Drumbeat: August 13, 2009

OPEC Spare Capacity May Stymie Oil’s Rally

(Bloomberg) -- Crude oil prices, which have surged 60 percent this year, may not rise above $80 a barrel because spare production capacity among OPEC members has swollen.

The CHART OF THE DAY shows the relationship between crude oil futures traded in New York and excess output capacity of the Organization of Petroleum Exporting Countries this decade. Prices climbed to a record $147.27 on July 11, 2008, when OPEC members had the ability to bring fewer than 3 million barrels of additional production online.

In March the 12-member group could have produced 6.84 million barrels a day above its actual production, if needed, the most since 2001, according to a monthly Bloomberg News survey of oil companies, producers and analysts. That margin was 6.11 million barrels last month.

“The numbers have gotten much larger over the past year,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “The Saudis alone probably have close to 3 million barrels excess capacity. The excess shows how effective OPEC’s been in managing the market.”

Precision CEO sees gas supply and demand tightening

CALGARY, Alberta (Reuters) - Natural gas supply and demand should start coming back into balance in North America by this winter as severe cuts in drilling lead to a drop in available volumes, the head of Canada's largest contract driller by rig count said on Thursday.

Major reductions in capital spending among energy companies in response to weak gas prices are prompting steep production declines in Canada and the United States, Precision Drilling Trust Chief Executive Kevin Neveu said.

"We think this aggressive decline rate in both Canadian and U.S. gas is catching up right now with the demand side," Neveu said at an investor conference in Denver, Colorado.

"We expect to see clear evidence of this decline early in the 2009-10 winter ... season."

Bombs in the bush: A gas boom triggers rural resentment

Long a bucolic place of fertile farms, the Peace valley has become the centre of the hottest natural-gas boom in North America. New drilling technology has unlocked two vast pockets of shale gas with recoverable reserves of about 70 trillion cubic feet (2 trillion cubic metres). A stampede of energy companies has snapped up exploration rights, drilling more than 700 wells last year alone, and building pipelines. They have brought a bonanza of jobs and wealth to the area and to the province. In 2008 the provincial government netted C$2.66 billion in sales of land and drilling rights, and a further C$1 billion in royalty payments.

To the mysterious bomber this represents the destruction of a rural arcadia. The police take the threat seriously. They have beefed up local units and called in a national counter-terrorism squad. A decade ago more than 160 sabotage attacks took place in next-door Alberta, in protest at the energy companies’ alleged disregard for farmers, and particularly their practice of flaring gas to eliminate toxic impurities. This was blamed for causing stillbirths in animals and humans. The police have interviewed one of those responsible for that outbreak of vandalism (who was jailed for two years) but have eliminated him from the current investigation.

Mexico's Pemex placed 200 mln euros debt last week

The company has already raised approximately $7 billion this year to fund its business plan and meet upcoming maturities. But executives have said they may issue more debt to prefund 2010 requirements if borrowing conditions are attractive.

Filthy SF power plant to close

San Francisco's dirty power plant on the eastern waterfront would shut down by end of next year, under a legal agreement announced today between Mirant Corp. and City Attorney Dennis Herrera.

July sees big jump in fuel efficiency of new cars

WASHINGTON - Cars and light trucks sold in July got more miles per gallon than those sold in previous months, say researchers, who credit the Cash for Clunkers program.

The average mileage for new vehicles rose from 21.4 miles per gallon in June to 22.1 mpg in July. That may not sound like much, but it’s the highest mileage that researchers at the University of Michigan have seen since the Environmental Protection Agency reconfigured mileage estimates in October 2007. It’s also the biggest one-month jump.

Natural gas stocks grow less than expected

NEW YORK -- Natural gas stockpile levels rose less than expected last week, but they're still well above last year's levels, the government said Thursday.

The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states grew by 63 billion cubic feet to about 3.15 trillion cubic feet for the week ended Aug. 7.

Analysts had expected a build of between 65 billion and 69 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

ExxonMobil pleads guilty to killing birds

WASHINGTON (AP) -- Exxon Mobil Corp. pleaded guilty to killing migratory birds in five states, and will pay about $7,000 for each bird killed, Justice Department officials said Thursday.

ExxonMobil pleaded guilty to causing the deaths of approximately 85 migratory birds, most of which died after exposure to natural gas well reserve pits and waste water storage facilities. Birds died in Colorado, Wyoming, Kansas, Oklahoma and Texas between 2004 and 2009.

Safest hybrid cars

These five ultra-efficient vehicles have earned the Insurance Institute for Highway Safety's Top Safety Pick Award.

Vandals destroy Portland community gardens

In her 35 years as director of community gardens, Leslie Pohl-Kosbau had never seen anything like it: wooden trellises shattered, cornstalks cut down and trampled, tomato plants ripped out by the roots.

Vandals had struck the garden several times during the week, but in the wee hours of Tuesday they wrought the most damage. "They took some tools that were stored there and chopped the heck out of the gardens," says Pohl-Kosbau, who works for the Portland Bureau of Parks & Recreation. "It was wanton destruction."

Water spigots were turned on full blast and left to flood the gardens for hours. It was the fifth -- and most devastating -- strike since late April.

Neighbors who witnessed the vandalism refused to talk, saying they feared retribution.

Breaking the barriers to bicycling in Washington County

Craig Dirksen, Tigard's mayor, hadn't ridden a bike in 20 years. But spurred by high gas prices and the nagging thought that he should exercise more, Dirksen bought an electric bicycle in June. He does most of the pedaling -- saving the battery for long trips or hills -- and now bikes to his job, in his work clothes.

Washington County Commissioner Dick Schouten wants to see more people using bicycles for shopping, errands and work. He wants to see more jeans and khakis than lycra, more "bike riders" than "cyclists," more women, seniors and others who "look less like Lance Armstrong and more like regular people."

Schouten thinks this is important because greater bicycle use could reduce traffic congestion, greenhouse gases and foreign oil use while improving people's health.

Make every job a green job

The aspiration to create "green jobs" should really be seen as shorthand for two public priorities -- immediate job creation and long-term transformation of the economy for sustainability and prosperity -- and both goals can be addressed simultaneously. However, in judging our progress, a simple tally of jobs in "green sectors" is only a partial indicator of the impact and thus can be misleading.

Apocalypse Later? I'm Going Local Now.

Suddenly the end of globalization and other apocalyptic visions of the planet's near future, once the purview of Idaho survivalists, are prime-time stories on CNN. Mainstream suburban friends of mine who used to say that my experiment in neo-rugged-individualism was radically subversive have abruptly changed their minds. Now they just say it's radically unfeasible. Yet everyone seems to sense that 69-cent plastic garden buckets might one day be difficult to come by.

I have a fiancee and a son to provide for, so I decided to take a hard look at our prospects for survival if our consumer safety nets went away. For now, my green lifestyle choices at my remote 41-acre outpost in the American Southwest are optional. You know, growing lettuce instead of buying Chilean. Using organic cotton diapers instead of buying Pampers. But what if one morning in, say, 2049, I wake up to milk my goats and find out that supplies are no longer streaming in from China and California? What would I do if both big-box stores and crunchy food co-ops suddenly were no more?

In other words, I'm examining my place in a hypothetical post-oil, post-consumer society 40 years in the future.

Food crisis: Fields of gold

A bumper crop of corn set to come in at harvest in the U.S. this year. A global recession hogging all the attention. That’s all it took, and all of a sudden the Global Food Crisis, such a topic of conversation last year, is nowhere to be seen.

The quick disappearing act has some wondering where good sense has gone. “One good year and the problem is over? That’s ridiculous,” says Donald Coxe, a well-known commodity fund manager. His latest work of art, the Coxe Commodity Strategy Fund (TSX: COX.UN), was the biggest IPO on the TSX last year (raising $297 million from investors). So you know where his interests lie. Nevertheless, he is concerned that we are still just one bad crop away from another round of volatile food prices. “We’ve just had the worst deflation in the postwar period, and yet the prices of food are still high,” says Coxe. “We’re still right on the edge.”

Invest in Africa, invest in the whole world

Africa will feel the worst effects of rising food prices. But with greater investment in agriculture from governments and donors, the continent could become the bread basket of the world.

Grow your own sausages

Ruth Lees's large town-centre garden in Wilmslow, Cheshire, was, until recently, home to four young porkers. "The pigs looked very excited when we walked them out of the garden; it was almost like they were expecting to be taken on a lovely trip," she says.

"I felt a bit mean knowing that their destination was the local abattoir. But they'd gone by the Tuesday, were back in pieces by the Friday and, to be honest, the homemade sausages tasted so good that none of us – not even the boys – felt in the slightest bit squeamish when we sat down for supper."

Debunking the meat/climate change myth

If I butcher a steer for my food, and that steer has been raised on grass on my farm, I am not responsible for any increased CO2. The pasture-raised animal eating grass in my field is not producing CO2, merely recycling it (short term carbon cycle) as grazing animals (and human beings) have since they evolved. It is not meat eating that is responsible for increased greenhouse gasses; it is the corn/ soybean/ chemical fertilizer/ feedlot/ transportation system under which industrial animals are raised. When I think about the challenge of feeding northern New England, where I live, from our own resources, I cannot imagine being able to do that successfully without ruminant livestock able to convert the pasture grasses into food. It would not be either easy or wise to grow arable crops on the stony and/or hilly land that has served us for so long as productive pasture. By comparison with my grass fed steer, the soybeans cultivated for a vegetarian’s dinner, if done with motorized equipment, are responsible for increased CO2.

Hedges Pay Off for Natural-Gas Producers

For oil and natural-gas companies, the budding crackdown on U.S. energy markets comes at an awkward time.

Producers are relying more than ever on the futures markets to hedge the risk that prices will fall, even as regulators take aim at energy traders in an effort to blunt the sort of spikes that hit consumers last year.

Pemex Needs Oil at $70/Barrel to Sustain Projects

(Bloomberg) -- Petroleos Mexicanos, Mexicos’s state-run oil company, needs oil to average above $70 a barrel to sustain a $19.5 billion investment plan this year aimed at developing deep sea wells, Energy Minister Georgina Kessel said.

“Pemex needs to maintain its current levels of investment to develop its reserves,” said Kessel, the oil producer’s chairwoman, in an interview yesterday. “Prices above $70 to $75 a barrel are appropriate to help develop those projects.”

Firms Tied to Stolen Oil Products

U.S. authorities have linked two Texas companies to a cross-border organized-crime operation that smuggled stolen oil products from Mexico into the U.S.

Government officials seized money from the bank accounts of two small fuel distributors earlier this year in connection with the sale of stolen natural-gas condensate from Mexico, court documents show. Some $100,000 was taken from San Antonio-based Valley Fuels Ltd., and about $40,000 from Houston-based Continental Fuels Inc.

U.S. case highlights Mexico's rampant oil theft

Tapping into state oil monopoly Pemex's pipelines to steal gasoline, diesel and even jet fuel has generated hundreds of millions of dollars of profits for Mexican criminals for years.

The lost fuel is a significant cost for Mexico, which relies on imports for more than 40 percent of its gasoline despite being one of the world's largest oil producers and exporters.

Pipelines buried beneath farms and in other rural areas are frequently dug up by the thieves who attach valves to allow them to drive up tanker trucks to the line and siphon off the fuel.

For the most part, stolen fuel is sold to corrupt service station owners and companies that operate large fleets of vehicles in Mexico.

Mexico to build $9 billion refinery in Tula

MEXICO CITY -- Mexico's state-owned oil company says it will build a $9 billion oil refinery in the city of Tula in central Hidalgo state.

Petrobank losses widen

Canada's Petrobank Energy and Resources posted lower second-quarter results as the oil and gas company was hurt by a drop in world oil prices, but said production rose 72%.

Cap-and-Trade's Unlikely Critics: Its Creators

Economists behind original concept question the system's large-scale usefulness, and recommend emissions taxes instead.

Climate culture wars

With the global economic crisis pushing unemployment higher and an international climate change deadline looming, the old jobs-versus-the-environment dichotomy was bound to get a bit of a workout.

Despite the best efforts of many governments to link together economic stimuli, environmental measures and ‘green jobs’, those tensions are still welling up.

The wildebeest river is running dry

The animals' stampede through the Mara river is one of nature's most spectacular events. But now the watercourse is drying up, a sign of the damage being done to Africa's fragile eco-system.

A Wind Boom in Missouri?

Figures released last month by the American Wind Energy Association show that Missouri’s wind power supply grew far more quickly than that of any other state in the second quarter.

Wind power capacity increased 90 percent in Missouri; the next closest states were Pennsylvania (28 percent) and South Dakota (21 percent).

Act now for better energy efficiency

Rashkin quoted Wayne Gretsky, who once said, "A good hockey player skates to where the puck is. A great hockey player skates to where the puck is going to be." Rashkin then laid out an interesting scenario, explaining just where our energy "puck" is likely to be in the not-too-distant future.

The story was about the future cost of electricity but Rashkin started by explaining the link between the price of oil and corn. When oil prices recently rose so drastically, it became more profitable for many U.S. farmers to sell their corn to ethanol producers to be used as an alternative fuel rather than as a food crop. The corresponding shortage of corn on the open market led to a rapid tripling of the price. As we turned food into fuel for cars, the price of corn became linked to the price of oil. There were repercussions to this linkage, including strong protests in Mexico dubbed the "tortilla wars" since many people could no longer afford the corn tortillas that are a staple part of their diet.

Many things are similarly affected when linked to the price of oil, which is a finite resource. We need alternatives to fossil fuel and there is no doubt that plug-in hybrid and pure-electric cars are inevitable. As Rashkin emphatically pointed out, "They are coming!" This transition will reduce our need on dwindling reserves of foreign and domestic oil which is a very good thing, but it also means that the value of electricity will become linked to the price of oil.

Oil refiners investment in complex plants backfires

LONDON (Reuters) - Oil firms that invested in complex refineries to process the most difficult crude and in theory generate big profits have inadvertently forced up the cost of feedstock, wrecking the economics of their plans, especially in Europe.

An increase in the cost of high quality lighter crude, which began about seven years ago, first inspired investment either in complex new plants or in adding cokers and residual hydrocrackers to existing refineries so they can process heavier oil.

What the refiners did not predict was the extent to which heavy crude costs would be driven higher by increased demand from more complex refineries and the plunge in refined products that followed the end of the oil market rally last year.

As profit margins have diminished, some new projects, particularly in Europe, are likely to be shelved, raising the prospect of supply tightness when demand recovers and as heavy crude supplies are expected to outstrip availability of lighter oil.

BUY OR SELL: Should heavy crude cost as much as light?

NEW YORK (Reuters) - Heavy, sour crude has rallied against light, sweet crude in recent months, bringing grades like Mexico's Maya and U.S. Mars sour into close range with light-sweet crudes, such as West Texas Intermediate.

Oil May Fall Below $10 in Next Decade, Prechter Says

(Bloomberg) -- Crude oil may plunge to less than $10 a barrel in the next decade after surging to a record $147 last year, said Robert Prechter, who achieved fame for cautioning on Oct. 5, 1987, that stocks would crash.

“I expect crude oil prices to fall below $10 a barrel sometime over the next decade,” Prechter, founder of Elliott Wave International Inc., said in an e-mail yesterday. “It took many years for it to achieve $147.50, and it will take a long while for the full retreat to occur.”

Oil should fall to between $4 and $10 a barrel based on a technical analysis called Elliott Wave principle, Prechter said in the Elliott Wave Theorist report last month. The forecast rests on a “supercycle” theory, which through a series of five waves from last century suggests a decline from last year’s peak.

IEA Bearish on 2009 Oil Demand, Overlooks U.S., Barclays Says

(Bloomberg) -- The International Energy Agency remains too bearish on its outlook for oil demand this year and has overlooked U.S. industrial output that will boost consumption in the coming months, Barclays Plc said.

The IEA, energy adviser to the Organization for Economic Cooperation and Development, yesterday raised its forecast for global oil demand after increasing the estimate for the second quarter. By maintaining its prediction for the latter half of 2009, the IEA isn’t accounting for signs of an economic recovery in the U.S., the largest oil-consuming nation, Barclays Capital commodities research analysts led by Paul Horsnell said in a weekly report yesterday.

“The potential for some strong demand signs in the middle of the demand barrel is one reason we continue to believe the International Energy Agency is still being far too bearish on 2009 demand,” the analysts said, referring to increased demand for transportation fuels, including diesel.

Oil rises above $71 as IEA boosts demand outlook

VIENNA – Oil prices rose to near $71 a barrel Thursday after the International Energy Agency boosted its global crude demand forecast.

Investors brushed off evidence of weak crude demand in the U.S. The Energy Department's Energy Information Administration said crude inventories rose last week by 2.5 million barrels and were up 7.5 million during the last four weeks.

"There is now enough crude oil on hand to cover the next 24.2 days of demand," wrote trader and analyst Stephen Schork, in his Schork Report. "That is the largest amount of forward cover for the month of August since Saddam sent his tanks rolling into Kuwait in 1991."

The Influence of ''Peak Oil''

An article in the Washington Post this weekend, together with a must-read interview in The Independent, a paper I used to read regularly when I lived in London, reminded me of an observation I made several years ago concerning the similarities between Peak Oil and Y2K. Having spent a fair amount of time in my former corporate role planning for the serious outcomes the latter might have produced, I don't intend this as a slam on the former. Without rehashing the technical arguments behind either phenomenon, it's worth spending a few minutes thinking about the consequences of a growing belief that we might be only a few years away from the end of oil, as we know it. Whatever one's take on the validity of the Peak Oil argument, it has already evoked noteworthy consequences, both positive and negative.

Mexican Oil Output May Fall to 2.6 Million Barrels

(Bloomberg) -- Mexico may pump as little as 2.6 million barrels a day of oil this year amid declines at the country’s largest field, Energy Minister Georgina Kessel said.

Production will be between 2.6 million barrels and 2.7 million barrels, Kessel said today in an interview in Mexico City. State-owned producer Petroleos Mexicanos on July 30 cut its production forecast to 2.65 million barrels a day for this year, from an earlier estimate of as much as 2.8 million.

Mexico’s output is slumping as production at Cantarell, the company’s largest field, drops at a rate twice as fast as forecast by Pemex, as the company is known. Last year, production slumped at the fastest rate since 1942.

Kuwait May Receive Three LNG Cargoes at First Import Terminal

Kuwait is importing gas chilled to liquid form to burn in its power plants after failing to obtain the fuel by pipeline from neighbors Iran and Qatar.

Aramco seeks yard for new jack-up

The final value of the newbuild contract however, is likely to be lower than that for a similar unit a year ago given the falling material costs and reduced global rig demand.

Steel prices have decreased by 20% to 30%, while drilling packages are also experiencing price reductions, said an analyst who prefers to remain anonymous.

Russian army drills to defend oil, gas exports

MOSCOW (Reuters) - The Russian army is holding its first major training exercises to protect against what Moscow sees as possible terrorist attacks on its vital oil and gas export routes, the military and media said Wednesday.

Sweeping drills in the Siberian Military district, covering a theater of operations spanning hundreds of miles (km) from Irkutsk to Buryatia near Lake Baikal, started Monday and entered their main phase Wednesday.

Suncor Shuts Alberta Refinery for 2nd Time in a Month

(Bloomberg) -- Suncor Energy Inc. shut units at its Edmonton oil refinery in Canada for the second time in a month and Royal Dutch Shell Plc reported a fault at its Alberta plant, cutting fuel supply just as the region recovers from shortages.

Suncor shut units yesterday after the facility lost steam and hydrogen, the Calgary-based company said in a message on a community hotline. Black smoke was released from the “upset,” the message said. Hydrogen is essential for diesel production.

Shell to build plant at Pernis refinery

AMSTERDAM (Reuters) - Royal Dutch Shell (RDSa.L) will build a new plant costing $500 million (302 million pounds) at its Pernis refinery in the Netherlands to increase production of cleaner fuels, it said on Thursday.

The plant, a hydrodesulphurisation unit, is expected to come onstream in the second half of 2011 and will produce low-sulphur fuels at Europe's biggest oil refinery, which has a capacity of about 400,000 barrels per day.

China calls halt to Gwadar refinery

QUETTA, Pakistan - Cash-strapped Pakistan, which has had to accept more than US$11 billion from the International Monetary Fund, is threatened with the loss of a huge foreign investment after China said it had shelved its multi-billion dollar coastal oil refinery project at Gwadar, in southwest Balochistan province.

Citic Resources May Double Oil Production With Field

(Bloomberg) -- Citic Resources Holdings Ltd., the Chinese metals producer turned oil supplier, started drilling an offshore oilfield in northeastern China that could potentially double its petroleum output by 2014, boosting sales.

Peak oil production at Yuedong field in Bohai Bay may reach about 1.8 million metric tons a year, Chief Executive Officer Sun Xinguo told reporters in Panjin city, Liaoning, yesterday. That’s equivalent to 36,150 barrels a day, compared with the company’s total output of 33,500 barrels daily this year.

Turkmenistan lines up Iran gas pipe

Turkmenistan, Central Asia's largest gas producer, will launch a new gas pipeline to Iran in December this year to diversify exports, Turkmen state media said today, following a row with its main partner Russia.

Turkmenistan, which produces over 75 billion cubic metres of gas per year, used to sell about 50 Bcm to Russia and just 8 Bcm to Iran. Exports to Russia were halted in April after a pipeline explosion, reported Reuters.

The pipeline is operational now but Moscow, faced with falling demand for gas in Europe and struggling with a recession, demanded a review of the sales terms. The two sides have yet to agree on the new terms.

Yanzhou Coal to Buy Felix for About A$3.5 Billion

(Bloomberg) -- Yanzhou Coal Mining Co., China’s fourth-biggest producer of the fuel, agreed to buy Australia’s Felix Resources Ltd. for about A$3.5 billion ($2.9 billion) to secure supplies.

Automakers charged up over EVs ... again

After a century of vain attempts, the race towards "electrification" is back on and it's heating up among automakers large and small.

Transit: Tax gas

To the applause of mass transit advocates, Gov. Martin O'Malley announced his support for the light-rail option of the Purple Line on Aug. 4. While completion of the Purple Line sometime late next decade will be a positive step forward for our state, the cuts to transit in the last year alone amount to a comparable step backward.

U.S. court blocks plan to curb mountaintop mining

WASHINGTON (Reuters) - A U.S. court on Wednesday blocked an attempt by the Obama administration to overturn a Bush administration rule that made it easier for coal mining companies to dump mountaintop debris into valley streams.

The Peak Oil Crisis: A Disruptive Technology

Every now and again there comes along a new technology that changes civilization. Gunpowder, steam engines, electricity, internal combustion, nuclear energy, transistors, and the integrated computer circuits readily come to mind.

Looming just over the horizon is the possibility that another such disruptive technology may, and I emphasize may, be in the offing. This technology would be a capacitor with the ability to store large amounts of high-voltage electricity as a static charge in a relatively small and inexpensive device. No chemical reactions - just electrons in and electrons out.

Using renewable energy in the Pacific

Driving north along the coast of New Caledonia’s main island, the profile of the surrounding hills suddenly changes when you pass the town of Kone. Silhouetted against the sky is a forest of wind turbines, twirling in the afternoon sun. The islands of New Caledonia have an extensive programme of wind power, using new technologies that are being exported to other Pacific islands nations.

At a time of concern over energy prices, peak oil and greenhouse gas emissions, countries around the region are looking to cleaner and cheaper sources of renewable energy. Kiribati and other small islands states are boosting the use of solar power for rural households.

Cameco Says Utilities in China Stockpiling Uranium

(Bloomberg) -- Cameco Corp., the world’s second- largest uranium producer, said power utilities in China are continuing to stockpile uranium, making them the market’s single-largest group of buyers.

Utilities in China have bought an estimated 8 million pounds of uranium, the raw material in nuclear-reactor fuel, on the spot market this year, said George Assie, Cameco’s senior vice president of marketing.

“Keep in mind they have 13 reactors under construction,” Assie said today on a conference call with investors and analysts. “The stockpile there is for a very specific reason and that is to feed those reactors under construction.”

Drive for atomic energy adds to nuclear challenge: US

GENEVA (AFP) – A senior US official acknowledged on Wednesday that the growing demand for atomic energy in response to climate change was adding to the challenges of preventing the spread of nuclear weapons.

"Some people are calling this a nuclear renaissance, it's very much in vogue," said Susan Burk, the US president's special representative for nuclear non-proliferation in what she termed her first public presentation.

Pertamina May Spend $3 Billion Building Geothermal Power Plants

(Bloomberg) -- PT Pertamina, Indonesia’s state oil company, may spend $3 billion on building geothermal power plants to meet the country’s growing electricity demand.

Pertamina plans to construct geothermal plants with a total capacity of 1,000 megawatt within five years, Abadi Purnomo, president director of PT Pertamina Geothermal Energy, a Pertamina unit, told reporters in Jakarta today.

“We will seek commercial loans of $800 million to $1 billion,” Abadi said, adding that the company is also in talks to borrow from the World Bank.

The Biofuel Future

The only way that biofuels will add up is if they produce more energy than it takes to make them. Yet, depending on the crops and the logistics of production, some analyses suggest that it may take more energy to make these fuels than they will provide. And if growing biofuels creates the same environmental problems that plague much of large-scale agriculture, then air and water quality might not really improve. Prized ecosystems such as rain forests, wetlands and savannas could be destroyed to grow crops. Biofuels done badly, scientists say, could go very, very wrong.

Next-Generation Biofuels: Field of Dreams, or Feasible?

The U.S. pinned a big part of its hopes for future transport fuel on cellulosic ethanol, something that doesn’t even exist commercially today.

How feasible is the idea of producing 90 billion gallons of ethanol per year in 2030—enough to displace well over one-third of U.S. gasoline consumption—and keep it affordable? That’s what Sandia National Laboratories set out to answer.

The upshot? There are no theoretical barriers, but a host of practical ones, the laboratory found in a study soon to be published in Bioresource Technology.

Germany's first offshore wind farm starts working

FRANKFURT (Reuters) - Germany's first offshore wind power park, Alpha Venture in the North Sea, has begun the gradual commissioning of the first three of its total 12 turbines, a spokesman for the venture said on Wednesday.

CU hosts first major 'biochar' conference in U.S.

In the last several years -- as world leaders have continued to debate how to stem the consequences of global warming -- an ancient farming method has begun to gain traction with scientists as a possible new-world solution for climate change.

Thousands of years ago, the indigenous people of the Amazon River basin turned relatively infertile soils into nutrient-rich dirt by adding biochar -- a type of charcoal they called terra preta, which means "dark earth" in Portuguese.

This week, the University of Colorado's law school is hosting the first major biochar conference ever held in the United States. U.S. Secretary of Agriculture Tom Vilsack gave the keynote address for the conference Monday afternoon.

Denmark: Oil depletion hastens green energy race

The opposition is echoing calls from the Danish Energy Agency for the country to become entirely free of its fossil fuel dependency by 2050, reports Politiken newspaper.

In a report released this week, the agency indicated that the country’s oil and gas reserves in the North Sea would run dry by 2018 and 2020, respectively.

Steven Chu, A Political Scientist

"What the U.S. and China do over the next decade," declared Energy Secretary Steven Chu, the Nobel Prize – winning physicist who is leading President Obama's push for a clean-energy economy, "will determine the fate of the world."

China signals long-term plans to curb greenhouse gases

BEIJING (Reuters) - China will make "controlling greenhouse gas emissions" an important part of its development plans, the government said, as pressure on the world's top emitter grows ahead of global talks on tackling climate change.

How does China deal with climate change and environmental problems?

China has taken global financial crisis as an opportunity to consolidate its measures in reducing green house gas emission, readjusting industrial mix and changing the mode of growth as well as promoting China's environmental protection cause, said Dr. Zhou Guomei from China Environmental Protection Research Institute at a forum in Stockholm when China's Trade Promotion Delegation visited Sweden recently.

China has set its goal of reducing energy consumption by 20% per GDP unit and pollutant discharge by 10% from 2006 to 2010.

Goldman, JPMorgan Face Carbon Market Curbs in Senate Proposals

(Bloomberg) -- Goldman Sachs Group Inc. and JPMorgan Chase & Co. would be barred from a planned U.S. carbon- emissions market or face trading restrictions under proposals by Democratic senators crafting climate change legislation.

At least nine members of the majority party say speculation by Wall Street banks may cause excessive price swings in the cap-and-trade system of pollution allowances at the center of President Barack Obama’s plan to curb global warming.

Lobbyists elbow for influence on U.S. climate bill

NEW YORK (Reuters) – Manufacturers and energy companies sent squads of lobbyists to the U.S. Congress earlier this year to influence the climate bill, an indication the U.S. Senate will face pressure to adjust the legislation ahead of its vote, a nonprofit investigative group said.

Australian Senate Rejects Rudd’s Cap and Trade Emissions Plan

(Bloomberg) -- Australia’s Senate rejected the government’s climate-change legislation, forcing Prime Minister Kevin Rudd to amend the bill or call an early election.

Senators voted 42 to 30 against the law, which included plans for a carbon trading system similar to one used in Europe. Australia, the world’s biggest coal exporter, was proposing to reduce greenhouse gases by between 5 percent and 15 percent of 2000 levels in the next decade.

Second Warmest July on Record Globally, according to NASA

NASA's Goddard Institute of Space Studies (GISS) has determined that July of 2009 was the second warmest July globally, since records were kept going back well over a hundred years.

Climate change turning Aussie birds smaller: study

MELBOURNE (AFP) – Australian birds have shrunk over the past century because of global warming, scientists have found.

Using museum specimens, researchers measured the size of eight bird species and discovered they were getting smaller in an apparent response to climate change.

Bjorn Lomborg: The cheap, effective solution to global warming

Global warming will mean that more people die from the heat. There will be a rise in sea levels, more malaria, starvation, and poverty. Concern has been great, but humanity has done very little that will actually prevent these outcomes. Carbon emissions have kept increasing, despite repeated promises of cuts.

We all have a stake in ensuring that climate change is stopped. We turned to climate scientists to inform us about the problem of global warming. Now we need to turn to climate economists to enlighten us about the benefits, costs, and possible outcomes from different responses to this challenge.

Trucking industry making eco-friendly strides

Driving techniques designed to conserve fuel and curb emissions of greenhouse gases are catching the fancy of the Japanese trucking industry, Kyodo News reported.

Called ''eko-doraibu'' (eco-driving) in Japanese, its proponents say it contributes to cost cutting, leads to safer driving and is friendly to both humans and the planet.

India depleting key water source, study finds - Farming collapse and severe drinking water shortages possible

NEW DELHI - Excessive irrigation and the unrelenting thirst of 114 million people are causing groundwater levels in northern India to drop dramatically, a problem that could lead to severe water shortages, according to a study released Wednesday.

Levels have dropped as much as a foot a year between 2002 and 2008, for a total of 26 cubic miles of water that vanished — enough to fill Lake Mead, the largest manmade reservoir in the United States, three times.

The study comes as India's struggles with water have become a major political issue. The problem reaches across the country's vast class divide, touching everyone from residents of elite neighborhoods where the taps regularly go dry to poor farmers in desperate need of irrigation to grow their crops.

Could someone verify something about the weekly unemployment claims report?


Do the July 25 EUC numbers 2,785,372 add to the Ins Unemployment or are they included in the 6,104,047?

Retail sales post surprise drop for July

Not a surprise to me; guess that's why I'm not an economist. ;-)

Denninger was not surprised, either.

Housing still ugly, too:

Foreclosure plague: No cure yet

The housing market is still sick, with a record number of foreclosure filings posted in July.

But hey- the Fed is 'optimistic'...

Fed shows a little optimism
Central bank says the long decline for the U.S. economy appears to have ended, although it's likely to remain weak for awhile.

The Federal Reserve said Wednesday it appears that the U.S. economy has halted the longest period of decline since the Great Depression, although it cautioned that economic activity is likely to remain weak in the near term.

The central bank left its key overnight interest rate at a 0% to 0.25% range, as expected. Its statement at the conclusion of its two-day meeting said "economic activity is leveling out."

That is the Fed's most bullish assessment of the economy in more than a year, and suggests that a recovery may have started.

Reminds me of a few quotes from the beginning of the Great Depression:

"Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction." - News dispatch from Washington, January 21, 1930

"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity." - President Hoover, May 1, 1930

"The worst is over without a doubt." - James J. Davis, Secretary of Labor,
June 29, 1930

"We have hit bottom and are on the upswing." - James J. Davis, Secretary of Labor, September 12, 1930

"Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment." - Charles M. Schwab, October 16, 1930

"I see no reason why 1931 should not be an extremely good year." - Alfred P. Sloan, Jr., General Motors Co., November 1930

"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce, June 9, 1931

"Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work." - The Nation, August 12, 1931

And unemployment as well:

  • http://finance.yahoo.com/news/Jobless-claims-up-retail-apf-1948834182.ht...
  • I think those "green shoots" are bamboo shoots, as in the torture.......

    Not a surprise to me; guess that's why I'm not an economist. ;-)

    Before the crash, when house prices had tripled or quadrupled in a matter of years after the dot com bust, how could anyone have been surprised by the crash? The only possible way: years and years of indoctrination in ECONOMICS followed up with a lobotomy (hm, perhaps in reverse order, less painful).

    If oil falls to $ 10, as Prechter predicts, we're truly screwed.

    If it falls to $10, it will be because we're in the Much Greater Depression. Which is not impossible.

    Prechter is smart but he doesn't explain this call very well. He uses the term "Peak Oil Mania" but $4 to $10 oil 110% guarantees dramatic downsizing of oil production globally, along with the possible collapse of alternative energy projects. His scenario is more like total global collapse than a depression-IMO he is underestimating how hard China is going to fight his prediction, and how capable they are.

    My understanding is that the future $10 bottom would be driven by:
    1) Deflation - which means that future $10 is worth a whole lot more than today's $10.
    2) Low Oil Demand - resulting from a major worldwide depression, which has only just begun.

    Note that I said "future $10 bottom". Once the overall bottom is reached then deflation would cease, the economy would start to rise again, inflation would start to reappear, and the cost of oil would begin to climb again.

    For all the study we do here of resource cycles, it's surprising that we so often quickly dismiss ideas about economic cycles and cycles in social mood (mood effects economic optimism vs pessimism).

    For all the study we do here of resource cycles, it's surprising that we so often quickly dismiss ideas about economic cycles and cycles in social mood...

    Greg, please post the URL of the post, or posts, that "quickly dismiss ideas about economic cycles" because I missed that one. Any fool that can read a chart knows there are cycles in the economy and in the price of equities as well as commodities. What I dismiss is the idea that these cycles predict the future. I dismiss the idea that one can look at past cycles and predict when the next cycle will happen and how far this cycle will swing up or down.

    Tea leaf reading will probably work better.

    Ron P.

    Ron P. says:

    I dismiss the idea that one can look at past cycles and predict when the next cycle will happen and how far this cycle will swing up or down.

    That's fine, everybody is entitled to their opinions. I wish you luck with whatever method you use to position yourself for future events :-)

    Prechter's Elliot Wave analysis has worked well for me so far. Like I said before, I don't use it to invest for profit - I use it to keep my retirement savings safe and for a peak at what's around the economic corner. In my eyes, saving and investing are whole different worlds. I may have missed an occasional opportunity for profit-making, but I have not lost any of my savings during a time when many people have lost way too much.

    And I do enjoy reading his stuff, even though occasionally it rubs me wrong. Sometimes his predictions even go against common sense, like back in late 2007 when oil was touching $100 and he said that it had reached the minimum (not maximum) needed to fulfill it's pattern and to be prepared for the price to head back down. Five months later it hit the $140's then plunged back to the $40's. Ooops, the timing was 5 months too early! But still pretty amazing that the pattern prevailed and it did eventually fall hard, as predicted.

    Sometimes his predictions even go against common sense, like back in late 2007 when oil was touching $100 and he said that it had reached the minimum (not maximum) needed to fulfill it's pattern and to be prepared for the price to head back down. Five months later it hit the $140's then plunged back to the $40's. Ooops, the timing was 5 months too early! But still pretty amazing that the pattern prevailed and it did eventually fall hard, as predicted.

    Are you aware of the fact that Prechter has repeatedly called a top in oil since oil first crossed $40/barrel (perhaps sooner)? Ofcourse, eventually he was right! What if oil crosses $100 again? Will Prechter admit he was wrong or will he call another top? There is nothing amazing about the pattern. There are a large number of possible Elliot wave patterns and labeling the waves is subjective. Regardless of what the market does Prechter can always find a matching pattern and claim the market is following Elliot waves! Once in a while he is right. Most of the times he is wrong.

    It is good that you protected your assets after listening to him. But that says nothing about using Elliot waves as a valid tool for technical analysis.

    Once again, in the Thirties it appears that demand only fell one year, in 1930, rising thereafter throughout the Thirties. The actual nominal overall price of oil in the US, based on data on the Carpe Diem website, rose from about $1.70 in the summer of 1931 to about $2.80 in the summer of 1937, an annual rate of increase of about +11%/year (it was around $4 in 1929). And there were reportedly three million more cars on the road in 1937 in the US than we had in 1929.

    IMO, China is to our current predicament as the US was to the Thirties, with the key difference, on the consumption side, being that hundreds of millions of people worldwide now want to drive a car for the first time, while the key difference on the supply side, IMO, is that we are now facing a long term accelerating rate of decline in net oil exports, versus an expanding oil supply in the Thirties.

    Prechter's low number of $4 oil in e.g. 2011 means he predicts oil will basically be free (no demand or use for oil products).

    It's always hard to predict, but ...

    - I think the OPEC spare capacity is exaggerated.

    - China energy use (and a strategic reserve) has increased demand.

    - US demand has not 'fallen off the table'.

    - Tanker storage is not bearish, but supports - and is supported by - contango in the futures markets.

    - As long as central banks continue to print money, the financial markets will be supported.

    If oil gets above $80, look for $100 and a retest of $147.

    What happens next? A failure @ $147 would indicate that prices will trend around $70 - $80, that's my guess. I just don't see a lot of cash laying around that can be transferred to OPEC. The real world if poorer than it was last summer, less credit. I just don't see anything sending oil up to $150 - $200 without a great crash elsewhere.

    I suspect a great crash will happen because of + $60 oil, (and a slow death @ $50 oil) ... anyway.

    Add in deflation and Prechter might be right!

    IMHO ...

    Arabia1 crude oil production from EIA tables
    8,362 1997
    8,389 1998
    7,833 1999
    8,404 2000
    8,031 2001
    7,634 2002
    8,775 2003
    9,101 2004
    9,550 2005
    9,152 2006
    8,722 2007
    9,261 2008
    8,105 2009 to May
    It always amazes me when hard evidence of peak oil is brought forward, there is an immediate Bloomberg article of some capacity story that is trotted out. Above is KSA crude production for the last 12 years. The capacity story certainly would have revealed itself in 2008 when crude was $147. The capacity increase was 500,000 b/d.in 2008. This is the only hard evidence of the capacity story, and $147 to get it.
    If you believe the Bloombergs or others like them on Wall Street will tell the truth about oil, I have that proverbial bridge in Brooklyn to sell you.

    How much?


    I think that there has been some voluntary cutback in Saudi production this year, but there is "voluntary," and there is "voluntary," i.e., with a group of aging oil fields, pushing them hard, which is what they did in 2008, is not a good idea.

    In any case, I think that 2010 will tell the tale. If oil prices in 2010 are higher than 2009, and if Saudi Arabia has still not exceeded their 2005 annual production rate, I think that "It's all voluntary," story will be getting a little old--since the Saudis would have then shown five years of production below their 2005 rate, BTW, at about the same stage of depletion at which the prior swing producer, Texas, peaked (based on the logistic, or HL, models).

    But as always, the net export number is what really counts, and I think that there is very little chance that Saudi Arabia will ever exceed their 2005 annual net export rate.

    The mam is just making a living running his mouth about something he either knows nothing about or else he could care less about the truth.

    Any body who wants to spend some time working at it can find all kinds of "patterns " and "cycles"in history that prove any thing you like if you look for them.

    Sometimes they have some predictive value,occasionally great predictive value,if circumstances have't changed a lot.

    Circumstances have most definitely changed in this case and I would bet a large sum that if we were all good friends he would tell us that HE hasn't shorted any oil stock.

    Yeah. It also means that none of the depletion taking place is compensated for with new projects. These will all get cancelled on $10 oil. To me the Never Ending Depression is inevitable.

    That prediction is based totally on technical analysis. No fundamentals whatsoever were considered. For those not familiar with technical analysis, basically it is looking at charts of past price performance and trying to divine how the charts will squiggle in the future. Market technicians, as they call themselves, use terms like “double top”, “head and shoulders”, “double bottom” and other such terms to describe how the chart looks. These are supposed to signal turns in the stock or commodity in question.

    Elliot wave charters look at waves in the chart. Not just one wave but they superimpose several waves upon each other. That is they superimpose long term waves over medium term waves and short term waves and predict that when all these waves hit a top at the same time then they will all turn down at the same time, signaling a huge drop in prices. Prechter uses five different waves as most Elliot Wave theorists do.

    Sometimes these guys accidently get it right. After all, a stopped clock is right twice a day. Prechter hit it right in 1987. It is worth noting that virtually all the other Elliot Wave theorists completely missed the 1987 crash. Anyway those who accidently get it right enjoy a day in the sun. That is until they are brave enough to make another bold prediction. And of course they far more often than not, completely miss on this prediction.

    Anyway, technical analysis is akin to trying to divine the market’s direction from gazing at goat’s entrails.

    Ron P.

    OTOH fundamental analysis is totally useless in the short to medium term.

    That depends on what you call "short to medium term". Day traders do not use fundamental analysis they trade primarily on market sentiment as they see it. Most try to detect a trend and try to ride it. Sometimes they are right and sometimes they are wrong.

    Trading on news, any news, is basically fundamental analysis. Earnings news can cause a stock to move for several days, weeks or months. Traders who use insider trade volume usually make money but they have to hold for months sometimes. Anyway, those who predicted a collapse in the banking industry last year, based entirely on fundamentals, were right and it happened pretty fast. They shorted and made a mint. Those who stayed long lost their shirts.

    Ron P.

    I exaggerated-I need 5 inappropriates to get that one out of there.

    "Sometimes these guys accidently get it right"

    That made my day Ron.

    Problem is these people appear to have a lot of influence on policy, like the economists. See Leanan's link to "surprise" drop in retail sales up. They should retreat back under their rocks.

    That is why we have so many "surprises" in the past year.
    Surprise retail un-sale, surprise unemployment going down, surprise
    foreclosure rate, blah blah blah...

    It was surprising how many idiotic predictions these guys can make w/out looking stupid.

    Darwinian said:

    Sometimes these guys accidently get it right. After all, a stopped clock is right twice a day.

    But the Bloomberg article says:

    Two weeks after Prechter warned in 1987 that stocks would crash, the Dow Jones Industrial Average plunged 23 percent. He advised betting against U.S. equities three months before the market peaked in October 2007. In February 2009, he recommended ending that bet in anticipation of a “sharp and scary rebound.”

    Sounds like Prechter does much better than "accidently getting it right" :-)

    I've been reading his forecasts for years. But I'm definitely not a big investor or day-trader, so I haven't used the forecasts much. I have seen him get the major market turns right much more often than not (though sometimes the timing is off a bit, which real angers the day-trader types).

    His service has kept my retirement money intact. I have not lost a dime of it - which is better than 99% of the other economic forecasting services out there have done for people...

    Greg, then by all means you should short oil and hold your shorts until oil hits $10 a barrel.

    In my opinion anyone who predicts crude oil to drop to $10 a barrel, based on divining the charts, is absolutely nuts. That is the most absurd prediction I have ever heard. Oil cannot be produced and shipped at that rate.

    Of course if the world economy totally collapses and there is nothing but total anarchy, anything can happen. Oil could be $10 a barrel in Saudi Arabia and $1,000 a barrel in Japan. But the world economy cannot possibly stay intact with oil at $10 a barrel.

    Only a total ignoramus would make such a prediction. If you followed his advice in the past and made money then it is time to quit while you are ahead.

    Ron P.

    But the world economy cannot possibly stay intact with oil at $10 a barrel.

    Of course the world economy is not intact then. Combine $10 with Greg's:

    1) Deflation - which means that future $10 is worth a whole lot more than today's $10.

    We can have $10/barrel oil if we have a real $10. Actually we would have $1.50/barrel oil.


    It's worth bearing in mind what selection criteria you used. If very, very early in his career you said "he's the predictor I'm gonna use" and then future predictions worked out very well, then that's strong evidence for that his personal technique is a good predictor. But if you were looking in the marketplace of predictors someone who was a good predictor relatively late in the day (say the late 90s) and thought "hey that's a strong track record", you're potentially subconsciously ignoring the fact that 99% of other forecasting services got some to all predictions wrong, so what are the chances that 1% of the forecasters happened to get things right "with a significant element of luck"? That probability is much higher than people intuitively think because they don't "see" all the failed contestants. (There's a theoretical share-picking scam that works by sending combinations of predict up stock/down stock on 10 stocks to different people so that all combinations are used and asking for a commision for further predictions: the one guy who by chance receives the 10 completely accurate ones thinks "wow, that's gotta be good".) Another related intuitive illustration is: the odds of YOU winning the lottery are astronomically small, the odds of SOMEONE winning the lottery are actually quite good.

    I don't know enough about Eliott wave stuff to know how effective it is, but as a machine learning guy my spider sense gets triggered by the report that other people apparently using this theory can get completely different predictions.

    As a sidenote on the original point, I wish people would quantify in their predictions not just the price oil will reach with for how long it will stay at around that level. I can imagine oil hitting 20 dollars a barrel for a day or two and that not causing huge benefits/problems. (The same wish applies to both low and high predictions.) If oil remains around 20 dollars for even 3-4 months I think it might both signify and cause huge problems.

    I first read Prechter's Eliot Wave Principle about 25 years ago. At the time I was trying to make sense of the stock market. Silly me.

    Over the years I come to the conclusion that technical analysis is at best only useful over short time periods. Over longer periods it is worthless. The same is true of Eliot Wave. With Eliot Wave one is never sure of the wave count. And there is always an alternate wave count which can turn into any another wave count. The same is true of technical analysis. Any formation can turn into any other formation and usually does.

    Some one has said there are no rich technicians. If Eliot Wave is the "key" why is Prechter still peddling it. He should have made his fortune by now.

    At one time before the advent of computers and the internet, Eliot Wave and technical analysis may have given traders an edge. In the case of Japanese Candlesticks, traders hundreds of years ago trading rice futures noticed patterns in the charts. But as the knowledge became ever more widespread it became less valuable. If everyone knows something, there can be no trading edge.

    Now with high speed internet and computer power as great as it is, everyone knows all the formations be they technical, Candlestick or Eliot wave. There can be no edge anymore. That leaves fundamentals which are useless because everyone knows those too or thinks they do.

    Markets are perverse and anticipatory. Buy the rumor, sell the news is the rule. The other rule is that prices can not be stable for very long because then it is difficult for traders to make any money. So they run 'em up and run 'em down hoping to shake some action loose so they can make a quick gain. I do not have the temperament for it. You can spend your whole life analysing the markets and will never understand them. Life is too short. Money will not buy at lot of things like time and health.

    Prechter has been wrong about a lot of things since at least since 1995. If you had traded on the basis of his advice, you probably would have lost all your money a long time ago. He has been calling for a "grand supercycle great depression" since at least 1995. According to him, everything (oil, commodities, gold, stocks, real estate) will collapse in value. Note that he has been calling for a top in the stock market since 1995, a top in gold since gold was at $350/oz, a top in oil since oil first traded above $40/barrel and a huge rally in the US dollar since at least 2003 or 2004.

    Since he makes numerous predictions, once in a while he gets it right. Then his "correct" predictions are loudly trumpeted while his incorrect predictions are conveniently forgotten. I subscribed to his services in late 2002 and early 2003. In my opinion, he is a quack. His newsletter was making predictions about stock market by correlating it with Michael Jordan's career, popularity of slasher films like "Kill Bill", popularity of heavy metal bands, real estate books published by Donald Trump and sunspot cycles (I am not making this up).

    The problem is that if you look for patterns and correlations, you will find them. Most of the time they have no predictive value.

    Hey, this guy makes money....selling subscriptions to his newsletter. If he was really any good at predicting the market he would be a billionaire trader, not a pipsqueak newsletter peddler.

    Ron P.

    Someone always wins the lottery also.

    Do you know how to start and market a mutual fund?
    Start with 10 different strategies that have no or even opposite correlation and track them.
    2 of them will work the others won't market the 2 that work.

    You want to start a news letter?
    Taleb says. send out 10k free news letters 1/2 bullish, 1/2 bearish.
    do the same to the 5000 that you sent the correct prediction to.
    do the same to the 2500......etc.
    charge the 312 that sign up 100/mo.


    Got to love the United Swidlers of America.

    Yes-you just provided a quick description of the entire mutual funds industry. The first thing you learn is that it is 95% sales and promotion, 5% results.

    But you need a MBA to run a mutual fund................what a joke.

    I almost forgot.............. once you budding mutual fund managers get money under management quietly morph into an index fund so that you don't perform worse than the crowd and can keep the money to skim.
    Most people won't take their money out if they feel that they aren't doing any worse than their neighbor.
    Stupid Americans.

    Anyway, technical analysis is akin to trying to divine the market’s direction from gazing at goat’s entrails.

    Pretty close to the way I view it, with the following exception. Because many people believe/trade-on this sort of black magic, it has a chance to change demand for such stocks. Thus a signal that is considered favorable by enough market participants can generate a wave of buying, and hence the prediction may become self fullfilling.

    That's it.
    I have done this stuff for a long time and the key to winning is to have an execution advantage.
    Otherwise try to come up with an anticipator that gets you in before the mechanical trading crowd. But don't anticipate the anticipator!!
    Technical analysis has taken on a life of it's own since online trading started. In fact the market in general has taken on a life of it's own and has no basis in reality.
    I am speaking stocks that is.

    "“I expect crude oil prices to fall below $10 a barrel sometime over the next decade,” Prechter, founder of Elliott Wave International Inc., said in an e-mail yesterday."

    When I first read this on Bloomberg I instantly thought "The guys nuts..." but then I got thinking -well if there was a huge price spike to $400 and 25% of Americans stopped driving for 3 months it would release an huge flood of oil onto the market. Tankers would be sitting full and idle desperate to ofload at any price. Of course you would have to ask how oil got to $400 in the first place and the answer would probably a 25-50% speculative hike (probably like last time but lets not argue this one now.)

    So we have a collapse of demand and the price starts to plummet. BUY: SOIL !! -Those speculators are shorting oil all the way into the ground (funny how nobody seems to mind a trader when they are pushing prices down...)

    It sails down past $100, $50, $35, gotta stop now no? Oh No! down it goes to $10 -a blip maybe b4 a steep rise back up to margin-of-production levels but hey -Who thought a year ago oil would be down at $35??

    -So maybe the guy isn't so crazy, maybe the "higher highs" and "higher lows" isn't right (although it seems more intuative).

    I guess we shall see sometime in the next decade...

    -Btw. I do not think we shall see Deflation, the printing press should see to that, its one reason why the next high will certainly be a LOT more than $147...


    How much oil is now being produced today at $10/bl? I'm guessing there may be a few fields here and there, but really -- what percent of the of the world's production would make economic sense at $10?

    The Denmark article caught my eye this morning:

    Denmark: Oil Depletion Hastens Green Energy Race

    Predictions that Danish reserves of oil and gas will run dry in the next 10 years look about right when reviewing the production data from the Energy Export Databrowser:

    (It is so nice to have such a straightforward and honest assessment as part of the public discussion.) The question is what will replace those sources energy.

    Yes, the Danish company Vestas is a leader in the area of wind energy but how much more wnd energy can the Danes produce above current levels? The Danes are also developing new multi-family "passive house" apartments that use only 1/3 the energy of a standard building -- but is it enough?

    The consumption plot for Denmark shows that total energy consumption from fossil fuels is currently at the level of the 1980's. Yes, they have swapped some oil use for natural gas but the overall pictures shows how difficult it is, even in a country with an enlightened energy policy, to reduce fuel consumption below some critical level. People do like to stay warm in the winter.

    With no potential for hydropower and little political will for nuclear, where will Denmark's energy come from? It will be interesting to see what suggestions surface.

    -- Jon

    Postscript: I will be visiting a client in Copenhagen in late October and am interested in speaking with any TOD readers in that lovely city. Danes, I believe, have the temperament and will power to navigate the post-peak oil landscape. I'm just not sure how they will do it and would love to hear some ideas.

    I've spend part of my holidays in Denmark. Many people use wood to stay warm in winter. And there may be not so much political will for nuclear (which in my opinion may be more of an economic issue then political) the Danish really do not mind importing it from Sweden, like they do now. When you visit Copenhagen just look accross the sound to see Malmo's huge nuclear power plant.

    And yes, Denmark is relatively well situated for a post PO world.

    This nuclear power plant is now shut down. The #1 Reactor was shut down in 1999, the #2 Reactor in 2005. I'm not sure how the Swedes have made up for the lost electricity. Nautral gas plants?

    Barsebäck nuclear power plant

    No gas. We cope by a combination of more imports, uprating the other nukes and higher prices/curbed demand. The uprating will eventually more than compensate the shortfall, but that uprating could have been done anyway, of course - the Barseback shutdown was an extreme waste - these were modern and well placed plants. They were simply sacrificed to make the greens and the (somewhat ex-)communists agree to support the social democratic minority government. Fortunately, the center-right alliance currently in power has agreed to allow new nuclear (a smaller centre-party supported mostly by farmers has finally let go of an old taboo) and the public opinion likes this.

    We have interconnected more with the rest of Europe's grid, which has increased our electricity prices in concert with wind subsidies and the nukes' shutdown, and this has pushed down demand a bit. For instance, the big paper plants are major electricity consumers, but some of them has had to close due to less competitive electricity prices.

    On a side note, I remember visiting the Ringhals nuclear power plant during contruction. This was in early 1973 during a school trip. The only negative thing the engineers showed us was the expected increase in ocean temperature just outside the plant. There was a healthy dose skepticism among the students of course.

    PaulusP states:

    ... the Danish really do not mind importing it from Sweden, like they do now.

    jeppen, speaking for Sweden, says:

    We cope by a combination of more imports, ...

    Passing the buck like this will be a dangerous game going forward.

    Somebody -- Norway, Russia, Algeria, Qatar, ??? -- must increase their exports of oil, gas or electricity so that Denmark will be able to increase imports from Sweden who will increase imports from the exporter.

    With other nations also planning to increase imports, this implies that the combined global energy export market must increase. To see if this is even possible we must look to the individual components of the Nordic countries' energy portfolios:

    1. Coal -- I believe it is unlikely, given global warming awareness, that the Swedes or Danes will dramatically increase their consumption of coal.
    2. Oil -- the total export market has probably already peaked (see the Energy Export Databrowser)
    3. European gas pipelines -- potentially already maxed out (see Is Europe Running Low on Natural Gas)
    4. LNG -- large increases expected in the global export market (see qatargas.com)

    It appears that energy importing nations will need to switch some portion of their energy portfolio to LNG on their way to fossil fuel independence. This will require new import terminals and new gas-fired power plants. Are these part of the discussion in Sweden and Norway?

    Without these, the transition may be abrupt and more painful.

    -- Jon

    Russia is about to build "North Stream", a 55 billion cubic metres per year off-shore pipeline in the Baltic Sea, going directly to Germany. The total cost is about €14 billion.

    Russia is also preparing to build "South Stream", a 63 billion cubic metres per year pipeline that will feed Italy, Greece, Bulgaria and Austria. The cost may be as high as €16 billion.

    These two together are equivalent, energywise, to about 2 million barrels of oil per day. The chairman of North Stream is Gerhard Shroeder, former German PM, while Romano Prodi, former PM of Italy and EU President of the Commission, was offered to chair South Stream, but declined. Finnish former PM Paavo Lipponen was hired as a consultant and door-opener earlier in the North Stream project.

    Also, the Russians are nice enough to plan a few nukes close to EU borders with the specific intention of exporting the electricity produced.

    But no, Sweden and Norway aren't very interested in gas or coal plants or terminals. We have so much hydro that we could make do with that alone. Actually, Norway has twice the US per-capita production of electricity, and it's all hydro! (Norway also produce lots of oil and gas, as you know, but use very little of it themselves.)

    not so much political will for nuclear (which in my opinion may be more of an economic issue then political)

    That is probably not a correct assessment, on the contrary, they seem to not care about costs. Denmark was done building their 3 GW wind in 2003 already - after that, they have not increased any. This means they did their buildout while wind was still expensive. Also, their wind is sold at a loss - they have to export it cheap and import balancing hydro power expensively.

    If they built four nukes, that would cover their electricity needs and they could get rid of imported coal, stop using natural gas and let their wind farms slowly die. If they wanted to build more, they could sell it to the big German market, which has very expensive electricity. This would all be great for the economy, for the environment and for their energy independence.

    So I'm fairly certain it's all political considerations.

    "We are coming out of the recession"

    Tell that to all the auto workers in Michigan....
    Sounds a lot like what some said back in 1931 - 32.
    Then 10 years later in the middle of WWII it was still tough.
    In the WWII days there was plenty of new oil.

    We are now in the "energy transformation period".
    The general public does not accept it.... yet....

    News from CNBC:

    It is now a "screaming signs of economic recovery".

    It is like the daily show, but during the middle of the day.


    I had no idea! There is No Recession It's a Planned Demolition

    ... In 1955, IRS records indicated the 400 richest people in the country were worth an average $12.6 million, adjusted for inflation. In 2006, the 400 richest increased their average to $263 million, representing an epochal shift of wealth upward in the U.S."

    Even adjusting for inflation the wealth of the 400 richest people in Americh has increased 21 fold since 1955.

    Anyway this article is a very good read, a real eye opener.

    Credit is not flowing. In fact, credit is contracting. When credit contracts in a consumer-driven economy, bad things happen. Business investment drops, unemployment soars, earnings plunge, and GDP shrinks. The Fed has spent more than a trillion dollars trying to get consumers to start borrowing again, but without success. The country's credit engines are slowing to a crawl.

    Ron P.

    Mike Whitney is a hoot! I love reading him just for the entertainment value (and any actual new information or ideas is just gravy).

    It's the throwaway lines at the end of a paragraph that get me. Like in this article, at the end of a paragraph talking about bank exposure to toxic assets, he throws out "It's a bloodbath."

    Others I've seen have been (from memory, so may not be exact); "It's a mess." "It’s a complete fiasco." "It’s madness." "Our goose is cooked." And one of my favorites - "Its all bad."

    I fully expect that one day I'll ready a Mike Whitney piece and hidden in there as if it was a natural extension of what he was just writing about will be "And we'll all die."

    Gotta love him, though. And I'll give 'em this - he was all over the banking mess months before it appeared in the mainstream press.

    You are an easy guy to amuse.
    The banking mess was starkly obvious to anyone paying attention way back in 2005-6.
    I called Fannie and Freddie blowing up 2 years in advance just by watching the ridiculous lending practices in the mortgage industry.
    It was a epidemic of fraud and no one seemed to give a sh#t so here we are.

    That wealth adds up to $100 billion, which is about 0.7% of US GDP. So these guys have been accumulating wealth for many decades, and have amassed a fantastic 0.7% of the yearly US production? Scary.

    Now, does Bill Gates eat his Microsoft stock every year - so you go hungry as a result? If these 400 individuals CONSUMED 0.7% of the yearly production, that would only leave 99.3% of US production for the rest. Even that wouldn't be bad, rather it would be a very small price to pay for living in the richest (per capita) country in the world. (Yes, there are a few richer, but they are small oil nations or city states.)

    I can't believe you US socialists doesn't see how lucky you are and how well your system really works. Now you are going for socialised medicine, but you'll be sorry. Some 50 years ago, a few well-meaning tax breaks for employer-paid insurance have made immeasurable amounts of damage and continues to do damage even today, and now you are going to make a mistake of equal proportions.

    Jeppen, you are wrong, as wrong as a person can possibly be. In the days of the internet there is no excuse for making such a dumb mistake! The combined wealth of the 400 richest people in America is $1.57 trillion not $100 billion. The poorest of the 400 owns 1.3 billion. It took Google and I all of about 10 seconds to figure that out. The Forbes 400

    The price of admission to this, the 27th edition of The Forbes 400, is $1.3 billion for the second year in a row. The assembled net worth of America's wealthiest rose by $30 billion--only 2%--to $1.57 trillion.

    And from my original link:

    "During eight years of the Bush Administration, the 400 richest Americans, who now own more than the bottom 150 million Americans, increased their net worth by $700 billion. In 2005, the top one per cent claimed 22 per cent of the national income, while the top ten per cent took half of the total income, the largest share since 1928.

    So while their wealth growth slowed slightly in 2008 because of the recession it increased by $700 billion, seven times what you say the total is, just during the Bush Administration! That is an increase of almost $100 billion per year. And to put things in perspective, the combined total wealth of the 400 is greater than the combined wealth of the bottom 150 million Americans, half the nation's population.

    Ron P.

    With stats like that, I'm amazed you guys don't have another revolution.

    Actually that's explained by looking at our education statistics and the quality of network news.

    Yeah, with better quality of news, you might create a revolution and eventually rival the wealth of Venezuela or Cuba.

    The chart I saw today showed percent of wealth owned by the top .01%. It is now at 6%, higher than at the peak of the gilded age. But since every Joe Sixpack thinks he's only one lottery ticket away from joining them, the poor are happy to bide their time watching lifestyles of the rich and famous.

    The poor don't start revolutions.
    The poor are generationally poor and have no hope.
    The newly dispossessed and disenfranchised middle class are the group with potential to revolt and they need leaders. These have usually been made up to a large extent by disaffected intellectual idealists.
    It seems to me that the ingredients are being gathered for a classic class conflict.
    Once the middle class here figures out that they are out of the game for good something will happen.

    In the days of the internet there is no excuse for making such a dumb mistake! The combined wealth of the 400 richest people in America is $1.57 trillion not $100 billion.

    The guy I commented said that the 400 averaged $263 million, and I just multiplied these numbers. I don't really consider it a "dumb mistake" to not check every fact I comment. The arguments I offered are still valid btw - wealth (and even income) isn't very interesting - consumption is. The top 400's wealth is primarily in the form of ownership of companies, and someone do need to own them. If you feel that you would be better off by the government owning these companies like formerly in the Eastern Bloc, please feel free to socialise them. Or if you feel that you would be better off by dividing the companies among yourselves and cannibalise them for consumption, then please do so. But otherwise, please stop pretending it is a problem when someone gets rich! It isn't - the economy isn't a zero sum game and Bill Gates doesn't eat a million times more food than you do. Congratulate them instead.

    If you don't look at economy the way economists do, it is fairly easy to see that, ultimately, it is indeed a zero sum game. There is a finite amount of resources on this planet, and when one person uses up more, less is left for the others, including (and especially) future generations.

    Trickle-down is pure propaganda, and it's actually amazing how many people buy into it (no pun intended).

    If you don't look at economy the way economists do, it is fairly easy to see that, ultimately, it is indeed a zero sum game.

    Hey, if it were "fairly easy to see" that mainstream science is wrong, then it wouldn't be mainstream science.

    There is a finite amount of resources on this planet, and when one person uses up more, less is left for the others

    It is nice that you at least accept the consumption emphasis I made. Less nice is that you do not realize that it is human labor and knowledge in a free market that is our prime resource. The leftist commenters here display why abundance of natural resources is negatively correlated with growth and economic wellbeing: You focus on equitable sharing of easy revenue streams instead of on economic freedom and smart, hard labor.

    "Trickle down" is quite obvious. Would you rather be a waiter in Pakistan or in the US? Which way does economic refugee streams go? Away from the US?

    Less nice is that you do not realize that it is human labor and knowledge in a free market that is our prime resource.

    I could not disagree more.

    The US became a world superpower not because of education, hard work, Christian morality, free market capitalism, or anything like that.

    We became a world power because we landed on a continent's worth of previously unexploited natural resources. As the saying goes, we were born on third base, but thought we hit a triple.

    And it wasn't "discovered" it was stolen.
    And once those resources started to dwindle the US Empire was born.
    No different than any other apex civilization in history.
    The US is in decline and China is ascending. There will be wars in the future and no good times.

    We became a world power because we landed on a continent's worth of previously unexploited natural resources.

    In that case, Africa should have dominated all along, the USSR should have won the cold war and Japan should be dirt poor.

    No, you came to be dominant because you embraced capitalism, and now you are about to lose dominance as China is embracing capitalism. All the while Africa is staying poor due to not embracing capitalism.

    The US became a world superpower not because of education, hard work...

    Resources without education and hard work are useless. Both are necessary.


    Agree bascally but education,hard work,Christian morality,capitaliasm ,etc,could reasonably be construed as the reason(glue-that-binds) we are a continent sized country rater than half a dozen (or fifty) different countries.

    But otherwise, please stop pretending it is a problem when someone gets rich! It isn't - the economy isn't a zero sum game and Bill Gates doesn't eat a million times more food than you do.

    The people getting rich is not the problem, it is the people at the bottom getting poorer, that is the problem.

    The widening gap between rich and poor

    Maybe it never was all right. Or maybe it's worse now. But the gap between the rich and poor in both the circumstances of living and the level of civility is widening. And the two may be related.

    Because the American economy is so leveraged, no one in a position of power has to care who gets annihilated.

    Ron P.

    Are the bottom really getting poorer? I don't think so, not if you consider a longer time period. But I guess you'd like to focus on the current downturn?

    "Poverty" in the US is quite fascinating. In 2001, 76% of poor people had air conditioning, 97% has at least one TV, 73% has a microwave oven, 46% own their homes - only 6% of poor households are overcrowded. The average poor American has more living space than the average non-poor individual living in Paris, London, Vienna, Athens and other European cities. Nearly three-quarters of poor households own a car; 30% own two or more cars. 78% have a VCR or DVD player; 62% have cable or satellite TV reception; and one-third have a dishwasher.

    Your "poverty" is the envy of the world's poor.


    You are spot on and the leftists/socialists need to be reminded of these facts from time to time.

    I trot them out myself sometimes when I can get a good argument going-either side is ok with me,as there is plenty of truth on both sides.

    It is not where you are it is where you believe you are going.
    The key to contentment or discontentment is if the individual believes tomorrow will be better or worse than today.
    Once above basic survival it all becomes relative.
    The perception of going backwards will cause as much consternation as thinking you will be poor forever.
    It is the change for the worse that is the most dreaded.

    Third swine flu case strikes fear in tiny Yolo County town

    When one neighbor is dead and another is hospitalized with swine flu – both otherwise young, healthy people – fear becomes palpable.

    Questions arise: Is it OK to hug? Whose hand can I shake? Am I next?

    "There's 300 people here," said Leo Refsland, manager of the local service district. "You start thinking about percentages."

    Everyone knows everyone...but they're afraid to go to the funeral because they might have to touch deceased's family members.

    Budget cut of the day...

    NASA falling short of asteroid-detection goals

    Without more funding, NASA will not meet its goal of tracking 90 percent of all deadly asteroids by 2020, according to a report released today by the National Academy of Sciences.

    The agency is on track to soon be able to spot 90 percent of the potentially dangerous objects that are at least a kilometer (.6 miles) wide, a goal previously mandated by Congress.

    Asteroids of this size are estimated to strike Earth once every 500,000 years on average and could be capable of causing a global catastrophe if they hit Earth. In 2008, NASA's Near Earth Object Program spotted a total of 11,323 objects of all sizes.

    But without more money in the budget, NASA won't be able to keep up with a 2005 directive to track 90 percent of objects bigger than 460 feet across. An impact from an asteroid of this size could cause significant damage and be very deadly, particularly if it were to strike near a populated area.

    Actually, this would be the perfect time for a large 'roid to hit the Earth... It would wipe out much of the human population and slow down the Holocene extinction event...

    I don't see much point in tracking them. Even if it was determined that one was going to strike the planet there wouldn't be anything that could be done about it, cheesy scifi flicks notwithstanding.

    ...a large 'roid to hit the Earth... It would... slow down the Holocene extinction event...

    Altho the operative word here is "large" (how large is large?), I'm not sure why you would say this. Anthropogenic Mass Extinction is taking place over a period of tens of thousands of years. While this is virtually instantaneous in terms of geological time, it's still five orders of magnitude more slowly than the rate of extinction that would result from a "large" bolide impact.

    Point taken... I assumed humans would be more sensitive to this kind of event; perhaps that assumption is flawed.

    The point is that the catastrophic change that is coming really can only be prevented by a more catastrphic change...

    A large bolide strike would take down humans, for sure. But it would take down a lot of other things over a period of hours, days, weeks... AME has been ongoing since even before the African diaspora. Of course, it's picked up steam over time, with the invention of firearms, pesticides, large earth-moving machinery, etc.

    The point is that the catastrophic change that is coming really can only be prevented by a more catastrphic change...

    Yep. A bullet to the brainstem sure will prevent starvation.

    Er wait... The Indians have an idea... (file this under WTF)...

    Less sex, more TV idea aired in India

    On World Population Day this year India's new health and welfare minister came out with an idea on how to tackle the population issue: Bring electricity to every Indian village so that people would watch television until late at night and therefore be too tired to make babies.

    That statement raised eyebrows across this vast country -- but what are the realities and reactions from families who make up the second largest population in the world?

    At 80-plus years old Omar Mohammed has never heard of population control.

    He lives in India's most populous state Uttar Pradesh and has certainly done his part in contributing to India's burgeoning population.

    "Now you see I have 24 children, 13 boys and 11 girls," Omar says.

    Omar believes only God can decide how many children you should have. He lifts his hands to the sky and says: "This is His command. It's not my doing, it's His doing."

    They keep putting this stuff out in the MSM but realistically, is there much of a positive correlation between frequency of sexual intercourse and number of children produced? Cutting back on sex to cut back on reproduction almost sounds like something a bureaucrat or economist would propose.

    Too true, once a year is more than enough for overpopulation.

    Yup. There have actually been studies that found people who have more sex have fewer kids. (In the US.) Why? Apparently, because people who don't really like sex use having kids as an excuse to avoid it. Once she's pregnant, it's an excuse to not be intimate.

    I think that the astronomers think they can predict a collision pretty far ahead,perhaps several years.This is as I see it doable,and provable.

    The idea seems to be that if a bomb of some sort could be delivered to such an asteriod well in advance of the collision date .it could defect it's path of travel by a very tiny amount,but supposedly that's enough to turn a hit into a near miss.

    Delivering the bomb might have a 50 to 75 percent chance of success???

    Personally I think that the money could be put to better use elsewhere.

    There are lots of things that could wipe us out that are more likely to come to pass.

    Yeah Mac, astronomers can predict an impact fairly reliably, and of course the reliability improves the closer to point of impact it gets. But there's no evidence that a nuclear blast would deflect the bolide, or that a nuclear explosive could be delivered to it in an accurate & timely way. The larger the bolide the more damage it would do and the less likely a blast would deflect it. I agree that the money NASA spends tracking space rocks could be better spent.

    Hey, if we can afford to give banksters a trillion dollars, surely we could afford to send a man to the moon?

    How about split the difference and send the bankers to the moon.
    Strapped to the nose cone of a Saturn V of coarse.

    How about we send the banksters to the moon. I hear the weather is lovely this time of year.

    I like the way you think.

    Bah, you beat me by 2min!

    What has the moon done to deserve it ?!?

    Well, Venus has a more appropriate climate and level of biodiversity, but it's too far. I just think it makes sense to send people that always want to be first to a place where they'll be first to experience our planet's future.......

    DD, your statement is incorrect.

    Deflecting even a large asteroid requires neither warp drive, tractor beams, nor even spare nukes fired from excess ICBMs.

    It requires time, provides by a relatively inexpensive network of modest telescopes, and some decent computing power and some smart, dedicated people. Given enough warning time (a couple of years, a several-ton spacecraft could be sent to orbit an asteroid and gradually tug it off course a little bit, causing a miss...use the 60-to-one rule (1 degree of course change over 60 NM will cause a 1 NM deviation from the original track).



    A couple years out, the uncertainty of a strike is large. Why perturb an object when it isn't even certain it's going to strike Earth? Such perturbation is just as likely to turn what would have been a near miss into an impact, as the converse. The distance with that much lead time is also great. What vehicle exists that could intercept a bolide deep in interplanetary space? How long would it take to reach its target? Nearer to impact, spatially & temporally, the gravitational influence of the vehicle on the bolide would likely be overwhelmed by Earth's gravitational pull.

    While it might be theoretically possible to divert an asteroid or comet as you suggest, it isn't at present technologically feasible. A project to develop this technology would be prohibitively expensive, especially in this economy and in the face of peak oil. The risk of major bolide impact is too remote to warrant such expenditure. The money could be much better spent on more pressing problems here on Earth.

    DD, the uncertainty of a strike is dependent on the accuracy of the orbit calculation as well as the time to closest approach. The cost to divert a body from a high probability orbit is dependent on the size and composition of the body and the amount of advanced warning we have.

    If we have a lot of good observations of a body we can calculate strike probabilities decades in advance, if we only have a few we are lucky to be able to tell if there is a chance at all.

    Projects like the comet probes have shown that we can place machines of a reasonable size in a matched orbit with just about any threat, and at a price we can afford as a society.

    Thus, if we value protecting the planet (and ourselves) from the threat of asteroid impacts at all, the correct strategy is to scan the solar system for any bodies of threatening size and map their orbits as accurately as we can. This way we have the possibility of diverting any that are particularly dangerous without bankrupting our economies in the process.

    The money could be much better spent on more pressing problems here on Earth.

    Or wasted bailing out incompetent and fraudulent businessmen.

    Besides, money spent collecting detailed knowledge about our surroundings is likely to be valuable for more than just avoiding getting hit by big rocks.

    I checked out the quarterly report of Petrobank to see how the testing of Toe to Heel Air Injection technology for producing heavy sands is working.

    It sounds like things are progressing, as rapidly as one can expect. Petrobank seems to have found some new liners to help with sand control. They tested them on one well (where the new liner seemed to work), and are installing them in new wells. Production was temporarily down, as they drilled two new wells with liners at Whitesands.

    Petrobank now has a total of three other projects as well.

    May River is planned to be the first commercial application of THAI, with 10,000 bpd available initially, and 100,000 bpd ultimately. The plan was filed in December 2008, and should be through regulatory approvals by the end of the year.

    Kerrobert Project was filed on April 22, 2009, and has already been approved and drilling started. It will apply THAI technology to Saskatchewan’s conventional heavy oil resource base.

    Dawson Project is a joint venture with Shell Canada Ltd. It is similar to the Kerrobert Project, but applied to a more mobile sands area near Peace River, Alberta. Application has been filed, and approval is expected by the end of the year.

    I saw that country in the 1970s: Dawson Creek, the mighty Peace River, Lake Athapaska, the Alaska Highway... It saddens me to think that such beauty is being torn up for the sake of extracting such filthy crud. I know that you think that FF production needs to be maintained for the sake of fueling some sort of 'transition' to.. what? I don't know? To some hothouse climate nightmare, some acidic parody of what was once an ocean, gratis continued FF oxidation, I guess. If the Canadian people were sane they would insist that their government shut down this nonsense immediately.

    Turns out Canadians like heating, cars and food too.

    Keep in mind the country is not being torn up for Canadians, but for rapacious Americans.

    If Canadian people were sane they would shut off the gas and oil pipelines to the U.S. And, if the Canadian people are sane, they will not sell water to the Americans.

    For whom the bell tolls pal...

    If Canadians stopped selling their natural resources to Americans, then they might not be able to afford their "free" health care.

    I've thought that as well, and that their pension funds would likely suffer as well, though I'm sure many of those are invested in US equities and securities and will take a bath along with the US.

    I suspect it's pretty safe to say, "as goes the US, so goes Canada" during the decline, though the open spaces, resources, and low population should stand them in better stead long-term.

    It appears that their heavy oil production unit, where the Toe to Heel Air Injection (THAI) technology is used, produced 205 bpd in the second quarter of 2009.

    Here is a link to the original Oil Drum post on this company, from two years ago:


    "Vandals had struck the garden several times during the week, but in the wee hours of Tuesday they wrought the most damage. "They took some tools that were stored there and chopped the heck out of the gardens," says Pohl-Kosbau, who works for the Portland Bureau of Parks & Recreation. "It was wanton destruction."

    -I fine example of Anarchy in action?!


    Supermarket owners probably paid the vandals to do it. Not anarchy, just capitalism.

    Even though I can hardly be accused of being a great fan of either capitalism or supermarket owners in general, I doubt that this incident has any of the hallmarks of an orchestrated event. However if it should turn out to be the case, the backlash will not be, how shall we say, good for business.

    It could be a drug lord controlling his turf which would explain why witnesses were too afraid to talk.

    It could also be a scam concocted by the "victim" to encourage charitable people to donate food. The statement that the woman has been too poor to buy fresh corn for several years is a bit suspicious given that fresh corn is inexpensive compared to most foods.

    I think it's plain old destructiveness. Note that the plots that seemed the most cared-for were the ones that were targeted.

    When I was in college, we had a project that involved making models of various engineering techniques. One was a miniature suspension bridge, made out of wood and rope, displayed on campus. The neighborhood kids took one look, and started trying to break it, by jumping up and down on it, etc. It was very sturdily built, though, and took the load easily. So one night they came back and cut all the ropes.

    Children seem to go thru a destructive phase. Sociopaths just never grow up...

    E. Swanson

    I'm tossin into the frey here a book report on Christopher Steiner's $20 Per Gallon. Although I'm somewhat doomerish on post peak oil, not seeing how a reduced net energy future could possibly be good, the by-line on the cover caught my attention, which is; "How the inevitable rise in the price of gasoline will change our lives for the better"

    So I thought, well maybe he's on to something that will make a difference. But once I started reading it I realised he was viewing the rising cost of fuel myopically in the realm of transporation only. How it will change in ways that reduce obesity, improve air quality and reduce noise, etc.

    The trouble is even at 10 dollars a gallon the price of oil would be about 250 dollars a barrel. Well, we all saw what happened at 147, so how would the economy support 250. At 20 a gallon oil would sell for about 500 a barrel. So I think he's failed completely to see the economic implications of oil selling for sky-high prices.

    So, I tried to find him online to give him a critique to help enlighten him, and although he has a website, there is no contact information whatsoever. Not even a P.O. box to send mail. Pretty smart, I figure. Come out with a book the cornucopians will appreciate, but not have a way to contact him, because the information in the book is really based on a faulty premise. That the only factor involved in the rising price of fuel, is the positive ways that will influence our lives.

    Book publishers have addresses. You can mail something to him thru the publisher. They know how to find him.

    Hello Cslater8,

    Your Quote: "The trouble is even at 10 dollars a gallon the price of oil would be about 250 dollars a barrel. Well, we all saw what happened at 147, so how would the economy support 250. At 20 a gallon oil would sell for about 500 a barrel. So I think he's failed completely to see the economic implications of oil selling for sky-high prices."

    IMO, it all depends upon the postPeak depletion rate and the speed of our economic adjustment paths. For example: the timing is uncertain, of course, but I highly doubt the world will easily give up guns, bicycles, and wheelbarrows [and I hope the world sees the need for SpiderWebRiding]. The requirement for lubing these simple devices is quite obvious as a rust-frozen mechanism or ball-bearing makes them useless.

    As seen in my LATOC posting and embedded weblinks, even though the world is currently awash in oil: $12,000-$100,000 per barrel equivalent is already occurring NOW for certain finished products:


    $250/bbl is still very, very cheap compared to having Unobtainium. Sure, a $250, or even a $500/bbl price spike would immediately park a lot of ICE-vehicles, but all these people would eagerly pay a much higher price than the current [$12,000-$100,000 TODAY] for all the lubes they need to keep their essential guns, bicycles, and wheelbarrows, moving by the billions.

    IMO, we need to avert quickly adopting the Tlameme backpacking scheme for as long as we can for Optimal Overshoot Decline. SpiderWebRiding gearsets pedal-powering steel wheels on steel rails is my postPeak proposal, but even this will require much bearing lube and chain-oil.

    When total world oil production drops to, let's say 1 mmbbl/day [2060? Sooner?] that won't be enough to provide most of what we take for granted presently as 'civilization', but it should provide sufficient lube to keep 9 billion pedaling, and hopefully not shooting, plus other essential finished oil products or uses for a long time to come.

    But I think the ecosystem will be severely degraded, possibly what most would consider as "collapse" long before 2060. If we had globally accepted Malthusian Principles to force a DIEOFF back when M. K. Hubbert first announced his Peak results in 1955 [EDIT: plus the suvivors built SpiderWebs everywhere]-->we might have had a chance to gracefully transition, but I think it is too late now, but YMMV.

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

    Bob Shaw, there are two major considerations. The first is what we will do with the oil that is available, and the other is what will depleting oil do to the economy? If the economy crashed at 147, then how will the economy do at even higher prices? I just don't see a calm, even keeled transition from an oil based economy.

    Demand destruction by high price eliminates the less important uses first retaining the ones that can tolerate a higher price. Unless an alternative to crude oil is found, this suggests that subsequent price shocks will rise higher before demand destruction kicks in. I am estimating $200 / barrel for the peak of the next price spike.

    I am estimating $200 / barrel for the peak of the next price spike.

    I think that is a little high. The economy will start to hurt as the price rises. And you are missing something. It is not those who can tolerate high prices it is those who have jobs and companies that are still in business that creates demand. That is, it is not a decision like "do I need to drive today" but rather "do I have a job to drive to?"

    I do not expect to see prices above $125 a barrel again in 2008 dollars.

    Ron P.

    You are absolutely correct Ron, but there is a time lag between the cause and the effect here.

    Depending upon the velocity of the increase, any price is theoretically possible before the economic impact causes the price to correct back downwards. Loosely couple feedback with a time delay does that.

    That is probably what happened in 2008, and there is no reason to believe it cannot happen again.

    Ron -- On a purely emotional level I too find it difficult to accept the possibility of long term oil prices above $125 or so. But I also wonder how the economy might have handled the price spike if we had not suffered all the other over-leveraged economic woes at the time. On the other hand I just started a new job for a private investor intent on spending $300 million with the drill bit over the next several years. He's sees a definite possibility of a $200/bbl spike in the coming years. How good is his opinion: he's made billions in the equity/commodity markets, several PhD's, sold out all his equity positions a few months before the collapse, etc. He sees hyperinflation, a second EU collapse, drastically declining $ and a future where commodities will explode in value. And thus our business plan.

    No way to answer the question but I do wonder how big a hit our economy would have taken if all it faced was $125/bbl last year. A drop for sure but a recession? The big flaw I see in our plan is the potential for all the current stimulus efforts to eventually crunch the economy as hard (or even harder) the what we experienced last year. If it does and consumption drops significantly we won't see the price boost we're expecting. There will still be a profit to be made when we cash out the company but just not as big. We'll be drilling very economic prospects even at lower commodity prices: we're seeing truly prime prospects that have lost almost all capital support from the investor theater. And we're using our capital position to buy into to these deals at great prices. During a boom period we wouldn't even have an opportunity to pay too much for such deals: we wouldn't have a chance to see the great majority of them before they were placed. The pressure on us is to get into as many good deals as fast as possible in order to ride the next price wave. After almost 35 years I thought I had seen as much drama in the oil patch as I ever would. I was wrong.

    Rockman, thanks for the post. If your new boss is correct then that means we will definitely recover from this deep recession. That is, he seems to be thinking we will return to BAU and therefore the possibility of a new price spike.

    Right now, a spike of even above $100 would send the economy reeling into an even deeper recession. Even $70 oil may be keeping us from a recovery. Also you seem to be under the impression that high oil prices last year had nothing to do with the collapse of the economy. Of course the sub-prime mortgage problem was the major cause. However very cheap gasoline was one reason for the housing boom. People could afford to drive great distances to work therefore spiking the housing demand in suburbia. And “liars loans” caused these homes to be available to virtually everyone, even people who had rather low paying jobs. But once gasoline prices spiked, these people could not afford their long commute to work and back.

    But I digress. I simply don’t see any major recovery on the horizon. The folks on CNBC are talking about a W shaped recovery. That is because they equate recovery to the stock market. The S&P 500 chart will look like a big W. We will have another leg down before the final big leg up and the great recovery. But though the stock market has recovered the rest of the economy is sill at the bottom of the first leg down. And with all the other problems our economy is facing I simply do not see any great recovery on the horizon. Therefore I believe your new boss will be disappointed.

    Ron P.

    Ron -- I'm not sure he's thinking so much about a major recovery or a return to biz BAU. I think he envisions more of a near term supply gap followed by another killer recession brought on by higher prices/limited supplies. The plan is to sell out the company at the peak before the inevitable collapse of the oil patch again. As usual, timing iskey. Not a very different profile then I've seen over the last 40 years except now it seems as thought the high/low cycles will run every 4 or 5 years instead of 10 to 15. Either way I not tempted to disagree with a man who has made billions over the last 30 years correctly anticipation market turns. I just hope like hell he right about this one. I'm getting way to old to ride roller coasters anymore.

    From CoreLogic:

    More than 15.2 million U.S. mortgages or 32.2 percent of all mortgaged properties were in negative equity position as of June 30, 2009 according to newly released data from First American CoreLogic. June’s negative equity share was slightly lower than the 32.5 percent as of the end of March 2009 and it reflects the recent flattening of monthly home price changes. As of June 2009, there were an additional 2.5 million mortgaged properties that were approaching negative equity and negative equity and near negative equity mortgages combined account for nearly 38 percent of all residential properties with a mortgage nationwide.

    The aggregate property value for loans in a negative equity position was $3.4 trillion, which represents the total property value at risk of default. In California, the aggregate value of homes that are in negative equity was $969 billion, followed by Florida ($432 billion), New Jersey ($146 billion), Illinois ($146 billion) and Arizona ($140 billion). Los Angeles had over $310 billion in aggregate property value in a negative equity position, followed by New York ($183 billion), Miami ($152 billion), Washington DC ($149 billion) and Chicago ($134 billion).

    ... Nevada (66 percent) had the highest percentage with nearly two‐thirds of mortgage borrowers in a negative equity position. In Arizona (51 percent) and Florida (49 percent), half of all mortgage borrowers were in a negative equity position. Michigan (48 percent) and California (42 percent) round out the top five states.


    I know it's probably some right wingnut's idea to distort reality.

    Perhaps a bit of a sense of perspective is in order. The United States of America is not all that important if we look at the *BIG* picture.


    Sobering images, but I don't think the commentator has a grasp of relativity - claiming that viewable galaxies are receding from us faster than the speed of light - or maybe it's me!

    It is a weird effect, but it is due to the fact that the expansion is actually the space itself getting bigger rather than the galaxies moving though the space.

    Their actual velocity relative to their spacial frame and nearby galaxies is nominal, much like our own local group, but since the space itself is getting bigger between us and those galaxies we measure a redshift velocity that can exceed light speed.

    That probably doesn't make any more sense to you, I think I might revisit this one post-coffee.

    No, this is quite correct. It's one of the reasons behind the interest in the Alcubierre warp drive concept for FTL travel (as impossible as it is, the theory has interesting physics behind it).

    "... some right wingnut's idea to distort reality."

    that or some right wingnut can't remember if debt matters or not.

    So what is the deal with EEStor's capacitor? (Tom Whipple)
    Has the TOD crew done an analysis on this device?

    Videogame Industry Revenue Takes a Fall

    ..Analysts were bracing for overall U.S. videogame spending on games, consoles and accessories to fall around 15% in July. Rather, the U.S. market slowed at nearly twice that pace, dropping 29% from the previous year to $848 billion, NPD said. July was the fifth straight month of double-digit percentage declines in industrywide spending.
    Let's hope these kids and adults are now studying Peak Everything, bicycling a lot more for their health, and wheelbarrowing O-NPK in their new gardens. Just wishful thinking on my part, or can someone find some statistics for proof of the first sentence in this short paragraph?

    Or is a new generation starting to abandon 'first shooter videogames' to instead spend lots of hours target practicing lots of live fire at the local shooting range?

    U.S. Senate Gun Ruling Has Pro-Gun Groups Worried

    ..The Senate's decision underscores months of worry by pro-gun groups about the future of gun control. Gun sales have spiked since the November election. Some store like the Security Academy have sold out of guns and certain ammunition. Some jokingly calling the President the firearm salesman of the year.

    "There gonna find a way to outlaw them even though it will be against the Constitution. But if they don't outlaw guns they'll outlaw ammunition."

    Spike in gun sales could be driven by fear

    The manufacturing and sales of firearms has been a booming business since November 2008 when Barack Obama was elected president..

    ..Then there’s another type of fear that seems to lead to increased gun sales. This one borders on delusional and is rooted in paranoia. It goes like this: the economy will unravel, creating a mass of angry unemployed people who will revolt against the government, creating violent unrest and lawlessness that underfunded law enforcement agencies won’t be able to control. Citizens will have to be armed to protect themselves..

    ..One can’t help but wonder, how many of the 7 million-plus firearms purchased from licensed gun dealers so far this year were purchased based on politics and fear?

    ..For those of you who like to hunt or use firearms for any reason you should know that there are two anti-gun bills still waiting to be passed in Sacramento.

    Assembly Bill 962 sponsored by Kevin De Leon (D) would make it a crime to privately transfer more than 50 rounds of ammunition even between family or friends unless you are registered as a “handgun ammunition vendor” complete with fingerprinting. Mail order ammunition sales would be prohibited.

    Then there is Senate Bill 585 introduced by Senator Mark Leno (D) that would prohibit the sale of firearms or ammunition in the Cow Palace in San Francisco thereby starting the effort to ban gun shows on all publicly owned property in California.

    It appears that Democrats en masse are attempting to destroy all of our Constitutional rights behind our backs. Is this the change you were looking for?

    Quote by 1800s Financier Jay Gould: "I can hire one half of the working class to kill the other half."

    Hello TODers,

    Regular readers of my postings know that the US economic crisis has resulted in the closing of many golf clubs, resorts, and public links [See TOD Archives or google for yourself]. Therefore, it seems safe to conclude that those 'Murkans giving up videogames are not becoming avid 'duffers'.

    EDITORIAL: Terror on the links
    Venezuela declares war on golf

    Venezuelan dictator Hugo Chavez has taken a swing at golf as the latest threat to revolutionary progress.

    In a national television address two weeks ago, Mr. Chavez denounced golf as a "bourgeois sport" for lazy elitists. Now officials in Venezuela are moving to close two of the country's best-known courses, in the cities of Maracay and Caraballeda, in order to make way for either public housing, parks or an extension campus of Bolivarian University. Mr. Chavez's regime is closing an average of three golf courses per year, and there are only about 20 left in the country...
    As most here already know, I would prefer we try to diminish huge amounts of postPeak machete' moshpit class warfare here in the US by convincing Tiger Woods and Justin Timberlake [great eco-names!] to lead the Transition Town charge by their plowing of our 16,000 US golf courses into veggie and fruit acreage.

    Let's hope that Tiger will meet his destiny as predicted by his father:

    The world needs leadership more than golfers, but does that make Tiger Woods the bad guy?

    .."Tiger will do more than any other man in history to change the course of humanity," Earl Woods said. No kidding? Smith was understandably skeptical, so he followed up: Would the kid do more than Buddha, Gandhi and Nelson Mandela?

    "Yes, because he has a larger forum than any of them," Earl said.

    And there it was — the 2,000-pound quote. Earl was dismissed as an overheated papa, but the dreamers among us held out hope...
    IMO, Tiger doing a sudden flip-flop; a quick 180-turn on golf "..will do more than any other man in history to change the course of humanity". Time will tell...as usual, please continue to email Tiger's website with your Peak Outreach concerns. Thxs

    EDIT: When Tiger and Elin look down upon their sleeping toddlers, I wonder if they ever discuss Earl Woods's remarkable prediction? If the world goes postPeak topsy-turvey: his kids certainly cannot eat trophies. Will the Master Golfer ever become the Master Gardener?