Campos Basin.

P-51 installed at a water depth of 1,255 meters and 150 km off the coast of Macaé, is capable of producing up to 180,000 barrels of oil per day and is considered strategic for the maintenance of Brazil’s oil self-sufficiency.

Pros puzzled by gas prices

The markets for all sorts of financial instruments, including oil and gasoline, according to AAA, have been extraordinarily volatile in recent months so some pricing anomalies are to be expected.

“However, the run up in the price of gasoline at American’s gas pumps in recent weeks seems to have gone beyond any rational explanation since the price seems completely divorced from both supply and demand,” according the news release, stating the situation is even more “perplexing when one reads about oil tankers parked at sea waiting for an upturn in prices and domestic refineries scaling back operations or speeding up maintenance schedules to help trim gasoline inventories.”

Wind farms lying fallow in hard times: Recession, oil prices undercutting costly green energy generators

To state officials and proponents of "green energy," Thursday's ceremony celebrating New England's newest wind farm was a relatively small yet symbolic step toward greater energy independence in Maine.

But with a construction price tag topping $60 million, First Wind's Stetson Mountain wind farm also highlights the fact that pollution-free energy doesn't come cheap.

Obama Green-Energy Dream May Lag Development Pace of Bush Years

(Bloomberg) -- President Barack Obama may find it harder to increase renewable energy than his predecessor during a financial crisis that has sidelined Lehman Brothers Holdings Inc. and other financiers of alternative power, investors said.

Obama to Take Steps On Car Fuel Efficiency

President Obama plans to instruct key federal agencies today to reexamine two policies that could force automakers to produce more fuel-efficient cars that yield fewer greenhouse gas emissions, according to sources who have been briefed on the announcement.

The move, which the White House has privately trumpeted to supporters as "the first environment and energy actions taken by the president, helping our country move toward greater energy independence," could reverse two Bush-era decisions that have helped shape the nation's climate policy and its auto market.

Agency passes nuclear debate to state

Florida's utility regulators have crafted their vision of Florida's green energy future without answering the billion-dollar question: What is green energy?

Months of intense lobbying and public hearings on how and when Florida's energy companies should go green ended on Jan. 9 with the state's Public Service Commission deciding not to decide whether nuclear power is green enough to be part of the state's mandate to reduce greenhouse gases. The issue — raised by Florida Power & Light, the state's largest producer of nuclear power — was the only issue the commission did not decide. The prickly question now goes to the legislature, where FPL is a major political player.

China dams reveal flaws in climate-change weapon

XIAOXI, China The hydroelectric dam, a low wall of concrete slicing across an old farming valley, is supposed to help a power company in distant Germany contribute to saving the climate - while putting lucrative "carbon credits" into the pockets of Chinese developers.

But in the end the new Xiaoxi dam may do nothing to lower global-warming emissions as advertised. And many of the 7,500 people displaced by the project still seethe over losing their homes and farmland.

Antarctic sea creatures hypersensitive to warming

ROTHERA BASE, Antarctica (Reuters) - Thriving only in near-freezing waters, creatures such as Antarctic sea spiders, limpets or sea urchins may be among the most vulnerable on the planet to global warming, as the Southern Ocean heats up.

Can Green New Deal solve economic crisis?

Economic policies and measures to combat global warming are not compatible. Slapping emission limits on greenhouse gases spells doom for economic activity. These opinions have regularly been aired during debates over global warming.

However, the Green New Deal policy proposed by new U.S. President Barack Obama has added a new dimension to measures aimed at tackling global warming.

Global warming could unleash ocean 'dead zones': study

PARIS (AFP) – Global warming may create "dead zones" in the ocean that would be devoid of fish and seafood and endure for up to two millennia, according to a study published on Sunday.

Its authors say deep cuts in the world's carbon emissions are needed to brake a trend capable of wrecking the marine ecosystem and depriving future generations of the harvest of the seas.

From first hand experience I can say that the Russian oil&gas industry is taking a pummelling, and it may take a few more months to get additional stats out into the market. Our Russian outfit has made a number of redundancies, and the remaining staff are on 50% of their former salaries. Clearly like elsewhere the service sector has limited cash flow to fall back on, so reacts pretty quickly. However we get feedback that many projects are stalling because of investment hold-ups. I would not be surprised to see this reflected in the ongoing production stats for the next few quarters.

Since hitting a post-Soviet high crude production rate of 9.5 mbpd (EIA) in October, 2006, Russian production has been between about 9.3 and 9.5 mbpd, and it appears that they are showing a small annual decline in 2008.

Our (Khebab/Brown) middle case is that Russia's post-2005 cumulative net oil exports (from mature basins) will be on the order of 26 Gb, and they have shipped about 30% so far, leaving about 18 Gb in remaining cumulative net oil exports. Based on our middle case, at their current net export rate they are shipping one percent of remaining cumulative net oil exports about every 25 days.

Does that mean they will only be able to export for 100/1% x 25 =2500 days? (~7 years...)



18 GB / (9.5 mbpd *365 days) = 5.3 years.
assuming they will keep the production rate until the last day, which is not the case.
7 years sounds about right

edit: i'm mixing apples and oranegs. my bad, 18 GB was supposed to be the exports left, not total production

If they didn't show a net export decline, but here is what Khebab's mathematical modeling showed for future Russian net oil exports from mature basins (low case, middle case, high case). The overall projected 10 year net export decline rate is shown.


Russia appears to have maintained an output level in excess of the one predicted by the model, how do you account for this?

(the upper forecast is ~6-7mbpd by 2010 -that's also a huge decline from where they are now, >>6%/year)


Net Oil Exports Vs. Production

Here are the actual and projected Russian (total liquids) production & consumption curves:


cumulative net oil exports (from mature basins

Isn't Russia supposed to be one of the bright spots for future production from new fields?

I thought that Eastern Siberia had not been fully exploited yet.

Many things are possible, but I suspect that the frontier basins in Russia are to Russia as Alaska is to the US (by the time that Prudhoe Bay fully kicked in, the US had been a net oil importer for about 30 years). And as Hubbert noted in 1956, a one-third increase in projected URR for the Lower 48, from 150 Gb to 200 Gb, only postponed the projected Lower 48 peak by five years, from 1966 to 1971.

In any case, what people are--in effect--asking, when they reference various basins around the world that are not developed, or not fully developed, is that "Isn't there some way for us to maintain an infinite rate of increase in our consumption of a finite fossil fuel resource base?"

Not only is it not possible to maintain an infinite exponential rate of increase in our consumption of a finite resource, our model, recent data, and some ongoing examples (e.g., Mexico), suggest that net oil exports will show a long term accelerating decline rate. This is the ultimate irony of our current political situation. Just as we, IMO, are at the start of a long term accelerating net export decline, the government is going to try to spend vast quantities of borrowed money to try to stimulate demand.

"Just as we, IMO, are at the start of a long term accelerating net export decline, the government is going to try to spend vast quantities of borrowed money to try to stimulate demand."

And keep the $ strong in order to maintain our Empire.

And keeping the banks private/solvent, while infrastructure
industry withers on the vine:

WABCO, formerly Westinghouse, Air Brake Division:


Barely green this AM.

I think its likely that this time we will escape 'by the skin of our teeth' but next time...

Well, you can only borrow from the future while a better one exists and if that is shown to be untrue the whole pack of cards will come tumbling down.

"Peak Oil" may never be acknowledged, it will always be spun as falling demand as recession after recession crushes usage.


Hey WT & other TODers,

Hope you saw my last link in yesterday's DB--I am hoping some TODer can attend, then report about, the upcoming SPE MegaPowers-II Ghawar Supersim Seminar at the Marriott Convention in the Woodlands,Texas, Feb 2, 2009.

Oil patch cuts claim Alberta's high-paying jobs

Province's engineers start to feel bite of plunging oil prices, global financial crisis


GE down over 10% on Friday.

CAT down almost 10% this AM.

Markets flat/green both days.

The odds of this are just about zero.

Until banks' shareholders are wiped out, nothing changes for the better.

Barclays up 75%. Impossible.


It's still half what it was a week ago, but why up so much?

Barclays is joined at the hip with falling house prices, Tier 3 fraud,
and offshore tax havens.

JPMorgan Cazenove picks ex-Barclays man Naguib Kheraj - Times Online
Jul 29, 2008 ... Naguib Kheraj, the highly rated former Barclays finance director, has been named chief executive of JPMorgan Cazenove in an attempt to ...
business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4419375.ece - Similar pages -
FSA hires ex-Barclays man for bank regulation role | Business ...
FSA hires ex-Barclays man for bank regulation role. Julia Finch · guardian.co.uk , Wednesday 23 April 2008 18.46 BST. Naguib Kheraj, working with the FSA on ...
www.guardian.co.uk/business/2008/apr/23/banking.northernrock - 87k - Cached - Similar pages -

The Financial Services Authority has hired the former finance director of ­Barclays bank to advise on how to tighten up its regulation of British banks following the Northern Rock crisis.

Naguib Kheraj has taken a part-time role at the FSA, reporting directly to the authority's chief executive and working half a day a week on "the design and exe­cution" of a new "supervisory enhancement programme".

The programme emerged from an internal review of the FSA's monitoring of Northern Rock before the bank's near collapse last year.

The hinges on the Revolving door need lubricating. ;}

So who does Naguib work for? And this is a lie or in his new job(s) all
regulatory rules will be ground.

Barclays finance chief quits over 'grinding rules' - Times Online
NAGUIB KHERAJ quit as finance director of Barclays in part because he was not enjoying the regulatory grind of the work.

Martin Ellis, Halifax chief economist, predicted further house price drops in 2009.

The local news (SouthEast Florida) did a piece on the small businesses in a strip mall surrounding a soon-to-be-shuttered Home Depot Expo store. The restaurants in the strit catered to the hundreds of Expo employees and now they will likely end up closing as well.

I guess that's how 40,000 - 50,000 - 60,000 announced layoffs become 600,000+ for a month.

I know: there's too many strip malls, too many home depot like stores, too many dependant businesses on the too many bigger businesses beign shuttered. Like stacked dominoes.


My dad said just look Obama will fix things.... snark.

So the pits are openning up below us, when will the guys get here to fill in our graves? Or will we get to see the sun for a few more days up out of the rim?

As an Author I get by on pretty much less than $6,000 a year or there abouts, sometimes more, sometimes less. I don't sell enough stories but, I garden, make homemade walking sticks, make my own climbing gear and work with others in the survivalist arena locally.

But I know people that these job cuts will not make happy. Sighs.

Hey I did tell you all to vote for me, as President, I would have been a little better informed than the average Joe-Poli-Tick.


Scientists alarmed by ocean dead-zone growth

Dead zones where fish and most marine life can no longer survive are spreading across the continental shelves of the world's oceans at an alarming rate as oxygen vanishes from coastal waters, scientists reported Thursday.

The scientists place the problem on runoff of chemical fertilizers in rivers and fallout from burning fossil fuels, and they estimate there are now more than 400 dead zones along 95,000 square miles of the seas - an area more than half the size of California.

The number of those areas has nearly doubled every decade since the 1960s, said Robert J. Diaz, a biological oceanographer at the Virginia Institute of Marine Science.

"Dead zones were once rare, but now they're commonplace, and there are more of them in more places," he said.


Those dead zones no longer absorb CO2 also.

why would this happen - i would of thought that the absence of O2 would not effect either the solubility of CO2 or the ability for carbonic acid to form from CO2.
(who has not done any chemistry for 8 years)

Hey Andrew,

I've been learning about these things with my investigation into carbon sequestering cement. (Which, by the way, seems to rely on a proprietary "secret" alkalyzing process)

My guess as to Soup's thinking is that, just like when all of our fossil fuels were formed, life incorporates carbon; and when life ceases, bodies sink and that carbon is sequestered away in the ocean bottoms.

Dead zone = no life = no carbon rain into the depths

A dead zone is a dead zone because instead of phytoplankton doing photosynthesis (releasing O2), it is an environment of microbial decay (using up O2, and releasing CO2). It takes oxygen to "burn" all that dead organic matter, and soon that patch of ocean has no more. Then you have a dead zone. Fish swim into it and die.

Well, I would think that without the oxygen present, oxidation of whatever hydrocarbons would be small to nonexistant. So these dead zones are likely to at least a small extent be carbon sinks. Of course there is a good chance that they are methane sources as well, and it wouldn't take much methane to overwhelm any good effects from the carbon sinks. Of course other uses of the dead zones, either for seafood, or for nature are precluded, so this isn't a process we should be encouraging.

The areas that are now dead zones were once CO2 assimilators - photosynthesis from mass algal growth due to over-fertilization. The mass algae blooms die off, and bacteria consuming the algae releases the CO2 back into the environment. The metabolism of the bacteria is what uses up the O2 and creates the dead zone.

Caterpillars 4th quarter results were interesting.
However as an employee I felt the need to explain that much of the information being considere "news" this morning about layoffs, buy-outs and executive compensation is old news that is being recycled. All of the above were announced in December - todays news is not in addition to what was previously announced.

Regardless its been quite a U-turn for the company. 1Q thru 3Q was strong enough to make the total of 2008 a record year in revenue and profit, while the 4thQ was a total crash. 2009 looks ugly hence all the "trough management". Many of my projects have made interesting U-turns - I wish I could elaborate but its not really appropriate. Lets just say with current prices, fuel consumption is less of a concern as we develop engines for the upcoming EPA Tier IV emissions standards. I think you and I can call a spade a spade - thats a very short-term view - but thats also typical of a large public corporation.

The opinions expressed here are my own, and do not represent those of Caterpillar Inc...

Thanks for the inside insight. In the mining biz in Nevada, few are buying new iron and I suspect some who bought this year (General Moly?) may wish they hadn't. Despite $900 gold, things appear to be slowing radically; several clients who were "go" in November are at "full stop" now.

Bernanke: Game Over?

Once this begins expect mass bankruptcies in the commercial sector as private credit provisioning will immediately disappear. Bernanke's ability to replace that functionality is fanciful and he will soon learn this lesson the only way the market knows how to teach it - the hard way - just as he has had every other "plank" in his Doctoral Thesis destroyed - one at a time.

No, it is not inflationary when your job disappears because the place you work for goes under; while Ben can try to replace the entirety of the private credit market I wish him the best of luck in that endeavor, given that it is some fifty trillion dollars. How much faith will the world have in The Fed when it tries to backstop a $50 trillion marketplace with under $1 trillion in banknotes? It has already doubled its balance sheet - but this would require expanding it by twenty five more times.

Market reacted with steep increase of price of gold too - that's something that Denninger won't tell, because he's anti precious metals.

Of course, gold was quite above $1000 per oz during last March (due to Bear Stearns debacle), but hasn't reached $900 until Friday for quite some time.

My belief is that someday we will go back to gold standard, but who knows when and who knows if the gold won't be confiscated again should the migration occur.

Bad news: we're back to 1931. Good news: it's not 1933 yet

The liberal economic order is still in tact, if fraying at the edges. Capital and ships move freely. North America and Europe talk the same political language. China has so far proved a dependable pillar of the international system.

But then the world seemed benign enough in early 1931. It is the second phase of depression that does terrible things.

"Should Government Mandate a Variable Gas Tax?"


"World Affairs Council of Washington, DC
Washington, DC
Jan 13th, 2009

Deborah Gordon argues that government should set a "fuel price floor" to encourage green business.

She believes keeping gas prices stable will prevent markets from being "thrown into a tizzy."

the full program;

"2 Billion Cars: An American Love Affair"


"Transportation experts Daniel Sperling and Deborah Gordon provide a concise history of America's love affair with cars and an overview of the global oil and auto industries.

The authors explain how we arrived in this state, and what we can do about it. They expose the roots of the problem – the resistant auto-industry, dysfunctional oil markets, short-sighted government policies, and unmotivated consumers.

The authors contend that the places with the most troublesome emissions problems -- California and China -- are taking the lead in developing effective strategies that can help wean us from our reliance on petroleum-fueled cars - World Affairs Council of Washington, D.C."

Running out of iron ore? Now that's silly. There are production capacity bottlenecks but these have little to do with the total raw reserves of iron ore at current prices.

Just recycle the existing rusting stuff - about as good an 'ore' as you can get.

Never mind the rusting stuff -- look at all those new cars upthread! If they're painted well, they shouldn't rust and that should take care of us for several years.

Yep, plenty of source material to quickly hammer out: the Serrated Sword of Tahoe; the Mighty Mazda Miata Machete'; the Deathly Sharp Buick LeSaber; the vaunted Escalade Excaliber, the Dodge Ram Spear; the brain-spilling Maces made from a brace of Honda Civics & Accords. /rant off

Hopefully, we will wisely choose to make Strategic Reserves of bicycles, wheelbarrows, and Spiderbikes from these cars [photos below]:



Plus my new favorite of using your head and body for the maximum somatic efficiency possible:


Interesting. Thanks for posting this. The magnitude of the lay-offs appear to be substantial, as do the rapid decline in exploration and drilling activities world wide.

Regarding the Matt Simmons slide referring to $100 trillion needed for fighting 'rust' and energy infrastructure. Does no one else see the connection between 'wealth' and declining energy gain? $100 trillion is triple the value of all the world's stock markets combined. We need cheap energy to 'grow', otherwise that $100 trillion is going to become a receding horizon, as folks who have visited Zimbabwe, are well aware of.

Where are we going to get $100 trillion, without debasing what the $100 trillion stands for. Nearly impossible IMO.

Some more perspective on trillions. The world produced about 80 Gb of crude oil in 2006 to 2008, inclusive, which relative to the 5/05 monthly rate shows a cumulative shortfall, but if we use the average US oil price over this time period as an approximate index price (about $80), the world spent on the order of $6.5 trillion in three years for oil.

I don't know what the oil industry spent in three years, but as noted, it was not enough to prevent a cumulative shortfall relative to 5/05.

Why should we spend so much to fight 'rust', if we are going out of the stuff anyway?

If our society wants to survive peak oil (long term) it should start to mitigate away of oil ASAP.

Anyway, I find the 100 trillion number a 'little' exxagaratted. But then again, I haven't made any calculations myself.

Yup. And we have Shell telling us that we cannot switch to a different source of energy, because of all the bazillions we have already invested in the existing oil infrastructure. Fixing the rust is expensive, but building all new will be more so.

For those keeping score at home, infrastructure dependence is one of five minor limitations.

The other four minor impediments are time, thermodynamics, mass conservation, and system complexity vs. human cognition, perception, and biology.

I view this all as an avalanche. And while some people are analyzing and planning and preparing to find the best spot to withstand the full force and power of the avalanche, I recommend getting the hell out of the way.

can you please detail a little more on the mass conservation and biology part?


Right or Wrong...it is hard to ignore Matt Simmons. He is afterall, the one that made me become peak oil aware. Those blue powerpoints always scare the crap out of me.

I think he tries very hard to let the facts speak for themselves. But, I think, a lot of folks think he is a crazy loon.

I for one, will keep on listening to him and watching the events unfold, cause I keep asking myself, what if he is right!?

Stolen from another site;

A billion seconds ago was…1959—which means some of you here haven’t yet lived a billion seconds. A billion minutes ago Jesus was walking along the Sea of Galilee—more than 2 millennia ago. A billion hours ago, about 100,000 years before the present, the classic Neandertal peoples were wandering Europe and the Middle East, and Homo sapiens started to move out of Africa. We throw the term around a lot, but a billion is a big, big number.

A trillion is 900 BILLION + another 100 BILLION.

100 TRILLION is just nuts.

My godz! I've been alive for over a billion seconds! That brings it home...

I think his math is off. 1 Billion seconds ago was 1977 by my count (60*60*24*365.25*31.69)

Thats what I get for stealing.

There you go, Sgage, TWO billion seconds. No soup for you!

Aieee! I'm freakin' out! That's a boatload of seconds!

Nearly impossible IMO.

Well, you opinion is wrong. It's totally impossible. :)

Opinion: Obama Can Solve the Energy Crisis With Electric Vehicles

There is a way to solve our energy crisis with strong leadership. Either candidate could have done it, and President-elect Barack Obama should. If our rich and prosperous country’s leader defines the strategy, implements the tactics and requires results, he could free the U.S. of dependence on foreign oil, clean the atmosphere, and lower the cost of fuel and enrich our national technology — all at the same time.

The critical steps are:

* 1. Evolve autos from gasoline/diesel to hybrid to plug-in hybrid.
* 2. Develop a battery that can run 200 miles on a 10-minute recharge.
* 3. Strengthen America’s electrical distribution system.
* 4. Recharge cars in garages, public places and service stations.
* 5. Build nuclear power plants to enlarge the supply of electricity.
* 6. Use all alternate sources of energy, i.e. wind, natural gas, solar.

I think the basic case for electrified transportation is even stronger than this article makes. In contrast to investing on the oil side, where increasing investment can't really grow production (see the recent Simmons presentation), prospects to grow electricity generation and better utilize current capacity in place are pretty good.

Shifting from oil to electricity would, by building electricity demand, help spread the investment out over an increasing base of users. From a carbon dioxide emissions standpoint, auto miles from coal-fired electricity is an improvement over auto miles from gasoline, maybe allowing us to utilize our coal a bit longer.

I see some significant obstacles:
1)electric cars and hybrids cost more, and it is unclear if the cost gap between conventional ICE and electric/hybrid will completely go away;
2)the cost/benefit equation gets murky as you switch over to electricity, easing constraints on gasoline and lowering its price;
3) batteries remain a major constraint;
4) renewable energy may be getting less expensive, but upgrading the infrastructure to deliver the scaled-up MWhs will offset the price declines (and plenty of controversy remains about how cheap wind and solar can get).

Overall, though, the investment plan for this can take place against a backdrop where increasing investment can be paired against increasing load, while tapering our carbon footprint. I'm not sure it's a win/win, but it just might be a win/hold serve.

Seems to me with the Greater Depression underway and peak resources making many new adventures unprofitable in the short and long term, that someone would take a hard look at retrofitting a large section of the existing fleet. I mean, really, if things get as bad as some think is possible - who cares what is available to drive as long as it's available. I live 10 miles from town, 45 from major city. What level of technology advancement is needed to get me there and back?

I drive a 1993 Toyota pickup. What do I care what's under the hood as long as it can be used? I just don't understand why we need to REPLACE what we have versus MODIFYING it.

We'll probably go back to burning wood gas before we go electric.

If your interested in having this around, here's the book in PDF:


What the hell, why not just have him develop a batter that runs 400 miles on a five minute charge? I'm sure there are plenty of batteries that will go 1000 miles on a five minute charge, but not if it's shoved in a Surburban.

I read an interesting Article over the weekend about how GM is pushing the Lithium batteries mostly because Toyota has cornered the market on the REEs necessary to build NiMH en masse which have proven real-world superiority. It's a long article, but very informative. Helps to explain why all this Santa's wish list is just that.


How about just giving every American a Pedometer and reducing their taxes by the number of miles they walk.

How about changing cross walk button to immediately cycle the lights to the benefit of pedestrians and bicyclist rather than having to suck on smog for 3 minutes.

I have a list too, but it's not getting implemented either.

I need some of those 1600 AMP jumper cables.

Most politicians can't do even the very simple math to realise just how stupid they are! Sigh!

Don't forget the hoist to safely lift those heavy 1600 AMP jumper cables into position. Don't want to blowout your spine. Also, any un-intended, errant spark-arc will temporarily deafen and blind those standing nearby. Yikes!

2. Develop a battery that can run 200 miles on a 10-minute recharge.

Sure, that can be done - at about $250K a pop. There might be a few dozen people that would actually buy one.

The reality is that most of those fortunate to have any kind of motorized wheeled transport at all within a couple of decades or so are going to consider themselves lucky if they have enough batteries to take them on a 10-20 mile round trip, with an overnight recharge. Even that will be too expensive for the lower tier of the population.

The truth of it, though, is that something that will take one on a 10-20 mile round trip is all that most people really need - IF decent mass transit and intercity passenger rail are also available.

Written by theantidoomer:
2. Develop a battery that can run 200 miles on a 10-minute recharge.

It can not be done using existing residential electrical sockets. At best one has 220 VAC and 20 A available. A 10 minute charge would provide 733 W·hr which is completely inadequate.

3. Strengthen America’s electrical distribution system.

Why? All it would accomplish is to allow long distance competition that would drive local power plants out of business and raise our electrical rates. Also 733 W·hr for a 200 mile range is super efficient and would not require an expansion of the electric grid.

4. Recharge cars in garages, public places and service stations.

Unnecessary with the proposed super battery that gets a 200 mile range from a 10 minute charge.

If we actually stop buying imported oil while the producers have an ample supply, OPEC will have no reason to trade crude oil in U.S. dollars. If they abandon the dollar, its value will probably free fall making imports prohibitively expensive. Since this country lacks sufficient manufacturing to compensate for the shortfall, we would have shortages of nearly everything for years. We have to bring manufacturing back to America too.

From the Simmons Presentation:

Hard data argues that sustained peak supply reached in 2005

He's using the March 2008 Report, missing the July 2008 datapoint, but is there something more I'm missing? Is he assuming a downward revision for 2008 is in the works?

Also, has anyone recently done a 1 year moving average? If May 2005 was the peak, we're nearly 4 years out from there.

The crux of Hubbert's original argument was various if/then scenarios for areas under a production rate versus time curve, which is the total cumulative production for a region.

Using the 5/05 world crude production rate as the index rate (74.2 mbpd, EIA), we see a sustained cumulative shortfall, through 10/08, of about 885 mb--between what we would have produced at the 5/05 rate, and what we actually produced.

Building on prior work by Simmons, et al, Khebab and I are taking the analysis a step further and looking at the percentage of post-peak cumulative production under a production rate versus time curve that will be (net) exported. The original Export Land Model showed that only 10% of post-peak production from Export Land would be exported, with 90% being consumed locally. Depending on various factors, this percentage will of course vary from region to region.

That July 2008 datapoint is looking more and more like a "one off" rather than anything "sustained".

It's supply/demand at work. The market bid the price of oil up to the $133 plus range in June and July, 2008 (versus $56 in 5/05), and the market responded with a "flood" of new oil supplies--an increase of 600,000 bpd over the 5/05 rate (EIA, subject to revision, generally downward).

So, an increase in oil spending of about $5.8 billion per day versus 5/05 resulted in an increase of 600,000 bpd (about $10,000 per new bpd*), an annualized cost of about $3.7 million per new incremental bpd of production.

*Difference between $133 and $56 times 74.8 mbpd divided by 600,000 bpd

I was thinking about that too. I suspect that back in July everyone with a one gallon jug was loading crude oil into Volvos for $147, which would also explain why oil was washing up on shore in September when the big oil price crash began.

I would not be surprise to see new "peaks" from time to time even as the line slopes ever downward.

Also, has anyone recently done a 1 year moving average? If May 2005 was the peak, we're nearly 4 years out from there.

The average for the first 10 months of 2008 is 73,936,000 barrels per day. That is still almost 200,000 barrels per day above the 2005 average. But that is not the point. We have been on a four year plateau. It really does not matter in which of those four year we had the peak month, the plateau was the peak! Non-OPEC production has been on a five year plateau and has now fallen off that plateau. Average non-OPEC production, in 2008, will average about 600,000 barrels per day less than the average for the previous four years.

OPEC was producing flat out before they started cutting in October and November of 2008 while non-OPEC had already started a rather steep decline. The peak is past and it was 2005 thru 2008. Any difference in those was mostly noise.

Ron Patterson

Non-OPEC production has been on a five year plateau and has now fallen off that plateau.

The decline rate of non OPEC production should increase at a higher rate from 2009 as production is now declining at high rates in the North Sea and Gulf of Mexico. Russia's production is in decline. Brazil's production will probably reach a bumpy peak plateau in mid 2009 of about 2.1 mbd C&C. Low oil prices and credit constraints are limiting C&C production upside from Canada's oil sands.

Azerbaijan and Kazakhstan should increase C&C production but it won't be enough to offset the rest of non OPEC declines. Consequently, non OPEC C&C production in 2009 is forecast to be about 1.1 mbd less than the peak of 41.0 mbd in 2004.

click to enlarge

The peak is past and it was 2005 thru 2008. Any difference in those was mostly noise.

Well said, Ron!

OPEC supply cuts of 4.2 mbd this year almost certainly ensures that the peak C&C plateau from 2005 to 2008 has past. Non OPEC C&C production is forecast to fall another 1.3 mbd from 2009 to 2010 as shown in the chart above.

The only way that world C&C production might reach 74 mbd in 2010 is if both Iraq and Saudi Arabia are capable and willing to increase their C&C production. I think that the likelihood of both Iraq and Saudi Arabia increasing production by at least a combined sustainable 2.5 mbd from current levels to possibly make world production reach 74 mbd is extremely low.

click to enlarge

Due to OPEC production cuts and to continued non OPEC involuntary production declines, supply destruction is likely to exceed demand destruction. This implies that oil prices should continue increasing this year which is important as it will help renew the focus on energy conservation and renewables.

click to enlarge

'We have been on a four year plateau.'

I think this is the exactly right way to look at it... The question is, would 2009 have been within the four year range? ASPO says 2008 was the peak, but they've been oscillating between 08-10 for years. opec cuts will clearly mean that 2009 will be lower, maybe low enough to be off the plateau. Then, with projects cancelled on account of low price, depletion will likely mean we never regain the plateau.

Academic of course, but IMO 2009 would have been on plateau, maybe 2010 too, but not now. IMO we will never recover from opec cuts combined with the lack of investment in 2009. Land rigs have been increasingly idled in the US, now some deepwater contracts are being cancelled. Meanwhile US consumption looks to be climbing even as the recession bites deeper... nothing like something you like going on sale to spur buying. High prices bred low prices, now the reverse will be true, naturally with our buddies at opec helping out. Speaking of which, I never hear US politicians praising opec for helping us reduce our demand for foreign oil.

IMO we will never recover from opec cuts combined with the lack of investment in 2009.

The lack of investment in future projects is causing a down trend in gross project capacity additions from 2009 to 2012. Even if OPEC cuts by only 3 mbd instead of 4.2 mbd, this will effectively drop gross capacity additions in 2010 from 3.5 mbd down to only 0.5 mbd.

The annual gross capacity additions for 2010 through 2012 are not enough to offset annual field production declines. Consequently, the chart below provides more evidence that world crude, condensate and oil sands production has passed peak production.

click to enlarge

Hello Ace,

I gotta hand it to you, you sure know how to scare the crap of out people with statistics and graphics. Between you, Darwinian, Khebab & WT, Rune, Euan, and Rembrandt plus a big hat-tip to Simmons & ASPO--I'm about to start strapping on a daily diaper before I log into TOD.

I think people write LOL too much, but at this I literally laughed out loud.

Also from the Simmons presentation (slide 19):

Simmons asserts that "$100-$147 oil did not cause catastrophic economic damage."

I beg to differ: Are we not experiencing catastrophic economic damage right now, and is it not continuing to cascade?

And yes, oil prices were a major factor. Consider the following:

1) Comparing 07-08 with the 1990s, $25 average oil versus $100 average oil can be shown to represent the difference between 3% economic growth and 2% economic CONTRACTION ALL BY ITSELF for the US economy - due to additional $600billion outlay for oil this represents.

2) Fact 1 is one of among a number of factors dampening US consumer spending beyond a critical threshold where cascading contraction has been initiated, due to mutually reinforcing feedbacks of various kinds (such as less employment leading to less consumer spending leading to less employment....).

It would be interesting, though, to try to quantify the relative contribution of the factors just cited relative to other, non-oil-related ones involving corruption and criminality in the fiscal sector, excessive debt levels, reckless monetary policy leading to bubbles, etc.

By the way, I do enjoy and appreciate Simmons' presentations.

I think a series of Very Bad Decisions™ had already weakened the economy, the jump in oil prices was the shock that caused it to topple. We might have been able to sustain $125 + prices had the economy been healthy going into the shock.

What we are living now is the natural end stage of Reaganomics.

Simmons thinks that because the oil price went >$8 a gallon in places like the UK and our economy worked ok that the oil price didn't do any economic damage, but according to the Governor of the Bank of England oil prices did a lot of inflationary damage here.

Simmons doesn't understand oil is where a lot of our taxes come from - some of the things that are taxed in the USA are not taxed here, that's how we can stand the high oil taxes - and we have small cars that do relatively lots of miles to the gallon!

I think it would be useful for Gail or someone to calculate the amount Americans, for example, spent on petroleum products above and beyond the 2003 price and see what effect that likely has had on savings, spending and mortgages.

I've no doubt oil prices helped pop the housing bubble, at minimum, and played a relatively important part in the current economic downturn.


Simmons asserts that "$100-$147 oil did not cause catastrophic economic damage."

I found this assertion curious as well. My guess is that his between-the-lines agenda is to encourage infrastructure investment, arguing that the increase in prices necessary to fund the investment would not be overly harmful to the economy. But this would only be true if you can bank on growing supply.

The far stronger message is sobering: 1) we have likely already past peak production capability for oil globally and 2) the infrastructure (both skills and iron in the ground) are in need of a major upgrade. Taken together, these points augur the end of oil as a useful resource maybe sooner than we think. Not only is our ability to find and deliver oil at stable prices likely to decline, but the enormous investment needed to improve the infrastructure would need to be amortized over inexorably fewer barrels brought to market. Beyond some locally advantageous prospects, who would take that bet?

Oil's doom appears sealed in a vicious cycle, with a huge liability to anyone dependent on it (i.e., the USA). A pyrrhic approach may be found in competing for relatively abundant sour barrels, but the end is in sight.

An oil supply optimist might be able to frame a way out of this crunch, but has the burden of refuting both the state of the infrastructure and the empirical data on peak production.

I disagree, at least partially.

I think it's necessary to be careful to avoid confusing causation with correlation. There is undeniable correlation between the 2008 spike in oil prices and the ongoing economic damage. However, I think there is significantly less evidence that the immediate CAUSE of this economic decline was the high oil prices. The real-estate ponzi scheme, the need to perpetually extend more credit to people with ever worse credit to continue an ever-increasing flow of money into the real estate market in order to keep prices going up (a basic, and flawed assumption upon which all ponzi schemes rely) was destined to fail eventually. Did high gas prices act to prick this bubble? There may have been some causality, but I'm inclined to think that the bubble popped primiarly by itself (and would have popped in roughly the same fashion even if oil had never topped $60/barrel).

That's not to say that high oil prices can't or won't crash our economy in the long run. I just don't think that 2008 was that event. I think we'll see much higher oil prices (quite possibly not in absolute dollar terms, but certainly in % of median personal income terms) create just such a crunch, but not for a few more years. Just how soon will depend in part on 1) how much the current low price kicks the legs out from under ongoing drilling and the development of alternatives, and 2) to what extent we're able to fix our short term financial/economic problems to create another short-lived bubble that ramps up demand just in time for a serious crunch in supplies...

Bear Stearns got taken out in March. The stock market started going down Oct 07. The Recession began in Dec 07. Housing peaked in 06 and has been tanking since.

Things started to blow up WELL BEFORE $100 oil first appeared.

That is because the price was a symptom of the disease not the disease itself, Which is falling NET energy (falling EROEI). The economic effect of falling EROEI is that the oil industry (and associated industries i.e. steel) boom as more and more of the production is folded back into itself, GDP can rise in this case, as energy is 'productively' used but the long term effect is destructive (it just takes a while to unfold).

I also note that Simmons says "Easiest way to crush any economic recovery is to end up with oil shortage and sky-rocketing oil prices"

So what is it Matt? do or do not high prices affect the economy?

The high prices outside the US are tax driven, and are therefore a consumption tax which makes the economies drive toward efficiency and less susceptible to changes in the material cost.


This sounds right to me. Bubbles and crises have been around a long time and are always popped by something, but what pops them is not what causes them. However what oil (peak) affects are the prospects for recovery. War got us out of the Depression. The recovery and subsequent post-war prosperity were funded by abundant oil and other resources. They're not there this time.

Bubbles and crises have been around a long time and are always popped by something, but what pops them is not what causes them.

A big difference this time is the amount of leveraging (translated into economics for dummies, as betting) that went on worldwide. This has amplified the impact by at least an order of magnitude. This baby woulda burst spectacularly without a commodity price spike. It is possible that the pressures to fake growth, were in part caused by the commodity ceiling, but I don't think they were the primary cause.

Written by PhilRelig:
Also from the Simmons presentation (slide 19):

Simmons asserts that "$100-$147 oil did not cause catastrophic economic damage."

I beg to differ: Are we not experiencing catastrophic economic damage right now, and is it not continuing to cascade?

I agree with Simmons that $147 / barrel was not enough to spur sufficient demand destruction. The subprime crisis caused the U.S. financial industry to collapse and along with it the world. The U.S. dollar began strengthening as crude oil prices fell. This was not a coincidence. It was causation. The U.S. dollar began strengthening because banks began hording dollars in preparation for the worst of the subprime crisis which would occur in fourth quarter of 2008. They did this just after the FDIC issued its annual report on banks on June 30, 2008. The banks froze credit. Also Saudi Arabia managed to get production up from their new oil well beginning in May 2008 and increasing through June. The subrime crisis drove the price of crude oil down with a strengthening U.S. dollar and killed demand with disappearing credit as supply exceeded demand. The triple combination made the price plummet. The deteriorating economy marked by reduced sales of most goods and rising unemployment is keeping demand down even with a low price for crude oil. When manufactures make less stuff, they use less energy. When people lose their jobs and houses, they use less energy.

Financial firms, such as Fannie Mae, Freddy Mac, AIG, Lehman Bros. and JPM Chase, began failing before manufacturers, such as GM. If the high price of crude oil drew sufficient money away from the economy to collapse it, manufacturing would have failed before the financial sector. Please explain to me how high crude oil prices could kill mortgage companies, investment companies and banks before retailers and manufacturers? People cut discretionary spending long before they give up on their mortgages. The adjustable rate mortgages whose rates reset in the Spring of 2008 were made 2 to 3 years ago. There is about a 6 month delay from when the rate resets to when the loan is 3 months past due and considered in default. The worst part of the subprime crisis was easily predictable in advance as fourth quarter of 2008 by anyone who was paying attention to the financial crisis.

Sure the high price of crude oil put recessionary pressure on the economy, but $147 / barrel was not enough to kill demand meaning next time demand bumps up against the limit of world crude oil production, the price will soar above $147 / barrel.

Written by Simmons (slide 28):
2009 needs to be “Year of Enlightenment.

It should have been 1995.

Looks like the new administration is serious about exploring fusion power:

PRINCETON: University gets $390 million U.S. contract for Fusion Research

The U.S. Department of Energy (DOE) on Thursday announced the award of a new contract valued at $390 million to Princeton University for the management and operation of the DOE’s Princeton Plasma Physics Laboratory (PPPL), a collaborative national center for plasma and fusion science located in Plainsboro.

theantidoomer -

Well, $390 million should keep this quasi-academic boondoggle alive for at least another five years or so.

The nature of these huge long-term open-ended R&D projects is that the participants eventually become less interested in solving the initial problem and more interested in 'colonizing' the problem, i.e., building a cozy career by keeping the gears turning and cranking out academic papers to be presented at conferences, etc, etc.

Of course, if they unexpectedly hit a breakthrough, I'll be happy to eat those words.

I'm skeptical as well, but I'm all for basic research funding.

Of course, with this infinite power will come infinite economic growth, if what I've learned on this site is correct.

Be careful what you wish for.

Yea, just the idea of emulating the sun down here on earth is simply put :: above my collar.

Of course, if they unexpectedly hit a breakthrough

More likely history will repeat itself. Someone else will make a breakthrough, and the politically well connected PPPL will get it suppressed/defunded, bacause it represents a threat to their empire.

I think the scientists on that have a mixed set of views on it. some might actually think they are trying to save this way of life. though i will bet money on some of them using it as a 'retirement/welfare' for themselves.

Critics want to pull plug on 'big extension cord' through eastern Oregon
A plan to build a 298-mile-long power transmission corridor across eastern Oregon to Idaho is rankling residents who say it will spoil spectacular views and lacerate prime onion-growing territory.
The project could be a sign of conflicts to come. With wind turbines popping up across eastern Oregon -- and a recent U.S. Department of Energy report predicting that U.S. demand for electricity is likely to grow 40 percent in the next 22 years -- the need for new power lines will only increase.
Bless said it's the first electrical transmission line proposed in Oregon in more than 20 years.
But the most controversial segment would extend 37 miles through Oregon's Treasure Valley in Malheur County. Thirty percent of the nation's onions are produced there and across the Snake River in Idaho, all within 50 miles of Ontario.
But the lines and towers would make aerial spraying impossible in some places, putting the industry at risk, Jensen said.
She theorizes that the utility opted for private land to sidestep "dealing with environmental groups and public land issues."
The corridor also appears to disproportionately favor private land in Baker County. That's wrong in a county where 50 percent of the land is owned by the federal government, Baker County Commissioner Fred Warner said.


It would be easy to label the farmers as NIMBYs (or BANANAs), but at the very least it seems strange that the utility would go after hundreds of private land holdings, avoiding the big guns (and their EIR requirements) that defend BLM lands.

Massive mono-cropping (onions in this case) causes massive pest problems which leads to massive aerial bombardment with deadly chemicals.

Anything wrong with this picture?

Maybe they could just become organic farmers then they wouldn't need Vietnam-style aerial warfare against our fellow creatures. Or they could diversify a little as well, grow more than 1 crop and thus not create their own pest-related problems.

Another reason why I'm not always the most optimistic guy in regards to our collective future...

If those power lines are more than 50 feet off the ground, the duster pilots will fly under them. BTDT.

Mexico oil production fell 9% in 2008

It is expected to fall further in 2009, but may decline at a slower rate as their KMZ field makes up for much of the Cantarell decline in the months ahead...

If Mexico is like the US, the UK, and Indonesia they may decline another ~25% before some stabilization in the years ahead.

For details, see today's blog at www.setenergy.org


Pushy Yanks saved themselves on Titanic

"The Titanic was built in Great Britain, operated by British subjects, and manned by a British crew. It is to be expected that national ties were activated during the disaster and that the crew would give preference to British subjects, easily identified by their language," the researchers said.

Savage and Frey realized that assumption was off after investigating passenger data.

They found that British passengers, who queued for a place in one of only 20 lifeboats provided for the 2,223 on board, had 10 percent lower chance of survival than any other nationality.

In contrast, Americans, who reportedly elbowed their way to the front of lines, had a 12 percent higher probability of survival than British subjects.

Reminds of that Jared Diamond article on the Donner Party. Selfishness pays.

So here we are now on the good ship SS Gaia. I see no reason to expect that there won't be pushing and shoving, and then downright fighting, for whatever lifeboats may be available. I fully expect the US to elbow and connive with the best/worst of them.

I wonder how many Chinese reactors turn out plutonium? How many fusion nukes do they have? Seems like having China join Russia and the US in the MAD nuclear aristocracy would be against the interests of both countries.

In contrast, Americans, who reportedly elbowed their way to the front of lines, had a 12 percent higher probability of survival than British subjects.

Imagine, 300 million Americans elbowing (or shooting) their way through arguably the most severe population bottleneck in human history.

Passengers of the first and second class were advantaged: they likely had better access to information about the imminent danger, not to mention that they were closer to the boat deck.

This is already happening. Matthew Simmons has bought land and a farm. Barton Biggs recommends creating a "safe haven" and stocking it with canned food, seed, fertilizer, and guns. And you can bet that behind the scenes, TPTB are similarly inching their way towards the back door of the theatre.

But maybe that was partly because the Americans on board were rich. After all, the poor people on the Titanic must have been mostly British (since poor Americans wouldn't have had the money to make the trip over to England in the first place.) I did read that rich passengers on the Titanic were much more likely to be saved than poor ones.

Selfishness might not be the thing that counts in this case. It's the fact that they were wealthy and not in steerage (i.e. below decks). The richer passnegers were probably more likely to make their way to the head of the line. They probably felt entitled to survive because of their social position.

I am not an expert on the Titanic, but it occurs to me that many lives could have been saved if:

1.As soon as the Captain realized the ship would sink, it was announced everywhere ASAP.

2. The few lifeboats immediately lowered and pack to the gills with children and the sick & weak. Then women next in the remaining lifeboats.

3. Concurrently with the above 1,2: the Captain and crew should have encouraged all the remaining passengers to quickly tear the ship apart for anything that would float, then to lash it together, then throw it overboard. I wonder how much lumber, rope, wire, ornate woodwork, empty barrels [or barrels that could have been emptied quickly] were dragged to the bottom enclosed by the huge steel tonnage. Another example: a huge kitchen soup pot [or a metal sink itself safely plugged] might make a lifeboat for one adult or one child if they can get safely inside and settled down without getting seawater inside too.

4. If you could climb/rope down the ship's side onto one of the crude, lashed-together lifeboats without getting totally soaked--you probably stood a good chance of avoiding hypothermia death until the Carpathia arrived a few hours later.

5. If you fell into the water and were not totally incapacitated by the impact and thermal shock, but could then swim or be rescued to one of the primitive rafts-- huddling/sharing body heat with a dry person in a blanket may keep you alive until the Carpathia arrived on scene.

If the above had been followed--maybe very few [to none?] would have actually died. My feeble two cents.

Compare to the South African cruise liner sinking where the Captain was the very first overboard, then quickly motored to land, supposedly to 'masterfully' direct/effect the rescue of his passengers from the safety of Terra Firma.

I am not an expert on the Titanic, but it occurs to me that many lives could have been saved if:

It's claimed that the fact this didn't happen wasn't due to a single weakwilled captain, but rather to the prevailing attitude of the time. People simply believed in fate, and making extraordinary efforts to ward it off just wasn't (often) done.

1. It was supposed to be "unsinkable", and everyone believed that to be true. At first they thought they were just going to take on a lot of water and need "assistance". It wasn't until pretty late that the Captain and crew finally had to face up to the fact that the ship was indeed going to sink. By then it was probably too late to prevent major loss of life.

2. The whole lifeboat scene was apparently not quite as orderly and organized as some have made it out to be. Some lifeboats were apparently lowered that still had room for more people; if all hands realized how many lives were at stake, the decision might have been reached that it was worth the risk to place a few more people in each lifeboat than what the official design capacity called for. Some women and children didn't make it on to the lifeboats, some who were not women and children did. It all had to be done pretty quickly, once the ship started listing beyond a certain point it was no longer possible to safely lower some of the lifeboats. Remember that there was pretty poor communications around that huge ship, even when all was working normally; getting all the people to the right lifeboats at the right time and getting them all launched before it was too late would have been a near impossibility even under the best of circumstances.

3, 4, 5. It was ice water - literally. Iceburgs were floating around. One didn't need to be IN the water to experience hypothermia, just being wet and continually splashed was certainly enough to do it. Yes, more floatable objects could have been gathered and lashed together, and maybe that would have saved a few more people. However, it was chaos, communications was poor, and even if it were possible, ship's crews simply were not accusomed to thinking in such an improvisational manner.

.1 Where did you get that info? It is nothing like anything I've read.

The only people who thought the Titanic was unsinkable was the uninformed public.

From the time the extent of the damage was known, which was in the first twenty minutes the captain knew the ship was going to sink. He ordered the abandonment of the ship immediately he knew the damage.
They also knew when a rescue ship was likely to arrive. Not all ships had radio it was very new. They were hoping a ship close by would rescue them. They could see a ship passing nearby which did not respond to the rockets and must not have had radio.

Signal rockets and radio were being used from the time the ship was found to be foundering.

The first lifeboat departed with 28 out of a capacity of 65 because the crew were trying not to alarm the passengers. Many others were launched nowhere near their full capacity.
As far as I know ALL the main lifeboats were launched, two collapsibles floated off. The people remaining were those which didn't make it onto a lifeboat.
The last lifeboats launched had as many people as possible.

The only chaos was when the ship was listing badly and beginning to sink.
Anyway read it yourself, you might get rid of some of your assumptions.

Hello TODers,

My Thxs to Leanan for the Simmons' toplink. Since the paint is barely holding the rust together: it poses an interesting postPeak choice going forward. Is it better to just keep increasingly patching a large pipeline until it stops functioning at its Minimum Operating Level [MOL], or is it postPeak better to proactively downsize the pipe and have greater reliability, profitability, and longevity?

For example, there is a pipeline from Texas to Az [not sure of the size, but let's say it's a 30-inch pipe]. As rust and depletion never sleep-->we can expect an ever increasing rate of failures going forward in time, hopefully with few injuries and/or deaths. Thus, my Asphaltistan will have increasing fuel emergencies when this pipe becomes disabled more frequently. Building a local buffer for fuel storage will help, but you can only store gasoline for so long before it goes bad.

Or is the better choice to replace this old pipe with new 15-inch pipe for greater flowrate resilience [no fuel emergencies for a long time, but forcing my Phoenix to immediately reduce consumption to the max flowrate? If we are now postPeak--> it wouldn't make any sense to replace the 30-inch pipe again as international ELM and Tx-to-AZ ELM both kick into high gear.

I am not an engineer or petrol financial analyst, but it would seem that there is some cost/benefit point where replacing a big, rusty pipe with a smaller pipe becomes the way to go. The steel savings would also help reduce future steel demand so that more steel can be used for AlanFBE's RR & TOD and my SpiderWebRiding. Thxs for any reply.

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

I dont know if this was discussed back last year - Here are some images of a pipeline rupture that took place in appomattox VA in september of 2008.

Im not sure if the exact cause was identified - beyond the fact that the pipe burst - but perhaps we should expect this to occur more frequently as time goes on (and budgets for maintanence fall)??


The related local news articles contain some chilling eyewitness accounts.

Hello Toto, I am always enjoying your posts. This may answer your question “Are humans smarter than yeast?” – Will this species ever learn?

Tom; Growth is not an option.

"Will this species ever learn?"

According to Thermo/Gene Collision Theory--> No, not a chance, nada, no-way Jose'

Malthus + Hubbert + ELM = dire postPeak Bottleneck Squeeze

Best hope IMO, is moving toward Optimal Overshoot Decline strategies. My feeble two cents.

Yeah, but yeast can't knit, and they can't play the saxophone. Case closed.

Looking at the share prices and the front month for WTI it seems that they are getting to be tied together.
Stocks go up, so does oil, stocks go down, so does oil. This sort of implies if there is any recovery in the pipeline then oil will just shoot back up in price.

Like some are saying here, there can be no recovery because the price of oil will keep slapping everything down again.

Is there any charts out there showing oil price against the DOW?

Which is strange, because a year ago, it was the opposite. If WTI went up, the market went down - they were moving opposite. I think the theory was that rising price constrained the economy, lower price encouraged it - kind of like WTI price was a stand-in for interest rates.

Hello TODers,

I am not a golfer, but it occurred to me that my local courses do not have citrus trees scattered all over the fairways, even though these trees do well here. Instead, the country clubs have planted large, non-native trees that present much taller and more daunting obstacles to the golfer. Yes, I know that citrus trees are non-native to our Sonoran Desert, but they are a premium food crop.

The irony arises when one considers that these country clubs generally have attractive vendors on batt-carts that sell OJ, lemonade, and grapefruit juice [probably all long distance imported from Florida] that can be blended into the golfer's favorite course cocktail.

Wouldn't it make more sense to have the golfer, or the vending lady, just pick what is needed right off the golf course to reduce or eliminate the embedded transport miles? The same thing could be done with fresh tomatoes and celery for those duffers requiring a Bloody Mary. The vending person could probably even charge slightly more because the ingredients are so fresh, but also, for example, offer a slight discount to a golfer who self-picked a grapefruit or two on the 11th hole for his favorite alcohol jolt to be made.

What? How dare you expect these techno jockeys to have any common sense?

Only when they are tied to the control rods of a derlict reactor and lowered into the "safe" nuke cesspool, will they admit they were wrong about living with nature.

The Horror,,,,The Horror,,,The Horrorrrrrrr.


LOL! Quite the picture you paint. Compares well with my O-NPK recycling wood-chipper posting series.

Since Tiger & the PGA are still not paradigm-shifting in the face of overwhelming evidence: I am just trying to figure out a way to ease the transition of our golf courses into postPeak veggie plots. Consider that Zimbabwe, with all its starvation, mass emigration, and 'death by diarrhea' cholera, still has golf:

Golf, like much in the troubled African nation, tries to hang on -- and provide hope

..For more than a decade the Nick Price Junior Golf Foundation had been exposing children in Harare, the capital, to golf, but now that effort is also one of the casualties of the chaos. "I've still got my foundation, but it's shut down," Price said. "About six months ago, we just mothballed everything. It was hard to find gas to transport the kids around. A lot of the kids can't afford to feed themselves, let alone come to golf courses."

..According to Manzungu 32 COURSES ARE OPERATING IN ZIMBABWE [CAPS by me for mind-boggling emphasis]. The nation's oldest club, Bulawayo GC, opened in 1895, has weathered the turbulence but not easily. Membership is down from 700 in 2001 to 130, and the club is procuring staples across Zimbabwe's borders.
I doubt if the corrupt businessman and politicians playing these courses volunteer their golf-carts to those exhaustively wheelbarrowing a family member, with full-blown cholera, just outside the country club. You Can't Elevate Your Status by having fresh, explosive diarrhea and vomit scattered across your golf-cart's cheetah covered seats, and carved elephant tusk dashboard.

IMO, Mugabe should be shot for not plowing these areas a long time ago. Will the First World repeat Mugabe's mistakes? Or will we hopefully see Tiger fulfill his father's prophecy of using his international fame to move Nations? Time will tell...

That's actually a good idea bob. You could even take the idea of a eco-golf course a step further. You could have a links course with fresh vegetables being grown between teeoff points, and have the fruit trees as you said. The fresh veggies and fruit could then be used to serve first class organic meals in the clubhouse.

Also known as Edgefield outside Portland:

Interesting beginning to the resort...

As hard as it may be to believe today, Edgefield, built in 1911, served for several decades as the Multnomah County Poor Farm. Residents operated a self-sufficient environment, raising hogs, poultry, growing a variety of fruits and vegetables, operating a dairy, cannery and meat packing plant as well as working in the laundry, kitchen and hospital.

Hello Wisco,

Thxs for this EdgeField Resort & Golf info. Now the question is: will it be converted back, or will the starving, postPeak poor be kept at the Edge[of the]Field?

At the very least, we could go back to the Scottish method of golf course greenskeeping, i.e. sheep. They don't require gasoline like a large riding mower, and provide wool for stylish golf sweaters, leather for the shoes and gloves, and mutton for the after-round meal. They also provide free fertilization services.

Given my locale, I'd be remiss if I didn't mention milk and cheese. Ah, cheese.

Would the reasons be.............
Expensive to purchase shrubs.
Expensive to maintain, fertilize, prune, spray.
Constant damage by swinging golf clubs and balls.
Harvesting expenses.
Harvest reduced by poaching.
Deciduous trees, loss of application to course architecture.

In the end would, the EROI be positive?

The first golf courses were in Scotland. The effort to replicate Scotish landscape in the Sonoran desert has to be the height of insanity.

They don't need citrus trees, they need a bulldozer. Or just turn off the irrigation, nature will take care of them soon enough.

Hello WNC Observer,

Sorry, but we are going far, far past just merely replicating 'Scotland in the Desert' for our postPeak Golf Energy Orgy of 600,000+. "To infinity..and beyond":

FBR Open packing a punch

The FBR Open never has lacked a "wow" factor since it moved to TPC Scottsdale in 1987.

This week, it could be more like "wow-eee" with some of the tweaks to the PGA Tour event and Valley fans in a festive mood over the Cardinals preparing for Sunday's Super Bowl...

If fans don't have enough to celebrate already, the Open will provide a little more excitement with some changes this year, including pro golf's FIRST FULLY ENCLOSED HOLE [WTF?-BS I assume they will provide A/C too!], a new beer garden along the 18th fairway and a free public party to watch the Super Bowl on Sunday at the popular Greenskeeper Tent.

The Birds Nest party tent informally is being called the "Redbirds Nest" this year, and the Thunderbirds are hoping to see a "red-out" with fans wearing Cardinals colors.

Felix said the spectacle of 170,000 red-clad fans might put a premium on eyewear.

"That would be incredible," he said. "Sunglasses are always a good thing to bring out to the tournament, but that would be awesome."

The rowdy 16th hole this year has been fully enclosed for the first time with bleachers added to the right-rear portion of the hole and a JumboTron erected near the tee. Capacity around the hole has been increased to about 20,000.

A new feature along the 18th fairway is the Tilted Kilt, a bar with Celtic decor, international beers and traditional pub food such as shepherd's pie and drunken clams.

In hopes of attracting and holding more fans for Sunday's final round, the Open will host a Super Bowl bash at the Greenskeeper Tent near the main food court after the final putt drops. Admission is free, and the game will be shown on a JumboTron...
IMO, the only thing lacking to complete the total delusion is Maine lobsters and Alaskan King crabs continentally migrating across our huge desert with chocolates and bananas in their uplifted claws...

A partial repost of mine from early 2007 below:
We recently had the FBR Open Golf Tournament, huge crowds [508,000 attendees]:

That was when I was thinking about the possibility of going there with a placard to hold up to the teeming crowd and TV cameras. The placard would simply say, "When are we going to plow up this golf course to grow vegetables? Research Peak Oil!".

But I realized this was private property and that they would be within their rights to confiscate my placard before I even got near the grass. The event organizers obviously want everyone to drive miles to this affair, spend money, have some overpriced drinks and food, chase the opposite sex at the Tourney's huge parties, have some fun, instead of the crowd spending a few moments thinking.

Additionally, and most importantly: I didn't want a bunch of golf pros teeing off on my body with graphite drivers while the drunken masses cheered them on and the internationally broadcast cameras rolled.

I will have to think of some other strategy to help spread Peakoil Outreach before it is too late.

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

Congress has solved the Energy and the whole Money-Business-Credit problem. That MUST be why the House Committee on Energy and Commerce has time to consider cameras on cell phones will require a click noise if they are taking a picture.


Requires any mobile phone containing a digital camera to sound a tone whenever a photograph is taken with the camera's phone. Prohibits such a phone from being equipped with a means of disabling or silencing the tone. Treats the requirement as a consumer product safety standard and requires enforcement by the Consumer Product Safety Commission

Now, does anyone know how they have solved the Energy issue and whole debt-based money problem so they can move down the importance list to get to this oh-so-pressing matter?

Prohibits such a phone from being equipped with a means of disabling or silencing the tone.

If this ever becomes law, it will only take hours before the fix is all over the internet. How long did it take for the iPhone to get unlocked? Anything that is in the firmware of an electronic device is subject to change.

This is so that police, FBI agents, etc. can hear any bystanders that are taking pictures while they beat up, torture, or murder unarmed civilians. This way they can confiscate the evidence, and thus avoid the inconvenience of having their actions exposed to the public, as recently happened in Oakland.

This is how consumer products are rendered safe for TPTB.

Province betting on oil in our backyard

$300,000 aerial survey around Sarnia region aims to detect signs of additional oil reserves


Hello TODers,

After reading JHK's latest posting: the true definition of 'shovel ready' financing = $1.2 million for an executive office redo. Just wheelbarrowing, then shoveling this many loosely piled one-dollar bills into an office would take a pretty big cubic footage to fill. I read somewhere else that the toilet alone cost $35,000.

I guess we could say that this money was wastefully spent in Thain, to then head down the drain... Gotta love trickle down economics when your crap flows downhill..

Hello TODers,

'If no Palestine - disaster for Israel'
Perhaps a reasonable Madagascar Plan [or some other suitable location] may be a better solution.

Hello TODers,

Of course, this is just the agricultural version of same postPeak buffeting that Simmons discussed in his latest presentation on today's DB regarding FFs:

The price is wrong: Farms see costs rise, profits drop
Area farmers pay more for fertilizer, feed but get less for crops they sell

..Production costs show no signs of coming down anytime soon: Fertilizer and feed are two and three times higher than this time last year. At the same time, farmers are expected to make a third or half of what they got last year. A strained economy worldwide isn't helping, leading to a drop in agricultural exports.

''The volatility from everything from diesel to fertilizer has just been unbelievable,'' said Bob Leiby, director of the Lehigh County Cooperative Extension. ''These prices are hitting new highs and then a few months later they're at five-year lows, so it becomes very difficult to make good choices on what the profitable crops would be to grow for 2009.''
Have you hugged your bag of NPK today?

The other day a poster ID of Pragma asked for recommendations on CB radios/ rigs.

I am posting a reply here since others may be interested.

I always used Cobra brands way back in the 70's CB times. They were ok but sadly lacking.

Last year my son brought a new Cobra since he was on the road a lot.
It lasted about 2 months and blew a 20 amp fuse constantly in his auto fuse panel. I put it on my bench and found it was due to a dead short in the power supply area. Let it lay and didn't pursue at this time.

Around the time line before IKE it was planned that I would drive a tanker rig to the area for fuel , just as we did with Katrina so I went out to buy a new CB. I brought a Galaxy DX 959.

Why? It is easily modified. Can be upped to near 40 watts output.
Has far more features than Cobras. Capable of going out of band to the amateur freqs nearby the CB freqs...around the 27-19 mhz range.

For all this it was reasonably priced. The trip for IKE was called off and I have yet to use the Galaxy but I like the specs and I am always tweaking something.

I prefer the Galaxy...there is another brand similiar to the Galaxy the name of which I can't recall. The thing to do it check for mods on the web.

Airdale-try to get one that has SSB..upper and lower

Thanks Airdale:

I hope the worst of the ice storm is behind you.

Been checking a few things on the web, I've got a lot to learn.

As Nate mentioned, some basics on CB and ham radio might make for a good post. Alternate communications may come in handy in the future.

Sounds like you have the background to take a crack at it, (after you thaw out) :-)