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DrumBeat: February 27, 2009
Posted by Leanan on February 27, 2009 - 10:02am
IEA says oil capacity crunch looms
The International Energy Agency fears that an expected recovery in oil demand from 2010 and oil project cancellations due to low crude prices and the credit crisis will mean no spare oil capacity at the end of 2013."That is our concern. Investment, investment, investment, that is what we are asking," IEA Executive Director Nabuo Tanaka said at a conference in Lisbon on Friday.
The Paris-based IEA, which advises 28 industrialised countries, earlier this month said global oil demand would drop by 980,000 barrels per day this year but would rise again by about 1 million bpd in 2010 with an expected economic recovery.
Tanaka said in a Reuters report that there was no room for complacency on spare oil capacity.
Oil Falls for the First Time in Four Days as Recession Deepens
“The GDP numbers are terrible and that’s putting pressure on the oil market,” said Michael Fitzpatrick, a vice president for energy at MF Global Ltd. in New York. “Demand has cratered, and after these numbers we can expect it to sink further. The dollar is up, taking additional froth out of the market.”
World faces last chance to avoid fatal warming: EU
BUDAPEST (Reuters) – The world faces a final opportunity to agree an adequate global response to climate change at a U.N.-led meeting in Copenhagen in December, the European Union's environment chief said on Friday.
PDVSA seeks a 40% cut from contractors
Venezuelan Minister of Energy and Petroleum and chief of state-owned oil company PDVSA Rafael Ramirez said that the holding is engaged in negotiations so that oil contractors lower the rates they charge for services by 40%."In most cases, we have five-year term agreements. We are reviewing the contracts because the current rates are unbearable," Ramirez said.
The official added that, according to PDVSA estimations, the costs related to contractors must be lowered 40% by implementing new rates that are consistent with the collapse of oil prices that has seriously hit the energy market, said a report by El Universal newspaper.
Baker Hughes Oil, Gas Rig Count Hits Lowest Since January 2005
Rigs exploring for or producing oil or gas declined by 57, or 4.4 percent, to 1,243, the lowest level since the week ended Jan. 7, 2005, Baker Hughes said today on its Web site. The rig count has fallen for 15 out of the past 16 weeks.
New urgency to get to Iraq's oil
BAGHDAD (AP) -- International companies have waited years to tap into Iraq's vast oil wealth and now Iraqi officials are working feverishly to make that happen.There is growing apprehension about the cost of rebuilding the country with the price of crude, the nation's major source of revenue, nearing five year lows.
"It is a hard fact that oil and gas have become the sole source and the basis of our economy," Iraqi Prime Minister Nouri al-Maliki said Friday.
GE buys half of Gulf production unit
GE Energy Financial Services, a unit of behemoth conglomerate General Electric, will spend $150 million to buy about half of the ATP Innovator floating oil and gas production unit in deepwater US Gulf of Mexico.
Workers will strike if no deal with Sunoco - union
HOUSTON (Reuters) - The United Steelworkers union said on Friday it will strike at noon EST Sunday (1700 Sunday GMT) at Sunoco Inc's two refineries on Pennsylvania, if an agreement cannot be reached in line with a new national contract for refinery workers.
For survivalists, the end is always nigh
THE end, when it comes, will be swift. A spiralling economy and diminishing oil supplies will lead to power outages, food shortages, a breakdown in law and order, and ultimately, complete societal collapse. "I anticipate that it'll happen quite fast, like the bushfires," says Tony, a 44-year-old ex-stockbroker.Tony, who lives with his wife and three young children in Baulkham Hills, has been stockpiling supplies including rice, multivitamins, peanut butter and honey - "Stuff you don't need to cook or refrigerate and that is high in calories" - plus plenty of soap and toilet paper. "Sanitation will break down as sewerage [systems] clog because people will be unable to maintain the infrastructure. So we'll see diseases like cholera and typhoid."
Tony (who didn't want his second name used), is part of a new wave of Australian survivalists, a disparate group that includes peak oilers, permaculturalists and "transition teams" that are making plans for what they see as the coming apocalypse. Such people used to fret about nuclear Armageddon or Y2K: today, it's more likely to be global warming, shrinking oil reserves and financial collapse.
United States Oil Fund says not aware of CFTC probe
NEW YORK (Reuters) - The United States Oil Fund LP USO.P, a giant exchange-traded fund that the U.S. Commodity Futures Trading Commission has said it is investigating, said on Friday it was not aware of any such probe.The CFTC said on Thursday it was investigating the fund, which has swelled in size in recent months, concerning a recent large trade on the New York Mercantile Exchange made on Feb. 6.
Repsol Unlikely to Sell Stake in Unit, JPMorgan Cazenove Says
(Bloomberg) -- Repsol YPF, Spain’s largest oil company, may not be able to divest a 25 percent stake in its Argentine business as appetite for investment in the South American country declines, said JPMorgan Cazenove Ltd.“Unfortunately, we do not think that Repsol YPF will be able to reduce its exposure to Argentina in the near term,” analyst Nitin Sharma wrote today in a note to clients. “Given diminished inventor appetite for Argentine risk, in our view there is little likelihood of this materializing in 2009.”
U.S. Court Overturns Retroactive Power-Rate Increases
(Bloomberg) -- The U.S. Federal Energy Regulatory Commission overstepped its authority in allowing power utilities in California to raise rates retroactively to recover some costs from the state’s 2001 electricity crisis, an appeals court said.
Argentina Considers Plan to Nationalize Grains Trade
(Bloomberg) -- Argentina’s government is considering a plan to take over the country’s grain trade, threatening to worsen a year-long conflict between farmers and the state over agriculture policy.A proposal for the government to buy and sell grains and oilseeds to ensure that domestic demand is met before exporting surpluses is being studied at “the highest levels of the government,” said a government official who asked not to be named, citing internal policies.
Analysis: oil, gas deals give Russia long-term win
In a stroke, Russia locked in two huge markets as energy customers, shipping natural gas for Japan and even more oil for China. East Asia's two largest economies became even more dependent on Russian resources. Russia's oil-driven economy got some long-term certainty. A Russian-led effort to create an OPEC-style gas cartel got a little boost.And Europe was put on notice that if they don't like how Russian energy is supplied to the continent, Moscow now has even more customers to turn to.
It's a sign that, economic crunch notwithstanding, the Kremlin is playing for the long haul.
US oil demand in December came in 794,000 barrels per day less than previously estimated and down 1.52 million bpd from a year earlier, the Energy Information Administration (EIA) said today.
China to build 9 refining bases in 3 years
China, the world's No. 2 energy consumer, plans to build nine crude oil refining bases in coastal areas during the next three years, local media reported Thursday, citing the National Development and Reform Commission, China's top economic planning agency.According to China Knowledge news service, under the country's petrochemical stimulus plan, three of the new bases, each designed with refining capacity of 30 million tons of crude oil annually, will be built in coastal cities of Ningbo, Nanjing and Shanghai.
C$ hits one-month low as risk aversion heats up
TORONTO (Reuters) - Canada's dollar skidded to its lowest level in over a month on Friday given the combination of a drop in oil prices, safe-haven flows into the U.S. currency and data that showed Canada's current account swung into deficit.Weak stock markets overseas and in North America coupled with the nagging concerns about the global banking system weighed on commodity-currencies like the Canadian dollar as investors flocked to the greenback given its safe-haven status.
Brazil pushes for Campos' pre-salt
Petrobras is spearheading its development of Brazil's exciting new pre-salt play with an efficiency drive in the northern Campos basin, off Espirito Santo state.
Nigeria flushes criminals out of creeks
Port Harcourt, Nigeria - Nigeria's army raided a militant camp in the oil-producing Niger Delta on Friday, recovering arms and ammunition in what it said was part of an offensive to flush criminals out of the creeks.Colonel Rabe Abubakar, spokesman for the joint military taskforce (JTF) in the eastern Niger Delta, said the camp in the state of Bayelsa had belonged to criminals who were behind attacks on oil facilities, soldiers and civilians.
Nigeria to Sell Country’s Four Crude Oil Refineries
(Bloomberg) -- Nigeria will sell the nation’s four oil refineries to raise funds as falling crude prices widen the country’s budget deficit, the government said.The West African nation will also remove subsidies on gasoline and other petroleum products to cut expenditure, Finance Minister Mansur Muhtar and Petroleum Minister Rilwanu Lukman said on national television last night.
The moves are part of a package of recommendations presented to the Presidential Steering Committee responsible for mitigating the impact of the global financial crisis on Nigeria, they said.
Preparing for a Flood of Energy Efficiency Spending
KNOXVILLE, Tenn. — To the casual eye, the basement of this city’s Firehouse 9 looks like a jumble of old hydrants, Dr Pepper cartons, rakes and random gear. To specialists in energy efficiency, the 1960s-era building is a mess of a different sort: wasteful hot water heaters for the firefighters’ showers, ancient refrigerators and outdated lights.Wrapping up an elaborate energy audit, Knoxville is about to find out which of 99 city buildings are wasting the most energy. It hopes to begin repairs this summer, just in time to catch a tsunami of federal stimulus money earmarked for such unglamorous tasks as replacing light bulbs and fixing leaky insulation.
Canada current account swings into deficit
OTTAWA (Reuters) - Canada's current account plunged into deficit in the fourth quarter for the first time in nearly a decade as the global financial crisis crippled demand for oil and other natural resources exported by the country.
Cyclone Brews Off Australian Oil, Mining Region
A tropical low has formed off the remote west Australian coast and may develop into a cyclone this weekend, the country's weather bureau said on Thursday, threatening iron ore mines and offshore oil and gas production.
CERA WEEK 09 : “Doom and gloom”
As heads of the largest Oil & Gas, Power and Alternative energy companies gathered at the Galleria in Houston Texas last week the air was filled with cautious optimism and in many cases gloom and doom.Generally speaking, the heads of energy companies were more optimistic while economist and consultants were not.
Coffman blasts Salazar's decision on oil-shale leases
Coffman criticized the decision by Interior Secretary Ken Salazar to withdraw the offering for research and development leases in Colorado, Wyoming and Utah."We must be willing to look at every possible solution to our energy crisis," Coffman said. "Closing off leases for oil shale only hinders our ability to end our addiction to foreign oil."
Shifting Gears: Obama Budget Favors Renewables, Hurts Oil
President Obama’s first budget turns campaign rhetoric into a big change in tax policy that favors renewable energy at the expense of Big Oil. Combined with clean-energy tax breaks in the recently-passed stimulus package and the impending climate-change bill, it adds up to a seismic shift in government energy policy.That has oil companies hopping mad. The American Petroleum Institute said higher taxes would stifle oil-patch investment and job creation. “I don’t see how this bolsters energy security,” API spokeswoman Cathy Landry said. BP executive Lamar McKay told Congress Wednesday that taxing “core energy” while subsidizing new energy would do nothing to help the nation’s energy supply.
Broadway to kick cars to the curb
NEW YORK — Start singing a lullaby for Broadway. The famous street is being shut down at the crossroads of the world: Times Square.To speed traffic and give pedestrians more elbow room, New York City will close five blocks of Broadway around Times Square to traffic. The famed Great White Way between 42nd and 47th streets will become a pedestrian zone with benches, tables and landscaping.
Plunging auto sales could hit low point in February or March
Auto sales continue to collapse this month, but less sharply than forecasters said only a week ago, suggesting to some that the end of the market decline is in sight."We believe we are nearing the bottom," says Jeff Schuster, chief of global forecasting at J.D. Power and Associates. "Our expectation is for February or March to be the low point."
Nevertheless, Power cut its forecast for the full year's sales to 10.4 million from 11.4 million and pointed out that it previously thought December had been the market's bottom.
Frugal Families say cutting costs long term is hard
The Pivnicks saved $140 a month by changing cellphone plans. The Porters reduced driving mileage by 35% when they started doing errands in one trip. The Joneses bought organic food more cheaply.
Lack of Fuel cause for Turkish Airlines crash
A fuel shortage is believed to have caused the crash landing of Turkish Airlines passenger at Amsterdam, Dutch daily De Telgraaf said on Thursday citing sources involved in the investigation.
Farming policy: an end to French hypocrisy?
After 46 years of shovelling farm subsidies to its richer, more polluting farmers, France yesterday took a historic step towards a greener and fairer European agriculture policy.Paris announced that from next year it would confiscate over 20 per cent of the billions of euros of European taxpayers’ money paid to its ranch-like cereals farms and divert the cash to hill farmers, grazing land, shepherds and organic agriculture.
The announcement brings to an end almost half-a-century of official hypocrisy in which French governments have talked about protecting “family farms” and “quality food” but allowed the bulk of European largesse to flow to chemical-assisted, hedge-free, cereals-ranching in northern, central and eastern France.
Concerns over ash pond pollution grows
A 2007 study by the U.S. Environmental Protection Agency showed more than 60 sites nationwide where coal ash is suspected or has been proven to have polluted water. Selenium, a byproduct of the coal processing that can cause fish and bird deformities, was implicated at more than 20 of the sites, including Belews Lake in North Carolina — a cooling lake for another Duke Energy power plant.After years of study and debate, Congress and the EPA may be ready to move forward.
Climate change lays waste to Spain's glaciers
The Pyrenees mountains have lost almost 90% of their glacier ice over the past century, according to scientists who warn that global warning means they will disappear completely within a few decades.While glaciers covered 3,300 hectares of land on the mountain range that divides Spain and France at the turn of the last century, only 390 hectares remain, according to Spain's environment ministry.
The most southerly glaciers in Europe are losing the battle against warming and look set to be among the first to disappear from the continent over the coming decades. Their loss will have a severe impact on summer water supplies in the foothills and southern plains south of the Pyrenees.
If human civilization is to have a realistic chance of surviving global climate change, President Barack Obama and mobilized citizens will have to lead a virtual revolution in America's approach to the issue. Because the hour is so late and America's role so central, Obama must lead, and be pressed to lead, on three fronts at once. First, the United States must commit itself to serious reductions in its greenhouse gas emissions and begin achieving them without delay. This will restore US credibility on the issue, paving the way for step two: encouraging the rest of the world, especially China, to cut its emissions dramatically. The United States and China together account for 40 percent of global emissions, making them climate superpowers: if they do not cut emissions, it won't matter how much other nations reduce. Finally, Obama must urge the United States and all nations to begin preparing for the sea-level rise, water shortages and other impacts of climate change that are inevitable, with special emphasis on assisting the poor, who stand to suffer first and worst despite having done nothing to cause the problem.
The oil story and a glimpse at future chapters
In the next chapter, as the global economy recovers and the demand for oil increases, supplies will once again come under pressure and the price will rise. This rising price will increase the cost of goods and services. "Given that crude oil fuels 36.4% of the world's energy consumption, the seriousness of shortages cannot be underplayed," writes William Marsden in The Vancouver Sun (Jan. 17/09). "Our reliance on oil is almost total. It fuels 100% of air and sea transport and most of our land transport." It also supplies us with plastics, fertilizers, medicines, building materials, clothes, tires and innumerable other products of the petro-chemical industry. The rising price of oil will eventually slow the global economy, demand for oil will fall and, in the latter part of this chapter, the price will come down again.These extreme price fluxuations that are interspersed with economic recessions are the early consequences of a diminishing supply of oil trying to service an oil-based economy that is running out of oil. And these erratic prices mark the beginning of the end of the so-called Age of Oil.
Peak oil means sooner or later we'll wake up to a new normal
Less energy equals less economic growth. If that sounds too simplistic, check the energy and production history of any nation on Earth. Over the coming decades, our society will discover something we do not yet quite understand although the evidence surrounds us. We will learn that the root of our financial crises is not just greed and deceit, but the actual biophysical constraints of what Earth can supply to fulfill human desires.We dream of innovations that might indemnify us from nature’s laws—“clean” coal, a nuclear renaissance, or solar panels—but sooner or later we’ll wake up to a new mode of normal behaviour: living within the limits of nature’s bounty.
Oil nationalism diluted but far from dead
LONDON (Reuters) - Resource-rich countries hoping oil will rebound from a $100 crash will not relinquish overnight the power that came with record prices, but relations between international firms and state-run companies have begun to thaw.The price weakness of the 1990s, which culminated in a drop to around $10 a barrel in 1998, provided the context for deals on ultimately untenable terms. They were torn up when rising prices shifted the balance of power back to state firms.
Oil at around $40 now, down from a record near $150 last July, is more likely to help build bridges between state companies and foreign firms than to spur bargain-basement deals.
Are We Entering a New Era for Natural Gas?
Crude oil, with its whipsaw pricing during 2008, clearly has received most of the attention given to energy over the past year. Indeed, who would have expected its per-barrel price to fluctuate from more than $145 in July to a winter levy below $35?But lest you think that natural gas is taking a decided and irrevocable second place to its crude sibling, you need to know about the gas goings-on in a couple of areas of the world. In the U.S., for instance, a group of gas producers -- including Chesapeake, the nation's top natural gas producer, and Devon, its Oklahoma City neighbor -- are in the process of joining other independent producers in forming a lobby group aimed at promoting natural gas for power generation and transportation.
Shell Oil Sees Global Demand Doubling By 2050 (audio)
As oil companies plan for the future, they are expecting prices and demand to be higher. Oil company executives were on Capitol Hill this week to discuss offshore drilling, which they say needs to be part of America's long-term energy policy. Shell Oil Company President Marvin Odum tells Steve Inskeep that he expects demand throughout the world to double by 2050.
Shell Says Hurricane-Damaged Platform to Resume Output in April
(Bloomberg) -- Royal Dutch Shell Plc, Europe’s largest energy company, said a Gulf of Mexico oil platform damaged last year by Hurricane Ike will resume output in April.The offshore South Timbalier 301 platform was knocked out of service in September when Ike roared through the Gulf. Shell disclosed the planned start-up for South Timbalier 301 today in an e-mailed statement.
Petrobras eyes Australia, Indonesia gas opportunities
SINGAPORE (Reuters) - Brazil's state-run energy giant Petrobras is seeking opportunities for natural gas in Northwest Australia and Indonesia, to expand its energy investments in Asia, a company official said on Friday.Petrobras, which gets most of its output from the Americas, has put aside almost $16 billion for its international business in the next five years, and has been spreading its wings by boosting oil exports to China and acquiring a refinery in Japan.
U.S. pipeline group cranks up operations in TransCanada's turf
CALGARY -- The U.S. pipeline group competing against TransCanada Corp. to build the Alaska natural-gas pipeline is cranking up operations in its rival's backyard, with plans to start field work here this winter, expanding its staff and recently opening its own office in Calgary.
Kazakhstan oil exports unaffected by pipeline leak
ALMATY (Reuters) - Kazakh crude shipments to Russia have not been affected by the partial suspension of a key pipeline following an oil leak, its operator said on Friday.Caspian Pipeline Consortium ships crude from some of Kazakhstan's biggest oilfields such as Tengiz to the Russian port of Novorossiisk.
"The suspension... has not affected CPC export shipments thanks to the use of reservoir facilities," the Chevron-led pipeline group said in a statement.
Centrica Plans to Sell 650 Million Pounds of Bonds in Two Parts
(Bloomberg) -- Centrica Plc, the energy supplier looking to buy U.K. and Norwegian gas-producing assets, plans to sell 650 million pounds ($921 million) of bonds in two parts, according to a banker involved in the transaction.
Inflation: the hidden factor behind the downturn
I'm not arguing that banks and debt weren't critical, far from it, but I wonder if we've forgotten something: inflation.What makes me think so is a striking parallel with an earlier crisis in the 1970s.
The seventies were defined by economic chaos in the wake of two oil-price shocks.
The price first doubled then doubled again.
Developed economies reeled.
The very words "oil-price shock" became shorthand for an economic upheaval in the same way that "credit crunch" has today.
For boomers who had experienced financial crises in their lifetimes before, seemingly decades remained in which to recover and make retirement comfortable. Now, as $40 trillion in net worth was wiped out worldwide, suddenly 65 looks like it's coming the day after tomorrow.This time around, America can't count on the younger generations to help out. CNW Marketing Research pointed out this month that fully 53% of buyers under age 30 have disappeared from the new car market in just the last two years. The negative impact is such that, based on last year's 13.2 million car sales, it would take 19.2 years to replace the entire American fleet. For comparison, the year the first boomers became adults America enjoyed a 9.8-year fleet replacement rate, based on new car sales.
And for perspective, at the depth of the Great Depression in 1933, car sales ran at a 14.8-year replacement rate.
Commission recommends federal gas tax increase
On Thursday, the National Surface Transportation Infrastructure Financing Commission called for the 10-cent-per-gallon increase, as well as indexing the federal gas tax to inflation. The panel also backed adoption of a system to begin charging motorists by 2020 based on how many miles they drive.Relying on a gasoline tax is "not sustainable in the long term and is likely to erode more quickly than previously thought due in large measure to heightened concerns regarding global climate change and dependence on foreign energy sources, which are creating a drive for greater fuel efficiency, alternative fuels and new vehicle technology," the commission report said.
The 15-member bipartisan commission said that charging motorists based on how many miles they drive "embodies the 'user pays' principle and more accurately aligns the costs and benefits of the surface transportation system to those who are using it."
$25 Billion to Promote Electric Cars Is Untouched
WASHINGTON — The future of the American auto industry is getting off to a slow start.The Energy Department has $25 billion to make loans to hasten the arrival of the next generation of automotive technology — electric-powered cars. But no money has been allocated so far, even though the Advanced Technology Vehicles Manufacturing Loan program, established in 2007, has received applications from 75 companies, including start-ups as well as the three Detroit automakers.
Toyota Prius tops Consumer Reports best value list
The ranking takes into account the total cost of ownership over five years, weighing fuel costs, maintenance and repairs, insurance costs, depreciation, financing rates and taxes against the purchase price of the vehicle.
Ryanair mulls charge for toilets
Irish budget airline Ryanair has said it is considering charging passengers for using the toilet while flying.Chief executive Michael O'Leary told the BBC that the Dublin-based carrier was looking at maybe installing a "coin slot on the toilet door".
US ethanol sector faces grim prospects - USDA
WASHINGTON (Reuters) - Hard times have hit the once-robust U.S. ethanol sector amid the economic recession, with as much as 15 percent of production capacity likely standing idle, USDA chief economist Joseph Glauber said on Thursday.It was a sobering assessment of the fledging industry that was once bursting with optimism and financial gains as the country issued mandates on using the renewable fuel to reduce dependence on crude oil.
UK: The Future of Energy is renewable
The recent U-turn by of some of the UK's leading environmentalists - and one-time nuclear energy opponents - on the issue of nuclear energy, has caused vigourous debate in the media. Their reasoning is that we simply don't have the capacity to produce enough renewable energy to meet our needs. But as this comprehensive Ecologist report from 2007 shows the UK is really a renewable energy powerhouse.
Fourth Sumatran tiger killed in Indonesia: official
JAKARTA (AFP) – Indonesian villagers have trapped and killed a fourth endangered Sumatran tiger amid a spate of tiger attacks blamed on illegal logging, according to environmental group WWF....The incidents in Riau occurred in an area dotted with pulp and oil palm plantations and recently subjected to burning to clear forests.
EPA says farm dust requires regulation
DES MOINES, Iowa – Nothing says summer in Iowa like a cloud of dust behind a combine.But what may be a fact of life for farmers is a cause for concern to federal regulators, who are refusing to exempt growers from new environmental regulations.
Calif. regulators target tech industry emissions
SACRAMENTO, Calif. - California air regulators on Thursday broadened their reach into Silicon Valley, implementing rules intended to cut greenhouse gas emissions from semiconductor plants.The state Air Resources Board voted unanimously to regulate some of the most potent gases produced by the semiconductor industry, which makes chips for cell phones, computers and cars.
California's Dirty Energy Secret: BP and Rio Tinto Team Up with Local Utility
A project to use petroleum coke for power generation and to capture and store carbon dioxide emissions is underway in California, a novel project that recently won approval from the state Public Utilities Commission.
Australia fires release huge amount of CO2
SINGAPORE (Reuters) - Bushfires that have scorched Australia's Victoria state released millions of tons of carbon dioxide and forest fires could become a growing source of carbon pollution as the planet warms, a top scientist said on Thursday.Mark Adams of the University of Sydney said global warming could trigger a vicious cycle in which forests could stop becoming sinks of CO2, further accelerating the rise of the planet-warming gas in the atmosphere.
Sport failing to take role in environmental protection: experts
MADRID (AFP) – The world of sport is failing to do its part to protect the environment, using huge quantities of oil for travel as well as water resources to make sporting goods, participants at a global forum said Thursday."When we talk about sport and the environment, we should look at travel by sportsmen and women, at the infrastructure, and at the manufacturer of sports equipment," Nathalie Durand, a representative of France's Sports and Sustainable Development Observatory, told the first Global Sports Forum.
Obama budget proposes shift to green energy
WASHINGTON – President Barack Obama's first budget plan moves aggressively to tackle climate change and shift the nation from reliance on foreign oil to green energy.The proposed budget released Thursday by the White House would rely on $15 billion a year, beginning in 2012, from auctioning off carbon pollution permits to help develop clean-energy technologies, such as solar and wind power. But Congress has yet to write a bill that would regulate heat-trapping gases and collect that money.
Across the government, Obama's commitment to dealing with climate change is apparent.
US lawmakers urge 'greener' Capitol
WASHINGTON (AFP) – Top Democratic lawmakers Thursday urged Congress architect Stephen Ayers to switch the Capitol's century-old power plant from burning coal to using natural gas, in keeping with an initiative launched in 2007.House of Representative speaker Nancy Pelosi and Senate Majority Leader Harry Reid wrote Ayers asking him to prepare the Capitol Power Plant (CPP) for a conversion to cleaner burning natural gas.
CO2 Famine: Exxon-Paid Scientist Says Earth Is Short On Greenhouse Gases (VIDEO)
The Senate's Environment and Public Works Committee had an unusual guest recently: a man who says we are in a carbon dioxide famine. Treehugger's John Laumer spotted the video, which is actually really much more interesting to watch than a lot of scientist-on-politician action. Part of it is just his manner -- lazily slumped over a chair, smirkingly saying that our planet used to have four times as much CO2, and that things were "prosperous" then.
Global Cooling Formed Glaciers in Antarctica: A massive CO2 drop also played a part
“Previous reconstructions gave no evidence of high-latitude cooling. Our data demonstrate a clear temperature drop in both hemispheres during this time,” he argues. “Temperatures in some regions, just before the Antarctic glaciers formed, were surprisingly higher than current climate models predicted, suggesting that these models underestimate high-latitude warming under high CO2 conditions,” Pagani's postdoctoral student Zhonghui Liu, an assistant professor at the University of Hong Kong and the lead author of the Science paper, adds.
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"Shell Oil Company President Marvin Odum tells Steve Inskeep that he expects demand throughout the world to double by 2050."
How can you double the demand when only half the supply will exist?
Not possible........
I heard that interview. Inskeep asked direct questions & Odum dodged them. Liars on behalf of special interests in conflict with the interests of the people & of the biosphere - like Odum - need to be in prison.
As CEO he is trapped into not telling the truth. If he does, stocks drop and he is liable. That does not make it right, but a journalist would be a fool to ask a man a question when you know he is going to lie.
We had the API up here to talk on public radio and tell us if peak oil was real or not. I guess we should be asking the cattleman's association if red meat has cholesterol....
And so we simply accept an economy and a society built on lies. Make the f**ker lie, and call him out!
"As CEO he is trapped into not telling the truth."
This statement is key.
This is epidemic in the corporate realm, and political too for that matter (NEWS FLASH)
So with all the top people, the best and the brightest lying their a$$es off how can we expect anybody to do the right thing.
This tragedy is about a tiny .001% of the population lying and manipulating the vast majority, not simply explained and summarily dismissed by saying “oh that’s just how homowhareverus is. It’s in the genes. We can’t help it...”. BS
The flawed rules we used to build our civilized juggernaut of growth will accelerate the collapse.
I think that's precisely when it's most important for a journalist to ask such questions.
The best journalists are also reasonably well prepared for what that lie is likely to be, and have follow-up questions ready and aimed for when the liar tries to BS the question.
British journalists seem to be very good at this. American ones not so much.
"...follow-up questions ready and aimed for when the liar tries to BS the question."
or a shoe
BTW that guy has my vote for Nobel Prize
RE:Prison
I thought the exact same thing, DD. Actually, a little worse.
I was pleading for Santa to give me an advance on Christmas for next year and have Inskeep somehow accidentally ask Odum just what the US production and discovery curves have looked like for the last 40 years.
"How can you double the demand when only half the supply will exist?"
Ummm...ding, ding, ding...by having the price go up until the quantities supplied and consumed roughly match up? (Or maybe also by 'rationing', i.e. the government puts a gun to the head of everyone not politically well-connected and orders them to go jump off the island?)
Paul, you don't understand the question and your answer is simply worng. Demand is simply another term for "Petroleum Products Supplied". The EIA uses both terms interchangably. If demand doubles that means that supply doubles as well. Demand must always equal supply with price the arbitrator. That is price will cause the two to meet at some point.
When Shell Oil Company President Marvin Odum said demand would double he also meant supply would double.
Ron
But how do you measure it?
If you measure by money transferred rather than by volume, then demand can easily double while the total volume supplied goes down. Most lies of this nature operate on the unexamined assumption.
They measure it in millions of barrels per day and definitely not money transferred. There are no unexamined assumptions in this case.
And Consumer, the EIA referrs to demand as being basically the same thing as consumption, or more accurately, petroleum products supplyed. That is demand is what you get when you are willing to pay the price. In the real world that is not the case. A child may demand candy but will not necessarly get it.
Ron
Whom is this "they" to which you refer?
I would expect the CEO of a corporation asked to evaluate the demand for their product on the spot to use whatever measure they thought was most favorable, whether it's gallons, dollars, or magical pixie fairy dust units.
Just because it is "Industry Standard" doesn't mean it is the only possible measure, and the easiest way to lie about any sort of flows is to change the way you are measuring them to something non-standard and not say that you are doing so.
"Demand" for petroleum can be measured in dollars or gallons, the equation balances the same either way. It is dishonest to measure it in dollars when you are asked about volume availability, but that has never stopped anyone before. It is equally dishonest to talk in terms of physical units shifted when asked about sales flows for profitability of the company, but that never slowed anybody down, either. What we lose per unit we make up for in volume!
The EIA, the IEA, OPEC and virtually every other oil reporting agency around the world. Except of course those who use metric tons as their measurement. Then the numbers are converted to barrels by the EIA and the IEA.
When WT, or anyone else on this list talks about net oil exports, they are talking about oil, not dollars. When we talk about oil production falling or rising, we are talking about oil, not dollars. When we talk about oil consumption we are talking about oil not dollars.
Of course there are other ways of measuring but the when Shell executive was talking about demand for oil doubling by 2050 he was talking about oil as measured in quantities oil, not dollars. That should have been down in the dirt obvious to anyone so why are you being so silly?
Ron
You missed my point completely.
To expect that the CEO of an Oil Company who deals with $SALES volume demand as well as physical volume demand for his product will not use whichever measure he thinks puts his company in the best light when speaking in a public forum where he does not expect to be challenged on whatever assertion he chooses to make is an invalid assumption.
What measure CERA, IEA, EIA, and everyone else uses is irrelevant to what he said and that is how what he said can be a lie and the "truth" at the same time, thus saving his fat from any immediate fire.
I wrote: "When Shell Oil Company President Marvin Odum said demand would double he also meant supply would double."
You replied with a question: "But how do you measure it?"
They measure it in quantities of oil! Barrels, tons or whatever, they measure it in quantities of oil. That should have been blatantly obvious to everyone. They (the EIA, IEA, OPEC, or whomever), do not measure demand of oil in dollars. When the EIA publishes data on demand, they publish it in barrels per day. The debate about oil doubling by 2050 was all about oil, not dollars.
End of story. Gotta go now. I am meeting another list member for lunch. First time I have ever met one face to face in the three years three months I have been on this list.
Ron
Two economists are walking down the street, when they pass a Porsche dealer. One sees the brand new Porsche 911 in the window and says "Wow that's beautiful, I really want that car". "Well, obviously, you don't" says the other.
Three statisticians were out hunting, when they spotted a magnificent buck. The first one took his shot, but it was clearly a couple of feet low, in the dirt. The second fired off a round, but it was clearly a couple of feet high, clipping a tree branch.
The third one shouted... "we got him!"
It's an established fact that >100% of the population hate, mistrust, and don't understand statistics! ;)
In a complex world, the same can be said about government, politcal parties, technology, religions, and the opposite sex.
Complexity is the problem.
One of the reasons people generally have trouble understanding this (the main one, IMO) is because of our social psyche - with its emphasis on thinking of the universe as being made of separate bits. It misses half the picture...
There are 10 types of people. Those who read binary and those who don't...
That's good :)
three guys(maybe statistician) were out hunting: in the morning they went outside to strech their legs and there was a hugh buck standing there, they each took a few quick shots and went inside to get their guns.
US ECON: Preliminary Q4 GDP Down 6.2%
It turns out that the economy is a lot worse than a lot of people thought. And when the GDP was declining in 1982, we were pulling out of a recession. This time we are sinking into a recession, and quite possibly another great depression.
Ron
Recession vs Depression?
At what point does a recession turn into a depression?
When unemployment is over 10%?
When GDP falls at 10%?
At what point does a recession turn into a depression?
The 1929 Depression, which started in 1928 in Florida
ended Dec 7, 1941.
Only after it ended was it called Depression.
When the military budget is cut in half.
When the number of US bases overseas are cut by 3/4ths.
"Taleb is known for introducing us to black swans (reality-altering observations that invalidate earlier conventional wisdom) but another animal he should be rightly famous for is the Christmas turkey. Taleb says that asking an economist to predict the future is like asking the Christmas turkey what's for dinner on Christmas: based on its entire lifetime of experience, the turkey expects to be fed on Christmas, not to be eaten. As far as the turkey is concerned, Christmas is a black swan-type event.
But yesterday it occurred to me that this analogy extends to all professionals, and certainly to technologists and scientists: when asked about the future of, say, nanotubes, or nuclear fusion, or genetic engineering, they will predict that it's bright, and continue to say so until the day their grants are canceled, their salaried positions eliminated, and their labs shut down for political and macroeconomic reasons they are ill-equipped to try to comprehend."
http://cluborlov.blogspot.com/
I am a member of a website devoted to IT technologists. Networking,programming,etc.
They are getting a very bad case of jitters as some have started to talk about their careers. Or rather lack of careers.
Being 'let go'. Not being allowed back in the door. Finding that degrees and experience count for nothing anymore.
Some have resorted to going to the doors of businesses and asked about jobs. They are totally ignored and find out some realities they would have rather been able to ignore.
For me this occured way back just after Y2K which was followed by immense outsourcing. As a way of repaying programmers who had saved their systems they basically said "We don't need you ...go away."
Of course they needed those skills but they decided to then go on the 'cheap'. Lots of programmers never came back. I was ok since I had left the farm to engage in it and had something to come back to. I was asked to take contracts and so I did but the payback and blowback was awesome in its indignities once the event was over. People with enormous skills were traded off for those who had zip-nothing but an ability to massively suckup and lie on a resume. Offshore IT depots as well. It never hit the news. The same paradigm rattled throughtout the country and business people made choices that they now tend to forget.
Airdale-so a nation falters and dies slowly, rotting from its own stupidity and hubris
A good bit of career advice for the younger generation now in school:
When the BLS says that there is going to be increasing demand for a certain category of worker, don't believe them. We have seen this over and over again. The BLS forecasts a boom in employment in some career field, students rush into it, too many graduates in that field are produced, and then people can't find jobs in that field. I can't count the number of times I have seen that happen.
If the BLS recommends it, stay away from it!
Hi Airdale.
Hope things are getting back to normal for you after the ice storms.
Hey, I've been a software engineer for 30 years. In the last 10 years, there has been only one year where I filed my taxes with only one W-2. I get laid off on average once a year. Things get bad and then things get good. It's a very cyclical industry as you know.
I'm going to guess that you and I are at least as smart as 50% of the population. So, until there is 51% unemployment, I'll venture a guess that you and I will do just fine over the long run.
This leg down will bottom out eventually. Even if the world is collapsing, it won't collapse in a straight line. And since 99% of the people don't know or don't care about peak oil, they'll be buying and spending again. When you're working, save. When your not working, enjoy life. It's too short already without spending half of everyday worrying about stuff neither of us have any control over. I don't think that nations actually die. Only people die, and more often than not by choice. The best thing to do when life is getting crazy is go find a chore you've been putting off and take care of it. Action trumps depression every time.
I apologize for my terse response to you the other day. It won't happen again.
jeethan,
Ahh if I noticed it I just let it slide off.
Glad to see some other programmers still here.
I may be a retired farmer but I retired from systems programming first long ago.
Regards,
Airdale
And speaking of enjoying life, Yacht Meander is sailing from San Francisco to Tahiti and on to Oz and Thailand about the first week in May.
I would prefer seasoned or retired crew. You'll pay for your own food and personal needs.
If you want to enjoy life and escape the tough times, this is a fine opportunity .
Contact me via my bio above
Dave on Meander
From what I have read, a recession is supposed to be more-or-less cyclical behavior in a "normally" functioning economy. A depression results from a serious structural issue. The current economic situation is clearly a structural issue based on collapsing home market, massive deleveraging and blatant bank mismanagement; and simply based on the fact that the era abundant cheap oil appears to be over.
IMO, a depression is here already.
-best,
Wolf
Does the "American way of life is non-negotiable" constitute a "serious structural issue?"
Maybe the world economy is unable to handle a nation that operates on the combined principles of B Madoff and the Roman Empire.
<sarc>As long we make it over from something "non-negotiable" into something we "will not apologize for", that fixes everything without changing anything... </sarc>
Cheney is the Sith Lord & Obama is his new padawan, having exiled his old one to Texas for lack of mastery of the Dark Side of the Force.
Look at the fleet replacement rate, the rate at which the US population of cars is replaced, it's worse than it was in the deepest part of the last Depression.
Or as Gomer Pyle would have said, "SUHRPRAHZ, SUHRPRAHZ, SUHRPRAZ"!!!
It just amazes me that these people can be so shameless about what they are doing. Almost as much as it amazes me that anyone at all still attaches any credibility to these government "statistics".
WNC, is it your position that these numbers are just "made up"? Do you place nay credibility in any kind of government statistics? What about the oil production numbers? Are they just "made up" as well?
The point is we all know these numbers are not exact. We all know that there are errors made, else there would be no revisions made at a later date. However these numbers are legitimately gathered from the best possible sources then compiled and released. No, they are not perfect by any stretch of the imagination but they are usually pretty close. However they are only as good as their sources and if the sources are not correct then it is not the governments fault.
Just like the oil numbers. They are gathered from around the world as they are released by the producing agencies. These agencies may often lie or fudge the numbers slightly. But this can go on only to a certain degree before the numbers get so out of whack that it becomes obvious that they are lying. Venezuela is a perfect example of this situation. Then other agencies step in and correct the numbers as best as possible.
My problem with your post WNC is that it simply reflects a cynicism that I think we can do without. If you think that all numbers released by the government are just made up lies then you should say so and get it over with. But if that is your position then it would behoove you to state why you think they are doing this and in which direction they are lying, are they making the numbers better or worse?
But are we going to try to have intelligent conversations on this list or are we going to just throw up our hands and say; "Its all bull crap so why are we even discussing it?" And that sees to be your position WNC.
Ron
I'm sure that there are plenty of competent and hard-working government statisticians that are trying to do the best that they can. But I am also sure that they must work under the authority of political authorities - people who do not always have accuracy and objectivity at the top of their political agenda.
Especially when it comes to econometrics, there is far less scientific precision that goes into these things than the general public is led to believe. This, in turn, leaves some scope for a degree of manipulation.
Am I saying that TPTB tell the government bureaucrats to use one set of assumptions when it is politically expedient for a statistic to look one way, and a different set of assumptions when it is more expedient for the numbers to look a different way? I am saying that the possibility cannot be dismissed. Furthermore, I am inclined to suspect that this is the case unless or until I see enough evidence to convince me that we have such an incorruptable government that this sort of thing is simply beyond the pale and unthinkable. I am very far from having yet seen that sort of evidence.
So, does that make me "cynical"? I suppose so, although "realistic" might be a more accurate term, given the circumstances.
Case in point:
Does anyone here think that Unemployment is 7%?
Via: Bloomberg:
In California’s Contra Costa County, 40,000 families are applying for just 350 affordable-housing vouchers. Church-operated pantries are running out of food. Crisis calls have more than doubled in the city of Antioch, where the Family Stress Center occupies the site of a former bank.
The worst financial crisis in seven decades is forcing thousands of previously middle-income workers to seek social services, overwhelming local agencies, clinics and nonprofits. Each month 16,000 people, including many who were making $60,000 to $100,000 annually just a few years ago, fill four county offices requesting financial, medical or food assistance.
H/T Cryptogon:
http://cryptogon.com/
In Kentucky I just recently went to all the social services entites here to ask what they offered since I was going to move my aged mother here soon.
They all and everyone told me the same.
"We have no money. If you want you can get on a waiting list."
I was floored. I had heard and read articles in the past as to how great these entities were.
Those who I spoke to were goberment employees. Mostly fat and chubby youngish women.Well fed one surmises. They were all sitting around have group chats when I came in the door. They hardly broke up their gossip circle to speak to me. I believe they later might have returned to their PC and the game of Solitaire.
Senior Citizens gave me the same story.
Airdale
Tax marijuana sales and you will have plenty of money. In fact, I have heard that California is considering that. It is about time.
It would also free up a lot of prison space, thus saving a great deal of tax money.
Let 'em have their dope, it takes some ambition to do violent crimes. Legalizing dope should bring the violent crime rater way down.
Tobacco was once a very major portion of this states income. As well as alcohol.
Now they just increased taxes on both by a huge amount. Enough to put some dealers out of business as both are now cheaper elsewhere.
Tobacco was a crop one could grow on a small piece of land. Land in some parts of the state is not amenable to row cropping and horse farms have been not too productive of late. So many farmers who could get by with horses and tobacco now have a hard time of it.
So up with the taxes. Sure.
When the going gets tough the toughs take what you got,
Airdale
"Does anyone here think that Unemployment is 7%?"
The devil is in the details of how you define it. In a society where people are taught to sing "I am special, look at me" from an early age, many have highly inflated ideas of what they're worth. That makes it hard to determine (for legal and statistical purposes) whether they're looking or just fooling around. If they're just fooling around, then counting them as unemployed and diddling with macroeconomics to try to get them employed is unlikely to be very effective. Nonetheless, the 'statistics' invite skepticism because even aside from conspiratorial models, there's no escaping the subjectivity of the determination.
OTOH, the evidence you cite can just as well be seen, should one wish, as not so much about unemployment as about utterly insane house prices in California and elsewhere, even now after some decline. It should be no big surprise under any economic circumstances that lots of people might seek "affordable-housing vouchers". After all, if you manage to land one, you've got yourself one helluva free gift paid for by your neighbor. Who's going to turn that down?
"Does anyone here think that Unemployment is 7%?"
Not I.
http://www.shadowstats.com/charts_republish#emp
Cheers
"taught to sing "I am special, look at me" from an early age,"
I actually seen this on a young pre-teenager's t-shirt and that on the front cover of a semi-farming magazine. Article inside was about how farming families are so precious and doing such wunnerful things for their communities.
"Treat Me Like A Princess"
Where does this stuff come from? What land does these persons inhabit?
Airdale
Oh! So it is "The Powers That Be" who are giving the government their instructions on what to say or do and what statistics to publish. Well, now I know where to file your comments WNC.
Thanks anyway.
Ron
With all due respect, if you are thinking that government agencies are not run by political appointees, then you are badly misinformed. The political appointees are there to do what the President wants them to do. Presidents don't get elected without big campaign contributions, and the strings that go with them. We use "TPTB" around here as a shorthand for all that. If you have a different shorthand term to suggest, I'm sure that we would be happy to consider it. I would point out, though, that I am hardly the only person to post on this forum that uses such shorthand in such a context.
Political appointees are the government! To say that political appointees tell the government to do this or that is simply to say that the government tells the government what to do. It is simply double talk. And when most people use the term TPTB they are usually talking about the Trilateral Commission or some other commission that they believe is truly running the government.
You see WNC, people mean different things when they use the acronym TPTB. However the term is just shorthand for saying "somebody, I am not sure who, is really running things." It is a cop-out pure and simple. And I would say that to everyone else who uses that particular acronym.
Ron
Then I regret if my use of "TPTB" caused that misleading impression, for that was not my intent.
What I meant to say was that in every government agency there are career civil servants who do the work, almost always with competence and integrity. However, each agency has a political appointee in charge, a person appointed by and responsible to the President. These people are operating on a political agenda, an agenda that is deeply influenced by people who have bought themselves that influence through big campaign contributions. I am saying that it is this collection of people - major campaign contributors, the President, and his political appointees, that direct government agencies to operate in a manner consistent with their political agenda and perceived political interests.
This all seems so very self-evidently obvious to me, I can't help wondering why you are so very offended by my stating it?
Darwinian,
Out of curiosity, I am wondering whether you have listened to Chris Martenson's Crash Course, and what your opinion would be. As a medical doctor, I find myself rarely agreeing with analyses of public health, paying for health care, etc, etc... so I am always wondering what I am missing when I read about other topics. Chris Martenson (www.chrismartenson.com/crashcourse) in Chapter 16, makes a detailed argument supporting his belief that GDP, inflation and employment statistics are calculated in a way that (premeditated or not) obscures what is really going on. He clearly states that each administration since Kennedy, has added changes to statistics that have the cumulative effect of understating inflation and unemployment, and overstating GDP. Adjusting these figures would, according to Martenson, lead to the conclusion that we have been in a recession for a number of years, thus explaining why things are suddenly so catastrophic.
I am interested in your opinion of Martenson's analysis.
myrtoashe at yahoo
Paranoid, yes I have watched Chris Martenson's Crash Course three times! It may shock you that I agree with everything he says. It is true that the GDP data does not reflect the true GDP, core inflation, as everyone with half a brain knows, does not represent true inflation and the government's unemployment stats do not represent true employment.
That being said, the government is not really lying, just being deliberately misleading. They tell us exactly what core inflation is, everything else except food and energy. And I, along with everyone else rightly rails against this fudging of the numbers. But the government is up front about what the numbers really are and admit freely that core inflation does not represent true inflation.
The same with GDP and the unemployment numbers. The government freely admits that their unemployment does not represent people who have not applied for work in the last few months. If you just give up, you are no longer counted. During the great depression that was not the case. Then it was the percentage of the workforce who were not working.
But the numbers still tell us which way things are heading. If the GDP numbers are falling, then things are getting worse. And if the unemployment numbers are going up, even while people give up and quit looking are being dropped from those numbers, things are really getting worse.
Paranoid, the government, with these numbers. is telling us that things are getting really bad. Do you believe them? Or do you choose to believe that the numbers are garbage and things may really be getting a lot better? No matter what you think about the numbers, they do represent the trend, just as the world oil production numbers do also.
Ron
You'd make a fine lawyer or bureaucrat yourself ;)
But they admit that the data is misleading as to what it meant in the past. That is, they tell us that core inflation is not true inflation and that the unemployment figures do not include people who have stopped looking for work. Is that lying? No, I would argue that it is not. It is saying: "These figures are not what they traditionally meant, they now have a new meaning, and here is why....."
I understand what you're saying. I just thought that sentence was a great example of lawyer-speak :)
Hamburger = steak is a lie, pure and simple. Thus, everything that rests on that equation is equally a lie.
And it's not like they do their utmost to explain to the country that these changes are being made. In fact, the opposite. Hiding the truth is a lie.
A look forward to the day a lie is a lie, rather than some twisted definition intended to make a lie look like a reasonable thing to say.
Cheers
Thanks for your reply Darwinian. I am not so much shocked, as deeply worried to hear that you agree with everything Martenson says. I knew the unemployment figures were missing many of the folks without work (as the "discouraged" made up the bulk of my patients, these last 20 years), but I did not know that the result of calculating "core" inflation by leaving out food and energy would then result in overestimating the GDP, thus finding that our economy was growing when it could well have been contracting all along.
I won't get into the fray as to what is morally acceptable from one's government. Certainly as a doctor I labor under more stringent rules - I don't even run the risk of misleading people, telling them that looking at it sideways, they are healthy when I know that they are getting sicker.
This does change further how I see the future. Just the fact that government agencies feel that they need to do this sort of thing suggests things in the economy have been hopeless for a while.
I had a biochemistry teacher once upon a time who used to say: "It is not enough to express something so that everyone will understand; you need to express it so that no one will misunderstand."
I wish!
Paranoid - As you are an MD who I assume has a greater understanding of the constraints and is questioning things, I would ask you to review this documentary compiled by a physician friend of mine and give your impression.
http://www.ourailinghealthcare.com/
Thank you in advance.
Darwinian,
I must say that I find it quite irritating that you are all over WNC over his mistrust about government statistics. It is generally common knowledge in Peak Oil circles that key government statistics have been grossly manipulated for decades. Go to shadowstats.com for detailed explanations of the technicalities involved, as well as the breathtaking scope of the deceptions involved, before you continue with your moralizing denunciations on this score.
This is simply not so. It would be correct to say that key government estimates of future oil production has been grossly overestimated for decades. However the government't data on oil's past production represent exactly the data they are given. I follow closley the reports from PEMEX, from the Norwegian Petroleum Directorate, from Russia's CDU TEK or Petroleum Data center, and the numbers they produce are the exact numbers the EIA publishes. I have no doubt that they do the same with other agencies.
Sometimes however, as with OPEC nations, no numbers are given by the producing nations. However the EIA's numbers are pretty close to the IEA numbers.
But if you have evidence that the government has manipulated numbers given to them by other agencies, or grossly manipulated the numbers that have no good reliable source, then by all means produce the evidence. But it is simply not so that it is general knowledge that they are manipulating these numbers. We heard that claim perhaps 10 years ago, quite often. But as the years have rolled by, people generlly agree that the numbers the EIA gives out are very close to the actual production numbers. After all, they do generally agree with all other numbers published around the world.
Ron
That would totally depend on what one's values are, and human values are arbitrary. Hence, the question is meaningless.
I have direct experience with how numbers are made up, as my wife was a data analyst for a NG field service company until her health issues recently made her unable to continue working. Analysts routinely made up data for malfunctioning meters. I've said this in this forum before and have been criticized on the grounds that imprecise wellhead data gets averaged out in cumulative storage figures. I continue to contend that imprecision becomes compounded, not averaged out. And then there is the issue of profit & politically motivated data manipulation. As a coworker of mine recently said, in regard to data derived from poorly designed agricultural experiments: "The data may not be very good but it's the only data we have." My response to this line of reasoning is: "Garbage in, garbage out."
"I have direct experience with how numbers are made up, as my wife was a data analyst for a NG field service company....."
that would count as indirect experience.
You're correct, altho when I had to listen to her rant day in & day out about how management made her lie in reports she filed, it seemed pretty direct at the time.
Thanks for posting this comment.
I think it is important because it gets at the larger issue why analysts would feel compelled to fabricate date.
I believe it is because our current management culture is more interested in assigning blame than fixing problems. Problems such as faulty well meters.
For the analyst, this attitude means failure is not an option. If all the meters read correctly, they are congratulated on being average and sent on their way with a +0.5% cost of living increase.
Conversely, if there is faulty equipment, the analyst is likely to be scapegoated for the problem and the company's woes in general. Lobbying to fix the equipment is a no-no because now the lowly analyst dares dig into the all-important bottom line. They are also likely to get labeled a "low achiever" on their annual review.
Ultimately, I feel that the climate of fear created by our BAU management culture will prove hideously self-defeating.
At any given time up to 30% of meters would be malfunctioning. These meters were reported to maintenance and it often took weeks or months for them to be repaired or replaced. At "close out" at the end of each month, production figures for each wellhead had to be reported. The honest report of "missing data" for malfunctioning meters was unacceptable. Hence, analysts had to average data for months when the meter was functioning and report that, or else take data from a similarly situated meter and report that for the malfunctioning meter. This was the routine business practice and all the analysts were compelled to do this. Gail has said before that this practice is a good thing, in that it gives a best estimate of production. I contend that making up data, even if it is based on average prior data, is lying.
I'm currently employed in agricultural research. My colleagues and I are called "scientists." Yet I see for myself how the assumptions of parametric statistics are routinely violated in experimental design and analysis. For the sake of convenience plots are laid out in repeating rather than randomized blocks, sampling is biased so as to maximize yields, significant figures are ignored implying a level of precision researchers can't defend, etc. Bias & pseudoreplication is rife. Suggestions of using random number generation software or using non-parametric tests are met with blank looks. Often calls on my part for better rigor are countered by saying that the consumers of our research are unsophisticated farmers and county extention agents who neither know or care about rigor.
My point is that even people in the energy or agricultural fields who are trusted to be competent and conscientious about collecting, analyzing & reporting data, often aren't. I'm sure that this is true in most fields. Having come from an academic tradition where rigor, accuracy, precision, and honesty were valued, this slipshod technique observed in the energy & ag sectors disgusts me. I don't trust anything they publish. Those who place more confidence than I do in the published data probably have less exposure to actual field practice, &/or greater tolerance of ambiguity, than I have. And then there's the issues of profit or funding or politically motivated obfuscation & manipulation... "Caveat emptor" applies to research findings & data reporting as much as it does in the marketplace.
Re: the consumers are unsophisticated farmers and county extension agents who neither know or care about rigor.
They do not care about the data or the rigor of gathering it because the logic of it is false. They know that just because a certain seed or other input may have achieved a result in a non randomly selected test plot (they are all non random to tell the truth) does not mean it will achieve comparable results on my farm.
Farmers know this stuff. That is why they either stick with or test a new input each year. Lately with the rapid changes in genetically modified seed, it has become nearly impossible to plant the same seed two years in a row. I have long known that the yields that I can achieve on my farm never reach those of the data supplied by the researchers. That applies to seed, fertilizer application and other crop practices.
Farmers know the data is cherry picked or outright made up to put the data supplier in a good light. They also know that factors that are uncontrollable such as weather and market prices are more important than acknowledged by the "scientific" data. The logic that the scientific data is more important than factors outside of scientific measurement is wrong.
Statisticians, scientists and others fascinated with models and precise measurement have a hard time with this. It is the reason many can not see anything wrong with EROEI for example. They can not conceive that the data is less important than the logic.
This goes to Taleb's black swan thesis. The black swan event outweighs the data even if it were absolutely accurate. The mathematical models for measuring risk were so precise and elegant that it had to be correct. The risk was being spread around mathematically. That that very action would make the securities worthless when defaults increased beyond the model rate was dismissed as unlikey. But logic had its revenge and won albeit at a high cost to the risk mangagers, their believers and tax payers.
I have found that most seed is about the same if it is comparable genetically for example. This is because the base stock which the seed companies use for growing the hybrid seed all comes from the same company. The main difference in seed is the advertising and promotion. This is where farmers are sucked in.
It is clever marketing and branding that keep some farmers hooked on one kind of seed or another. Such things as feeding the ego and buying from a prominent farmer neighbor sway many. And many farmers will pay extra so as not to be seen planting an "off brand".
You know x, I really wish you wouldn't use my posts as springboards for my rants. You have no credibility with the thinking people who post on TOD. Everyone knows you're just a shill for corn ethanol. Just ignore me and I'll ignore you. Agreed?
Darn it DD, that was one of his 5% of thoughtful posts. How about encouraging that rather than indiscriminately flaming.
DD, I see where you are coming from, but I contend it has nothing to do with GDP numbers. There are no GDP meters to break.
However, in the case you describe, you must understand what the numbers represent and most importantly why would anyone fudge the numbers. In the case of a company, an employee might overestimate the gas flow, or whatever, in order to make his company more profitable. But when the meter was finally fixed, then one would have to look at the flow before the meter broke, and after the meter was fixed, then see if the estimated in between numbers were too high. In other words, I think you are making it a far greater problem than it really is. I don't see how the error could be compounded unless the meter remained broken forever.
We see the same case in the oil numbers. In the case of Venezuela, the meter is broken. Venezuela, for political reasons, was constantly overstating their production numbers. But all agencies who track such numbers noticed something was wrong. So they used import data from nations that imported from Venezuela to correct their bad data.
So it is not the case of garbage in garbage out. Not with oil numbers and not with the government's numbers on GDP or anything else. They can be wrong but they are in the ballpark. They are based on the best data the government could gather. You cannot simply say they mean nothing as WNC implied. Like the production numbers from the EIA or the IEA, they may be errors in the data but they are pretty close. They definitely give us a very good indication as to which way world oil production is heading. Ditto for the GDP numbers, the unemployment numbers and all other government supplied data.
My point in all this rant is I believe this constant, on going, never endind cynicism by a few people on this list is simply counterproductive. Why can't people just say they believe the numbers are incorrect and explain why. By no stretch of the imagination are the numbers pure garbage.
That is not to say that some estimates are not delusional. Believing we will be using twice as much oil by mid century as we are today is....at best...delusional. But that is a prediction, not a mesurament of any current data and another situation entirely.
Ron
This premise is open to challenge.
In a prior life I worked in a new Canadian oil province. There was an election underway. The incumbent Premier was painting "castles in the air" and telling the electorate they would soon be rich beyond their wildest dreams due to the coming growth in E&P. The oil patch was to be a future fount of unparalleled wealth.
Those of us who actually worked in the patch would exchange incredulous looks after work, or sometimes just blank looks. We could not tell where this politician was obtaining his data. What we did know was that our industry association had provided government with a realistic assessment of likely production profiles and the resulting economic benefits. But this data bore absolutely no resemblance whatsoever to what was being promised the electorate.
The politician was elected. The patch went bust. The citizenry hated us for the distorted future we had presented to them. We had nothing to do with it. No one in the industry was stupid enough to go on record to correct the record. When you went to visit politicians you always wore tall boots and you cleaned them carefully afterwards.
See my above reply to wolverine.
You have a good point Ron. The data isn't complete garbage but it isn't very reliable either. Perhaps I overstate its unreliablity but if I do, others err by giving it too much credence. The point is that we generally don't know how reliable data is. Not knowing how reliable something is can be worse than knowing that it's unreliable. When we know that something is unreliable we can reject it out of hand. When we have no way of knowing how reliable something may be, we don't know what to do with it. Maybe it's okay, maybe it isn't. Making predictions based on data that may or may not be reliable is an exercise in futility. This is why I pay little attention to TOD besides Leanan's DB. Analysis may be excellent but I simply don't trust the data it's based on.
Your comments, dawinsdog, have been well made.
I will add that if there’s to be “scientific rigor” in the analysis of GDP, unemployment stats, or world oil production numbers for that matter, these key items, among others, need to be addressed and clearly stated (this should hold true for TOD technical reports as well as govt reports):
1) Just what is being measured? In the case of oil: light sweet, heavy sour, broken down by crude oil API?
2) How are the measurements being made? Are the methods consistent between companies and countries? Are the measuring devices well-calibrated and maintained?
3) What assumptions are being made to arrive at the measurements?
4) What are the precision and accuracy of the measurements being made?
5) Who is doing the measurements? What are the potential biases among those making the measurements?
6) Can the measurements be independently verified? This is a hugely significant component of scientific inquiry. If so, is there anyone doing such verification?
7) How has the measurement methodology changed over the history of oil production?
8) Have any measurement-methodology changes over the many decades of oil production been significant enough for an inflection change in trends seen in the long-term data?
To thoroughly understand what the data are indicating, the method of measurement also needs to be understood in-depth. Is there a TOD expert who would be willing to tackle this obviously involved line of inquiry?
-best,
Wolf
I'm really not eager to contiue a big argument with you, but I would just state that I am not making a sweeping statement questioning the accuracy of ALL government statistics without exception. Clearly, when physically measurable quantities like oil production (as opposed to oil reserves) are in question, the scope of opportunity for manipulation must be limited. There is probably always going to be an irreducible +/- factor in any such statistics, but for hard physical measurements, this factor must inherently be very small.
On the other hand, GDP is an abstract, theoretical construct. It is assembled from a number of components in the national income accounts, most of which are themselves theoretical constructs. These in turn are built up from a variety of data sets, some of which are very hard, some of which are based upon statistical samples, and some of which are just put together as best as can be estimated based upon incomplete and spotty data. Things rarely add up exactly, which means that one will almost always see plug numbers in the national income accounts to bring the components into balance. This all provides considerable scope for some degree of manipulation. There are limits, of course. No one would believe a claim right now that the US economy was growing at 5%. However, whether it is presently declining at a 2% or 6% or 10% rate is considerably more debatable, and I very much doubt that anyone really knows for certain. It is doubtful that, for any given historic period, anyone ever has or ever will know for absolute certain what the actual GDP and growth rates were. Econometrics can only give us best guesses; that is the actual state of the discipline presently.
I'm 100% with you on this WNC.
Deliberately misleading? Slanted? Not totally accurate?
All BS. Its lies , lies and lies all the way.
And its TPTB...and that is exactly what I shall use as I see fit and
when I am speaking of Obama I will say OBama but for all the other faceless squirrels hiding out in the Goberment..I will say TPTB.
Airdale-someone is too busy splitting hairs beyond reason.
Of coure...it depends on 'What the meaning of IS IS!'.or lying sniveling words to that effect as mouthed by a liar in the not too distant past.
I think your point about numbers being fudged as far as they can be until it's obvious they're out of whack is true for many markets, including the US economy. There is a strong vested interest in flattening any dips with the hope (perhaps unfounded, but seemingly springing eternal) that better numbers next period will average it all out.
I suspect that when we see revisions for last period downward it's purposefully done so as to make this period's fudged-up numbers look a little better by comparison. There is a floating percent of too of decline that gets floated forward, and it may well be growing as it goes. The gov't already knows that Jan sucked and Feb too, but if they can push some bad news into last Q, a perceptual past, they can make this Q seem less bad.
I guess I see the gov't treating statistics like putting blinders on a horse -- you try to keep the market from getting spooked by small stuff while risking it getting blindsided by something major which "nobody could have foreseen" simply because they had the blinders on.
Some think there are manipulators who do all this as part of a grand nefarious plan. Perhaps some do, but I think most are just some combination of incompetence, wishful thinking, and small-minded selfishness -- all of which seem to be self-reinforcing. The nefarious part is the perpetually marketed view that more gov't will make it all better.
Darwinian,
From Agora Financial's 5 minute forecast today:
"Making matters worse, the U.S. economy shrank more than initially reported in the last quarter of 2008, the Commerce Dept. announced today. GDP fell at an annual rate of 6.2% in the fourth quarter, just a shade off of the guv’ment’s estimate last month of a 3.8% contraction.
(Just an aside here… amazing the chorus of Americans calling for Wall Street firings and arrests for such gross overcommitment of assets and underestimates of losses. Yet when disgusting revisions like this come out… not a peep?)"
They don't seem to trust the government's statistics either..
Black Friday. Again.
So far it's only Gray. Just down 2%. Still, that's a new 52-week and decade low for the S&P and DOW, and it's getting close for the Nas.
Edit: EU markets are down more -- 3% plus.
To see Market manipulation up close and personal in real time.
Citi:
http://finance.yahoo.com/echarts?s=C#chart1:symbol=c;range=1d;indicator=...
There is no floor.
Citigroup has a $12 billion capitalization. It is going to let Uncle Sam buy 40% of that for $25 billion. You do the math."
http://ckm3.blogspot.com/
Your data is now out of date - it's now $9 billion.
I guess this is what confuses me about why people are opposed to "nationalization". It seems like it's better to buy 100% of something for $9 billion, than 40% of it for $25 billion. Especially when you are going to be giving them another $25 billion for another stake in two months.
The gvt can't officially nationalize the 7 largest banks because that would mean the gvt assumes the debt of those banks. That would roughly double the public float of USTs. Rates would have to go up dramatically and likely the dollar would tank.
That's why they are de facto nationalizing but not officially.
WeekendPeak
If Citi or BOA will have large derivative losses through Merril Lynch or any other of their trading entities there is potentially not enough money in the treasury to bail them out. The derivatives might lead to greater losses than in the mortgage meltdown alone. AIG is very fragile and holding CDS paper written to insure for mortgage paper wihout Federal law requiring any funds to back up the CDS units in case they get called. The mortgage mess is expected to cost 3.6 trillion, about half that from U.S. banks. As companies go out of business the CDS, credit default swaps, based on the credit worthiness of their failing bond issues might implode institutions. My brother has a master's degree in math and did not understand the Florida real estate market. I told him housing prices cannot keep going up 20% a year, he bought anyway, and recommend I buy two properties. It seemed like every house would soon be worth a million based on the shape of the price curve. I did not buy into it.
The part I don't get is who is actually impacted if the ALL implode -- shareholders? Nope -- their value is already gone (today they lost 40% of what was left). Taxpayers? A little -- only to the tune of the hundred $B they've spent already, plus FDIC for depositors. Bondholders? Ahh, there's the rub. Pension plans and foreign investors.
I think the gov't can and should let every CDS evaporate. Bondholders can have what's left. It'll suck, but no worse than the path we're on already, where taxpayer dollars go to cover bonuses, salaries, and all sorts of debts rather than bankruptcy priorities.
I wonder if once the common shares are done crashing if the bond market will crash? There will be plenty of T-bills for investors to swap into, after eating their loss.
Here is my attempt to think it through, and why the FedGov is trying to forestall it:
1. Citi and BAC declare bankruptcy
2. Bankruptcy judge orders liquidation of assets
3. People start looking through the books and either can't figure out what the assets are worth, and/or decide they are worth nothing
4. Shareholders get nothing, but as you said they pretty much already have nothing
5. Bondholders are wiped out
6. Secured debtholders wind up with all of these assets that they don't want and can't sell
7. The bondholders (many of whom were pension funds and mutual funds in people's 401k) are broke, and so there is a run on the pension guarantee corp.
8. ???
9. Blood flowing through the streets
From what we're seeing, AIG can't sell assets. Presumably, Citi and BOA will struggle as well. Why? They aren't worth much, and any sale at all will erase what little equity the company has to prop up other debts.
So what happens? Everybody agrees to eat debts as they fail, and keep as many toxic assets in the closet as they possibly can forever?
I think what this means is that all the bonds are already worthless, but so far the holders are successfully pretending otherwise.
Is there an easy place to track Citi bond prices?
A view of the problem. The brokers are fighting like mad to preserve the right to buy and sell CDS, slaiming the economy will go down if they are not allowed their take in the speculation. Those not hired by the industry might have more interest in the commonwealth of the nation:
"Banks in Europe and the US face a new wave of losses linked to contracts issued to insure against companies going bust and defaulting on their loans, City analysts have warned.
After the billions lost over the US sub-prime market and leveraged loans, investment banks such as Morgan Stanley, Deutsche Bank, Barclays, UBS and RBS face losses on credit default swaps (CDS) – contracts that allow an investor to be repaid if a company loan or a bond defaults.
CDS contracts became a favourite tool of speculators, mostly hedge funds, which bought the contracts without having any link to the original lending. They bought the contract to trade or in the expectation the company would in fact default, meaning they could claim back the full value of a loan they never made.
The CDS market exploded to be worth as much as $50tn (trillion), many times the size of the underlying assets. Each loan could have thousands of protection contracts, even if there were only a few lenders. Hedge funds accounted for about 60% of CDS trading, according to ratings agency Fitch.”
http://marketoracle.co.uk/Article9123.html
When a company holds deravitives on its book, the assets might be worth less than nothing. It might mean the company who sold a deravitive for a dollar owns fifty dollars worth of debt obligation. If 5% of these deravitives fail one month, there is yet risk as 95% remain.
Citigroup's Derivatives Reduce Bailout to a Non-Event, Seeking Alpha 2009 In other words, don't tell them it is fixed, if it is yet broken.
rainsong - I believe you hit the nail.
Nationalization would expose the true depths of the deravitive debacle and no one wnats to go there.
This decline did not happen overnight. It is merely being reported that way.
There should be little doubt in most people's minds that Bernanke, Greenspan, Paulson, and many in the Bush Administration were deceiving us about the state of the economy, for years, almost routinely as a matter of course.
That is important to understand. This was no act of God, no hurricane or meteor strike. And a lot of folks on Wall Street and in Washington playing dumb now knew what was coming. You can decide their motives for yourself, but fear and greed should be high on the top of your list.
http://jessescrossroadscafe.blogspot.com/
He who does not hit the nail on the head hits his thumb.
Chinese proverb: He who waits for roast duck to fly into mouth starves.
I think the Citigroup report link was broken, new link:
http://seekingalpha.com/article/113114-citigroup-s-derivatives-reduce-ba...
Madoff was using derivatives as part of his portfolio, that was how so much money disappeared. If he were playing it straight, he would have saved maybe half the money in his portfolio like Warren Buffet. Madoff did not run to Congress to tell them all the potential trouble he was in as his proverbial ship was sinking.
Citi sold its near bankrupt stock to the government in exchange for what? Promise to be efficient? Promises and broken promises, broken banks and hard times. Citi was unable to disclose all the risks involved. Same thing with BAC buyout of Countrywide. Angelo Mozilo of Countrywide did not fully explain the mess they were in. The Countrywide assets helped bring down the largest bank in America to the point of them begging for public assistance like a welfare mama. The number of subprime loans being issued has fallen precipitously, but the problem with the derivatives yet looms as a major threat.
Edit: Nevermind, Darwinian beat me to it.
And whadya know, it was worse than first 'expected'.
Maybe we should start "expecting" the worst to happen, and then maybe something good will happen?
Expectations are merely weak estimates. Apparently our estimating routine is not good, or fast enough to keep up with the current level of change.
We made it through the 1980s, and we will make it through now. This time there is no new North Sea or Gulf of Mexico, or other place to pull us out with new oil, we must convert off of oil!
We should pass a law on oil import restriction in the US. 10% less imports per year, and then in 10 years we are off of oil imports!
Any bets on the Chicago PMI?
So Chicago PMI has a record of accurately predicting national ISM. Based on what I hear locally in an area not yet hit badly, it's going to be nasty. Layoffs are ramping here, after merely weak manufacturing sales in late 2008.
I'd expect another "worst in 26 years" kind of number. How long before we breach the '82 boundary and head for "worst ever"?
Chicago PMI just came out better than expected. Every thing is O.K. now, "nothing to see here, move along" (Jedi Mind Trick).
It is still really bad, with some down components, but I'm sure the very modest improvement will still help the markets trim losses for a while.
The overall sentiments are still so poor I can't really see any sort of broad-market recovery though.
Auto, Housing & Finance Vs. Food & Energy Since May, 2005
In my ELP Plan article (Economize; Localize Produce), like a lot of other people I thought that we would see deflationary trends in auto, housing and finance with inflationary trends in food & energy prices.
Based on EIA data, the world has failed to match or exceed the May, 2005 crude production rate of 74.2 mbpd on an average monthly basis for the last seven months of 2005, for all of 2006, for all of 2007 and it appears for all of 2008. And of course, I have--on occasion--talked about the Net Export issue.
In any case, let's look at stock prices for GM, D R Horton and Citigroup, for the end of May, 2005 versus most recent prices (rounded off to nearest dollar):
GM:
$31 to $2 (down at -73%year)
D R Horton:
$35 to $8 (down at-39%/year)
Citigroup:
$48 to $2 (down at-85%/year)
Let's look at food & energy:
Wheat:
It looks like wheat was around $3.40 in 2005, versus now around $5.20 (up at +14%/year)*
Oil:
$50 to $43 (down at about -4%/year, futures prices are higher)
*Anyone have better numbers for wheat?
So, what will these prices look like at the end of 2012?
ABARE's been the best I've seen:
Ray Brindal | December 09, 2008
Article from: Dow Jones Newswires
THE Government's chief commodities forecaster, the Australian Bureau of Agricultural & Resource Economics, today forecast wheat production in the 2008-09 crop year ending March 31 at 20.0 million tonnes, if achieved up 54 per cent from the previous crop and barely changed from an early November projection.
Later dropped to 19.4 per rain in W Ozzieland and
continued drought in Victoria.
But I'm thinking something like 30% came from
destroying the Murray Darling thru irrigated wheat.
And cotton, rice which are even thirstier. The Ozzies
can't keep this up.
"
Cotton lint production in 2008-09 now is estimated at 281,000 tonnes, up from 272,000 tonnes in September and more than double last year's output of 133,000 tonnes.
Production from the new rice crop is estimated at 71,000 tonnes, up from an actual 19,000 tonnes previously.
http://www.theaustralian.news.com.au/business/story/0,28124,24773350-364...
Which is what China's been doing. Huge drought there.
Argentina in terrible shape with their drought.
And here we go:
From Infarmation:
Crop farmers under pressure
27 Feb 2009
The area sown to crops this year in south eastern states could be cut by half because of continuing dry conditions says Grain Growers Association chairman John Eastburn. VFF Grains Group president Geoff Nalder said there was potential for a very greatly reduced season. Input costs were still very high said Nalder and this could reduce the acreage planted. "If banks decide the inputs are too high, then growers may have to pull their heads in and grow their crops well on a smaller acreage," he said.
The Weekly Times, 27/02/2009
From US Wheat Associates:
Texas winter wheat conditions are the worst among the states with 64 percent of the crop rated poor to very poor. Conditions in Oklahoma are slightly worse than last year with 36 percent of the crop rated poor to very poor. Conditions are near normal for the soft white crop in the Pacific Northwest.
In the Middle East, following severe region-wide drought last season, autumn precipitation showed improvement in Iraq and western Iran compared to the previous season. Planting in Turkey, Syria, and eastern Iran suffered the second year of below-normal precipitation. Unseasonably warm weather over most of the growing region has forestalled adequate snow cover leaving winter grains susceptible to late season cold.
China, the world’s largest wheat producer, is experiencing what the government calls its worst drought in 50 years in the central and northern regions that produce 80 percent of the country’s winter wheat. Chinese officials report that half of China’s 22 million wheat hectares have had little rain or snow since last November."
IMHO price will now be secondary to barter.
Like getting electricity from Uzbeckistan to Tajikistan
by way of Kazakh wheat.
Prices in 2012 -
GM - $0 price, non-existant
D R Horton - $0, out of business
Citigroup - $0, out of business
Wheat - $10
Oil - $150
Re: Cheap is the new chic
From Drudge:
http://www.bloomberg.com/apps/news?pid=20601109&sid=auZeM63nrgzo&refer=home
Arsonists Torch Berlin Porsches, BMWs on Economic Woe
Unless it just happens to be in the wrong place at the wrong time (ie - in the path of a riot), I think my 18 year old Subaru with a crumpled nose is not a likely target.
FACTBOX - Financial crisis sparks unrest in Europe
Migrants' families feel money pinch
Obama gives student loans the axe
Beef producers reel as consumers shun steak
Sallie Mae has lost 92% of it's market value since July 2007. I never thought that student loans should be left to private lenders -- I was irresponsible at that age and had to pay a heavy price for it later in life.
Violence between repo men, car owners rising
General: Graves found after Bangladesh revolt
Arsonists Torch Berlin Porsches, BMWs on Economic Woe
Latest milestone: Dow < 50% of all-time highest close (14,164).
Currently around 7050.
This is more of an economic than an energy post, but since it will impact the ability of new megaprojects to be financed, it is still somewhat on topic.
While I am not a professional economist, I have learned some things over the years. For example, I know that if the FedGov ramps up the annual budget deficit hugely, the only way it is going to be able to finance that is by issuing massive amounts of new Treasury obligations.
I also know that if you massively increase the supply of something, the price will go down - unless the demand also increases massively. Now it is just possible that households and businesses might start being a little more frugal, save a little more, and thus increase demand for Treasuries a little. However, we are in the midst of a recession (depression, really); millions of people are losing their jobs, other millions are seeing their incomes stagnate or decline, businesses across the board are on the verge of bankruptcy. It is unlikely that domestic demand for Treasuries is going to increase to anything even remotely close to the increased demand that is being issued. By the way, if domestic demand for Treasuries DID increase that much, wouldn't that mean that consumers were saving a lot more and spending a lot less? Given the fact that 70% of the US economy is consumer driven, how would this "stimulate a recovery"? Wouldn't that defeat the whole point of this exercise?
Similarly, because the entire world is in recession, it is unlikely that foreign demand is going to increase for our Treasuries, either. Thus, it is likely that supply will increase substantially relative to demand. This suggests to me that the prices of Treasuries will be falling - substantially.
Now, I also know that when the price of a bond goes down, the yield must go up. Thus, it appears that we can confidently predict that the yields - and thus the effective interest rates - of Treasuries will be going up substantially over the next couple of years.
This can't be limited just to Treasuries, either. When their yields rise, yields for other bonds and interest rates in general will also have to be forced up. Why would anyone buy a corporate bond or CD for 2 or 3 percent when they could earn twelve percent on a Treasury bond?
So, over the next couple of years, it looks set that we will see a massive increase in interest rates across the board - probably into double digit territory.
Now, let me ask: Given double-digit interest rates, how likely is it that the US economy is going to "recover"? Isn't this a recipie for stagnation or decline?
Of course, the Federal Reserve could try to avoid this by buying the Treasury obligations itself. The technical term for this is called "monetizing the debt". The immediate consequence of this is to increase the money supply. This, in turn is inflationary. Even if such inflation doesn't show up immediately in prices and wages, it will indeed make itself felt very quickly in US dollar exchange rates. The immediate effect of debt monetization will be a massive devaluation of the US dollar.
Will the Chinese and other holders of large amounts of US Treasury obligations just sit tight and see the value of their holdings decline, or will they start to divest themselves of their holdings? I very much doubt that they will all just dump everything all of the sudden (AKA "The Nightmare Scenario"); however, it is quite likely that they will taper off their purchases of new issues, and might very well start paring down their holdings, slowly and quietly. Thus, if the Fed absorbs the increased supply of new Treasuries, there is no guarantee that foreign holders of old Treasuries will not respond by selling some of their holdings, thus increasing the supply of Treasuries on the market and confounding the Fed's efforts. Furthermore, not only would we fail to avoid a run-up of interest rates due to simple supply and demand, but we would also see an even further increase in interest rates as an inflation premium would be added by the market.
In conclusion, it appears to me to be about as certain as this type of thing can be, that THIS CANNOT WORK. Which means that the probability of this being a protracted "L"-shaped recession with no recovery on the horizon is not 30%, as Roubini has estimated, but rather close to 100%.
Getting back to energy, I would just point out that a regime of double-digit interest rates and declining US dollar values would not appear to be a favorable one for the financing of mega-projects and other large-scale energy-related investments.
Yes. My opinion differs slightly from yours in that IMO TPTB are quite aware of these fundamental facts. As an example, they were putting out the "no recession" story while they had the 6.2% GDP decline data in their hands. Same old story.
Don't confuse rhetoric with reform
I'd add a new Glass-Steagal to the list as well. All things that should have been done before spending a single dollar of bail-out money.
IMO the whole board of directors thing is totally broken. In many cases the board is an enemy of the owners of the company (shareholders). The board should consist of shareholder reps, period, and it should be determined by % ownership of the entity. As it is now, it is a disgrace.
When the limited liability corporation was first invented, shares were held by individuals. While there was a small amount of trading, for the most part it was "buy and hold". Individuals would have a keen interest in the well-being of their investment, and thus would be very attentive wrt who was on the board of directors and what they were doing.
Unfortunately, while we have kept this structure intact, times have changed. Now, for most corporations a majority of shares are not held by individuals but by institutions. Stock exchanges have evolved to the point where stocks are extremely liquid and can almost always be sold at a moment's notice. We are now in a regime where all investors, and especially institutional investors, are constantly on the lookout for new and better opportunities. The moment a company starts to underperform, the stock gets sold. Many investors don't even bother to vote their proxies anymore. If they don't like the way the corporation is performing, they vote with their feet by selling.
Coroprate boards are essentially self-appointing and self-perpetuating. The ONLY real control over them is the discipline of the market. If they do a poor job, the value of the stock goes down, and just maybe they become a target for a hostile takeover. Unless the directors are all BIG stockholders, they are going to see their job more as a nice little perk rather than something where they personally have a lot at stake. Thus, if I had anything to say about reform, the first thing I would do is require that all directors own a certain minimal amount of corporate shares - enough where they are really going to lose a lot of money if they mess up.
Actually, I would rather just see the limited liability corporation dumped in the trash bin of history. Cancel their limited liability, and they would all transform themselves into smaller companies or cooperatives in no time. I do not expect to see this happen in my lifetime, though.
WNC,
Very eloquently put and ably argued. Yet, since the world of finance and its intersection with the real economy became a matter of daily interest on my part early last fall (and I'm sure I'm not alone in that regard!), I have been repeatedly humbled by the sheer complexity of it all. On that basis, I tend to hedge regarding even the best argued and most authoritative pronouncements on these matters.
WNC. Thanks. Good explanation. I can follow it easily.
http://www.treas.gov/tic/mfh.txt
Above is table of foreign holder of treasuries by month from dec 07 - Dec 08. It is about 3.1 Trillion total in Dec. 2008, up by 800 billion over Dec. 07. Obama will increase the deficit by 3 Trillon over Fiscal years 2009(1.75 Trillion) and 2010(1.2 Trillion) to 14 Trillion. US owned national debt is around 70% of the total current 10.8 Trillion. If foreigners maintain 30% of US debt ratio then 30% purchases over two years for foreign entities would be .3 x 3 Trillion or 900 billion. US owned would be the rest or 2.1 Trillion.
China ,Japan and UK have the most US Govt. debt:
China 700 billion
Japan 600 billion
UK 350 billion
All three could use extra cash for their own stimulus programs obviously so they should be borrowing and not lending. Also private foreign people as well have the same problem.
To expect US citizens to buy 2 Trillion in T-Bills over 2 years is absurd. Lots of people are losing everything and big business is going bankrupt. This attempt at borrowing should squeeze out any other borrowing in commercial markets and shoot down economic recovery as well, in addtion to interest rates rise and eventual inflationary problems you mentioned.
Still the whole thing with this debt has seemed magical to me for decades as it just seemed to grow without limit year for year and it was always explained away with handwaving depite common sense protests from people like myself about how "this just can't go on".
Remember its GLOBAL economic crisis. Check out the EU;
(great chart)
"Economic crisis in European Union"
http://www.nrc.nl/international/article2160480.ece
History - Bear Market of 1981 - 1982 - Dow Jones went from 1000 down to 776.
Discount interest rate was cut from 12% down to 8.5%.
Looks like todays market is much different than 1982 when GDP fell 6.56%.
Prior to that GDP fell 8% in April 1980 and 10% in Jan. 1958 (only lasted one quarter).
Also noting that this is now the 3rd quarter in a row with negative GDP growth.
That has not happened since 1974! We all know what happened due to oil supply in 1974.
Debt as percentage of GDP is where it was in 1929. Debt is skyrocketing while domestic production of goods & services continues to fall. Population is 1929 was only 40% of current population and the environment was much less seriously degraded. There were many millions more family farms in 1929 and it was still 45 years before US oil production peaked. We are much worse off today than we were at the beginning of the so-called "Great Depression." In fact, we are today in the early stages of the environmental & socio-political downturn that will culminate in population collapse.
Some commentary about the South Australia drought. It is not likely a 1000 year drought, rather like the 8 years Federation drought of about 1900. The Murray River has dried up several times since in other droughts early in the 20th century. The place is drought prone and the Murray-Darling would have suffered more drying episodes had it not been for a modern dam/storage system.
http://www.news.com.au/story/0,23599,20737980-421,00.html
To clarify, a "1000 year drought" does not mean that the drought lasts 1000 years; it means that it can be expected to occur about once every 1000 years (or has a .1% probability in any given year). Similarly, a 50 year rainstorm or 100 year flood relates to probability, not duration. Calculating those odds is tricky business, as there are many dynamic variables at work.
The lower part of my property has experienced three "100 year floods" since 1993. Even if these probabilities are based on good geologic evidence, they don't reflect recent watershed degradation due to overgrazing & deforestation. Obviously, precision declines the longer the time period. 10 year floods are predicted with greater precision than 1000 year floods are. And, of course, 1000 year floods may come two years in a row or there may be 100,000 years between them.
Part of my job is to size culverts for the 100-year storm, which is pretty tricky business because we have less than 100 years of record. We should probably have 500+ years of record to do it right, but now the climate is changing, so that's not going to work. Yes, there is a lot of flat out guess work in these numbers if you don't have a few hundred years of record.
My property comprises a series of terraced shelves sloping down to the river, and has about 100 meters of riverfront. I bought it shortly after the great Mississippi floods of 1993 and because part of the property is within the floodplain the mortgage company was going to insist that I buy flood insurance which would have doubled the premiums of my homeowner's policy. I had to obtain flood maps and demonstrate that all the developments, including the leach field of the septic system, were above the 500 year flood level. This delayed closing for several weeks. Twice since I've owned the property, and once a couple years before I bought it, the river has risen to just below the brink of the second terrace below the house. This is regarded as the 100 year flood level. If it goes above this brink, it will be considered a 500 year event.
In July of 2006 the river flooded. Twin culverts big enough to ride a horse thru, under the highway across the river, became occluded with mature cottonwoods washed down an arroyo. This occlusion effectively formed a dam and the water rose over the highway and the guard rails along it. Within minutes the water cut down thru the asphalt, took out those culverts and smashed them like empty beer cans. The water was released in a great pulse that swept away barns & houses, vehicles & livestock. For a few hours that unnamed arroyo had a spate the volume of the Mississippi. My son and I had gone down into the bosque to witness the flood and when that pulse came we literally had to run for our lives. The roar of the river from the house above was deafening for hours. While I regret all the damage done by the flood, I revel in nature's power. Those floods are awesome.
If I were you, I'd make my calculations for culvert size, then order culverts twice that big.
Actually, that's not far off from what I do. I take the empirically derived curves to estimate the water flow. Then I up it a size to account for debris and sediment. Then I up it another size to account for climate change (it's forecast to get wetter here).
Then the engineering staff says it's too expensive and puts in whatever they damn well please.
One thing is certain, a true 100-year flood is an incredible amount of water! Pretty much inconceivable if you've never seen one.
Regarding flooding and the Mississippi.
There have been several floods of the Mississippi since I have been living near it.
From the Mississippi confluence at the Ohio we over here on the Ky side do not build dwellings on this side of the river. We build up atop and beyond the bluffs. Over on the Missouri side they build behind levees since they ground is extremely flat and no bluffs.
So when hell breaks loose the question is whether the levees will hold or not. Many break and flooding starts. There is one area that if the levee broke it would flood 30 or more miles inland. Or so I am told by those intimate with the river and that area. I have ridden it many times by car and motorcycle. And yes its just that flat. All the way to Dexter,Mo...you find no high ground at all until you get that far inland.
Why then do folks elsewhere decide to build in flood plains?
I have seen many suburbs in my past build right smack in the middle of what was floodplains. A lot of dirt was shoveled around but they were still prone to flooding.
In the floods of 93 as I recall , burial caskets were seen coming down the river. Des Peres in St. Louis flooded many homes quite far from the Mississippi.
We fish in the back waters. Shot buffalo with bow and arrow. We plant in the bottoms since the soil is very rich. We do not build there.
I don't understand this.
Right now our soil is absolutely totally saturated and has been since before the ice storm that came on Feb 25th. Last week a guy went down to the river. A rain came up and he was trapped by a normally 6" flowing creek ,bluff side of the river. Had to send out DES to get the fool back across the heavily risen creek up the bluffs. He did catch a pretty good mess of crappie however. He wasn't from here and so he He have stayed away and was lucky at that.
Folks who live near or on the river should understand what it can do. I have seen raging waters that are rather awe inspiring and very dangerous. They can take a life in a heartbeat. And have.
Some of my friends are river pilots. I love to live near a big river. Means water will always be available ,one way or another.
Airdale-I have two boats and a small camper. I intend do start doing some very intensive fishing and lazing about shortly..soons that backwater goes down. Catch crappie,drink a beer,fry crappie,drink a beer,eat crappie and drink a beer , smoke a cigar,go catch some more crappie and start over again. Forget about Obama and the rest for a while...maybe a whole week. Crappie run starts usually in March. Spawning.
I thought a 1000 year flood reviled 1000 years of geology
Revealed, you mean? Storms cannot insult geology in a meaningful way, but it may be fun to imagine I guess.
1000 year flood means a flood event of such magnitude that it can be expected to occur once every thousand years, on average. In other words, a .001 probability of such an event occurring any given year.
20 some odd years ago I took a geology course at our local JC, I specifically remember the instructor defining floods in terms of how much erosion the flood caused. He maintained that a flood that stripped away 100 years geologic time (sorry I can't find the right words for that) is not that rare at all. Was he wrong or has the definition change over the years? He was from Eastern Europe so maybe he just saw it differently.
He was wrong.
The post you replied to from Darwin's Dog has it exactly right. A 100-year flood is a flood that has a 1% chance of happening in any given year.
This is splitting hairs; differences of precise definition and/or different viewpoints.
I would think a strong flood current, rapidly eroding/removing topsoil over several days, could easily remove 500-1,000 years of topsoil nutrients and mulch. Recall that these normally build up very slowly. Unfortunately, nowadays for many locations: once the waters recede, much toxic material and other residues/debris makes restoring the soil that much more difficult.
Think about the recent [Tennessee?] fly-ash flood when the holding pond embankment broke. Unless they really pour lots of restoration efforts and dollars into this area, I bet it will be a very long time before the habitat is healthy again. I think the same could be said for already deforested Haiti after the last hurricane season. Pretty damn difficult to farm if most of your soil is now in seawater bays.
It most certainly is not hair-splitting. It has a specific meaning that all engineers understand.
Agreed (speaking as someone with a BSc in civil engineering). Besides, that instructor's definition introduces another variable that would be virtually impossible to account for. Instead of just understanding the water shed, you'd have to understand how resistant the land is to the water too just to design a culvert. Talk about making work for oneself...
my impression at the time was that a geophysicist would have no problem accounting for the erosion of any given rock/soil type. It is quite clear engineers need a different means to anticipate water flows. I've just been under the impression all these years that geophysicists defined it differently, googling around does not support my position.
Definitely wrong.
One of the first projects I ever designed was a culvert for a small village that used to suffer flooding several times a year. They told me to design it for a hundred-year storm. I thought I'd be safely dead before the design was tested, or at least working elsewhere. But three months after it was built, they got a hundred-year storm. The water level was 3" below the top of the culvert, but thankfully, there was no flooding. (And no erosion.)
Read The Fine Article:
They are saying :this happens all the time, at least once or twice a century, it isn't a Thousand Year Event like a certain high-level politician has claimed.
Yes, and Rainsong posted:
Which in my reading mixed the metrics, so I replied to clarify. The fact that the "rating" of the present drought in AU is debatable at all speaks to the challenges of assigning a probability or frequency scores to these events; they are not like earthquakes with a nice stable reference.
Jesus Wept! As an Australian I get a bit fed up with non-Australians pontificating on the Australian situation.
This continent has,probably,the most wildly variable climate on Earth.
Whether a a certain drought,flood or bushfire has a certain degree of probability is way beyond the point.They are all a bloody disaster.Stick with your own disasters,boyos,I'll enjoy reading about them.
Europe's Crisis: Much Bigger Than Subprime, Worse Than U.S.
http://finance.yahoo.com/tech-ticker/article/195065/Europe%27s-Crisis-Mu...
Fire Sale -
Citigroup down 33% today - only $1.65 per share!!!!!!
Buy now while its low!
As of 13.27 somebody has actually bought 1,218,535,236 of their shares today ... somebody who bought just after the market opened will have seen a large loss today ... bizarre behavior.
BTW, how can a share worth $1.65 actually be included in the S&P 500?
there is no limit to human greed and folly(tm).
you never know if a president is good or bad until it is too late!
the man enslaved to wealth can never be honest.
so i needed a tire today 205/75r14. a local tire dealer installs it on the rim for....$100! CRY-KEY! a no name tire for a premium price.
i could have done a 40 mile round trip and wasted 2 hours to save, maybe, $20. tires use petroleum. isnt oil tanking? why are tires so expensive? the dealer told me tire prices have gone up 20%. true or false? is this the start of the collapse? no one will be able to afford tires soon. as an aside, i have been unemployed for 2 months.
i guess i put the new tire on my car and just dont drive it anywhere
for a few weeks. get the money back on gasoline i dont consume.
what we need are more bread and circuses. if the empire is to collapse i want to be entertained on the way down. THUNDER DOME! we dont need another hero.
14 inch tires are getting scarce, nothing new uses that size anymore. I was stuck in OKC (at my sisters, not a problem) 2 extra days waiting on one.
Tirerack has a closeout studless ice & snow in that size for $39
I just got 4 new Goodyear Wranglers on my jeep last week. Big tires with all-weather treads.
Paid $473 out the door. Included everything. Balance and taxes etc.
Re: US oil demand takes a tumble
That's some revision!
OK, but OPEC is cutting production by 4 million barrels per day.
Yes, but what I'm getting at is it seriously calls into question all the recent weekly figures we watch so closely here. That's a drop of 7.5% year-on-year in product supplied. The latest weekly figures from Wednesday show product supplied currently down only 0.8% but presumably that's about to be massively revised down as well.
Much more stunning demand revisions here
UPDATE: EIA: US Revised 08 Oil Use -6% Vs 07; At 10-Year Low
I wrote a little post about this. The weekly estimates have been consistently higher than the monthly numbers for all of 2008. They were somewhat closer in 2007, but there was still a big gap. One of the problems is bad export estimates.
Because of this, I do not recommend comparing weekly estimates to monthly estimates, unless you first give the weekly estimates fairly large haircuts. Of course, once enough people complain about the issue, the EIA will fix it, and our work around won't work any more.
Anyone care to guess where gasoline consumption will go when the Summer Driving Season gets underway?
People this winter have been holding back on driving, so will they return to much more driving than normal to make up for the holding back during the last 6 months or so?
I suspect that vacationing at home this year will be all the rage.
OTOH...people who last year might have flown to Paris or Hong Kong or Disneyworld - or even to Michigan to visit Grandma - might take road trips this year instead.
Give Green Day's "Holiday" a listen...we may all be on permanent holiday sometime in the near future.
Thanks for this link to a nice picture collection. Maybe this one is also appropriate for TOD:
Link
Good advice too...
Winterise your home - insulate walls and ceilings...
Check your heating plant - install fuel saving devices...
And it's only 1945
BobE
Made it into a text link. Some people are on dialup.
Leanan,
Thanks.
BobE
New nuclear power plan to cost Georgia Power about 6.4 billion dollars.
They will begin charging customers in 2011 even though the plant will not be finished until 2017.
IMO their estimated cost of $6.4 billion is way too low. It will probably run about $15 billion based on their past history of mis-estimating costs.
This expense will raise electric bills by 10% to 20% per month.
A cost of about $5000 per person served.
http://store.altenergystore.com/Kits-and-Package-Deals/On-Grid-Grid-Tied...
.. get'em while they're cheap! And the watts will start coming in the next sunny day!
Obama announces end to Iraq war on Aug. 31, 2010. All combat troop activity will cease.
Aug. 31, 2010 -- Iraq War Over
Sept. 1, 2010 -- Iran and Russia takeover Iraq.
The US put Iraq in the Iranian camp several years ago.
That was when the US controlled Iran. Now Russia controls Iran.
No, the US didn't control Iran when we launched the war in Iraq, which is when we thrust Iraq into the Iranian camp.
Prior to our overthrow of Saddam, Iraq and Iran were implacable enemies.
The US hasn't "controlled" Iran since the days of the Shah.
"I don't know what the justification is for 50,000, a presence of 50,000 troops in Iraq," Pelosi told MSNBC's Rachel Maddow on Wednesday. "I do think that there's a need for some. I don't know that all of them have to be in [the] country."
And top Senate Democrats echoed Pelosi's skepticism.
"That's a little higher number than I expected," Majority Leader Harry Reid, D-Nevada, said Thursday.
The third-ranking Senate Democrat, Sen. Charles Schumer of New York, said, "It has to be done responsibly, we all agree. But 50,000 is more than I would have thought."
Go ahead and make my day - Pull them all out now.
This is why we do not let the Speaker of the House run the military!!~!!!!!!!!!!@@@@@@@
"Weak stock markets overseas and in North America coupled with the nagging concerns about the global banking system weighed on commodity-currencies like the Canadian dollar as investors flocked to the greenback given its safe-haven status."
What baffles me is why the American dollar is considered a safe haven. Canada is being sideswiped by the Wall Street disaster but our economy is far better placed. For one thing, we have lots of oil, grain, beef, and gold, the only four commodities that will really matter in a post-Peak Oil world. Our banking system is different and stable, and we never had the liar-loans of the USA. We have universal health care (Canada spends 9% of its GDP on health care versus 17% for the USA). Our unemployment system is run by the federal government; American states can't fund their systems.
The market today isn't just irrational, it's absolutely insane.
I think this becomes more understandable when one realizes that 50% of all Polish mortgages are denominated in Swiss Francs and the zloty has suffered a 50% depreciation against the franc. A lot of those Polish homeowners are going to walk away from their homes.
The funds invested in the new Euro states came primarily from the old Euro states and the European banks are facing a meltdown equal to or worse than that on Wall St. There are a lot of worried people around the world and at the moment the US $ looks to be a better alternative than any other currency. Also there will be US firms and hedge funds selling off foreign investments and repatriating the funds to cover losses from the meltdown. Both of these result in short term demand for the dollar.
My hunch is that these funds will depart as quickly as they arrived should some other region of the world show it is coping with the collapse of the global economy and beginning a return to growth.
The problem that Canada faces is that its primary customer is on the rocks. Given that fact it is expected that the problems associated with the USA will flow north and impact Canada which makes for SELL signal.
The loonie's seen as a commodity currency. Commodities are tanking, and that's about all the market cares about. They don't know what "post-peak" even means, as I'd wager an absolutely miniscule percentage of currency traders ever read TOD or any site like it. Insanity, like you said!
What baffles me is how Canada is one of the only countries in the western world (or entire world, really) that has avoided this financial crisis. Our banks are reporting less profit than last year, but the fact they're making money at all while everyone else loses their shirts is really remarkable. Are our regulations honestly that much better? Or do our rules just make it easier to hide losses?
Or perhaps they are just smaller. The US has something like 8300 banks, most are pretty small local affairs. Most of these guys are in good shape -at least sofar. There is concern that they may be vulnerable to different classes of loans, such as commercial real-estate. Hopefully there won't be a second phase, as banks with exposure to commercial realestate, and car loans discover that they aren't immune after all.
Hello everyone - I know it is getting late on Friday at the end of a very *interesting* (?) week. I am an infrequent poster, but I would like to solicit your assistance.
I teach at a community college (junior college, sort of) in upstate/central NY and I and a (very few) colleagues are working to bring the concept of sustainability to our campus. We have pockets of interest in a couple of departments (biology, architecture, geology, and a few others) but most of this interest is only in the topic as far as each individual disciplines.
I am in the middle of proposing at least one course more geared toward a generalist approach to the topic that would be appropriate for nearly ALL students - no matter what the major. My interest is in encouraging every one of our graduates and students (especially non-science majors) to have at least a passing introduction to this topic. My colleagues are generally supportive of this in the same way that you let the Village Idiot have his/her say in running the town. ;-)
Anyway, I know that there are many educators reading this and if you have any syllabi that might help me with a formal course proposal, I would be grateful for any assistance you can provide as far as sample syllabi for the sort of course I am proposing. I am optimistic, fool that I am, that I can propose a course that will meet a couple of the SUNY (State University of NY General Education requirements), because if it does, I can be more confident of getting students to TAKE the course.
This course would have an ID of SUS-100. At present, we don't have this as a valid course prefix, so we have our work cut out for us.
Any help would be appreciated. I can be reached at kleink AT sunyocc.edu (this is different than my contact info for my Rev Karl account but it's ok to use it too).
Thanks for all the great information you all provide. I am constantly amazed at the depth of information that is available here.
- rev karl (Universal Life Church of Modesto, CA)
Would suggest getting in as early as possible in the day with a post like this - and a weekday.
Lots of good talking points in this interview with John Bellamy Foster. Don't know this guy's creds, but he talks like he has a grasp of the big picture...
The "Great Financial Crisis": A whole new kind of struggle is emerging: Interview with John Bellamy Foster
Marxists are blessed with an insightful analysis of capitalism and cursed with a hopelessly romantic prescription for action.
As I once heard it: "Everything Marx said about capitalism was right, everything he said about socialism was wrong".
Guys...read the whole article...it is not romanticism of Marxism or Socialism at all. It mentions both, but it not saying those are favored solutions.
And don't ever, ever think that sociology professors are Socialists or Marxists. My wife is one (soc. prof) and she is neither.
Nor was Marx! :-)
In an Observer column once it said Marx's writings about the problems of capitalism were generally descriptive rather than perscriptive.It was Lenin and his heirs who created a practical system based on his ideas. How faithful they were to his writings is a matter of dispute.
It's like mentioning 'Hitler or Hippies'.. as soon as that word is out of the gate, all other responses are reactionary.
The guy is saying 'YOU'RE BEING ROBBED!' .. and all anyone can do is toss out Pithy Epiphanies about a dusty stereotype.
Thanks for the link!
Bob
http://rabble.ca/news/global-finance-nationalization-banks-eight-theses-...
The above links to a piece by a couple of Canadian scholars in the 'marxist stream'. It's a very perceptive analysis of the current crisis.
Thanks...I thought it had thorough analysis and perceptive commentary. I see that the Market Oracle posted it too this morning as a featured "GEMs of the Week".
http://www.marketoracle.co.uk
Re: the IEA article:
Since the IEA shows negative consumption growth this year, and an offsetting equal growth in 2010, and a supply squeeze by 2013, that means they believe that give or take 2 years of growth we're at peak oil given current investment scenarios.
If I'm reading between the lines correctly, their statement about "4 new Saudi Arabias" needed by 2030 simply underscores how ridiculous the situation already is.
And they are largely ignoring the Net Export issue.
Here's a question that's been nagging at me.......
Given a prolonged economic decline, at what point will ELM export countries cut back on consumption, necessarily, to maintain an income stream?
I know SOME countries have the ability to live with net zero exports/imports of other products, and could perhaps use all their own oil. Are there some countries for which oil sales equal food imports, such that some amount will always be made available for export?
Looking at it another way, could there be a point at which the US will export precious food at elevated prices to trade for precious oil at elevated prices? Of course people in both countries could well be starving at that equilibrium point.
The problem is that I really can't find much evidence for a counter example to the ELM.
Consider the fact that the US went from finding its biggest Lower 48 oil field (East Texas Field, in 1930), and from being a major net oil exporter, especially during the war, to zero net oil exports in only 18 years, in 1948--22 years before our production even peaked, because of rising consumption.
Indonesia went to zero net oil exports at prices below $40.
The UK went to zero net oil exports with almost no increase in consumption.
You also have to consider the scale of the decline in demand necessary to maintain net exports. Mexico's numbers in 2008 were about as follows:
Production 3.2 mbpd (down at about -10%/year)
Consumption: 2.2
Net Exports: 1.0
If Mexico's production decline rate continues at -10%/year and if they wanted to maintain net exports of 1.0 mbpd, they would have to cut their consumption at about -16%/year, from 2.2 mbpd in 2008 to 1.0 mbpd in 2013--and this would only maintain flat net exports.
I suppose the resulting slopes don't shift that much if you assume that past a given point internal consumption ratchets down at the same rate as exports -- it'd shift the slope somewhat, but it would still run close to zero pretty quickly.
If we assumed a -10%/year production decline rate for Mexico and a -10%/year decline in consumption, in five years, the numbers would look like this:
Production: 1.94 mbpd (-10%/year)
Consumption: 1.33 (-10%/year)
Net Exports: 0.61 (-10%/year)
I understand that this is a hypothetical asumption. But I'm living in Latin America and I would like to state that third world countries have much less leeway to reduce consumption. They are always operating under very stressed circumstances. I could imagine mexican consumption to go down to those 1.94 mbpd and to reach zero net exports within five years - but IMO that's all that would be realistic.
You also have to appreciate the irony of demanding that lower income consumers in some exporting countries (e.g. Mexico, Venezuela) reduce their consumption so that oil can flow to higher income consumers in importing countries.
You are not keeping up with the times. There are many countries in which the poor reduce their consumption of food so that foodstuffs can flow to higher income consumers in importing countries. These folks often die but we don't pay much attention to the poor in other countries much less the poor in our own countries. It's capitalism, man. The Madoff plan. We are all players.
Hello Paleocon,
"Looking at it another way, could there be a point at which the US will export precious food at elevated prices to trade for precious oil at elevated prices? Of course people in both countries could well be starving at that equilibrium point."
IMO, I think it greatly depends upon our levels of soil degradation and Net Primary Productivity [NPP]. Recall this link I posted earlier:
-------------
A Colorado State University and United Nations led science group is convening in Washington, D.C. to better understand the affects of land degradation, an issue that impacts 30 million Americans.
"The United States is a severely affected country...
In the United States alone, more than 20 percent of the land surface is in varying degrees of degradation, which makes the country the fourth most severely affected by land degradation worldwide. According to the FAO's Global Land Degradation Assessment only Russia, African states south of the equator and Canada are ahead of the United States in terms of degraded lands. It affects about 30 million Americans - 10 percent of the population - which is equal to the population of the states of New York and Ohio combined.
Desertification and dustbowl-type soil erosion has historically been a problem and remains a concern across a large portion of the western United States. Recent droughts have increased U.S. vulnerability as desert areas have increased by about 2 percent. Some 20 million ha, or 50 million acres, of arable land are lost every year to desertification and land degradation.
-----------------------------
The above is directly taken from the UN FAO 2008 GLADA Report 5, "Global Assessment of Land Degradation and Improvement" [68-page PDF Download Warning]:
http://www.fao.org/nr/lada/index.php?option=com_docman&task=doc_download...
-----------------------------
The country ranking of severity of land degradation by proportion of the global degrading area is 1 Russia (16.5 per cent), 2 Canada (11.6), 3 USA (7.9), 4 China (7.6), 5 Australia (6.2).
Rank by loss of NPP (million tonneC) is 1 Canada (94), 2
Indonesia (68), 3 Brazil (63), 4 China (59), 5 Australia (50);
Rank by proportion of the country affected is 1 Swaziland (95 per cent), 2 Angola (66), 3 Gabon (64), 4 Thailand (60), 5 Zambia (60).
Rank by rural population affected (millions) is 1 China (457), 2 India (177), 3 Indonesia (86), 4 Bangladesh (72), 5 Brazil (46).
------------------
Have I mentioned the need for strategic reserves of I-NPK for buffering as we ramp to full-on O-NPK recycling before?
Don't forget the UN FAO's Fertilizer Forecast [57-page PDF]:
ftp://ftp.fao.org/agl/agll/docs/cwfto11.pdf
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Does the degradation of the canadian soil has something to do with the mining of oil sands?
No, the oil sands are under (were under?) mostly Boreal forest. The two issues are distinct.
"Does the degradation of the canadian soil has something to do with the mining of oil sands?"
No connection whatsoever. Firstly, the oilsands are in the boreal forest, not agricultural areas. Secondly, these studies are about soil erosion and other factors.
Thirdly, and what bothers me most, I don't believe these soil models. Acoording to many of them, there shouldn't be any fertile soil left in North America. When I was in university, I took several soils courses, one of which was on agricultural soils. We had a project where those of us from farms, such as myself, plugged in numbers for our farms, such as the types of crops grown (grain, pasture, rangeland), the terrain (flat, hilly, gently rolling), presence of water bodies and internal roads, and so forth. By my calculations, our farm should have been exposed bedrock long ago. I well remember my professor saying that I must have used the wrong data when I dared suggest that perhaps the erosion model was wrong.
The fallacy of erosion models is that they assume the soil is gone forever, when in fact most of it is just redistributed within the farm or local area. Textbooks like to show recent gullies; one author checked photos taken 50 or 100 years ago and found that today the erosion sites had recovered or filled in. My grandparents lost their farm in southern Saskatchewan during the Dirty Thirties because of sandstorms and poverty. When my father revisited the site in the 1960s, now owned by a different family, it was a working farm again.
Hello Westexasfanclub,
Thxs for responding. Since they used satellite sensing, plus much more [see below], it includes all Canadian surface area including the tar sands. Even the dying areas from bark beetle infestations, forest fires, dead areas from acid rains, bare erosion, abandoned saline soils, paved areas, and much more were remote sensed from on high.
From page 2 of the Glada report:
-------------------------------
This study uses NDVI data produced by the Global Inventory Modeling and Mapping Studies (GIMMS) group from measurements made by the AVHRR radiometer on board US National Oceanic and Atmospheric Administration satellites...
-------------------------
IMO, whenever the UN FAO releases the next data set, it will probably be even worse.
New oil Field Discovery in India's KG Basin (India Times)
Global Warming Caused by Solar Intensity
Billions of years ago the CO2 levels may have been 10,000 times greater than today.
1.4 billion yrs ago the CO2 levels may have been "at least ten to 200 times" greater than today.
This based on a theory of a strengthening sun, after measurements of CO2 gas in oceanic fossils.
U. Maryland, and Virginia Tech. geology dept. research:
http://www.sciencedaily.com/releases/2003/09/030918092804.htm
How does that have anything to do with anything?
Soon the your electric bills might rise as the proposed Federal carbon taxes might take effect and you the consumer will have to pay for global warming that may have been increasing for the past 20,000 years causing a 120 meter rise in sea level. The fact that gasoline burned in autos produced great clouds of carbon dioxide might mean that you will see the price of gasoline rise along with some your electric bill. Natural gas contains much carbon also, thus some heating and cooking bills will rise, including restaurant and food processing company bills.
The current warming trend is not correlated with total solar irradiance (TSI).
And Al Gore is fat, and makes money selling books.
What other reason would he do this propaganda?
(Sarcasm off)
It has a great deal to do with the temperature balance of the planet. The greenhouse forcing is roughly proportional to the logarithm of the CO2 concentration. A doubling of CO2 concentration has nearly the same effect as increasing the intensity of the sun by 1.7% (IIRC). So 11.4 bilion years ago the sun was 11% dimmer. That requires roughly six and a half doublings of CO2 to make up for. That is a factor of roughly ninety times. If we hadn't had a strong greenhouse effect early on, the planet would simply have been a big ball covered with ice!
It has zero to do with the current situation. In 200-500 million years, this will be a major issue for whatever species inhabit earth. The timescales of increasing solar energy are completely irrelevant for any discussions we could be having here.
11.4 billion years ago, the Sun did not exist. In fact, that's longer than its main sequence lifetime.
The Sun is thought to have increased in output (luminosity) by about 10% per billion years. Thus, it is indeed thought that in the Hadean/Archean there was a stronger greenhouse to keep the planet above freezing. But there's a good deal of doubt that it was accomplished with carbon dioxide. If the atmosphere was a reducing one, as suspected by some modelers, methane would have done the job nicely.
It's also worth mentioning that Snowball Earth appears to have been a geological reality, although there is dispute about how completely it was frozen over at the equator (perhaps Slushball Earth would be more appropriate). But there was definitely low latitude glaciation in both the Paleoproterozoic and Neoproterozoic, and the ice-albedo feedback model suggests that when ice reaches below about 30 degrees, it rapidly expands to cover the rest.
Interesting, but no, this has nothing to do with our situation today.
But that is not rainsong's reason for posting it. He posts it as evidence global warming is not an anthropogenically-forced problem.
Note his evidence is 6 years old.
Note it's been debunked. Utterly.
Note he keeps posting such rubbish, anyway.
For whatever reason many of the food producing regions are under stress from climate change and soil degradation.
A reduction in grain/seed/nut production, which is where most calories come from, will soon follow.
Schwarzenegger declares Calif. drought emergency
http://news.yahoo.com/s/ap/20090227/ap_on_re_us/california_drought
Hello TODers,
As you know, I am on the lookout [hope other TODers are too!], for any info that might help build [or refute] Matt Simmons' Russian postPeak argument that they are becoming 'cold toast'.
I was reading the POT website when I stumbled upon some possibly corroborative info [framed in *** below]. I think it is safe to assume that POT can easily afford all the high-dollar market forecasting reports that I cannot.
http://s3.amazonaws.com/potashcorp/main/2008_ar/PotashCorp_2008_2009_Out...
----------------------------
2009 Outlook
6. Natural Gas
The futures market projects medium-term US natural gas
prices will remain relatively strong. With higher gas prices,
Western European nitrogen producers are expected to
continue as the high-cost global suppliers.
***Nitrogen product from Ukraine, where gas prices have more than tripled, is not expected to compete in the US. We expect Russian producers to lose their substantial discount on gas prices within five years, moving to global parity.****
7. Nitrogen
World nitrogen demand is expected to be soft in first-half
2009 due to curtailed production of solid phosphate fertilizer
(made with ammonia), farmers’ deferral of fertilizer purchases
and the effect of the economic crisis on industrial demand.
***However, with substantial capacity offline and questions
about natural gas reliability in some key producing regions,***
conditions could improve quickly, especially as crop prices
have rebounded. Meeting pent-up demand may lead to
logistical problems, product shortages and higher prices –
particularly as phosphate and nitrogen fertilizers are likely
to be needed at nearly the same time.
--------------------
http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/mcs-2009-nitro...
------------------
USGS 2009 Nitrogen Report
Net import reliance, as a percentage of apparent consumption = 48%
Import Sources (2004-07): Trinidad and Tobago, 56%; Canada, 15%; Russia, 12%; Ukraine, 10%; and other, 7%.
-----------
So, 10% of our imported N quickly goes bye-bye, and another 12% goes adios shortly thereafter because the Russian transport cost to the US is 50% higher compared to Trinidad's ports. Removing the Russian internal N H-B mfg subsidy is a pretty serious move, too, as Russia is the world's largest exporter of N-products; IMO, another indicator that their natgas supplies are becoming constrained.
Perhaps another indicator?
http://uk.reuters.com/article/oilRpt/idUKLR1388320090227
-------------------
Gazprom may cut '08 dividend by 26 pct -paper
--------------------
If Gazprom is hoping to attract fresh, long-term investment funds, lowering your dividend payout is not the way to do it.
Totoneila,
Thought of you when I saw this. Apparently the Swedish and Chinese understand O-NPK recycling.
http://www.nytimes.com/2009/02/27/opinion/27george.html?em
Hello Consumer,
Thxs for the info. Yep, IMO, we all need to plan to move in this recycling direction. Much better than Zimbabwe's non-program of wading thru sewage and spreading cholera.
If the drought in Cali really gets bad: it will be fascinating to see if they swap out their multi-millions of standard porcelain thrones and how quickly. If I was the Governor: I would order all govt toilets switched out now so the average J6P can get mentally acclimated to the idea for his own house.
Someone might make a huge financial windfall by securing early the exclusive import contract of these next-gen toilets, or by setting up their own manufacturing line somewhere in Cali. Time will tell.
Something else to consider: if oil spikes to $500, as suggested by Simmons, then I-NPK might double or triple in price again. If the Cali govt collects the O-NPK statewide, processes it, then sells it relatively cheap to the farmers & gardeners, the state could collect huge revenues besides saving much energy and water [much less pollution too]. We will see...
Toto,
I fear its going to take far more than potty tweaking to save California.
They have been on the leading bleeding edge for a long time now.
As to the views on I-NPK..I agree. It could get bad rather fast. Still on this end farmers are saying nothing. I think they are still trying to read the tea leaves and seeing just some crud in the bottom of the teacup.
If they are worried they have yet to break a sweat. I think they are worried but they are still highly engrossed in the Obamamania arenas and wondering why he is mum on the ag front. Whats coming for us they say? What bitter pills is he brewing up?
Have to go peruse some farming websites then...
Airdale
A couple more alt energy items that seemed interesting enough to post:
4 top EU wind developers join forces for 25 GW project
LDK reduces electricity to make silicon by 2/3
Robert McHugh reports on financialsense.com, he has a web site which was free, now is pay per view. he is good about macro economics. he is expecting a short and quick bounce in the stock markets in the next month or 2, after that, he is expecting a cataclysmic crash, not drop, but crash in the markets. i have not heard this word
(cataclysmic) except in books. he says cataclysmic crash. these 2 words together infer we are headed for very, very, very bad times. he has been accurate in the past and prepares for the worst.
check out the broadcasts for 28 feb.
I think this is it! the grand finally!
http://www.financialsense.com/fsn/main.html
he never gave a number on the markets, (normally he does) i am hearing dow at 5500 or 5000 and thats a maybe. could it get lower? your guess is as good as mine! i have read this or heard this from various sources on the web.
this is going to get dire.
and when you think about it, 1st qtr results come out in march, so many analysts have expectations. a company that exceeds or reports less than market analyst expectations will send the markets up or down. big swings either way.
give it a few weeks, maybe a month. expectations recently seem to be worse than projected. get your food,water and bullets ready. prepare to lock and load!
I hate to be mr doom and gloom on this stuff, but i think this is it!
this is where the train at full speed hits the wall!
and then there are world events. russia, iran, israel, north korea.
pakistan?
just freakin lovely! ain't it?
hey bartender!
make mine a double, on the rocks!
more trouble in the canadian oil patch:
"challenger gets bankruptcy protection"
http://biz.yahoo.com/iw/090227/0478397.html
challenger is a partner in recent multi tcf ng finds offshore trinidad, the operator haas spent about $300 million drilling three wells.
and because they have depleted all their cash and credit, they cant pay the bills for testing and completing the last of the three wells.