DrumBeat: February 6, 2009

U.S. pump prices on the rise as refiners cut back

At least seven U.S. refiners have announced fuel production cuts as a result of weak profits stemming from softening demand, including Valero Energy Corp and ConocoPhillips -- the nation's two biggest fuel producers.

As of the end of January, refiners were running their plants at just 82.5 percent of capacity -- four percentage points below last year, according to government figures.

"There is too much capacity to make gasoline in this environment," Valero Chief Executive Bill Klesse said last week. "If the industry doesn't balance supply with demand we will have negative margins as we had in December."

Miners lead the rush to raise equity

Since January 26th three leading firms—Rio Tinto, Freeport-McMoRan and Xstrata—have indicated that they will probably try to raise equity in one form or another. Together they could target as much as $17 billion, lopping a fair chunk from their combined net debt of $62 billion, and equivalent to just over a quarter of their stockmarket value.

Why miners? All three firms have high borrowing, in large part due to overpriced acquisitions they made during the boom years. Indeed, Freeport also announced that it was writing off half of the $26 billion it paid for Phelps Dodge in 2007, and Rio will surely have to write down Alcan, which it bought for $38 billion in the same year. But all three had reasonable liquidity and could have hunkered down for at least another year. Perhaps they reacted more quickly than other firms because the damage a downturn does to miners’ earnings is immediate. Denial is not an option.

Spending on infrastructure could easily run amok

On January 28th ASCE estimated that $2.2 trillion is needed over the next five years to raise the nation’s infrastructure from a “D” to a “B”. The House bill has only $9 billion for public transport and $30 billion for highways. An amendment to add $25 billion in infrastructure spending to the Senate’s bill failed on February 3rd. This may be a blessing, given how the money is likely to be spent.

New biomass charcoal heater: A 'new era' of efficiency and sustainability

Using waste biomass charcoal, their heater recorded a thermal efficiency of 60-81 percent, compared to an efficiency of 46-54 percent of current biomass stoves in Turkey and the U.S.

"The charcoal combustion heater developed in the present work, with its fast startup, high efficiency, and possible automated control, would open a new era of massive but small-scale biomass utilization for a sustainable society," the authors say.

The Great Acetonitrile Shortage

Now here’s a news item that I’m pretty sure you haven’t heard about unless you work in or near a laboratory. We’re in the middle of an extreme shortage of acetonitrile, a common solvent. . .

So why are we going dry on the stuff? There seem to be several reasons, one of which, interestingly, is the summer Olympics. The industrial production that the Chinese government shut down to improve Beijing’s air quality seems to have included a disproportionate amount of the country’s acetonitrile production (for example). A US facility on the Gulf Coast was shut down during Hurricane Ike as well. But on top of these acute reasons, there's a secular one: yep, the global economic slowdown. A lot of acetonitrile comes as a byproduct of acrylonitrile production, which is used in a lot of industrial resins and plastics. Those go into making car parts, electronic housings, all sorts of things that are piling up in inventory and thus not being turned out at the rates of a year ago.

Why sustainable power is unsustainable

Renewable energy needs to become a lot more renewable – a theme that emerged at the Financial Times Energy Conference in London this week.

Although scientists are agreed that we must cut carbon emissions from transport and electricity generation to prevent the globe's climate becoming hotter, and more unpredictable, the most advanced "renewable" technologies are too often based upon non-renewable resources, attendees heard.

US Lawmakers Preparing to Draft New Offshore Drilling Laws

Federal lawmakers are gearing up to legislate a new offshore drilling plan that could restrict development in major areas of the Outer Continental Shelf, but allow some acreage previously closed to access to be opened for exploration.

House Natural Resources Committee Chairman Nick Rahall, D-W.Va., on Wednesday announced a series of hearings on offshore drilling that will explore the appetite for drilling off the nation's coasts.

Exxon Touts Surefire Plan to Stimulate Economy: Drilling Creates Jobs

The big state [Alaska] and the big company [Exxon] have been at loggerheads over Point Thomson, one of the largest undeveloped fields in the U.S. for years. Last year, a few months before she became the Republican vice presidential nominee, Gov. Sarah Palin attempted to revoke Exxon's license to develop the field because they were moving too slowly. Exxon is ready to move quickly now, arguing at a recent administrative hearing that it could begin drilling before the end of winter, if the state gave it a license to build an ice road to move in a drilling rig the size of the Statue of Liberty. Late last month, the state complied, Palin's recent green conversion apparently notwithstanding.

What was the winning argument? Essentially, Exxon promised to move quickly this time, generating jobs, investment and ultimately revenue from oil and gas production. Exxon's first witness, Alaska production manager Craig Haymes, dove right into the job creation angle at the beginning of his testimony.

Europe's Ricardo claims breakthrough in ethanol engine efficiency

Engineering firm Ricardo today announced new technology that optimizes ethanol-fueled engines to a level of performance that it claims exceeds gasoline engine efficiency and approaches levels previously reached only by diesel engines.

The company's Ethanol Boosted Direct Injection, or EBDI, takes advantage of ethanol's best properties—higher octane and higher heat of vaporization—and achieves the performance of diesel, at the cost of ethanol, and runs on ethanol, gasoline, or a blend of both, the company said.

Charter Street plant will use biomass fuel, not coal

The new biomass boiler will be online in the heating plant before the end of 2012.

The boiler will be able to burn 100 percent biomass fuel, up to 250,000 tons a year.

Biomass fuels range from wood chips to switchgrass pellets.

Using biomass fuels would replace the 108,800 tons of coal annually burned at the heating plant, which provides steam for heating and cooling in buildings on the UW-Madison campus.

UPDATE 1-Global rig count down 8 pct in Jan-Baker Hughes

Baker Hughes, a leading oilfield services provider, said the industry's January U.S. rig count was 1,553, down from 1,782 the previous month. The worldwide rig count stood at 2,974, down 8 percent from the month before.

The U.S. rig count has been hit particularly hard so far because many wells are drilled with equipment on shorter contracts and by smaller operators that respond more quickly to market signals in order to manage their cash and risk.

Chevron Makes Big Oil Find Off Texas

Chevron has confirmed a potentially huge oil find at its ultra-deepwater Buckskin prospect in the Gulf of Mexico. The oil-bearing structure is about 200 miles off the coast of South Texas. The discovery well had to navigate almost 7,000 feet of water to a total depth of 29,404 feet -- an astounding engineering achievement for Buckskin's owners.

Until recently, the Lower Tertiary Trend was largely considered a wildcatter's pipe dream -- potentially a billion barrels of oil at a depth that was impossible to reach. This week's double-header from Chevron and Anadarko is now forcing all the naysayers in the debate surrounding the Gulf's Lower Tertiary to rethink those conventional views.

Chevron also confirmed on Thursday that it will defer a planned improvement to its refinery in Pascagoula, Miss. A spokesperson said that the delay will stretch until 2010 at the earliest.

Emerson Electric Plans to Cut as Many as 14,000 Jobs in ’09

Feb. 6 (Bloomberg) -- Emerson Electric Co., the world’s largest maker of power equipment for oil companies, plans as many as 14,000 job cuts this year after already slashing 7,000 positions since October amid lower demand.

The company expects to shrink its workforce to as little as 120,000 by its fiscal year ending on Sept. 30, according to spokesman Mark Polzin, citing a presentation today by Chief Executive Officer David Farr. The St. Louis-based company had 141,000 workers on Oct. 1, 2008, Polzin said.

'Oil prices can not go above $40 now'

We suggest that people contain any oil purchases between $35 and $40—not above $40 at this point in time. Oil longer term is far more likely to be higher than that level than equities looking out the same timeframe. As bearish as oil looks right now in the demand destruction, we’re also having development destruction, which happens very fast. We have argued for almost four years that the peak oil theory, which many people latched onto during the last dramatic rise, couldn’t come into play without another recession and without what has been taking place in the oil market recently. As we get into the next economic recovery, which I think will be more a world recovery versus a U.S. recovery, the peak oil argument could have a more pronounced effect on the oil price. That’s particularly true in light of the fact that this decline has caused just about everybody to stop any real new exploration and hold off where expectations of oil were high, such as the tar sands in Canada.

'Cash for Clunkers' pulled from stimulus

An amendment to spend $16 billion to encourage buyers to purchase new, fuel efficient autos was pulled from the bill.

Ice collapse 'could raise sea levels 20 feet'

A team of experts has calculated that if the West Antarctic Ice Sheet collapses -- as many expect it to -- the outcome will be worse than has been forecast.

The sea level in the wake of the collapse is already projected to rise between 16 and 17 feet. The new research suggests the true figure could be almost 21 feet in the North Atlantic.

Update On Renewable Energy Stimulus Provisions

Senators Tom Harkin (D-IA), John Thune (R-SD), Tim Johnson (D-SD), and Jon Tester (D-MT) introduced an amendment (#397) to the economic recovery legislation last night that would move US $1.14 billion from the U.S. Department of Energy (DOE) into energy programs at the U.S. Department of Agriculture (UDSA). The amendment could be voted on later today. . .

The senators noted that in order to meet the national targets in the Renewable Fuel Standard, there needs to be new support for biomass crop production, harvesting, transport and storage – programs already in place at USDA. In addition, during this time when private investment capital is slowing to a drip, the senators believe that Congress needs to support the growing number of commercial biorefineries for advanced biofuels, as well as biomass research and development for better technologies in the future.

Obama: Energy an essential part of economic recovery plan

Energy components are essential parts of a strong economic recovery plan because they would begin to reduce reliance on imported oil, US President Barack H. Obama told Department of Energy employees on Feb. 5.

"Your mission is so important and will only grow as we seek to transform the ways we produce and use energy for the sake of our environment, our security, and our economy," Obama said in a joint appearance with US Energy Secretary Steven Chu.

DWP's renewable energy efforts will boost rates, report says

The Los Angeles Department of the Water and Power's decision to embrace renewable energy will have a "significant impact" on the electricity bills of customers, according to a five-year review of the nation's largest municipal utility.

In a 223-page document released Thursday by City Controller Laura Chick, PA Consulting Group also said the DWP would have difficulty accomplishing Mayor Antonio Villaraigosa's plan to make renewable power -- generated from wind, solar and other sources -- one-fifth of the city's energy portfolio by 2010.

Utilities Turn Their Customers Green, With Envy

The [Sacramento Municipal Utility District] had been trying for years to prod customers into using less energy with tactics like rebates for energy-saving appliances. But the traditional approaches were not meeting the energy reduction goals set by the nonprofit utility’s board.

So, in a move that has proved surprisingly effective, the district decided to tap into a time-honored American passion: keeping up with the neighbors.

Last April, it began sending out statements to 35,000 randomly selected customers, rating them on their energy use compared with that of neighbors in 100 homes of similar size that used the same heating fuel. The customers were also compared with the 20 neighbors who were especially efficient in saving energy.

Customers who scored high earned two smiley faces on their statements. “Good” conservation got a single smiley face. Customers like Mr. Dyer, whose energy use put him in the “below average” category, got frowns, but the utility stopped using them after a few customers got upset.

Confusion in the Oil Patch

Last week I said that I was going to defend the proposition that it is unlikely that the world oil production would ever exceed its July, 2008 peak. I realize now that I was getting ahead of myself. Instead I will use a simple model for the available oil supply and examine each term in it this week and next. . .

Contrary to reasonable expectations, oil producers (mostly) outside OPEC are pressing forward with new oil projects everywhere you look, to wit—

U.S Government Agencies Should Consider Taking Back the Tap

"USDA should look at the big picture regarding bottled water. In most locations, tap water is safer than bottled water because EPA requires municipalities to test their water hundreds of times a month. Meanwhile the FDA, which regulates bottled water, only requires that companies test four empty bottles once every three months for bacteria. They are not required to test after bottling or storage.

"Tap water is safe to drink in virtually all communities and if the USDA is concerned about water quality in some locations, the best option is to provide filtered water that can be put in refillable bottles. The truth is, the only truly sustainable water is the kind that requires no packaging or shipping at all and that's tap water."

Major Oklahoma utilities plan to supply 10 percent of their electricity from turbines

Public Service Co. of Oklahoma Thursday announced it has signed long-term agreements to buy about 198 megawatts of wind energy from two new wind farms planned for western Oklahoma.

The announcement means Oklahoma’s two largest electric utilities, PSO and OG&E Energy Corp., each soon expect to pass a major milestone by generating more than 10 percent of their electrical power from renewable wind energy.

Amish help neighbors left without electricity

MAYFIELD, Ky. -- When the wind died down and the ice storm had passed, Joe Stutzman gathered his spare lanterns and stepped out of his Amish farmhouse to lend them to his modern-living neighbors.

"I feel sorry for my neighbors who were used to electricity and all of a sudden didn't have it," Stutzman said. "I know that must be hard for them."

It's nice to drive electric

The family car powered entirely by electricity is ready for daily use. The vehicle has been on sale in the Netherlands for a few days now. ECE (Electric Cars Europe) is a young company in Lochem which was specifically created to manufacture electric cars. It recently delivered its first specimen to the Essent energy company. Essent, which will quickly make a large part of its fleet electric, will advertise with the words: 'From now on electric driving is a real option.' . .

The ECE's electric family car is still much too expensive for the average family, with a price of around 100,000 euros. However, thanks to all sorts of environmental subsidies and tax breaks it can be interesting to companies. Moreover, the 'fuel costs' - in this case electricity - are a fraction of the costs of petrol or diesel. A full engine is only a couple of euros.

Petrobras: Opportunity or Trap?

Here is the reality: Petrobras benefited from high oil prices and made huge profits and a lot of it went to the Brazilian government. That’s great! It was good for Brazil and let’s hope Lula spent the money wisely. Brazil also made huge profits from the commodities boom but now the boom is over and the flow of capital all but evaporated with the credit crunch. Profitability has suffered and Brazil will have to issue debt to stimulate demand (read this RGE Monitor regional report). We’re going to see a role reversal where the government will be forced to pump money into Petrobras. So, don’t expect miracles from this company anytime soon.

Penn Virginia Corporation Reports a 35 Percent Increase in Proved Reserves and a 15 Percent Increase in Annual Production

Records for Annual and Quarterly Production and Proved Reserves; 604 Percent Reserve Replacement at a Drillbit Cost of $1.94 Per Mcfe; Fourth Quarter Production 13 Percent Higher Than Previous Quarter

For full-year 2009, oil and gas production guidance has been lowered to a range of 51.0 to 53.0 Bcfe, or 139.7 to 145.2 MMcfe per day, an increase of nine to 13 percent over full-year 2008. This guidance compares to a previous guidance range of 52.0 to 54.0 Bcfe. The expected 4.1 to 6.1 Bcfe increase in 2009 production is primarily attributable to anticipated increases in the Lower Bossier Shale, the Granite Wash, south Louisiana and Mississippi, partially offset by anticipated decreases in the Cotton Valley, Appalachia, south Texas and horizontal coalbed methane (HCBM) in the Mid-Continent.

Ethanol: Myths and Realities

Doesn't producing ethanol on a large scale use a great deal of energy?

Yes. Some ethanol skeptics have even argued that the process involved in growing grain and then transforming it into ethanol requires more energy from fossil fuels than ethanol generates. In other words, they say the whole movement is a farce.

There's no absolute consensus in the scientific community, but that argument is losing strength. Michael Wang, a scientist at the Energy Dept.-funded Argonne National Laboratory for Transportation Research, says "The energy used for each unit of ethanol produced has been reduced by about half [since 1980]." Now, Wang says, the delivery of 1 million British thermal units (BTUs) of ethanol uses 0.74 million BTUs of fossil fuels. (That does not include the solar energy -- the sun shining -- used in growing corn.) By contrast, he finds that the delivery of 1 million BTUs of gasoline requires 1.23 million BTU of fossil fuels.

Producing ethanol could get more efficient soon as new technologies help farmers get more corn per acre of land and allow ethanol producers to get more of the fuel from the same amount of corn.

Allis-Chalmers cuts 235 jobs amid recession

Oilfield service company Allis-Chalmers Energy Inc. said Friday it is laying off 235 employees nationwide and cutting day rates for certain personnel and benefits for all staff.

It efforts will save $21.7 million a year, the company said.

Venezuela behind on payments to oil contractors

CARACAS, Venezuela (Map, News) - Venezuela's state oil company is behind on billions in payments to private oil contractors from Oklahoma to Belarus, some of which have now stopped work, even as President Hugo Chavez funnels more oil revenue to social programs.

Petroleos de Venezuela SA, or PDVSA, says unpaid invoices jumped 39 percent in the first nine months of last year - reaching $7.86 billion in September. And that was when world oil was selling for $100 a barrel.

With prices plummeting by more than half, PDVSA is trying to renegotiate some contracts. But analysts say hardball tactics to reduce charges from crucial service providers could backfire by lowering Venezuela's oil output. And foreign debt markets are reflecting jitters about Venezuela's finances.

Polish company: Gazprom may boost gas deliveries

Russia's Gazprom may increase its gas deliveries to Poland to cover a shortfall in supplies coming through Ukraine, Poland's gas monopoly said Friday. . .

Poland is receiving only 76 percent of its total contracted deliveries from Russia because the Swiss-based energy trader RosUkrEnergo -- which is half-owned by Gazprom -- never resumed gas deliveries after the resolution of last month's pricing dispute between Russia and Ukraine.

Exxon: Juggernaut or Dinosaur? (Podcast also at same link)

Yet despite its seeming invincibility, Exxon is surprisingly vulnerable. Interviews with industry analysts, consultants, and current and former employees cast doubt on its strategy and growth prospects. Most immediately, Exxon's oil reserves and production are shrinking, and it is relying on less valuable natural gas to replenish them. Worse, it is getting much of that gas from a single country—Qatar—that could change the terms of their deal at any moment.

More broadly, Exxon seems overly wedded to a playbook drafted decades ago. The company's aversion to risk, a point of pride, has caused it to withdraw from lucrative exploration projects prematurely. And Exxon's perceived arrogance, reflected in its dismissal of alternative energy and its strained relations with foreign governments, has cost it business.

Economic crisis heralds uncertain times for gas

It is becoming increasingly likely that the global economic crisis will result in substantially lower demand for gas in Asia over the next few years than was previously expected.

Yet lower than anticipated global demand for energy could reduce gas prices sufficiently to make piped gas and liquefied natural gas (LNG) more competitive with coal as a power sector feedstock, so it is difficult to predict whether falling revenues for gas exporters will be matched by lower consumption.

Indeed, gas prices have already fallen sharply in all four major Asian gas markets.

The market for spot LNG deliveries in Asia already seems to have dried up.

Farm state lawmakers call for loan guarantees for ethanol pipe

A congressional delegation of farm state lawmakers this week called for the US Department of Energy to expand its program of loan guarantees to help fund a dedicated ethanol-only pipeline, a potential boost for Magellan Midstream Partners, who hopes to start construction on a 10 million gal/day pipeline to the US East Coast.

A federal loan guarantee may aid the efforts of Magellan to start building an ethanol-dedicated pipeline in the next year or so. A "go/no-go" decision on a 10 million gal/day pipeline to bring Midwest ethanol to the East Coast is "at least a year away," Magellan CEO Don Wellendorf said earlier this week. "We continue to advance the ball on the project," Wellendorf said in a conference call discussing the Tulsa, Oklahoma-based company's fourth quarter earnings.

The pipeline, to be developed in partnership with Buckeye Partners, would stretch 1,700 miles from several Midwestern states to New York Harbor. If developed, the pipeline would be the first long-range line dedicated to moving ethanol in the US. Ethanol is currently moved via rail, truck and barge.

Iran interested in Nabucco

TBILISI, Georgia, Feb. 5 (UPI) -- European parties to the planned Nabucco gas pipeline have continually approached Iran on participating in the project, the Iranian envoy to Georgia said.

"Very many experts are expressing their assurance that without involving Iran, the Nabucco project will not be economically viable," he said.

He called on European customers, Nabucco hosts and potential suppliers to approach Iran on joining the project.

Possible Link Between Dam and China Quake

A Columbia University scientist who studied the quake has said that it may have been triggered by the weight of 320 million tons of water in the Zipingpu Reservoir less than a mile from a well-known major fault. His conclusions, presented to the American Geophysical Union in December, coincide with a new finding by Chinese geophysicists that the dam caused significant seismic changes before the earthquake.

Scientists emphasize that the link between the dam and the failure of the fault has not been conclusively proved, and that even if the dam acted as a trigger, it would only have hastened a quake that would have occurred at some point.

Clean-Coal Debate Pits Al Gore’s Group Against Obama, Peabody

Coal is at the center of the discussion about so-called green energy because the fuel provides half of U.S. electricity -- and 30 percent of the greenhouse-gas emissions that contribute to global warming.

The issue, framed in dueling television campaigns, is whether U.S. energy policy should be based on what is still largely an assumption: that technology can capture carbon emissions before they go into the air and store them permanently underground.

How long will the world's uranium supplies last?

If the Nuclear Energy Agency (NEA) has accurately estimated the planet's economically accessible uranium resources, reactors could run more than 200 years at current rates of consumption.

Most of the 2.8 trillion kilowatt-hours of electricity generated worldwide from nuclear power every year is produced in light-water reactors (LWRs) using low-enriched uranium (LEU) fuel. About 10 metric tons of natural uranium go into producing a metric ton of LEU, which can then be used to generate about 400 million kilowatt-hours of electricity, so present-day reactors require about 70,000 metric tons of natural uranium a year.

According to the NEA, identified uranium resources total 5.5 million metric tons, and an additional 10.5 million metric tons remain undiscovered—a roughly 230-year supply at today's consumption rate in total. Further exploration and improvements in extraction technology are likely to at least double this estimate over time.

Iran in scramble for fresh uranium supplies

Western powers believe that Iran is running short of the raw material required to manufacture nuclear weapons, triggering an international race to prevent it from importing more, The Times has learnt. . .

Iran, which has always claimed that its nuclear programme is peaceful, acquired several thousand tonnes of yellow cake from South Africa during the mid-1970s shortly after the Shah initiated the country’s original push for civil nuclear power. Tehran also has two small uranium mines but they are costly to run, yield only small quantities of ore and are suffering from problems with purity.

Central Asia Poised To Become The Atomic El Dorado

"The NEA has...recently published a nuclear energy outlook, which says by 2030 projections for low nuclear growth will require as much as 70,000 tons of uranium a year to even higher nuclear growth that would require over 100,000 tons a year," Vance says.

"Right now about 40,000 to 45,000 tons is being mined every year around the world, so there's a need to ramp up this industry and Central Asia, and particularly Kazakhstan, will play a very central role."

Gazprom announces major price cuts for gas exports to Europe

Moscow - The Kremlin-controlled Russian gas firm Gazprom announced Friday it was to reduce gas prices to Europe.

This year the average price paid by European energy firms will go from 409 to 280 dollars per 1,000 cubic meters, according to the Interfax news agency, citing a company official.

Gas prices are closely tied to the oil price, which since last summer has plummeted by almost three-quarters to around 40 dollars a barrel.

Gazprom also said it will reduce its exports to Europe by around 5 per cent to 179 billion cubic meters due to an anticipated decline in demand.

The state-monopoly will also this year reduce its gas extraction by around 7 per cent to an anticipated 510 billion cubic meters.

Suncor oil sands production up

Suncor hopes to produce of 300,000 bpd each month this year, compared with an average 228,000 bpd last year, according to company reports.

Chevron hits oil at Buckskin

US giant Chevron today announced a new deep-water oil discovery at the Buckskin prospect in the deep-water US Gulf of Mexico.

The block is approximately 190 miles southeast of Houston and 44 miles west of Chevron's 2004 Jack discovery in the lower tertiary - a geological formation seen as a potential source of significant new supplies in the offshore fields.

The Buckskin 1 discovery well encountered more than 300 feet of net pay, Chevron said in a statement.

The well is located in about 6,920 feet of water and was drilled to a depth of 29,404 feet.

OPEC President Says Group Analyzing Impact of Cuts (Update1)

Feb. 6 (Bloomberg) -- The Organization of Petroleum Exporting Countries is monitoring the result of its production cuts to decide whether more reductions are needed at a March 15 meeting to push the price of crude to $75 a barrel, the group’s president said.

“There will be a deeper analysis from the delegates,” at the March meeting in Vienna, OPEC President Joao Maria Botelho de Vasconcelos said in an interview yesterday in Luanda, the Angolan capital.

Gazprom and PDVSA get talking

A Gazprom delegation led by Stanislav Tsygankov, head of the company’s International Business Department, paid a working visit to Venezuela to discuss exploration projects.

CNOOC to hike investment 26 pct despite oil's fall

BEIJING, Feb 6 (Reuters) - China offshore oil specialist CNOOC said it aims to increase total investments in 2009 to $16.5 billion, up 26 percent from a year earlier, despite oil price falls that have forced some foreign firms to cut spending plans.

The company, parent of CNOOC Ltd (0883.HK)(CEO.N), plans to produce 48.05 million tonnes of oil equivalent this year, 14 percent more than in 2008, General Manager Fu Chengyu said on Friday.

The targeted growth is sharply higher than its output gains in 2008, when it produced 42.93 million tonnes of oil equivalent, 6 percent more than in 2007.

Renewable Energy Project Finance: Cause For Optimism Amidst Turmoil

But in the face of all this, promising signs and valid cause for optimism remain.

Long fought over extensions and expansions of renewable energy investment and production tax credits were included in the US $700 billion financial rescue and economic stimulus package passed in October. Adding to that, "green" economic stimulus is a core aspect of President Barrack Obama's "American Recovery & Reinvestment Act of 2009," which could inject as much as $126 billion worth of government capital and additional private sector incentives into the economy over the next two years.

Moreover, the bursting of this latest speculative investment bubble is imposing a healthy dose of investment and fiscal discipline that was probably lacking during the frothy "go-go" days of recent years.

Congress Delays Troubled Switch To Digital TV

The later deadline will create some new problems. Local TV stations will have to pay bigger power bills to keep both analog and digital signals on the air. Stations are allowed to cut off analog signals before June 12, and some may do so because of the additional costs.

Some broadcasters say the delay will be expensive. Christopher Lane, vice president of technology and engineering at WETA, Washington's public television station, said keeping the analog signal will cost $20,000 a month. "But we can't be the only broadcaster in the market not to be broadcasting. It puts us at too much of a disadvantage."

Washington's Fox affiliates, WTTG and WDCA, will continue to pay power bills of $30,000 a month to keep two analog signals for an extra four months. Both stations have finished working on the towers and transmitters for the Feb. 17 deadline, said Jeff Andrew in the affiliates' engineering department.

Now scale this across the nation, and you get a lot of juice...

Peak TV. There will be fewer programs on the air, and fewer people watching them, from here on out.

A waveguide (like a wire) will always reduce the power needed to transmit signal. The stations will continue to use 'alot of juice' be it analog or digital - the lack of a waveguide assures this.

I really don't understand what you mean by this. A waveguide is a type of transmission line typically used at microwave frequencies. While they are low loss, it would not be practical to use a standard waveguide at VHF frequencies.

The only way to maintain a signal's quality while lowering the power is to derease the system losses (transmission line, mostly) or increase the gain of the antenna. TV stations would already be using a low loss feedline to minimize transmission line losses. As for the antenna, assuming an omnidirectional pattern there is not a whole lot you can do to improve the gain of the antenna by more than a few dB. You can use a directional antenna to increase the effective radiated power in one direction, but that is at the expense of reception in other directions.

What you are talking about is cable, then. A cable is a waveguide. Just a straight line from the transmitter to my TV. Of course, when you build a cable system, then you have a huge physical plant to support, with power requirements to match. That 'last mile' is a beyotch.

To tell the truth, I don't subscribe to cable... costs too much for too little information. As it stands, my TV will die when they switch off analog. And I don't really care.

Obama Blasts Stimulus Critics

"Don't come to the table with the same tired arguments and worn ideas that helped to create this crisis," the president said at the House Democrats' annual retreat in Williamsburg.

"We're not going to get relief by turning back to the very same policies that, for the last eight years, doubled the national debt and threw our economy into a tailspin," he said. "We can't embrace the losing formula that says only tax cuts will work for every problem we face, that ignores critical challenges like our addiction to foreign oil, or the soaring cost of health care, or failing schools and crumbling bridges and roads and levees.

"I don't care whether you're driving a hybrid or an SUV -- if you're headed for a cliff, you've got to change direction."

Geez. That is actually damn impressive. I feel badly he has the facts against him and we are in crisis mode - 10 years earlier and the situation wouldn't have needed draconian measures. (But 10 years earlier such a man wouldn't have been President - as every wisdom in life, one can't understand it by hearing it from others or textbooks - one needs to experience it.)

He needs to throw his ACORN buddies under the bus instead of overfeeding them another $5 billion more in PORK. Acorn is a big reason we have houses selling in Detroit for $1 and massive forclosures among the poor that should have never bought housing or refinanced with butt kicking below market balloon loans.

The ACORN scandal was of course virtually airbrushed out of existence by the liberal media lest it reduce the electoral market value of His Holiness Barak Obama.

Good article on ACORN here:


Also here:



I was pretty sure that the ACORN scandal was made of smoke and mirrors by a right wing noise machine desperate to undercut a winning Democrat and simply blew away with the gales of November.

Happens to a lot of puffery.

It is. Quoting the National Review? That's sad. It's like quoting Rush Limbaugh: if they're right - it's a matter of luck.

The NRO article is so painful to read - it's full of so much substanceless conjecture.

ACORN's voter registration fraud last fall isn't close to the same thing as voter fraud. Much ado about very little.

Yes, let us demonize folks who want to register voters, good job.

How about this: If you have to pay the IRS (and you are a citizen), you are automatically eligible to vote. If you are eligible to be arrested by the police (and you are a citizen), you are automatically eligible to vote. All voting machines give the voter a paper receipt, coded to show how they voted. Punch the code into a web site and you get to track how your vote is counted in the official tally. Elections overseen by boards of elected judges and citizens drafted just like they are for jury duty, except no opting out and no jury nullification/pre-screening. Anyone convicted of fraud goes to jail for a minimum of one year.

Oh, and institute Range Voting: http://rangevoting.org/

All candidates will be afforded free web hosting to air their platforms.

Things can be fixed, if TPTB are faced down.

$ 5 billion in pork ? that is less than 0.1% of the debt el' befuddleoso ran up in 8 short yrs.

The whole thing is pork, it just depends on your view point........
We do not have to spend any of the stimulus.
All of those projects are beneficial to those who receive the money,
but it does not solve the basic problem which is too much debt.

But pork is raised on corn from Kansas, that is bought for less than it cost to raise because ADM and ConAgra each get more PORK than the whole state of Michigan.

Quite right to swat down the 'Pubs for their Johnny One-Note, "the only tool in my tool box is a tax cutting hammer, so everything looks like a nail" approach to governance.

However, what we really need is to scrap the whole tax system and make a fresh start of it. The US needs a VAT so that we are no longer at a competitive disadvantage against our trading partners, most of whom do have VATs. A VAT will also help begin the reorientation of the US from a consuming nation to a saving and investing nation.

We also need a highly simplified, broadly based, highly progressive income tax with a negative income tax credit for the lowest tier of the population. Eliminate double taxation of dividends, just do withholding at the corporate level instead, and pass through both income and withholding credits to shareholders, just as is done on partnership and Sub-S K-1s. Eliminate any special breaks for capital gains, except index the basis to inflation. Eliminate most deductions and credits.

This would require truly bold leadership and innovative "out-of-the-box" thinking -- something we are not likely to see in Washington, unfortunately.

Yes. The change agent should be forced to publicly defend the necessity of anti-employment policies such as payroll taxes. Scrapping the payroll tax would be far more "stimulus" than this pile of pork.

The US needs a VAT

I would suggest that the US needs an incrementally increasing oil products tax, at a minimum, that reduces income taxes in a revenue neutral fashion. That way, there is no tax increase while at the same time we are incentivizing alternative fuels and modes of transportation. Start the tax off at an additional $0.10 per quarter for at least 5 years, dropping the income tax commensurately.

"I don't care whether you're driving a hybrid or an SUV -- if you're headed for a cliff, you've got to change direction."

Wow. The most powerful man on the planet sounds just like a TOD poster. Angry and frustrated with TPTB.

Should we be laughing? Or crying?

I continue to be surprised by Obama's cluefullness on energy. If he'd only been there 8 years ago...

I predict that any day now we'll be hearing that energy "independence"* is the long term way out this greater economic mess.

*feigning bipartisanship by using conservative code words to stand in for "renewable energy".

A Most Interesting Podcast

Exxon: Juggernaut or Dinosaur? is an interesting article but far more interesting I thought was the podcast, linked to on this page: Podcast: Why Exxon Is Weaker Than You Think The very strong implication is that Exxon is hiding something, that their reserves are not what they claim them to be. It is by the author of the Business Week cover story "Exxon: Juggernaut or Dinosaur?".

Note: The podcast is not the video on this page, it is the MP3 podcast linked to to the right of the article.

Ron Patterson

Spanish windmills owned by Iberdrola SA and Endesa SA may generate a record amount of electricity next week that will slash local power prices, calculations from Bloomberg weather data show.

Wind has become a bigger factor in Germany and Spain because they both subsidize rates for the renewable energy and give producers preference to sell in wholesale markets. Utilities that acquire power, from Essen-based RWE AG in Germany to Union Fenosa SA in Madrid, must buy any available wind and solar power before tapping fossil-fuel plants.

Carbon Versus Wind

The two governments’ financial incentives spawned an investment boom that’s helping wean both nations from carbon-based combustion, a source of greenhouse gases that warm the planet.

From the latest Statistics Canada unemployment report:

"Employment fell by 129,000 in January (-0.8%), almost all in full time, pushing the unemployment rate up 0.6 percentage points to 7.2%. This drop in employment exceeds any monthly decline during the previous economic downturns of the 1980s and 1990s. In January, the drop in employment was most pronounced in manufacturing, where the net loss totalled 101,000. ... The only industry with notable gains was health care and social assistance, where employment increased by 31,000. Canada's three largest provinces accounted for the entire employment decrease in January. While just over half of employment losses were in Ontario (-71,000), there were also large declines in both British Columbia (-35,000) and Quebec (-26,000). Employment was little changed in all other provinces."

Note that last sentence. Alberta seems to have ducked the bullet thus far. There is no separate category for petroleum in the statistics, which is lumped in with natural resources, which essentially stayed even. I think the major reason why Alberta statistics haven't worsened is because we had a large proportion of migrant workers in the oilpatch and construction industries, many of whom are heading back to whence they came instead of staying in Alberta to be counted as unemployed. If the price of oil stays low for this year, then one would expect unemployment to creep up. Also, conventional oil still makes money at $40/barrel; most of the pain so far is postponed oilsands projects and reduced natural gas drilling.

There is a saying going around Calgary that an optimist is someone who thinks he can make money drilling for natural gas.

Not a pretty picture you paint. You should take heart in the idea that eventually oil prices will rise and rise mightily, wish should make Canada's problem temporary. Hopefully us down south don't screw things up too much.

I have found memories of Calgary and the many pints of Albino Rhino consumed.

If I were you, I'd start poking around looking for cash rich, but money losing oil sands projects to invest in. If you have a social objection, perhaps you could use your profits to support the local food bank.

Good luck.

"If I were you, I'd start poking around looking for cash rich, but money losing oil sands projects to invest in."

I don't have any investments in oilsands; that's for the big boys and, more importantly, relies on $75 oil. Mine are in private equity conventional oil junior petes that operate only on cash flow, and also in mineral rights. Private equity because the share price equals book value, with no violent fluctuations like publicly traded stocks where price has no relation to value. Conventional oil because a drilled well can still make money at $40. Cash flow operators only because the junior petes that relied on a line of credit are in trouble. Mineral rights because the operator does all the work and sweating, and I just sit back and collect my royalties.

None of these are get-rich-quick but conversely none are get-poor-quick either. It all comes down to how well you want to sleep at night.

Perfect plan IMO Dale. No one ever lost a cent owning royalties. I'd be sleeping better if I still had some of my overrides working.

That sounds like a good plan as well.

My thinking was that 75 dollar oil will be back sooner than later, and some of those plants up there we're built years ago at a much lost cost basis. I don't invest in them, but since you're in the neighborhood you might know who is going to prosper and who isn't.

Middle East oil demand to stay robust

The deteriorating world economy was expected to burn less oil for the second consecutive year in 2009. But while demand contracts elsewhere, the International Energy Agency IEA.L expects cheap fuel to lead to Middle East consumption rising by around 200,000 barrels per day (bpd) or nearly 3 percent.

full story:

Analyst sees declining oil production in Vietnam

Analyst BMI has forecast a 3% reduction in Vietnamese oil production during 2007-18, with volumes peaking at 400,000 b/d in 2009-10 before slipping to 330,000 b/d by 2018.

full story:

Re: A consumption increase of 200,000 bpd in 2008 for all of Middle East

Saudi Arabia alone showed an increase in liquids consumption of 140,000 bpd in 2007, versus 2006 (EIA). Long term chart:


Regarding Vietnam, the ELM strikes again. 2004 to 2007 exponential rate of change (EIA):

Production: -4.7%/year
Consumption: +4.2%/year
Net Exports: -23.5%/year

Net Exports Chart:

Analyst BMI has forecast a 3% reduction in Vietnamese oil production during 2007-18, with volumes peaking at 400,000 b/d in 2009-10 before slipping to 330,000 b/d by 2018.

This makes absolutely no sense at all. Vietnam peaked in 2004, producing 415,000 bp/d for three months during the summer of that year. They have been in a steep decline ever since, averaging 277,000 bp/d through the first 10 months of 2008 and 258,000 bp/d for October, the last month the EIA reported.

The Vietnamese decline from August 04 to October 08 has been almost 38% or 9% per year. That is a far cry from 3% spread over the next 10 years.

Of course this is C+C but for sure adding liquids will not make much difference in the overall numbers. Vietnam is clearly post peak and is currently in steep decline. I am really puzzled as to where some of these analyst get their information.



vietnam has projects in various stages of development in the works.

vietnam has projects in various stages of development in the works.

Not much. 160 kb/d in 2010 and 20 kb/d in 2012 and that is all! Wikipedia Megaprojects It is doubtful that these projects will deliver that much oil, that quick, as all megaprojects usually come up short and are usually delayed a few years. At any rate given their decline rate, that will keep them even for a couple of years then back to a steep decline.


Fires to follow floods as wild weather hits Australia

Looks like things are poised to get biblical down under...

A once-in-a-century heatwave was forecast to intensify over the weekend with high temperatures and dry winds producing the worst wildfire conditions in 25 years...floodwaters have devastated more than one million square kilometres (385,000 square miles), inundating homes, destroying at least a fifth of the region's sugar cane fields and stranding tens of thousands of cattle...Some towns in the Gulf of Carpentaria region could remain inaccessible by road for another six weeks...

" ' We're talking about fire danger that hasn't been seen since Ash Wednesday coming up on Saturday,' said Ron Patterson, an environment department spokesman from Victoria state."

Darwinian, I knew you lived in the South, but did not think it was that far south. ;o)



Maybe he lives in Darwin :->

Unemployment hits 7.6% in US. Less people going to work means lower gas usage.
Does that number include oil and refinery workers laid off due to declining demand?
Who knows the rough number of workers in the US oil industry?

Most job cuts in January 2009 since 1974. The cuts in 1974 were related to the oil shock from the US peak in 1970, and the OPEC situation driving up prices. I can still remember the day when gas went from 25 cents to 40 cents per gallon. Then they lowered the speed limit from 70 to 55 mph.
Why don't we lower speed limits now? Or tax gas guzzlers at a higher rate?

But hey, they're voting on a stimulus bill today so the stocks are UP!

The disconnect between Wall Street and Main Street has become absurd.

The only thing being stimulated by that bill is more greed and pork barrel projects.

Horse manure. You don't get to simply make up your own reality anymore. The Bush administration is over. Tax cuts for the rich fuel greed, we have had enough of that. To call the stimulus bill "pork" is to call the Oil Drum a political blog. It may there (here) in some small amounts, but it's not what the bill (blog) is all about.

President ObamaPresident Obama: We’ll also lead a revolution in energy efficiency, modernizing more than 75 percent of federal buildings and improving the efficiency of more than 2 million American homes. This will not only create jobs, it will cut the federal energy bill by a third and save taxpayers $2 billion each year and save Americans billions of dollars more on their utility bills.

well said wisco!

Pure rhetoric...Bull $hit....and hype to get people to vote for it.
IF this bill actually does what Obama claims, I will believe it when I see it.
The new jobs will go to the people who are "friends" of Obama.
Already Obama was criticized for having the Oval Office temp high enough to grow orchids.
He needs to lead by example and turn it down, and put on a sweater like the rest of us.
Like I said, I will believe it when my utility bill goes down. HA!

See news item below (utilities hike rates thanks to declining demand). So, I am not sure who to blame if your utilities go up. What are you doing about it?

Unlike past admins, you can watch how this money is spent. Again, I defer to the President:

Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now.

I am installing my own utilities, and getting off of public systems.
Someday when the blackout happens, my lights will still be on.
We know how the govt has spent money in the past , present and future - unwisely.
The US gov't will never spend money wisely. That is an oxymoron like "jumbo shrimp".
Do you really believe that the online govt system will report actual expenses?
Or some made up garbage?
Just think about it....They have been telling us for years "there is nothing to fear......"
The govt just now went online, when everyone else has been online since 1998. US govt is now the Zimbabwe of North America.

When the power goes out, the govt system will not report anything anyway.
And, how will they pay any employees to run it when the dollar is worthless?
This new stimulus is being shoved down our throats just like the bailout back in October.
All this does is pass money to certain wealthy individuals. Then us lowly tax payers get the bill for the rest of our lives. Let's just throw the tea in the harbor and go back to 1776.

It's not your fault that you think everything coming off the Hill is a lie. The last Administration made it into an Art Form, and was proud of their position that government was merely a problem. Self-fulfilling prophecy, eh? It's not useful to go to your extreme, however. There are actually good things that come from our governments, both National and Local.

The mail gets delivered, the states aren't warring with each other, Police in Minn can talk to Police in TX, there is still the rule of Law (limping along, but it does have advocates in DC), a state dept, a National Science Foundation, etc.. don't throw the baby out with the bathwater, or we WILL have to build the whole thing from scratch.. which is a lot of wasted energy.

Also, don't be too drawn by every leader's personal habits. The Bush presidents both have Solar panels for themselves.. but they did NOTHING significant in getting their people prepared to have their own energy supplies.. not EVEN lip service beyond the most cursory utterances.

Their are good things from govt, but, this is not a Presidential problem, but a debt problem.
When the country ran the first deficit, the fate was sealed.
The US govt has failed, and is failing now as we speak. Even the new admin is still going down the same path. I say give us our tax money back, and let the states rule themselves.
Do not need US Mail, get rid of it, UPS and Fedex can handle it.
Do not need an FBI, CIA, ATF, FCC, or any of those agencies.
Do not want my money to bail out California.
I cannot think of a single thing the Federal government does, that I need.
They are basically wasting 1/3 of my salary every year.

Do not need an FBI, CIA, ATF, FCC, or any of those agencies.

Your dreamworld sounds a lot like that of Engels. In the case of the Communists, the great evil was property. In the eye of the libertarian, it is government. But the promised land they imagine is the same:

[For the Communists], men are corrupted by a particular institution: the institution of property. The abolition of this instituition guarantees the return of mankind to the state of original innocency which existed before the institiion of property arose, a state which Engels describes as one of idyllic harmony with "no soldiers, no gendarmes, no policemen, prefects or judges, no prisons, laws or lawsuits."

--Reinhold Niebuhr, The Irony of American History

More into this philosophy -

Civil Disobedience (Resistance to Civil Government) is an essay by Henry David Thoreau that was first published in 1849. It argues that people should not permit governments to overrule or deteriorate their consciences, and that people have a duty to avoid allowing such acquiescence to enable the government to make them the agents of injustice. Thoreau was motivated in part by his disgust with slavery and the Mexican-American War.


He's a real nowhere Man,
Sitting in his Nowhere Land,
Making all his nowhere plans
for nobody.

Doesn't have a point of view,
Knows not where he's going to,
Isn't he a bit like you and me?
Nowhere Man, please listen,
You don't know what you're missin',
Nowhere Man, the world is at your command.

He's as blind as he can be,
Just sees what he wants to see,
Nowhere Man can you see me at all?

Nowhere Man, don't worry,
Take your time, don't hurry,
Leave it all 'till somebody else
lends you a hand.

Doesn't have a point of view,
Knows not where he's going to,
Isn't he a bit like you and me?

Nowhere man please listen,
you don't know what your missin'
Nowhere Man, the world is at your command

He's a real Nowhere Man,
Sitting in his Nowhere Land,
Making all his nowhere plans
for nobody.
Making all his nowhere plans
for nobody.
Making all his nowhere plans
for nobody.

I know where I am , but you do not.

No Where is Now Here.

Go take a wiz on yourself wisco.
Here are the lyrics you are looking for -

Imagine there's no heaven
It's easy if you try
No hell below us
Above us only sky
Imagine all the people
Living for today...

Imagine there's no countries
It isn't hard to do
Nothing to kill or die for
And no religion too
Imagine all the people
Living life in peace...

You may say I'm a dreamer
But I'm not the only one
I hope someday you'll join us
And the world will be as one

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people
Sharing all the world...

You may say I'm a dreamer
But I'm not the only one
I hope someday you'll join us
And the world will live as one

Nowhere and I obviously disagree on at least one other topic - vehemently - but on the general gist of this sub-thread, he far closer to right than his critics. It has become painfully obvious that the size and complexity has made the system in the US untenable. Gov't can do little that is right and Obama has rolled back nothing of importance that was instituted by the BuCheney regime.

* NSPD 51? Intact.

* Patriot Act? Intact.

* MCA? Intact.

* Renditions? Intact.

* Growth paradigm? Intact.

* Car culture? Intact.

If these are not to be rolled back, then all else is smoke and mirrors, whether out of ignorance or by intent.

Complexity theory and history teach us that high complexity coupled with high efficiency leads to collapse (simplified for this post, but accurate). On that basis alone, Nowhere is correct. The stimulus bill does nothing to address the underlying bases of these issues.

Look at energy alone: what percentage goes to the development of alternative energy? Some very small percentage when it should be a majority of the bill. How much goes to the financial system when virtually none should - at least not for what they are spending it on.

This bill is worse than smoke and mirrors, it's a bait-and-switch. And that's being kind. To my mind it is a damned lie. It purports to offer what it cannot deliver: economic recovery and transition to non-FF energy.


I cannot think of a single thing the Federal government does, that I need.
They are basically wasting 1/3 of my salary every year.

Nowhere Man, you really need to take a vacation in Somalia, or anywhere else without a functioning national government, to see what the Federal government does for you. If you survive marauding bandits, cholera, hunger and epidemic disease, maybe you will have new appreciation for the services which the US provides for you, whether you appreciate them or not.

I have lived in a few different countries and IMO the US was the toughest place to live. I disliked the boredom of the CT suburbs (I was a child at that time and couldn't drive) so I chose a city for grad. school and had to deal with guns and crime. My purse was pickpocted and the criminals cashed hundreds of dollars of checks in my name. I received letters from credit agencies for years asking me to pay. I had to pay for my own health insurance and take an AIDS test to get it (a stranger came to my apartment and drew blood, I hated it.) I disliked cars and yet had no choice but to use them and actually had two minor accidents (one in which I wasn't driving) but fortunately noone was injured at all.

My point is that it's easy to feel as if you're getting nothing and that nobody's helping you at all in the US. The people who stole my purse felt the same way I'm sure--that managing is tough and they had to do what they had to do to get by. In other countries a car is more optional, not mandatory, cities are easier to live in because there aren't guns, and there's health insurance. The government protects you in other words. I commute by bicycle on roads that are safe for bikes. There are fewer cars per capita and you really can feel it. Not just in the country I live in now but in the other ones as well.

The US spends (I believe) as much on its military as the rest of the world combined. This totally suits the companies getting the contracts but the ordinary citizens of the US do I think suffer terribly from this burden. You don't know what you're missing until you find it abroad: national daycare, public transportation, national healthcare, firearms control, sidewalks so you can ride your bike.....

I have lots of family and friends in the US and I feel terribly sorry for them, just as I feel terribly sorry for everyone who lives there and feels as I used to do, that no one can protect or help ordinary people live a safe, ordinary life. You end up feeling like you're paying a lot for nothing. Which, in fact, you are. Because the bombs and fighter jets they're buying with your money are effectively useless for you.

Hopefully the current financial problems will cause the end of this militarism. Let's hope!

I suggest you go thru yesterdays DrumBeat and read the post/links regarding the number of states beginning to invoke the 10th amendment.....

----"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."----

This BS game your elected nits in washington are playing, is much more serious than most consider. A Constituional Convention, will be the end of this country as you know it. The breakup really is starting, you just have not heard the cracking sounds as yet. I suggest you listen a little closer.

Power Down.

Who needs the 10th ammendment, Ted Nugent started his own country in his yard.
He protects his borders, lives in peace and practices what he preaches.

The Oil Drum should be a place where comments have at least some minor factual basis.

Nugent is a proud citizen of the US who has considered running for various elected offices (difficult if you live in your own country/backyard).

From wikipedia,
"In May 2005, Nugent said he was "getting real close to deciding to run" for governor of Michigan. On August 4, 2005, CNN reported that Nugent had withdrawn from the race for 2006 but was keeping his options open for 2010. Nugent also was rumoured to be under consideration by the Illinois Republican Party as its candidate in that state's 2004 Senate race.[9][10] Ted and his family now live in Crawford, Texas, a small town west of Waco, Texas, which is also the location of Former President George W. Bush's ranch. He is a weekly contributor to the local newspaper, the Waco Tribune-Herald.[11] In July 2008, Nugent reiterated his desire, saying "I was serious when I threatened to run for office in the past if I cannot find a candidate who respects the U.S. Constitution and our sacred Bill of Rights."[12]"

I suspect that more than a few people in a few state capitals are starting to consider how much better off their states might be if they were out from under the dead weight that the FedGov represents.

Can you imagine what a mess it would be if we had 50 different monetary systems, and no co-ordinated highway system? There are pluses and minuses.

Most of the states are artificial constructs and are not viable as stand-alone nations. I suspect that if the USA ever did dis-integrate, a number of regional mini-federations would quickly form. There would probably also be some continued continent-wide coordination for standard setting and the like.

Ah, trying to visualize life without the Interstate Commerce Clause.

'Papers? We don't need no stinkin' papers!'

Well, in regards to what utilities do or don't do in regards to rates or even the restoration of electricity (My neighbors have been without power for over a week now due to the ice storms,) I don't give a hoot. I produce my own electricity and am off-grid. I don't have municipal water or municipal sewer. I'm not saying that I wouldn't care if the entire grid failed, as it would effect those around me, and as a result, indirectly, me. I have two fossil-fuel inputs currently, the first of which is propane for cooking, and the second is gasoline for my cars. The gasoline for the cars will eventually be eliminated after I finish converting one of them to electricity, with exception of long trips..

The system abandoned the people long ago, and I've decided to return the favor.


How do you handle your water supply, on-site pump, catchment or both ?

Before all of you drink this "stimulus bill" kool aide, consider the possibility that the Financial Times's William Buiter is right - that piling on yet more debt (which is what spending money we don't have entails) is exactly the wrong thing to do.

In a world where all securities, private and public, are mistrusted, the US sovereign debt is, for the moment, mistrusted less than almost all other financial instruments (Bunds are a possible exception). But as the recession deepens, and as discretionary fiscal measures in the US produce 12% to 14% of GDP general government financial deficits – figures associated historically not even with most emerging markets, but just with the basket cases among them, and with banana republics – I expect that US sovereign bond yields will begin to reflect expeted inflation premia (if the markets believe that the Fed will be forced to inflate the sovereign’s way out of an unsustainable debt burden) or default risk premia.

The US is helped by the absence of ‘original sin’ – its ability to borrow abroad in securities denominated in its own currency – and the closely related status of the US dollar as the world’s leading reserve currency. But this elastic cannot be stretched indefinitely. While it is hard to be scientifically precise about this, I believe that the anticipated future US Federal deficits and the growing contingent exposure of the US sovereign to its financial system (and to a growing list of other more or less deserving domestic industries and other good causes) will cause the dollar in a couple of years to look more like an emerging market currency than like the US dollar of old.

This Mother-of-all-Potlatches will be just about as effective for curing what ails the US economy as the application of leaches were for diseased patients a couple of centuries ago.

It's a breath of fresh air to see at least one economist finally wake up to the realization that morality does indeed matter. As Amatai Etzioni wrote: "The neoclassical pardigm does not merely ignore the moral dimension but actively opposes its inclusion."

"[T]he fact is that neoclassicists have labored long and hard to show that practically all behavior is driven by pleasure and self-interest," he continues.

But even though Buiter may have began to throw off his ideological shackles and is starting to see the world in multi-color, and not black and white as the regnant economic paradigm requires, his insights are nevertheless still quite blinkered.

For, as Etzioni goes on to point out, "neoclassicists tend to study the market, or even the economy, as if it was worlds apart from the polity, culture, and society..."

And that is exactly what Buiter does. As Etzioni goes on to explain:

[T]he variables ignored will come to haunt the actors, as is the case when the psychic implications, or the social, cultural, and political prerequisites of economic policy are ignored. This happens, for example, when without regard to the stability of a government, austerity programs based on monetarist theories are introduced into developing countries in order to curb inflation causing governments to be overthrown and the policy to be thrown out together with the policy makers (Diaz-Alejandro 1981; Nelson unpub.).

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

If one takes the time to wade through the stimulus package, regardless of what banner it is being floated under, it is clear it has much more to do with alleviating the suffering of the poor, unemployed and dispossesed than it does with getting the economy moving again. But what is the political alternative?

Also, I question Buiter's sense of equity, justice and proportion. We have, after all, already lavished more than $8 trillion on the finance industry, and are apparently prepared to double, triple or quadruple that downpayment, whatever's required to save the assorted lot of theives and incompetents from their greedy selves. (I know, only approx. $2 trillion of that is actually spent, the other $6 trillion being in guarantees. But I am convinced that, by the time this is all over with, 80% or 90% of what is now in the "guaranteed" column will somehow manage to make its way over to the "spent" column.)

So let me get this straight. We have already spent $8 trillion to bail out the finance industry, and are prepared to spend much more. But we can't spend $1 trillion to help the millions who are suffering?

So there is something very, very wrong with Buiter's policy recommendations, not only from a practical, pragmatic point of view, but from a moral perspective as well.

Regardless of the belief systems underlying the conclusion, the conclusion is correct: the stimulus is not a good idea as a stimulus. As a welfare/social program? OK. But call it that. You appear to be conflating the two ideas, as are the people writing the bill.

BTW, have you got links to show why you think this bill "has much more to do with alleviating the suffering of the poor, unemployed and dispossesed than it does with getting the economy moving again."?


This was from the House version:

Nearly 30 percent is devoted to unemployment benefits, food stamps and fiscal aid to states...

The package expands the Earned Income Tax Credit temporarily to raise the pay of the working poor. There also is money to allow low-income workers to qualify for a tax credit of up to $1,000 per child...

The measure devotes $145 billion to Mr. Obama’s “Making Work Pay” tax credit for the next two years. The credit, up to $500 per worker...

It also includes $40 billion to subsidize the cost of health coverage for the unemployed.

[Compare that to spending on infrastructure:]
It contains $62 billion on infrastructure spending for highways, mass transit and school buildings, and tens of billions more for other projects.


More here:

The provisions intended to have the swiftest impact are the tax cuts, totaling $275 billion, roughly a third of the package.


When you subtract from the $819 billion all the tax cuts and welfare/social spending, how much is left over for infrastructure?

I wasn't challenging your assertion, but now I have to disagree. One third? That's not "much more about" except how you framed it vs. infrastructure rather than vs. the 800b total.

Meh... It's still not a stimulus. Krugman, however, is of the opinion we need all stimulus, all the time. His take is that the failure of the spending during the Great (soon to be Lesser?) Depression was that Roosevelt got spooked and stopped too soon, but should have kept spending (Morning Joe).

Structurally, things are very different now. The lack of savings makes it hard for the public to reciprocate, I'd think.



This Mother-of-all-Potlatches will be just about as effective for curing what ails the US economy as the application of leaches were for diseased patients a couple of centuries ago.

While I agree with the essence of what you are saying you have definitely picked the wrong analogy there...


In June 2004, the Food and Drug Administration cleared the first application for leeches (Hirudo medicinalis) to be used in modern medicine as medical devices. By definition, a medical device is an article intended to diagnose, cure, treat, prevent, or mitigate a disease or condition, or to affect a function or structure of the body, that does not achieve its primary effect through a chemical action and is not metabolized.

Surgeons who do plastic and reconstructive surgery find leeches especially valuable when regrafting amputated appendages, such as fingers or toes. Severed blood vessels in such cases often are so damaged that they lack the ability to clear the area of blood. In these cases, it is difficult for the surgeon to make a route for blood to leave the affected part and return to circulation.

Well actually...

Maggots and Leeches: Old Medicine is New


....and during a potlache you gave away your own stuff



compared to what ?

tax and spend is way more responsible than borrow and waste.

Ya, It's kind of sickening. The gamblers on Wall St. bet on the short term gains of the artificial cash infusion, and the talking heads tell us "look, Wall St. is up again, BAU, go back to you lives". I feel like they are trying the old Jedi Mind Trick on us.

I've been meaning to post this for a while but I keep forgetting. This seems like as good a time as any. Has anyone else noticed, or been puzzled, that the Dow seems to have an invisible rubber floor around the 8000 mark? The market can have a strong rally amidst the most dire news. It makes no sense at all. Given the continued deterioration of the economy, I always wondered how the DOW, and other American markets, could remain so entrenched.

Then I learned of the "President's Working Group" or Plunge Protection Team.

This is what controls the markets and gives the "disconnect" between Main Street and Wall Street that Paleocon mentions.

Ellen Brown has great article about all of this.


October 24 marks the 79th anniversary of the October 1929 stock market crash. Heavy selling started on Thursday, October 24, 1929, and accelerated the following week on Black Monday and Black Tuesday, October 28 and 29. Many feared a repeat of this disaster on Friday, October 24, 2008, after Japan’s Nikkei stock average fell nearly 10% during the night, Hong Kong’s Hang Seng fell 8%, and Germany’s and Britain’s fell 5%.

“In a stunning turn of events,” reported Yahoo! Finance, “the futures for the major indices were ‘lock limit’ down before the start of trading Friday, meaning they had hit a 5% threshold that prevented them from trading any lower until the stock market opened Friday.” Traders prepared for the worst, but remarkably, disaster was averted. The U.S. market fell only 3.5%, just another “ordinary” bearish day.

Why the more modest drop in the U.S., where the financial debacle originated and should have hit hardest? Suspicious observers saw the covert hand of the Plunge Protection Team (PPT), the group set up under President Reagan to maintain market “stability” by manipulating markets behind the scenes...


The DJI is hanging around 8K because most people are still thinking (wishing?) that this is a short-term downturn and that things will be turing around within the next 6-12 months - like usual. In other words, they haven't discounted a much longer and deeper downturn, AKA "reality". Once they acquaint themselves with "reality" and adjust their discount rates accordingly, the market will find a newer, lower floor.

Surely there's some floor to the market above zero, something equivalent to the total value of the physical capital owned by corporations (as opposed to their NPV based on rates of return)? Maybe not the equivalent of DJI 8K, but how much smaller?

Maybe the question investors ask themselves is "what's the alternative?"

I'm with you, WNC Observer.

I think before this thing is over with we'll see a 4000 to 5000 DJIA, perhaps much lower.

The debt bubble, as a multiple of GNP, was twice as great this go round as it was back in the 1920s. And back then we saw the stock market lose 90% of its value from peak to trough.

We're also almost 80 years farther along the road in the depletion of our natural resources. That has to count for something.

Calif. counties threaten to keep taxes from state


The California implosion begins


What will they do when firemen, police and State Patrols go to find other jobs that pay real money?

Re CA firemen and police-even if they cut their salaries by 25% they have very nice spots-there is no place for them to go.

But what do salary cuts do to default rates on mortgages and credit card debt?

CA has firemen and cops making over 200 grand a year-they need a salary cap as of yesterday. The CA economy is far too small to economically support the spending of the CA government. If someone making 200 grand a year defaults on their credit cards, they are going to default if they make 400 grand a year IMO.

CA has firemen and cops making over 200 grand a year-they need a salary cap as of yesterday.

A gross exaggeration! The average patrol officer in California makes about $54,000 per year. California Police Patrol Officer Salaries

Average Firefighter Salary in California: $45,000. Firefighter Salaries in California Only the very senior officers, (The Chief?) make $120,000.

$45,000 is not a lot of money if you pay rent or have a mortgage in California.

Ron Patterson

Actually what I wrote is correct-it means there are CA firemen and cops making over 200 grand a year-if this was the median pay I would have stated that. Firefighter in CA also get a lot of overtime pay. Re their wages not being high as CA RE prices are high, how are the non-government workers in CA going to pay rent or mortgage payments? CA is bankrupt-you tell me how the books get balanced.

Actually what I wrote is correct-it means there are CA firemen and cops making over 200 grand a year-if this was the median pay I would have stated that.

No, still a gross exaggeration.

Firefighter Senior Officer in California $120,000

That means there the boss of all california firefighters makes $120,000. He does not get overtime. The average firefighters salery in California is 45,000. These guys work 24 hour shifts, including sleeping in the firehouse. Only on the occasional emergency do they get overtime.

The average patrol officer gets about $54,000. Overtime will not put that much higher.

police chief Salaries in California

Average police chief salaries for job postings in California are 2% lower than average police chief salaries for job postings nationwide.

Hawaii County Police in California $127,000  
Orleans Police Recruit in California $35,000  
Chief of Police in California $83,000  
Police Lieutenant in California $71,000  
Police Chief in California $90,000  
Campus Police Officer in California $49,000 

Again, Chiefs do not get overtime. NO Policeman of Firefighter in California makes $200,000.

My granddaughter is a Deputy Sherriff in Fredrick Md. She has been on the job less than one year. She makes about 35 grand, about the same as a California recruit. California firefighter and police pay is no higher than the average throughout the USA. In many cases, like the Southeast, it is higher but in other cases it is lower.

But the gist of your post was that firefighters and policemen in California are grossly overpaid..."they need a salary cap as of yesterday." They are not; they make no more than the average policeman or firefighter nationwide.


This article (one of many) disagrees with your numbers http://www.reporternews.com/news/2008/sep/10/california-town-spends-itse...

You are corect, I was wrong about one city in California.

each of the 100 firemen paid $230 a month in union dues and each of the 140 police officers paid $254 a month, giving their respective unions enormous sums to purchase a compliant City Council.

With that kind of union purchasing power, no wonder Vallero is bankrupt.


Personal experience: A friend of mine dated a sheriff in CA. He made almost double his salary in overtime. That = @ 75k/yr in the early 90's. Given the number of police officers/sheriffs it seems likely overtime was and is common.

One must add in the lucrative pensions, etc.


"-you tell me how the books get balanced."

Well they don't get balanced with unreferenced information, do they? Why don't you base your comments on something you can share the source for?


This story is about not getting paid at all in Calif. not the amount.......
This story is about not getting paid at all in Calif. not the amount.......
This story is about not getting paid at all in Calif. not the amount.......
This story is about not getting paid at all in Calif. not the amount.......
This story is about not getting paid at all in Calif. not the amount.......

I think you hit a wrong key there. :)

I agree totally. We are not living in isolated bubbles here. The most important thing we get out of reading this site is a heads up on what may be coming our way. Don't neglect to learn the lesson here!

California is just the tip of the iceberg.

I suspect that the high salaries are part of the reason for the absurd prices for homes in California.

When I looked at a site advertising firefighting jobs in Georgia, it indicated the following job counts:

>$30,000 37 jobs
> $50,000 27 jobs
> $70,000 4 jobs
> $90,000 2 jobs

The same site, for policemen shows

>$20,000 274 jobs
> $40,000 183 jobs
> $60,000 94 jobs
> $80,000 26 jobs
> $100,000 7 jobs

Could be the other way around. The high home prices mean that you must offer higher salaries in order to entice people to risk their lives as police and firemen.


Working at a 7-11 or driving a taxi is far more dangerous than being employed as a police officer, and not nearly as lucrative.

But ask yourself this:

Would you rather live in a town without 7-11's and taxis, or without police and fire?

I never said that there we're jobs with higher risks, I just said that higher salaries were needed to entice candidates to take the police and fire jobs. These candidates must hold pretty high qualifications. The qualifications for these jobs are much higher than they are 7-11 clerks and taxi drivers.


In any rational system they'd lead to the downfall of aggressively optimistic lenders, and the benefit of savers with money to invest in the pieces. In this system, it'll lead to more nationalization of another big-spending sector of the economy -- this time CA.

California is now issuing IOUs instead of paychecks. State funded Workers may move to other states. (States that are not insolvent like Calif.)
Not referring to the amount of pay, but getting a paycheck period.

Well, the good news is that when enough vacant foreclosed homes have been torched, that will reduce the inventory enough so that the housing market might actually find a floor.

(With only the very slighest touch of sarcanol, unfortunately)


An LNG glut seems to be brewing as well. Hate to be repetitive, but whatever happened to that imminent cliff in natural gas that Matt Simmons was hysterically squealing about 6 years ago? With rising domestic production from shale and other unconventional natural gas plays, and now a surge of LNG, we seem to be swimming in the stuff.


I'm not sure about LNG but you can stop counting on the unconventional NG plays TODAY. Not next month, not next fall. The play is dead but you haven't seen the numbers yet. By mid summer the published production numbers will support this. I can't estimate exactly how fast the UNG rates will drop but I suspect they’ll fall even faster then you saw them rise since 1/1/07. In the next month we'll be dropping 15 of the 18 drilling rigs we have running in the UNG plays and have no plans to increase that number for the rest of the year.

of course they are not drilling the unconventional anymore rock, cause of the glut they are not needed. What happens when we need more gas and the price goes up? The drills hit the unconventional again and we are right back to a glut again.

Nope...not what I would call a glut but that's just semantics. UNG prices just dropped below economic requirements. Despite the big jump in drilling over the last couple of years the profit margin was slim. Just my opinion, of course, but the retraction I'm seeing in the oil patch right now will take a long time to repair. Higher NG prices will add an incentive but the response will be slower then most might expect. And regardless of the current price, we still need NG right now. Economic recovery (whenever that happens) will only add to the problem. But you’re exactly right about the cycling of NG demand/prices. This has been going on for almost 100 years. The big difference I see right now is how quickly the cycles reverse. Even if the economy hadn't taken a hit from the credit/mortgage melt down, it would have still struggled to deal with energy price volatility IMO.

Welcome, new member Cornucopian du jour. Glad you have discovered TOD and are joining the discussion.

What eventual peaking level and timeframe, if any, do you see in NG production in the US?

the glut probably wont develop overnight. the last time the gas rig count was 1100, domestic dry gas production was just over 50 bcf/d and declining. the decline wasnt reversed for more than a year with 100 more rigs drilling.

have the economics of ung changed that much ? recently, the cost of new ung production was widely quoted at $7/mmbtu.

If one LNG tanker blows up in port, you'll be surprised at how quickly that glut goes away.

Alliant Energy may seek electricity rate increase

Utility executives said the increase would be needed to offset a dramatic decline in power sales because of the recession.

Sounds good to me. My significant other has stock in that company. And I am all for increasing electricity prices. I hope they double it.

Now I need to fix my parent's basement so they aren't destroyed by said price increases (they use electric heaters to keep the pipes from freezing).

Peter Schiff: Stimulus Bill Will Lead to "Unmitigated Disaster"


You gotta give these libertarian ideologues their due. When it comes to spin, they are without parallel (not to mention their gall).

Take this jewel for instance:

...the path of increased government intervention will lead to "unmitigated disaster,"

Now I agree that we are in for an “unmitigated disaster.” But that's going to occur pretty much regarless of what Obama does, for this disaster was created way before Obama took office. It was created by over 30 years of following the ideology of laissez faire and the free market worship of people like, well, Peter Schiff.

Then Schiff goes on to "enlighten" us further. The problem, he tells us, is the government is trying to perpetuate a "phony economy" based on borrowing and spending.

Gee whiz, Schiff! Now, after 30 years of doing that very thing, you tell us.

I listened to the whole interview; Schiff actually says it would be better for the whole economy to collapse so that we can rebuild it from scratch, that this would be preferred over hyper-inflation a-la Zimbabwe. Maybe...really how are we to know beforehand with any certainty? Seems that Schiff is just a hyperinflationist among the inflationists-deflationsists debate. They all have good points, but to sit and do nothing, to watch the entire economic system collapse because it will build good character or something? Seems like an unlikely scenario. Humans seem to prefer doing things.

Talking about the inflationists-deflationsists debate, did you catch the recent squabble between Schiff and another leading libertarian ideologue, Michael Shedlock?

William Buiter had a much more highly nuanced outlook on the inflation-deflation dicotomy today in the Financial Times, far superior than either Schiff or Shedlock seem to be capable of:


Unfortunately, despite Buiter's excellent analysis of the inflation-deflation dynamic, his policy recommendations, which essentially boil down to trillions for the banksters and a big one up the rear for everyone else, fall way short of the mark.

his policy recommendations, which essentially boil down to trillions for the banksters and a big one up the rear for everyone else, fall way short of the mark.

That's not exactly what I understood Buiter's position to be. In This column he advocates that the government play nursemaid in the creation of a set of new, clean "good" banks, and that all of the existing banks that are in trouble (i.e., most of them) be allowed to die. The new good banks are what we will rely upon to get the economy moving forward.

This seems to me to be a better strategy than anything anyone else is suggesting.

Denninger has already suggested this (a while ago)-the reality is that those in control of taxpayer funds are not objective stewards-JPM,C,GS and others have a pretty short leash on Obama, just like they had on Bush, just like they would have had on McCain.

Here's where he lays out his position in the article I cited:

Instead, the US and UK fiscal authorities should aggressively use their fiscal resources to support quantitative easing and credit easing by the Fed and by the Bank of England (through indemnities offered by the respective Treasuries to the Fed and the Bank of England to cover the credit risk on the private securities these central banks have purchased and are about to purchase). The £50 bn indemnity granted the Bank of England for its Asset Purchase Facility, by HM Treasury should be viewed as just the first installment on a much larger indemnity that could easily reacy £300 bn or £500 bn.

The rest of the scarce, credibility-constrained fiscal resources of the US and the UK should be focused on recapitalising the banking system with a view to supporting new lending by these banks, rather than on underwriting existing assets or existing creditors. Other available fiscal resources should be focused on supporting, through guarantees and insurance-type arrangements, flows of new lending and borrowing. As regards recapitalisation and dealing with toxic assets I either favour temporary comprehensive nationalisation or the ‘good bank’ model. Existing private shareholders of the banks, and existing creditors and holders of unsecured debt (junior or senior) should be left to sink or swim without any further fiscal support, as soon as new lending, investment and borrowing has been concentrated in new, state-owned ‘good banks’.


I did not read the article you linked where he advocates the "good" bank solution.

From re-reading the above quote I'm still unclear as to exactly what his policy recommendations are. To me paragraph 2 seems to contradict paragraph 1. But nevertheless, his position is obviously not as cut and dry as the way I characterized it as "trillions for the banksters and nothing for everybody else." So my bad.

Denninger's policy prescriptions, for me at least, are less ambiguous and much easier to understand than are Buiter's.

Buiter is quite technical and a little hard to decipher, especially given the British tendency toward understatement. "Pull the plug on the &^&^$ banksters!" would have been a lot clearer, but that just isn't his style.

He's not perfect, but I consider him considerably preferable to most of the BAU shills.

About the only thing that the massive collapse scenario would "build" would be more cemeteries, lots more. Back to the land, ye tired and hungry, plow those fields and dig those graves!!

E. Swanson

Is that what they mean by "Shovel Ready?" ;)


Now that's the best definition of shovel ready I have heard so far!

This being said after several days of attending sessions by state officials and here at work dealing with how to hand out the funds and trying to figure out exactly what "shovel ready" means. Definitions go all the way from a signed construction contract to a picture of the board with the silver shovel at a groundbreaking ceremony.

Careful there. Mixing sarcanol with E100 biofuel can be dangerous!

E. Swanson


I'm about a libertarian as it gets (not counting the kooks out there). But I agree with you about the general inability of any president to change the course of the economy significantly in neither a good or bad direction. I would have said the same thing about congress some years ago but now I'm not sure. We all have a different perspective but after hearing the thoughts of many smart folks here it seems that much (or all) of the current economic problems can be traced to the efforts of congress: grow the economy by ramping the housing industry by changing the regs to allow the sub prime market to expand. No one party to blame as far as I can tell: both D's and R's were both fully onboard with this artificial economy. It might have worked longer had not other factors kicked in. Heck...it might have worked for a long time. But it was a high risk ploy and we got called on it. We all allowed this to happen either by ignorance, not paying attention, honest but misguided compassion or by just plain greed. Thus we are responsible to cover the bet IMO.

As much fun as it can be to p&m about the damn gov’t or that damn CEO or that damn oil exporting country, at the end of the day I still feel we individually have more control over our destiny then any of them. Unfortunately many of us make poor choices and suffer the consequences. Having our leaders screw up doesn’t help but we shouldn’t use that as an excuse for our own lack of effort. With all that is wrong with the world at the moment I still see that my biggest current concerns are the result of my own poor choices in the past.

But I agree with you about the general inability of any president to change the course of the economy significantly in neither a good or bad direction.

The last eight years very strongly, and vehemently, disagree with you.

No Iraq? Funding of alternative energy? Real oversight of banking? Etc?

I agree with the underlying reality of cycles, etc., being the great determiners of the economy, but I also see gov's and individual actors as agents in determining the amplitude and length of any given cycle. This past ten years is the perfect example of the theory.


Fight your oil miseries in a new way -
Putin is a Dancing Queen:
Kremlin Flies ABBA Cover Band to Remote Military Location to Perform for Vladimir Putin,
and they got paid $45K for a one hour show.


US solar module prices continue to fall in February, but at a slow pace.

At this rate, grid parity occurs in many markets 2016-2020.

See details at:


Senator Kit Bond (R-MO) is proposing two dangerous amendments to the Senate’s version of the stimulus bill that will drastically reduce the amount of funding available for rail and transit projects.

Raiding mass transit funds for highways

Please take a moment and call your Senator and ask these two amendments be defeated. We have passes peak Vehicle Miles Traveled. We don't need more highways. We need more rail lines. Please help this stimulus bill have less BAU and more peak oil planning.

(Or call both of your Senators if you are lucky enough to be in a state with two...)

The house bill has more transit funding, so you could also call your house reps.

Graphs of VMT

Dynamic Cities take on planning for fewer streets.

Are more recent stats available? I'm have difficulties finding any.

Thanks Gail, for taking over for Leanan on this immeasurably informative TOD news feed. Both of you have been tireless in your efforts, and you should know that these efforts have been greatly appreciated.

You are welcome! Leanan gave me some of her sources, but I am not terribly efficient at this. I find myself reading a lot of articles and then deciding not to include them.

On the supply side it is also becoming apparent that shale gas production in the United States will be higher than previously forecast...

From link above Economic crisis heralds uncertain times for gas

Myths die slowly, especially when they are bolstered by the multi-million dollar media blitzes of the likes of Aubrey McClendon and T. Boone Pickens. Judging from the above statement, it appears the "from shale to shining shale" panacea is still alive and well.

And the regulatory capture of governmental agencies only helped to make the distortions worse. Take this EIA publication from June 2008, for instance:

Natural gas production in the Lower 48 States has seen a large upward shift. After 9 years of no net growth through 2006, an upward trend began that generated 3% growth between first-quarter 2006 and first-quarter 2007, followed by an exceptionally large 9% increase between first-quarter 2007 and first-quarter 2008.


The EIA report then goes on to elaborate on the whole gas shale spiel.

All I can say is: "What a crock!"

If we take a look at the production of the 10 largest gas producers in the U.S. gas production increased only 5.5% from first-quarter 2007 to first-quarter 2008.

Comparing third-quarter 2008 to third-quarter 2007, gas production for the largest 20 gas producers rose only 4.2%.

Production for the largest 20 gas producers actually declined from second-quarter to third-quarter 2008. Some of this perhpas can be attributed to the hurricane effect. But the number of rigs drilling for natural gas during this period rose continusouly, from about 1400 in January to 1600 in September.

The financial statements of the natural gas producers will be out soon, so we'll soon get another data point.

And the EIA has been constantly revising its production forecasts downward to match reality and not the political agenda of T. Boone Pickens and Aubrey McClendon.

But the statement that "it is also becoming apparent that shale gas production in the United States will be higher than previously forecast" is absurd.

Pardon the pun but you need to dig a little deeper to get the real story. Take the Marcellus shale for instance. Most of the infrastructure to make use of this resource is just being built now. For example, the Millennium Natural Gas pipeline to carry gas from upstate New York down to the Hudson Valley wasn't completed until December of 2008. Pennsylvania's first large-scale gas processing facility opened in October 2008. A lot of the drillable land is still being purchased, and the notoriously slow Northeast governments are still running environmental reviews.

Horizontal drilling is still a relatively new technique, and when the infrastructure is built and the governmental reviews are done, you will see more unconventional natural gas on the market.

Two things.

1) All the data points I gave dealt with past performance, just as the EIA did when it made its claim last June (a claim which I believed at the time, and still do, to be false) that natural gas production was up 9% YOY for first-quater 2008.

2) However, if you want to talk future natural gas production, I suggest you read ROCKMAN's comments on this very same thread. As an industry insider--someone who is still working and actively involved in the industry--I don't think you can brush aside his insights so facilely.


As I see it if you accept the EIA numbers as valid it predicts an even worse future for NG supplies even in the next 12 months. The growth they depict came predominantly from shale gas and to a lesser degree from the Deep Water GOM fields. Virtually every shale gas well that came on production during this time began its decline the first month it went on. I just mentioned that elsewhere and was surprised how many folks mistakenly thought there was some period of "flush" production before those rapid decline rates kicked in.

I only know with certainty how far my client is cutting its rig count this next 6 weeks (80%). That’s dropping 15 rigs and no plans to pick up any more thru the end o 2009. If the rest of the players are only cutting half as far we'll probably see drilling rates drop to pre-2007 levels in just a few months. When you accept the EIA numbers and throw that growth in reverse at the same or greater velocity due to the combination of less drilling and continued rapid decline rates there’s the possibility of production rates dropping faster then demand destruction shrinks the market. I don't know how to characterize that probability. But, IMO, it’s a viable possibility.

They can build all the pipelines they want in the Marcellus and other plays but if a lot of wells don’t get drilled very soon you’ll be seeing a lot of those p/l companies going bankrupt. Those are huge investments that demand large cash flow. And the only income is from moving large volumes of NG over fairly long time periods.

Government green guru Sir Jonathon Porritt calls for two-child limit

He accused parents with more than two offspring of being "irresponsible" and criticised green groups for shying away from the issue in debate.

But family campaigners likened his remarks to China's one-child policy and suggested they could encourage a further rise in abortions.

His comments were also dismissed as "absolutely barmy" by the Conservative MP Ann Widdecombe, who said that Britain's problem was not too many children but too few.

{sigh} Can someone please educate Ann Widdecombe.

While I've never agreed with her politics, I do have a soft spot for Ann Widdecombe. When I lived in Britain, she was in the shadow cabinet and I always found her rhetoric highly entertaining. In a way she's an archetypal British eccentric (the country has many, no offence to any Brits :), I cannot help seeing her somehow similar to David Irving, who sometimes comes across as a fairly decent chap that just happens to be infatuated with Hitler...

More to the point, at least Ann Widdecombe herself has no children, unlike most people who go on about population overshoot.

These ideas only work in places where a large homogenious population is the vast majority (like China). China's one child policy exempts minorities. Try that same policy in India or the USA -both countries have many different ethnicities- and see what happens.

North Korea is probably another example where a USA deserter to NK (during the Korean War) said that even sex was planned. Kinda takes the fun out of it :).

Denninger is pretty interesting today.

That's "Depression", not "Recession".

And the last couple of weeks - since January 20th - confirms both that it will happen and that, just like the 1930s, it will be caused by government.

The difference between a Depression and a Recession is not quite so simple as the pundits would tell you. The conventional wisdom is that a Depression is just a long and deep Recession.

That's nonsense.


I thought it was interesting that Denninger said:

Depressions are a different animal. They come about because of structural problems in the economy, and are always credit-driven.

He also says:

A structural reset of some sort must take place to get the economy out of this mess. Attempts to "protect" the old structures that are no longer functional will, at best, produce short-term gains that will soon be shown to be a chimera and simply leave yet more debt overhang in the economy, and prove ineffective.

I definitely agree that the current situation is structural and that it is credit driven. I also agree that a structural reset needs to take place. Where I disagree with Denninger is on whether the structural reset will really fix the situation.

The current situation is an outgrowth of the peak oil situation (and other resource limitations), so we can no longer grow rapidly enough to pay back debt with interest. Therefore the whole debt bubble has to come crashing down. Even once it is down, however, we will be in a very different world--the structural reset will hardly fix the situation. We will still not be able to grow, and long-term debt will still not work well. Denninger doesn't understand peak oil and its impact on the economy, as far as I know, so only understands part of the problem.

When peak US oil happened in 1970, we went to other countries to bail us out with more oil.
Now there is nowhere else to go......
When credit problems happened, we borrowed from other countries.
Now there is nowhere else to go......
When our mighty military falls, who will bail us out ??????
We will be over taken, then people will realize the mistake of over consumption.
Castro wants Gitmo back, and if he gets it then other countries will ask for all kinds of things.
You cannot negotiate with terrorists. They will take all you have and then some.

How about we sell it to him?

And perhaps with our vast military we could run a protection racket: if you pay us we'll protect you... or else.

If we don't use our military we should make vast reductions to it's budget (this line of thinking is probably why we have all the terrorist fear mongering - because many people live off our gigantic miliary budget - at more than half the current stimulus per year).

When our mighty military falls, who will bail us out ??????

Something people need to keep in mind, and it's a thought that does not send me to my Happy Place: NK has existed with virtually no economy or trade and limited internal resources for about fifty years. It's done it for almost two decades now even without the aid it used to get from the communist bloc.

And it has a huge military. The US's is, what?, about 1% of the population? NK's is about 7.5%.

Where there's a will (like starving, collectivising and imprisoning the general populace), there's a way. One wonders how large Rome's armed forces were when they reached peak and started to decline, and how long they stayed a significant portion of the population, if they ever were.


Gail, it depends on how you define "fix the situation."
Nature bats last - the situation will be fixed - but not to our liking.

Denninger is calling for a quick and painful shift, getting it over with, in the hope that the fix won't necessitate catastrophic wars and famines.

But one way or another, those who are still standing will be using less oil, and probably less of everything else, too.

The current situation is an outgrowth of the peak oil situation (and other resource limitations), so we can no longer grow rapidly enough to pay back debt with interest. Therefore the whole debt bubble has to come crashing down. Even once it is down, however, we will be in a very different world--the structural reset will hardly fix the situation. We will still not be able to grow, and long-term debt will still not work well. Denninger doesn't understand peak oil and its impact on the economy, as far as I know, so only understands part of the problem.

Very well put, Gail. That is the essence of the situation. A structural reset will only help us in the long-run if we move forward from that point on a sustainable basis. This will necessitate a change in our monetary system that does not include debt based, fractional reserve lending. Our current monetary system is where the growth imperative stems from. I will give Dennigner credit on noting that the sun is our only true source of energy. He's said something to that effect several times, however his lack of acknowledgment concerning Peak Oil is truly frustrating.

As an aside, Thomas Homer Dixon's interview on the C-Realm this week, really fell short on this mark. He explained the growth imperative as a result of improved efficiencies and technologies which displaced workers. The motivation for growth was to find work in other areas for these displaced workers. While this surely has an effect, I wish he would have recognized the monetary system as the primary source of the growth imperative.


Aren't Schiff and Denninger saying the same thing ?

Gail wrote:

The current situation is an outgrowth of the peak oil situation (and other resource limitations), so we can no longer grow rapidly enough to pay back debt with interest. Therefore the whole debt bubble has to come crashing down.

It's long been assumed by many economic types that there is a hard and fast relationship between energy consumption and GDP. That's because the two were highly correlated in the days before the Arab/OPEC Oil Embargo in 1973. Since then, there's been much more growth in real GDP than that seen in energy, particularly oil. What has happened is both an increase in the efficiency of energy use and a shift from oil to other sources of energy which can perform the same function(s).

I think that in the short term, there are still many avenues left to increase energy efficiency in production and there's also the possibility that consumers will decrease their consumption as well, thus freeing some more energy for use by the producers in the economy. Lumping all forms of energy this way glosses over the problem of Peak Oil, but I think this does indicate that there is still the possibility of some continuation of growth in GDP.

But, throw in the problems of declining EROEI and the need to reduce CO2 emissions to minimize the impact of climate change and it would appear that there is a point of Peak Net Energy somewhere ahead. My guess is that we aren't there yet, so Denninger's focus on the immediate problem is reasonable, especially if the stimulus efforts are directed toward attacking the other near term problem, which is Peak Oil. Unfortunately, we seem to be living in a time like the Biblical Tower of Babel, where everybody has a different opinion about what to do and all are shouting as loudly as possible at the same time thru their respective mouthpieces...

E. Swanson

It's long been assumed by many economic types that there is a hard and fast relationship between energy consumption and GDP. That's because the two were highly correlated in the days before the Arab/OPEC Oil Embargo in 1973. Since then, there's been much more growth in real GDP than that seen in energy, particularly oil. What has happened is both an increase in the efficiency of energy use and a shift from oil to other sources of energy which can perform the same function(s).

Perhaps it isn't so much that cheap energy has become uncoupled from GDP as it first appears. Past peak USA (1970) has tended liberally toward fictional bubbles of vapor wealth creation. Tech, dotcom, subprime, Enron , Bernie Madoff, a 10.5 trillion Federal debt and unfunded obligations for trillions more, commercial real estate, a huge shift toward personal debt and on and on.

Much of this is counted as 'real GDP' but rather lies at the base of the collapse we are currently undergoing.

There is just a ton of current 'real economic activities' not terribly essential for the vital exchange of energy/food and shelter/transportation that is necessary to support society. And might be characterized as 'bubbles'. The combined weight of the global economic meltdown, ecological crisis and peak net energy crisis revealing to a large degree what of those functions no longer are absolutely necessary.

The GDP is melting.

Double plus up arrow burb - You beat me to it.

"Past peak USA (1970) has tended liberally toward fictional bubbles of vapor wealth creation. Tech, dotcom, subprime, Enron , Bernie Madoff, a 10.5 trillion Federal debt and unfunded obligations for trillions more, commercial real estate, a huge shift toward personal debt and on and on."

This "make work" no longer exists so we can expect HUGE unemployment from here on out.

Hey soup.
Always enjoy your comments.

Don't see how we're going to avoid the greater 'D'.

Every time that machine went 'TILT' I never did get my quarter back.

Gail: I agree, Denninger was right if one assumes that continued long-term growth is possible. Add in the reality that we are now starting to enter into a period of long term resource and economic decline, and you've got a different problem. The solution needed is not just a drastic "reset" to clear out the bad debts and move forward. What is really needed is a "redirect". We need to understand that the economy has permanently changed direction, that we can no longer continue heading in the same direction that we used to be going, and that we had better adjust ourselves to the new realities and start building a new economy that can cope with long term decline.

We need to be thinking strategically:

1) What industries, institutions, and infrastructures will we most critically be needing in the future to stay up and running as a civilization? These need to be championed, and scarce resources need to be invested to preserve and enhance these. (And yes, that DOES mean "industrial policy" - national survival is too critical to be entrusted to abstract idealist libertarian theories.)

2) How can we best help our people cope and survive (forget about "prosper), given what we will be facing in the future?

3) Given that we can't save everything, what is most important to us, what do we really value that is worth saving? We as a nation cannot continue expending resources to support everything we have been doing in the past; some hard choices will need to be made.

4) For everything else - everything that is non-essential and that is serving more as a drag on our economy rather than being helpful to us as we transition into the future - how can we relieve ourselves of these burdens as quickly and painlessly as possible?

I will start to feel something other than pessimism and dispair when I start seeing national leaders actually addressing these types of questions.

We should save Governor Schwarzenegger, he is most important in America......The Terminator......
We will cope by making new movies -
1. Conan the Debtor Barbarian
2. Terminate the Debtinator
3. Kindegarten Cop goes Broke


I must be bored becasue I have been listeneing to the "stimulus" debate in the Senate. What a waste of words...

We're going to do this the long hard way or as, Winston Churchill (I think) opined to paraphrase "we'll get around to doing the right thing after we've exhausted all other avenues".

Only it may be too late by then.


Nassim Taleb (in an interview in Jan. 26 New Yorker magazine)pp. 46-47

--advocates a return to antiquity.."you end up with antiquity," he said, a new Classical age. "I'm becoming obsessed with my idea."
--..."advocates withdrawing from 'the idiotic race' for a life of maximum inefficiency and leisure".
--he says "the gods don't want us to be too ambitious, too agressive. The gods just want us to be subservient to nature. Leave the planet the way we got it."


State Workers (CA) Take Their First Furlough Day

SACRAMENTO, CA - More than 200,000 state government employees were told not to show up for work today, with Gov. Arnold Schwarzenegger ordering the first furlough Friday.

California's budget crisis prompted Schwarzenegger to impose the twice-a-month furlough in an effort to deal with a $42 billion budget deficit.

But even as Friday approached, some state workers expressed confusion over who was supposed to be furloughed and who wasn't.

Thirty state agencies sent memos to their employees with conflicting information regarding the furloughs.

On Thursday, Sacramento Superior Court Judge Patrick Marlette ruled the furlough order does not apply to constitutional or elected officers. But the governor's office disagreed and said the governor expected all employees to follow his furlough order.

The furloughs reduce the average state worker's salary by 9.2 percent.

Equivalent to almost a 10% pay cut for all state workers.


Calif is issuing IOUs instead of paychecks. How long will those be good?
This is the first state to fall.
If we bail out Calif. then the rest of the states will revolt.

If I sent an "IOU" instead of a check to any of my creditors, I would be considered to be in "default".

I will start feeling more encouraged when I start seeing things called what they actually are.

Actually, I think that checks as legal instruments are the equivalent of IOUs. You only get in trouble when the bank cannot honor the IOU on your behalf.


A written order instructing a bank to pay upon its presentation to the person designated in it, or to the person possessing it, a certain sum of money from the account of the person who draws it.

More than 200,000 state government employees were off the job Friday as California imposed its first-ever furloughs to save money during an unprecedented fiscal crisis.

Gov. Arnold Schwarzenegger ordered employees to take two unpaid days off a month, closing most state offices, including about 180 Department of Motor Vehicles offices, the Department of Public Health and the governor's Office of Emergency Services.

State parks and unemployment centers remained open.

Now State parks are more important than Public Health and Emergency Services.

"More than 200,000 California state government employees were off the job Friday..."

Did anyone notice they were gone?

Be nice. There are plenty of people who take pride in their work who are government employees. Not all of them, but that's not the case in the private sector either.

Yes, my wife is a Public Defender and if you have a prosecutor who is stretching the law as much as they can get away with (or a cop making up evidence -- yes, they are caught in lies all the time, the court usually ignores it), you want someone like my wife on your side.

mixed gas/ethanol efficiency breakthrough
A claim for a mixed gasoline ethanol engine with higher efficiency.

Evergreen solar hurting
Serious declines in stock price.

better heating with biomass
A better designed biomass heater for home use.


Genetic Analysis of Brown Rot Fungus Reveals Unique Enzyme Systems for Breaking Down Cellulose; Possible Application for More Efficient Cellulosic Biofuels Processes

P. placenta rapidly deconstructs the cellulose in wood, but does so using different mechanisms than used by cellulolytic microbes; the genes encoding exocellobiohydrolases and cellulose-binding domains, which are typical of cellulolytic microbes, are absent in Postia. The research, conducted by more than 50 authors, is reported in the 4 February online edition of the Proceedings of the National Academy of Sciences (PNAS).

'Cash for Clunkers' pulled from stimulus

Ok, that's fine. Let's not let people replace their clunkers. But then this: http://www.nytimes.com/2009/02/04/us/politics/04stimulus.html?ref=us

Senator Barbara Mikulski, Democrat of Maryland, who proposed that tax deduction, said it would aid the struggling automobile industry and save many families roughly $1,500 on the purchase of a $25,000 car.

C'mon, now we give tax breaks so that people can by cars. Geez. Talk about people wanting to keep Business As Usual. The Republicans have also put forth that weird measure about 4.5% cheap government home loans. They must think the only way out is keeping the housing bubble somewhat afloat.

In other votes on Tuesday, the Senate rejected an amendment put forward by Senator Patty Murray, Democrat of Washington, that would have added $25 billion in public works projects to the recovery bill, including highway construction, public transportation and water and sewer projects.

This would have been money better spent (unless the vast majority was highway construction). I'm too lazy to find the details since it's been rejected anyway.

I feel like George Carlin more and more every day:

I look at it this way... For centuries now, man has done everything he can to destroy, defile, and interfere with nature: clear-cutting forests, strip-mining mountains, poisoning the atmosphere, over-fishing the oceans, polluting the rivers and lakes, destroying wetlands and aquifers... so when nature strikes back, and smacks him on the head and kicks him in the nuts, I enjoy that. I have absolutely no sympathy for human beings whatsoever. None. And no matter what kind of problem humans are facing, whether it's natural or man-made, I always hope it gets worse.

I think the lack of a solid stimulus plan in the right direction (power lines, public transportation, home weatherization, renewable energy) will be a kick in the nuts. And the way it looks, I hope the stimulus plan doesn't pass and I hope it gets worse. Because apparently an economic depression is the only solution.

Bush overpaid banks in bailout, watchdog says ...


Perhaps I'm remembering wrong but didn't Congress say they had complete oversite of how the bail out bucks were spent?

That's OK. I'm sure all the folks responsible for the screw ups will step forward in a day or so and admit their culpability.

Perhaps I'm remembering wrong but didn't Congress say they had complete oversite of how the bail out bucks were spent?

That's OK. I'm sure all the folks responsible for the screw ups will step forward in a day or so and admit their culpability.

Woman robs restaurant while tearfully apologizing

SOUTH BEND, Ind. (AP) -- Police have arrested a woman they say robbed a South Bend restaurant while tearfully apologizing to the cashier. The woman, whose identity wasn't released, was taken to the St. Joseph County Jail on a charge of theft Tuesday night.

According to a police report, the woman told the cashier at the Long John Silver's restaurant she had a gun and needed money, then began crying and said, "If I wasn't down and out, I wouldn't be doing this."


The Sichuan earthquake seemed like such a preventable tragedy, with many deaths due to the collapse of shoddily built schools and public buildings. Now the implication of the Zipingpu dam in the triggering of the event redoubles the pressure on the Central Govt.

I spent a day at the panda sanctuary North of Chengdu, Sichuan, not ten months before the quake. It sickens me how much of the media coverage focussed on the cute fuzzy creatures' welfare, at the expense of bearing witness to the human loss.


This link is to an image I captured that day at the panda preserve - Yes, it's a real black swan. At the time I hadn't even heard of Taleb's book.

Thanks for mentioning this.

I have long wondered if there was a relationship between massive amounts of water on the land and the earth quake. But I was more focused on the tsunami that hit southern Asia just days before the earthquake. If this quake was going to happen, and if the damn mentioned in the article put it on even more of a hair trigger, surely hundreds of millions of tons of water weighing down the other end of that tectonic plate could have been the most immediate trigger for this catastrophic event.

If the tsunami did have any such effect, that means that as GW raises sea levels and increases the intensity of storms...it could indirectly trigger more catastrophic earth quakes. This is a threat of gw that gets very little discussion.

Could any geologists weigh in on these random ramblings?

that means that as GW raises sea levels and increases the intensity of storms...it could indirectly trigger more catastrophic earth quakes. This is a threat of gw that gets very little discussion.

Could any geologists weigh in on these random ramblings?

At least for the biggie quakes, the rate of loading due to plate motion (one to five centimeters of relative motion per year), greatly dominates these other factors. If all the relevant part of an earthquake fault is either totally underwater, or totally above water, the only net effect of rising sea levels is a slight increase in hydrostatic pressure, which would be stabilizing (but only very-very-slightly so). Now after getting into a fault, water can lubricate it, and make it easier to rupture. But that probably requires it to be pumped underground at high pressure. I would place effects on earthquakes/volcanoes on the very bottom of my list of concerns.

Clark Atlanta Lays Off 100; Cancels Classes
Friday, February 6, 2009 – updated: 1:46 pm EST February 6, 2009

ATLANTA -- Clark Atlanta University laid off 100 people Friday and canceled classes until Tuesday, according to school officials.

Seventy faculty members and 30 other staffers were laid off.

Classes on Friday and Monday were canceled.

School officials said the moves are part of an attempt to reorganize the school.

"We are exercising sound management practices that will position the University well for future growth and progress," said CAU president Carlton E. Brown.

Spokeswoman Jennifer Jiles said the school is grappling with a reduced enrollment, though officials are still tallying just how many students they've lost. She said the administration realized last fall that some students wouldn't return for the spring semester, with many explaining they couldn't afford it.

Clark Atlanta’s annual cost, including food, housing and tuition, is about $25,000. Ninety percent of students receive financial aid.

Jiles said the school is making sure its faculty levels are in line with the reduced student body.

They blamed the layoffs on the faltering economy and declining student enrollment.

On sea level rise (e.g. West Antarctica linked above). My understanding is that ice only moves because it is lubricated by water below (water being heavier than ice). It seems obvious to me that all you'd have to do to stop it moving is pump out some of the under-ice lakes. I think they are under pressure. Shooting the water up high on cold windy days will probably get it to fall downwind as snow/ice.

The fact that water is denser than ice means that H2O liquifies below 0C if the pressure is high enough. That's why ice skates work: The concentration of force under the narrow blade causes a thin film of liquid water to form momentarily as the blade slips over.

Same with the glacier - It's lubricated by a thin film of subzero liquid water that's formed in situ by the immense pressure on top. There are indeed lakes in some places under the Antarctic ice, but that's not why the glaciers slide.

Even if you could "vent" that thin film of water somehow, the ice settling on the rock would instantaneously generate a new liquid film.

I certainly believe in "modelling not arm-waving", and I understand that ice flow modelling is in its infancy. Still, we know these ice lakes move around and I feel that the ice above must move when that's happening. Also, if you pump out a lake [if possible], then the ice upstream will start falling into that cavity instead of pushing across the lake and adding to the push on the ice beyond. Net ice outflow is the small difference between two big numbers, so we don't have to halt all forces to get back into balance. However I concede your evident superior technical knowledge in this area.

I'm sorry that you don't even know the basics about the water/ice phase diagram:
Pretty simple, really - Increasing pressure lowers the melting point.

Not that the normal lubrication process is necessary for glacial motion - Ice itself undergoes plastic deformation and flows under sufficient pressure.

My understanding is that ice only moves because it is lubricated by water below (water being heavier than ice). It seems obvious to me that all you'd have to do to stop it moving is pump out some of the under-ice lakes.

An interesting idea. I doubt it is practical, the water does move around, and we probably can't predict where its location will be when the drilling hits bottom. Then we have to pump it up (it won't be under enough pressure to reach the surface, ice is about .9 as dense as water, so hydrostatically you would expect the pressure to be roughly enough to get the water 90% of the way up). Then you have to prevent it freezing before you get it to the surface. Then the other source of instability is that sea water pushes in from the edges, as a result of both rising sea levels, and decreasing height of the ice.

In any case, the article assumed you just let the ice instantly melt. But this sort of deglaciation would take quite a while, for one the amount of heat absorbed melting that much ice would cool off the ocean/climate. So I don't think it is realistic to fear more than a couple of meters per century sea level rise.

But it is interesting, that the effects of deglaciation on sea level are not just adding water to the ocean, but also involve a shifting of the earths rotational axis, which effects the distribution of the rise.

http://www.ecosmagazine.com/?act=view_file&file_id=EC137p14.pdfI don't think it is realistic to fear more than a couple of meters per century sea level rise.

What in the world do you think the effects of 2 meters of rise would be?? And, if you are being literal in meaning 2 meters, you'd better think again - not that 2 meters wouldn't be bad. But 4? That's catastrophic no matter what.


In an interview with the 7.30 Report in March, Hansen said, ‘If we get warming of two or three degrees Celsius, then I would expect that both West Antarctica and parts of Greenland would end up in the ocean, and the last time we had an ice sheet
disintegrate, sea level went up at a rate of five metres in a century, or one metre every 20 years’.


Indeed, the palaeoclimate record contains numerous examples of ice sheets yielding sea level rises of several metres per century when forcings were smaller than that of the business-as-usual scenario. For example, about 14,000 years ago, sea level rose approximately 20 metres in 400 years, or about 1 metre every 20 years.

There is growing evidence that the global warming already under way could bring a comparably rapid rise in sea level.


Whip up a batch of slightly wet mashed potatoes and pour them out on the kitchen floor. The initial peak subsides as the perimeter expands and the potatoes flow toward the perimeter.

This is what the Antarctic ice sheet is doing. Glacial ice under pressure generates a water film at the ice / bedrock interface and this helps the ice flow. I think you are underestimating the scale of natural processes vs the potential for human engineered solutions. Creating antarctic fountains is along the lines of halting global warming by having us all keep our fridge doors open for 3 hours a day.

You will make out OK but your children's children are totally f**k*d.

Hello TODers,

It is important to remember that much of the bottom of the WAIS is far, far Below sea-level. Yet the ice reaches very far Above sea-level. The Bentley Subglacial Trench alone:

The Bentley Sub-glacial Trench is a vast oceanic trench in Antarctica, 80°S, 115°W. At 2,555 meters (8,327 ft) below sea level, it is the lowest point on the surface of the earth not covered by ocean, although it is covered by ice.[1] Most people do not count it as the lowest point on land, since the ice makes it essentially subterranean. Also, if the ice melted, the area would be under water. The trench's size is similar to that of Mexico.
I have much discussed the WAIS in earlier postings.

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

Food for thought: if one could build a ski run from the top of the Vinson Massif to the bottom of the Bentley Trench, it would drop approx. 7500 meters [24,600 feet] over a distance of roughly 300-400 miles. This is just a very small portion of the WAIS. I hope this factoid can help one visualize just how much ice is in the WAIS.


Water can't exist below -20C.

While this may be true, the temperature at the bottom of a glacier is likely to be greater than that at the surface. Geothermal heating from below slowly warms the ice from below. So, the glacier slides/surges down hill...

Dahl-Jensen, D., K. Mosegaard, N. Gundestrup, G.D. Clow, S.J. Johnson, A.W. Hansen, and N. Balling, (1998). Past temperature directly from the Greenland ice sheet. Science, 282, pp. 268-271.

The temperature at the bottom of the GRIP core is about -9C at a depth of about 3000m and the Dye 3 core is about -13.5 at a depth of about 2000m.

E. Swanson

Catherine Austin Fitts on Rethinking Diversification

For our entire lives, most of us have depended on highly centralized systems. Our food comes from a thousand or more miles away. Our savings is shipped into distant financial centers and invested by strangers in enterprises run by strangers. We watch highly scripted news that serves the same spin no matter how many channels we try. We bank at impersonal global banks with criminal records that would make a felon blush and have no idea where our money goes, just that the government guarantees that we will get it back.

Within this centralized system, diversification means having your financial assets deposited into a “one-stop-shop” brokerage account invested in securities representing different global industries, the idea being when one industry is doing poorly, another “countercyclical” industry would be doing well.

But suddenly, we find that we may not be able to trust these centralized systems. Suddenly, traditional portfolio theory no longer addresses our anxiety. This is because we need to shift from diversification within a centralized system to real diversification in a decentralized, possibly “out of control” world.

Catherine Austin Fitts also appears on the C-Realm Podcast.

Episode 19: Piratization


This is pretty much preaching to the choir:
Why sustainable power isn't sustainable

He really only discusses thing film solar, and hydrogen fuel cells. I think we pretty much know on TOD, that there is only materials for so much thin film PV production. At least silicon isn't scarce. And we are finding ways to use it more efficiently all the time. The real issue IMHO, is do we time time for the buildout?

Yes. It's too bad that discussion of renewables so often only looks at the cutting edge stuff.

Personally, I think glass and mirrors based RE could provide a Lion's share of our energy-capture, and proper home and town design could offset so much of the excess used. PV and Fuel Cells are great technologies, but are really the 'Frosting, not the cake'.

The EIA's International Petroleum Monthly is just out. It gives production numbers through November. World oil production, (C+C), was down 445 thousand barrels per day in November. OPEC was down 849 kb/d in October while non-OPEC was up 403 kb/d. Most of the non-OPEC gain was the US recovering from the hurricanes. The US was up 293 kb/d in November.

Saudi Arabia was down 441 kb/d, Kuwait down 143 kb/d, Iran and the UAE both down 100 kb/d. The rest of OPEC was down by much smaller amounts. Angola and Algeria were not down at all and Ecuador was up 5 kb/d.

As for non-OPEC the US was, by far, the largest gainer. Azerbaijan was up 86 kb/d and Canada was up 67 kb/d. The largest non-OPEC loser was Russia, down 71 kb/d.

Ron Patterson

These are a couple of graphs of EIA world production data a reader sent to me this afternoon:

The comments about July being the peak of production were inserted by the reader, but I would agree.

When I look at those graphs, I am almost always shocked; when I take in consideration how high oil prices climbed during this period; with oil trading at historic highs, the best oil producers around the planet could do was to squeeze few hundred thousands barrels more then May 2005; which in return begs the question: if producers with ample access to credit and triple digit oil prices could hardly dent the plateau, what would a world of $40 oil, limited financing and ever faster depletion rates would do to production?.

I believe this is why the futures market continue to show a historic contango, since as soon as the global economy rebounds, we could have a super spike as demand largely outnumber supply, and even if the global economy was to stagnate, supply destruction will soon start running ahead of the demand slow down.


Ron: I keep hearing that OPEC (mostly KSA) will voluntarily cut back xxx mb/d. Is it voluntary or decline? I remember many papers about the OPEC creation and with it the creation of virtual crude. I wonder if they have run out of virtual crude and now the real stuff is in a bit of decline.

IF (big IF) this is true and it becomes well known, the world economy may take another hit bigger than financial melt down.

Ron and I have been of the opinion for a while that 2005 was probably Saudi Arabia's final production peak. Even before the recent announced voluntary cutbacks, Saudi Arabia was almost certainly going to show three years of annual production below their 2005 rate--at about the same stage of depletion at which the prior swing producer, Texas, started declining.

But the key story is net oil exports, and our middle case is that the top five net oil exporters have already shipped about 20% of their post-2005 combined cumulative net oil exports--and that by 2018 they will have shipped about 80% of their post-2005 cumulative net oil exports.

Lynford, there is no doubt that Saudi Arabia is voluntarily cutting production. However even before they began cutting 2008 production was 183,000 barrels per day below their 2005 level. As Jeff says, that was their peak. The current cuts will assure that 2005 was their peak because their fields in production in 2005 are declining at around 600,000 barrels per day per year. So even their new fields will not make up that difference.

However, if the price of oil rises, Saudi will no doubt increase production. But I do not believe they will ever increase their production above their 2005 levels.

OPEC production, in the first ten months of 2008 was above their 2005 levels for the same 10 months of 2005 only because Angola has dramatically increased their production since then. Remove Angola from the mix, (they were not a part of OPEC in 2005), and OPEC's average production is still over 250 kb/d below their 2005 levels. Also without Angola, their peak 2008 month of July is still 262 kb/d below their peak in September of 2005.


Bonus Babies: The Big TARP Recipients and their Booty

According to the linked table, the top seven recipients of TARP money collected $140 Billion from TARP, yet paid out $85.1 Billion in bonuses. This means that 61% of your money to "bail" them out went directly into their personnel's pockets!

Merrill Lynch and Morgan Stanley paid bonuses that just about equaled their TARP monies, while Goldman Sachs' bonuses EXCEEDED their TARP monies.


Hard to see how this mess can be fixed-the capitalism model some criticize is clearly broken. The theoretical owners of these businesses (shareholders) have no effective control over upper management (the boards are filled with compliant puppets). They steal from the shareholders until there is nothing left to steal, then the taxpayers have to hand over their money. Obama's plan to limit compensation (with an exemption for GS,C, etc. as expected) drew criticism yet none from shareholders (who actually own these companies). What has been created is an elite of upper management, answerable and accountable to no one and now so important and crucial to society that the taxpayer must fund their absurd excesses.

From a stimulus point of view, (The TARP funds were meant to stimulate the economy, right?) what's the difference between loaning the money out or giving it to an employee?

Getting upset about how they use the money is a distraction.


Ummmm. They are banks. We were supposedly saving bank so they could do what banks are supposed to do--loan money to businesses to keep the economy going.

That the people responsible for the criminal activity that spawned this economic catastrophe are walking away with tens of billions of the dollars that they were supposed to use to fix this mess is, well, shameful is the word Obama rightly used, though I could think of a few stronger words.

Are you so morally retarded that you can't see a problem here? Or are you one of the banker-thieves making off with the publics cash?

Doesn't this imply that all the likes of Goldman Sachs need to do to be solvent is forgo obscene bonuses? Or is it that they never needed taxpayer money at all? Makes me wonder which is worse: transparently funneling billions to terrible (and terribly wealthy) businessmen in a "legal" manner while thumbing their noses at everyone else, or doing it covertly and having tens of billions just disappear, unaccounted for?

TPTB are doing both, and nobody is accountable either way. How much longer can this go on before enraged citizens rise up and beat their billions of dollars back out of rich execs and sleazy politicians, vigilante style?

How much longer can this go on before enraged citizens rise up

Many here wonder the same - the rest have given up it ever happening.

Gotta figure the chances improve as millions more are laid off, giving them the requisite rage and lots more free time to contemplate the way they've been screwed by the corporatocracy.

Yes and if and when inflation (food and fuel prices especially) comes back these elite bankers will have all the money to pay for the things they want and need.
Noone will be able to compete with their purchasing power.

Citigroup Hides Mystery Meat in Balance Sheet

Quoted text is presented in a different order than in the article but I thought it made more sense this way for the short summary.

Feb. 5 (Bloomberg) -- Even now, Citigroup Inc.’s bosses can’t get over their delusions of grandeur.

You can see their shiny optimism in a $44 billion balance- sheet item called deferred-tax assets, which is a fancy term for pent-up losses that the bank hopes to use later to cut its tax bills...

...Deferred-tax assets, or DTAs, typically consist of losses carried forward from prior periods. Under the accounting rules, these carryforwards are valuable only to companies that make money and pay income taxes. If a company is losing money and doesn’t expect to be able to use these assets, it’s supposed to record an offset, or allowance, to reduce their value...

...That figure tells you Citigroup’s executives, in spite of their bank’s near-collapse, are still forecasting future profits as far as the eye can see. They have every incentive to do this, too. If they ever turned pessimistic, the assets might go poof...


ToucanSanctuary -

These mega-banks sure look like they are getting desperate.

Just today our local newspaper (the Wilmington, Delaware News Journal) ran a full-page ad by Bank of America essentially trying to reassure us that they are okay financially, that we should continue to trust our money to them, and that things will be okay 'moving forward'.

In that very same issue is a story about the head of BofA's credit card operation (formerly MBNA) giving a pep talk to the Wilmington Rotary Club. He stressed the need to be positive and to work toward building consumer confidence. This at the same time that BofA's stock is tanking and at the same time that BofA is planning to eliminate over 30,000 jobs (but not eliminating executive bonuses of course).

As I see it, excessive 'consumer confidence' is the reason for the explosion in consumer debt levels, and that in turn is partly responsible for the mess we are now it. With all the current unemployment and home foreclosures, a good chunk of that consumer debt is never going to be repaid. The last thing we need right now is for tapped-out and over-stretched consumers to take on even more debt. But that is exactly what the BofA credit card operation depends on in order to stay alive.

Promoting more consumer debt in the form of credit card borrowing is going to be a dying business, simply because debt cannot be expanded indefinitely. A limit has been reached. The chickens have finally come home to roost, and the likes of BofA know it, as more and more people are taking a pair of scissors to their credit cards.

In Sweden the government took over the banks and got a better deal for taxpayers:


Am not sure about this good bank bad bank theory. It seems to there is risk of they give the banks the good, and give the tax payers the bad to please the squawkers on Wall Street, yet one may need to analyze the plans rather than to make random accusations.

Regarding the first article, how much are further refinery cutbacks likely to affect gasoline pump prices? Locally they've already risen about 40 cents in six weeks, to well above the national average, while oil prices remain stagnant.

The UK National grid website can't be bothered to post the storage levels of UK gas [AGAIN]:

"There are no items to show in Storage Monitor and Stock Level Data."

IS Undertow out there? [S]He seems to have another source for this data.

UK is burning its gas storage as fast as possible this year, after pumping full tilt to Belgium through January..

Hello TODers,

The usual Friday night massacre so as to hopefully fly under the radar of the ignorant masses:

Three U.S. Banks Shut by Regulators as Financial Crisis Deepens

County Bank of Merced, California, with deposits of $1.3 billion and assets of $1.7 billion, was shut yesterday by the state’s Department of Financial Institutions, according to an e-mailed statement from the Federal Deposit Insurance Corp.

The Georgia Department of Banking and Finance closed McDonough-based FirstBank Financial Services Inc., which had $337 million in assets and $279 million in deposits as of Dec. 31, the FDIC said in a statement.

The California Department of Financial Institutions shut Culver City-based Alliance Bank, with assets of $1.14 billion and $951 million in deposits.

Hello TODers,

Have you hugged your bag of NPK today?

Potash Corp. of Saskatchewan Inc. [stock symbol: POT] advanced 4.4 percent as grain and oilseed prices climbed on droughts in Brazil and China, suggesting farmers may step up fertilizer purchases for the next crop season.

Potash prices at record high

Potash prices have soared in recent years. What was once a commodity worth about $200 a tonne is now expected to fetch $1,500 by 2020.

According to Scotiabank economist Patricia Mohr potash purchasers are currently paying US$872.50 per tonne at the port of Vancouver. “It is at a record high,” she added.
Since we are highly likely to be far postPeak at 2020, I would expect potash & I-NPK to be much, much more than $1,500/ton. The only thing that can help hold back I-NPK price increases is full-on O-NPK recycling.

Evidently, investors don't think O-NPK recycling is going to ramp anytime soon as a share of POT has gone from a [Dec. 5, 2008] low of $47.54 to today's high of $92.52-->nearly a Double in just two months.

Since I-NPK is basically 'transformed FFs' any rise in FF costs will help drive I-NPK costs up, and perversely, make it even more expensive to process & transport O-NPK to that final topsoil square foot.

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

Melbourne Australia had its hottest day ever recorded today at 45.7C. A commuter airport just outside the city recorded 47.9C or 118.2F.

Hello Boof,

Thxs for the info--hope everyone is trying to stay cool and drinking lots of water. 118F is hot, but that temp is not that unusual for my Asphaltistan here in AZ.

Although Phoenix residents may feel that their city MUST be the hottest place around at times, top honors go to Lake Havasu City,AZ, where the mercury climbed to 128° on June 29, 1994. This bests the Phoenix mark of 122°, set on June 26, 1990.

Re: top honors go to Lake Havasu City,AZ, where the mercury climbed to 128° on June 29, 1994.

Human protein starts to cook at these temperatures.

It seems to me summer temps in the high 40s C are going to be AC dependent therefore less sustainable post peak. The stockbroker belt is in the leafy suburbs with green lawns like Melbourne is supposed to be. Scorching summer temps may be OK for outback mining towns because they have something (gold, uranium etc) that pays for people to have AC.

Hello TODers,

Recall my earlier discussion on FF/I-NPK latency and the JIT pull system for the I-NPK supply chain. Here is another way to look at it:

Fertilizer Forecast: Where Are We Headed in 2009?

..Fertilizer trade is very different from grain and oil trade. There isn’t a centralized trading for fertilizers, no CME or CBOT. It is a physical market.

“There is no futures market,” he said. “There is a swap market.”

Today, purchasers of fertilizer have to make more forward payments and plans for product.

“We are doing a lot more on a forward basis,” he explained.

..Today’s fertilizer market is different than the market in the past, he said. Fertilizer is a continuous production, seasonal use commodity, unlike grain that is a seasonal production, continuous use commodity; and energy that is a continuous production, continuous use commodity.

The difference is that storage plays a critical role in determining the supply of fertilizer available to the marketplace in season.

At this point, Diller said “storage is king”.

The supply chain is much larger now. The majority of nitrogen is imported.

“We didn’t use to rely on that much,” he said. “It’s coming from a long ways away.”

Fertilizer now operates on firm contracts. Previously, in the wholesale market, product could just be “reserved” and if it wasn’t actually needed n there was a “no harm, no foul” mentality. Now that’s not the case. Contracted product belongs to and needs to be paid for by the company contracting the product.
"Storage is King"-->IMO, reads like a positive plug for strategic reserves or my speculative 'Federal Reserve Banks of I-NPK'.