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DrumBeat: May 13, 2009
Posted by Leanan on May 13, 2009 - 9:37am
Moscow warns of future energy wars
Russia has warned that military conflicts over energy resources could erupt along its borders in the near future, as the race to secure oil and gas reserves gains momentum.A Kremlin policy paper, which maps out Russia's main challenges to national security for the next decade, said "problems that involve the use of military force cannot be excluded" in competition for resources.
The National Security Strategy's release coincides with a deadline for countries around the world to submit sea bed ownership claims to a United Nations commission, including for the resource-rich Arctic.
The paper, signed off by Dmitry Medvedev, Russia's president, says international relations in the next 10 years will be shaped by battles over energy reserves.
"The attention of international politics in the long-term perspective will be concentrated on the acquisition of energy resources," it said.
Nigerian Militants Wage ‘Bloody Battle’ in Oil Region
(Bloomberg) -- Nigeria’s main rebel group, the Movement for the Emancipation of the Niger Delta, is fighting a “bloody battle” against government troops and advised oil companies to evacuate the delta region within 24 hours.A government attack today against two rebel camps sparked the fighting, Jomo Gbomo, spokesman for the group known as MEND, said in an e-mailed statement today.
“A bloody battle is ongoing and two gunboats belonging to the army have already been sunk by mines,” Gbomo said. Fighters are on alert to “defend their positions and unleash a horrible toll on the oil industry and the Nigerian economy.”
Kazakhs say yes to Russia gas link
Kazakhstan is set to take part in a Moscow-led gas pipeline, which could divert potential supplies away from Europe's Nabucco project, days after refusing to commit to the European Union-backed plan to cut reliance on Russia.
BP's US industrial customers see falling oil demand
LA JOLLA, Calif. (Reuters) - BP's industrial customers in the United States are still seeing falling oil demand, Tony Hayward, CEO of oil major BP, said on Wednesday."Most of our industrial customers are still seeing declining demand. It's not at the pace it was in the first quarter," Hayward said.
Solar power unlikely to be competitive - BP
LA JOLLA, Calif. (Reuters) - BP CEO Tony Hayward said on Wednesday solar power technology was unlikely to ever be competitive with more conventional energy sources."I think solar is probably the most challenged of all of BP's alternative energy interests," Hayward said.
Ethanol may replace 25 pct of US, Europe mogas-BP
LA JOLLA, Calif. (Reuters) - Ethanol could replace up to 25 percent of gasoline supplies in the United States and Europe, Tony Hayward, CEO of oil major BP (BP.L), said on Wednesday.
Developing oil sands to become even more costly: CERI
Even as oil briefly crossed above US$60 a barrel Tuesday, what's becoming increasingly clear is that Canada's oil sands won't be the Holy Grail everyone expected to meet the energy supply needs of the future.As shown in a report Tuesday by the Canadian Energy Research Institute, the cost of complying with climate-change legislation that is being aggressively pushed in the United States will make Canada's oil sands, already the world's most expensive to develop, even more costly.
The Man From Plains, With Lessons From the '70s
Calling Jimmy Carter to testify about energy security, it might seem, is a bit like calling Michael Vick to testify about pet care.But John Kerry is a gambler, and the new chairman of the Senate Armed Services Committee invited the 39th president to talk to his panel about his cardigan-wearing days in the White House -- and why the nation, 30 years later, still hasn't solved its energy problems.
A lesson in meeting challenges of the downturn
In his best-selling book, The Upside of Down, Thomas Homer-Dixon advances the thesis that environmental and economic breakdowns have an "upside." While such breakdowns may be accompanied by many disastrous effects they also present unparalleled opportunities for reinventing economic and political systems -- if we have the capacity to recognize those opportunities and the courage to seize them. Hence the "upside of down."As Canada struggles to find a way through the current economic downturn, we would also be wise to consider an analogous phenomenon -- the "downside of up."
Libya Wants Oil Prices to Rise Further, Top Oil Official Says
(Bloomberg) -- Libya wants crude oil prices to rise further, the top oil official of the North African nation said in a telephone interview.OPEC, the supplier of 40 percent of the world’s crude, will take into consideration the increase in prices when it meets on May 28 to decide whether a cut in production is needed to support prices, said Shokri Ghanem, the chairman of Libya’s National Oil Corp. “There is still an oversupply in the market,” he said.
Aramco output hits 3.2 bln bpd in '08
Saudi Aramco said Wednesday its 2008 total crude oil production reached 3.2 billion barrels, with its 2008 average daily production standing at 8.9 million barrels a day.
Natural Gas Prices and LNG's Dirty Little Secret
While the drilling rig count, and especially the gas-directed rig count, are down sharply from last year and continue to fall, the key question remains when we will get an upturn in gas demand from recovering automobile and housing industries. Most gas industry CEOs and Wall Street analysts are confident that all that is needed for a sustained recovery in natural gas prices is an uptick in gas demand, but more importantly the fall in production due to the gasrig count downturn. Once gas prices recover, then drilling should resume, but due to the rapid production declines for most gas shale wells, the industry will be spending quite a bit of time trying to catch back up with falling supply in the face of rising demand thus sustaining higher natural gas prices.
Love Affair with Gadgets Squeezing Power Supply
LONDON -(Dow Jones)- The rapidly growing number of televisions, laptops and other electronic gadgets in households is putting a growing strain on electricity supplies and jeopardizing efforts to cut carbon emissions, the International Energy Agency said Wednesday.Without new policies by governments and gadget-makers to improve the energy efficiency of electronic devices "efforts to increase energy security" will be jeopardized, the Paris-based agency said in a new study.
Quebec moves to adopt cap and trade system
QUEBEC AND TORONTO AND OTTAWA — Pressure is mounting on the federal government to fight climate change with a national carbon pricing regime as Quebec became the second province to move toward adopting a cap and trade system.
EU warms to Mexican path to global climate deal
BRUSSELS (Reuters) - Global talks on combating climate change this year might progress best by focusing on Mexico's proposal for a world climate change fund, one of the European Union's top negotiators said.
Cities Should Think Twice Before Turning Off Street Lights To Reduce Carbon Footprint
Last year during Earth Hour, the City of Kingston delayed turning on some street lights until 9 pm to reduce greenhouse gas emissions. But a review of 15 published studies by the Cochrane Collaboration warns that municipalities should think twice about such a practice. The studies showed that street lighting reduced total crashes by between 32% and 55%, and fatal injury crashes by 77%.
Stress-Testing Biofuels: How the Game Was Rigged
Last week, while the financial world was obsessing over stress tests for fragile banks, the environmental and agricultural worlds were watching the results of the Obama Administration's stress tests for renewable fuels. An outgrowth of the 2007 energy bill, the tests were supposed to document whether corn ethanol and other biofuels designed to replace fossil fuels would accelerate or alleviate global warming overall. But like the much-criticized bank checkups, these stress tests don't seem particularly stressful.
Gasoline belatedly takes role of summer oil driver
LONDON/NEW YORK (Reuters) - Investors have been slow to make their seasonal move into gasoline ahead of the U.S. driving season, but now have helped to push oil to six-month highs and are likely to keep providing modest price support.Economic downturn and the credit crunch had warded off the investors that typically bet on a summer upsurge in gasoline use in the world's biggest fuel burner.
Gas may be cheaper, but many staying home anyway
When gas prices hit $4 a gallon last summer, Joyce and Ricky Eagle of Warrenton, Va., simply padded their travel budget a little before tooling around the Midwest in their motor home.This year, gas is considerably cheaper. But the Eagles' 36-foot Holiday Rambler will stay in the driveway. The reason? The software company Ricky works for sliced 20 percent off his paycheck.
AAA: Cheaper gas, deals to boost holiday travel
The USA will kick off the summer vacation season with slightly more people taking Memorial Day trips this year than in 2008 as lower gas prices and abundant travel bargains unleash the nation's "pent-up demand" for travel, according to a report from leisure travel organization AAA.
OPEC Raised Oil Output for the First Time Since July
(Bloomberg) -- The Organization of Petroleum Exporting Countries boosting oil production last month for the first time since July, exceeding its quota by 967,000 barrels a day and backtracking its implementation of supply cuts intended to stem falling prices.
'Risks' remain for oil prices: OPEC
"Considerable risks remain" on the oil market, OPEC warned on Wednesday as it again reduced its forecast for world crude demand.
OPEC Cuts Forecast for Oil Demand as Economy Shrinks
(Bloomberg) -- The Organization of Petroleum Exporting Countries cut its 2009 forecast for the ninth straight month, predicting oil demand will fall as consumption shrinks in the U.S., the world’s biggest energy consumer.OPEC lowered its estimate for global demand this year by 150,000 barrels a day to 84.03 million. Demand will contract by 1.57 million barrels a day this year, or 1.8 percent, the Vienna-based producer group said today.
“Continuous downward revisions to world economy growth have been exhausting world oil demand,” the group’s secretariat said in its monthly report today. “The current global recession may go down in history as the deepest and most synchronized downturn the world has experienced in the past 60 years.”
Nigerian fuel marketers say resuming imports
LAGOS (Reuters) - Nigeria's fuel marketers are resuming imports after the government agreed to start clearing around $400 million in subsidy arrears, the head of the Major Oil Marketers Association (MOMAN) told Reuters on Wednesday.
EOG Resources plans to rail Bakken oil to market
HOUSTON (Reuters) - EOG Resources Inc plans to ship North Dakota Bakken Shale oil to market by rail due to limited pipeline availability, a spokeswoman said on Tuesday.
Noble rig damaged as legs sink in seabed off Qatar
SAN FRANCISCO (Reuters) - All three legs of an oil and gas drilling rig have penetrated the sea floor off the coast of Qatar, causing severe damage to the jackup and its legs, rig owner Noble Corp said.
Sakhalin 2 operator sees first income from stage 2 in 2013: report
Moscow (Platts) - The consortium developing the Sakhalin 2 oil and gas project in Russia's Far East expects the first income from the second stage to come possibly in 2013, Sakhalin Energy's CEO Ian Craig said in an interview with Russia's Vedomosti daily Wednesday.
Chavez, Citgo sued for five billion in damages
MIAMI (AFP) – A US advocacy group and a Venezuelan exile said Tuesday they have filed suit seeking five billion dollars in damages from Venezuelan President Hugo Chavez and state oil companies for alleged human rights abuses.The suit, which was first filed in April by Washington-based Freedom Watch and exiled Venezuelan journalist Ricardo Guaripa, accuses Chavez of alleged acts in support of terrorism, torture and human rights violations.
Car dealers fight rapid closures; 180,000 workers could lose jobs
DETROIT — Car dealers from around the nation will be in Washington Wednesday to urge President Obama's automotive task force to let the economics, not the government, decide which car dealers should shut down, and when.The task force has been pushing General Motors to trim its dealer ranks faster than the several years originally planned as part of its overall restructuring. Speeding up that process will only dump 180,000 more workers onto unemployment rolls in a recession, the dealer group argues.
John McEleney, president of the National Automobile Dealers Association, says he understands that fewer dealerships are needed. But since dealers are independent business owners and get little financial support from the automaker, he argues, they aren't adding to GM's financial problems.
The key to changing our cities involves the car. Cars dominate cities in the rich countries, and they are increasingly swamping poor countries as well. Big auto companies, are rapidly building car factories and highways in China and India. Many cities, like Berkeley, California where I lived for 30 years, don’t have a single pedestrian street — and their citizens don’t even notice how completely given over to the car their towns are. Only one out of 10 people on the planet actually drives cars, but drivers are causing a vastly disproportionate share of planetary damage through the automobile-sprawl pattern of development.
Under Andean ice, a golden prize
SANTIAGO (AFP) – An ambitious gold mining project in northern Chile, high up in the Andes close to ancient glaciers, is finally getting underway amid the economic downturn despite fears from environmentalists.
Energy security and environmental sustainability aren't just two sides of the same coin, they're two aspects of the same principle. We all want to be able to forget about the threat of losing what we have. The challenge that comes with our reliance on fossil fuels is, at its core, all about finding alternatives that we don't have to worry about. Renewable sources. Clean sources. Domestic sources.Civilization should be concerned with more than just a reliable and affordable source of energy. Government should be devoted to ensuring a fair crack at peace, order, justice, health, liberty, equality, fraternity, and, if you prefer, the pursuit of happiness. That's quite enough to fill the legislative agenda of our elected representatives, without piling on the need to locate, guard and exploit energy.
And yet, governments everywhere are obsessed by necessity with energy. How did we get here?
By not acknowledging two facts that have been widely known for more a long time. First, sooner or later we're going to run out of organic fossil fuels. Second, returning all that carbon to the atmosphere several orders of magnitude faster than it was removed will produce profound changes to the biosphere.
Canada scolded over greenhouse gas estimates
VANCOUVER, British Columbia (Reuters) – Canada has overstated how effective its efforts to cut greenhouse gas emissions will be, the country's top environmental watchdog said on Tuesday.The government has also not set up systems for accurately monitoring reductions in greenhouse gases or where the emissions are coming from, according to Commissioner of the Environment Scott Vaughan.
US efforts on climate insufficient: experts
BRUSSELS (AFP) – US plans to reduce greenhouse gas emissions fall short of what is needed, climate change experts said after talks with the European Commission in Brussels."The US objectives are not strong enough, they have to make their commitments stronger," said Nicholas Stern, a British former world bank chief economist whose 2006 Stern Review put the economic case for green policies.
White House memo challenges EPA finding on warming
WASHINGTON – An Environmental Protection Agency proposal that could lead to regulating the gases blamed for global warming will prove costly for factories, small businesses and other institutions, according to a White House document.The nine-page memo is a compilation of opinions made by a dozen federal agencies and departments during an internal review before the EPA issued a finding in April that greenhouse gases pose dangers to public health and welfare.
Democratic Climate Plan Would Trim CO2 Emissions 17%
(Bloomberg) -- Democrats on the House Energy and Commerce Committee agreed on a compromise measure to cut U.S. greenhouse-gas emissions 17 percent by 2020, Chairman Henry Waxman said.The accord, reached yesterday, exceeds the target sought by President Barack Obama.
Sticker shock in acting on global warming
Here's some news that might give many Americans sticker shock: The cost of cutting greenhouse gases by 15 percent would cost the average US household about $1,600, according to an estimate by the Congressional Budget Office (CBO).Such unbiased estimates are emerging only late in a hot debate over global warming on Capitol Hill. Too bad. The numbers are pitting Democrats against one another when credible cost projections from neutral sources should have been clear long ago.
UNCTAD: World Facing Multiple Energy challenges
The FINANCIAL -- The global credit squeeze, which makes energy supplies more difficult to obtain; concerns about carbon emissions and their effects on the climate; and potential declines in conventional oil reserves mean that the world, and especially developing countries, are facing serious obstacles in improving living standards and expanding their economies, UNCTAD’s Trade and Development Commission was told by a series of experts today.
Here comes the flood: Policymakers must start to view mass migration as a form of adaptation so that the global response to climate-induced migration is one of facilitation rather than neglect.
Two leviathans are about to collide on the world stage of science and politics — climate change and migration. Their combination brings us to a tipping-point that could spawn a phenomenon of a scale and scope not experienced in human history. Beyond reducing the greenhouse gases that drive global warming, we are now faced with the task of finding ways to deal with the impact of climate change. Next in line, or perhaps even ahead of mitigation, adaptation is the new game in town.
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Going to lots of debate on the OPEC story regarding supply/demand imbalance for FF.
OPEC sees oil demand falling further
I expect we will see a Wiley Coyote moment when sepculators rush for the exists at the same time, lots of stored oil comes to market, the price collapses, and projects are suspended.
Low oil costs will help pull the world out of recession but at the cost of economic disorder in the gulf states and cancellation of projects which will create a supply squeeze once FF demand finally begins to pick up.
My hunch is that we overshoot to the downside and prices of $30 a bbl a likely.
A rush for the exits is unlikely. Speculators can pay the cost of carry and simply wait to see how things shake out.
If you are betting that markets will be volatile (e.g. conflict in Middle East, Gulf hurricane, etc.) then you are better off "paying the rent" for storage today and selling opportunistically later.
On the other hand, stored oil tends to dampen price volatility and reduces the chance that you can recoup your rent charges. How much dampening depends upon how much of that storage is squirrelled away in SPRs.
Finally, depending upon your storage costs, you may be better off selling forward into contango rather than dumping spot. This will also reduce the rush for the exit.
By way of illustrating democracy at work, view the first 4 minutes or so of this video.
Note the "funny" comments made by Senators of both parties regarding the voices of "we the people."
"Invited stakeholders" appear in this hearing to be those with huge bankrolls for political campaigns and lobbyists.
The comments made by Senators -- for example, John Kerry -- are "priceless."
"Is there anyone in the audience who didn't come to ... er ....."
Note that the Chairman jokes "We need more police!" and the whole committee and invited guests laugh as though this were a Saturday Night Live skit.
http://www.peaceteam.net/action/pnum982.php
And this is also how energy, er, non-policy gets made.
Thanks for the link. It also provides a simple way to advocate for single payer proponents to be included in talks.
To me, it would be like having the "Peak Oil" view completely ignored while trying to formulate energy policy!! (or is that what we are doing?)
Or the "limits to growth" viewpoint shut out from economic recovery discussions (are Americans STILL not interested in resuming their previous spending habits??? What a bunch of dimwits...)
Right.
There are two conversations going on in Washington DC. There is public discourse, which is all propaganda all the time. The second discussion happens outside of the public arena, in private conversation with paid lobbyists and those who can afford them.
Therefore our real policies are radically different from whatever might be represented in public discourse.
I loved the off-camera voice asking "How many of them are there?!?!?"
A lot more than they think.
'Risks' remain for oil prices: OPEC
"Considerable risks remain" on the oil market, OPEC warned on Wednesday as it again reduced its forecast for world crude demand.
I thought this was funny. Everybody knows that OPEC is going to be screwed in 30 years, when oil will be considered primitive. So, yes OPEC, you will always be in the risk column until your demise.
Eric T. http://www.jazdoilandgas.com
Foreclosures: 'April was a shocker'
I suppose that this kind of thing was factored into the stress tests... And Denninger sees how this will all pan out...
In Atlanta, the median sale price of homes was $115,600 in the first quarter of 2009 (down 25% from a year ago), according to this article. This median includes all homes, not just those in foreclosure.
I am sure the median for home in foreclosure was even lower. I suspect that these low prices are having an impact on other sales. Why pay $200,000 for a home when the house next door is being foreclosed, and can be purchased for $100,000?
My sister in northern California bought a house. I told her not to - that prices were only going down - but she wanted to "buy on the dip." The small drop in prices looked like the opportunity of a lifetime to her.
Now the house across the street is selling for half what she paid. And there are lots more foreclosed homes in her neighborhood. The signs keep popping up, like mushrooms in a cow pasture after it rains.
Ahhh, it is good to read such poetic simile! Nicely done -- very fitting. Thanks!
At least in my neck of the woods the green shoots ARE weeds.
I don't get the "despite" part of the article's title either ;-)
Home foreclosures: South Florida figures rise despite signs of recession easing
I was a prospective juror - yesterday - not chosen - but was surprised to see a "foreclosure sale" room at the Broward County courthouse - borrowing space from the juror waiting room complex.
Pete
Hi Pete,
I live in Hollywood FL, you aren't the Pete that's showing up at my Peak Oil meetup this Saturday are you?
Nope, but tell me more. I live in NW Broward.
ptoemmes at bellsouth dot net
Pete
Sent you an email
"Car dealers from around the nation will be in Washington Wednesday to urge President Obama's automotive task force to let the economics, not the government, decide which car dealers should shut down, and when"
Ohh we are way past that stage; the government is picking the winners now. Obviously you didn't vote the right way or something.
In other news:
Europe's largest LNG terminal opens to slow demand
LNG terminals are opening all over. How will this affect prices?
Keith -- this link from above
http://www.rigzone.com/news/article.asp?a_id=76043&hmpn=1
has a very interesting story to tell. Skip on down th the "dirty secret" section of the story. Bottom line: there are some factors which could lead to the dumping of huge volumes of LNG into the US market at prices far below today's already low prices. Essentially predicting a potential low NG pricing environment for a number of years even if demand imporves significantly.
The dirty little secret has to do with the value of the natural gas liquids contained in the LNG. According to the Rigzone article:
Gail -- Makes you wonder if the gov't might impose penalities/restrictions for dumping LNG into the US market as the did many years ago when Japan was dumping steel here. We in the oil patch won't be holding our breaths waiting for the folks in DC to pull that off. It will be interesting to see if LNG imports ever rise to a factor sufficient to add another level of insecurity of our imported energy requirements. Granted we have a long way to go to reach that level. But there's a lot of NGL's out there in those very big stranded NG fields.
Hi Rockman,
Wouldn't Qatar just reinject the gas to keep the reservoir pressure up? Why would they liquefy and ship the gas if it was the NGLs that they were selling?
One last thought: Wouldn't this depend on the ability of the local petrochem companies to absorb this NGL production? If they glut that market, the free gas strategy does not work.
My guess is that it would cost less to burn off the NG right at the end of the pipe above ground than pump it down for additional NGL's... Also, they can burn it for cheap electricity.
In this case, though, as NG is a waste product with *some* value, it makes sense to sell it for whatever you can get for it. A similar effect is seen in Ethanol where a byproduct is distiller's grain and can also be sold for *something* rather than just be disposed of for nothing.
Jon,
They could re-inject if there wasn't a market for the LNG. But it costs a good bit of infrastructure and money to re-inject at formation pressure. Might make more economical sense to just flare the NG. As to aiding recovery that would depend upon the reservoir drive: Pure pressure depletion: a big help (if you drop reservoir pressure too much (the "dew point") the NGL liquefy in the formation and greatly impede production. OTHO if it's water drive no big benefit. Don't know what the drive mechanism is.
I've actually seen (many, many years ago) operators give away free NG to municipalities because they wanted the oil but had no market for the NG and couldn’t flare it legally. The future? So may what-ifs: Russian NG to the EU; ME LNG to the EU; Indonesian LNG to China vs. Japan; switch to NG as a motor fuel in the US; potential rapid depletion of all those unconventional NG wells in the US> It gives me a headache just trying to itemize the list of factors let alone developing any sort of predictive model.
I agree: "If they glut that market, the free gas strategy does not work." We sould expect to see the same volitility in the LNG market as the crude market. Seeme to be an unavoidable ad relatively unpredictable future IMO.
The writer MUST have his abbreviations mixed up. 1,800 BTU gas yielded me less than a gallon per thousand cubic feet, or MCF - I would wager that he is referring to a million cubic feet, or MMCF. The 1800 BTU gas is very rich gas in terms of liquids. The richest gas I have seen or heard of is 2,100 BTU. I would like to see the writers backup for his measurement / numbers.
Also, LNG costs a bunch to pressurize and de-pressure (not the right term, but you can understand.) It takes three stages IIRC to bring the liquid gas back down to pipeline pressures of about 800 psi so it can be shipped is the reason for the high cost at that stage. "Free" would translate to about what the market is right now, if you are talking gas in the pipeline headed to the consumer / user.
Anyone have any idea how the large amount of NGL (which I assume has a significant amount of propane) might affect the future price of propane for home heating for the next few years in the USA?
as woodchucky posted just above the yield for qatar gas is probably 48 bbls/mmcf, not 48 bbls/mcf , off by a factor of 1000.
It all depends on what you think M means. If you're Julius Caesar and think it means 1000, then, yup MMCF.
If you're from the 20th or 21st century and think it means million, then Mcf. If you mean 1000 use a K like normal engineers do.
the aime(spe) adopted m for thousand and mm for million in about 1953. those were normal engineers, as normal as engineers can be.
petroleum engineering spoken here.
48 barrels of ngl/mmcf would amount to about $2.40/ mcf (@ $50/bbl). not a compelling reason to give the gas away.
Frank --elwood is correct but there has been a disconnect between industry and the general public. For us M has always and will always be 1000. But for most of the world it will mean one million. we just have to be careful tossing them around between the two groups.
Re: Noble rig damaged as legs sink in seabed off Qatar
The reason for this punch through is that the soft nougaty center of the earth is much closer to the surface off Qatar.
FF are in such great oversupply that they now have rigs drilling for caramel.
Same nuget center off S La. too BOP. Years ago I had a jackup just west of the Miss. River capsize half an hour after we abandoned it. Many years later I had another j/u in the same area which was in 20' water depth but the legs sunk over 170' below the mudline. And it kept sinking as we drilled. Fortunately we finished drilling before we lost the minimum freeboard. Even more amazing: they jacked all three legs out without tearing them up.
Abiotic oil, man. I mean, Geez, what do you think is in the center of the global Tootsie Pop? /sarcasm
Doesn't it that Abiotic oil get replenish from Titans Moon Oily? I here it enters a worm hole in space, and goes directly to the center of the Earth.
Re: but the legs sunk over 170' below the mudline
Pity the driller making the WOB calculations. He has the whole rig coming down around him. I avoided these problems by sticking with floaters. But even then there were problems. Phillips had a semi in the North Sea that triggered a sub surface blow out, the water turned all fizzy, and down she went.
Yeah BOP. We were between a rock and a hard spot. Water too deep and currents too strong for a barge rig and not deep enough for a semi. When I went to work for Mobil in 1975 I read a report about one of their semis that blew NG from around the surface pipe and aerated the water column. No one on the rig had seen this happen before so the just stood their and watched. Then it sank with all hands onboard. Think it killed a few of them. Next time it happened a year or two later they dropped the anchors lines and had the workboat tow them off location. Guess that’s what they call the “experience factor”.
Where were you when they needed you?!
Off getting fizzy in my own inimitable way.
Carter on energy security; VIDEO
http://politicalnewslive.blogspot.com/2009/05/video-carter-energy-proble...
College graduates struggle to repay student loans
Or maybe he should have avoided the student loan debt. Do you really need a pricey college degree to be a children's book author?
A lot of young adults are pushing for some kind of "jubilee" for student loan debt. If banks and car companies can get bailouts, why not?
Of course the lenders are saying educational loans will become harder to get if people don't pay them back...but that is probably how it should be. People are borrowing ridiculous amounts of money for degrees that won't lead to enough income to repay them, even at best. (One article described a man who borrowed $400,000 to get a degree in music. He ended up fleeing the country to avoid repaying the debt.) Yes, he's an idiot for borrowing that much, but those who lent it to him are even more idiotic.
Ahhh, yes... Student loans: The only legal loans in America where you can't refinance, can't discharge through bankruptcy, and if you default you owe many times the original loan amount... And there is no escape: you can have your wages and government benefits garnished with impunity...
'The Student Loan Scam'
NPR had a great show about it... listen if you like.
Sad but true Leanan. It has also seemed obvious to me that the main reason the inflation rate for college tuition running far ahead of the rest of the economy was this influx of "easy money". I throw many of these programs into the same category as subprime loans.
ROCKMAN -
With regard to college tuition, access to easy money appears to have had the same effect as it has had in the housing market. People who normally could not have afforded to go to a particular university were now able to and thus expanded the pool of potential applicants, which in turn enabled the universities to get away with charging more. Minority-preference scholarships had much the same effect. It's simple: more potential buyers = higher prices.
Further aggravating the problem is the fact that during the 1990s and up till fairly recently many universities went on an obscene spending binge to expand and upgrade their physical facilities. This was partly driven by competition for incoming students, i.e., something a tour guide could proudly show off to groups of potential applicants and (more importantly) their tuition-paying parents.
This sort of competition is not unlike that between posh resorts. I know first hand that some of the newly constructed dorm rooms at certain universities look like suites in the better hotels (a quantum leap up from the bare cinder-block walls of our crappy little dorm at the engineering school that I attended about a hundred years ago).
Bottom line: the level of pointless spending in academia would make a Pentagon weapons program director proud.
So true joule. Unfortunately as I look around with the thought of unsustainability in the back of my mind there seems to be countless examples of "pointless spending" as you say. Just this morning the GAO announced a revision of the time when Social Security revenue will be exceeded by outflow. Moved the day two years sooner to 2017(?). For at least 20 years I've been aware of the unsustainability of our hydrocarbon base. But now that just appears to be just one component matched and, perhaps, over shadowed by other factors. I'm just a couple of weeks shy of my one year anniversary at TOD. Thanks to the thoughtful folks here PO is no longer the one big monster hiding under my bed. He has lots of company.
Agreed. Here are 3 more data points. My father, my sons and I have all spent time at the same private college for at least a year.
1954 cost for one year of college: $285
1977 cost for one year of college: $4000
2009 cost for one year of college: $32,000
Of course it's obscene, way beyond the rate of general inflation, and it continues to escalate merely because loans and grants allow it to.
But, I suspect, like any other unsustainable thing, not forever.
One more data point:
I went to the University of Wisconsin as an out of state student in the 90's. My tuition went up by 50% in the four and a half years I was there.
I don't think it is fair to be so critical of him. I am in the same boat. I left home at 18 with a few dollars in my pocket and went into the military. After 6 years, I got out and went to school. We live in a society where we are told the route to a good life is to go to college. So I went. I had some money from my GI bill but without any savings and no parents that could pay for my college, I racked up $20k in student loans. Your first job out of college never pays much. I worked two jobs, paid off some credit card bills and then after a few years decided for grad school. We live in a society where you can't get a corporate job (or in his case write books) without a degree. And anymore you almost are required to have a masters. So another 20k in student loans. Again, the first few years after, you are trying to start putting money in 401k's, buying that first condo, maybe a little nicer car, in my case having to help family members. I've turned my attention to my student loans, but it has taken a while. I also see how they limit what a person can do. I am trapped by them now. I've learned how I don't really like the corporate world, I would rather be out working as a paramedic. But I can't afford to quite my corporate job and go to paramedic school because of that debt. I can't imagine what people do when they have a 100k in debt just to be able to work as a social worker or teacher, etc.
shanwnott -- I agree with you. Perhaps folks did make bad choices but they were given a great deal of encouragement to do so by much wiser and experienced folks. Similarly it's hard to be too critical of folks who bought with subprime loans. Yes...many had a high probability of defaulting but they were offered a chance to switch from a small apartment to a nice enough house with a note that may have been lower then their rent. And could do so with putting little or no money down. From one perspective these folks had little to loose and something significant to gain if they could hang in there. And many of them did. But there were wiser folks who encouraged them to take the chance.
I've been there myself. However, things are changing now. I think it's pretty clear that for most people, the price of college will never be worth it. Everyone's complicit. The colleges, the lenders, the students and their parents who are completely out of touch with reality. The reason the rules about student loans are so draconian is that the boomers really abused them. They borrowed money and used it for vacations or investing in the stock market...then never repaid the loan, even when they could have easily afforded it.
Colleges are making big money from student loans...including some scam institutions that aren't real colleges at all. People who aren't suited to college are being encouraged to go, and they end up really screwed, because they have the debt but no degree to show for it.
But I also think current students are simply not being realistic. Like I said, I've been in that boat myself. Many young Americans really have no experience with money. (Like many, I didn't even know how to write a check when I graduated from high school.) Heck, even people who should know better overestimate their ability to repay. The idea of paying $30,000 or $80,000 or $100,000 later, when you're an adult and have a good job, doesn't seem so bad. Especially for those who have never actually had to pay rent or buy groceries.
Now it seems people are becoming aware of what a trap student loans can be. So they are planning to take the loans and not repay them back. Some are unaware of how difficult that is. Some are counting on the laws changing. Some are planning to get a government job that will result in loan forgiveness. (Never mind that government jobs are being axed just like all the rest.) This is just not going to end well.
P.S. I don't know what your field is. Some do require higher education. Einstein hated school, but he had to go. It's pretty much required for a physicist these days.
But many jobs do not require college. For something like writing books, college is not required. Lots of successful authors got their education from the school of hard knocks. When you submit your manuscript to a publisher, they aren't to check and see if you have a degree. They are going to look at your writing.
I agree, jobs like chemist, geologist require degrees. Story writing does not. Though I have corresponded with someone from this site that wrote a non-science book outside his field and since he wasn't an "expert" on that field (ie Phd) he couldn't get it published. I have my undergrad in finance/real estate, an MBA in international management and a cert in database analysis. I also have my EMT-basic cert. I'm sure a lot of people here would suggest I don't need a college degree to work in marketing, but from a purely "getting hired" perspective, it is required.
I think by posing it as "require" college you're looking at it the wrong way. Let's talk about some vague notion of "further education" that in the future might well not by college as currently structured. The question is "will you able to perform better at what you want to work at?" Authors are not really a homogeneous group: some authors write genres that wouldn't be improved by further education and others do, so it's a difficult group to argue from. A more informative question is do people like, say, social workers, store owners, restauranteurs or office employees benefit from further education? I suspect the answer is "they benefit from some, but probably a shorter, more focused period which costs less": certainly the number of people who decide to open a shop or restauarant late in life after other careers who don't make realistic projections about possible revenues or know about issues in carrying stock and dealing with delayed cash-flow suggests that some basic education in business issues would be helpful to them even though they never show the degree certificate to anybody, but not the kind of overblown MBA studies. Maybe it's being a scientist/engineer, but I'm constantly being amazed/infuriated by people from the school of hard knocks who think "I've had this thought one afternoon, therefore it's absolutely certainly true and I and everyone else should act on it immediately".
I guess my fundamental reason for thinking some form of further education is beneficial is that it should be a situation where you interact with people who should (at least without "all must have prizes" mentality) tell you you've misunderstood what you think you've learned. The real question is how do we figure out what is an appropriate amount of further education for people, decoupled from tradition, and how can people be persuaded to fund this sensibly?
In case I'm being too oblique: I agree that the US (indeed even the slightly more restrained UK) university system is serving most attendees badly on a cost basis, but that doesn't mean that no "further education" for anyone other than doctors, physicists, etc, is the right answer for many individuals with other job interests or for society as a whole. (There will of course also be many other people who never do any job in their lives that'd be improved by some education.)
There are educational opportunities other than college. Two-year colleges, trade schools, etc. That was what most people did, only a generation or two ago.
I expect to see the apprentice system, augmented by technical schools, making a comeback.
There are certainly other educational avenues already available; I was replying more to a possible implication in Leanans original post that if you didn't need the kudos of a degree certificate you would be as best served by the "school of hard knocks". The other point was that there's very little variation in types of further education, and I suspect that in addition to obvious inflation of costs and personal financial profligacy, part of the high levels of student debt come from inability to buy just the education that fits your goals.
Apprenticeships are an extreme example: you're paying (in reduced wages) to be taught only what the "master" knows and thinks you ought to be told but it's highly reliable and applicable skills. That definitely makes sense for some people, but there seems to be little options between that and full blown college courses.
I don't think that's true at all. People just don't think about the alternatives.
One of my acquaintances has a degree from Princeton. (He personally knew Albert Einstein.)
His son chose not to go to college (with his dad's support). He instead got training in auto repair. It was a six month or one year program, paid for by the car manufacturer (a European brand). He ended up in a job that paid as well as his dad's engineering job.
Community colleges are also a great way to get vocational training. Or the first half of an undergrad degree cheap. States have adult education classes, too, where you can learn all kinds of things (and often get access to equipment and stuff that might be expensive to get on your own).
A lot of people get education in the military. Not just the academies and ROTC, but military technical colleges and graduate schools.
And, on the flip side, it's about being whom *you* want to be and choosing the path *you* want to be on. A friend of mine loved trains as he was growing up and always dreamed of being a railroad engineer (more like Train Operator). He was intelligent, got several scholarships to go to college, but ended up working at the local railroad. He's been there for almost 10 years, makes decent money, does what he has a passion for, and is not burdened by student loan debt.
I suspect that car maker was German. Europe retains a respect for highly skilled manual labour. In North America any form of manual labour has a distinct lower class connotation and is looked down on.
When I was in the oil industry one of my tasks was to obtain immigration clearances for our foreign workers; we sourced skills from around the world. I remember the government types getting very, very, huffy over the fact a Senior TP had a grade 8 education yet was pulling down in excess of $200,000 USD (inflation adjusted). To the government types this salary differential was evidence of a grave and hurtful injustice. But those white collar boys couldn't pilot their desks safely much less make a pair of tongs sit up and dance.
That depends. My son who is definetly going towards computer programming, has already had as senior math (1st year calc), as the CC offers. They are good for general ed -and maybe some vocational training, but usually don't offer sufficiently advanced stuff for the more serious students. They are also a useful way for good high school students to take more adavanced stuff. The twin of the aforementioned student, plans to take that pre-mentioned calc course this summer.
I suspect that there's a lot in between. At the end of Film School, my two internships gave me contact with industry professionals, and a very immediate view of the real world I would have to navigate, with the skills, both technical and social that I would be expected to manage a year or two later.
Following that, essentially ALL my paying work over the next decade could be traced to those two internships, and one more of a classmate's internship in his Senior Undergrad year. But this apprenticeship, if you will, was under a number of masters, so I got a varied view of what I'd need to know.
Part of the problem is that some student loans are too easy to get. When I was in graduate school may other students got both subsidized and unsubsidized Stafford loans to supplement their regular graduate student stipend (which was enough to live on). Essentially they were doubling their income to live a middle class lifestyle while being students: new car, three bedroom apartment, eating out every day, etc. It is tempting because it is so easy, but it is a huge burden once you graduate.
My continuing prediction: I expect to see the "Student Loan Protest March on Washington."
I will repeat again advice I have posted before.
If you are a genius, and intend to apply your intelligence in something like one of the sciences, then you should indeed attend someplace like MIT. Places like that are for people like that. We are talking about the top 0.01%, or maybe the top 0.001%, of the student population.
If you are simply of above average intelligence, a good student ("A"s and a few "B"s) , and intend to pursue a career in science or engineering, then you need to attend a good school with a good program in your chosen field. Most states have at least one state university with a "good enough" program, and that will be a reasonably affordable option. If you are OK with the military life and see yourself in an engineering career, by all means try for one of the service academies - a totally free ride in return for a service committment. If you can't make it into one of the academies, consider ROTC, which provides almost as good of a free ride. That might be the better option if you are not serious about a long-term military career.
OK, for the vast numbers that are simply "OK students" (mostly "B"s and a few "A"s and "C"s), here are your affordable options:
1) Take advantage of whatever advanced placement courses are offered in high school. The quality of K-12 education has deteriorated so badly that you are almost certainly making better use of your time earning college credits, and this will give you a jump start toward completing a college degree.
2) Go to your local community college the first two years. Almost all of these now have articulation agreements with their state universities, meaning that your credits will transfer without problems; don't assume that this will be the case absent such agreements. Community colleges are inexpensive, the classes are small and taught by experienced, good teachers who can speak English, you can stay at home and save money, and the scheduling is more creative and flexible than is the case at most universities (more evening and weekend courses). This is important, as it makes it possible to also hold down a part time, or even full time, job; being at home rather than in a university town also means that you'll likely have better job opportunities than waiting tables or washing dishes. If your career plans require a bachelor's degree, then focus on getting most of your "general education" courses out of the way at the community college. For many people, one of the two-year technical programs might be all the higher education they will ever need; these are a great value, and well worth considering for many students.
3) Also look into credit by examination. If you have the discipline to study a subject on your own, then all you have to do is pass a test, and you get instant credit. Correspondence courses are a similar option, but these are more expensive, and not necessarilly any better. If a student doesn't have the discipline and intelligence necessary to master a subject on their own, then they probably need the direct personal guidance of a classroom instructor.
4) Once you have racked up as many credits as you can by the above options and gotten most of your gen ed requirements out of the way, you can then transfer to your state university for your final two years. Almost all universities require that you earn a certain number of credits at their campus to graduate, so you are going to have to do this in any case. Most state universities will accept transfers, especially from community colleges. Hopefully, you will have been able to earn a little money while living at home to help out with your costs. I would suggest that instead of trying to work your way through those final semesters, that you instead take a maximum load and try to plow through as quickly as possible, non-stop; with any luck, you might be able to manage things so that you can make it through in just a year and a half. This is tricky and takes careful planning, especially given that required courses are not offered every semester. Don't expect reliable advice from your "advisor"; you need to take the responsibility to study the catalog from cover to cover, understand its requirements completely, and take care to assure that you take what you need when you need it. Remember that it is NOT in the interest of the university for you to finish and get out of there sooner rather than later.
Some final thoughts:
-Making it through college affordably (which means minimal or preferably no debt) is hard work. The idea of college as four years of play doesn't mesh with that.
-Don't be too hung up about career preparation; whatever career ladder you start out on will likely be pulled out from under you at some point in the future. Having a broad, well-rounded education and learning how to learn are hugely important.
-That being said, majors do matter. Many disciplines churn out graduates vastly in excess of what the job market demands. Be aware that if the BLS is forecasting an increasing demand for nurses, or engineers, or computer programmers, or whatever, that thousands and thousands of other students are plunging into those programs and will soon be competing with you - many more thousands than there will be job openings, most likely. Research and find out which programs those are, and avoid those programs unless you truly have your heart set on it and know that you are going to do what it takes to be very, very good.
- Understand the difference between learning and credentialing. When you go to college and earn a degree, you are getting a credential. If you've played your cards right, you just might be able to use that credential to advance your career prospects. This has far less to do with actual learning than most people suppose. Learning can happen regardless if there is a credential attached to it or not; indeed, sometimes credentialling gets in the way of effective learning. Credentialling is something that is mostly external to the student - jumping through the right prescribed hoops and all that. Learning is something that goes on inside the head of the student, and is mostly up to the student. It is quite possible to learn things without ever setting foot in a classroom; at best, good teachers can help greatly in the learning process, but ultimately, it is up to the student. Whether or not one earns a credential, and from where and of what type, should be purely an economic decision: will the hoped for return justify the initial investment. Credentials tend to be overvalued in our society. Learning, on the other hand, tends to be undervalued. It is worth learning as much as you can, and especially learning how to learn.
WNC...Best advice of the day!!
+ 10
Some comments:
One frustration that you will face as a self-actualized learner is that a lot of folks in the slots around, and above you, will be people who occupy their positions by virtue of their credentials. They often will not appreciate independent thought and will view the self-actualized learner as a threat. This can be very frustrating.
Choice of organization can be as important as choice of occupation. Organizations in the same market can differ greatly in how they operate and the nature of their organizational culture. You will likely have greater satisfaction working in an org in which you are a positive "fit." Your performance will also likely be better rewarded. Problem is it can be difficult to identify and get a fix on organizational culture.
Getting into a large org was in the past deemed a better career move than getting into a smaller org. The reason was that there were more development avenues available and a greater range of jobs in the internal job market. Given the nature of future change this may or may not remain true.
Anyway, great post WT!!
Ooops. make that WNC. Shows you who taught me to read :-)
I actively avoided my college advisor. They were utterly useless. My high school career counselor was the most useless person I have ever met.
I ended up making a flowchart of all the classes I needed, which classes were prerequisites of other classes, and identified the critical paths and classes that I needed to get through.
I took summer classes, even if it was to get the general education stuff out of the way.
I took courses that satisifed many general requirements at once (for instance, learning about 'Religions of America' satisfied both my Humanities requirement and Ethnic Studies requirement). I'm sure a class in African American Jazz falls under the same thing.
I went to school for Nuclear Engineering, dropped out for Comp Sci 3 years in, got that four year degree in two, and then returned to get a Ops Management degree (another 4 year degree) in 2 years, knocking out a bunch of classes for my MBA in case I decide to get an MBA (which would probably take me slightly longer than a year). A lot of it is planning, planning, planning... You can never overplan the classes you take, or the schedule you create every semester.
Oh, and BTW- I got that second 4 year degree while working full time. With kids. Can be done.
There are a lot of good free college texts available on the internet, including even some graduate level courses. If a student is highly self-motivated, he could search these out, and do self study. It would be nice to find an expert on the subject to talk to part time -as you can get hung up by misunderstanding some key concept or two. But for the most part, it is amazing how much stuff you can pick up through little more than effort and determination.
No, I beg to differ. Education, at least the kind of education necessary to qualify someone to be able to write a children's book, should be free.
Same goes for degrees in the arts including music, if you have the talent society should foot the bill and the artist can pay his debt back by producing good art for the enjoyment of society. Win win.
Of course that doesn't work in the current paradigm where idiot entertainers get paid the big bucks to promote the society of buy baby buy!
I warned you all on retail sales about a month ago. Today's headlines are bearing this out. Don't believe the hype about an improved economy...it is hollow as the inside of talking heads on financial MSM.
April retail sales fall, raising recovery doubts
This is the most significant headline of the day; consumers are scared. Consumer spending is more than two-thirds of the US economy, and if consumers don't spend, the economy is going nowhere.
The massive spending by the current administration was meant to be a "shock and awe" kind of jolt to the economy, but it backfired. People I talk to are wondering how we are spending all of this money, yet the auto industry is collapsing, banks are being foreclosed and people are still losing their homes.
We have the same problems as before, but now the government is swimming in debt. Who is going to go car shopping in a situation like this?!
The economy has spent the past 8 years being juiced by home equity withdrawals and lots of cheap credit. All of the productive capacity was built to conform to the needs of the juiced consumer. This means the economy is overbuilt and will continue to contract as spending contracts.
"Going nowhere" is not quite correct. Consumer retrenchment means an economy that is going down and getting smaller and providing much less opportunity than was available previously.
A twelve percent decline. By ordinary standards that wouldn't be a big deal, but to economist, and businesses whose profit/loss depends upon the margins it is a big deal. This is all part of the process of society adjusting its attitudes towards thrift. Longer term it is healthy, but it sure makes it tough on anyone entering the job market.
It might also be that "consumers" (AKA "citizens") are just totally fed up with walking into store after store and seeing nothing on offer except aisles and aisles of cheap Chinese junk. Increasing numbers of people must also be realizing that the country can't go on importing most of its oil and its consumer goods and exporting very little except IOUs; maybe people are starting to realize that if our government isn't going to do anything about it, then it is up to them to curtail their purchases of imported goods. Just maybe more and more people are saying: "Enough! I don't really need any more of this imported crap!" I know I have done so.
This does not mean that people have stopped buying altogether. Ebay is doing a booming business, yard sales are doing a booming business, and I would imagine that this should be a pretty good season for auctions. Those are some of the few places where one can actually still buy good quality, made in USA stuff.
I just bought a Moline juicer. Moline Manufacturing has made juicers since the 1950s, under contract for a couple of big names.
Said names moved production to China & Korea. Moline said "#@$ on that" and brought out their own line (slightly improved versions of what they had made).
Just bought a Moline #104.
Alan
Aramco output hits 3.2 bln bpd in '08
Here's a question: Have the Saudis now deducted 3.2 billion barrels from their claimed 267 billion barrels of proven reserves?
They haven't done it in the last 20 years- why should they start now?
Saudi Arabia's Golden Goose
Don't worry, there's plenty more where that came from:
Aramco 2008 Oil Output Rises, New Discoveries Likely
Yeah, their reserves are always flat or increasing, yet you never hear about any new fields being discovered. It's always Khurais, Manifa, or some other old field's reserves increasing.
They speak the truth Frugal. I can even promise you there's a 100% chance of finding many new fields just in the US. Now, notice I said "finding". I didn't say find enough to replace what we're producing. There are certainly thousands of successful well yet to be drilled by Aramco. But that says nothing about the amount of oil that these wells will eventually produce.
You too can own a piece of history for one dollar...
GM stock touches $1, lowest since Depression
I think it would be fun to have a few GM stock certificates for posterity's sake. You know, just frame it up and display it in a collection of artifacts from famous collapses. It would go well with a piece of the Berlin Wall, a chunk of the WTC, and a stock certificate of Enron stock. Or that 'Dewey Defeats Truman' paper.
Own a piece of history today, folks!
And the damage isn't limited to GM-
Stocks take a thumping
I think Wall Street is finally seeing reality again...
Hello Geckolizard,
Thxs for the link. Disclaimer: the following is not to be taken as investing advice.
Speculation ahead [as I know nothing on the workings of the market]: there may be some stock market players who are realistically postPeak assessing that the Elements NPK might be a better investment than discretionary, consumer stocks:
http://online.wsj.com/article/SB124216682938612533.html?mod=googlenews_wsj
-------------------------
Bulls Root on Fertilizer Firms; Bears Stalk Best Buy
-------------------------
As Borlaug roughly stated: that without I-NPK-->Game Over!
Civilization is dependent upon job specialization, and only food surpluses allow people to specialize. Of course, most of our food is now generated by I-NPK as the primary 'transformed fuel' for our topsoil.
Thus, what is the true intrinsic value of our global I-NPK infrastructure? How valuable will locally recycled O-NPK become postPeak when FFs & I-NPK start rapid depletion?
Understand that a mountain of I-NPK at the chem-factory gate is essentially worthless, its value is entirely derived once the bag of has moved past the farmgate and has been finally applied to each square foot of topsoil; ie, the farmer's/gardener's desire to grow crops is what powers this I-NPK pull-system supply chain.
Have you hugged your bag of NPK today?
Agreed. Stoneleigh has been saying the drop would come anytime from a couple weeks in to, more likely, this summer. It's always felt like a short term thing to me. Full disclosure: I thought the rally had peaked in the first two to three weeks twice. Learned my lesson and stopped predicting and just started observing.
Ever since the S&P passed 850 I figured either the late Feb/early March highs or the New Year high were going to be the top. Looks like it might be the latter. I figured for the rally to keep going into the summer there would have to be some real, actual, concrete good news, but there hasn't been. All the "green shoots" have been nothing more than lies, smoke and mirrors, or slight lessening of the black depths of the bad news. I really can't think of a positive signal that one would call significant.
Stoneleigh thinks a sideways market is possible till summer (or did not too long ago), but, again, what would keep the market up? the news that China really is dropping the dollar (albeit slowly)? Etc.
The comparisons with past deep recessions and the GD all show long downturns punctuated with bear rallies. It's frankly irrational to even pretend we are at a low or that we're going to bounce back to strong growth (3%??!!!) within 6 - 12 months.
1. All those resets coming in '10 and '11.
2. Personal credit still contracting.
3. Commercial real estate crashing.
4. Unemployment still falling hard (especially if you take out government, i.e. unproductive) jobs.
5. Foreclosures raging.
Etc., etc.
I think this rally is going to deflate rather quickly. I see eventual S&P 300-400 - just don't ask me when or how many rallies lie between here and there.
Cheers
Disclosure: This post is not to be construed as anything other than the ravings of an internet nobody.
Summary of Weekly Petroleum Data for the Week Ending May 8, 2009
Seems like the inventory drop is keeping oil prices stable even with the stock decline today.
(Doomer Queen don't care about report this week?)
We aren't doomers. We're realists.
I stand corrected then -- new title is Realist Queen.
EDIT: Nope, I think Doomer is more apt:
Reference
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EDIT2: Nope, I don't think Doomer is apt -- pretty sure she isn't living in a Permaculture village or even considering it. I am certainly of the Doomer clan.
I don't think a Malthusian crash is inevitable. Possible, yes. Inevitable, no.
I guess that makes you a "Possible Doomer". I am an "Inevitable Doomer" pure and simple, not just because of peak oil but because of peak everything. If there were no peak oil, or peak fossil fuels, the Malthusian crash would be somewhere between 2030 and 2050. But because of peak oil the Malthusian crash will be somewhere between 2010 and 2020.
I like the distinction between peaknik and doomer. A peaknik tires to save the whole world but a doomer tries to save himself/herself and others of his/her survivalist clan. The latter greatly improves his/her chances of survival while the former simply marches over the cliff with the rest of the limmings while crying "change world change!"
Ron P.
Why imminent?
I'm pretty sure it has been collapsing for the last 30 years or so. Has nobody noticed?
Yet another peak. “Peak Civilization” happened about thirty years ago, 1979. I was there and wide awake and I agree that was a good time. But then again the most exciting year of my life was 1967-1968 (Tet et al). I think the serious lack of civilization started in the mid to late 90's and a cliff (downward of course) last year with the Banksters and Sec Tres.
Lynford-
I agree. everything has been downhill from 1967.
You just can't do those things anymore.
That's a horrendously misguided attitude. It's essentially saying "I already know the truth, so there's no point me keeping an open mind". It's practically guaranteeing self-delusion, and it makes it highly likely that your beliefs will only be true by sheer coincidence.
A great number of factors will affect the future, meaning that one of the few things we can be sure of is that the expectations of everyone here will be wrong in at least some details. Keeping that in mind, how none of us have a lock on "the truth", is vital for getting as close to the truth as we reasonably can.
+1
My efforts are towards principles.
Such as Technical progress, but no JIT Technological Fairy (i.e. we should NOT stipulate that such & such technology will appear in a certain time frame; but be flexible as things develop).
And we need to build a parallel, efficient Non-Oil Transportation system.
Best Hopes,
Alan
Here's a job creating opportunity...GM to Export China-built cars to the US http://finance.yahoo.com/news/Reports-GM-to-export-apf-15230502.html?sec...
I read this before too. We gave GM billions? Really? So they can build cars overseas?
No, we gave them billions so they can declare bankruptcy, restructure, default on all their employee pension plans, eliminate the need to pay employee health benefits, not have to worry about evironmental restrictions etc...etc... and then go overseas to build cars for the Chinese market since there won't be any buyers here in the US. Lovely, ain't it? /snark
More Retail Disappointment
This 10% down Year on Year figure in retail is closer to reality.
When reading these reports, people need to pay attention to what the This Year / Last Year comparisons are and not the Actuals vs. Forecast figures. Here's why...if you forecast your business to be 6% less in 2009 than 2008 and you hit your forecast, that sounds great, but in reality you are 6% down from the year before.
So, everyone's forecasts are shooting on the low side so if nothing else, we can say we are meeting forecast. The problem this year...we are not even making the downgraded forecasts...beware!!
Once you have digested the above start thinking about all those summer jobs that high schoolers and college kids rely on every year. They will not be there this go around. We are going into summer with a lot of uncertainties.
And the AAA post about "pent-up travel demand" seems more like travel organization rah, rah, rah than an accurate forecast of summer driving. My hunch is that folks continue to retrench, avoid discretionary spending, and hunker down in the backyard with the barbie. If this is correct, we should see continued inventory build and dropping FF prices.
It's just a sub committee so this is likely to get less MSM press than stuff like this ordinarily does - which isn't much.
We knew what, where, and when - now we know who.
Courtesy of Mr. Denninger.
FLASH: Liddy Lays An Egg On BERNANKE!
Interesting Development at the pump:
Gasoline Price to Pass Diesel Soon
-Dennis
The Bank of Serta is looking better and better:
Brazil to Tax Savings to Keep Easing Interest Rates
This about sums up our current predicament
HT: Auto Earth
There is a very useful video on "The Crisis of Credit"
http://vimeo.com/3261363
No mention of peak oil or any reference to high energy prices ending the housing boom, but a good visualisation of the problems.
That's a very good explanation of the mechanics of the credit crisis however as you say it doesn't address some of the fundamental underlying issues such as peak oil.
I recommend Chris Martenson's full Crash Course which pretty much covers the synergy of energy, economics and the environment.
However if you don't want to take the time at the very least watch chapter three which covers the exponential function.
http://www.chrismartenson.com/crashcourse/chapter-3-exponential-growth
Re: Stress testing biofuels story in Time Magazine: Up top.
http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/a...
Land use changes have been occurring for a long time before the advent of biofuels. Arguments that claim that biofuels are the cause of current land use change have no evidence that separates out bio fuel from other causes of land use changes that have been happening all along and are still a factor.
It is an even further stretch to claim that deforestation is done to grow corn for ethanol. Deforestation in Brazil can be related to growing soybeans, but nearly all soybean usage is food related even in the U.S..
It is entirely possible that most of the land use changes are related to increasing world population pressures, rising fossil fuel prices and rising feed/food prices. Charging all land use changes to ethanol is unreasonable and unscientific. At most only a percentage of land use change should go to biofuels.
Nonetheless, land use change appears to be a factor in evaluating future ethanol plant contributions to carbon emissions. Since current ethanol plants are grandfathered in, only new plants will be affected. This may stop ethanol expansion in it's tracks.
In that case, those areas of the country that have ethanol plants up and running will benefit as the price of crude and gasoline inevitably rise and they will rise even faster with no new ethanol plants. Those states with the most ethanol plants will be sitting pretty and so will their farmers as ethanol prices rise along with crude. There will be no threat of increased ethanol supply from new plants due to environmental regulation.
It may turn out that this is the best thing that ever happened to ethanol "scammers" like myself as the price of corn shoots ever upward during the next crude oil price spike. Thank you ethanol opponents.
Here is some more must see video starring that Grayson troublemaker, who is beginning to look like the only USA politician they haven't purchased (yet) http://www.truthout.org/051309J?n
Hello Leanan,
Thxs for the DB toplink: "Moscow warns of future energy wars".
IMO, the real ugly wars will be over access to water & the Elements NPKS as there are No Substitutes to leverage photosynthesis above a Liebig Minimum. We can substitute a lot of human labor as FFs inevitably deplete, and hopefully most of this effort will go into closing the Circle of Life.
Recall my prior posts whereby I speculated that the USA needs have 60-75% of our postpeak labor force dedicated towards this end. Converting 16,000 golf courses would only be a start of what we need to quickly accomplish, IMO.
The depleting flowrate of the phosphates of Northern Africa will be especially prized IF we globally fail to ramp [P]hosphorus recycling.
For a brief intro to this topic, please listen to this 20 minute audio:
http://energybulletin.net/node/48898
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Peak phosphorus: the sequel to peak oil? (audio)
Dana Cordell, University of Technology Sydney conference via ForaRadio (Australia)
Phosphorus isn't quite at the top of the list of fashionable causes, but perhaps it should be. Dana Cordell warns of a looming problem, we've become addicted to it and, like oil, it's believed it will run out...
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The Moscow article reminds me of the Mr. Spock line,
"Captain, your logic is impeccable. We are in grave danger."
In other words, the resource wars seem to be ready to escalate.. (since they're 'Always' resource wars, aren't they?) .. as are so many of the repercussions we suspect are part of this waterfall we're barrelling over..
So Now that it's that much more clear what's happening.. are people feeling the courage to trust their logic (and I mean TOD readers, not the general public), and take the next steps?
Hoping that my steps are wise ones..
Bob
http://www.rgj.com/article/20090513/NEIGHBORHOODS03/905130389/1247/NEIGH...
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Golfing was unanimously ruled out as an option for any public purchase of the Northgate Golf Course, the Washoe County Commission agreed Wednesday.
..The Reno-Sparks Convention & Visitors Authority closed the golf course in December.
..But after the water rights, as well as an extensive list of equipment, have already been stripped from the course, any potential operator would have to come up with at least $5 million in start-up costs, said County Commissioner John Breternitz.
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My guess is that the person or corp. who sold the water rights made out like a bandit! The 150 homeowners around this course got royally screwed. Also, I see no reason for the city to buy the land at all [especially with no water rights!]--just let it go naturally back to a open preserve.
Hello TODers,
In case you don't know, 'The First Tee' is an org devoted to making future golfers. I would suggest they change their postPeak goals and rename the org-->'The First Crop':
http://www.starnewsonline.com/article/20090513/ARTICLES/905139953/-1/OPI...
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First Tee of Wilmington no longer on course
..The program, one of 207 chapters nationwide, is not offering any clinics or classes and has none scheduled at this time, apparently a victim of insufficient funding.
..The First Tee was created by the World Golf Foundation in 1997 as a way to bring golf to children who ordinarily wouldn’t have the means. Chapters are located in 49 states and five countries.
..But the chapter, a 501(c)(3) non-profit, is closing its office at Echo Farms Country Club, and, according to its Web site, is not offering any programs...The Wilmington chapter, which held events at Echo Farms, Inland Greens and other area courses, is no longer listed on the organization’s national Web site.
Nationally, the First Tee loses an average of one chapter per year, according to spokesman Steve Gerrish.
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My guess is the Banksters over-arching goal is to continue to tax the hell out of these poor families so that their funds can be used to bailout the most desired golf courses postPeak. The decreasing donations also has the benefit of keeping the riff-raff off the greens.
Does this makes sense to you too; ie, the Masters of the Universe will do everything in their power to keep the Masters golf course unplowed?
Hello TODers,
I wonder how many golfing real estate developers are reading my postings? I think this is great news!
http://www.thetimes.co.za/News/Article.aspx?id=998939
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Buyers shun golf estate
AN auctioneer was stunned when developers refused to bid for a 700ha golf estate at a much anticipated auction in Sandton, north of Johannesburg, yesterday.
..The Highland Gate golf and trout-fishing estate, which has an 18-hole Ernie Els signature course, in Dullstroom, Mpumalanga, was expected to fetch between R50-million and R75-million.
But none of the developers who attended the auction at the Southern Sun Hotel were willing to take the risk of splashing out on the liquidated estate.
..Last week, it was reported that scores of developments worldwide had been shelved...The liquidated estate follows a global trend of similar world-class courses facing closure, as a result of the global recession.
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IMO, Tiger Woods really needs to get going on converting his golf course design business into a postPeak company skilled at making relocalized permaculture veggie plots or wildlife preserves. Time will tell.
ATTN: to the much admired statistical analysis gurus here on TOD,
I hope Sam, Ace, WT, Euan, WHT, Memmel, et al can find the time to eyeball this PDF on Bart's EB [scroll down]:
http://energybulletin.net/node/48909
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New PhD thesis: Depletion and decline curve analysis in crude oil production (PDF)
Mikael Höök, Global Energy Systems, Uppsala University, Sweden
Submitted by Kjell Aleklett, professor at Uppsala University and president of ASPO-International.
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I haven't read it yet, but I hope the author has succeeded in advancing what the postPeak Hubbert Downslope might look like.
Dear Toto
The annual 6 cubic meters of premium composted steer manure has just been delivered in our garden plot. The spouse and I are planning an exciting holiday weekend spreading it with shovels, rakes and wheelbarrels. We shall think of you. It does grow lovely potatoes. There goes my winter spare tire...
Hello Paleobotanist,
Thx for your reply and Huge Kudos on your O-NPK delivery! May be in the nick o' time:
http://seekingalpha.com/article/137299-commodities-demand-will-benefit-c...
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To be as brief as possible, roughly two billion people in China, and thriving, “emerging markets” have large pools of savings, and only mild declines in their economies. There was never a possibility that these people would stop increasing the quantity and quality of their diets, simply because the U.S. economy was collapsing, and the West was in a recession.
..Thus, increasing demand for food was always a certainty, even with the global recession.
On the supply-side, two perspectives on the U.S. agriculture industry provide alarming information about U.S. agricultural production. With the U.S. rapidly becoming a “plantation economy” (i.e. a “Banana Republic”), agricultural production was supposed to be the one facet of the U.S. economy to be unaffected by its Greater Depression. Not true!
A Reuters article provides considerable detail on the collapse of credit for U.S. farmers [Please click on embedded link in source article for more], accompanied by dramatic increases on defaults for loans for agricultural equipment. The same situation exists with regard to obtaining loans to seed their land.
Thus, in a “best-case scenario”, U.S. agricultural production would have declined dramatically from last year's record harvest.
However, as has been described in detail in Eric deCarbonnel's blog “Market Skeptics”, because of serious weather problems, this year's U.S. harvest will fall far below optimal [Please click on embedded link in source article for more]. He describes in a series of posts how U.S. grain production has already been severely damaged by early-season weather problems in several, key U.S. states...
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My basic beef against the Bankster Bailout is that Bernanke & his Boyz are feeding the parasitic 'fleas & ticks', when the money should be going to the farming/gardening 'dog'; ie, we should be making damn sure that growers have the funds to be highly efficient and profitable so that they can afford I-NPK PLUS ramp O-NPK recycling.
Very quick read and I can get the essence. The main premise is that decline rates that are constant give an exponential decline that is proportional to how much oil is held in reserve. That is a very good approximation when reserves don't increase. Big oil fields draw down more oil per time than small oil fields in a proportional sense, and this holds as the reserves shrink over time. A very basic model yet still hard to get people to understand. The writer does not try to explain anything beyond this point, which I find the most fascinating aspect of depletion analysis. So I do get the essence but since it doesn't go into a visionary model, I will wait a while and use the thesis as a general reference instead of saying it is the "end-all". I applaud him for investing a few years (I presume) to produce what would be the equivalent of a Master's thesis in the USA.
Funny how mention is even made of abiotic oil. I would have only referred to abiotic oil as a complete joke and not worthy of further discussion. So that's a general problem with scholarly works -- you must present a seemingly absurd side as that is published material (i.e. "distinguished" scientist Thomas Gold's abiotic theory), yet no where can you reference something such as Sam or Ace present because it is internet only (i.e. "crazies"). That will change over time because of the ongoing paradigm shift in knowledge sharing.
Hello WHT,
Thxs for your quick read and related comments.
I think it is one of the papers in the group that Dave Murphy and Rembrandt plan to have up this week.
http://www.losangeleschronicle.com/articles/view/102273
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BERKELEY SEES LOCAL, SUSTAINABLE FOOD AS SOLUTION TO CLIMATE CHANGE
May 13, 2009
Earlier this month, the Berkeley City Council unanimously approved its Climate Action Plan and consequently moved one step closer to becoming one the first governments in the country to address climate change by developing a more local, sustainable food system.
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By my quick count: approx. 50 area golf courses could be converted:
http://www.golflink.com/golf-courses/city.aspx?dest=Berkeley+ca
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Berkeley, California Golf Courses
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I think this is not an actively updated list as I recall posting some earlier info on the some of the Chuck Corica courses being already kaput [originally opened in 1927].
I think it would be fascinating if some aspiring relocalized permaculture urban-designer mapped these courses out on Google Earth, then figured how many miles of narrow-gauge SpiderWebs would be needed to connect to downtown Berkeley.
My Phx Asphaltistan has over 200 area golf courses:
http://www.golflink.com/golf-courses/searchresults.aspx?coursekeyword=&c...
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Golf Course Search Results for Phoenix, Arizona
GolfLink found 216 results matching your search criteria.
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But since Phx is highly dependent upon 'Snowbird tourists': I would expect us to jack-hammer, then plow up defunct car dealership lots and bankrupt strip malls to grow food before most of the golf courses get converted.
Hello TODers,
This article offers a mere tidbit of what promises to be great book, IMO. Power, Tragedy, Change, and Conspiracy at the highest levels of Communist China:
http://www.time.com/time/world/article/0,8599,1898042,00.html
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Tiananmen Ghosts: The Secret Memoir of a Fallen Chinese Leader
When the tanks and troops blasted their way into Beijing's Tiananmen Square 20 years ago, crushing the student-led protest movement that had captivated the world, the biggest political casualty was Chinese Communist Party chief Zhao Ziyang, the man who had tried hardest to avoid the bloodshed...
..Published this month, "Prisoner of the State: The Secret Journal of Premier Zhao Ziyang" provides an intimate look at one of the world's most opaque regimes during some of modern China's most critical moments.
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I bet the Chinese Internet censors will go nuts trying to keep this from being electronically dispersed...
This will probably be the Chinese equivalent of Russia's landmark book by Aleksandr Solzhenitsyn:
http://en.wikipedia.org/wiki/The_Gulag_Archipelago
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..In the winter of 1974, unbound and mimeographed samizdat copies of The Gulag Archipelago began being surreptitiously passed between Soviet citizens. These initial readers were normally given 24 hours to finish the work before passing it on to the next person, requiring the reader to spend an uninterrupted day and night to get through the work. Years later, this initial generation of Soviet readers could still recall who had given them their copy, to whom they had passed it on, and who they had trusted enough to discuss their thoughts about the book.[10]
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