Drumbeat: April 1, 2009

Keynote: The Back-to-the-Lander

Vandana Shiva, India’s leading environmental activist, says that the industrialized West is literally consuming the developing world. We eat cinnamon that comes out of Thailand, bananas from Central America. To feed our ever-growing appetites, we push industrial agriculture methods on once-traditional agrarian societies, and now we want these faraway lands to produce a different kind of food: biofuel, to feed the West’s automobiles. At some point, Shiva argues, we’re going to have to choose between sacred cow and sacred car.

Shiva founded an organization called Navdanya to promote research in organic agriculture and saving heirloom seeds. In her 2008 book Soil Not Oil: Environmental Justice in an Age of Climate Crisis, she argues that the rebirth of sustainable, traditional agriculture offers the best way forward, in both India and in the West.

“There is a myth that there are agricultural societies, and then there are industrial societies and service societies, as if when you become an industrial or service society you don’t need food,” she says. “As we hit climate chaos, as we hit peak oil, assuming that you can get your food from far away and use fossil-fuel-intensive systems to produce food is totally not sustainable. Bringing food security close to home will have to be the project of the future.”

Oil Sands Docu "Downstream" Launches "Our Earth"

With Canada (not Saudi Arabia) as the U.S.'s primary source of oil, the film relates how one courageous doctor fights for the lives of the aboriginal people residing downstream from the oil sands of Alberta, one of the most polluting and burgeoning oil operations in the world (over a million barrels of oil per day to the U.S.). The doctor spots a surprising increase in the rate of a rare type of cancer among the townspeople of Ft. Chipewyan, while the citizens have seen an increased amount of wildlife deformities in the river and ecosystem over the last 10 years.

Kuwait bourse halts trading in 36 companies

KUWAIT CITY - The Kuwait Stock Exchange on Wednesday halted trading of shares in 36 companies over their failure to meet the deadline to provide financial results, a move affecting an unprecedented number of mostly investment firms that reflected how seriously the global meltdown has affected this oil-rich nation.

South Africa: Petrol stations 'will run dry if strike goes ahead'

Petrol stations will run dry if a strike by the South African Transport and Allied Workers' Union (Satawu) goes ahead, the Fuel Retailers' Association said on Wednesday.

"The infrastructure is under pressure in any event -- so a strike will cause chaos," said the association's CEO Peter Morgan.

North Sea Team Searching for Helicopter Finds 8 Bodies, Sky Says

(Bloomberg) -- Rescue workers searching for a helicopter that ditched today in the North Sea off eastern Scotland found eight bodies, Sky News reported.

VeraSun closes sale of 5 ethanol plants to Valero

SIOUX FALLS, S.D. (AP) -- VeraSun Energy Corp. says it has closed on the sale of five ethanol plants and one development site to traditional refiner Valero Energy Corp.

VeraSun, which filed for Chapter 11 bankruptcy protection in October, auctioned off its assets and Valero submitted a successful bid of $477 million for plants in Aurora, South Dakota; Charles City, Fort Dodge, and Hartley, Iowa; Welcome, Minnesota; a development site in Reynolds, Indiana, and two additional plants.

Clash of Subways and Car Culture in Chinese Cities

GUANGZHOU, China — Chan Shao Zhang is in the race of his life.

After four decades of false starts, Mr. Chan, a 67-year-old engineer, is supervising an army of workers operating 60 gargantuan tunneling machines beneath this metropolis in southeastern China. They are building one of the world’s largest and most advanced subway systems.

The question is whether the burrowing machines can outrace China’s growing love affair with the automobile — car sales have soared ninefold since 2000. Or are a hundred Los Angeleses destined to bloom?

Enthusiasm Builds for Helping a Shift to Fuel-Efficient Cars

WASHINGTON — Finally, a bailout for truly needy Americans: the owners of gas-guzzling, rust-bucket, heap-of-junk, rattletrap pieces of — well, let’s just say jalopies.

A concept embraced by President Obama on Monday as part his effort to save General Motors and Chrysler from collapse would provide cash to buyers of new fuel-efficient cars — if they traded in a clunker.

Plan to rescue MTA goes off rails: Bailout 'falling apart' over payroll tax dispute

A plan to rescue millions of straphangers from sky-high fare hikes and widespread service cuts suddenly veered off track in Albany Tuesday night, sources said.

Sources familiar with the talks between Gov. Paterson's office, the Assembly and the state Senate said it became unclear that Senate Majority Leader Malcolm Smith could get a package passed - even without tolls on the city's free bridges.

"It's falling apart at the seams," one source said, adding that some Senate Democrats also appeared to be balking at the employer-paid payroll tax part of the plan.

Auto bankruptcy: What it means

A bankruptcy at GM or Chrysler will have widespread impact, from consumers to auto workers to taxpayers.

Boats Too Costly to Keep Are Littering Coastlines

MOUNT PLEASANT, S.C. — Boat owners are abandoning ship.

They often sandpaper over the names and file off the registry numbers, doing their best to render the boats, and themselves, untraceable. Then they casually ditch the vessels in the middle of busy harbors, beach them at low tide on the banks of creeks or occasionally scuttle them outright.

The bad economy is creating a flotilla of forsaken boats. While there is no national census of abandoned boats, officials in coastal states are worried the problem will only grow worse as unemployment and financial stress continue to rise. Several states are even drafting laws against derelicts and say they are aggressively starting to pursue delinquent owners.

Duke Energy plans wind project, lines up sales

Electric company Duke Energy Corp. on Wednesday said it plans to develop a second wind energy project in Cheyenne, Wyo., and has reached power purchase agreements with two regional utilities.

U.S.-Backed Program Gave Millions to Iran, Syria

(IsraelNN.com) Iran and Syria received millions of dollars from a U.S.-backed program that promotes the peaceful use of nuclear energy, according to a U.S. Government Accountability Office report released Tuesday, The Wall Street Journal reported. They were two of four terrorism-sponsoring countries to receive funding under the International Atomic Energy Agency's Technical Cooperation program,

Drop in oil industry spending fuels fear of shortages, price spikes

An investment slump in the global oil industry is delaying projects worldwide, and raising concerns about future production shortfalls and another bout of record high prices in coming years.

Even conservative estimates suggest global crude production could be 7 per cent below previously forecast levels in 2014 if current investment trends continue. As demand picks up, the supply shortfall would drive prices higher, says a recent report from the Cambridge Energy Research Associates, a Massachusetts-based consultancy.

But the price spike may be coming sooner than many people expect, said Matthew Simmons, a Houston-based investment banker who has become the most prominent prophet of looming oil shortages.

Changing Landscape of Global E&P Industry

Last week marked a significant point in the current petroleum industry downturn. The more than $100 a barrel oil price decline, coupled with a 70%+ drop in U.S. natural gas prices during the second half of last year, signaled energy industry participants that their world would be significantly different in the future from the view they held as late as July 2008. There was little recognition of this change in the early stage of the price decline, but after the credit crisis exploded in mid September, about the same time that Hurricane Ike landed on the upper Gulf Coast of Texas, the realization about the future became real.

Cheaper gas can't last, analysts warn

Retail gasoline prices fell across much of the U.S. over the last week, the Energy Department said Monday, but analysts warned motorists to enjoy it while it lasted. Prices were expected to rise to as high as $2.25 a gallon nationally and to $2.50 in California and the West Coast by the Memorial Day weekend.

Mexico catches gang that allegedly stole oil, sold it to US refineries

MEXICO CITY (AP) — Police in northern Mexico caught a gang that allegedly stole oil from state-owned pipelines and smuggled it across the border to sell it to U.S. refineries, authorities said Tuesday.

Exxon Boosts Exploration in a Maturing US Gulf of Mexico

After years of flirtation, it seems that the U.S. Gulf of Mexico has finally seduced Exxon Mobil Corp.

The Irving, Texas, oil giant said in a financial and operating review released Monday that in 2008 it obtained 142 leases to explore for oil and gas in the offshore Gulf -- up from five tracts a year before and seven in 2006. This level of interest is a sign that the area, once considered a wild frontier, has reached maturity in the eyes of the largest oil company in the U.S.

"There's more oil to be found than they thought before," said Jason Gammel, a New York-based analyst with Macquarie.

Gazprom signs north Nigeria oil search deal

ABUJA (Reuters) - Russian energy giant Gazprom has signed an agreement with a Nigerian firm to analyse three oil blocks in northern Nigeria for possible exploration, a senior company official said on Wednesday.

Petrobras Invests Heavily in Offshore Drilling

With massive deepwater finds in the pre-salt layer, as well as the Campos and Santos Basins, Brazilian state-owned Petrobras pledged an investment of $174.4 billion for 2009 to 2013. With a firm commitment to exploration and production, the company hopes to become one of the five largest energy companies in the world.

In an interview with Rigzone, a Petrobras executive explained that the company was able to achieve its recent successes because it invested when times were tough. "This allowed the company to develop in deepwater oil production, in the '80s when only a few companies could do it because the prices were not lucrative," explained Decio Fabricio Oddone da Costa, CEO of Petrobras Energia.

Kazakhs accuse Eni, Parker Drilling of tax evasion

ASTANA (Reuters) - Kazakhstan accused Eni (ENI.MI), one of the companies developing the huge Kashagan oilfield in the Caspian Sea, and U.S. oil services firm Parker Drilling of tax evasion.

Kashagan, Kazakhstan's largest oil field, was at the centre of a dispute between the government and foreign oil majors over the timeframe and its costs of development. The row ended last year after Kazakhstan increased its stake in the project.

Shell Resumes Soku Gas Supply to Nigeria LNG Plant

(Bloomberg) -- Royal Dutch Shell Plc, Europe’s largest oil company, said it restarted output at its Soku natural gas plant in Nigeria that supplies a liquefied natural gas terminal.

Abu Dhabi, Conoco Preparing Sour Gas Project Tender

(Bloomberg) -- Abu Dhabi National Oil Co., the state-owned crude producer, and partner ConocoPhillips are preparing a tender for bids for work on a sour-gas project to boost output of the fuel in the Persian Gulf state.

Russian pipeline blasts in Moldova, gas supplies to Balkans suspended

BUCHAREST (Xinhua) -- A gas pipeline explosion occurred Wednesday morning in southern Moldova, and Russia's gas supplies to the Balkans were suspended after the incident.

Gazprom says Turkey to get more gas

MOSCOW (Reuters) - Russia's Gazprom will raise supplies to Turkey via the Blue Stream pipeline after it was forced to cut supplies to the Balkans by 40 percent because of a blast on a pipeline in Moldova, the firm said on Wednesday.

Russia oil service firm fails to pay CLN put - sources

MOSCOW (Reuters) - Russian oil service company Siberian Service Company (SSK) has failed to pay a put option exercised by holders of a $100 million credit-linked note , a banking source and a holder of the bonds said on Wednesday.

"The company has paid the coupon but failed to execute the put option," the banking source said.

Iraqi forces revamp hit by oil prices: Pentagon

WASHINGTON (AFP) – The global economic crisis and recent drop in oil prices could hamper Baghdad's efforts to better equip its security forces, the Pentagon said in a report released Tuesday.

Saudi government cracks down on Shiite dissidents

AWWAMIYA, Saudi Arabia – A cleric's threat of secession has brought a swift government crackdown in this poor, radical Shiite town in Saudi Arabia's increasingly restive religious minority heartland atop the Sunni kingdom's main oil reserves.

Utility customers in arrears face loss of service

With the state-mandated cold-weather moratorium on gas and electric shutoffs officially over, thousands of electric and natural gas customers face potential service disconnection today.

BP faces civil charges over Alaska spill

WASHINGTON (AFP) – The United States has said it had filed a civil law suit against BP's Alaskan subsidiary BPXA, following pipeline leaks which caused crude oil to spill into Alaska's seas in 2006.

A statement from the Justice Department said it had filed a complaint with a District Court in Anchorage, accusing BPXA of failing to prevent the leakage of 200,000 gallons (757,000 litres) of oil into Prudhoe Bay.

Stimulus-funded highway projects underway

A USA TODAY review shows the early stimulus money appears to have gone to highway projects.

Cities' paratransit services face cutbacks, fare increases

Cities nationwide are raising fares and cutting service for paratransit for seniors and people with disabilities to make up for funding shortages.

"As good of a system it is for people with disabilities, it's a very expensive service for transit systems," says William Millar, president of the American Public Transportation Association (APTA).

At the same time that partransit systems are struggling with funding, ridership is up. There was a 5.8% increase in national paratransit ridership last year, according to APTA's "Public Transportation Ridership Report" released in March.

Shell Says Biofuel May Make Up 10% of Fuel Mix in ‘Few Decades’

(Bloomberg) -- Royal Dutch Shell Plc, Europe’s largest oil company, said biofuels may account for as much as 10 percent of global transport fuel in the coming decades.

“We believe biofuels could grow from just 1 percent of the world’s transport-fuel mix today to as much as 7-10 percent over the next few decades,” Chief Executive Officer Jeroen van der Veer said in a speech published on Shell’s Web site today, which he will deliver tomorrow at the Paris International Oil Summit.

Weak crude, cane shortage hit India ethanol expansion

Mumbai - A sharp decline in sugar cane production coupled with lower crude oil prices that make ethanol a less viable option as fuel has hit India's plans to sharply increase its ethanol production capacity, analysts said Wednesday.

This could delay millions of dollars in new investments as sugar mills put off or scrap investments in new ethanol facilities.

BP axes 620 jobs from solar business

BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies.

The Green Movement Is All About Energy

I’m aware that this might be controversial, but if you had the choice between insulating a house with “R19” recycled denim insulation and one with “R35” fiberglass insulation, the more highly efficient fiberglass-insulated house is going to do more to help solve the Earth’s current energy dilemma. I apologize to all the “greenies” out there, but this fact is indisputable.

Reminder: Don't Mess with Mother Nature. She has a Long Memory and a Nasty Temper.

Author James Howard Kunstler told the Forum that the end is near, as he's been saying since 1994. In The Long Emergency: Surviving the End of Oil, Climate change, and Other Converging Catastrophes of the Twenty-first Century, he predicts that we will return to an agrarian society, and hunger and thirst will prevail. Well, yes. It could happen, but we are smarter than that and more practical.

Bill McKibben issues global call to action

On October 24, we will stand together as one planet and call for a fair global climate treaty. United by a common call to action, we'll make it clear: the world needs an international plan that meets the latest science and gets us back to safety.

This movement has just begun, and it needs your help.

California: Senate Approves 33% Renewable Energy Bill

SACRAMENTO – Senate Bill 14, which requires all energy providers to buy 33 percent of their energy from clean renewable energy sources by 2020 has been approved by the Senate 21-16. The bill, authored by State Senator Joe Simitian (D-Palo Alto) now heads to the Assembly.

Saudi ‘slow to act on climate change’

JEDDAH // In the 1980s, expatriates working at Saudi Aramco, a Saudi oil company, used to spend their weekends water skiing and swimming in a lake in the heart of the desert.

Two decades on, however, and there is nothing left of Lake Layla, once considered the largest body of water on the Arabian peninsula.

Carbon Capture Needs ‘Apollo-Style’ Program in EU, Alstom Says

(Bloomberg) -- The European Union must accelerate efforts to capture and store carbon dioxide released by power plants or risk missing its goals to reduce global-warming emissions, a report commissioned by Alstom SA said.

UN climate talks: Save the forests -- but how?

BONN (AFP) – Deforestation, one of the main drivers of global warming, has barged its way to the heart of UN climate talks, which resumed in Bonn this week.

But which makes the better incentive for saving the carbon-absorbing tropical woodlands: market mechanisms or public funding?

U.S. House Democrats detail climate change proposal

WASHINGTON, March 31 (Reuters) - Leading Democrats in the U.S. House of Representatives on Tuesday offered a climate change and energy efficiency bill that would give industry up to 2 billion tonnes in "offsets" to help them meet requirements for cutting greenhouse gas emissions.

The legislation by top Democrats in the House Energy and Commerce Committee also would give industry "rebates" so that U.S. firms can remain competitive with overseas competitors.

Earth population 'exceeds limits'

There are already too many people living on Planet Earth, according to one of most influential science advisors in the US government.

Nina Fedoroff told the BBC One Planet programme that humans had exceeded the Earth's "limits of sustainability".

..."We need to continue to decrease the growth rate of the global population; the planet can't support many more people," Dr Fedoroff said, stressing the need for humans to become much better at managing "wild lands", and in particular water supplies.

About the CERA report, does this essentially acknowledge the existence of a type of "demand destruction"?

I have been taking to refer to this also as a suppressive shock. AFAICT, the same thing essentially happened in the 70's and 80's. Like Fred Sanford said, this could be the big one.

Memmel, are you out there? When you talk about the "Shark-fin" curve, does this fit into your idea?

The curve above relates to drop in discovery effort. Production lags discovery by quite a bit so the same thing will happen to the production model.

This is a 20% suppressive shock using the Shock Model.

"Peak oil is a political notion invented by environmentalists to get us off of oil" -- Jim Quinn

"CERA is a political notion supported by IHS to keep us on oil" - Bob Fiske

"Joel, NEVER, EVER mess with a man's livelihood.."
Guido, the killer pimp (Joe Pantoliano) - Risky Business, 1983

IMO, CERA is analogous to the Bunny Ranch in Nevada. They are both paid to provide certain services, and they provide certain services.

Yeah and from what I've seen on TV the analogy stretches further - a lot of those woman obviously peaked in the 70s and what's available from Russia is cheaper and far better quality.


(That's an 'underhanded' kind of a Smiley.. Thanks for the laugh)


I think that CERA has been looking for a way to stage a strategic withdrawal from their previous unrealistic production estimates--down to lower, but still unrealistic, production estimates--and the decline in drilling provided a perfect opportunity for them.

Yergin's assertion, in late 2004, was that rising production would drive oil prices down to a long term index price of $38. In fact, relative to either the 5/05 (C+C, EIA) production rate or the average annual rate in 2005, we have seen a significant cumulative shortfall between what we would have produced (using either 2005 metric) and what we actually produced through the end of 2008. This, aided by net export factors, drove prices up to an average rate of $100 in 2008, until of course, demand fell.

I think that CERA has been looking for a way to stage a strategic withdrawal from their previous unrealistic production estimates--down to lower, but still unrealistic, production estimates--and the decline in drilling provided a perfect opportunity for them.

CERA will likely listen closely to their NOC clients to figure out what they can say about peak oil and when they can say it. Their business relies on passing the message that their clients have the goods (i.e. plenty of oil to flow). As production constraints tighten, I would expect the message to shift from 'there is plenty of oil to flow' to 'we have more oil than anyone else.'

Peak Oil Is Here, According to CERA

Cambridge Energy Research Associates, also known as CERA, announced today that world oil production is in irreversible decline.

CERA Chairman and Pulitzer Prize-winning author of The Prize: The Epic Quest for Oil, Money and Power Daniel Yergin said "After reviewing all available data, it is apparent that world petroleum production has peaked. The negative effects of lower oil production upon importing countries will be overwhelming." He adds, "But oil will go to $38/barrel."

CERA added that this conclusion was made from examining depleting oil production from supergiant oil fields such as Cantarell, Ghawar, and the North Sea, as well as case studies from Texas oil production in the 1970's and Nothern Slope production in Alaska.

"The data concerning petroleum discovery and production is widely available, and strongly implies a future decline in petroleum regardless of price." added Yergin.

When asked why CERA did not reach this conclusion earlier, Yergin had no comment.

Ever been Rick Rolled?

Happy April Fools.

lol when I read your post I almost covered my keyboard with the water i was drinking :P

CERA to acknowledge peak oil....not until hell freezes over.

God, I hope hell doesn't freeze over. The ACC Denialists would just become uncontrollable!

They had a good leap up to this joke, as a week or so ago the indications were that CERA was revising their usual cornucopian outlook. It just took someone to put it over the edge of credibility.

So, we know that today's oil price influences money spent on new production projects.
And, we know that new projects are a major factor in future production (plus depletion of existing wells).

Do we know the average lag time between oil price signals and new production coming on stream?

If so, can we create a sort of running average of the last 10 weeks oil price, and use it to predict how much new production will come on stream in about two years?
Or, is it because price signals are not linear, we don't get accurate predictions? I was thinking that if everybody says they need exactly $70 to green light new production, we would probably have a sort of gold rush again next year. It seams that even the onset of peak oil can't get the oil patch out of the boom-bust cycle.

As I noted yesterday, it took an all out drilling effort to keep the 1972 to 1982 decline in Texas production down to about 30%, while oil prices went from $3.5 in 1972 to about $32 in 1982, almost a ten-fold increase in oil prices. This is what happens when older larger oil fields go into terminal declines--much like North Ghawar & Cantrell today.

IMO, the real question is what happens to the decline rate when we see less than an all out drilling effort--especially as the world transitions to the stage of depletion at which the overall Lower 48 and the North Sea both showed accelerating decline rates.

And when the oil/gas prices go up again, people will be bitching/moaning and demanding that the government and oil companies do something to drive prices down again. There will also be calls to hang the speculators and drill, baby, drill. It will be yet again another wake up call. But for every wake up call, our nation just pushes the snooze button.

Instead of a problem, this situation should be used as an opportunity to accelerate efforts to divorce ourselves from this cycle. However, the sense of urgency engendered by $150 oil is now lost and Obama is being told that he should drop the multitasking, to focus on the immediate crisis and forget about the future.

It would be prudent to operate under the assumption that production will not be adequate if and when the economy recovers.

Those who are long oil are counting on our short sightedness and unwillingness to deal with the long term problems and cyclical nature of oil production.

If I was a CEO of a big oil company, I wouldn't spend this year's bonus just yet. When this summers gas price spikes (even a little), the pitchforks will come back out. Obama got good ratings from the last populist bonus bashing. I expect him to rinse and repeat, until less that 50% of the people enjoy it.

LOL yes this is exactly what you get.

There is also a second shock where current resources are being drained down for cash flow.

This is different from dispersive discovery because I don't think dispersive discovery does a good job of covering in field drilling rates or work over of fields.

We can look at North American UNG plays for example most of the rigs being dropped where drilling wells in existing UNG plays they are already discovered in production and simply need wells drilled to produce. Assuming a similar dropping of rigs happens in the oil fields one
should see "discovery" drop faster as production of known oil sources slows.

Next I've proposed a second shock if you will that advances in technology allow us to extract at a faster rate pushing the peak production rate later down the depletion curve. This flattens the peak to a plateau and leads to a steep drop off once technological improvements can no longer cover decline.

I argue that unlike the medical industry we have a shark fin shaped extraction model in the oil industry.


In it he says, "It used to be assumed that differences among hospitals or doctors in a particular specialty are generally insignificant. If you charted a graph showing the results of all the centers treating cystic fibrosis-or any other disease, for that matter-people expected that the curve would look something like a shark fin, with most places clustered around the very best outcomes. But the evidence has begun to indicate otherwise. What you tend to find is a bell curve: a handful of teams with disturbingly poor outcomes for their patients, a handful with remarkably good results, and a great undistinguished middle."

Both are very high tech areas but oil fields are not patients you have time to consult with experts and apply the best treatment. I.e in general oil fields are produced with the best technical solution possible. They get the best treatment unlike the human patients. Also although you have to be aware of the difference Medicine like oil technology has progressed rapidly over the last several decades. In medicine overall life expectancy has not changed dramatically despite the advances. I'd argue that this is not because of the treatment bell curve since but because the precentage of patients with diseases that benefit from medical advances is itself small. To some extent its the same with oil horizontal drilling was the big advance similar to say penicillin for medicine but once it was in place further advances in both extraction and discovery only found or extracted the marginal barrel. This is simplistic but the point is you have two types of advances one thats generally applicable and can boost production in almost every field these tend to fall into the group that increases extraction rate. And others that apply only to marginal cases and by definition are not going to change the overall curve all that much they only act to sharpen the final shark fin.

So in a sense you have two shocks one is dispersive discovery and I'd argue that the long decades of low oil prices and slow increase in demand have acted as a long term shock slowing discovery coupled with a recent short term shock so its a two part shock.

Next you have technology improvements almost overwhelmingly applied to existing fields and basins these are new extraction technologies and new discovery technologies that allow more efficient extraction of a known field. This is the extraction shock fin.

It would be interesting to apply these shock if you could get suitable parameters on oil extraction after the 1980's. Back then you had a sharp drop in demand that should shock discovery I think you will find that a second shock is needed to match the real production curve since as new discovery fell off existing fields where exploited even harder.

Given the price shock was fast like your modeling and we actually have some reasonable numbers for demand changes for the time you should be able to get the price shock exactly.
Then I'm arguing you must introduce a second shock to match actual production. This is the technology shock. What it really is is a increasing extraction rate for discovered fields.

Overall I'm suggesting that we have not correctly modeled oil production since the 1980's a number of factors where at play for decades that have distorted the production curve.

I think you have to watch out what the "bell curve" is measuring or indicating. For quality of medical service it is measuring a steady state distribution of outcomes. That type of data is not something that changes that rapidly with time. It turns out to be essentially a histogram where the bins are some subjective or objective measure of a patient's outcome.

For oil depletion, the real measurement is the cumulative, and the bell-shaped curve only comes from the derivative of the cumulative with respect to time. It is this single fact that has gotten people so confused as to how the curve comes about.

I was mainly wondering whether the asymmetry of the shark-fin was what you were getting at -- i.e. concave downwards on the lead side of the fin/peak, and then a sharp transition to a concave upwards on the trailing side.


Nice charts!

In the short term, I'm also getting a "shark-fin" but only a small one due mainly to OPEC's response to demand destruction. The top of the "shark-fin" was July 2008 and the bottom about now.

Search suppression has been occurring as oil companies cut back on oil exploration but another important factor is investment suppression which is delaying the development of past discoveries. Consequently, the expected annual decline rate of 2.9 % from Dec 2009 to Dec 2012 could be steeper over the short term possibly creating a bigger "shark-fin" pattern from 2008 to 2012, followed by a slower decline rate from 2013.

The forecast below assumes that OPEC complies with about 80 % of the announced 4.2 mbd cuts from Mar 2009 to Jun 2009.

click to enlarge

Here is Colin Campbell's recent discovery curve. The world is currently discovering such small amounts of new oil that any delayed discoveries shouldn't make a big difference to the production curve.

click to enlarge
source http://www.aspo-ireland.org/index.cfm/page/newsletter

For more info about declining world oil production, please refer to

World Oil Production Peaked in 2008

I'd agree that on the downside of the discovery peak, discussion of a shark-fin is moot. On the production side it is much stronger as we are near the top of the curve.
I mainly wanted to figure out what behavior that Memmel was referring to. I thought I was missing some terminology, so if we have a better name for this kind of shape, I am open to it.

It also looks an awful like a capacitor charge/discharge cycle, but that doesn't even have a name that I can remember, other than a linear first-order transient.

I love that "the growing gap" chart. I wonder if it would be possible to do a version that filled in the "past discovery" bars with the cumulative production. What year's discoveries would we be up to now?

Interesting, I guess that would be the oil equivalent of the "Tax Freedom day" that people use to gauge how much of their income goes into taxes. It just has to be phrased in a way that it is not misinterpreted.


We'd be up to about 1970 for which cumulative discovery equals cumulative production to 2009Q1 of 1.06 trillion barrels. According to Colin Campbell, that leaves the world with about 0.84 trillion barrels left of regular conventional oil including 0.11 trillion barrels of yet to find.

Note that the definition of regular conventional oil in the chart below excludes oil sourced from polar regions, heavy oil and deepwater oil.

click to enlarge


That simple addition of shading rocks! If one mentally overlays the population growth curve, the situation is even clearer.

I just watched a segment about the impending pissing contest over the Arctic areas.

Don't you know that 25% of the remaining reserves lie under the Arctic ocean? /sarcanol

There may be, but it really frosts my buns how these numbers are thrown about by the MSM with no references (EIA, CERA, USGS?) and, dare I say, no mention of marginal costs.

Again, thanks for your work along with Jeff's, WHT and many many others.



I've had the same idea as consumer for quite a while and am glad to see this. My thought was to shade the area under the production curve first, then shade above the curve for the gap area between production and discovery. I think it would be a little more intuitively obvious.


Thanks! Now one can intuitively see that we are currently burning about one year of 1970's discoveries each year. So it seems obvious that the production curve will follow the discovery curve down.

Interactive US Carbon Footprint Chart, illustrating Greenest States and a lot more down to US City Level...


Why is it that some of the "greenest" states politically tend to fare so poorly in terms of carbon output per capita?

I would guess that it's climate-related. The liberal northeast is also the coldest and oldest part of the country.

I dug in a bit more and the black portion of the bar is the relative carbon emissions.

The "liberal" NE and NW actually fare pretty well despite climate. Even frozen like a rock MN hits in the middle of the pack.

The big hits are Industry and low population density increasing transport energy use.

How do you know which are the "greenest" states? Anyway, there are a multitude of factors that contribute to carbon output, many of which have very little to do with the opinions/attitudes of the individual citizens. Climate, geography, historical access to hydropower, industrial output, etc., may drive up per capital output even though the citizens may attempt to cut their consumption at the individual level. Also, what if a state gets most or all of its power from out of state? The output per capital (like Vermont, for example) might seemingly be very low while the true output could be very high. Further, do these statistics reflect the carbon footprint of the all the goods people consume from places like China? All in all, I find this study pretty worthless unless it has taken all these factors into account.

tstreet -

I would agree that a state-by-state ranking of per capita energy usages is not terribly meaningful and doesn't tell one very much. (Ditto for a lot of other state-by-state per capita rankings of physically-related entities, whatever they may be, e.g., toxic releases, cancer rate, etc.)

I think the people generating this sort of stuff have perhaps forgotten that state boundaries do not physically exist, but rather are an abstraction of our political system. (Try to locate the boundary between Colorado and Wyoming from an airplane.) If one were to take an empty map of the US and superimpose over it 50 random numbered pieces of a jig-saw puzzle of the same total area, then one could just as easily calculate per capita energy usage for each of those new areas and come up with an entirely different ranking profile. Is one really more valid than the other?

As a resident of the tiny state of Delaware, I am keenly aware of how unfruitful this sort of exercise can get. Delaware happens to have a high cancer rate (and no, it's not from all those chemical plants, because while Delaware is headquarters to the giant DuPont Company, it actually has but a few large chemical plants). This has been a long-standing cause for concern, particularly among various environmental groups. The simple fact that seems to be ignored is that most of the population of Delaware lives in the northern third of the state which happens to abut the southern edges of the Philadelphia metropolitan area and its near suburbs. Could it be that this just might have something to do with it? If Delaware were to be annexed into Pennsylvania and its cancer incidence mixed in with that of PA, this artifact would disappear.

People often get into all sorts of trouble when they divide one large number by another large number and then try to draw all sorts of dubious conclusions from the resulting ratio.

Global call to action (above)

There are no limits here--imagine bike rides, rallies, concerts, hikes, festivals, tree-plantings, protests, and more. Imagine your action linking up with thousands of others around the globe. Imagine the world waking up.

Imagine every westerner does not fly or drive his/her car that day, does not eat meat that day and does not turn on his/her computer, cellphone, tv set.
A little less "waking up" and "action", and a little more self-restriction. Just for one single day.

Imagine there’s no oil left
This might make you cry
Nowhere to drive or fly to
Empty streets and sky
Imagine all the vehicles
Scrapped forever more

Imagine there's no oil multis
All bankrupt at last
Nothing to pump or search for
And no global warming too
Imagine all the vehicles
Scrapped forever more

You may say I'm a doomer
But I'm not the only one
I hope someday you'll join us
And the world will power down

Imagine localization
I wonder if you can
No need for multinationals exploiting
The community of man

Imagine all the vehicles
recycled to make windmills

You may say I'm a doomer
But I'm not the only one
I hope someday you'll join us
And the world will power down

My apologies to the estate of John Lennon

Well done.

Obama: 'We must reduce consumption'

President Barack Obama announced a radical long-term economic plan today during a press conference.

"My economic advisors and myself have come to the conclusion that all of the long term problems that our nation faces- global warming, peak energy production, and environmental degradation- stem from our desire to overconsume. The average American uses more energy per capita and generates more waste per capita than most of the developed world. Of all the nations of the world, we are the most responsible for global warning and fossil fuel consumption, and this overconsumption must be reduced today. We must reduce consumption.

"We will be implementing a 100% sales tax on all goods and services beginning July 1. This will both reduce consumption and help balance the budget in light of the current deficits we're facing."

When asked how this is going to affect the automakers, he said "In a future where oil production is declining, they are selling a product that cannot be powered without cheap oil. They're not going to survive no matter what we do, so all bailout and stimulus for the automobile sector has been suspended."

When asked about the financial sector, he replied "Less oil means less jobs, which means less money flowing throughout the economy. They are also toast, and we are discontinuing their bailout. Besides, most of that money was only going to a few employees of that sector in the form of raises and bonuses, which we beleive is ineffective."

When asked if this is going to help the housing situation, he reponded "Suburbia is a joke. You can't possibly afford to have a $300,000 house 50 miles from your job in an energy constrained future. I'd like to get all of these folks who bought these homes in a room and say 'What the f*ck were you thinking? And I suppose you have an ARM that will reset to 12% in a year or two, and make minimum wage. What made you even possibly think this was a good idea? And all the rest of us need to bail your dumb a*ses out.'"

He added "Someone find me Bush 42. I so want to beat his a** for the situation we're in."

Ever been Rick Rolled...?

Happy April Fools.

I don't think John would have minded this at all.

LOL. Now amongst all the American white middle class engineers on this site can somebody's Karaoke skills do this justice?

Watching TV And Doing Nothing Might Just Save Us

...It is apparent to me that just sitting down, watching TV and doing absolutely nothing all day could save the planet.

Consider the following: Driving causes over 20% of the Greenhouse Gas in our environment. Staying home and not having a job helps the environment... Also, by having a lower cash flow, one reduces their own consumption. I mean, how many unemployed people have a Hummer? Without money, you can't overconsume, deplete resources and generate waste. And if you don't pay your bills, the utility company will shut off power to your home, which is the best way to conserve energy imagineable.

Oh, and stay at your parents while you are at it. Save the world and... well, just watch their TV.

Ever been Rick Rolled again?

Happy 4/1.

Slackers are way underappreciated.

Getting past the noise and back to something relevent for TOD,

Duke Energy plans wind project, lines up sales

Electric company Duke Energy Corp. on Wednesday said it plans to develop a second wind energy project in Cheyenne, Wyo., and has reached power purchase agreements with two regional utilities.

Wind Turbines problematic for new species of bird.

Nation-State and Transnational Environment Conference hosted by UT's Institute for Historical Studies

Conference to explore ways nation-states have attempted to find international solutions to global environmental problems.

The eminent environmental historian William Cronon has written that there is nothing fundamentally new about the challenges confronting national governments in the twenty-first century. "The rate of change may have accelerated and its scale shifted dramatically, but in fact current environmental problems almost always have historical analogues from which we have much to learn."

The current environmental situation--in which rapidly intensifying transnational flows of people, goods, money, and ideas steadily erode the capacity of national governments to meet global challenges including resource scarcity, mass migration, and environmental degradation--is unquestionably dire, but it is not as unprecedented as much recent commentary might have us believe.

The Nation-State and Transnational Environment (NSTE) Conference is the centerpiece of the Institute for Historical Studies (IHS) global borders theme for the program years 2008-2009 and will be held at the new ATT Executive Education and Conference Center on the UT campus, April 16-18, 2009. The conference is free and open to the public.

[OPINION] Peak Oil... Demand for it, that is.

It is demand for oil that may peak as governments adapt to the problems of global warming, security of supply and an amplitude of market volatility that could bring economic ruin to nations and then the world....
As a rider to this, it should be noted that there is no such thing really as "global peak oil" since different fields, under the control of various regimes will peak at different times, thus shifting the emphasis of economic and political control across the globe.

That sentence about no such thing really as "global peak oil" caught my attention. The ignorance about peak oil in the scientific and political world is alarming. The US peaked in 1970 even though Prudhoe Bay had not even come on line then. Global peak oil will be, or was, the point when global production peaked and began to decline. It simply does not matter when individual nations peak.

Ron P.

Changing Landscape of Global E&P Industry

Is the domestic oil and gas industry finally waking up to the reality that, if natural gas prices don't rebound soon, that many could wind up in the same boat as the banks and the auto industry, with their assets and cash flow evaporating from under their feet?

Could somebody please tell me how, for instance, Chesapeake Energy is a financially viable entity if natural gas prices don't bounce back from $3.66 per MCF by early next year? At the end of 2008, it had a PV-10 of $15.6 billion. But that was caluclated using a natural gas price of $5.71. What would the PV-10 be at $3.66 per MCF? Would it even be $5 billion?

But this is offset by $14.2 billion in long-term debt.

And look at its daily average production last year (BCF of natural gas per day):


Could Chesapeake have reached "Peak gas"? If they couldn't increase production with prices at $7.00 to $13.00, what's going to happen now with prices below $4.00?

Cheasapeake has announced that it will "voluntarily" cut back its production:

Chesapeake has elected to curtail approximately 240 million cubic feet of natural gas equivalent (mmcfe) per day of its gross natural gas and oil production due to currently low wellhead prices in the Mid-Continent region. The company has curtailed approximately 200 million cubic feet per day of gross natural gas production and approximately 6,000 barrels per day of gross oil production for at least the month of March 2009. The curtailed production represents approximately 7% of Chesapeake’s current gross operated production capacity.


And I'll bet that Chesapeake isn't the only major U.S. independent oil and natural gas producer that finds itself with a huge balance sheet problem.

In the short term I believe they are headged at a much higher price. Long term they claim to have a lot of great prospects for the shale gas play. I dont know much other than that. I think Nate listened to their latest conference call a month or so ago. Also I think you can google a transcript if you are interested.

My new article (just posted) discusses E&P for natural gas: Natty Dread (with shoutout to Jon Friese's recent TOD piece on supply/demand balance)

The first post in yesterday's drumbeat was the most succint,simple explanation of why I am planting as many fruit trees as I can.

I feel it is important to thank you you, WT, and everyone here for helping explain not only current events, but also what is likely to happen in the future.

Thank you all.

Summary of Weekly Petroleum Data for the Week Ending March 27, 2009

U.S. crude oil refinery inputs averaged 14.2 million barrels per day during the week ending March 27, up 23 thousand barrels per day from the previous week's average. Refineries operated at 81.7 percent of their operable capacity last week. Gasoline production increased last week, averaging 8.7 million barrels per day. Distillate fuel production increased last week, averaging 3.9 million barrels per day.

U.S. crude oil imports averaged nearly 9.6 million barrels per day last week, up 170 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 9.3 million barrels per day, 275 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.2 million barrels per day. Distillate fuel imports averaged 263 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased 2.8 million barrels from the previous week. At 359.4 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased 2.2 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories fell last week while gasoline blending components inventories rose during this same time. Distillate fuel inventories increased by 0.3 million barrels, and are above the upper limit of the average range for this time of year. Propane/propylene inventories increased last week by 0.7 million barrels and are above the upper limit of the average range. Total commercial petroleum inventories increased by 6.4 million barrels last week and are above the upper limit of average range for this time of year.

Total products supplied over the last four-week period has averaged 18.9 million barrels per day, down by 4.4 percent compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged 9.0 million barrels per day, down by 0.2 percent from the same period last year. Distillate fuel demand has averaged about 3.8 million barrels per day over the last four weeks, down by 9.1 percent from the same period last year. Jet fuel demand is 1.8 percent lower over the last four weeks compared to the same four-week period last year.

Cushing inventories are down 800'000 barrels.

Note that the rising imports puzzle continues. Oil Movements predicted a sizable drop in OPEC shipments last week so it may not last.

Supply cuts continue to puzzle me where are they? Supposedly everyone is cutting supply yet with a relatively puny decrease in demand we build inventory virtually every week. The money talks bullshat walks is totally true in this market. Everyone seems to be waiting to the other guy to shut in his production. Obviously the O&G guys can't stand prosperity and have extremely sore feet from continually shooting themselves there. I guess counting on OPEC and the industry to have a brain is beyond stupid. Exxon (whom I believe are the biggest liars in the industry) is going to have the chance buy assests for pennies on the dollar if they want. Maybe that's the method to the madness destroy the independents and steal their assets thru cheap oil prices make big profits in the long term.

i dont think it is any secret that reserves are easier(cheaper) to find on wall st and bay st than, say deep water gom. my question is who do they want to acquire and when ?

Exxon (whom I believe are the biggest liars in the industry) is going to have the chance buy assests for pennies on the dollar if they want. Maybe that's the method to the madness destroy the independents and steal their assets thru cheap oil prices make big profits in the long term.

That's certainly the scenario that Thorstein Veblen articulated:

The machine was not concerned with values and profits; it ground out goods. Hence the businessman would have no function to perform--unless he turned engineer. But as a member of the leisure class he was not interested in engineering: he wanted to accumulate. And this was something the machine was not set up to do at all. So the businessman achieved his end, not by working within the framework of the social machine, but by conspiring against it! His function was not to help make goods, but to cause breakdowns in the regular flow of output so that values would fluctuate and he could capitalize on the confusion to reap a profit. And so, on top of the machinelike dependability of the actual production apparatus of the world, the businessman built a superstructure of credit, loans, and make believe capitalizations. Below, society turned over in its mechanical routine; above the structure of finance swayed and shifted. And as the financial counterpart to the real world teetered, opportunities for profit constantly appeared, disappeared, and reappeared. But the price of this profit seeking was high; it was the constant disturbing, undoing, even conscious misdirecting of the efforts of society to provision itself.

--Robert L. Heilbroner, "The Savage Society of Thorstein Veblen," The Worldly Philosophers

Veblen's vision gets even darker:

Looking to the future, Veblen predicted the end of the capitalist—not through the action of Marx's proletariat, but by a tougher force: the machine. The recurring business crisis brought about by the entrepreneur would show to all the inability of the system to remain in balance. As the alternative, Veblen hoped for the day when a corps of engineers would take over the running of the economy, along the lines of a huge, well-ordered production machine. And if this didn't come to pass, then eventually the plundering spirit of Big Business would increase until the system gave way to fascism.

I recommend The Worldly Philosophers, a timeless classic. I have read it more than once.


Orthodox economics achieved such dominance in the U.S. during the last 30 to 35 years that many of these earlier critiques were all but forgotten. The fortress of neoclassical economics became so impregnable that most couldn't even imagine organizing economic and social life in any other way, much less mounting a critique of the status quo.

I wish someone would do an update in the tradition of The Worldly Philosophers to include the work of the structuralists and post-structuralists, such as Foucault.

I think most people tend to defend the economic, social, cultural and political structures as long as they work to their benefit, that is if they even acknowledge they exist. But when those structures begin to work against them, there's a sudden epiphany and a change of heart.

Presumably non-US importers are cutting imports more than OPEC is cutting exports. But I wonder who is cutting imports the most.

OPEC has kept supplying less oil than the month before for about 6 months now. They were too slow, what with the brutal downturn, Saudi playing tough to get the cheaters in line and all but, all in all, they were pretty responsible. It could be a lot worse than ~45$.
The decision not to cut more at the last meeting was troubling though. It could get ugly if demand doesn't strengthen.

I don't know that big oil is really in a position to do much to tighten the supply.

It's Russia's behavior that I find puzzling. They're not a small producer: what they do unilaterally would have an impact. Yet they apparently decided to lose money and make it up on volume, sending their natgas prices down for the ride as well. What are they getting out of this? Saudi is vulnerable militarily so I can imagine what kind of pressure they're under... but Russia?

I've seen lots of comments (by Undertow?) to say that Russian Nat Gas exports to Europe are way down this year, and European stocks are very low. It seems like a game of chicken between buyer and seller. If Europe does not buy when gas is cheap in spring, they will be forced to buy when gas is expensive in autumn. Or maybe Europe is like the UKraine, just too flat broke to pay up.

Last year Gazprom exported 180bcm (6.3 Tcf) They've just revised their export forecast for this year down to 140bcm. Coincidentally (or not) the missing 40bcm (1.4 Tcf) is almost exactly the amount of gas required to top up European storage this summer. But in any case, Gazprom will have to seriously step up production even to get to 140bcm. Exports to Europe through Ukraine in January and February were down about 50% on last year. Haven't seen figures reported for March yet,

And now that their old pipelines are starting to blow up (all reports so far say genuine accident) it just adds one more thing to worry about.

Russian natgas prices used to be indexed on oil prices (with a 6 months delay). Is this agreement void? If not, Russian natgas will be quite cheap in autumn.


The average price for Gazprom's European supplies was also expected to decrease to $260 per 1,000 cubic metres from the $280 previously expected and from around $400 last year, Medvedev said.

Supply cuts continue to puzzle me where are they? Supposedly everyone is cutting supply yet with a relatively puny decrease in demand we build inventory virtually every week.

There's some analysis and projections in the latest IEA monthly report (PDF). Up until now demand destruction has exceeded even OPEC's cuts but supply and demand are now almost back in balance. If OPEC fully complies with announced cuts here's the IEA's projections for OECD stocks

If OPEC continues complying at 80% and US gasoline demand continues to strengthen ahead of the summer driving season, as shown below, then US stocks will probably start falling very soon.

source http://tonto.eia.doe.gov/oog/info/twip/twip.asp#

6 days above average oecd consumption is about 275 million barrels. if demand exceeds supply by 1 million bpd, it would take more than 9 months to work off that (excess) inventory.

wouldn't the excess (export) inventory look the same as excess (import) supply ?

Total commercial petroleum inventories increased by 6.4 million barrels last week and are above the upper limit of average range for this time of year.

Up 6.4 million barrels now add the 1.7 million barrels added to the SPR That's 1.15 million barrels a day in inventory build. Looks to me like supply is freaking STATIC.

The rising imports are most easily explained by assuming that floating storage is now being off loaded. This will continue for some time. Then we should see imports start declining again and then finally we should see on shore inventories start to fall.

Only when we see some steady drawdowns of onshore storage can we assume that floating storage has been depleted until then we have a fairly murky understanding of how much oil is still sitting offshore.

Tanker rates could probably help but I think it would be hard to figure out to many other variables.

Here's the latest public data from the IEA monthly report although it's only up to the start of March.

February  short ‐term  crude  floating  storage  level stabilised  in  the  50 ‐55  mb  range  as  new  charters balanced  out  cargoes  discharged  into  the  spot market.  As  of  early  March, floating  storage  remained close  to  that  range.  However, recent  narrowing  of  the WTI  and  Brent  crude  futures  curves  has  made the practice  less  economically  attractive  and  reports indicate  the  selling  of  more  cargoes. 

Good point.
But we're talking about around 5 million barrels of "excess" (over the trough in import flow rate, that is) imports in three weeks, only for the US.
After taking into account the ongoing implementation of the OPEC cuts as well as the floating storage in the North Sea and elsewhere, you'd end up with a mighty fast depletion of floating storage. I suppose it's possible but that doesn't seem likely. There are probably several factors conspiring to produce this imports surge.

Well I posted this idea over on Pup55 forum to see what he would say.


But the idea is that we are indeed now rapidly drawing down floating storage and because of accounting reasons it works to cause a short term double counting causing a false import surge.

The problem is the same oil is probably being reported as storage by a trader holding the oil in floating storage and as imports as its offloaded. Only once its counted as storage by the final buyer and removed from the report by the trader do you balance out the account. In between you get a false surge of imports that are really just oil changing hands between physical speculators using floating storage and final buyers.

This is not a problem for onshore storage or for direct deliveries that are not held offshore and reported in the inventory then showing up as imports when offloaded.

I don't think the import numbers are corrected for this effect and its only a problem if you are rapidly drawing down a lot of floating storage which is a rare condition in the US. Its not normal for traders to be sitting on 50 million barrels of physical oil playing contango.

If I'm correct as soon as its off loaded then we should see storage levels drop rapidly.

As I posted in Pups thread I think the real number is we have 1-2 days supply at best above the top of the five year range or we could even really be right at the top. This matches up very well with the recent price action in oil which does not match at all with us having more oil then we have had in 15 years.
No way if we had that much oil would the price be above 40. I just don't buy that.

I'm betting that people are now dumping their physical oil since the contango no longer makes that game lucrative which also fits my model they should be dumping oil right now.

If I'm right about this and right that underlying depletion has accelerated then we should expect the oil inventories to draw down rapidly as floating storage is gone and the books balance out.
To repeat myself from what I posted on peakoil.com I'm guessing now 2-4 weeks before we start seeing significant inventory declines. Assuming we are now pulling down about 50 million barrels of floating storage at 2-3mbd. Similar probably for the north sea. Globally there is probably 80-100 million barrels of floating storage thats now being pulled down at about the same rate 2-3mbd. If right then we have about 40 days at most before oil price will begin to rise consistently. And now really guessing I'd suspect say a good 5-10 dollar increase within two weeks if I'm right.

Look, you believe what you want about goes into the price but the contango is not a matter of belief and it's now stronger than it was a few weeks back.

The IEA floating storage number is probably for the OECD. Where do you get this gobal figure of yours? It's the highest I've ever seen.

And 4-6+ mbpd of drawdown is downright ludicrous. Where would the stuff be going?

The car voucher article was fascinating-a possible total of 2 billion and they will take months debating it-Ben Bernanke can piss away 2 billion in taxpayer capital in a matter of hours and not only is there no discussion at all he won't even mention who got the money. Democracy in action.

for the money they spent on the bail out they could of bought every man woman and child 2 smart cars and still have a good portion left over.

Leanan - feel free to clobber this, but I thought we might have some fun with a cooperative joke/story. Feel free to participate - or not.

I get to start :-)

Daniel Yergin, Matt Simmons, and God walk into the G20 Summit...

God drops the stars from the sky.

Daniel Yergin, Matt Simmons, and God walk into the G20 Summit...

God drops the stars from the sky.

Only to have them shine on the American and Chinese flags.

Not to be outdone, Yergin drops something even bigger...

...The End

In recent weeks several posters have prognosticated the impending death of the Internet as power shortages grow and support funds dwindle. Nothing could be further from the truth, as while the Internet may morph and change, the IP protocol suite was designed to be, and has proven to be, remarkably robust.

If the current system of servers and routers which handle data manipulation and forwarding fail on some level, the world will simply need to adjust its expectations to processing and forwarding mechanisms which better match the available resources.

The IETF has been proactively researching this information arena, and already has drafts in place for some potential eventualities.

  • http://tools.ietf.org/html/rfc1149
  • A Standard for the Transmission of IP Datagrams on Avian Carriers

    Avian carriers can provide high delay, low throughput, and low
    altitude service. The connection topology is limited to a single
    point-to-point path for each carrier, used with standard carriers,
    but many carriers can be used without significant interference with
    each other, outside of early spring. This is because of the 3D ether
    space available to the carriers, in contrast to the 1D ether used by
    IEEE802.3. The carriers have an intrinsic collision avoidance
    system, which increases availability. Unlike some network
    technologies, such as packet radio, communication is not limited to
    line-of-sight distance. Connection oriented service is available in
    some cities, usually based upon a central hub topology.

    See, many hands make for light work!

    Doomers just fail to believe that outside the box solutions may fly.

    I appreciate the discussion, but personally, I won't take any promises from either camp.

    As Thoreau said in a fable, 'There's no safety in numbers, or in anything else.' .. so I'll try to cobble together backups for my most valued and essential tools and systems.. I'd like to have a packet-radio setup, and other forms of long/medium-range voice communications, as well as the means to power them. A good shortwave, and you can talk to the world.


    OCD is a terrible thing to waste.

    I think my memory must be based on Phonics..


    The best part of that RFC is that it has actually been implemented!

    Nothing could be further from the truth, as while the Internet may morph and change, the IP protocol suite was designed to be, and has proven to be, remarkably robust.

    Paleo, that is an assertion with irrelevant justification. Whether or not IP is robust has nothing to do with whether or not the internet stays up. Every one of my clients - all we do is e-commerce - has been seeing plummeting sales. They pay me and I pay to keep my bit of the net up. They go - and lots of them have been closing up - and the infrastructure they pay to keep alive goes.

    The net - as currently used - is very much based on 5 9's service. Imagine trying to process credit cards at your favorite shopping site if that were not so. Streaming podcasts? Google? Sure, IP can handle them but consider how podcasts or internet radio and streaming will work over UUCP. The relation between client and server will change; gmail will be a problem. If pornography and advertising no longer pay as much of the freight, if online commerce no longer pays the freight, the network withers. Once it loses 5 9s quality of service, it will contract faster. Just the time for Obama to focus on digital health records.

    POTS has its own power system. That's not so for the internet. Not so for VOIP or any IP services. [I'm not sure about cellular.] The net is subject to financal disruption - MCI, ENRON, Fairpoint/Verizon. The threats to the net have nothing to do with robustness of IP protocol.

    cfm in Gray, ME

    Given simple linear projection, at the point that 20% of the world's population gains gigabit-speed internet access (GPON, Ethernet, bonded VDSL, whatever), the resulting switching and server equipment using today's technologies would only consume about the same as the total world electrical consumption today.

    That means that EVERYBODY in the world could sit around browsing TOD and Facebook, oggling Netflix, and sending emails if only we can settle on 200Mbps per user and double our electrical infrastructure. It seems unfair to continue to penalize the bandwidth-challenged, I would say.

    As for network access -- the phone company came up with the pesky five 9's reliability standard that has plagued us telecom engineers for decades. Cisco masterfully ushered in an era of "Internet model" quality that argues that redundancy and reliability can be better replaced by fault-tolerant network resilience coupled with lower end-user expectations. The dot-com craze popularized this approach to the point that the Internet rapidly exceeded the traffic of the traditional voice network and at lower costs, and investors turned the Bell model on its head. But there has been a cost, and few if any data networks come close to five 9's reliability. There are many, many architectural improvements that have come along with the Internet, including for resiliency, but by and large networks are designed to minimize cost rather than to maximize service availability.

    In the 60's you didn't have to argue with Ma Bell about whether the problem was with your wireless router that you'd mis-configured or Wal-mart switch that your kids had infinite-looped, or an unplugged or failed backup battery in your VoIP gateway, or a DNS fault at your ISP -- if the phone didn't work you knew and they knew it was a Bell issue. Today additional responsibilities are pushed upon the customer (not without value, in many cases), and a host of support fees have been generated as well.

    But I digress....if our cable modems go down as the network fades, we'll eventually drop some of the glitzy flash junk and go back to dial-up. If the server farms go away we'll go back to a more distributed model (remember bulletin boards?). Electronics prices could go back up an order of magnitude and still be cheap. Electronics are dense and valuable -- like the spices of days gone by. Power scales with performance, and slower networks would use much less (especially if they were designed to do so). In short, geeks will keep communications up, even if it leads to a Pony Express solution here and there -- I actually started a protocol approach I called exactly that.

    It's a long way from gigabit passive-optical networks down to smoke signals, but both offer broadcast data transmission over a geographically limited area. Surely somewhere in between we'll find a point that is sustainable?

    I think the sustainable version will more closely resemble ham radio than the Internet as we know it.

    If the server farms go away, so does a lot of the reason people want Internet access. Content isn't free, though it often looks as if it is now. Once that content is gone, why bother being online?

    Lots of the huge server farm functions could be replaced with sorted libraries and distributed file systems. People shared data before the giant server farms were built and most of the internets usefull functions an exist withouth them as it worked a decade ago plus the software development done since then.

    But a fallback to pre AOL times when sysadmins could stomp out spam etc sure sounds nice! ;-)

    I think when it comes to telecom the future will not be quite like the past, and what results will be somewhat of a mash-up of Internet, open-source approaches, ham radio, and probably some new stuff. I don't think the electronics industry is going away anytime soon, and one could certainly conceive of an ad-hoc mesh of varying technology radios interconnected by varying transmission technologies. Some of the most basic needs are very bandwidth-limited -- "I'm OK" or "I need help with the barn" or "I have appendicitis".

    I don't think we "need" quality-managed broadcast video to survive. I do think we need communications. And I think people will pay for services to a surprising degree. Sending short datagrams by telegraph was NOT cheap "back in the day". We see old movies where people seem overly impressed to get a telegram, but that's because it was limited to important uses.

    Content can still be managed, much like the Library of Congress and local libraries once did -- centralized repositories of information. Google will still manage to survive in some form, even if the main server farms end up in Iceland near geothermal sources or by other power plants.

    Cheap energy and cheap credit have caused a value compression, IMHO. An awful lot falls into the "so cheap it's effectively free" segment. As both collapse we'll see striations redevelop, as necessities become more expensive and simply luxuries fade away. I think connection-related content like Facebook and LinkedIn will remain viable, as staying connected in person will get harder but will still offer much value. I think the US mail system as we know it will go away before e-mail does, though both will get much more expensive. And you may have to trot into town to use either.

    In any case, I think I'll have work in telecom for a while yet. Especially since I actually know how analog phones work!

    I don't think we "need" quality-managed broadcast video to survive.

    I don't, either. I don't think that's the reason the Internet took off (though it helped, especially pr0n). When I said server farms, I was thinking more Amazon, Google, eBay, Wikipedia, and the like.

    And I think people will pay for services to a surprising degree.

    This is where I disagree. Yes, people who could afford it paid to send telegrams...but they didn't have the means to send telegrams in their living rooms. They simply didn't send them often enough to make it worthwhile. And a switch to that kind of thinking is a sea change for the Internet.

    Content can still be managed, much like the Library of Congress and local libraries once did -- centralized repositories of information. Google will still manage to survive in some form, even if the main server farms end up in Iceland near geothermal sources or by other power plants.

    Again, this is a sea change. Who will pay for Google? If ads no longer support it, it will become a government service. But will the government be able to afford it? And which government? Would people trust the information on Google or Wikipedia if it's run by a government? China has a lot of cash lying around. What if they buy Google and Wikipedia?

    I'm not expecting the Internet to disappear overnight, but I am expecting it to shrink. Not because we lose the technology or there's a EMP attack or something, but simply because people will be increasingly reluctant to pay for it. This will not be just because money will be tighter all around, but because the Internet will become less valuable. Most of the content on the net is either supported by commercial activity, or paid for by individuals who want a soapbox. I don't see either of those weathering peak oil very well. And the content providers that might replace them, such as central or local governments, aren't likely to provide much that people would be willing to pay for.

    I think that is what they said about cars during the first recession after they were invented.

    I think that is what they said about trains during the first recession after they were invented.

    I think that is what they said about telephones during the first recession after they were invented.

    I think that is what they said about TV's during the first recession after they were invented.

    I think that is what they said about radio's during the first recession after they were invented.

    I think that is what they said about electricity during the first recession after it was invented.

    I think that is what they said about indoor plumbing during the first recession after it was invented.

    I think that is what they said about bras during the first recession after they were invented.

    I agree that the "fee for service" model has never transitioned well into the Internet, except for on-line shopping. Arguably Amazon.com is a success which is driving the likes of Borders out of business (and their competitor, Barnes and Noble, does "well enough" to survive in both virtual and brick & mortar venues).

    I see nothing to say that Sears & Roebuck will come back, so I can't see why Internet shopping will die.

    To make many services viable won't really cost all that much, but I agree that many "free" services will go away. How will TOD survive? Connectivity is the crux of the problem (once you get to your ISP the backbone will probably always be supportable at some bit-rate). With cheaper labor copper and fiber will be significantly cheaper in absolute terms even if more expensive relatively speaking, and copper can work "well enough" for many years in many, many geographical areas. Wireless, perhaps with solar-powered repeaters, could serve the rest.

    As for services, things will have to get a lot worse before pron and on-line social/dating networks go completely away, and further still for e-mail. I could see most of my families cell-phones and most of cable going away before the Internet, and with each cut-back it'll become more precious. It'll be a while before that last $50 per month hurts for anybody who is still employed.

    Google is like the Yellow Pages of the Internet -- it'll have less revenue so it'll be smaller, but I think it will still exist. Wikipedia will probably still exist too. How much gov't support is a good question (and trust is maybe thornier still), but even small rural co-ops can manage triple-play delivery at a profit today (voice, video, data), and they'll probably continue to do so even if the rates are lower and the content is less.

    People like to communicate. Anybody with a teen can attest to the lengths we'll go to just to do it. It won't rank as high as "food and shelter", but it'll be right up there with "lighting".

    I see nothing to say that Sears & Roebuck will come back, so I can't see why Internet shopping will die.

    I think Internet shopping will die because shopping will die. Not completely, of course, but people will be shopping a lot less.

    And the rolling warehouses/door to door models of Amazon and eBay don't seem well-suited to a peak oil world. They are built on cheap oil. Sears Roebuck may not return, but I suspect something like their original delivery system will. People will go to a central location to pick up their purchases, rather than have them delivered to their doorsteps. If peak oil means more localization, as many are predicting, it doesn't bode well for Amazon.com.

    How will TOD survive?

    I am not sure we will. Our bandwidth was paid for via ads; now we have sponsors who pay the hosting bill. The content is provided for free, as we all work for no pay.

    Is that sustainable? I kind of doubt it. Ads are the first thing to suffer when the economy goes bad. Sponsors may not be so generous if money is tighter. And those of us who now work for free might not have the time and resources to do so as the Greater Depression deepens.

    I could see most of my families cell-phones and most of cable going away before the Internet, and with each cut-back it'll become more precious. It'll be a while before that last $50 per month hurts for anybody who is still employed.

    I think you're wrong on that. Some of my coworkers, who I know are making almost six figures (and some much more), are canceling their Internet service. It started when gasoline prices spiked, and is continuing now with the bad economy. Most are keeping their cell phones, especially if they have kids, but cable TV and Internet service are expendable.

    Often, the reason they finally drop Internet service completely is because their computer stops working. Rather than shelling out for a new computer or repairs, they cancel the Internet service.

    Yup Sears was actually a good model, send it out only once it's ordered, hold it till the buyer can make it into town. Did it a lot in the 80's. Mostly tools and farm stuff. Remember a come-along I got that way, still works, and sits in one of the sheds.

    I've stockpiled a Galacticom BBS, software, etc. I probably have 30 pc's stored. Got one box with probably 30 usr modems. When I had the beast up and running, we had 28 serial ports on a 486. The hex address spacing got me, but I had help, an older gent who actually witnessed some of our first atomic tests. He could compute trajectories in his head. He could think in Hex. Just amazed me. Good ole days, all get together and add another bocca board, cuss, scream, and moan, but when it worked it was some sweet.

    There's a bunch of us out here, ole fido net hounds, we know how this stuff works. We'll keep you running in some form for as long as we can. When I first started with a BBS, it was only available in the evening, I can see something like that happening again. Pop on, pop off. But hold files, bigtime.

    Don in Maine

    * Text takes less bandwidth than voice.
    * Even yak herders in Mongolia have cellphones.

    Ergo, the internet lives.

    Paleocon - Yes! How I yearn for that 3-minute long-distance phone call to Grandma from Aberdeen, SD to Tracy MN for $3 in 1951. In today's $'s that would only be about 25 bucks. But, we made fewer calls and saved all of that energy.

    consider how podcasts or internet radio and streaming will work over UUCP.

    Podcasts can use uucico.

    Avian carriers! LOL!

    And yet, I sense other posters have failed to spot the bulge in your cheek, courtesy of your tongue...

    Pigeon Powered Internet Takes Flight

    In 1990, David Waitzman wrote RFC 1149, a tongue-in-cheek standard for using pigeons to transfer information using the Internet Protocol (IP). On Saturday, a group of Linux enthusiasts in Bergen, Norway, succeeded in exchanging some data using the Carrier Pigeon Internet Protocol (CPIP).

    He tells us that he has psycho-somatic illnesses – backaches and pains – that tip him off to changes in the market. “It’s as if you’re a jungle animal, and you see another animal facing you. You have to make a decision: fight or flight? Your hair stands up and you growl and you decide, ‘Am I going to attack because I’m stronger or am I going to run away because otherwise he’s going to eat me?’ You are very tense. And that’s the tension that gives you the backache."

    My grandma had arthritis and would get bad joint pain before a storm. It was a better predictor than the weatherman.

    The George Soros Depression: because his body says so.

    Or as Chomsky puts it, "Sometimes even the herd senses when something is wrong." What Nate Hagens would call integrated intuitive cross-dimensional lateral thinking. [To put words in his mouth.]

    Interesting article linked at LATOC re the superrich ramping up their theft http://www.baltimoresun.com/news/local/bal-md.rodricks24.1mar24,0,685952...

    The apocalyptic rich have hoarded cash and assets - and they continue to accumulate as much as possible - and they've built retreats to allay a deep fear that, when the world starts to fall apart, they will be at the top of a mountain, in a secure compound with its own source of energy and potable water (and a decade's supply of cabernet), isolated from the screaming, rioting masses.

    As the world's population grows, as the recession expands and unemployment worsens, as the globe continues to warm and the oceans rise, as questions about the future of energy and natural resources become graver, as civil unrest becomes a greater concern, the masters of the universe grab all they can. It's an Idaho panhandle mentality on Wall Street - hoard money and assets, and enough golf balls to ride out the coming cataclysm. There's social Darwinism at play in this, to be sure - survival of the richest - but it's the most cynical and self-centered kind, based not on enterprise or capitalism, but on a dark view of the future. Their concept of the greater good is gone, and they certainly display nothing you might call civic-mindedness or patriotism.

    "Qu'ils mangent de la brioche."- Marie Antoinette (Translated: 'Let Them Eat Cake.')

    And, BTW, revolutions generally are not so kind upon the rich or upper class... Ask the Russians, French and Cambodians.

    Revolutions are not very kind to anyone, in all three cases you mentioned, the lower classes weren't particularly sparred.
    Not sure who said that Revolutions are only the replacement of the ruling class by another one, and the lower classes don't really change.

    The article "Auto bankruptcy: What it means" outlined an orderly chapter 11 kind of bankruptcy where the US government input massive amounts of money and there thus are resources to honor manny contracts and even do massive legal work for a few years. But what happens if such resources do not exist and one or more of the large US automakers are dissolved in a chapter 7 or similar bankruptcy where all of the obligations and contracts end up in a paper shredder?

    There is no reason to maintain existing mechanisms other than as a form of trickle-down welfare.

    If people are not buying GM cars, GM will not be buying parts and services to match. The lack of revenue will impact all suppliers regardless of the state of GM itself.

    Unless Obama can get people to buy too many cars for too much money, Humpty GM can not be reassembled to anything resembling its former self.

    Even a pre-packaged bankruptcy may still leave a GM that is too large and that does not understand its market, and that will be destined to fail and fail again in the coming years.

    The more that gets liquidated now, the better. It's time for some cuts that go too deep, as too many up til now have not gone far enough, and the rot continues to spread.


    IMHO, the only part of GM that has any realistic future is the GMC division (with maybe a few Chevy truck plants thrown in), and the only part of Chrysler that has any realistic future is their GEM electric car subsidiary. Those need to be shown to the lifeboats, everything remaining in both companies can and should sink.

    Re the article about US funding Iran and Syria Nuke stuff reminds me of a quote from one of the classic Greek dramas

    "The Libyan legend tells that once an eagle, whence pierce by a dart, looked at the shaft as said, Not with the talons of another but with our own feathers are we smitten"

    Hard to charge the US taxpayer $500 for a hammer when there are no Boogeymen out there to slay-sometimes these Boogeymen can't build themselves up-they need a little help.

    Alan Drake passed on this rather fantastic statement last week:

    To quote Hoda Kotb (native New Orleanian & now co-host on last hour Today show on NBC) when interviewed by her old TV station here:

    First there is New Orleans, then San Francisco, then New York City. The rest of America is just McDonald's


    Surely this must refer to cuisine? But that probably would come as a bit of a surprise to those of you in, say, San Antonio.

    Admittedly about the only time I bother to watch the Today Show is when they make fun of it on The Soup, but in response to Hoda and Alan here are some examples of American "folk" or "traditional" culture as it existed or exists outside of big cities, Easy or otherwise. These are mostly sites that archive music, reflecting my interests.

    Many of you have read the Foxfire books; lesser known are the Bittersweet periodicals and books, covering similar material from the Ozarks. The Max Hunter and Wolf Folklore collections cover Ozarks music; the Digital Library of Appalachia is somewhat more multi-media, and has artists from a broad swath of the South.

    People in the rest of America used to like to sing as well, as documented at the Wisconsin Folksong Collection. Some of the same artists recorded there headed out to California to work on WPA projects, and were recorded again: California Gold, part of the American Folklife site of the Library of Congress. Other collections there include Folk Songs of America, Florida Folklife, Hispano Music and Culture, and many more. Those listed are archival recordings as much as 80 years old, but some of these collections are from modern times, from locales such as West Virginia, for instance. Documenting old styles of fiddle playing is the Rounder label's North American Traditions series, covering artists all over the continent, from Missouri to Cape Breton. This is only one of innumerable such efforts in the folk music movement to preserve archaic styles of music, it stands out by being issued by a more prominent label and having exemplary standards of production.

    Almost all of the singing on the above mentioned sites is unaccompanied. The transition from people singing songs at home, to listening to "artists" perform them on stage or radio or record with backup, happened with the rise to prominence of the commercial recording companies in the 20s and 30s. Thousands of commercially recorded examples of Old Time music, the progenitor to modern Country, can be heard at Honking Duck and Juneberry78s. The latter also has sections dedicated to gospel, black fiddling, Irish and Scottish music, calypso, blues, jazz, and, to finish things up here, Cajun.

    Hope that's of interest. The scope of American traditional art is something few people are aware of, it's as broad and varied as the landscape and the people themselves. These bare performances of songs are more likely what music will be like in the future if we really fall of an energy cliff, too, assuming anyone remembers them in the first place.

    First there is New Orleans, then San Francisco, then New York City. The rest of America is just McDonald's Alan

    Surely this must refer to cuisine?

    Nope. Alan had said on TOD that those are the only cities that matter and the entire nation should do whatever it takes to save them.

    He claimed is was about their 'culture' - Yea, that New York Wall Steet culture is what needs a-saving!

    The argument could be made that the United States of America is under attack from the evil alliance of NYC and DC.

    The Attack is by offshored Oligarchs, not cities.

    The drain on this country and the world economy is the new Empire of Corporate Multinationals..

    but go ahead... part of the game plan is to keep you guys slugging away at the wrong targets. McDonalds thanks you.

    Ha!.....Those are the first cities that need to go. Stop sucking the life out of rural America.

    Well, ONE of those cities qualifies as the hottest, stinkiest place I've ever been.

    New Orleans sucks life out of itself:


    'Sucking the life out of?' You mean giving them a market for their produce, and getting it to foreign ports? Those parasites!

    You confuse what was (America once had a diverse and rich musical heritage) with what is.

    New Orleans still has music as an integral part of life and much of it is live. A brass band practicing in a parking lot, Mardi Gras Indians getting together in a bar to practice their chants, playing and singing on the stoop, the Farmer's Market has a band most weeks, free concerts downtown every Wednesday, Jazz Fest, WWOZ#, this is New Orleans.

    I was in Austin during the Armadillo World Headquarters days, and the first SXSW and saw what people were trying to do, and what was created. But the focus shifted to success, "making it big" and by the time I left Austin (the day GWB was sworn is as governor), what little organic music "spirit" there was in Austin had shrank. It certainly was not a part of everyday life.

    The bizarrely high creativity of New Orleans, is, I believe, directly related to our lack of social pressure to conform. "Be who you want to be", as the old standard says.

    Best Hopes,


    # Having older professional musicians as DJs adds greatly to the station.

    With all the people who dislike technology and have diebetic people in their life they DO care about I present:


    Yeast cells feeding on the glucose in human blood might one day power implants such as pacemakers. A living source of power that is able to regenerate itself would eliminate the need for regular operations to replace batteries.

    (insert April 1st date comments and comments about 'might one day')

    I'd suggest that these birds would be suitable for use with the protocol I posted early, but I suspect it would then only be compatible with Linux servers.

    What is a "diebetic?"

    Dude, he spelled it wrong.

    He meant dietetic.

    I think I found one, On-topic, but better for April 2nd.

    Since a Western diet conducive to diabetes has led us not to improved eating habits but to a growing diabetes industry, complete with its own magazine (Diabetic Living), Mr. Pollan finds little wisdom from the medical establishment about food and its ramifications. “We’ll know this has changed when doctors have kicked the fast-food franchises out of the hospitals,” he says.


    Re: Lake Layla, Saudi Arabia

    "Today, alas, Layla Lake has been pumped dry, apparently for agricultural purposes."