Drumbeat: April 12, 2009

Cheap Oil Forever: Why Prices Will Keep Falling

Despite all the worries over "peak oil," the fact is that the major bear markets in oil have been demand, rather than supply led. And when demand eventually picks up, there's usually some new alternative (nuclear energy, natural gas, green technologies) waiting to pick up some of the slack. The real price of oil today is now at the same level as in 1976 and, before that, in the 1870s, when oil was first put to mass use in the United States. This long-term price decline is due mainly to the constant discovery of new fields and greater energy efficiency, making nonsense of the idea that the world is rapidly running out of oil.The experience of the 1980s is instructive in the current context as well.

Japan and Europe continued to grow strongly in the 1980s, and yet oil consumption remained essentially flat through that decade as both the regions strived to achieve better fuel efficiency and switched to alternative sources of energy, such as nuclear power. Similarly, 90 percent of the growth in new oil capacity since 2004 has come from biofuels, synthetic oil and natural-gas liquids. As countries get richer, their per capita consumption of commodities declines. It's a myth, then, that the boom in China and India will inexorably drive up oil and other commodity prices.

Is Energy Security Desirable?

The pursuit of "energy security" has brought us to the brink. It is directly responsible for numerous wars, big and small; for unprecedented environmental degradation; for global financial imbalances and meltdowns; for growing income disparities; and for ubiquitous unsustainable development.

It is energy insecurity that we should seek.

The uncertainty incumbent in phenomena such "peak oil", or in the preponderance of hydrocarbon fuels in failed states fosters innovation. The more insecure we get, the more we invest in the recycling of energy-rich products; the more substitutes we find for energy-intensive foods; the more we conserve energy; the more we switch to alternatives energy; the more we encourage international collaboration; and the more we optimize energy outputs per unit of fuel input.

The global crisis foretold

The pleasures of playing Cassandra are fleeting. Just as you prepare to enjoy your vindication, the juddering realisation hits that the doom you prophesied is at hand.

With electricity ventures, H.L. Hunt's grandson bringing dynasty into 21st century

In the last eight years, by applying Ray Hunt's contrarian business principles and his own unassuming, brainy style, Hunter Hunt, 40, has changed the way the Texas electricity industry operates.

"We clearly see the energy mix of the country and the world evolving," Hunter Hunt said.

"Oil is certainly part of the future of Hunt as far as the eye can see," he said, but "30 years from now, if the fuel mix of the globe looks like it does today, it's a perilous situation," threatening the security of the U.S. energy supply.

Crude prices could hit $60 in Q3

Iran's oil minister said on Sunday he believed crude prices could rise to $60 a barrel in the third quarter of 2009, but that $75-80 was needed to secure future supply.

Gholamhossein Nozari also called for cooperation between Opec and producers outside the 12-member organisation to help stabilise the market, with oil prices still trading about 65 percent below their peak in mid-2008.

Power plants drive new construction projects

From Kuwait to Saudi Arabia, power plants are becoming the Gulf’s new symbols of growth as the region’s development focus shifts from soaring towers to infrastructure. The recent drought in project financing has left the Gulf’s shores littered with the shells of half-built property developments, some of which may never be completed. GCC governments are now pushing the region’s banks to direct lending to power and water projects instead, and have announced plans to award contracts for a flurry of developments in the sector.

Demand for refined oil to rise in GCC

The Gulf Co-operation Council (GCC), along with Iran, remains one of the last regions in the world where demand for refined oil will grow in 2009.

Demand for refined products in the region is expected to increase by 205,000 barrels per day this year, even as global demand contracts substantially, a study said.

China and Kazakhstan may sign $10b accord for oil

China, the world's second-biggest energy consumer, may agree next week on lending $10 billion to Kazakhstan in return for the right to take a stake in an oil producer in the Central Asian country.

Iraq, Russia discuss oil, military cooperation

MOSCOW — Iraqi Prime Minister Nouri al-Maliki met Saturday with Russian business leaders to encourage them to take an active part in rebuilding Iraq’s economy.

Turkmenistan flexes muscles in gas tiff

Turkmenistan's rebuke of Russia over a pipeline explosion this week reflects the Central Asian state's unease over Moscow's reliability but is unlikely to spark a new "gas war," analysts said. In an unusual step for the secretive ex-Soviet state, Ashgabat publicly blasted energy-giant Gazprom for an explosion on the Central Asia-Centre supply network that caused the interruption of Turkmen gas supplies to Russia.

Global crisis may block GCC nationalisation drive

Ambitious job nationalisation plans by Gulf oil producers could become the latest victim of the global financial turbulence as private sector retrenchment policies would scare off citizens, according to a key Kuwaiti bank.


Oil companies are committing more than 300 safety breaches on North Sea oil and gas rigs every year, raising fresh concerns about dangers faced by offshore workers following the Super Puma helicopter tragedy earlier this month in which 16 people died.

Figures obtained by The Sunday Times reveal that inspectors from the Health and Safety Executive (HSE) investigated more than 1,000 incidents between 2006 and 2008. They included evacuating rig workers without supplying them with the immersion suits essential to survival in the North Sea, and failing to maintain gangways and railings, leading to serious injury.

South Africa: Call for oil firms and state to join forces

A partnership between government and oil refineries is needed to secure the fuel supply, said Peter Noke, national director of the SA Petroleum Retailers’ Association.

Noke suggested major oil companies be offered a share in a planned multibillion-rand PetroSA refinery at Coega industrial zone near Port Elizabeth.

Power outage hits industrial output in Punjab

Industrial productivity remained under pressure in Punjab during the week due to shortage of power.

The industries that used to run three shifts a day now operate only two shifts resulting in a steady decline in the workforce. The All Pakistan Textile Mills Association (APTMA) strongly protested against unscheduled disruption of gas supplies to its member units.

Textile exports that are already under pressure would suffer further as a result of uncertain energy supplies.

Kenya: Motorists' association wants govt to enforce fuel price control measures

The national association of motorists is appealing to the government to enforce fuel control measures to prevent random increases in pump prices.

The association says such increases will affect the citizens through higher transport charges, compounding further to the hunger crisis and record high food prices.

Graft in China Covers Up Toll of Coal Mines

ZHONGLOU, China — When an underground fire killed 35 men at the bottom of a coal shaft last year, the telltale signs of another Chinese mining disaster were everywhere: Black smoke billowed into the sky, dozens of rescuers searched nine hours for survivors, and sobbing relatives besieged the mine’s iron gate.

But though the owner and local government officials took few steps to prevent the tragedy, they succeeded, almost completely, in concealing it.

Help Iran go nuclear

Should the United States sell advanced civilian nuclear reactors to a Middle East country that doesn't seem to need them? A country that can keep pumping oil for the next 100 years, that has a pipeline to a vast natural gas field next door and enough desert for a solar panel array of biblical proportions?

No, it's not Iran. It's the United Arab Emirates, that federation of seven states, proposing the efficient and safest nuclear-generating program money can buy. It intends to purchase third-generation nuclear reactors from France, the United States, South Korea or Japan to power and air-condition its glittering desert cities and use the surplus heat to desalinate its drinking water at the same time. And it's in the U.S. national interest to help the UAE do it, as counterintuitive as that may seem to the American right wing, the green wing or nonproliferation hawks.

Woods burner

On April 30, 1844, Thoreau started a blaze in the Concord Woods, scorching a 300-acre swath of earth between Fair Haven Bay and Concord. The fire was an accident, but the destruction of valuable woodland, the loss of firewood and lumber, and the narrowly avoided catastrophe that almost befell Concord itself angered the local residents and nearly ruined Thoreau's reputation. For years afterward, Thoreau could hardly walk the streets of his hometown without hearing the epithet "woods burner."

That the father of American environmentalism could have been the scourge of the Concord Woods may seem too ironic to be true. Yet, not only did this unlikely event actually occur, but it seems quite possible that, given Thoreau's general lack of direction at the time, as well as his growing interest in pursuing a career as a civil engineer, America's first great naturalist might not have undertaken his Walden experiment at all, had it not been for the forest fire he sparked a year earlier.

Briefing: Electric cars: Plug in, drive off

The government is promoting the use of electric cars through a subsidy for new purchases. Is this really the way to save the environment?

The race is on to create more mean drivers

Today’s green cars are fitted with systems that reward drivers for their economy.

Dyer: Half an ark won't do

"We want to be in (the new UN climate pact), we want to be pragmatic, we want to look at the science," said Jonathan Pershing, the head of the US delegation, during the talks on cutting greenhouse gas emissions in Bonn last week. So how will the Obama administration reconcile political "pragmatism" with the scientific realities? "There is a small window where they overlap. We hope to find it," Pershing explained. But it doesn't really exist.

Cows With Gas: India's Global Warming Problem

Indolent cows languidly chewing their cud while befuddled motorists honk and maneuver their vehicles around them are images as stereotypically Indian as saffron-clad holy men and the Taj Mahal. Now, however, India's ubiquitous cows — of which there are 283 million, more than anywhere else in the world — have assumed a more menacing role as they become part of the climate change debate.

Monnbiot: Plastic bag obsession is carrier for environmental ignorance

Don't get me wrong – I don't like plastic bags either. We use too many of them, just as we use too many of all the earth's resources. They litter the countryside and cause problems for wildlife when they end up in the sea. But their total impact is microscopic by comparison to almost anything else we do. As environment writer George Marshall records in his excellent book Carbon Detox, our annual average consumption of bags produces 5kg of carbon dioxide a year. Total average emissions are 12,500kg.

Why the Ecologist has gone online

We are closing down our print edition to focus on the internet in search of a broader, more immediate impact.

Poor prognosis for our planet

Every patient with an incurable illness will ask how long they have to live. The answer goes something like this: "No one can say how long you may live, because every individual is different, but focus on the changes you observe and be guided by those. When things start changing for the worse, expect these changes to accelerate. So the changes that have occurred over a year may advance by the same degree in a few months, then in weeks. And that is how you can judge when the end is coming."

Apply that thinking to climate change. When An Inconvenient Truth opened in 2006 it was generally supposed we had a window of two or three decades to deal with climate change. Last year that shrank to a decade. Last month Australia's chief scientist, Penny Sackett, told a Canberra gathering that we have six years to radically lower emissions, or face calamitous, unstoppable global warming.

UK goes into ecological debt on Easter Sunday

Think-tank study points to the date Britain's ecological debt begins - when the country starts living beyond its means and relying on international imports.

A Blueprint for a Safer Planet: How to Manage Climate Change and Create a New Era of Progress and Prosperity by Nicholas Stern

Climate change is an issue to which economists in the past have contributed some spectacular idiocy. Even if they accepted the reality of man-made global warming, they argued that risks were small and that the potential benefits to the unborn were not enough to justify investment. In their opinion, money would be better spent on more pressing problems such as fighting disease, improving crop yields and providing clean drinking water. Adapting to a warming climate would cost less than trying to mitigate it, they said.

These are the arguments that fuelled America’s fears of unemployment and gave a spurious academic gloss to the Bush administration’s retreat into protectionism and its refusal to look science in the face. Stern winnows them away like so much chaff. He makes the obvious point that communicable disease and water shortages will be exacerbated by global warming. They are not competing imperatives, they are one and the same. So it is with global poverty. The effects of warming will make poor people poorer, and the hungry hungrier. “The two great challenges of the 21st century, fighting world poverty and tackling climate change,” he says, “must be tackled as an integrated whole by a united world.”

Happy Easter!

(Darn cars!)

The author of "Cheap Oil Forever: Why Prices Will Keep Falling" doesn't seem to understand the Red Queen's Race, the idea that new oil production is not an addition to existing supplies but rather a partial replacement for depleted supplies. When I talk to non-Peak Oilers, I find this is the most difficult point to make them understand, that new oil doesn't add, it replaces and only partially at that.

"This long-term price decline is due mainly to the constant discovery of new fields and greater energy efficiency, making nonsense of the idea that the world is rapidly running out of oil."

The fallacy here is that of the man who fell off the roof of a 50-story building and as he passes the 26th floor muses to himself that there are still lots of floors left.

"Similarly, 90 percent of the growth in new oil capacity since 2004 has come from biofuels, synthetic oil and natural-gas liquids."

The author of this piece seems to think that syncrude and NG liquids are alternative fuels. Biofuels, of course, are only a tiny fraction of any increase.

"As countries get richer, their per capita consumption of commodities declines."

The fallacy of this argument is that it is the absolute consumption that matters, not the per capita. China, India, and the USA (the three most populous countries in the world) might reduce their per capita consumption but because their populations are still growing, the absolute amount of commodities used will grow over time, even if individuals are more efficient.

Yeah, the writer has no clue about energy.

He wrote:

...Optimists say a revival in consumer demand will drive up oil and other commodity prices, while pessimists are buying commodities as a hedge against a feared outbreak in inflation, given all the money central banks are printing across the world.

Both scenarios ignore history, which shows that only one commodity rises in an inflationary environment: gold. Other commodity prices tend to bloom only during the mature stages of a boom when the global economy overheats and demand briefly exceeds supply...

He looks to prices for metals, as well as oil, ignoring the direct link between mining and the energy used to recover and process the metals into useful forms. It takes energy to concentrate the diffuse atoms of iron or copper or aluminum and thus the price of these in the market is directly a function of the price of the energy used to make these processes go.

He's driving toward a resource cliff looking in the rear view mirror. He fails to notice that the Earth is a finite space and there was very little fossil fuel near the surface to begin with. It's an obvious fact that those fossil fuels will be harder to recover and more expensive in economic terms as time passes. Unfortunately, there are many people with similar blindness...

E. Swanson

In the short run, he is correct. Global warming will necessarily reduce the human population and the price of oil -- who will need the stuff anyway when complex societies are collapsed?

In the long run, he will be correct. Global warming will bring us depopulation, large shallow seas, algae beds, etc.

In only a few tens of millions of years, tectonic activity will have squished the algae into oil. The remnants of the human population can start all over again!

I really wonder about the "per capita consumption of commodities declines" thing. In wealthy countries, heavy industry tends to move to poorer nations, that are more likely to put up with pollution, labor abuses, etc. But does consumption in rich countries really decline - if you consider imports of finished goods that aren't considered commodities, but were made out of them?

I remember seeing one study that estimated that 50% of the supposed "increased efficiency" in western countries after the '70s oil crisis was not actually increased efficiency, but outsourcing of energy-consuming industries overseas.

EIA 1.8 World Consumption of Primary Energy by Energy Type and Selected Country Groups
www.eia.doe.gov/pub/international/iealf/table18.xls (SPREADSHEET)

GDP data from here

I have no idea of the kinds of errors that might exist in that data, but when combined, you can show that energy efficiency - as defined by GDP/BTU (global) - more than doubled over a 25 year time frame. (GDP in billions, BTU in quadrillions)

1981: GDP(curr$)/BTU = 42.7
1981: GDP(ppp)/BTU = 68.8

2005: GDP(curr$)/BTU = 97.1
2005: GDP(ppp)/BTU = 185

So, what happens to GDP when the BTUs become much less affordable.

GDP = 97.1 x BTU.

The BTU are twice as heavily geared as they used to be 25 years ago!

The GDP gearing works in reverse when (not if) the BTUs go into decline!

The loss of a barrel of crude oil energy slaves today is much more economically serious than it was 25 years ago.

Hmmm. Something worth thinking about.

Kind of a 'potential energy' built into our increasing sophisticated production technologies that could unwind with greater force than it first would appear if the rate of energy scarcity overwhelms the rate that new efficiencies come online.

Agree that we are more efficient than 1981 but I wonder how accurate is the GDP number when one accounts the "TRUE" rate of inflation. If the inflation number is exaggerated (fudged) by just 1.5% point, all that gain on GDP/BTU is meaningless. Also, another point I want to raise is "during this period of great economic progress where you see the US GDP almost quadrupled -- HOW the heck did we in US manage to get so much in DEBT?" Isn't a lot this GDP growth are fueled by DEBT?

What you are describing is called energy intensity and it is covered by V. Smil in "Energy at the Crossroads" and also by Ayres, Ayres and Warr, et. al. in a series of papers such as:


Capital investment and improved equipment and processes have reduced energy intensity. Developing countries have high energy intensities in part because they are bacis goods producers but also because they do not always use the most efficient processes and equipment.

Great link. Thanks for the heads up. Especially like this quote:

A 'growth engine' is a positive feedback loop involving declining costs of inputs and increasing demand for lower priced outputs, which then drive costs down further, thanks to economies of scale and learning effects.

I've clumsily finding my way to a similar thought.

Here is a link to the Economist Magazine article from 10 years ago, that made basically the same points as the Newsweek article, and which predicted $5 oil for the indefinite future:

Of course, my standard rebuttal is that Peaks Happen, even in areas developed by private companies, using the best available technology, with virtually no restrictions on drilling, so what happens when the world is at the same stage of depletion as regions like the North Sea?

But the fact remains that articles like the one in the Economist Magazine and like the one in Newsweek reflect the conventional wisdom. Peak Oilers are generally considered to be more akin to space alien cultists.

Well, as one critic of the article wrote: "This article furthers the ridiculous belief that as in the past, so will be the future." Truth is, the future will no longer look anything like the past. We are entering a new era, the era of world economic collapse.

That being said it is entirely possible that prices will remain low for years to come. This could very easily happen even while production is dropping. A lot of peak oil people seem to completely underestimate the dramatic effect the economic collapse is likely to have on oil prices. If people are unemployed, or dramatically underemployed, they will be buying very little petroleum products.

I, for one, simply do not believe that oil prices will rise above $100 a barrel in the next few years. Our economy is not just based on oil, it is based on cheap oil. And if oil prices rise in the near future, it will have an exacerbating effect on the economy, driving prices back down again.

Ron P.

Our economy is not just based on oil, it is based on cheap oil.

Just needs repeating is all.

As countries get richer, their per capita consumption of commodities declines.

Pure drivel. Time after time, in article after article, we are reminded that the average U.S. citizen uses thirty times the energy resources that are used by a citizen of India.

The stages of development are pretty much set in stone - or maybe rock oil as it used to be called. Once a society reaches a certain point, call it the Henry Ford inflection, consumers and businesses replace animal and people power with IC fossil fuels. The results are entirely predictable: More production and more consumption of everything, especially oil. Unless there is none to be had.

This article is a classic BAU fallacy, the kind cornucopians everywhere quote to encourage politicians to fund new airports and cloverleafs to serve new suburban residential grids. Lots of money in that kind of BS, everybody wins for a while. Lots longer than any political election cycle or quarterly reporting period. Maybe it's this different time cycle that makes Peak Oil so hard to grasp?

Why does 75% drilling efforts waste?

You can read the full story at this URL:
Best regards
Andrey Berg

that is sick, very sick.

amanda lewis repported yesterday " the bunny has been very busy". i know not what it means, but it can not be good.

Yes the image of the Easter Bunny is sick yet...we are sick.

Its a perfect scenario for us and our country.

"Please put that dog out here. You know he nipped at Wendi.The farmers love dogs.It'll be ok."

Later I saw the almost hairless Chihuahua standing by the side of the curb on the bridge over the creek. Standing in the snow and slush and freezing wind and watching anxiously for the once caring adults and children to return and pick it up. For a while it watched each vehicle as it sped by throwing a mix of slush,dirt and snow in a spray over it. As I passed it by in the 18 wheeler grain truck I saw the look on it face. In my rearview mirrors I saw it then turn and walk off the curb and head for the nearby fringe of woods. The only shelter it could sense.

It would become frozen dinner for a wandering coyote before the moon rose that night. Just because it looked like the dog in the Taco Bell advertisement on TV. Talking and amazing the spoiled children of the family that now dropped it out in the country in a blizzard because the kids demanded one like it. Good until they almost broke its tiny legs and now they ditched it.

Americans are sooo good to other lifeforms.

Yes the bunny knows.

And we act like we don't.


Agreed that the bunny image is a perfect metaphor for what our society has become.

Regarding the chihuahua, I agree with this blog that posits the fallout from people who bought into Paris Hilton's use of small dogs as fashion accessories:

SF Animal Control Reeling from 'Paris Hilton' Syndrome

There are far too many people out there who ran out and got a small animal because it was 'cool' without stopping to think about the massive responsibility involved in properly caring for such a critter.

we have a steady stream of former pets (cats), not feral cats, we know because they are not wild, want to be petted and cared for and come in the house. we know not where they may have come from but speculate they are from forclosures and renters moving out. in some cases, i know the cats want to return to their territory but there are just too many for that to be the explaination. apparently some view these pets as throw aways. i wonder if people have gotten accustomed to throw away pets because of everything else that is thrown away.

We've taken in 5 cats plus a 2 month old sick Humane Society kitten whose mum vanished. We're full up at 4 now (2 died) and can't afford anymore (vet bills, time, attention). The 5 cats really wanted a home, clearly were former pets. As you say, some could have gotten lost, but all? One is purring in my lap now as I type. They are all most affectionate.

I see a lot of cats dumped around here, too. I think it's because of the nearby college. The students are mostly not from this area, and leave their pets behind at the end of the term, especially if they're not cute little kittens any more.

Nuclear fallout. U.S. putting more gimmee's in for Nuclear power. (read original here,for many embedded links)

Thirty years after Three Mile Island's failure belched radioactive waste across thousands of families and their homes, the US nuclear industry's still moribund. Why? Although nuclear power's mutant priesthood long ago tricked the public into paying for their toxic accidents (hey, the banksters had to copy someone) through the Price-Anderson Act, even that potential $550 billion subsidy isn't enough. Despite NPR's fever dreams, demand for new nukes has remained dead. Harvey Wasserman describes why:

"No independent financiers will take an un-subsidized flier on new reactors. Nuke operators can't get private insurance on a major melt-down. With the proposed Yucca Mountain dump all but dead, the industry---after fifty years---has no certified place to take its high-level radioactive waste......

Let's help the Arabs develop nuclear power! Yucca Mountain is all but dead, but the Empty Quarter would be a superb place to put all that nuclear waste from the new American reactors that Energy Sec. Chu would like to build!

But most important, the U.S. should endorse and assist the UAE because its proposal could serve as a model to Iran and other countries for how to build an environmentally friendly civilian nuclear plant that doesn't make the world conclude that your real goal is a nuclear bomb.

Ahhh, the peaceful atom program of the 1950's.

How's the promises of that age all working out for us eh?

This rethoric is plain silly. As fossil fuel resources are depleted, we will increasingly rely on nuclear power. It has already begun, and however scary nuclear accidents may seem, switching from coal and oil to nuclear power will actually save lives. (Yes, it will save lives even if there are a few core meltdowns here and there. Nuclear accidents are over-rated.)

If you have not seen Chernobyl Heart, the HBO produced documentary on children living with the effects of a core meltdown, you can view it free here:

Makes you wonder what a life "saved" means when it's still a life thoroughly wrecked.

This rethoric is plain silly.

Would you prefer we discuss how man is so comfortable with each other that fission reactors won't become targets for attack?

(Yes, it will save lives even if there are a few core meltdowns here and there. Nuclear accidents are over-rated.)

And toxic sludge is good for you.

And yet wind/solar heat-PV don't suffer from the issues of 'a few core meltdowns'.

Simple fact is: Nuclear isn't perfect but coal is orders of magnitude worse.

First persuade people to use less energy, then say we don't need nuclear.

First, read this if you haven't.


Next, show me how to build over 400 of them in the U.S. and thousands of them across the planet within the next 10 years and I'll consider it. All with a depression going and energy prices bouncing like a super ball. And, yes, the ten years is meant to reflect the urgency of the climate problem.

So, there is silly rhetoric here, and it is your rhetoric.

Sure, nuclear can be part of the solution in the shorter term for a few sites, but you are not going to get to 80 - 100% cuts in GHG emissions by 2050 via nuclear. No way, no how.

Longer term, we have to replace those thousands of power plants a minimum of 1 time a century, no? More, actually. At a shelf life of around 60 years on a good day, we need 3.3 plants every 200 years.

There are simpler, healthier ways to do this. For example, were you to push for a 75% reduction in global energy use combined with more nuclear you'd not sound like a cheerleader for a losing team.

Even that is not a best option.


Vanity Fair, of all things, has an article about Iceland:

Wall Street on the Tundra

Two months earlier, in early October, as the market for Icelandic kronur dried up, he’d sneaked away from his trading desk and gone down to the teller, where he’d extracted as much foreign cash as they’d give him and stuffed it into a sack. “All over downtown that day you saw people walking around with bags,” he says. “No one ever carries bags around downtown.” After work he’d gone home with his sack of cash and hidden roughly 30 grand in yen, dollars, euros, and pounds sterling inside a board game.

Everyone in Iceland is now keeping their cash at home. They are also hoarding food, and torching their cars.

For the past few years, some large number of Icelanders engaged in the same disastrous speculation. With local interest rates at 15.5 percent and the krona rising, they decided the smart thing to do, when they wanted to buy something they couldn’t afford, was to borrow not kronur but yen and Swiss francs. They paid 3 percent interest on the yen and in the bargain made a bundle on the currency trade, as the krona kept rising. “The fishing guys pretty much discovered the trade and made it huge,” says Magnus. “But they made so much money on it that the financial stuff eventually overwhelmed the fish.” They made so much money on it that the trade spread from the fishing guys to their friends.

It must have seemed like a no-brainer: buy these ever more valuable houses and cars with money you are, in effect, paid to borrow. But, in October, after the krona collapsed, the yen and Swiss francs they must repay are many times more expensive. Now many Icelanders—especially young Icelanders—own $500,000 houses with $1.5 million mortgages, and $35,000 Range Rovers with $100,000 in loans against them. To the Range Rover problem there are two immediate solutions. One is to put it on a boat, ship it to Europe, and try to sell it for a currency that still has value. The other is set it on fire and collect the insurance: Boom!

This Vanity Fair article is a joke. Not many true facts in this article. I live in Iceland. Life is going on mostly as normal. People are generally not keeping cash at home.

To quote an american who has been living in Iceland since 2004 (his blog: http://icelandreport.blogspot.com/2009_03_01_archive.html )

"michael lewis
...recently wrote a fairly "incendiary" piece on Iceland for Vanity Fair magazine, in which he said, among other poorly researched misstatements, that Icelanders were routinely blowing up Range Rovers on the downtown streets. Apparently they were doing this to their own cars to collect insurance money, a scenario that doesn't really make all that much sense after a few moments of reflection. Maybe he deduced this when a kid set off a firecracker (fairly common) outside the downtown bar he was drinking at and someone next to him wryly joked that it was a high-end car getting the torch. He took the man seriously, and built the first section of his article around a falsehood.

The Range Rover story that started out as a cynical Icelandic joke has however taken on a life of its own in the American media. Now Fox News is warning that Iceland is a dangerous place to travel, and even staid old NPR is in on the action, apparently repeating the meme without any further reporting of their own. My dad quoted the NR story to me as though it were fact. Meanwhile, there have not been any cars, overpriced/ugly British SUVs or otherwise, set alight on the quiet streets of the village that is downtown Reykjavík.

Why would a guy like Michael Lewis, an author who I respected for Moneyball - and who does indeed have some good insights in this piece as well, start off his article by painting such a distorted picture of the country he came to report about? Is it perhaps that he came to the place expecting to see a certain level of panic, destruction, and despair, and in fact found nothing of the kind? Did he or his editor feel the urge to invent violence where there was none to be found, perhaps to draw the American audience in to what might otherwise have been a fairly boring piece? Or was it just hard for an American to visit a country that is facing exponentially bigger economic woe than his native land, and yet in which people are managing to live their daily lives with a level of calmness and grace that American society doesn't possess in the best of times?

And if this much out-and-out untruth is being spun out in the world about Iceland, a Western country that is easy to access from both the U.S. and Europe, how can I really believe much of what the news media reports on more far-flung corners of the world?"

Muninn, don't worry, we know our media is all crap; we stopped listening to them a long time ago. This forced them to make bigger lies to get our attention which made us tune them out more, and now it is a vicious downward spiral. You really see how bad it is when you read something you have first-hand knowledge about like you with Iceland.

This piece was on Saturday's NY Times Op Ed and I don't see it in the DB posts:
Mr. Soddy’s Ecological Economy

This is one of the more cogent analyses of our energy-economy predicament to appear in the Times. Some choice quotes:

An economy is often likened to a machine, though few economists follow the parallel to its logical conclusion: like any machine the economy must draw energy from outside itself. The first and second laws of thermodynamics forbid perpetual motion, schemes in which machines create energy out of nothing or recycle it forever. Soddy criticized the prevailing belief of the economy as a perpetual motion machine, capable of generating infinite wealth — a criticism echoed by his intellectual heirs in the now emergent field of ecological economics.

A more apt analogy, said Nicholas Georgescu-Roegen (a Romanian-born economist whose work in the 1970s began to define this new approach), is to model the economy as a living system. Like all life, it draws from its environment valuable (or “low entropy”) matter and energy — for animate life, food; for an economy, energy, ores, the raw materials provided by plants and animals. And like all life, an economy emits a high-entropy wake — it spews degraded matter and energy: waste heat, waste gases, toxic byproducts, apple cores, the molecules of iron lost to rust and abrasion.

He goes on to note the functional role of debt as a call on future wealth and the reason why wealthy folks like creating debt:

“The ruling passion of the age,” Soddy said, “is to convert wealth into debt” — to exchange a thing with present-day real value (a thing that could be stolen, or broken, or rust or rot before you can manage to use it) for something immutable and unchanging, a claim on wealth that has yet to be made. Money facilitates the exchange; it is, he said, “the nothing you get for something before you can get anything.”

Many of the names dropped in article don't always feature prominently in TOD discussions and I have never heard of the author (Eric Zencey) but his writing skills and understanding of our dilemma suggests he would be good to invite for a key post. Heck, the article itself reads very much like it came from the pages of TOD.

I wonder how many people will read this and grasp the implications?

He goes on to note the functional role of debt as a call on future wealth

This is a widespread but highly misleading (mis)understanding. Debt is a promise by one party to pay another. In the context of the total world economy, which is a closed system, debt is simply promises on paper, it has no direct effect on the physical basis of the economy.

Debt is a promise by one party to pay another.

That is not necessarily a contradiction with what the author of the article stated. Debt is a call on the future wealth of the debtor.

In the context of the total world economy, which is a closed system, debt is simply promises on paper, it has no direct effect on the physical basis of the economy.

That statement is so absolutely outrageous I am at a loss as how to reply. I take it by physical basis of the economy you mean physical things like goods and services. These things, in the vast majority of cases, depend directly on debt to finance their production. My dad was a farmer. He borrowed money every Spring to put in a crop and, with the proceeds of his crop, paid it back in the Fall. Without debt there would have been no crop, no physical cotton, corn or soybeans.

Money is created because of debt. Money is borrowed into existance. Without that money the economy would stop growing. When debt collapses the economy collapses. (Which is exactly what is happening right now.) Nothing has more effect on the economy than debt.

Ron P.

debt is simply promises on paper, it has no direct effect on the physical basis of the economy.

Perhaps there is no direct effect, in that I cannot look out my window to watch a creature called "debt" stack bricks to build a brick wall, for instance.

But that is, to me, a hollow observation because it is certainly the case that our economy, which ultimately manipulates atoms and molecules in the real world, uses this technology called "debt" to get the job done.

It think this is what's missing from the Newsweek article about commodities always getting cheaper:

Matter taken up into the economy can be recycled, using energy; but energy, used once, is forever unavailable to us at that level again. The law of entropy commands a one-way flow downward from more to less useful forms. An animal can’t live perpetually on its own excreta. Neither can you fill the tank of your car by pushing it backwards. Thus, Georgescu-Roegen, paraphrasing the economist Alfred Marshall, said: “Biology, not mechanics, is our Mecca.”

Energy is different. It's a mistake to mix it up with other commodities. Given enough cheap energy, you can create, recycle, or find substitutes for other commodities. Trying to replace energy is a different story.

It's even worse, according to Nicholas Georgescu-Roegen.

It's not just energy that undergoes entropy, but the minerals on which civilization depends. Minerals can be recycled, but it becomes progressively more difficult to do so. Some percentage is inevitably lost in the process.

For example, phosphorous is mined from concentrated deposits. When it is applied as fertilizers or incorporated into products (such as detergents), much of it ends up dispersed in the ocean.

I suppose you could look on the organization of minerals into ores as a form of latent energy. Energy from geological process was required to concentrate the mineral. Using the minerals expends that energy, taking us further down the entropic slope.

Bart / EB

For example, phosphorous is mined from concentrated deposits.

Some of that was fixed by biological processes. Concentrated Sunlight, as it were.

t's not just energy that undergoes entropy, but the minerals on which civilization depends.

The minerals are far less replaceable than energy. Our planet has vast streams of available energy, in the form of sunlight, winds, water currents, etc., which are constantly replenished. Once we learn to tap into these on a sufficient scale, the energy part of the problem goes away. But the mineral part does not. We will never have a star trek matter replication machine. The above doesn't mean that we will get those sustainable sources of energy going at a sufficient scale in time to avoid a seriously difficult transition, just that they are potentially available.

We will never have a star trek matter replication machine.

I think we might...given enough cheap energy.

Or we could leave this planet and mine others.

It's energy that's the issue.

Energy to assemble matter? Not so much.

Energy and tech to create robots that mine the other planets and ship refined material back to earth? Now that is a possibility. If people want to pitch for 'lets have microwave power from orbit' - pitching for refined material dropped back into the gravity well strikes me as less of an issue than beaming power back at a level that is 'bout the same as a top of the line PV panel.

A star trek matter replication machine is science fiction at its worst. A little like traveling to the stars in a few days. Works great in the movies but nowhere else.

Or we could leave this planet and mine others.

Even if we had the energy to do this, the energy return on energy invested would be less than 1 to 1000. What could we possibly bring back from Mars that would pay back the energy and effort required to leave the earth, land on Mars, mine something, load it on the ship, leave Mars then land back on earth several years after we left. No payload could possibly be profitable enough to do that regardless of the amount of energy we had.

I'm not saying that I think it will happen.

Just that the limit on technology is energy. (Not just the energy that goes into the actual process in question, but the energy it takes to support the societal complexity the technology requires.)

It's cheap energy that has gotten us around all the other apparent commodity limits in the past. If you don't understand that energy is different, then of course it seems like there's no reason we can't do it again.

It is true that energy is a very important limit; however it is not the only limit. Given an unlimited amount of energy we still cannot do the impossible. We will never have a matter radio transporter no matter how much energy we have.

Einstein said it is impossible to travel faster than the speed of light. Some science fiction writers, Author C. Clark in particular, said he thinks it is possible. He never went farther than that. He just took it on faith that it was possible. So much for science fiction. A Star Trek matter transporter will never be built, not because of a lack of energy but simply because it is impossible.

I agree with you that energy is a very important limiting factor. But please don't suffer the illusion that it is the only limiting factor. There are some things, science fiction notwithstanding, that we simply cannot do. The perpetual motion machine is a good example. Such a machine would violate the laws of thermodynamics. Therefore it is impossible regardless of the amount of energy we might expend on developing such a machine.

Ron P.

Einstein said it is impossible to travel faster than the speed of light.

It's been awhile since my modern physics days, but as I recall, he didn't say it was impossible to travel faster than light. He said it was impossible to accelerate an object that was slower than light to to light speed...because it would take infinite energy. Theoretically, an object could be created traveling faster than light. Or if you could somehow skip the speed of light and go from sublight directly to faster than light, that might work.

So, I don't think traveling faster than light is impossible. Highly improbable, yes, and with a lot of bad side effects to deal with. It would take some major breakthroughs, but given enough resources, time, and incentive, I see it as a problem that could theoretically be solved.

You are taking the same position as Author C. Clark. "Possible that's all." he said. You are sayint "Theoretically possible that's all". That is a position of faith, not science.

And Einstein did say it was impossible to travel at the speed of light. That is the same thing as being impossible to travel faster than light. And we could create an object traveling faster than the speed of light? Now you are really deep into science fiction. The object would have to be created from energy traveling slower than the speed of light. And we haven't even figured out how to create objects at all.

Really Leanan, now you are just being silly. Then again, most of science fiction is nothing more than sillyness.

Ron P.

And Einstein did say it was impossible to travel at the speed of light. That is the same thing as being impossible to travel faster than light.

He said no such thing and its not. What special relativity indicates is that massive objects approach infinite mass the closer to c they get, and that massless objects must travel exactly at lightspeed. Its not the same as superluminal travel being impossible. What special and general relativity indicate however is that the effect of superluminal travel can have 'disturbing' implications for causality, but not necissarily. Comoving stabilized wormholes for instance dont violate relativity or causality.

What relativity does imply on its own are some rather nasty paradoxes that arise from the incompleteness of the theory. There are problems with rotating cylenders and naked singularities that just won't go away.

And we could create an object traveling faster than the speed of light? Now you are really deep into science fiction.

No, thats deep into the realm of theoretical physics. Tachyonic fields arise in quantum field theory and string theory. They aren't exactly usable for anything however...

And we haven't even figured out how to create objects at all.

Of course we have. How do you think we study all the particles that are unstable? We rip them from the vacuum out of nothing.

Even if we had the energy to do this, the energy return on energy invested would be less than 1 to 1000. What could we possibly bring back from Mars that would pay back the energy and effort required to leave the earth, land on Mars, mine something, load it on the ship, leave Mars then land back on earth several years after we left.

Ignoring the effects of meteors on PV panels - the ability to harvest solar energy and convert it into refined products may just make it worth it.

Add into the picture the ability to make a 'mess' of space with lax 'environmental' "laws" - splitting atoms in space to drive a refining operation might have a pay off.

Once you crack the AI nut to operate the machines.
And the space elevator.
And material science to deal with the radiation from Sol AND the fission power sources.
And material science to deal with the thermal stress of space/solar exposure.
And understand how to protect the EQ from solar flares.
And whatever else I've forgotten.

No payload could possibly be profitable enough to do that regardless of the amount of energy we had.

Depends - I'd bet bits of material from black dwarf stars would be a material engineers dream/nightmare. Dream to be able to use, nightmare to work with. Or it would make some awesome weapon - cuz man is all about the weapon.

Depends - I'd bet bits of material from black dwarf stars would be a material engineers dream/nightmare.

You are joking I hope. Do you actually believe that we may be able to travel to black dwarf stars, dozens of light years away, a trip that would take several thousand years at sub relative speeds, extract material from these stars that have graveity of several thousand times that of earth, then escape from this tremendous gravity, and heat that would no doubt melt any metal we know, and travel back to earth with a payload of this stuff.

Of course you may be one of those who believe that we can travel faster than the speed of light, and overcome all obsticles regardless of whether it violates the basic laws of physics or not.

The difference between science fiction and science fact is as great as the difference between actual everyday life and Peter Pan, Tinkerbell, Never Never Land. But some people insist on living in Never Never Land.

Ron P.

Ron, you are limiting the possibilities based on your 20th century education; we all do it. I'm sure people a few generations ago either thought splitting the atom was science fiction or couldn't even imagine nuclear power.
WHY must we travel to the stars when we can send unmanned spacecraft?
WHY must the spacecraft be made of metal?
EVEN if the great heat would melt any metal why not rely on firing an object a high speed through the edge of the star to dislodge a portion of schrapnel to be picked up a safe distance from the star. Many possibilities, all impracticable now, but the future may make some science fiction into reality.

"What else have I forgotten?"

Physics. The space elevator is science fiction at it's best. To begin with, if it could be built, it won't be any good to transport satellites into Low Earth Orbit (LEO). That's because the satellite released at LEO needs to be moving faster parallel to the Earth's surface than the speed of the tether. It would only make sense to lift to synchronous, except that there is still the problem of adding the velocity parallel to the Earth while the lift is underway. Will the tether be able to lag behind the vertical, pulling the mass along while the lifting is underway? Not likely, as that would also slow down the balance mass at the end of the tether out beyond GEO, messing up it's orbit. I think that somewhere in the process, a rocket (and fuel) must be used to add the needed velocity to the system, IMHO. And, there would be a need for the rocket and more fuel to slow things down for a trip back to the surface, and on and on.

Then, think of the problem of actually building the tether, layer upon layer, all to be done while the tether is under tension and with a rapid bonding of each layer to the previous layers. Carbon fiber or nano tubes in epoxy? How long does it take to cure the epoxy as it passes thru the climber? Each climber must be larger than the previous, if only to account for the increasing tension on the tether after each successive layer. And, that 20,000 mile trip to GEO plus the extra distance beyond to the balance mass would take quite a while, at perhaps 100 mph lifting speed, 200 or more hours for the trip.

Lastly, given that the tether passes thru the entire atmosphere, what are the chances that a lightning strike would hit it? If the tether breaks, the upper end of the thing would fly off into some useless orbit, if not break free of Earth's gravity and go to HeyZeus.

Sorry to say, the space elevator just sounds like science fiction to me. Just another distraction from the real problems that Shrub wanted to sweep under the rug, so to speak...

EDIT: Another question which comes to mind is the power needed to lift anything on the tether and where that power is to come from. Consider lifting a 1 ton mass at 100 mph. At the surface, that would take about 533 HP or 398 kilowatts. Scale that up to a decent size load and there's little possibility that the proposed microwave power source could deal with the required amount of power. Of course, there's always cold fusion...

E. Swanson

It appears that the materials problems may be solvable, and the political problems haven't stopped major dams from being built.

As for power, a space elevator needs an "anchor" at the outside end for stability according to the calculations I've seen. Put a nice big solar cell array and/or nuclear plant there and viola! power.

All that said, I personally feel that a space elevator isn't likely to be built because it will prove to be politically impractical for any group that can afford to do it, whether it proves to be possible in the end or not.

Will the tether be able to lag behind the vertical, pulling the mass along while the lifting is underway? Not likely, as that would also slow down the balance mass at the end of the tether out beyond GEO, messing up it's orbit.

Yes, that's exactly the way it works. The counterweight isn't in orbit; as long as the net mass-flow up the tether isn't so large that it bends the tether westward so far that the center-of-gravity of the system is below GEO, there's no problem. The mass being lifted gets accelerated sideways by tapping the angular momentum of the Earth.

Consider lifting a 1 ton mass at 100 mph. At the surface, that would take about 533 HP or 398 kilowatts....

The bulk of the power should be generated by decelerating mass coming down the tether. All you have to provide is enough to cover the losses and the net tonnage going up. (And there's lots of dirt on the Moon that can be exchanged for mass on the Earth's surface.)

I disagree.

First, your comment about the mass of the climber (plus payload) being accelerated horizontally sounds reasonable enough. But, that acceleration would need to be applied as long as the lift is in progress, so, at the upper end of the list, the acceleration would "bend" the tether such that the upper mass would also be accelerated, but in a negative direction. That would move the balance mass or the station at GEO or both away from the desired position directly over the station at the base of the tether, right?. Once the climber stops, the tether would begin to "pull" the upper masses back toward the overhead position. But, once the upper mass reaches the overhead position, it would be traveling faster than that for GEO, so it would continue to travel ahead. Sounds like a great pendulum, since there would be no damping without using a rocket to counter the motion.

Now, you mention generating power by decelerating mass coming down the tether. However, before the system is finished and operational, all the climbers must go past GEO to a greater radius and stop there, thus providing the balancing mass to provide the tension on the tether. So, the motors to power these climbers (each heavier than the previous) must become progressively larger and the power to run them can't be sent up the tether, as the resistance would fry the very thin tether if the energy were passed as electricity thru a wire. Given the power needed, the size of a metal wire would be large, and the initial mass of the tether would be beyond belief. The tether could not be built that way as a metal wire would not be strong enough.

Got any calculations to support your fantasy? As I mentioned at the start, physics is the problem.

E. Swanson

The physics work. Really. It's an engineering problem that looks likely to become a political problem.

The trick is that you cannot use a metal fiber for the structure, so people are working on making carbon nanotube elements for producing the high strength cable from. I don't know what the current state of laboratory progress is, but the main problem is getting the nanotubes to line up properly for maximum strength.

Here's an article from 4 years ago on the then state of the art regarding nanotube ribbons which appeared at the time to be an excellent way to get them to line up properly.

As far as the bootstrap operation goes, we still have rockets and they would definitely need to be used to start operations. I should think that that much would be obvious.

Some advocates of the space elevator I believe have some plausible numbers that work, but only if you have bulk carbon nanotubes. I remain doubtful of a space elevators utility and cost effectiveness compared to other options such as simple chemical rockets, electromagnetic launch, planetary disintigration, etc.

But, once the upper mass reaches the overhead position, it would be traveling faster than that for GEO, so it would continue to travel ahead. Sounds like a great pendulum, since there would be no damping without using a rocket to counter the motion.

Exactly, it's a pendulum, pumped by the Coriolis force on masses moving along the tether. You damp it by scheduling the next load about half a period out of synch with the first. If you've got a steady stream of mass moving along the tether, you get a very slight, permanent displacement from the vertical.

all the climbers must go past GEO to a greater radius and stop there, thus providing the balancing mass to provide the tension on the tether.

Once past GEO, it's downhill to the counterweight.

I can hardly wait for the Pink Unicorns to land their mother ship on the White House lawn and share with us these wonderful technologies.

What could we possibly bring back from Mars that would pay back the energy and effort required to leave the earth, land on Mars, mine something, load it on the ship, leave Mars then land back on earth several years after we left. No payload could possibly be profitable enough to do that regardless of the amount of energy we had.

It doesn't take that much energy to do low energy transfer orbits from mars to earth, or more likely the orbit where earth used to be. One could imagine after the machine gods tear apart the earth for raw material they'll want more raw material to complete a dyson swarm of energy collectors and computronium.

Hello Bart,

Well said regarding the mining of minerals, especially [P]hosphorus.

Recall that the first mined was guanos [an O-NPK product]--very easy to surface gather plus naturally superphosphated to boot to be readily water-soluble for plant root uptake. It also contains lots of [N]itrogen plus other Elemental micro-nutrients to leverage photosynthesis. A mined ton of guano basically yielded one ton that was directly added to the topsoil; a 1:1 input/output process.


Now let's consider some info related to the input/output of P-mining of raw Phosphorites/apatite ores to make I-NPK products:

For general use in the fertilizer industry, phosphate rock or its concentrates preferably have levels of 30% phosphorus pentoxide (P2O5), reasonable amounts of calcium carbonate (5%), and <4% combined iron and aluminium oxides. Worldwide, the resources of high-grade ore are declining, and the beneficiation of lower grade ores by washing, flotation and calcining is becoming more widespread.

Thus, ore mined P-->needs sulfuric acid-->phosphoric acid-->then further chem-processed [plus blending with N & K] into a finished, high potency, much condensed, high NPK ratio product like DAP; it requires much [S]ulfur per raw P-ore ton for beneficiation to become chem-activated for rapid root uptake.

Also, currently 6-7 tons of overburden & raw P-ore is mined, then massively washed and slurried to remove the silt, sand, and other useless materials. Generally: this 6-7 tons reduces down to one ton of finished product when the entire process is completed; a 7:1 input/output reduction process.

Over time, as we inevitably move to mining less concentrated ore [plus greater amounts of overburden that need to be removed first to even expose the ore body]: the input/output ratio will climb higher. Thus, at some point [10:1? 20:1? 30:1?]: the energy required to extract an economic flowrate, then globally transport to the final topsoil square foot will be prohibitive--it will be energetically cheaper to locally recycle every bit of available O-NPK.

In the meantime: Let's hope the mfgs' giant factories continue to use even more energy to continually remove the cadmium, arsenic, selenium, and radioactive Elements to reduce toxic and heavy metal uptake by our crops, too.

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

And one of the key insights, “The ruling passion of the age,” Soddy said, “is to convert wealth into debt..” is achieved by simply standing that equation on its head for the "pre-rich" of the world: convince people that wealth is created by debt! Presto, the financial wizards can blow bubbles!

People didn't really seem to learn this from the Great Depression of the '30's. We might learn it this time. Or not.

People didn't really seem to learn this from the Great Depression of the '30's. We might learn it this time. Or not.

The long wave theory types believe that the lesson needs to be relearned the hard way, once those with living memory of what happened last time die off. We are in the early stages of relearning that one. Seventy five to say ninety years from now the lesson will again be forgotten.

It might be because wealth really is created by debt.

Is that sunlight I see breaking through the clouds of economic ignorance???

This was exciting to see! Imagine, Herman Daly being mentioned in the NYT!

I sent a letter off to the editor pointing out that a lot of that future wealth production is in jeopardy due to the combined effects of peak oil and declining EROEI. Turns out Zencey knows about peak oil, but didn't mention it explicitly.

If you are interested in his background: http://www.esc.edu/esconline/across_esc/experts.nsf/expertslist/EricZenc...

I just posted the seventh in a series on "Steps toward an energy solution" at: Question Everything.

PS. Frank Rich's column was worth a read also.


this resulted in America's paper companies suddenly dumping diesel into their production process solely to qualify for the tax credit.

(and this is for the people who say coal's hazards don't get mentioned)

The Tennessee Valley Authority manipulated science methods to downplay water contamination caused by a massive coal ash disaster, according to independent technical experts and critics of the federally funded electrical company.

Oh and I forget this gem:

MACA represents chemical companies that produce pesticides, and they are angry that - wait for it - Michelle Obama isn't using chemicals in her organic garden at the White House.

Found a wonderful book (via The Economist!) on sustainable energy by David MacKay, a physicist at Cambridge. You can read it online at www.withouthotair.com.

He examines all the sustainable energy options (& by sustainable he means could last 1,000 years) including wind ,wave, nuclear, biofuels, CSP, etc. and does the sums on the basis of the physics.

He's sharp & cheery - an informative & enjoyable read.

I'd be interested to hear what other TODers think.

I just downloaded it Friday (after following the link on boingboing!). I've given it a quick read and, in my opinion, it's a very good discussion of our energy challenges. It pretty much lays out a foundation for discussions of future energy: 1) makes the assumption that for reasons of global warming or peak oil, we must switch to alternative energy (with alt energy defined as something that won't be exhausted for 1000 years); 2) he focuses on balancing energy production/consumption for the UK, but this analysis could be transposed/extrapolated to any country or the whole world. (Although with developing world do you count present consumption or aspirational consumption?) 3) He adds up total consumption of energy, for various sectors, and assuming a W European lifestyle, on a kWh/day basis. 4) He adds up feasible production for various sources, of alternative energy. It will be mighty hard to get things to balance, without a reduction in 3, and even assuming a committed dedication to 4.

The EIA has their 2008 net export numbers out. My estimate for the top five (Saudi Arabia, Russia, Norway, Iran & UAE) was 22.5 mbpd, which is what the EIA shows.

Here are the 2005 to 2008 numbers, some of which have been revised:

2005 23.5 mbpd
2006 23.0
2007 22.2
2008 22.5

Saudi consumption is up at +6.3%/year since 2005 (to 2.4 mbpd in 2008). At their current rate of increase in consumption, they would be at 4.5 mbpd in 10 years.

Here is how our three closest major sources of imported oil (Venezuela, Mexico & Canada) did from 2005 to 2008 (they did 5.3 mbpd in 1998):

2005: 4.7 mbpd
2008: 4.0

I think the situation is worse for importers than just the obvious deteriorating ELM.

The reason? ... because of technology and efficiency gains over the last 25 years or so each barrel of oil today is economically geared twice as much as it was.

So, if the amount of oil we can afford drops back to the consumption levels of say 1990 the GDP will likely drop much more, maybe to levels last seen in the 80s or 70s?


Could you please provide a link to the data? I can't find any 2008 export data browsing the www.eia.doe.gov website.

Ideally, I'd like to see some graphs. I figured I'd take a shot at something myself, but I can't find the data you are referencing above. I'm not sure exactly what would work best to drive home ELM with non-mathematical types, but I haven't seen anything yet. Perhaps there is something I've missed. The individual country 'z' graph doesn't do it for me.



Go to Select a country. Click on history for 10 year data, and they have Excel files for earlier data. The data tables appear to be updated, but not all of the graphs.

Thanks. I was looking for the data all collected, but I guess they haven't done that yet.

Interesting that Saudi Arabia's peak exports were in 1979-1980.

More doomer porn.... Whoohoo!



Hello TODers,

Recall my earlier post where I guessed maybe 5-10% of our 16,000 USA golf courses may close this year--I might be too optimistic by half:

Golf suffers in reeling economy...

..The global recession has touched all areas of the sport. A report last year by the National Golf Foundation suggested that private clubs, on average, are losing members and rounds played. Between 10 and 20 percent of the country's 4,400 clubs are at risk financially.

..Golf course architecture, planning and construction have stalled. In February, the ColoVista Country Club in Bastrop closed after seeking a new owner for more than three years. Another indicator: Travel + Leisure Golf magazine stopped publishing after its advertising-lean March/April issue.

..Then, "Boom! It [new course construction] just stopped." The recession has, in many ways, "decimated the golf industry," he said.

Particularly vulnerable is the resort-golf segment, which depends heavily on corporate meetings and retreats. Now that companies are watching more closely the way they spend, golf resorts are trying to cope with the loss of that revenue.

Old golf design values prove vital in new economic conditions

.. The point is, Old Tom, and even his son, Young Tom, for that matter, managed to create masterpieces that were fairly self-sustainable. Courses with wind-chiseled fairways, scraggly hills and flowing grasses blend into the seaside dunes. Imperfections created by the rugged climate add charm and challenge.

Early American architecture borrowed many of those elements. But everything changed in the 1960s with the Masters and color TV. The average Joe wanted to putt on quick greens and walk pristine fairways, too. So underground irrigation systems like Augusta National's were installed all over, maintenance programs ramped up, housing developments sprang up around courses and $50 cart-only rounds became standard.

"Augusta Syndrome" still exists. But our infatuation with perfect greens requiring two daily mowings and budget-straining fertilizations have put us in a deep pot bunker. Rounds played are decreasing. More courses are closing than opening.

Hello TODers,

April 13 (Bloomberg) -- Japan’s wholesale prices fell at the fastest pace in almost seven years, adding to signs the world’s second-largest economy may return to deflation.

Lower Grain Prices

Japan’s agriculture ministry lowered prices of the grain sold to processors by 14.8 percent on average this month, the first drop in three years, after import costs fell on a higher yen and a slump in overseas markets. The country imports about 90 percent of its wheat needs.
Remember, the lower grain and other foodstuff prices go, the more likely farmers will plant less & less.

Can the "Cheap Oil Forever" story really be as silly as it looks? I'm no expert, but a couple of things jump out at me as flying in the face of common sense:

...for the past 200 years, commodity prices have been trending downwards, thanks to new technologies, greater efficiency in extraction and the substitution of one commodity for another...

In other words, commodity prices have always declined, except for those times when they didn't? Is this really helpful?

The real price of oil today is now at the same level as in 1976 and, before that, in the 1870s, when oil was first put to mass use in the United States. This long-term price decline...

If oil costs about what it did 30 years ago and 130 years ago, how does that represent a "long-term price decline?" What happened to that "greater efficiency in extraction" that should have lowered prices dramatically over 130 years?