Drumbeat: October 14, 2009
Posted by Leanan on October 14, 2009 - 10:05am
Russia 2010 oil output to fall - Bernstein analysts
London (Reuters) - Russian oil output will stagnate in 2010 and begin to decline as mature fields lose production capacity and only one new project comes on line, oil analysts at Bernstein Research said on Wednesday.Russia, now the world's largest oil producer, pumped 10.01 million barrels per day last month, up 0.4 percent from the 9.97 million bpd produced in August, both record highs, Russian Energy Ministry data released last week showed.
But Bernstein analysts said Russian production, which recovered in 2009 after dropping for the first time in a decade in 2008, was merely experiencing a temporary spike following the launches of eight new fields this year.
Senior oil analyst Clint Oswald at Bernstein Research wrote that 0.6 percent year on year growth in the year to the end of September, in a year when eight projects added 640,000 bpd of new production, "does not sound like a great achievement or the start of an up trend.,"
Pemex Can’t Stop Working on Chicontepec, CEO Says
(Bloomberg) -- Petroleos Mexicanos can’t stop working on its Chicontepec oil development, Chief Executive Officer Juan Jose Suarez Coppel told Mexico’s lawmakers.“We can’t abandon the Chicontepec work, no matter how complicated it is,” Suarez Coppel said today at the lower house of Congress. Chicontepec is an onshore oil project at Pemex, as the Mexico City-based state-owned oil company is known.
“The development of Chicontepec is strategic for the future of the country,” Suarez Coppel said. That’s where a great part of the “known resources” are located, he said.
Lower taxes lure big oil to Iraq oilfield deals
DUBAI (Reuters) - Iraq has lured big oil firms into new service contracts on some of its giant oilfields by cutting taxes and sweetening terms to make the deals more profitable, industry sources said on Wednesday.International oil companies are close to striking deals that would almost triple Iraq's output and catapult it up the table of global producers. The firms walked away from those deals at an auction just over three months ago.
Warmer ties for Russia, China with big gas deals
The agreement highlights the determination of both nations to diversify their economies and seek new customers and vendors. It also reflects a political desire by both to steer a course independent of Western powers and especially the United States.But many experts say the deal doesn't necessarily signal that China and Russia are preparing to forge a major new strategic alliance.
California metal mine regains luster
Reporting from Mountain Pass, Calif. - Fear of a shortage of rare-earth metals used in high-tech military and industrial products has spawned global efforts to reopen abandoned mines, including the formidable Mountain Pass Mine in California's Mojave Desert.Discovered in the 1940s by uranium prospectors, Mountain Pass contains an array of rare earths, including cerium and lanthanum, in concentrations almost double those found at the world's biggest rare-earth mine, China's Bayan Obo.
"You're looking at the greatest rare-earth deposit in the world," says operations manager John Benfield as he ushers a visitor around the 2,200-acre site 60 miles southwest of Las Vegas.
Junk Science Expert Guides Us Through Green Hell
Steven Milloy, an adjunct scholar at the Competitive Enterprise Institute, frequent contributor to Fox News Network, and founder/editor of JunkScience.com, should get the Presidential Medal of Freedom for penning the most accurate and most comprehensive take-no-prisoners description of the demonic green “crisis” that grips society today.His new book, Green Hell: How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them, is a must-read for people seeking to understand the underworld of environmental scaremongering.
For the first time, the Navy has allowed a network television crew to see its ICEX exercises, which it conducts every two years. The purpose is to prove the Navy can operate in this unforgiving environment to protect the national interests.Those interests could be threatened because the Arctic ice is thinning and receding more every year, possibly allowing more access to this now frozen body of water.
A new National Science Foundation report suggests that the melt is so quick that the Arctic could be devoid of ice in the summertime by 2040. That could start a "gold rush" of sorts for all that "black gold" under the Arctic's seabed.
Bygone Pollutants Resurface as Glaciers Melt
Pollutants trapped in glaciers in decades past are re-entering the environment as the ice melts some 30 years later.A new study of sediments from a lake in the Swiss Alps shows that levels of many persistent pollutants, including PCBs, dioxins and several chlorine-containing pesticides including DDT have increased since the late 1990s after declining in the 1980s due to bans on some of the chemicals and emissions controls on others.
Looking at nature makes you nicer
“If it weren’t for Central Park, all us New Yorkers would kill each other,” says Ruta Fox, a 50-something jewelry entrepreneur from Manhattan. “It’s the saving grace of this city.”As extreme as that sounds, Fox may be on to something. In a set of recent experiments, researchers at the University of Rochester in New York monitored the effects of natural versus artificial environments — and found that nature actually makes us nicer.
Minn. city's get-healthy effort called a success
With organizers' help, the city crammed five years of sidewalk and bike trail construction into a year to make exercise easier for its 18,000 residents. Restaurants added healthier menu options and grocery stores showcased wholesome foods. People snacked on fruits and veggies and ate less fast food.Schools stopped celebrating birthdays with sugary treats and started setting up "walking buses" that allowed kids to walk to and from school together with adult supervision. Employers gave workers time to exercise.
New Mexico project would link nation's 3 electric grids
ALBUQUERQUE, N.M. – Officials announced an ambitious project in New Mexico on Tuesday that would allow energy to flow more freely across the nation's three massive power grids, breaking down significant barriers to ramping up alternative energy in the United States.The proposed Tres Amigas SuperStation in Clovis, N.M., would help route energy from isolated wind and solar installations to urban centers and other places that consume the most power.
New Mexico Gov. Bill Richardson, who served as President Bill Clinton's energy secretary, said the transmission station would be "historic."
Saving energy may generate billions, study says
What does energy efficiency do for you?According to a report from researchers at the nonprofit advocacy group Environment Northeast, all the money that government agencies, utility companies, and others are spending on efficiency programs not only saves energy, it pumps cash back into the economy - from $6 to $8.50 for every $1 spent.
Transforming Clean-Energy Industry Into a Local One
WILLMAR, Minn. -- From his desk at the local electricity cooperative, Bruce Gomm can see the looming black smokestacks of the city's aging coal-fired power plant. He can also see, on his office wall, framed photographs of sleek new wind turbines. Together, they are a changing world foretold.Gomm is placing a major bet on wind to produce the electrons that will power his customers' lights and run their dishwashers. He is at the forefront of a movement called community power, the idea that neighborhoods and towns can install their own renewable power sources and rely less on electricity that flows from distant realms.
As costs of solar and wind come down, the concept's popularity is looking up, though challenges remain for an industry in its infancy.
Cars must be electric, says climate tsar
Britain's ambitious policies to cut carbon dioxide in the fight against global warming are still not enough, the official climate change watchdog warns today in its first annual report.Even though the Government has created a detailed plan for transition to a low-carbon economy, a "step change" is still needed in the pace of reducing carbon emissions, and in fact the rate should be more than doubled, says the Climate Change Committee.
NEW YORK (CNNMoney.com) -- Oil prices surged above $75 a barrel Wednesday for the first time this year as the dollar remained weak and investors bet that global energy demand is poised to recover.
President Obama is betting on biofuels and batteries, but that isn't stopping some automakers from investing in hydrogen-fueled cars.
Saudis Seek Payments for Any Drop in Oil Revenues
Saudi Arabia is trying to enlist other oil-producing countries to support a provocative idea: if wealthy countries reduce their oil consumption to combat global warming, they should pay compensation to oil producers.The oil-rich kingdom has pushed this position for years in earlier climate-treaty negotiations. While it has not succeeded, its efforts have sometimes delayed or disrupted discussions. The kingdom is once again gearing up to take a hard line on the issue at international negotiations scheduled for Copenhagen in December.
Russia's Salym sees oil output declining in 2-3 yrs
MOSCOW (Reuters) - Salym Petroleum Development, a Russian oil joint venture between Royal Dutch Shell and Sibir Energy, expects its crude production to plateau within the next two to three years before starting to decline."We want to use this period of maximum production ... to prepare ourselves for the decline period," Simon Durkin, chief executive of Salym Petroleum Development, told reporters on Wednesday.
Pakistan: China keen to invest in Thar Coal Project
The prime minister welcomed Sino Coal to carry forward the project and assured that the government would remove all impediments related to its execution.He said Pakistan was currently facing a grave energy crisis and hoped that with Chinese technical assistance and expertise, Pakistan would be able to overcome the power issue.
Gilani said the government was focusing on coal-based power generation in addition to hydro and thermal power for overcoming the energy deficit, adding that the Thar coal reserves would be utilized in ridding the country of load-shedding.
Yesterday at our MIT seminar, we heard a presentation from Michael Specter of The New Yorker, who will soon be out with a book called Denialism: How Irrational Thinking Hinders Scientific Progress, Harms the Planet, and Threatens Our Lives. I won’t say more about its contents yet, but suffice it to say that while this book may sound a lot like The Republican War on Science or Unscientific America – all the way down to the cover image with the trusty test tube/beaker – it actually appears to be pretty different, in a good way. I’m hoping I’ll have a lot more to say about it soon.Meanwhile, I’ve just gotten an email notification that an even bigger scientific publishing event is happening: Timed for the IPCC-Copenhagen Summit, famed climatologist James Hansen will be out with a book entitled Storms of My Grandchildren: The Truth About the Coming Climate Catastrophe and Our Last Chance to Save Humanity, with an initial press run of 100,000 copies by Bloomsbury USA.
U.S. ‘Deeply Committed’ to Solving Climate Change
(Bloomberg) -- The U.S. is “deeply committed” to solving the problem of climate change, Energy Secretary Steven Chu said.“This is a fundamental trust we are about to break if we don’t act as aggressively as we can,” Chu told a meeting of ministers from the International Energy Agency in Paris.
CLIMATE CHANGE: Four Degrees of Devastation
UXBRIDGE, Canada, Oct 9 (IPS) - The prospect of a four-degree Celsius rise in global average temperatures in 50 years is alarming - but not alarmist, climate scientists now believe.Eighteen months ago, no one dared imagine humanity pushing the climate beyond an additional two degrees C of heating, but rising carbon emissions and inability to agree on cuts has meant science must now consider the previously unthinkable.
"Two degrees C is already gone as a target," said Chris West of the University of Oxford's UK Climate Impacts Programme.
Peak oil conference fails to settle debate
Today sees the final day of the "peak oil" conference in Denver, where the alarm was sounded that oil demand will soon surpass supply, triggering economic turmoil in the US and across the world.Unsurprisingly however, those in the oil and gas industry are proving hard to convince. Major commodity firms are still calling the theory "bogus", insisting there are still more than enough natural energy sources stashed in the world's reserves to satisfy our needs for years to come. Industry experts argue the main motivation behind the "bogus" peak oil theory is to simply stimulate renewable energy development. But oil and gas companies claim they have no intention of ignoring green industries in their pursuit of oil and gas, insisting both traditional and alternative energies can be developed in harmony.
Natural Gas Could Be A Major Bust: Analyst At Peak Oil Conference
DENVER — The promise of enough natural gas to last the United States more than 100 years based on discoveries of vast shale formations could be the country's next speculative bubble to burst, a speaker warned Monday at a conference exploring the notion that the world's oil and gas are diminishing rapidly.Arthur Berman, a Texas-based geological consultant, likened the optimistic projections for production from gas shale fields across the country to banks buying into mortgage securitizations, which spurred the housing market crisis and economic meltdown.
"In the midst of a boom or a bubble, it's hard to sit on the sidelines," Berman said during the Association for the Study of Peak Oil and Gas conference. "If you're not in one of these plays, then Wall Street says, 'Well, what's the matter with you guys?'"
Colo. gov touts 'new energy economy' at conference
DENVER – Colorado Gov. Bill Ritter says his state's efforts to build a new energy economy can provide a model for addressing climate change and other challenges facing the country and world.
Analyst: Widespread use of electric cars years away
Widespread U.S. use of cars and trucks that use electricity stored in batteries, such as plug-in hybrid electric vehicles, is decades away, but these vehicles will cut the nation’s reliance on oil, says one oil and gas industry expert.Tom Petrie, a longtime consultant for the oil and gas industry, is founder of Denver’s Petrie Parkman Inc., a division of Merrill Lynch. He spoke Tuesday at the 2009 International Peak Oil Conference, sponsored by the Denver-based Association for the Study of Peak Oil & Gas-USA, or ASPO.
The onset of this week in Denver has been witness to a conference hosted by the Association for the Study of Peak Oil, a collection of hand-wringers, theorists, and computer-modelers (co-founded, incidentally, by none other than Randy Udall, brother of U.S. Senator Mark Udall), who subscribe to the proposition that the world has reached, or will soon reach, the point of maximum oil production. This historic juncture, the theory asserts, will serve to signal the beginning of the end of the fossil-fueled society, as worldwide demand transcends supply, resulting in a steady, irreversible decline in oil production, terminating at the moment when the very last thimbleful of crude is cajoled out of the ground.Like virtually all successful fallacies, this one incorporates a large measure of truth; as a finite commodity, the world oil supply will, eventually, be exhausted. Insofar as this is the case, the theory is valid — all other factors remaining fixed, there WILL come a point in time where demand outstrips supply, and production thereby enters a terminal decline phase. The question, of course, is WHEN this will occur.
China's energy juggernaut is revving up, boosting global oil demand beyond what was expected and creating an opportunity for Canadian producers now focused on the U.S.Analysts recently have revised their forecasts for global crude consumption this year and next, based largely on China's resurgent economy and giving even more support for oil prices that have jumped on the back of a weakened U.S. dollar.
But the overall picture masks a tale of diverging trends: Demand is expected to climb sharply in emerging countries with the return of stronger economies and pent-up demand for automobile purchases among rising middle classes. In contrast, demand peaked four years ago in richer countries, including the United States, and many analysts say it is unlikely to recover that ground any time soon.
The rapid increase in oil prices in a concern for the International Energy Agency (IEA), its executive director said today.Crude oil futures surged to a 2009 high above $75 a barrel, this morning, boosted by optimism about a global economic rebound.
"The rapid hike of the price is certainly a concern," Reuters quoted Nobuo Tanaka telling a news conference on the sidelines of the organisation's biennal ministerial meeting in Paris.
TIMELINE - Oil's wild ride: Price moves since 2008
Reuters - Oil prices rallied for a fifth day on Wednesday to top $75 a barrel for the first time this year, stoked by a weak dollar and surprisingly strong China trade data that underscored a recovery in the world's No. 2 oil consumer.Markets have been steadily rising after a dramatic collapse to near $30 a barrel in December and January, from a record peak of almost $150 in July last year.
Here is a brief timeline charting the price highs since January 2008.
Oil Demand in Industrialized Nations Peaked in 2005, Researchers Say
After falling for two years, global oil demand is expected to grow in 2010, once the economy kicks back to life. But oil consumption in developed nations — including the United States, Europe and Japan — probably reached a high point in 2005, well before the current downturn, and consumption has been falling since, according to IHS Cambridge Energy Research Associates, a consulting firm.Thanks to efficiency gains in the transportation sector, aging populations and the growth in renewable fuels and electric vehicles, demand was unlikely to return to its peak level, the Cambridge Energy researchers noted.
Fuel-efficient cars help steady oil demand in rich countries
While IHS doesn't forecast the end of the oil age for the U.S. or other developed countries, it shows that "the long-term growth pattern" for increased oil demand in those countries "appears to be over," says Aaron Brady, IHS research director."Our economy will be less oil-intensive over time. And so oil price spikes, while you can't discount them, will be less dangerous to the economy," he says. The price of oil nearedhighs for the year Tuesday, at $74.15 for benchmark crude.
The situation differs for developing countries. In 2020, they'll account for 51% of the world's oil demand, up from 39% in 1999, IHS says.
Oil’s Rally May Halt at $78.40, Jakob Says: Technical Analysis
(Bloomberg) -- Crude oil’s rise beyond the one-year high reached today may be checked by a resistance level first encountered three years ago, according to technical analysis by consultants Petromatrix GmbH.Crude climbed to $75.15 a barrel in New York today, its highest price since last October. The rally may dissipate as it approaches $78.40, the highest price reached in 2006, the energy consultant said. The likelihood of crude breaking this threshold will be determined by movements in the U.S. dollar, it added.
Iraq cuts foreign deals for major boost to oil output
BAGHDAD (AFP) – Foreign energy firms have agreed to Iraq's conditions for investment in two major oilfields in the south of the country, Baghdad announced on Tuesday as it prepares to dramatically ramp up oil output.Oil Minister Hussein al-Shahristani told a news conference that the aim is for crude production to be increased to between 10 and 12 million barrels per day within six years -- up from the current level of around 2.5 million bpd.
Exxon, Lukoil submit competing bids for Iraq oilfield
BAGHDAD (AFP) – Competing consortiums led by US energy giant Exxon Mobil and Russia's Lukoil have submitted bids that meet conditions for a major southern Iraqi oilfield, the country's oil minister said on on Tuesday.Both consortiums agreed to be paid 1.9 dollars per additional barrel they extract from West Qurna 1 on top of current production, Hussein al-Shahristani told reporters in Baghdad.
ENI-led group agrees deal for Iraq's Zubair oilfield
BAGHDAD, Iraq (AFP) – A consortium led by Italian energy giant ENI has agreed to terms with the Iraqi government to exploit the Zubair oilfield in southern Iraq, Oil Minister Hussein al-Shahristani said on Tuesday."The consortium from Italy ... has agreed to the Iraqi price," Shahristani told a media conference in Baghdad. "These companies have qualified to take up the Zubair field, and we will finalise the contract."
Ghana Asserts ‘Approval’ Rights as Exxon Seeks to Buy Assets
(Bloomberg) -- Ghanaian officials asserted their government has “absolute” approval rights over exploration companies in the country as Exxon Mobil Corp. seeks to conclude a purchase of assets in one of Africa’s newest oil nations.“In the law, government approval rights are absolute,” said Kwame Ntow Amoah, Ghana National Petroleum Corp.’s head of economic evaluation and monitoring, adding GNPC’s role is to vet explorers and to advise the government. “No company can operate without GNPC” in oil exploration in Ghana, he said.
Putin’s China Visit Helps Russia Become Global Energy Supplier
(Bloomberg) -- Prime Minister Vladimir Putin used a trip to China to clinch oil, natural-gas and nuclear agreements, helping turn Russia into a global energy supplier with pipelines stretching from Berlin to Beijing.Russian companies signed deals on starting gas deliveries, jointly refining Siberian crude and building Chinese nuclear reactors on a two-day visit to Beijing that started yesterday.
Total to Ship First Yemen LNG Cargo to South Korea
(Bloomberg) -- Total SA will ship the first cargo of liquefied natural gas from its Yemen LNG venture in a “matter of weeks,” and the second production line will start in 2010, an official said.The first cargo from the 6.7 million metric ton-a-year LNG venture in Middle Eastern nation will be sent to South Korea under a multiyear contract with Korea Gas Corp., Francois Ravel, the company’s vice president of LNG marketing, said today in Beijing. The second of two units will start in the middle of next year.
Transocean Sued by Saudi Prince in $140 Million Fraud Claim
(Bloomberg) -- Transocean Ltd., the world’s largest offshore drilling company, was sued by a member of the Saudi royal family who claims he was cheated of his share of multimillion-dollar contracts won using his trade secrets.Soroof International Co., a Saudi trading agency run by His Royal Highness Bander Bin Abdullah Al Saud, claims Transocean reneged on a signed 2007 agreement that would have made the prince’s firm Transocean’s sole agent for pursuing drilling contracts with Aramco, the Saudi Arabian national oil company.
Sinopec’s Oil Refining Profit Falls on Crude Costs
(Bloomberg) -- China Petroleum & Chemical Corp.’s profit from turning crude into fuels fell in the third quarter because of higher oil costs, an official familiar with operations at Asia’s biggest refiner said.Margins were narrower between July and September, compared with the first six months, the official who declined to be named because the information is confidential, said in an interview in Beijing. Increased sales volume wasn’t enough to offset higher crude costs and the company’s refining business probably broke even in the quarter, he said.
Texas heavy industries worry about EPA crackdown
DALLAS – For 15 years, environmentalists have complained that state regulations have allowed the powerful oil and chemical industries to skirt Clean Air Act standards in Texas, the nation's foremost producer of industrial air pollution.But the Environmental Protection Agency last month scrapped several aspects of the state's air-pollution permitting program, including "flexible" permits that have allowed about 140 plants and refineries to exceed toxic emissions limits in the short term as long as they complied to overall federal averages in the long term.
Jordan begins site assessment of first nuclear plant
Jordan's Atomic Energy Commission announced Tuesday the launch of the site feasibility study for the Kingdom's first nuclear power plant.By January, it will be clear if the location is feasible to go ahead with the required procedures to establish the nuclear plant, head of the Commission Khalid Touqan said Tuesday at a meeting with concerned agencies and representatives of the companies implementing the study.
Areva May Sign India Nuclear Contract Early Next Year
(Bloomberg) -- Areva SA, the world’s biggest maker of atomic reactors, said an agreement with Nuclear Power Corp. of India to build a plant in the South Asian nation may be signed early next year before approvals are received.“That won’t hold up progress on the signing of the final contract,” Arthur de Montalembert, chairman and managing director of Areva’s Indian unit, said in an interview at the venue of a conference in Mumbai today. “We don’t foresee any problem there.”
Qatar Airways plane flies on gas to liquid fuel
DOHA (AFP) – Qatar Airways has said it completed the first trial of a commercial passenger flight in an aircraft powered by a fuel made from natural gas.
Next German gov't to cut solar subsidies
BERLIN – Germany's next government is considering slashing subsidies to renewable energy industries, particularly solar, an energy expert with Chancellor Angela Merkel's Christian Democrats said Tuesday.Michael Fuchs, an energy expert with the conservatives, told reporters after the committees for the environment and commerce met to hammer out the details of a new government contract said the most successful technologies would be the first to see cuts.
La. parish tries new approach to fending off hurricanes
BELLE CHASE, La. — This skinny spit of land at the southern tip of Louisiana— one blacktop road leading in, another out — seems an unlikely place for cutting-edge scientific innovation.But it's here that Plaquemines Parish leaders have developed a novel way to protect the area from storms: by usurping federal plans and barricading the region with barrier islands, marshes and cypress trees. That approach could change the way coastal experts and engineers strategize hurricane protection.
Lester R. Brown: Our Global Ponzi Economy
Our mismanaged world economy today has many of the characteristics of a Ponzi scheme. A Ponzi scheme takes payments from a broad base of investors and uses these to pay off returns. It creates the illusion that it is providing a highly attractive rate of return on investment as a result of savvy investment decisions when in fact these irresistibly high earnings are in part the result of consuming the asset base itself. A Ponzi scheme investment fund can last only as long as the flow of new investments is sufficient to sustain the high rates of return paid out to previous investors. When this is no longer possible, the scheme collapses—just as Bernard Madoff’s $65-billion investment fund did in December 2008.
'Alternative Nobel' winner David Suzuki feels 'humiliated'
VANCOUVER–Canadian environmentalist David Suzuki says he's proud to receive an "Alternative Nobel" prize announced Tuesday, but humiliated that Canada has become an international pariah when it comes to climate change.
China's coal-plant emissions can be controlled inexpensively
Getting China's coal-plant emissions out of the atmosphere so they don't worsen global warming may be cheaper, easier and longer-lasting than expected, a federal energy lab report finds.See also: How the process worksThe Pacific Northwest National Laboratory report, set for release today in London, says there are vast underground reserves in China that can be used for "carbon sequestration," a carbon dioxide-trapping technology considered vital to cutting greenhouse gas emissions.
"Conventional thinking had been that China did not have a lot of storage for carbon. But it turns out China does," says the lab's Robert Dahowski, the report's lead author. "Enough for many decades, perhaps hundreds of years."
Report suppressed by Bush administration shows global-warming risks
WASHINGTON — The Environmental Protection Agency on Tuesday released a copy of a long-suppressed report by officials in the George W. Bush administration concluding that, based on the science, the government should begin regulating greenhouse-gas emissions because global warming posed serious risks to the country.The report, technically known as an "endangerment finding," was prepared in 2007, but the Bush White House refused to make it public because the administration opposed regulating the gases most scientists see as the major cause of global warming.
Law change urged to cover ‘climate exiles’
International law is unfit to deal with the millions of people expected to flee their home countries to escape droughts and floods intensified by climate change, a group of lawyers has said.Under existing laws, host countries must protect and care for cross-border refugees, who are defined as those forced to migrate because of violence or political, racial or religious persecution.
There are no such provisions for so-called climate refugees.
Yet by 2050, between 200 million and 1 billion people could be forced to leave their homes because of global warming, said the Foundation for International Environmental Law and Development, which advises vulnerable countries and communities.
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question about natural gas:
how easy/difficult is it to switch from using oil to using natural gas?
how could this be done in the transport sector? does it need a whole new infrastructure? ...
conversion is relatively easy. the reality of a 100 yr supply is not so easy for those sane of mind to believe.
and while we are on the subject of reality , how bout that 500 gb to 1.1 trillion, (trillion with a t), barrels recoverable from the bakken.
I had a discussion with a person at work that was so convinced of the significance of Bakken simply from a story in the local paper. He had enough knowledge to talk intelligently about horizontal drilling and fracturing but would not hear of any discussion that perhaps it was too dispersed to yield a high recovery percentage. I was accused of being a pessimist.
This kind of discussion is fascinating to me because he really has no idea how seriously I take the subject matter. I intentionally did not argue from a position of authority (which I don't presume to have actually) but apparently the newspaper is the authority in this case, no matter that it was probably just a press release.
http://www.whatgreencar.com/cng.php#q5
A lot cheaper than buying a new vehicle.
It's still pretty expensive-especially done the American way on American cars.IIrc, the going rate is a couple of grand and up but don't quote me.
My guess is that not very many personal cars will be converted in the next few years but that fleets will be-having lots of the same make /model plus being able to contract the job on a large scale drives the cost down dramatically.
Plus large companies can get tax credits or co2 reduction credits as they become available to help cover the costs.
Plus most fleets can fuel up daily at the home base, meaning finding fuel is not a biggie .
And of course fleets rack up lots of miles, leveraging any cash and pollution savings.
So my guess is that most individuals who switch to ng will just trade for a new car direct from the factory or a high volume conversion company when the time comes.This would appear to be a far more practical and cost effective solution from the individual stand point in most cases.
Your current gasoline fueled car will most likely move under it's own power on gasoline until it moves for the last time on a tow truck to a scrap dealer.
Now if gasoline prices spike quickly and dramatically or the public for some reason decides that gasoline may become unobtainum,it's another whole new ball game.
I suspect at some point flex NG/Gasoline cars will be the rage.
Now as far as I can tell damn near any mix of NG or other stuff like propane and diesel is doable in diesels. With our new wizbang variable timings we can control compression etc very well to create a diesel that can handle a surprising range of flex fuels.
I'd argue everything form powered coal soaked in diesel to the fluid stage or even ethanol aka ink to NG is possible to burn efficiently in a readily doable advanced diesel engine.
I'm of course a big fan of solid oxide fuel cells which I think will one day be competitive and longer term cheaper. Needless to say "work" motors are viable.
Outside of internal combustion I think external combustion engines or steam engines are the real long term answer even if they may or may not exhibit lower efficiencies. Given a correct heat exchanger setup to accomplish preheating and esp if you look at dual fluid setups say water and a refrigerant of some sort or basically a setup with to heat absorbtion fluids differing in boiling point bay 20 C or so lots of efficiency is possible. And as long as you have decent pressure pulling a vacuum to increase a pressure gradient dramatically is a area thats not really been looked at so the secondary turbine could readly be expanding against a decent vacuum produced using the high outflow pressure of the primary turbine. The temperature on the exapand side of the outflow may well be low enough to effectively condense the primary water outflow efficiently.
My point is there is a tremendous number of possibilities in a dual or even tertiary or higher fluid exchange system for external combustion that I believe can result in efficiencies that rival a internal combustion system with a enormous range of fuel sources. And this is not even starting to look at stirling or other cycles.
And of course this can be mixed with electric no reason at all why you can't have a hybrid train that uses electric where available and fuels if needed or even bulky capacitors whatever. For rail the beauty is you need the weight locomotives have to be heavy to work.
http://www.howstuffworks.com/diesel-locomotive.htm/printable
http://www.internationalsteam.co.uk/trains/newsteam/modern12.htm
Re: The fallacy of peak Oil
If I may, I'd like to turn the tables on the author of this article with his very own words...
"And conservative estimates place the number of recoverable barrels in our own oil shale at between 500 billion and 1.1 trillion (with a ‘T'). To put that in perspective, consider that the lower number represents roughly triple the proven resources in the Middle East. "
conservative estimates being the estimates of "conservatives" such as rush limbaugh.
She obviously didn't do any home work. If she did she would have understood the debate is no longer about WHEN, because the Hirsch report has shown we need 20 years to mitigate it. It not about reserves either (reserves ARE important). How about EROEI? No mention of it. She also refers to Malthus "What Malthus forgot to consider was the role of technological advances in the food production industry". Technological advances largely to be contributed to oil and gas. Malthus may still prove right.
But it gets worse. According to her "North Dakota-Montana's barely tapped Bakken and Three Forks formations, and off the coasts of California, Florida, and in the Gulf of Mexico" are CONVENTIONAL resources of oil.
And finally, she is convinced of some miracle techno fix: "Oil will, necessarily, be replaced someday, but the substitute technology will arise, not as a result of however well-intentioned federal dictates, but from the ingenuity released by an individual, or group of individuals, seeking to capitalize on an innovation, arrived at by acting in their own best interest."
Oh really? So, according to her Oil will be substituted by Technology. I'm afraid she didn't contemplate the possibility that oil will not be replaced by anything.
The lady is totally incompetent to write about this.
"......(reserves ARE important)."
not when the definition of reserves is the 1st cousin of be b--- s---.
Some proven reserves are "known unknowns" like ANWR, others qualify better as "unknown unknowns" like deepwater GOM, or KSA's empty quarter. You can't have any flowrate without having any reserves.
As for reserves... Dude, there are more hydrocarbons that we can possibly burn on the surface of Titan. Peak oil problem solved...
Er, wait, isn't there EROEI problems here?
And folks, this is why oil shale will likely not be a major player post-peak. I have yet to see a positive EROEI way to remove oil shale (and yes, folks, this includes energy needed to move materials like water or gas or whatever else is necessary to extract oil from a rock.)
Don't forget the Geothermal reserves at the earth's core.
I though just putting them in that Worm Hole solved that Titan problem-
exxon is working on an interplanetary lng transporter.
From wikipedia: (http://en.wikipedia.org/wiki/Colonization_of_Titan)
the writer of that article, Kelly Sloan, is a male.
"...role of technological advances in the food production..."
While I know that a farm without cats is just a huge buffet for mice, I'm curious if anyone heard that localized parts of the East Coast now have rat infestations so bad that rats have killed the dogs that were used in an attempt to kill the rats. The only thing that currently effectively controls these rat populations are F3 Savannah Cats that have been brought in (under controlled conditions) for that purpose.
Is this an urban legend or has anyone heard anything anything similar?
Yeah, you can apply all those technologies - if money is no object. I suspect that most of those "in the business" do have to take such things as cost vs. oil price into consideration, though. Perhaps that is why all those advanced technologies, although already available, are not being more widely deployed - and why they might not be deployed in the future at anything like a rapid enough rate to make up for depletion losses.
As I understand it, even most of the "industry insider peak oil sceptics" pretty much acknowledge that cheap oil is history, and that everything becomes increasingly expensive from here on out.
It's time for us to stop letting "them" label us.
We are not "proponents".
We are not "theorists".
We are not strident "peakists".
We are HISTORIANS.
We are patient, fact-based catalogers of the history of oil extraction.
We have patiently cataloged the decline of production by the most technologically advanced, "greatest" nation on Earth, the goo ole' USA:
We have patiently cataloged the decline of production in the North Sea:
We are HISTORIANS.
They are Orwellian Ministers of Revised Truth.
Off Topic (?) - Cheap fiberglass insulation
FYI, Lowe's is running a special off on Owens Corning or Johns Manville insulation. Buy $399 (sales tax NOT included !) by 10-25-09 and get a mail-in rebate of a $100 gift card (good only at Lowe's).
By my reading the federal energy tax credit is that one can get a 30% tax credit for insulation installed in one's principal residence and the sales tax is included in the basis for the credit. Maximum of $1,500 in tax credits.
It is an open question (to me) if a gift card (not = cash) has to be deducted from the cost of the insulation for IRS calculations, so I plan not to. Consult your tax adviser ...
$399 insulation * 9% sales tax = $434.91
-$100 gift card - $130.47 tax credit = $204.44
Best Hopes for more insulation,
Alan
On-line someone claims Owens Corning R-30 15" x 25' (31.25 sq ft) roll of unfaced Attic insulation has a new low price of $9.37 (Was around $18 or so).
This is a perfect example as to why our entire economic system needs to be trashed and all those who run it and benefit from the loopholes, false advertising and pure unadulterated finely refined yak dung need to be put in shackles and forced to do hard time pulling oxcarts. Either that or lined up against a wall and summarily executed for crimes against humanity. /rant off.
Let's just say I'm not in a very benevolent mood this morning!
those sentiments are quietly shared by a great many people.
Lowe's 'gift cards' are inconvenient. If you don't use the entire amount on the card in one shopping trip, the next time you use the card, the cashier will ask you how much $$ is available on the card. The cashier has no way to check, and you have to find out yourself by calling some phone number on the card. I guess Lowe's hopes you don't want to deal with the hassle and throw away the cards. I deal with it by not shopping there.
Just use the card the next time you need a cartfull stuff and spend the whole hundred at a pop.-Every gift card discount scheme rebate deal I ever heard of is designed to sucker the customer to some extent.Lowes is much better than most-at least the hundred bucks is enough to be bothered -most of these "deals" depend on you first buying something mostly worthless and then putting time and postage in getting back five or ten dollars and even then you must spend that pittance on some specified product in most cases rather than anything in the store.
anyone here familiar with this product?
http://www.p2000insulation.com/index.php/component/content/article/2
I don't know that particular product, their R value is not the best - R4.1 per inch thickness, and adding the R-value of the air space next to it is an old trick. HD carries name brand extruded polysterene panels for about $0.87/sf - these are 2 1/2" thick for an R-value of 10, and I know thinner sheets are available.
I have suggested that the net energy of different conservation measures be a campfire topic. It takes considerable amounts of nat gas to produce fiberglass insulation. The energy payback time may cover several decades for a 15" thick layer. Will the lifetime of the building be long enough to actually have a positive net energy effect?
Good afternoon Drummers: I would like to throw out an idea and see what you think about it. This has to do with Thomas’ statement that it takes a great deal of natural gas to make fiberglass. I have no argument with that statement but when I purchase fiberglass R30 insulation blown in for about $.50 per square foot of attic (house size) did I not just pay for all the energy used to get the raw materials, make the fiberglass, transport it here, power the blower, pay the cost of materials, labor and profit and all the rest of the hidden energy uses in the process? Since it will take a few years to realize my return on investment, after that the $-ROI will be positive. We heat with propane, electricity, wood and other hidden energy uses. At the point where the $-ROI is positive we should be well past ERoEI because the $-ROI includes labor(s) and profit(s) as does the cost of propane, electricity, etc?
If this is true, what’s to worry about except TEOTWAWKI?
BTW: We put the insulation in a couple weeks ago. Our house does not feel any warmer because 70 degrees is still 70 degrees but I think the furnace runs a little less. In a year or so, I should be able to know pretty close when the ROI is positive if money stays about the same value. But that’s another problem isn’t it?
I would also like to thank each of you who voted for this administration and batch of congress critters for the $300 rebate. When they blew in the insulation, I got a certificate that will be worth 30% of cost next tax period. $-ROI takes a big jump then. ERoEI might be behind about then. I don't know.
I had a big Victorian type house in Asheville, NC for years. We kept the thermostat at about 63 degrees. After blowing the walls full of fiberglas and putting R-20 batts in the attic, we noticed a big improvement in comfort level even with the thermostat still at 63.
The difference in that with the cold walls before the insulation you will radiate your body heat to the walls and feel colder even though the air temperature is the same.
This 'comfort level' issue is missing in most discussions about insulation.
There is a lot of truth there. You are bathed in IR radiation from above, below, and the sides. You can think of this radiation as having a temperature, which if you buy one of the nifty infrared thermometers you can measure simply by pointing. In any case look up the Stefan-Boltzman law, which describes the amount of energy radiated as a function of temperature. Technically, your body radiates the same amount, assuming your skin temperature is constant, but the amount you recieve from your surroundings depends upon the temperatures of the surroundings. So more insulation, means for a given interiot temp, your walls/ceilings are a bit warmer (maybe a couple of degrees), and the radiation field will be a bit more energetic.
Incidentally, you can measure a sky temperature, typically a clear sky is radiating at maybe -30F to -60F, which shows that even a few clouds can warm the ground quite a bit. And for the global warming skeptics, the extra CO2, makes this sky temperature warmer, which effects how much radiation the ground sees....
This supports my mom's contention that even a thin piece of bedsheet over a window in wintertime seemed to have a noticable effect, even if the 'R' value was negligible.
The bedsheet trick works mostly because it breaks up the convective cell with the window.
And now, way more information than a simple reply to your post justifies.
Quick physics lesson (because I'm in that kind of mood this morning):
Heat transfer occurs because of, and in direct proportion to, the difference in heat between two materials at the point of contact between them.
The three forms of heat transfer from most efficient to least are convective, conductive, and radiative.
Convective transfer is done by fluid motion. Gas or liquid picking up heat in one location and carrying it to another. It is the most efficient because the recently heated liquid moves out of the way and is replaced by cooler liquid. This keeps the temperature difference at the point of contact high. You can think of it in terms of cold as well, it's all a matter of perspective. The room air is heating up the window in wintertime, the window is cooling the air.
Conductive transfer is what we get when there is no fluid circulation. Difference in temperature and size of the contact surface are what matters here. This is the heat transfer mode where thermal conductance and R values are significant. This is less efficient than convective transfer because the heat transfer medium does not move, so the temperature difference at the point of contact shrinks rapidly.
Radiative transfer is done by the emission of electromagnetic radiation, primarily but not exclusively in the Infrared portion of the spectrum. This is how the sun heats the earth, and is also responsible for the warmth you can feel from a woodstove when standing near it but outside any direct airflow path from it.
The reason for the efficiency changes is that each mode adds to the previous transfer mechanism. Radiative transfer always happens, conductive transfer happens whenever two materials at differing temperatures are in contact, and convective transfer happens when one of the mediums in contact can circulate to carry the heat more rapidly.
Mixing can be included as a fourth heat transfer mode extending the next step from convective transfer, though it is rarely included in listings like this. It is even more efficient than convective transfer since both mediums are in motion and the contact surface rapidly expands until temperature is equalized. Drafts are an example of heat transfer by mixing.
----
This heirarchy (Radiative->Conductive->Convective->Mixing) underlies and defines how best to approach home heating efficiency. Start from the most efficient and work down.
Eliminating drafts reduces mixing transfer with the outside, doors or curtains between rooms reduces internal mixing.
Curtains, dual-paned windows and filling or breaking up in-wall air spaces reduce convective transfer.
Use of materials with low thermal conductivity (high R values) reduces conductive transfer.
Use of reflective materials reduces radiative transfer.
Size and shape of a building effect all heat transfer modes by virtue of contact surface, which is why domes are popular in some groups and why larger buildings take more energy to heat. Surface to volume ratio is important when dealing with actual living space which is why apartments are more efficient per living unit than row houses which are more efficient than isolated single-family houses.
Also convection. If you have a cold side and a hot side you have air currents. This is worse if you have more floors and the heat is lost at the top. Of course we should live at the top of the house and sleep on the cooler ground floor, but we are dumb as rocks. I think there is an instinct to sleep in the treetops for safety from lions..
ceiling fans in reverse on low work to move hot air back down.
Ceiling fans over all are a great return on investment both summer and winter.
maybe humanoids have a tree-top instinct in the tropics, but cave men lived in caves and to caves we may return.
I came across this recently when reading about steel smelting.
It's one if the innumerable byproducts of basic industrial processes whose voluminous problematic wastes are used as inputs to other processes.
I've no idea of numbers or percentages for rockwool sources etc but I imagine that iron smelting produces most of the hot molten slag used to make it, sort-of-like cotton candy.
Once you've industrialised with coal and iron production, you kind of get all these other things "for free" : rockwool, soaps, chemical feedstocks, fertilizers, etc etc.
Which begs the question, if you stop smelting ore, what will the downstream impact be?
@ Memmel - maybe you could recommend some reading?
Alan, I just put in a new super efficient furnace. Do you (or anyone else) know if there is a top end on tax credits for home energy improvements? Is the insulation credit separate from efficient furnace? I think I maxed out the rebate for my furnace but would love a few more R's in the attic too.
One more interesting point to share: I found HUGE differences in pricing between vendors. I live in Boulder which is an expensive city. The small independent vendor I chose for the job was from a smaller town outside the main Boulder-Denver metro area. The price was almost HALF of what Boulder vendors charge. He said he couldn't in good conscious charge more in the pricey metro area than he does his small town customers (he may have also had some pity because I am unemployed). So my advice for those in the market for furnaces is to shop the smaller vendors. My new one is 96% efficient and had better specs than the lower-efficiency and higher-priced units others were quoting. If a vendor hits you with lots of advertising, fancy trucks with lots of custom paint, and 1-800 numbers, you can almost always bet you are paying too much.
Yes there is, you can find detailed information about rebates for your location by going to:
http://www.dsireusa.org/incentives/index.cfm?re=1&ee=1&spv=0&st=0&srp=1&...
I took a quick look and found this:
The IRS tax credit is 30% of the cost plus installation up to maximum of $1500 for tax years 2009 and 2010 for existing homes. The furnace should be approved.
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index#c3
http://www.ahrinet.org/ARI/util/showdoc.aspx?doc=1332
If you get a geothermal heat pump, solar hotwater or PV, small wind turbine or fuel cell you get a tax cut for 30% of the whole cost plus installation thru 2016.
Good summary of available tax credits.
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index
If Lowe's has a half price sale for R-30 unfaced insulation AND is giving an almost 25% "gift card" on the sale price, the tax credit is very nice, but I would add needed insulation regardless.
Best Hopes for More Insulation,
Alan
Attic insulation(>20%) isn't really the most effective use of the credit.
Air infiltration(30%) and wall heat loss(30%) are usually bigger energy losers.
If you have single pane windows(about 40% of residences) adding low e storms will save you 25% on your heating and AC bill.
If you really want to reduce wall infiltration, fill your walls with polyurethane spray on insulation like Icynene(R per inch of ~6) which is also an excellent air barrier.
You can also do a caulk and seal of your building frame and windows.
Pipe chases and interior walls act like ducts allowing heat to be pulled into the attic or pushed thru exterior walls.
Poorly sealed and insulated ductwork not only lose heating energy but leave some rooms under heated causing owners to turn up the thermostat.
Another problem is chimneys, water heaters, exhaust fans and furnaces which suck air into the house.
Condensing high efficiency furnaces and water heaters have sealed combustion chambers and independent fresh air intakes.
Most AC is oversized 25% which leads to frequent short cycling and
humidity problems like mold.
You can replace bath fans with heat recovery ventilators to eliminate negative house pressure.
JMHO
Something on BBC radio this morning about a leak at an offshore site in Austrialia. Leaking at the wellhead. Supposedly pretty big slick.
Anyone hear about it?
Here
Old story, really. Happened weeks ago. They said it would take weeks to fix, and lo, they are proven correct.
Gotta love this comment: A spokeswoman has insisted that the impact on wildlife had been minimal.
Perhaps that would be because she didn't think it would affect the polar bears? I don't suppose she has ever heard of Prochloro Cocci?
We really need to start getting people to understand that there is a whole lot more to ecology than what people can see! It is very frustrating to have to listen to all the complete idiots who pass for official spokespeople. Who not only are ignorant of reality but are too damn lazy to do any homework before they spout the official party line... "No problem, nothing to see here, move along and don't worry! I say lock the bums up for crimes against the commons.
See E.O. Wilson's talk to understand how absolutely criminal that statement really is.
http://www.youtube.com/watch?v=e-txR1WSPBs
this is comedy but it's not that far from the truth:
http://www.youtube.com/watch?v=8-QNAwUdHUQ
Factually true. Everyone knows there's no wildlife off the North-West Australian coast!
IGGY -- Here's one link. It can lead you to many more. Last i heard i think they were drilling a relief well that might take 4 or 5 weeks.
http://www.articlexi.com/diary/357/same-rigs-in-australian-blowout-sugge...
Transneft begins supplying oil to Kozmino
I just returned from my first ASPO conference and was deeply impressed with the quality of speakers and the whole professionalism of the conference. I'm an engineering manager and have been to many conferences in the electronics, medical, and manufacturing areas. This was the best conference of them all. The natural gas discussion between "100 years of gas" and the "70% first year decline in shale gas" was an example in point of the type of debate we should be having. It was respectful, full of data, and not watered down.
On the people networking side, there were 400-500 folks there and it was much more difficult to connect up and find other TOD'ers than I had expected. Honestly, it seemed everyone there read and appreciated TOD. I enjoyed meeting Nate Hagens (his final talk that closed the show brought a standing ovation from the crowd), talking to Kyle Saunders (Prof. Goose) who is just up the road in Ft. Collins, and getting to meet Jeff Vail in person after corresponding for awhile. It was wonderful to share a table with Gail Tverberg (Gail the Actuary), Nicole Foss (Stoneleigh), and Dave Cohen. I've got a number of contacts to follow up on and think I have a good PO book idea that I have started working on.
All in all, a most excellent conference. I got my money's worth from it, despite being currently unemployed and on a tight budget. I advise all to check out the ASPO web site for more info and presentation slides.
Very jealous Ody. Maybe one day when I'm not to busy with "Drill, baby, drill" I can also hook up with the gang. I know I shouldn't be surprised but the few MSM reports I've seen sound like you must have been at a meeting in some parallel universe where life was the opposite of what we find on earth today.
I still advocate us putting our money where our mouths are and doing this thing via the web. There was no way for me to get to Colorado, but could have joined in at least part of the time via the web...
Cheers
Maybe there will follow an excellent summary from this year ASPO-USA Peak oil conference on Energy & Capital (www.energyandcapital.com), like last year.
The bad news about natural gas wells (unconventional wells in shale formations) is a good example of a major fallacy in our thinking about energy matters. I just posted a blog yesterday about the fallacy of local optimization (that it implies global optimization) when using the greedy method of decision making with limited information about consequences. The blog is still fresh at Question Everything.
George
Just came across an interesting tidbit this morning. A group of us on break where I work were discussing price of oil among other things, and one of them with contacts in west Canada told us about the immanent start-up of a new oil pipeline from west Canada to the US, which will require 9 million bbl crude just to fill the pipe, all of which is essentially lost from the current market. He says they're anticipating a significant temporary hike in the price of crude as a result.
Keystone Pipeline
A couple of years ago, we spent a lot of time here discussing "MOL" (Minimum Operating Level). Matt Simmons, among others, was concerned that a lot of oil inventory was actually unavailable for use, because it was in transit in pipes, etc.
The DOE used to have an estimate of MOL, but no longer do. Partly because it's so hard to calculate. Every time a new pipeline is built, MOL changes.
When they decomission a pipe, presumably they push the remaining oil out with a pig or such? How about pipe stranded gas?
pond -- can't abandone a p/l with residual explosive NG in it. Most probably use N2 to displace.
Don't forget the Enbridge lines through MN and WI to Chicago:
http://www.enbridge-expansion.com/expansion/main.aspx?id=1240&tmi=1692&t...
The U.S. is putting in place some pretty impressive milkshake straws to Canada...
Climate change is hitting North Iowa with a sledge hammer this month.
This morning we have about 2" of snow again after about 3" a couple of days ago. Before that at the end of September and the beginning of October we received about 5 inches of rain in some spots.
Here is the chart I use to keep track of what is going on locally. It shows near record cold lately and the warm spell in September:
http://www.crh.noaa.gov/dmx/?n=climateGraphicsMCW2009
The problem being created is that the crops are standing in snow and do not dry down. Normally the soybean harvest is nearly completed by this time. This year it has barely begun. I haven't got any of mine out of the field.
This wet/cold spell is going on 3 weeks long now. It is all very unusual. The earliest snow I can recall is a Halloween blizzard about 30 years ago. Normally we don't get measurable snow until around Thanksgiving. Fortunately the snow isn't sticking and melts quickly leaving the fields wet and harvest at a standstill.
x, good luck getting your harvest in.
Can you dry them? Is this feasible at farm scales?
I'm still trying to get everything in out of the garden before the weather hits full on. I had to pull the garbanzos and soybeans and they are not only wet, but still partially green. At a garden scale, I spread them out in the dining room and we eat them first. Depending on the size of the farm, it could be a real problem.
Hamster
I heard a little while ago that the first half of October has been Iowa's coldest on record. Down here in Decatur County most of the crops have been harvested in spite of the cold rain. I have seen some corn not harvested until December around here as they waited for it to dry on the stalk.
Get used to it.
Peak oil conference fails to settle debate
The last statement cannot be correct. Over the last 50 years we've extracted considerable quantities of oil. Therefore, peak oil is nearer in time today than it was 50 years ago. You cannot rationally argue otherwise.
If only the number of discoveries really made a difference. To the innumerate public, maybe. But finding 99 pennies in the couch is not as good as a single dollar in the sock drawer.
No shame in walking away from mortgage: Those who ‘strategically default’ are using system the way it was designed
Someone made the good point the other day that many Americans feel morally obliged to keep throwing money away out of a sense of obligation to the bank, yet feel no such moral obligation to stick with a losing marriage-pretty impressive propaganda results from the elite.
if my house was a bitch, i would divorce (her) too.
That tossed a flashback from the 80's at me leanan. After dealing with the bust in the oil patch I finally declared bankruptcy and let the house go back. I was down to a few hundred $'s and a big car repair bill. I did my own bankruptcy filing (pretty easy paper work, actually.) I was one of the few folks the banct. judge talk to directly (I suspect because I didn't have a lawyer). He looked at the summery sheet and asked me why I hadn't filed bankruptcy a year earlier when I could have preserved more of my assets. I didn't know how to answer and then he looked at me and said (I remember those words as if I heard them yesterday): "You're a fool. People like you who don't get advice from lawyers are always making mistakes like this". Then he told me to go sit back down and then he approved my filing along with the other 60 or so folks in the court in one stroke.
I didn't file bank. a year earlier because I could keep paying the mortgage. Stupid me, eh? And then I began reading stories about folks who followed the advice of their lawyers and actually ran their debts up in anticipation of filing. Thanks goodness I now know where to go to get my moral compass reset.
The entire banking system is a racket designed to enslave and use the masses.
EFF THEM.
So the justice system (legal industry) was basically encouraging you to exploit (rip off) the system as much as possible? That seems to be exacly what the bankers are doing today.
The problem with this type of thinking is that someone else somewhere is getting hurt by the abuse. Why should others have to take the brunt of the rip-off perpetrators? It would be much better for society if it was perpetrators themselves who were getting hurt.
The system itself is based around corporations-anyone not protected by the corporate umbrella is out there exposed, like a Zebra on the plains-these banks, protected and often funded by the taxpayers, are run by management teams that loan huge amounts of money unsecured to their cronies who are protected by the corporate umbrella. Contrary to ripping off the system, anyone walking away is finally becoming part of the system.
So becoming part of the system is a way of getting even? If that continues, everyone would eventually become part of the rip-off system to varying degrees -- everyone would be ripping everyone else off. But that would neutralize any beneficial effects of rip-offs. You only way you could lose is if you refuse to participate because of moral qualms.
Somehow I don`t believe that everyone trying to rip everyone off has a net benefit to society.
There is no net benefit, but nevertheless that is the basis of the current post industrial USA economy. It will likely eventually collapse, but everyone has to do what they can to protect themselves-the power guys have the government to protect them.
In the years leading up to the collapse of the USSR, the joke making the rounds among the ordinary working stiffs was "We pretend to work, and they pretend to pay us!"
Variation on the same theme
Entropy is accelerating through the system. The question you should be asking is how to survive in a high entropy environment. Everything you depend upon to survive is degrading, albeit at different rates. The money in your pocket is devaluing; your job security, pension, healthcare and other support systems are in crisis; your home, heating, water and security is under stress; food supplies are being adversely affected.
Those being immediately affected are having to save whatever they can to aid their future survival. Walking away makes total sense if looked at it through the lens of systemic collapse. We're all going to have to live on less, the pie is shrinking, but the more of the pie you can hold on to, the higher your probability of survival.
Everyone cannot go through the bottleneck and the squeeze has already begun.
A lot of that sort of thing going around, though I'm not sure its any worse now than it was 30 years ago. eg. insurances. I consider home and auto insurance to be protective umbrellas for serious disasters, but many people I've heard will try to make a claim on every little event, which really raises rates for everyone. Employment insurance from govt. Its supposed to help workers bridge across unexpected jobloss, but I know many such as well-paid loggers who simply cannot work through the north Canadian spring thaw, when all the logging roads become impassable until the packed ice surfaces melt and the ground dries out, take 6 or 8 week layoffs and go "on pogey" every year as a natural course. Ditto auto assembly workers, who take annual insurance vacations every year while their plants are re-tooled for next years models. The UIC system shouldn't be supporting such systematic use. If the employer can't manage to pay an attractive annual income for such seasonal work, then the job should not exist. OTOH, if the employer goes out of business, or permanently downsizes employees, then they should qualify for the payments.
I don't have a problem with people making a claim on insurance if they feel an incident ought to be covered: stopping this from affecting things is what the "policy excess" and policy assessors are for. What's annoying is the number of people who exaggerate the effects of an incident (eg, a cushion is damaged so I'll make out that the base unit of the sofa got damaged and needs replacing, rather than just the cushion), going on to full fraud.
If you go into home foreclosure with assets, most states are recourse states and would let the bank take enough your assets to make up their losses.
I am not sure how this is playing out but would like to know what percentage of these folks have to pay anyway.
I don't think that's true. More states are non-recourse.
The whole point of the system is supposed to be that the lender can't lose money. If you default, they take the collateral - the house - and sell it.
They just never imagined a situation where the value of the collateral would be less than the loan.
I don't think that is true. By this list, the 38 other states are recourse/one action states.
LINK
Furthermore, all re-fi mortgages are recourse loans. Here is one of the stats I was looking for.
LINK
I don't think that list is complete.
From the link you posted:
So it sounds like not all re-fi mortgages are recourse loans (though they are in California).
This is in interesting article on mortgages and some uninformed proposal to make mortgage loans recourse.
LINK
Yes, it is quite complex. I wouldn't do it without consulting a lawyer, or at least a site like YouWalkAway.com.
But I think more people can walk away than you think. A big chunk of troubled mortgages are in California (which is why YouWalkAway.com is based there). And a lot of states that are not non-recourse nevertheless have some protections for indebted homeowners, as your link points out.
And the people who actually have assets to protect tend to know what they're doing. They aren't going to walk away, then be surprised when their wages are garnished or something.
Is it moral? Eh. I don't have a problem with it. It's just a business decision. Same as on the bank's side.
gog -- Not sure if the rules have changed but at one time it was very easy to save your cash assets. Have a $200,000 house and $1,000,000 in the bank? Just sell the house and buy another for $1,200,000. Your homestead was safe from liquidation. Clear bankruptcy, sell the house, buy another and bank the cash. But I know they've tightened up the rules not not sure if this is still a good ploy.
No shame in walking away from derivatives contracts: Those who ‘strategically default’ are using system the way it was designed
To which Denninger said: Ha-ha!
We might as well start listening to and promoting Dylan Rattigan on MSNBC. He is getting a lot more exposure and publicity than Denninger and is stating the problems just as bluntly.
Denninger still wilts when he goes on TV, whereas Rattigan calls the people on the carpet face-to-face, as he controls his own show.
Pwning the US Chamber of Commerce
http://www.huffingtonpost.com/2009/10/14/dylan-ratigan-to-chamber_n_3203...
He was also on Today Show this morning.
from TAE:
my emphasis:
It is like a Boxer who puts money on his opponent and then takes a fall.
"The promise of enough natural gas to last the United States more than 100 years based on discoveries of vast shale formations could be the country's next speculative bubble to burst"
By coincidence I just got an e-mail this morning from one of the private-equity junior petes I'm invested in, saying that they are restricting flow on all their natural gas wells and coalbed methane to a bare minimum. Just enough will flow to keep the payroll going. They're not in trouble because they have no debt and a minimum staff. They specifically mentioned that they want to store the gas underground and wait for sustained $5/gigajoule minimum price.
They're lucky Dale. Almost all the operators I know can't afford to not max cash flow right now even if it means selling cheap. All that easy credit (and subsequent interest payments) is still biting them in the butt.
"All that easy credit (and subsequent interest payments) is still biting them in the butt."
That, more than the actual price of NG, is what is hurting so many junior petes in Alberta. The publicly-traded ones are worse off because they are under more pressure to meet expectations. This is why I only buy into private-equity junior petes with no debt, because they can afford to take the long view. I can't see NG fortunes improving anytime in 2010, and even 2011 seems doubtful.
My conventional oil is doing nicely. It can make money down to $20. That is why I have no investments in oilsands.
I think most of you guys are a little too down on shale gas. I don't think it's anywhere near a "game changer", but the fact is there is a significant amount of resource that we didn't think was exploitable before, and it offers a kind of cap on NG prices, especially when it comes to LNG. Shale gas might not be profitable at today's prices, but the past year has shown that shale gas can ramp up production pretty quickly in response (in this sense its huge initial production numbers are a good thing, ignoring the equally huge decline rates).
Basically shale gas can act as an insulator from high world natural gas prices.
Valid points Dax. I'm not so much down on SG to provide a buffer as you describe. What bothers me is the "Don't worry about energy" hype which is based on huge NG reserve numbers. I know the SG economics first hand and, as you point out, they are good at the right price. Add that to the low probability of drilling a dry hole and the SG plays will always be waiting in the wings to explode again. It's just that most folks read this as a future of cheap and plentiful NG. As you know, it's either one or the other...but not both over the long haul.
You're exactly right, shale gas is certainly not even remotely the answer to all our energy problems, but I think it does give us more freedom to replace more coal with natural gas, which is going to be necessary to come close to getting remotely close to where we need for our CO2 emissions. But becoming a natural gas economy isn't in the cards.
Dax -- Given the lesser of two evils I'd go with NG over coal too. But just a WAG but I bet the tide swings to coal eventually in the losing effort to keep BAU.
That's my guess as well.
And all the planned CO2-EOR projects in the U.S. are desperately waiting for more CO2 production.
Not to rain on the shale gas parade, but it seems to me that I read that it is produced by hydrolic fracturing. That is, they use water to produce the gas. And, fresh water is not really plentiful in many of the locations they propose for production. Using salt water would degrade the water table in the area, and so would not be practical or permissible. That means long distance transportation of water - diminising EROIE, and IMO making it not a good thing to rely upon.
Just like shale oil, shale gas is an illusion, spun up by investors who want the next bubble to be the shale oil and gas fields.
Maybe I am wrong about this, but when I see the PR efforts in these two areas [and in oil sands, for similar and even more compelling reasons], my BS alarm goes off.
Warning, warning! Someone is trying to manipulate us!
My extended family has land in Fayetteville shale, while water is an issue, it is solvable. They are building free ponds (2to 10 acres) right and left, they will also pump out of farm pounds the top 3/4 or so. The local love selling water to them. And if they have to, they go to Greers Ferry lake and get the water. So water is not a limiting factor, just a cost issue.
Perhaps not in Fayetteville, or at least perhaps not today. AGW may change all of that for you. Even now, though, the plays in the Dakotas and in Texas are in water short areas... And, when your ponds start to dry up, whether from excess pumping or climate change, you may wish you had held on, or maybe charged a bit more.
Farm ponds, in addition to water, are home to fish, birds and other water loving species.
Also, after the water goes down, it comes up with the gas. At that point, from my understanding of the process, they drain it off into the hinterlands... meaning you get their run off, which at that point in time is no longer very fresh.
So, good luck with that.
In "The Fallacy of Peak Oil", the authors wrote:
"In 1803, Thomas Robert Malthus presented the second edition of his “Essay on the Principle of Population.” In it, he laid out his theory that the rate of population growth would outpace the rate of increase in the food supply. He predicted that famine would ravage the earth in short order."
Malthus is their favorite whipping boy - a straw man easy to construct, and so obviously wrong. Except that Malthus was not wrong... except on the timing. Malthus did not, nor could he in 1803, anticipate the use of stored energy in the way of oil as a means to produce food for so many more people. What the deniers neglect in their cornucopian fantasy is that, when oil peaks, so must population, and for the very reasons that Malthus stated.
And there are so many problems with the passing of peak oil and peak gas. Not the least of which is that oil is used for plastics that are needed to produce the technological wonders that are supposed to save us, to say nothing of the pvc pipes used in irrigation and water transportation. And, oil is used in factory farms and in transportation of food stuffs.
Natural gas, of course, is the main feed stock for commercial fertilizers, without which feeding 6.6 Billion folks will not be possible.
I suppose that when we stop feeding people, the deniers think that those people will just quietly die off. Well, maybe they do think that. Since they seem to think this is all a liberal scheme, perhaps there is a Republican scheme to have a disfunctional health care industry that will allow the masses to die off, while allowing the richest few to continue business as usual.
Actually, whether or not peak oil has passed [I happen to think we are in the plateau, and that it began circa 2005] does not depend on what who says. Rather, peak oil is a physical reality, or more properly a geophysical event, its veracity does not depend on faith. The law of supply and demand will not create new oil, new gas, or new uranium. Technology does have some limitations. Sadly, the longer we wait to curb our reliance of oil and gas, the less we will have available for necessary products in the future. Wait too long, and we will not have the materials we need to change our energy production and to creat our new infrastructure.
What makes the 'Fallacy...' article worse is that this is all without even beginning to consider what happens to the environment if the cornucopians are correct, and there is a huge supply just around the corner. Their BAU fantasy world would then become an ecological nightmare, with 4 degree C increases already on the mid-term horizon [likely by 2050 to 2060], without even considering the likelyhood of feedback loops and other natural forcings adding to those problems.
Since they even agree, at least in 'Fallacy...' that peak oil will come, their denials must represent a decision that being wrong would mean a world that they could not continue to dominate and manipulate, so that they do not care... if there is any chance at all that AGW is not true, and that peak oil is not near, that would allow BAU, and that is okay. Their being wrong is not acceptable, and cannot be considered. They are throwing a tantrum that may well wind up destroying the human race, and life as it now exists on Planet Earth. Because changing would mean giving up some of their wealth and their privilege and their control over others.
Sick.
There is no fallacy, only biological and physical dynamics that have certain outcomes.
Invest and grow, the mantra of industrial civilization. Invest in eating the fossil fuel, soil and fertilizer pie and grow larger and richer. How fast and how large can you grow? Expansively until the edges of your pie plate start to curve inward again. Then the rate of growth begins to decrease at an ever increasing rate until suddenly, quite unexpectedly, growth stops completely. Life support for a vastly oversized civilization will ensue until that too is untenable. Disorganization and collapse will follow. Do investors still feel good striving for the highest possible return and will corporations strive, at any cost, to provide those returns through growth? Everyone wants a big return on investment, right? It's funny, with any sustained exponential growth rate on a pie of limited resources, you are eventually finished and it becomes impossible to solve the problem without a catastrophic die-off as the existing massive civilization will rapidly eat the remaining resources before it can naturally shrink in size, if that is at all possible.
It took two hundred years to eat the first half of the pie and we grew large. It will only take thirty years to eat the second half. We are now wondering how to feed all the investments that were based on thirty more years of growth. Default or inflation? Doesn't really matter in the end. All energy will go towards keeping an excess of humans alive and houses and many businesses and even gold will be relatively worthless. What about a build-out of renewables and nuclear? We're quickly closing that door, if it is not already. There won't be enough pie left to feed the ailing civilization and expect massive energy infrastructure growth too.
Car sales are up 78% in China - that tells you a lot about where we're headed, and fast.
I find myself using the word, “Fantasy” often of late, especially in describing the BAU model so many desire. Fantasy, I found on searching, means: “the power or process of creating especially unrealistic or improbable mental images in response to psychological need. “
The psychology involved is quite easy to understand. I would like to be able to continue as we have – of course I would change a few things so as to make distribution of wealth somewhat more even and fair, but BAU is a nice thing. Otherwise we are looking at the dreaded CHANGE. And people fear change. That is why we are in trouble today.
What must happen on a global scale is a reevaluation of what Business As Usual really means. The assumptions underlying it must be desconstructed, examined and evaluated. Physical reality must be confronted, including probabilistic modeling of consequences. What is likely to happen, how soon, and to what effect. What if I am wrong and you are right? What happens then, best case and worst case. Most importantly, how acceptable is each consequence?
That physical reality makes me unhappy is not an acceptable criteria for decision making. I cannot deny facts just because I do not happen to like them. And, before going on, let me state for the record that I DO NOT like the facts. I hate that continuing our present course seems more likely than not to portend disaster. I hate that my children and grandchildren will have a less luxurious life than I did, and that my parents, and grandparents did. It does NOT make me happy to know that the planet cannot support more than about one fifth the people who presently inhabit it.
And, I cannot convince myself, no matter how I would like to, that eighty percent of the people on the planet will go of and die willingly or quietly. And, let me tell you, it is really a bummer to me that so many of those “po' folks” have guns, especially here in the good old U S of A,. And that, given how they are reacting to traffic jams [see: http://www.venturacountystar.com/news/2009/aug/10/1-dead-in-camarillo-crash/], their reaction to starvation will most likely make our mid term future quite hazardous, again IMO.
Does this mean that there is nothing to look forward to in the future? No! Absolutely not! It will just be very different, less luxurious, and require more physical effort; yet perhaps in time the future will yield a less stressed existence. One in which cooperative relationships become more valuable than company stock. The key, for me, is to be forewarned and to plan realistically for what is most likely to ensue.
As concerned citizens, it is important that we advise others and educate them. Not by being overbearing know-it-alls, but by patiently demonstrating factually and realistically what lies ahead... keeping in mind all the while that the future is always uncertain. Because deniers tend to be absolutists – remember it is a fantasy they maintain – our task as educators is more difficult. We must concentrate on those will listen – those who may be aware of the cognitive dissonance involved in looking away from unpleasant realities. Not because it matters to PO who believes, or who is right, but because the greater number of people who are prepared, the more likely it is that at least some of us may survive the impending collapse of our oil based civilization.
Deniers tend to be corporatists, and corporatists are experts at spin. They have been framing our day to day lives for so long that most people do not even question it. Their mantra to our economic malaise is, “we will grow ourselves out of it.” Growth is their answer to everything... and we know that unlimited growth is definitionally impossible in a closed and limited system. Our goal should be to show that we are very near that limit, and that the longer we put off the changes needed for long term survival the more difficult it will become... until even short term survival could well be impossible. This is not a liberal plot to take over the world... it is a plan to make survival possible.
As we learned from “The Long Descent,” there is a difference between a problem, that we can solve, and a situation, to which we can at best adjust and adapt.
We have a situation here.
They don't make plastic from oil, it comes from hatural gas. Over 95% of petroleum usage in the US, at least, is used for transportation, gasoline, diesel, aircraft kerosene and asphalt for roads.
It comes from both.
Ethane (and related ethylene) can come from both oil condensate and natural gas liquids. These two "associated production" streams are, respectively, lighter than crude oil and heavier than methane and overlap in their chemical composition, although the ratios tend to vary.
Ethane (-> polyethylene) is a common plastics feedstock but there are others for other plastics.
Alan
Lately one of my favorite themes as Peak Oil becomes ever more accepted and beaten to death is the impact of the internet on media and the resultant fragmentation of society as it drifts in different directions partly due to lack of a common reference point in the media.
Most recently this has been exemplified by the Right's effective use of old media i.e. newspapers, radio (Limbaugh) and cable (Fox) to make noise and distract computer/internet geeks like Obama from their liberal agenda. It is now obvious that newspapers are in terminal decline. Some may dispute this, but this puts the final nail in its coffin:
http://news.bbc.co.uk/2/hi/technology/8305731.stm
75% of young people, the future media market, said the could not live without the internet.
Also in terminal decline is the Post Office. Every day more and more communication shifts to the internet leaving the mail man in the dust.
It is now becoming more and more apparent that conventional radio and television are also headed in the same direction. Perhaps the Right's recent noise making use of these media are one of its last cries before death.
The young people in the linked article now use the internet as a substitute for adult advice and each is able construct a virtual world of their liking disconnected from the "real" world. All the while their seniors for the most part see the world though the filtering lens of newspapers, radio and broadcast/cable television.
This lack of a common reference point in society's media is new. Everyone use to hear the same town crier and got the same message. The radio sent out the same message to all and all who listened got it. The same goes for for television. These media were finite both in number and in the number of messages going out.
But the internet from a practical point of view is approaching an infinity of messages each targeted to a small group for the most part and heard only by them. These groups from a overall societal point of view mean that society is becoming more and more fragmented and disconnected even while communication increases exponentially.
The result is that it has reached the point that those using the old media often seem shrill and crazy to those using the new internet media. And both the old media and its users just doesn't get it.
So watch out Fox, your days are numbered as those 75% who "can't live without" the internet get older having spent very little time in front of the idiot box.
I think early newspapers were more like the internet than the corporate papers of today. A Ben Franklin with a few bucks could buy a press and put out his version of "whats fit to print". Its the consolidation of the small papers into conglomorates that now owe allegience to the "shareholders" and advertisers that makes the news look so homogonized. Because of the capital cost to get into the game both radio and television started in that place. So the internet, I think, is getting back to the early days of newsprint. Except that the underlying technology does depend on corporate power. Where will that lead? I dunno.
edit for spelling
I think the cost of the press was prohibitive. Ordinary people couldn't really start their own paper. Or if they did, they had to support it via ad sales and subscription fees or per-copy sales.
The infrastructure of the Internet is expensive as well, but the cost is pretty much invisible to users and publishers. You can publish a blog for free. Even if no one reads it, you can still publish.
I suspect this is going to change. And people who assumed the Internet was cheap or free are going to get a rude surprise.
To me the point is that an individual with his own press can be much more independent than an "corporate manager". Look at the recent history of the LA Times on PBS. I suspect Franklin had even more independence. Also look at the history of the presidential elections of 1796 and 1800. The papers were probably more partisan than Faux News is today.
They will keep a lot of it low-cost...they would not think of giving up their access into your lives. A veritable corporate/government intelligence bonanza, with willing participants!
Xcellent analysis !
Best Hopes for Quality winning on the internet,
Alan
It is unbelievably annoying that now that oil production has peaked, all the people who denied it are going to claim that "oil demand has peaked", and not acknowledge the peak oil pioneers who were right. The point is that supply and demand are always equal. So let's all stop saying "demand will exceed supply". It is important to instead say "demand will exceed supply at historical prices, forcing prices ever higher" or something like that. Of course available oil-using infrastructure will be reduced over time, so even this will cease to be true. It will still be true that there is nothing around to beat oil at $10/bbl and that infrastructure would quickly change to utilize that if it were available.
Distract internet geeks like Obama from their liberal agenda? When you read this link, what do you think? This is Obama's team. Is this just more Limbaugh propaganda coming from the evil right? Are these grifters getting millions then ushered into the inner government circle to screw the country left or right? Do they watch Fox or do they surf the net? http://www.bloomberg.com/apps/news?pid=20601087&sid=abo3Zo0ifzJg
I dunno, what do you think?
Last year none of these people were working for the Obama administration, and I do believe it is considered "bad form" for the President to interfere excessively in the choices his direct appointees make. At some point he has to trust his appointees to make the right decisions (including personnel) or he shouldn't have nominated them.
What would you have done? Chosen someone else? And if they had turned out to be as bad as or worse than Geithner for the job, what then?
Were you in Obama's shoes today, with the current situation, what would you do?
I mean, you and I know what a problem the banksters are, but what do you do when the odds are good that any qualified candidate for Treasury Sec has already been corrupted by the very system they are supposed to oversee?
I am disappointed, of course, doubly so by the Bernanke renomination, but I do not know what the view looks like from the Oval Office, and neither do you.
Your point is that whoever occupies the Oval Office has been pre-bought, therefore nothing can be accomplished, and it is not fair to criticise Obama as Hilary or Mccain would have done the same. On this point we agree-I was responding to the post implying that Obama is somehow cut from a different cloth. If you or me were given the job tomorrow, we might decide to feather our nest just like everybody else, but that doesn't preclude pointing out the facts. The guy has done absolutely NOTHING to indicate he is opposed to the looting taking place-what could he do tomorrow? How about give his public support to Ron Paul's motion to audit the Fed. That would shock a few people, both of us included. Your response is that he cannot do this, that would upset those that have put him there. Well, as Nader said in the interview I linked yesterday, millions of voters also helped to put him there and they are getting more upset with him by the minute.
Did you vote with me to elect Ralph Nader?
Until the people in this country can elect someone outside of the box...a Nader...a Paul....then we stay in the Matrix.
You missed my point.
Whoever occupies the Oval Office has to work within the structure that already exists, and the system is so complex that nobody can be expert in all of it as well as having the leadership skills necessary to actually get things done. This means he had to pick who to trust with management of various sectors, and until he perceives that there is a problem with his choice and has at least an idea of how to fix it he needs to stand behind his choice.
It isn't a matter of not annoying the corporate masters, it is a matter of being an effective leader within the limits of being human.
For him to publicly second-guess any of his direct appointees would undermine their authority and would be poor leadership. Odds are the first sign we will see of any displeasure Obama may have with the job Geithner is doing will be the announcement of Geithner's resignation "to spend more time with his family".
This is why I am much more concerned with his renomination of Bernanke to the Fed than I am with anything he has or hasn't said in his own public speeches.
You are saying the guy is impotent. To a certain extent you are correct in this view. IMO it appears he is on board with what is happening, you have the opinion he opposes it yet is as powerless as you are in this regard. You might be right.
I have no opinion as to whether he is "on board" with the program or not, and he is hardly impotent in the matter.
What I am trying to say is that if the guy is any good as a leader the signs that you are looking for won't be there (such as public statements contradicing Geithner's position).
This is why I consider the renomination of Bernanke significant. It indicates that he is either in on the plan or doesn't see the problems in the same way that we do.
Here is a fascinating Bill Moyers interview for all those still intoxicated with the Obama Koolaid http://www.pbs.org/moyers/journal/10092009/watch.html
great interview ... thanks
Over at thetruthaboutcars.com they are debating the potential size of the Chinese car market and the energy implications (in the comments section):
http://www.thetruthaboutcars.com/chinese-car-sales-break-sound-barrier/
Autosavant has his own website here:
http://www.autosavant.com/
He appears to be a cornucopian and thinks the Chinese are buying cars for "lawn ornaments". Interesting theory.
Well, that would be one explanation for why car "sales" are up 78% while gasoline consumption is down 8%.
Thought it was great that Elinor Ostrom who is a member of the Institute for Ecological Economics ISEE won the Nobel prize for economics this year.
Elinor is a long-time ISEE member, one of the founders, and a member of the editorial board of the Journal. She is the first woman ever to receive the award, and one of the few political scientists to be so honored. This is a crowning recognition of the importance of collective management of natural resources in economics, not leaving things up to the market to resolve.
To read the story visit http://www.nytimes.com/2009/10/13/business/economy/13nobel.html?_r=1&scp...
this was big deal IMO - not as big of statement as if Herman Daly had won but still. The prize is kind of political anyways but the 'politicos' are at least questioning conventional economic wisdoms...
What the..??? So, if I will grow apples and try to sell them, but nobody will buy them from me, then I can ask everyone (wealthy enough to make a purchase) for compensation?
Oooh... Why didn't I think of that? :P
[/sarc off]
I personally don't have anything against Saudis - they are people too, wanting to be wealthy and rich as anyone else, but quicker their proverb of riding the camel will come true the better for the world (and climate).
Sounds like American milk producers who get a govt subsidy if prices are too low?
Or Iowa corn producers?
I guess the Saudi's want some of our funny money. Just have the Fed print some more!
Why can't the Saudi's print their own funny monies, case closed ! For God's sake - it's been 500 years since Gutenberg and Monopoly goes back to 1904..... jeeezz. I 'hate helpeless peoples'.
I think their view would be that if you spent a lot of time building an orchard and then somebody just decides that you can't sell your apples, then you would ask for that somebody to pay you for effectively making your investment worthless.
I do not agree with them, but i think they would justify in it these terms.
hifi -- Did I miss something? I don't recall anyone telling the KSA they couldn't sell their oil. If I open a restaurant and everyone doesn't eat enough of my food to make a profit I should have my investment returned? I like that plan. Where do I sign up?
They didn't tell them they couldn't sell their oil...yet, anyway. They're afraid it might come to that, via carbon taxes, etc.
It's more like, what if the government puts a 50% tax on eating in restaurants because eating at home is healthier, and your restaurant goes out of business. Are you owed compensation?
I see your point leanan. But then the gov't taxes US oil companies which make us less competitive. Where do I stand in line for my check?
But your point does bring in the whole issue of import tariffs and the likes. Should US car makers get checks from foreign countries that import more price competitive cars? Should the US raise import fees on these cars to make it an even playing field for US producers. I'm not sure where you drawn the line between protectionism and fair play. Seems like dozens of contardictory scenarios out there.
I think protectionism is inevitable in the long run. Scarcity is going to mean the end of free trade and globalization.
And I suspect the Saudis aren't really expecting to get any compensation. They are just trying to put up barriers to anything that would reduce demand for their product. It is, as the article says, a "delaying tactic."
Leanan -- I agree. Perhaps the future resource "wars" will be fought primarially with "protectionism ammo". Might be a few ship bumpings on the open oceans but maybe the "wars" will be won by those with the biggest economic stick in the fight. That's one reason why I see a better possibility of China and the US being allies rather then enemies. They need our retail markets and we'll need their ever increase resource base.
I suspect that the Saudis are formulating another excuse as to why they have so far been unable to match their 2005 annual oil production rate, i.e., additional investments necessary to convert their "trillion barrel resource" to proven reserves are not warranted because of projections for lower global demand for oil, due to climate change concerns.
I can think of a legitimate argument for their case, although I don't think anyone, including myself will find it compelling (but really we would have to know the details and run the numbers...):
We (the rest of the world), want KSA to invest heavily in new capacity, otherwise we suffer some increased degree of risk of an oil price spike. As consumers, our interest is to have the Saudis overinvest (I'm assuming we don't have a really long time horizon and want to stretch out PO) in capacity -versus the level that would maximize the return the Saudis see. So it is perfectly reasonable to ask the rest of the world to take on some of that risk (that overproduction means too low a future price) off their hands. So if this were properly packaged, as the rest of the world getting higher KSA capacity investment, at the price of taking on some of the downside price risk it doesn't sound so far fetched. Packaged in that manner, it could be evaluated by the financial types, and perhaps it would make sense.
The Saudi's can hedge against falling price by shorting oil futures. They can also cut production if price falls too much. Note that increasing the production capacity is not the same thing as increasing production. After they have increased production capacity, they can modulate prodution to keep the price in the desired band.
The business of producing and selling oil is not much different from other commodity producing businesses. For two decades the price of gold fell and the gold mining companies survived by hedging and forward selling their production. The Saudi's are in a better position than the gold mining companies because unlike gold oil is essential.
They can do either/both. But I don't see how that alters their computation of the amount of of capacity investment which optimizes their goals. To move that balance point substantially higher requires some sort of an external subsidy, presumably from their customers.
"Junk Science Expert Guides Us Through Green Hell "
Excerpt from (Dr) Lehr's article. Jay Lehr, Ph.D. is "science director" of The Heartland Institute.
"Environmental activists profess concern about an alleged “peak oil” crisis, but there is enough oil in U.S. oil shale to replace 600 years of all U.S. oil imports combined, yet the environmental activists have fought tooth and nail to keep it from ever being recovered.
U.S. oil shale reserves are seven times greater than the proven Saudi oil reserves, but environmental extremists are doing their best to make peak oil a self-fulfilling prophecy."
So much for Mr Milloy's and (Dr) Lehr's "science" credentials...
The Heartland Institute
http://greenfyre.wordpress.com/denier-vs-skeptic/denier-myths-debunked/t...
Sourcewatch has good info too :-
http://www.sourcewatch.org/index.php?title=Heartland_Institute
I especially love (sarcasm) their water policy, which essentially says that if Asia can pay for Great Lakes water then, of course, we should just ship it to them. Water is *just* a "commodity", after all....
Surprise, surprise - Dr Lehr is a Doctor of Hydrology who works for a water corporation...
From HI website :- "In 2008 he (Dr Lehr) was named chief hydro-geologist for Earth Water Global (EWG) corporation, one of the world’s largest providers of water supply projects. "
Comforting that they're out there, protecting us from all the junk, eh?
My brother in law sent me a copy, so I dutifully went through and at least checked up on the climate change entries. A bit on the "hockey stick" stuff, but nothing else, except how Al Gore is a hypocrite, yadda, yadda, yadda. I plan on sending him a copy of Greg Craven's So What's the Worst that could Happen as an antidote.
US Navy To Go Green - No Foreign Oil
The US Navy plans to sail a "green" fleet demonstrating operations with zero dependence on foreign oil.
http://www.navytimes.com/news/2009/10/navy_energy_efficiency_101409w/
The US navy has never been dependent on imported oil. Besides the SPR the DOD has the legal right to acquire all domestic oil production for its own use if it ever needs to do so.
Once again, IT'S GOOD TO BE KING! But cutting DOD consumption (the largest user of crude oil in the world) isn't a bad plan either.
Yeah Yaeh Yeah...and the Air Force will run all of its aircraft on biofuels as well some day...
I am fairly plugged into the DoD/USG scene (all the stuff I say after this comes from Defense News, Janes, Aviation Week, etc)...the navy will cut its fuel use in half because its fleet will shrink by half.
The 30-year ship-building budget is continually getting downsized..go figure, all those new ships desired (DDX, CGX, LCS, EIEIO) are gold-plated billion+ dollar babies.
The Navy was just given relief by Congress to temporarily shrink the carrier force from 11 to 10...USN did not want to spend $1B to conduct a life extension on the U.S.S. Enterprise until the U.S.S. Gerald Ford comes online circa 2014. So big E will retire, and we will have 10 carriers until the Ford is operational.
The Navy should go with an mostly nuclear fleet, but that costs too much $$$. It would be an investment that would train a lot more nuclear engineers though, who could transition to civilian nuclear plant jobs.
The DoD is getting a rude awakening...we are short of helicopters in the 'Stan for the white force (as opposed to black ops) Green Berets; we couldn't afford any more F-22s; the Marines will have to scuttle their white elephant 38-ton expeditionary fighting vehicle program (only 20 years in development); the legacy fighter and bomber forces are getting long in the tooth and we cant afford to replace them; the Air Force is pissing the Army off big time (STILL) by reneging on its promise to provide a second JSTARS orbit in the 'Stan and upgrading these machines with radars which can detect walking people...
We are way over-extended, and we are trying to buy weapons to fight a 'near-peer' competitor (Russia, China) as well as stuff to fight these insurgencies, brush-wars, whatever.
We are the new Rome and our imperial over-reach is biting us in the rear-end.
good analysis. can you convince the neocons of this ?
The Power Brokers know...the 'Joe the Plumber' and Sara Palin types are out there to keep the stupid neo-con wannabees bamboozled; the wannabees who think because they have an IRA that they are part of the investor class and will maybe gain access to those vaunted gated communities some day...
Of course, the neocons are too busy implementing operation 'Peak Wingnut':
http://www.alternet.org/blogs/politics/143268/video%3A_birther_queen_rap...