DrumBeat: June 6, 2009

Energy execs worry oil rise just mood swing

HOUSTON (Reuters) - A broad consensus about the need for oil prices to rise over time is not reassuring energy experts, who worry that the recent rally is driven simply by an improving "mood," and therefore very fragile.

Energy executives at the Reuters Global Energy Summit this week sounded unnerved by a surge in the U.S. benchmark oil price near $70 per barrel which, while less than half its peak last July, is double its level of mid-February.

No relief in sight for asphalt pricing

Crude oil prices may be holding near recent lows, but don’t expect that drop to translate into lower asphalt prices now or in the near future.

Eric Sigurdson, asphalt operations co-ordinator at Imperial Oil’s Nanticoke refinery, the only plant in Ontario making asphalt, says there’s not much in the way of long-term relief in anyone’s crystal ball.

Pricey oil bringing revolution in lifestyle, writer says

We'll no longer import flowers from Colombia, bananas from Ecuador or steel from China.

More food will be grown locally or regionally. Long commutes will be out. Cities will densify.

And millions of cars--Rubin says 50 million or so--will likely disappear from North America's roads, as annual vehicle sales are cut in half, and commuters opt for mass transit to get around.

The tiny fleet of electric cars now on the roads won't grow much, he says, since the power grid simply won't be able to meet demand.

T. Boone Pickens Highlights U.S. Oil Dependence for Sixth Consecutive Month

DALLAS--(BUSINESS WIRE)--Today energy expert T. Boone Pickens provided his sixth consecutive monthly update on the level of United States’ oil importation.

Pickens said that based on the latest figures from the U.S. Department of Energy’s Energy Information Administration (EIA), the U.S. imported 65 percent of its oil, or 366 million barrels, in May 2009, sending approximately $21.6 billion, or $484,087 per minute, overseas to foreign governments.

Future of 'green' cars begins with the hybrid

Toyota Motor Corp.'s newest Prius hybrid, with tens of thousands of orders in before it hit dealerships nationwide in May, seems a sure-fire winner in the race to dominate the eco-car market.

Also in the running is Honda Motor Co.'s gas-electric Insight, introduced earlier this year.

But with full-electric vehicles coming up fast in the development lane and minivehicle makers scrambling to improve fuel efficiency, will hybrids fulfill their promise in the global market for "green" cars?

9 muscle cars we'd miss

As Detroit downsizes with a mandate to make greener cars, Motown's hot rods may not be around much longer. A fond tribute to an endangered species.

Weaning consumers away from dirty gas-guzzling autos

AUTO pollution is a major contributor to global warming and the energy crisis, yet life without the comfort and mobility offered by cars is unthinkable to many people.

The authors of "Zoom," Iain Carson and Vijay V. Vaitheeswaran, attempt to find a compromise - using clean fuel cars not powered by petroleum.

They appear confident, clearly too confident, that a timely shift from gas-burning cars to those powered by other sources will greatly help solve environmental problems without ridding the world of cars.

Oil and gas industry's costs of doing business slide

The oil and gas industry’s costs of doing business are falling amid a pullback in activity and the global recession, according to a pair of indexes kept by IHS/Cambridge Energy Research Associates released Friday.

However, the decline in costs is much slower than crude’s swift fall from last year’s unprecedented three-digit highs. Also, expenses for more fixed costs — like personnel or contracts for limited deep-water vessels — remain largely unchanged.

Daniel Yergin, IHS CERA chairman, said signs of the downward shift in costs emerged in the third quarter last year, before the recession really took hold.

But IHS/CERA’s latest cost analyses “place into clearer view the impact of the financial crisis, spending cutbacks and the fall in crude prices,” Yergin said.

Ukraine pays for Russian gas consumed in May - Naftogaz

KIEV (Itar-Tass) -- Ukraine’s oil and gas company Naftogaz Ukrainy has paid in full for the Russian gas imported in May, the company’s press-secretary Valentin Zemlyansky said on Friday.

“The required sum has been entered to Gazprom accounts,” he said.

Big oil watches Iran vote, but investment distant

DUBAI (Reuters) - Iran's presidential election on June 12 may mark a small step toward the return of big oil's cash to the country's energy sector, but it could be years before investment flows freely.

Iran sits on the world's second-largest oil and gas reserves, a mouth-watering prospect for international firms starved of access to Middle East fields. But Tehran has not signed a major deal with a large western oil company for years as political pressure over its nuclear program kept them out.

Nationalization spree continues with seizure of gas-compression plants

State-run oil company Petróleos de Venezuela (Pdvsa) continued its expropriation spree by taking control of gas-compression companies, under the law which reserves goods and services related to hydrocarbons primary activities for the state.

A month after the entry into force of the legal instrument and after the seizure of 76 oil service companies, President Hugo Chávez announced the timetable that the government will follow to seize about 70 gas-compression units in 14 Venezuelan plants.

Pdvsa, Citgo face financial and labor troubles

Futpv -which comprises some 67,000 workers- denounced that Pdvsa has breached the collective bargaining agreement as it has failed to disburse the trade union allowance. Further the oil giant failed to provide proper medical care and to deliver materials and equipments to carry out industry activities. Futpv also deplored the situation facing more than 8,000 workers in northwestern Zulia state, following takeover by the government of oil services companies.

Nigerian militants warn of "imminent attack"

LAGOS (AFP) – Nigeria's main armed group Saturday warned oil workers in the southern Niger Delta to leave within 72 hours to avoid an "imminent attack", which the Nigerian military dismissed as an "empty boast".

"This is a final warning from the Movement for the Emancipation of the Niger Delta (MEND) to local and foreign workers in the oil services and exploration companies to vacate the region within the next 72 hours due to an imminent attack," MEND said in an email statement.

The militants dubbed the attack "Hurricane Piper Alpha" which they warned "will not discriminate on tribe, nationality, or race when it sweeps across the region."

Kuwaiti oil puts on 9.1 pct this week, at highest so far this year

KUWAIT (KUNA) -- This past week can only be viewed as extraordinary for Kuwait's crude oil, which was able to make up for some of its losses since July 2008, when its exceeded USD 135 per barrel (pb), only to begin its downward tumble.

British motorists turning their backs on volatile petrol car market, says car manufacturer

Figures show that an increasing number of UK motorists are opting out of the petrol car market and turning to Liquid Petroleum gas (LPG).

With petrol prices again on the rise and LPG costing around half that of petrol, LPG sales figures from Proton reflect consumers changing attitudes.

Energy firms expanding, but cautious over risks

SINGAPORE (Reuters) - Energy companies are planning expansions to capture a bigger slice of future growth, looking past gloomy months on hopes the worst of the economic crisis is past, industry executives said this week.

But the optimism is tempered by the view the industry still holds many risks -- Japan's Idemitsu sees lower export margins this year and leading Asian trader Hin Leong says end user demand for distillates in Asia and Europe remains bad.

Total lives with oil at $50, sees $80

PARIS (Reuters) - Total is living with an oil price assumption of $50 a barrel this year but that could rise to $60 next year and $80 in the next two years, a senior company executive said on Thursday.

Saudi - Calling OPEC a 'cartel' nothing but show of Western bias

Technically speaking, there does not appear to be anything sinister in using the term "cartel" for OPEC, yet, journalistically speaking, the word definitely carries a negative, rather derogatory connotation. One cannot deny this.

OPEC sensitivity is definitely not without a background. In the Western media, OPEC has often been portrayed as a cartel, the gang bent upon destroying global economic prosperity. By endeavoring for a fair price, some accuse OPEC of masterminding the derailment of attempts at global economic recovery.

Somali Pirates Release Nigerian Tug, Crew Held Since August

(Bloomberg) -- Somali pirates released a Nigerian oil field tugboat with its 11 crew, held captive since August, after friends and relatives of the hostages raised a $43,000 ransom, the Somali-American who led the talks said in an interview.

Uganda toughens as oil bullies close in

KAMPALA (Xinhua) -- As Uganda prepares to start the commercial drilling of its oil, pressure has started setting in causing concern that the mineral may turn out to be a curse rather than a blessing like in many oil producing African countries.

Gazprom eyes takeover of Slovenia's fuel retailer

LJUBLJANA (AFP) – Russian gas giant Gazprom may be interested in acquiring Slovenia's largest fuel retailer Petrol, Slovenian daily Delo reported Saturday, citing unnamed sources.

"It seems that Petrol has become an interesting takeover target for Gazprom amid the global crisis in the capital market and the drop in share prices," Delo reported on its frontpage.

Obama tax plans draw ire of energy companies

HOUSTON (Reuters) - The Obama administration's plan to do away with billions in tax breaks for U.S. oil and natural gas companies faces a tough and expensive fight from the industry, which says the proposals would threaten energy security and raise costs for everyone.

Oil's Ascent To Ground Airlines Again

Just when things started looking up for the carriers, higher fuel threatens to put a lid on gains.

Coal, Oil and the Human Difficulty of Grasping Long Duration Problems

In the mid 19th Century, William Stanley Jevons patiently tried to explain to his fellow countrymen that the rich energy content in coal was not a marginal but a pervasive influence on nearly every aspect of the British economy. He warned that coal production would inevitably migrate away from the easy, near-surface deposits to the deeper deposits that would take more capital, more labor–indeed more energy–to extract. His point was rather simple, but, it of course escaped the understanding of the general public. Jevons held the view that British coal would attain, and then surpass, an optimal point of price, production, and therefore utility to the British economy.

Does any of this sound familiar? Jevons was repeatedly misunderstood as saying that Britain was running out of coal. He took great pains to explain the scale of the problem, but Jevons was talking about a cycle whose duration would extend beyond people’s immediate concerns.

Why Your World is About to Get a Whole Lot Smaller (review)

This is a book about the implications of Peak Oil: the theory that the world’s oil production is past the highest level it will ever reach, or very close to it.

Merely by writing that sentence, I have ensured a healthy crop of angry correspondence for the FT. Believers in Peak Oil are quick and often intemperate in defence of their views.

Their zeal is understandable. If you had uncovered a truth that would mean the end of civilisation as we know it, but were being universally ignored, you too might seem a little wild-eyed. Yet that intensity often makes it hard for the Peak Oilists to get their message across.

It does not help that many of them are engineers and scientists, unskilled in the subtle arts of persuasion. Some, who stockpile shotgun shells and tins of beans with grim satisfaction, seem actively to relish the prospect of a harsher but simpler world after society has broken down.

The new economy of tomorrow

Rubin says the "new economy" will have a wide variety of goods produced regionally with less environmental impact.

"It will be a more diverse economy with more diverse job opportunities," he says. "All of those things that we now import from somewhere halfway around the world - well most of those things we're going to now have to learn to make for ourselves."

But not everything will come from close to home, he admits.

"We've always got our tea and coffee from China," Rubin says. "And it's going to take a whole lot more global warming before we can start growing coffee in Canada."

Toyota says hybrids will be the best 'green' car for some time

TOYOTA, Japan (AP) — A Toyota executive said Thursday a battery breakthrough is needed for electric vehicles to become mainstream, and hybrids will remain the best "green" car choice for some time.

His comments came just hours after the Japan Automobile Dealers Association said Toyota's Prius hybrid was the No. 1 selling vehicle in Japan for May, clinching the top spot for the first time — even though the latest model had been on sale for only half the month.

Save money - car share

The county council has launched a Moving Forward campaign and part of the scheme includes a car sharing initiative.

The free service means people can find car share partners by matching journeys together online.

Alternative Energy Power Cost Parity By 2011 Experts Say

By 2011, solar power should be at a point where it has never been in history, which is being cost competitive with traditional power generation without taking any subsidies into account.

Antibiotic problem haunts biofuels

The Food and Drug Administration recently found that samples of a feed byproduct from dozens of corn-ethanol plants were contaminated with antibiotics. With that news, producing vehicle fuel from grain is looking not only like a wasteful and inefficient process but also like a danger to human health.

New device can make ethanol at home

This is how it will work: Interested motorists will buy the microfueler and keep it at home, probably in the garage. A normal wall socket and water supply are all that's needed to churn the waste into ethanol. GreenHouse Energy will supply the liquid waste at no charge.

Motorists can then pull the car up and pump the ethanol at the going market price, currently about $2 a gallon. They will be billed a fixed rate for the fuel pumped, most likely monthly. The pump machine can make 40 gallons a day and will automatically notify the distributor when supplies are running low, company officials say.

Rainforest Conservation More Profitable Than Palm Oil Production

Writing in the peer-reviewed journal Conservation Letters on Friday, researchers noted that a system of selling credits to reduce carbon emissions in the Indonesian rainforest could provide a feasible method of conservation.

Authors of the new report stated that paying to reduce rainforest carbon emissions could actually amount to more income than initiatives to use the deforested land for palm oil production.

New clean energy 2009 investment seen sharply down

LONDON (Reuters) - New investment in clean energy will total $95 to $115 billion in 2009, representing a drop of 26-39 percent from last year's total of $155 billion, data published by research group New Energy Finance showed on Friday.

The clean energy sector including wind and solar power enjoyed more than fourthfold growth in investment since 2004 but has suffered a sharp fall as a result of the financial crisis.

Clean energy depends on wider economy growth

LONDON (Reuters) - Clean energy has strong guaranteed government backing in long-term subsidies but its future growth hinges on wider economic recovery and European targets are in doubt, senior energy executives told Reuters Energy Summit.

The big picture for renewables is a sector which may emerge from recession as fast or faster than the wider economy, because government support is often in the form of guaranteed long-term price support.

The race for clean-energy innovation

ON A RECENT congressional delegation to Hong Kong, I toured a factory that is developing a thin solar cell that can be put on windows to generate electricity from the sun with zero carbon emissions. I thought of 1366 Technologies, a company in Lexington that is also racing to get advanced solar technologies to market.

It may seem like your typical competition between two companies, but this race is about much more than the solar market. It is about the race for trillions of dollars in clean-energy investments. As President Obama says, "the nation that leads in 21st-century clean energy is the nation that will lead the 21st-century global economy."

The Next Climate Deal: How Big is the Battle for Cleantech IP?

Late last month, the U.S. Chamber of Commerce pulled together a small, motley crew of companies with a stake in upcoming climate policy to launch its Innovation, Development & Employment Alliance — a group trying to ensure that an international climate deal doesn’t weaken rules about who can profit from cleantech innovations. As we’ve noted before, the V-P of the Chamber of Commerce’s intellectual property center called the UN climate negotiations taking place in Copenhagen this December “the IP battle of the year.”

But for those waging battles to defend IP, the consequences of negotiators taking a “very collaborative” approach to reducing greenhouse gas emissions and sharing “all intellectual property as much as possible,” as U.S. Energy Secretary Steven Chu has urged, may not be such big a threat.

Money grows on trees

Kevin Conrad, interviewed last week, said it was too early to conclude what went wrong but said an “independent review” was under way. He added that “carbon speculators” were putting pressures on landowners in many countries to sell large tracts of forest ahead of a possible deal on avoided deforestation in Copenhagen later this year.

The broader issue with any kind of carbon credit, however, is ensuring that governments of poor countries behave impeccably. Indeed, if problems like this can happen in Mr Conrad’s own back yard, it suggests that the challenges ahead for REDD are tough ones.

"Buy American" provision in House climate bill

WASHINGTON (Reuters) – A new "Buy American" provision in a massive climate change bill working its way through Congress is a worrisome sign of increased U.S. protection, a business official said on Friday.

The provision offers financial aid to automakers building plug-in electric cars. But it stipulates those cars must be "developed and produced in the United States."

Dodging a CO2 hangover

Even as they defend national interests, negotiators need to bear in mind the latest evidence of the continuing buildup of heat-trapping carbon dioxide (CO2) and other greenhouse gases in the atmosphere despite the economic slump, and the projections for a further massive rise as growth resumes, particularly in Asia.

Deciding when to move plants and animals to save them from global warming

As the climate warms and alters the global ecosystem, many plants and animals will find themselves in habitats too warm or physically altered. For some, it may be a case of move or die. Some researchers have proposed using "managed relocation," or assisted migration, to help move vulnerable flora and fauna to habitats where they are more likely to thrive.

Anglican Head Urges Churches to Pray, Act Now for Environment

LONDON – The head of the worldwide Anglican Communion has issued an appeal to churches to pray and act for the environment ahead of key UN talks on climate change later this year.

Archbishop of Canterbury Dr. Rowan Williams is urging churches to use Environment Sunday on June 7 as an opportunity to pray for the planet and the campaign for climate change to ensure that the best deal is reached by government leaders at the United Nations Climate Change Conference in Copenhagen.

Mexico promises CO2 cuts, activists urge consistency

XCARET, Mexico (AFP) – President Felipe Calderon has promised to dramatically reduce Mexico's carbon dioxide (CO2) emissions as activists slammed the government for inconsistent energy policies.

Developed countries responsible for climate change: Chinese expert

Developed countries bear the historical responsibility for climate change and should provide compensation for that, an expert from Tsinhua University said on Thursday.

Study Finds Large Area of Africa Vulnerable to Climate Change

A new study on climate change warns that hotter weather and shifting rainfall patterns could ruin as many as one million square kilometers of marginal farmlands in sub-Saharan Africa by 2050. Scientists say poor subsistence farmers may have to depend much more on livestock to act as a source for food and income.

Climate insurance

Since those early days, when manmade climate change was a virtually unknown theory, other far-sighted reinsurers, chiefly giant Swiss Re, have joined Munich Re in aggressively warning of climate-change dangers. In doing so, the reinsurers have been doing their duty in maximizing shareholder profit.

Fear of climate change, in fact, has been the biggest boon in insurance industry history. Contrary to conventional wisdom, the insurance industry has no interest in minimizing future risks to the public, in climate change or in any other field. To the contrary, the more that risks exist and the more that the insurance industry can charge to insure against those risks, the larger the potential market for insurance industry products.

Iowa senators say Indirect Land Use Change is bad science:


World sugar prices have been increasing. The world's largest producer of sugar has started to import sugar.

Nestle Brazil Head Zurita Says Coffee, Sugar May Rise -- Bloomberg, June 5

The use of corn ethanol is scheduled to increase as nations have legislated mandatory conversion of grain to fuel and quotas will require more conversion going forward.

This call for drilling is just the beginning for California.
Soon they will be cutting down those redwoods, and other trees, selling all available natural resources to survive this debt crisis. The poor may leave California and go back to Mexico?
IMO they should cut all state gov't expenses except emergency response. Stop all construction projects, cut the paychecks of the state legislators too. Cut Arnold's pay to $1 per year also.

More indirect evidence that energy resources alone (almost single-handedly) propel economic growth.

California has a huge entertainment industry.
California has a huge food and agriculture industry.
California has a huge high-tech electronics industry.
California has a huge military industry.
California has a huge recreational, leisure, and tourist industry.

So we go back to the well, so to speak, to get ourselves out of the hole we dug. Oil is money, everything else is a zero-sum game -- or worse without cheap energy.

California has a huge high-tech electronics industry.

This was true once but no longer. Sure we still retain part of the designers here in California but the high-tech electronics had gone to China. Have you look inside a computer lately? Probably assembled China, with all the ICs and components from there. Now, if Intel or any big high-tech firms was to open a design/manufacturing center, it would be in Asia.

California has a huge recreational, leisure, and tourist industry.

The economic crisis doesn't really help -- a lot of state parks are going to be closed -- with the impending energy crisis, people would travel less and less. I don't see a future in investing much in these -- sure we want some level of service so we can enjoy our live -- provided that we have the jobs to go to.

You made my point. These are no longer the drivers to growth (and perhaps never were). As we lose the energy driver, these start slipping away. China has the momentum right now due to a combination of cheap (read "exploited") natural resources, but that does not really matter as someone will always be ahead in a zero-sum game.

Arnold`s not accepting pay.

He said "he`d be embarassed after all that California has given him" to take any money for being governor. He also said he wants solar panels on every roof in the state, and feed-back energy tariffs.

Arnold works for free, so $1 would be a substantial raise. To my knowledge, he's never been paid.

For what it's worth, none of the past few governors are responsible for our little mess out here. The constitution as written allows the far left and far right to impede to wishes of the majority and there's not a damn thing anyone can do about it.

I would say that if we defaulted on our loans, it would force us to live within our means. But hey, guess what? The CA Constitution also requires us to pay G.O. Bonds and interest prior to any other expense. So, believe it or not, it is impossible for CA to default.

I'm afraid our state's citizens are in unbelievable denial, but unfortunately, denial of facts seems to be the American Pass Time. Or, maybe it's just me. The truth is, I just don't give a damn any more what our government does.

My unemployment check showed up today, so I guess California has at least $950. I'll be dropping off the back end pretty soon as it's been a while. I suppose that will make me a green shoot.

Like the engineers on a train, California seems to be arriving at the scene of the crash ahead of the rest of the country.

I'm afraid our state's citizens are in unbelievable denial, but unfortunately, denial of facts seems to be the American Pass Time.

Is it just me or does anybody else think that, the state that is host to the industry that creates fantasy (Hollywood, Disneyland) would have a lot of people engaging in the denial of facts? Being that close to the mecca of "something for nothing (Las Vegas) doesn't help either.

Alan from the islands

There is plenty of money in California. Things were great till the tax revolt people came along. They don't seem to understand that the flip side of taxes is funding for everything around you. If we undid Prop 13 and replaced the car tax that Arnold removed we'd be fine.

"Nobelist Daniel Kahneman on Behavioral Economics
Georgetown University"


"Nobel Prize-winning psychologist Daniel Kahneman addresses the Georgetown class of 2009 about the merits of behavioral economics.

He deconstructs the assumption that people always act rationally, and explains how to promote rational decisions in an irrational world."

A Race to Keep Up With the Tightwads

Instead of feeling self-conscious about spending less, people are flaunting their frugality. Both those who have lost income, such as Walker, and those who simply fear they may become at risk are part of the new discourse.

"Something very deep has changed in the American psyche," said Dan Ariely, a professor of behavioral economics at Duke. "The recession basically woke us up."

One can only hope that is true. But so many, many people's livelihoods depend on gross, mass overconsumption -- it's going to be a painful adjustment.

Who really needs granite countertops, and who can justify an F350 4x4's to go grocery shopping? And it's really more fun to stay in small hotels and B&B's than to drive around in a Monaco Motor Home and stay in trailer parks.

I hope the excess labor doesn't just all get converted to soldiers.

I can't stand articles like this. They say "coupons" is now a more popular search term than "Britney Spears". Well, "wood" is also a more popular search term than BS. What does that prove?

Great news about the benefits of coupon clipping. The amount of time you waste on coupon clipping is better spent on a $10/hour job. And they only put out coupons for mass-marketed junk food anyways.

Something might have changed in the American psyche, but not in the American IQ. Doh.

You are right-- they are infuriatingly precious

But frugality is really in better taste than profligacy. It's just so much more elegant.

They make it sound as if the consumer is still desperate to consume at the same levels as before, so they furiously look for deals any where they can. According to the article, its all about the american "psyche", so the attitude is to make up for our historical consumption prowess.

Instead of looking for coupons, people should be looking elsewhere for a sustainable lifestyle. More like what you and Leanan hint at below.

'Tis not a smooth glide path.

The amount of time you waste on coupon clipping is better spent on a $10/hour job.

Only if you can get a $10/hour job. A lot of people can't get any kind of a job.

I think ties into what Homer-Dixon and others have written about - the return of the household economy. It makes sense, for people who have more time than money, who can't get jobs in the formal economy.

"Cheap is the new chic."

"Why your world is about to get a lot smaller"

This book paints a vision of a world of energy scarcity that seems more appealing than the apocalyptic warnings of many Peak Oil believers. Rubin also fails to tackle the threat of a bitter struggle for resources as countries and individuals try to grab for themselves the dwindling reserves that remain, which some experts see as a real risk. No doubt Rubin will draw flak from the more extreme end of the Peak Oil movement for his Panglossian optimism, the economist’s perpetual failing.
For the rest of us, his book is a thought-provoking introduction to a future that, sooner or later, the world is inevitably going to enter.
Ed Crooks is the FT’s energy editor

Earlier in the review he states

For financially literate FT readers, the Peak Oilists’ credibility is further undermined by their suspicion of market forces. “Economist” tends to be a term of abuse in Peak Oil circles.

I don't think economists have come in for any more opprobrium as a group than any other identifiable class of thinkers. Everyone has their blind spots. I do believe that a general understanding that there are limits will help guide a more sensible debate -- whether we are talking oil, terrorism, medical care or Palestine.

Shouting matches that pass for debates, and radio tirades from Limbaugh and the like seem to be less acceptable as a style. It is so easy to be cynical, but there are some green shoots of civility springing up.

"some green shoots of civility springing up."

Hopefully; but I think that really went away with the Vietnam War.

I read both the book and the review. Of course the Financial Times would be protective of the economist's image. It seems in this world of specialists in almost every endeavor, there are no notable ‘Generalists’ to put reality all together. I find Rubin to be understandable in his specialty but hardly one to put all the black signets into a book.

I am reading “The One-Straw Revolution” by Fukuoka. Something as simple as putting straw on a small field of grain is complex beyond belief. BTW: This is a good book about generalist thinking compared to specialized thinking. It is a Zen thing of oneness.

Here on TOD with the many views and most of the time any so called facts or opinions will be challenged. As a consequence we find a pretty well balanced dialog carried on.

I am one of the reviewer’s “Raving Doomers” just growing a garden and visiting with friends on TOD.

I would like to go toe-to-toe with any economist regarding resource depletion modeling. I don't have anything against economists and especially the field of econometrics, since ostensibly they try to apply some formal math to the problem at hand -- the same thing I am deeply interested in. I just think they attack the problem with enough of a deflection from the correct course that they end up way off target.

This is just like aiming at something in the distance and not realizing that small deviations in your aiming angle will end up diverging widely from your target. Its infuriating because I don't think the resource depletion part is that hard to get right.

And this is not about complexity (Fukuoka's straw example) or chaos (butterfly flapping its wings) where errors can propagate. Its mainly about getting the premise correct.

... and you would merely disagree on the simple axiom that the economist would use : that everything can be replaced - including 75 billion barrels of oil per year - by technological advance.

For the economist, no resource ever runs out, because they are replaceable. The economist assumes technology is moving, and that for example running out of oil will make energy research have such a potential huge, huge payoff that everyone and his cat would be doing it - and that one of them would find something.

You on the other hand, would assume nothing could replace it.

Now historically, barring a few exceptions (mostly caused by global cooling), the economist was always right. One can number the times they were wrong easily on one's fingers, and they were never ever right for what you might call "western civilization". Western civilization has dug itself out of every last hole the world dug for it, including several resource shortage holes. Only individual colonies have starved, not the whole. By contrast, middle eastern civilization (ironically the now oil-rich muslims), african civilizations and chinese have had resource crises they did not recover from (the muslims literally caused terrorist attacks so bad their own food sources left TWICE, africans multiplied too fast for the land to sustain on countless occasions, and their attempts at conquering territory could not succeed fast enough to keep the hinterland liveable even when they were successful). Nevertheless, even with total collapse of the civilization enough people survived to "revive" it with Western help later.

I'm siding with the economist, not because I know oil to be replaceable, but because I hate to bet against a winning streak that's now lasted for some 5000 years with a time limit. Feels too much like "the world's going to end" predictions to be reasonable.

I'm happily riding the fence.

I have no problem being with people who have a sunny disposition, and are looking to a bright future. More power to 'em, I say. (With a wink..) I don't tell everyone how many contingencies I've been developing and assembling.

If true Darwinian success depends on being able to respond flexibly to eventualities, I don't find it's a great plan to slam and lock the doors on any side of me..

Be ready for good developments .. and be as ready as you can for bad developments.

You on the other hand, would assume nothing could replace it.

Not exactly. I would add an element to the model that accounts for the gradual decline of oil.

The closest thing economists have is Hotteling's rule. I can add a lot to this simply by modeling the dynamics of oil depletion, in terms of first principles. For example, the classic Logistic function is not what most people think it is; rather it comes about from some basic considerations of dispersion in rates during the course of exploitation of constrained resources.

I have no interest in end-of-the-world predictions; however I am interested in the concept of planning. Yet, to plan most efficiently, one really should understand the way things may play out. The fact that economists in the past got lucky by not planning, and simply substituted hope for a plan is shear luck. And luck is not a plan either :)

Or are you saying that economics is the science of getting lucky?

I thought that science is the field of study that tries to remove luck from the parameter space. Without science you can explain anything by saying they got lucky.

The opinion's fine, but don't you think the challenge is quite a bit greater than those in the past 5000 years? I mean, wood was the primary energy source until at least the mid 19th century in the United States (still is in some places). Coal came to the rescue and, I think, was 90% of primary energy in the U.S. at the time of my paternal grandfather's birth (1912). Oil shoved coal out of the way less than 100 years ago.

But if trend is destiny, OK then.

I take it that you know nothing about engineering or thermodynamics. (Or physics or chemistry or geology, etc)...

E. Swanson

Let me add history.

"And this is not about complexity (Fukuoka's straw example) or chaos (butterfly flapping its wings) where errors can propagate. Its mainly about getting the premise correct."

I generally agree but the ever changing relations between unemployment, climate change, lithium location, population growth, and light oil flow reduction just to name a few variables (while knowing full well there are hundreds more) to me is more than just asking the right question or getting the premise correct. But then again, I am just growing a simple garden to feed my family.

That's what happens on this blog. We all have different interests, and occasionally we can cross-pollinate ideas.

I would like to go toe-to-toe with any economist regarding resource depletion modeling. I don't have anything against economists and especially the field of econometrics, since ostensibly they try to apply some formal math to the problem at hand -- the same thing I am deeply interested in.

Malthus tried to do this, although he didn't do depletion, his assumption was closer to a fixed upper limit of supply. He assumed that the earth could supply more resources for any incremental increase in population, but that the resources per capita were a decreasing function of total population. Even with these rather mild limits, the consequences are pretty dreadful. In his theory, it was assumed that population would only be controlled by deprivation caused deaths. Of course we have observed a demographic transition -above some average welfare value, fertility drops off. So modern economics assumes we can reach a rich moderately low population state. Since it was working out that way for more than a single lifetime his theory became unpopular/discredited.

We all know what the end state will be. After all, didn't the economist Keynes say: "In the long run we are all dead" ?

My interest is in the dynamics or glide path as we approach that point. The temporal behavior is what we will use for planning. A plan with no time schedule, such as "we're all doomed!", doesn't really help us that much.

The issue with Malthus is that he assumed a deterministic outcome to his model. As formal stochastic analyses only gained a practical foothold in applied mathematics in the 1950's, that part of the model hasn't even been considered. Essentially, all the deterministic models give abrupt outcomes, and only when you consider the effects of dispersion and variability do you start to see the possibilities of a soft landing.

Do you think economists would be interested in that aspect? And if they aren't, what is the purpose of economics anyways?

Now that The Federal Government is bailing out the auto companies, do you suppose that they will retroactively bailout Packard, Studebaker, Hudson, Kaiser, Frazer, Nash etc...???
I'd like a new Packard with 500 cubic inch straight 8 engine and twin ultramatic transmission and torsion bar suspension in a slightly redesigned 55/56 Caribbean convertible model, Thank you. Or maybe a 750 cubic inch Twin Six engine (also known as a V 12)? Oh ya, I'll have the water/alcohol spray option to get better fuel mileage and reduce emissions.
What can I say, it's a cool rainy morning just made for daydreaming!

Cool and rainy for sure. All of a sudden my exuberant hopes for a global warming-induced tomato crop on the North Coast have frozen into the reality that we are still in the Holocene. I had to start a fire in the woodstove!

I'll vote for a Franklin Phaeton, myself. Franklin was dealt a cruel blow by the previous Depression. Perhaps it could be assuaged?

The low setting off the west coast has been pumping moisture and cool temps into the Reno area for the last 10 days and today is more of the same. The garden has just not done anything. Hopefully next week will bring sunshine and things can start growing again.

I have a wood bed set to deliver and my little open pickup won't do for that. A friend has a closed trailer I will borrow next week if it doesn't clear up soon.

I had a '41 Nash 600 (upside down bathtub) and it got 25 mpg when I had it in 1950-1. Trouble is that it only got about 25 miles to a quart of oil too. I was in college and could not afford more nor could I afford to have it overhauled. I put new rings, bearings and ground the valves which improved the oil milage. :-)

The low setting off the west coast has been pumping moisture and cool temps into the Reno area

Here in the far far east bay (elev 200 -essentially the same Climate zone as Sacramento this is a great pattern. I haven't had to run the AC for over a week -and with the forcast I'll think I'll make another one after that! And I only about half the water to keep the landscaping alive. Not done with my radiant barrier -still a few hundred square feet to put in -so more cool weather is a good thing. Getting even one party cloudy day a month during the summer is normally about it, we've had em for over a week straight now!

New device can make ethanol at home

This is how it will work: Interested motorists will buy the microfueler and keep it at home, probably in the garage. A normal wall socket and water supply are all that's needed to churn the waste into ethanol.

Heard about similar devices although no one ever admit that they have one it is always someone else.

In a nod to naysayers, E-Fuel founder Tom Quinn compared the microfueler to the dawn of the computer age, when skeptics couldn't imagine personal computers, laptops or iPhone technology.

I have read about a similar revolution before in Sweden then they discovered how to make alcohol from potatoes.

“So we really feel that this is going to start the greatest organic fuel revolution of our time,” Quinn said.

I have a device that can make ethanol at home as well...


All hail the mighty Ale Pail!

Let’s see. This ethanol is made from a byproduct of beer brewing. We will have to drink a lot of beer to get auto fuel. Will we have to drink 200 gallons of beer to get 40 gallons of ethanol bio-stuff? The DUI arrests will go up … more prisons …more broken homes … more bankruptcies … more lawyers … more politicians ... more debt for California.

Sounds like a deal. Go for it Arnold.

Actually, it sounds like a good silver BB if someone has a car that can run well on 100% ethanol (or beer), mine won't.

Hello TODers,

From reading Nate's latest thread: I am glad to see the growing 'topsoil fuel' discussion on O-NPK & I-NPK. I hope those with statistical prowess [Thxs WHT & Bart], and maybe access to the expensive proprietary reports, can advance this discussion for the postPeak era ahead.

Olduvai Theory: Toward Re-Equalizing the World Standard of Living

Basically, this supports Jay Hanson's fast-crash scenario of the Thermo/Gene Collision [of which I am drawn to] versus the very slow Catabolic Grind of Archdruid Greer. Twenty years is just a blink of an eye even from a human perspective,IMO. Of course, the ETA of Jay's 'Requiem Scenario' when we have long passed the Overshoot/Dieoff phase, and have then bottomed out in the Undershoot phase, will be the critical time to see if we go extinct or not.

from the link above, in reference to Fig. 5:
The Olduvai Scenario: The U.S. SL plunges (curve 4); the OECD SL dives (curve 2); the non-OECD SL levels off and then sinks (curve 3); the Olduvai SL (curve #1) peaks in 2010 7 and then declines to a scant 3.53 boe/c in 2030. That SL for the World in 2030 will equal the same SL the World had in 1930 – thus giving Industrial Civilization a “pip” of 100 years. In other words: The falling World SL will eventually limit both World population growth and industrialization.
Since world pop will be growing during this 20-year period [unless TSHTF] it would be fascinating if those TODers, with much admired data-freak skills, could offer their projections on global & US I-NPK volumes, and also how much O-NPK recycling & relocalized permaculture can be expected to grow if the global huddled masses mutually decide that compost pits are better than machete'moshpits.

My feeble US guess is that at 3.53 BOE/C in 2030: 2BOE/C will be dedicated to the entire [NPKS & H2O-->Food cycle] with half of this amount large scale industrial and the other 1 BOE/C for Relocalized Permaculture. I hope other TODers can further elaborate or refute my WAG with greater skill.

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

Recall my prior postPeak analysis of the UN FAO Fertilizer Forecast 2008-2012 as they did not include any postPeak cascading blowback ramifications in their report detail. This FAO text might be a good statistical base from which to start [PDF Warning]:


Or is everyone already too busy tightly hugging their bags of NPKS to statistically flog this dog?

I strongly doubt if Israel's MOSSAD will post on TOD about their war-game studies of Asimov's Foundation [of predictive collapse and directed decline] and Porridge Principle of Metered Decline, but here is another tantalizing tidbit:

Palestinians hardest hit as drought worsens

..Israelis use 240 cubic metres of water a person each year, against 75 cubic metres for West Bank Palestinians and 125 for Gazans. Increasingly, West Bank Palestinians must rely on water bought from the Israeli national water company, Mekorot.

.. The World Bank report said that in Gaza, the continued Israeli economic blockade played a key role in preventing maintenance and construction of sewage and water projects. In the West Bank, Israeli military controls were a factor, with Palestinians still waiting for approval on 143 water projects.
Essentially: "I drink your milkshake!" Please assimilate this info with my prior postings.


You really should read Fukuoka's book. It starts off with a Zen enlightenment when he was 25 or so. Afterwards he started to look into natural growing. He had been working on it for over 25 years when he wrote the book. He is growing more rice and winter grain with straw cover and just a little duck or chicken poop than commercial farms in Japan. His location has natural rain which we don't have here but we have a good well. The book will be well worth the read for the near zero NPK concepts and his take on specialists.

Later Lyn


Hello Lynford,

I will read this book when I get the chance, thxs. Have you seen this weblink:

California's Water Woes Threaten the Entire Country's Food Supply
[Posted June 6, 2009]

Nearly a third of the country's food supply comes from California, but drought there may be a catastrophe for farmers -- and the rest of us.

.."I don't think the American public has gripped in its gut what could happen. We're looking at a scenario where there's no more agriculture in California. I don't actually see how they can keep their cities going," Steven Chu told the Los Angeles Times in February, shortly after taking office in January. "I'm hoping that the American people will wake up," he added, "just in case there was any confusion about the gravity of the situation."

..As Chu explained, cities like Los Angeles will not have to think about why it can't hose off its driveways or take long showers; it will have to think about whether it is going to run out of water altogether.

"What are you going to say?" Metropolous asked rhetorically. "All you people have to move out and go elsewhere? That's not going to fly."
Duh! I would expect such a denial reaction from someone named Metropolous in a Supergiant Metropolis. Instead, I would suggest he study Catton's 'Overshoot' and Dieoff.org, then examine the long ago abandoned Indian ruins in the Southwest.

Recall that the current, fanciful projections are for Cali to add 20 million more to their current 38 million in the next twenty years. That will be a hell of a mess,IMO.

I attended a "Green Expo" being run in my neck of the woods on Saturday and was surprised to discover that a major new sewage treatment facility is now in operation serving the city. In an old government news agency press release the following is stated:

Located on 160 hectares (400 acres), the treatment plant has an intake capacity of 75,000 cubic meters (18 million gallons) per day and can facilitate some 600,000 residential and commercial customers in the designated areas.

It was built by Ashtrom and uses biological aerobic technology, basically the use of biological agents (algae) to process the waste. The main outputs of the facility will be water and ... surprise... organic fertilizer. Now if the local authorities can get some wind or CSP powered pumps to do the necessary pumping, at least we might end up with a sustainable sewage treatment plant and a source for O-NPK and irrigation water as we hit the downslope. Feeling a little less doomerish as a result of this discovery.

Alan from the islands

I have gotten criticized for not using the pricey consultant data, available for mere thousands of $. I guess we will have to substitute time and acumen for money.

Hello TODers,

Please click to study the many included graphs and discussion in this link. Let's just say he is Not a Happy Camper:

Poisoning the Green Shoots

..The soaring debt is the greatest poison. It is one thing to have a large debt in a rapidly growing and young country, it is another to have a large and growing debt in a maturing country facing an aging population which will place huge strains on the social networks.

..The green shoots we have seen over the last few months are dying for now. The bullshit spin on this week's economic events will not act as fertilizer...
Again, I encourage you to please open the link.

Hello TODers,

Srinagar June 6: Kashmir is on the precipice of an agronomic crisis as truckers from outside are hesitant to ferry chemical fertilizers to Kashmir due to the indefinite strike that entered its sixth day on Saturday.

..He said some 200 trucks are needed to transport the fertilizers to the valley. We talked to many goods carrier transport companies but none is ready to bear the risk of being attacked by stone pelting mobs reining the streets of Kashmir, he added.
IF full-on Peak Outreach was already widely known in Kashmir: the last thing that city dwellers would do is impede the flow of I-NPK to the rural areas that, in turn, re-supply food back to the cities. In fact, if these city people were really thinking ahead: they would be piling additional barrels of evaporated urine powder on these trucks instead of throwing rocks.

Any guesses when the same thing will occur in the US? Five years? Ten Years? Much earlier because our leaders & the MSM, at all levels, are not alerting the avg 'Murkan with Peak Outreach?

Try to imagine all major US seaport cites [LA, Houston, NY, etc] so convulsed with Mayhem that our near 50% reliance on imported I-NPK cannot be moved inland to the final topsoil square foot--Yikes!

..In India, Coke drained water from local villages but gave them fertilizer in return—which contained lead and toxins, according to a BBC investigation. A leading British poisons expert warned of "devastating consequences" for the local population, but Coke called the fertilizer "absolutely safe."
I wonder if the rural Kashmiris, in the first link, are going to get I-NPK with the same poisonous toxins as in the second link?