Drumbeat: October 19, 2009

Oil prices hit high but report warns of supply crunch

A report from the non-governmental organisation Global Witness – famous for its exposé of so-called "blood diamonds" – pointed to an impending supply shock that could be so severe that many of the world's poor countries would simply be shut off from the world of energy by sky-high prices.

Two years in the preparation, Global Witness's report, Heads in the Sand, accused governments of ignoring the fact that the world could soon start to run short of oil. This would lead to huge consequences in terms of price shocks and much higher levels of violence around the world than last year's food riots.

"There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem," said the report's author, Simon Taylor.

"We are all addicted to oil but if you look at the mathematics of the problem, they simply don't add up in terms of future supply and demand."

The report can be downloaded here.

U.S. MMS approves Shell's 2010 Beaufort Sea plan

ANCHORAGE, Alaska (Reuters) - Royal Dutch Shell's (RDSa.L) plan to drill two wells on leases in Alaska's Beaufort Sea next year won approval on Monday from the U.S. Minerals Management Service.

The exploration plan calls for Shell to drill two wells on leases located 16 and 23 miles offshore from Point Thomson and would replace an earlier, never-executed program in which Shell was proposing to drill a dozen or more wells over three years at Sivulliq and elsewhere in the Beaufort.

EPA: Indiana must rewrite BP refinery air permit

INDIANAPOLIS (AP) -- Federal officials ordered Indiana on Monday to rewrite an air permit for BP PLC's Whiting refinery, concluding the state may not have fully assessed all the new emissions a big expansion of the refinery will produce.

DOE buys geothermal plant in Wyoming

CASPER, Wyo. -- The U.S. Energy Department has bought a geothermal plant north of Casper for an undisclosed amount.

Ormat Technologies, of Reno, Nev., built the test plant at the Teapot Dome oil field to prove the technical feasibility of using hot water associated with oil production to generate electricity.

The plant was designed to produce 250 kilowatts of electricity. It has been operating for over a year, providing electricity to operate the oil wells.

Sustainability ‘is key’ in rural communities’ survival fight

Rural communities are being urged to fast-forward their plans for sustainability and self-sufficiency if they are to survive and thrive in the future.

The Warwickshire Rural Community Council is hosting an event to help people share information and find solutions about how to become more sustainable.

The GOOD 100: The Oil Drum

We’re running out of oil, but search for the phrase “peak oil” on the websites of 31 major U.S. newspapers, and you’ll get a mere 941 hits, total. That’s the kind of thing the Oil Drum would like to address. The online think tank, launched in 2005, is filling that void with grounded writing on natural resources and energy.

Margaret Atwood On Tour

Looming over all of this peppy tech chat is the Shadow That Must Not Be Named. It’s actually two shadows. First, the servers that make the Web run are now emitting a huge amount of heat and a big pile of carbon from the energy used to run and cool them. But Iceland is standing by, with carbon-free geothermal power in a cool climate.

The second shadow isn’t specific to the Web: it’s Peak Oil, which will be followed by a decline in cheap plastic, without which none of these online goodies can survive. But meanwhile, the technobookotronobiblioagonosphere will be making lulz while the sun shines.

Shifting the world to 100 percent clean, renewable energy as early as 2030 - here are the numbers

Most of the technology needed to shift the world from fossil fuel to clean, renewable energy already exists. Implementing that technology requires overcoming obstacles in planning and politics, but doing so could result in a 30 percent decrease in global power demand, say Stanford civil and environmental engineering Professor Mark Z. Jacobson and University of California-Davis researcher Mark Delucchi.

To make clear the extent of those hurdles – and how they could be overcome – they have written an article that is the cover story in the November issue of Scientific American. In it, they present new research mapping out and evaluating a quantitative plan for powering the entire world on wind, water and solar energy, including an assessment of the materials needed and costs. And it will ultimately be cheaper than sticking with fossil fuel or going nuclear, they say.

The key is turning to wind, water and solar energy to generate electrical power – making a massive commitment to them – and eliminating combustion as a way to generate power for vehicles as well as for normal electricity use.

Reflections from Colin Campbell on Peak Oil and ASPO

Question: Please reflect on the evolution of ASPO and your evolution of peak oil thinking. Maybe you can start by touching on your studies while in the industry.

Campbell: My interest in peak oil goes back a long time. Of course it was not initially identified as peak oil. I was asked by the company I worked for to make a study of Columbia in 1966 and in the course of doing that I looked all the different basins of Columbia. I saw how many wells had been drilled, what they had found, what the underlying geology delivered and even then, as long ago as 1966, it was evident that there were certain limits. Some areas not yet fully explored were very promising and indeed they’ve turned out to be productive. Others you could say just didn’t have what it took, nor have they delivered since. So, that was my first understanding of this subject. But in those days I had no global feeling in any way. It was just what I thought about a small country in Latin America.

Report examines hidden costs of energy production and use

WASHINGTON -- A new report from the National Research Council examines and, when possible, estimates "hidden" costs of energy production and use -- such as the damage air pollution imposes on human health -- that are not reflected in market prices of coal, oil, other energy sources, or the electricity and gasoline produced from them. The report estimates dollar values for several major components of these costs. The damages the committee was able to quantify were an estimated $120 billion in the U.S. in 2005, a number that reflects primarily health damages from air pollution associated with electricity generation and motor vehicle transportation. The figure does not include damages from climate change, harm to ecosystems, effects of some air pollutants such as mercury, and risks to national security, which the report examines but does not monetize.

Requested by Congress, the report assesses what economists call external effects caused by various energy sources over their entire life cycle -- for example, not only the pollution generated when gasoline is used to run a car but also the pollution created by extracting and refining oil and transporting fuel to gas stations. Because these effects are not reflected in energy prices, government, businesses and consumers may not realize the full impact of their choices. When such market failures occur, a case can be made for government interventions -- such as regulations, taxes or tradable permits -- to address these external costs, the report says.

China, The Global Carry Trade and Oil

What really caused the oil price to collapse? Philip Treick says it's not what everybody believes.

Conventional thinking believes the oil price collapsed because of the dropping global demand from a worldwide recession sparked by the US sub-prime fallout.

Treick, founder and principal of Thermopolis Partners LLC, has a slightly different view. He explains how everything – the oil price collapse, the global economy collapse – started with an unannounced policy change in China towards its currency.

Asian Catalyst Spurs Oil's Renewed Advance

A year ago, Asian exports were falling off a cliff, and economists were predicting the worst recession in 50 years. But the winds have turned quickly and Asia now appears to be experiencing its fastest recovery in 50 years. This is already affecting oil prices and will do so even more in coming months.

Just as Asian demand drove oil prices up in the boom years, a new wave of Asian demand will probably push prices higher again, economists say.

Iraq picks up pace on oil deals, elections loom

ISTANBUL (Reuters) - Iraq is poised in the coming weeks to sign a series of deals that promise to lure the tens of billions of dollars it needs to become one of the world's elite oil producers.

In addition to signing contracts already being negotiated, the world's largest energy companies will face off in December in a second fierce competition to develop some of the country's largest untapped oilfields.

Exxon Found Liable for Fouling New York City Water

(Bloomberg) -- Exxon Mobil Corp. was ordered to pay $104.7 million in damages after a jury found the company liable for poisoning New York City water wells with a gasoline additive meant to improve air quality.

A federal jury in New York ruled in the city’s favor today. New York accused Exxon Mobil, the biggest U.S. oil company, of contaminating five wells in and near the Jamaica area of the borough of Queens with methyl tertiary butyl ether, or MTBE.

The city sought $250.5 million to treat the water.

Seminole school employees get short summer work week

Every energy crisis has its silver lining. Just ask the oil companies as they count their profits.

For Seminole school district employees it will be a four day work week again next summer.

Technology environmentally cleaner; Fuel cells answer to energy crisis

As the world searches for a solution that would balance the energy crisis and global warming, Dr Ayman Al-Qattan returns to a very old technology, which was at the time of its inception upstaged by the more impressive steam power.

Fuel cells, says Al-Qattan, are the answer to the crises. However, there are challenges, principally that of costs, to make this proven technology a reality. There are also other solutions such as collective power generation, where every house would contribute power generated from rooftops to a centralized grid to meet the energy needs of a whole nation. A sort of cottage industry in electricity production.

Utilities Take a Shine to Solar Power

Solar energy, such as the 250 MW SunPower PV facility, increasingly is being developed at utility scale. Bolstered by lower costs (due in part to market imbalances that currently favor buyers), state renewable portfolio standards, federal incentives and even a bit of creative thinking, solar energy is gaining a foothold in many utility companies’ generation portfolios.

Energy Firms Are Split on Bill to Battle Climate Change

WASHINGTON — As the Senate prepares to tackle global warming, the nation’s energy producers, once united, are battling one another over policy decisions worth hundreds of billions of dollars in coming decades.

Producers of natural gas are battling their erstwhile allies, the oil companies. Electrical utilities are fighting among themselves over the use of coal versus wind power or other renewable energy. Coal companies are battling natural gas firms over which should be used to produce electricity. And the renewable power industry is elbowing for advantage against all of them.

The Oceans are Coming

And what of that lodestone, global sea level? This happens to be a very interesting question, because ocean levels are set to rise dramatically. According to UCLA scientists, the last time carbon dioxide levels were as high as they are today was 15 million years ago. At that time, the sea level was between 20 and 36 metres higher (75 to 120 feet), there was no permanent ice cap in the arctic, and very little ice in Antarctica or Greenland. That is where we are headed. The only remaining question is, How long will it take us to get there?

Energy Star Appliances May Not All Be Efficient, Audit Finds

WASHINGTON — The Energy Department has concluded in an internal audit that it does not properly track whether manufacturers that give their appliances an Energy Star label have met the required specifications for energy efficiency.

A tale of how it turned out right

Western governments, including the UK's, are desperate to restore the global economy along "business as usual" lines. But, argues Andrew Simms, that is a short-sighted approach; a radical, green-tinged redevelopment would bring much bigger environmental, social and economic benefits.

$70 a Barrel: A New Floor for the Oil Industry?

NEW YORK — After years of volatility, oil prices have found a level that seems to satisfy producing nations, oil companies and major consumers.

But in the wake of the economic crisis and the collapse in demand, a new reality has also set across the petroleum industry. Today’s price of around $70 a barrel is increasingly viewed as a new floor for the industry.

Below that level, oil executives warn that they will find it difficult to expand production or invest in new exploration projects.

Few petroleum executives imagine returning to a world where oil prices trade at $20 a barrel, their average throughout the 1990s. In fact, many are saying that spending in the industry has been crimped and projects have been delayed since oil prices dropped from last year’s highs.

Companies are feeling the crunch throughout the industry. ConocoPhillips, for example, said recently that it would cut its capital budget by 12 percent next year, and planned to sell assets worth $10 billion over the next two years to reduce its debt ratios.

Chevron's CEO Warns of Possible Oil Shortage in Next Decade

Chevron Corp. Chairman and Chief Executive David O'Reilly on Sunday warned of a potential oil supply shortfall midway through the next decade that could potentially trigger a substantial increase in prices.

While reiterating Chevron's 2009 capital spending budget of US $22.8 billion, O'Reilly said there is enough output capacity either on line or coming on line to prevent a supply imbalance in the near term.

But the world could face a supply challenge beyond the next three-to-five years if companies don't invest enough in production as the global population rises and living standards improve, he said.

Russia Gains at OPEC's Expense

MOSCOW — While OPEC members limped through a period of painful production cuts this year, Russian oil companies enjoyed an extraordinary run.

The year that has gone by since Russian officials floated — and then retracted — a proposal to coordinate production limits with the Organization of the Petroleum Exporting Countries illustrates why the Kremlin is unlikely ever to actually do so.

Already the world’s largest oil producing nation, Russia, pumping prodigiously through the downturn, this summer passed another milestone. As Saudi Arabia tightened its belt to live by OPEC cuts, Russia surpassed it to become the world’s largest exporter.

Algeria Struggles to Realize Natural Gas Potential

PARIS — Despite ambitious plans to expand natural gas exports, Algeria risks seeing its share of the European market dwindle as it struggles to develop new fields and attract foreign investment, analysts say.

Barron's: Africa's Fields of Dreams

Until relatively recently, big oil gave little thought to sub-Saharan Africa beyond the coast of Nigeria and Angola. That's changing rapidly after a significant find off the Atlantic coast of Sierra Leone, where both Anadarko Petroleum and U.K.-based Tullow have exploration licenses, and another strike in Uganda, where Tullow operates.

The Dilemma of Aging Nuclear Plants

Contractors generally designed plants to last for 40 years — a standard enshrined in the United States in the adoption by the Nuclear Regulatory Commission, or N.R.C., of a 40-year licensing regime.

A large part of the world’s installed nuclear power capacity is now coming to the end of that designed life span.

Considering Thorium as an Alternative Fuel for Nuclear Energy

PARIS — For decades, scientists have dreamed about turning thorium — an element that is less radioactive and produces less nuclear waste than uranium — into an alternative fuel for nuclear energy. Recent technological developments may be bringing the dream closer to reality.

API: Study Shows Canadian Oil Sands a Boon to US Economy

The economic impact of oil sands development in neighboring Canada is a boon for the U.S. economy and is expected to lead to the creation of more than 342,000 new U.S. jobs between 2011 and 2015, a new study by the Canadian Energy Research Institute (CERI) finds.

Global warming fund faces cuts

ALBANY -- The organizer of a global effort to fight climate change said Gov. David Paterson's raid of millions of dollars from a state climate change program sends "a terrible message" just weeks before world leaders meet to discuss the issue.

With the international climate change summit set in early December in Copenhagen, "we can only hope that the rest of the world has not been paying attention to what has just happened in New York," said environmental author Bill McKibben, who is organizing a global campaign that will host events around the world to urge political leaders to embrace dramatic greenhouse gas reductions.

Supply and Debate: Peak oil advocates Matthew Simmons and Kjell Aleklett say Daniel Yergin has the future of energy all wrong.

Daniel Yergin muses that oil, celebrating its 150th birthday this year, has never been in better shape ("It's Still the One," September/October 2009). He argues that the world's endowment of oil is larger than ever, despite a century and a half of constant use and a world consumption of more than 85 million barrels daily.

How terrific the world's outlook would be if Yergin's argument had even a touch of reality! Sadly, however, if one ignores opinion and simply adheres to well-documented facts, it quickly becomes clear that his assertions are utterly without substance.

Eastern economic promise holds little hope for western growth

A world of diminished expectations is going to come as quite a shock, especially if, as some believe, the trend is permanent. Writing in the latest New Left Review, Gopal Balakrishnan muses on the advent of the Stationary State, concluding that the "Indian summer of reflated American power" has come to an end, with nothing to take its place.

In a bleak assessment, Balakrishnan dismisses the idea that China or Europe can become the new driving force behind a reinvigorated capitalism. "We are entering into a period of inconclusive struggles between a weakened capitalism and dispersed agencies of opposition, within delegitimated and insolvent political orders. The end of history could be thought to begin when no project of global scope is left standing, and a new kind of 'worldlessness' and drift begins." That's all a roundabout way of saying we've reached the end of the road.

Those of a more cheerful disposition might prefer the latest piece from the New Economics Foundation, The Great Transition, published today. NEF says the crisis marks not the end but a fork in the road, with the choice between the climate change disaster and social catastrophe of a return to business as usual, and policies designed to deliver fairness, sustainability and well-being.

The Pickens Plan: What Went Wrong

A lot has happened since we taped our interview with billionaire oil and wind tycoon T. Boone Pickens on our show "Intelligent Investing With Steve Forbes" Sept. 2, 2008. Unfortunately, not much of it was good. Now, in honor of his upcoming second visit with Steve Forbes we revisit what happened to T. Boone Pickens and his plan.

The Coming Boom in Oil Recovery

I believe that the peak oil argument has been oversimplified to the point that adherents can't comprehend any outcome except for a disastrous global oil shortage. Ever-rising Chinese automobile sales might lead us down that path but I see some innovative solutions that don't require much exploration.

I spoke about the coming boom in enhanced oil recovery at several conferences last year, but this big-picture concept is moving to the forefront. We know that, on average, only one-third of the original oil in place (OOIP) found in oil fields is produced. The other two-thirds is stranded.

Shale speculation off base

At a time when we are seeking solutions to our long-term energy questions, it is too bad that progress can be clouded by misinformation.

"Gas shale’s future is uncertain” (Associated Press business story, Oct. 13) cast inexplicable doubt on a new resource that has changed the landscape of our energy future. Geological consultant Arthur Berman has been making a name for himself recently by writing columns and giving speeches that question the long-term viability of shale as a source of natural gas.

Oil retreats from one-year high above $79

LONDON (Reuters) - Oil hit a year-high above $79 a barrel on Monday, driven by bullish sentiment across financial markets, but later slipped back as traders questioned whether ample fuel supplies justified current price levels.

U.S. crude for November delivery touched a session high of $79.05 in early trade, the strongest since October last year, before paring gains to $78.30 by 1111 GMT, down 23 cents from the previous close.

Could rising oil prices stunt stock rally?

Investors may be pleased to see stock prices hitting highs this year, but there's something else soaring that's a bit scary: oil prices.

Oil prices are storming higher because investors anticipate stronger global demand as factories, cars and idled production facilities creak back to life.

Gains in oil prices are head-turning. The price of a barrel of oil has jumped to more than $78, a high this year and a staggering 76% rise in 2009. That gain dwarfs stocks' 20.4% increase this year as measured by the Standard & Poor's 500.

Most troubling, though, is that the last time oil started spiking was late 2007. That jump in energy prices helped start a decline that knocked stocks into the worst bear market since the Depression.

Angolan Crude Exports Scheduled to Drop in December

(Bloomberg) -- Angola’s daily crude oil shipments are scheduled to drop a second month in December, bringing exports closer to the country’s OPEC quota.

Felipe Calderon's power play

Dissolving a state-run electricity utility was either a cynical political move or a financially sound decision.

Dual approach is route to cheaper power

Finding the cheapest gas and electricity supply has become more urgent than ever as regulator Ofgem has predicted that fuel bills could soar by as much as 60% over the next seven years.

This is due to a combination of factors, including a lack of investment in alternative fuels as well as dwindling gas and coal reserves.

Kuwait to revive $14 billion refinery project

Kuwait's development minister says the government will revive the $14 billion project to build its fourth oil refinery, which was scrapped in March on corruption allegations.

Oil sands get ‘disproportionate’ bad reputation

WASHINGTON - Canada's new ambassador to the United States said Alberta's oil sands are facing a "disproportionate amount" of criticism in the climate-change debate -- arguing North America risks missing "the big picture" on global warming if Canadian oil is singled out as the chief carbon emissions culprit.

China May Stumble in Race With Rivals for African Oil

(Bloomberg) -- China’s plans to buy into oil fields in Africa may suffer a third setback in as many months if Exxon Mobil Corp. succeeds in snapping up drilling rights in Ghana, one of the continent’s newest oil nations.

Russian pipeline intact after bomb attack

An explosion injured a man but did not damage gas pipeline yesterday in a series of attacks on Russia’s southern regions.

The bomb exploded as a man tried to plant it under the gas pipeline, tearing off his arms at the wrists, Itar-Tass news agency reported citing local security officials.

Nigeria Offers Delta Residents 10% of Oil Projects, FT Reports

(Bloomberg) -- Nigeria proposes to give 10 percent of its oil and gas ventures in the Niger Delta to the area’s inhabitants in a bid to stem rebel attacks that restricted oil production by sub-Saharan Africa’s biggest energy supplier, the Financial Times reported.

Iran pushes South Pars deadline on Turkey

Tehran has given state oil company Turkish Petroleum a one-month deadline to finalise a $3.5 billion deal to develop part of the world's largest gas field in Iran, according to reports.

Managing Through the Forces of Change

What are the factors affecting fueling? Start with the notion of peak oil; whether you believe in a practical geological peak or not (this author does not), there is little doubt we have a political peak being orchestrated by Washington. Corporate Average Fuel Economy will cut into total annual consumption by at least 20 billion gallons over the next 10 years. Combine that with some sort of carbon legislation that will surely add between 40 cents and $1 per gallon to the price of oil, and even the normal 2-percent growth in average annual mileage driven experienced in non-recessionary times will be overwhelmed by both mandated and price-induced rationing.

Our biggest environmental challenge

For many people, the most critical environmental challenge facing our beautiful, blue planet is climate change. For others, it's peak oil, that scenario where we run out of the fossil fuels that make life as we know it possible. For still others, it's access to clean, healthy water.

They're all valid finalists, but if truth be acknowledged, none of these qualify as our biggest challenge. To find that, we need to look upstream at what's behind each of these issues.

The answer we find there is likely no more palatable to you than it is to me.

The problem is us, collectively - or more precisely our exploding population and insatiable consumption.

Do Increased Energy Costs Offer Opportunities for a New Agriculture?

One of the great missteps in most of the future energy scenarios propagated in the popular media is the notion that we can transition to “alternative, renewable energy” and thereby “wean ourselves from Mideast oil.” The underlying assumptions in this scenario seem to be that energy supply is an isolated challenge that can be solved without major systemic changes, that we can meet that challenge by simply switching from one energy source to another — from fossil fuels to wind, solar, biofuels or a host of other alternatives — and that our current industrial culture and economy then can continue on the present course.

Probably nothing could be farther from the truth. As Richard Heinberg points out, “Making existing petroleum-reliant communities truly sustainable is a huge task. Virtually every system must be redesigned — from transport to food, sanitation, health care, and manufacturing.”

'Britain an ideal location for new nuclear power'

A nuclear renaissance in the UK presents a tremendous opportunity. It has the potential to supply us with substantial amounts of home-grown, low-carbon, reliable and relatively cheap energy. That is why the government is facilitating a new generation of nuclear power: removing regulatory barriers, making the planning system fairer and faster, and creating more certainty for communities and industry.

Climate change and the need to replace ageing power stations mean this is the right thing to do. It is in our long-term national interest. We need to transform our energy sector, replacing old infrastructure with high-tech, low-carbon energy sources. Nuclear energy, alongside a tenfold increase in renewables and investing in clean coal, will be central.

Nations Leave 91% of Green Stimulus Funds Unspent

(Bloomberg) -- The U.S., China and major economies around the world are still holding about 91 percent of the $177 billion in stimulus money promised for clean-energy development because most projects haven’t been evaluated, a report showed.

Administrative hurdles remain for the majority of developers, with just 9 percent of the total funds having been disbursed from economic-stimulus programs designed to pull economies out of recession, according to the study by New Energy Finance, a London-based consulting firm.

Australia's three-way squeeze

Three momentous changes will make 2010 another turning point in Australian history: the Aussie dollar at parity, the preparation for emissions trading to start in 2011 and surging population.

British children worst for not switching off the lights and leaving television on standby

British children are the worst in Europe for switching out lights and saving electricity, despite knowing the most about climate change, according to a new study.

Econundrum: 5 Low-Carbon Foods

f you're curious about whether the deliciousness of your favorite foods are worth their emissions, check out the online carbon calculator created by Bon Appétit, a corporate catering company. Simply drag your treat of choice into the frying pan, and a thermometer on the right tells you how many emissions "points" the food is worth.

Voluntary Carbon Markets to Gain, New Energy Says

(Bloomberg) -- Voluntary carbon-emissions markets, such as in Europe, parts of the U.S. and planned for Australia, may gain in importance as December’s climate talks in Copenhagen are unlikely to deliver a global agreement, an expert said.

“We are unlikely to see a huge breakthrough and it (Copenhagen) will not be a win-win situation for all,” said Michael Liebreich, chairman of New Energy Finance, a climate change consultant and researcher, in a telephone interview from London. “We may see some sort of a statement on direction.”

Climate Policies Won’t Limit Warming to 2 Degrees, U.S. Says

(Bloomberg) -- Current policies to fight climate change in China, India, the U.S. and other major carbon-dioxide emitters aren’t enough to limit global temperature increases to 2 degrees Celsius (3.6 degrees Fahrenheit), a U.S. envoy said.

Major developing countries are moving in the right direction to contain global warming, Todd Stern, the U.S. delegate to a 17-nation conference on limiting climate change, told reporters today in London. Even so, the trend in greenhouse gas emissions is still too high, Stern said.

World must shift to low-carbon economy by 2014 or face dangerous climate change, says WWF

The world must start a "complete" shift to a low carbon economy by 2014 — or risk making dangerous climate change almost inevitable, a report warned today.

The study for conservation charity WWF showed that waiting until after 2014 to fully develop the clean industries needed to reduce greenhouse gas emissions, such as renewable energy, would leave it too late to halt temperature rises of more than 2C.

World faces 'catastrophe' if no climate deal: PM

LONDON (AFP) – Prime Minister Gordon Brown on Monday warned the planet faced "catastrophe" if action to tackle climate change is not agreed at a key UN conference on global warming in December.

Brown told a meeting of 17 major developed and developing countries in London that the costs of failing to address global warming would be greater than the impact of two world wars.

Sarah Palin on Energy

And we’ll continue that dependence [on imported oil] until we develop our own oil resources to their fullest extent.


Best Hopes for 2012 !


Let's hope that Nehemiah Scudder isn't elected.

That would be laughable if the majority of Americans didn't actually believe that she is right.

Unfortunate, yes, that Sara has such a large audience. The boondoggle of the proposed gas pipeline is an example of another bridge to nowhere.

Alaska gas needs to take care of the residents of Alaska first, and reserves made for future generations. Only then, should any be sold to the lower 48.

States rights over the Fed.....Always.

Then kindly give all your federal dollars back. Oh, and I'm sure the Russians and the Chinese would be glad to 'protect' your new independence.... I'm sure their energy corporations and intelligence services could work out an arrangement wherein cheap oil is provided to Beijing and kickbacks, Swiss bank accounts, and weapons are provided to the 'legitimate' government in Juneau. I give you guys a decade before you are just frozen version of the Niger Delta.

Our Chinese friends are here to help us! You betchya! Governor for life - isn't that swell? Now you too can see Russians from your house!

DC may be full of mobsters, but stupid people often forget there are worse gangsters out there than the federal government.

I wonder what percentage of Alaska's food is imported.

By the way, just saw The World According to Monsanto - on youtube. Amazing.

I don't know about gas trading, but i thought that oil almost always goes to the nearest refinery, e.g. Alaskan Oil goes to the Far East which is closest to AK. I agree with the boondoggle statement as the current gas market sure isnt going to support a pipeline as proposed. A gas pipeline to Valdez or Anchorage may be better suited to exporting if markets recover.

Resource Nationalism and Resource Statism are still subservient to Resource Ownerism, for the time being.. The Golden Rule.

I hope Alaskans are looking into other options, in case the hydrocarbons or their owners fail to satisfy them. Personally, I suspect that your state is going to adapt into a much more realistic population level pretty soon. It's going to be just too expensive to live there for most.

Mac: Do you eat the Lobsters?

Fisherman: No, too expensive. They're off to Inverness and the next night will be eaten in New York or Monte Carlo. They'll see the world!

LOCAL HERO - Bill Forsythe

Do you eat the Lobsters?

Yep! I catch them myself, for myself, family and close friends only.

When the bankers can no longer afford to eat them at the restaurants in New York or Monaco I will still be catching and eating them.

I hear bankers make good crab bait.

'Make a new Chum on Wall Street!'

Gotta get it from somewhere, our chum fish are being throttled back in the fishing restrictions now.. (as well, it sounds they should be)

I'm quite impressed actually. She gets it totally wrong when saying that "we’ll continue that dependence until we develop our own oil resources to their fullest extent". I don't think it's possible.

But she does offer some information we would all be happy for the average Joe to comprehend:
"even if we ran all our vehicles on something else (which won’t happen anytime soon), we would still have to depend on imported oil"
"That’s important in any energy plan: Tempting as they may be to central planners, top-down, one-size-fits-all solutions are recipes for failure."
"Whether we use it to power natural-gas cars or to run natural-gas power plants that charge electric cars — or ideally for both — natural gas can act as a clean “bridge fuel” to a future when more renewable sources are available."

And last but not least: "Alternative sources of energy are part of the answer, but only part"

She doesn't mention PO and conservation but she asserts real problems. I'm not a fan of her (no fan of any politician really) but she does raise valid points that many of us, I think, would appreicate to be more widely known.

Do you really think she wrote her own speech? Even presidents rarely do that. Do you think she has any inkling of the implications of the words she utters?

Not to get at Palin (much) more than other politicians...

What a muppet! I'd personally love to see her in the white house.. would be a right laugh! If the office of POTUS is not going to do anything sensible might as well make it into a real comedy show...

She might spend a year or two at it, then quit to do something else...(like she did her governorship)

Laughing would be better than crying. Take a look at the unemployment rate, budget deficit, dollar devaluation, etc, since the democrats' messiah was elected. This is beyond comedy, it's a tragedy.

Yes, everything was perfect until the 'democrat's messiah' came along and spoiled the party. Where were you when Bushco was driving the ship of state hard onto the rocks?

This is The Oil Drum - try to be serious, OK?

Sorry but the numbers were never this bad under Bush. Not even close. But I do realize that democrats like to blame the current government's mismanagement onto Bush. Taking responsibility was never a liberal strong point.

Come on, guy. It was Bush Jr. who blew the budget surplus built up by Clinton. It was Bush Jr who took the US into Iraq for nothing. The list goes on and on. Try your BS somewhere else.

Was it Bush Jr. that tripled the budget deficit, increased unemployment to 9.8%, and devalued the dollar 10% in the past 8 months? Amazing that he did all that when Obama won the election a year ago isn't it?

I guess when you're a left wing loony liberal that's been believing the BS that all the world's problems were caused by Bush, it's hard to think anything else eh? What a big surprise for all of you! lol

Enough with the name-calling.

Heck, enough with the partisan attacks...on both sides. This isn't that kind of site. If you're going to discuss politics the way they do at DailyKos or FreeRepublic, go there to do it.

Leanan, I tried to flag Conservationist's comment as inappropriate, but I am not sure it worked. If I flagged your reply, I apologize, I didn't intend to.

Maybe the budget deficit is what it is because of TARP? Maybe it is what it is because the Administration had to rescue the economy after the cheating and stealing that went on with your Republican friends on Wall Street? Maybe if the Reagan Administration hadn't created Adjustable Rate Mortgages people wouldn't be losing their homes? You Republicans always love to throw a party when somebody else picks up the tab, namely, the American taxpayer.

You sound like a strong Democratic Party supporter-is this what you voted for? How is it possible that you perceive this administration as a problem for Wall Street grifters?

I don't know. You tell me.

Is everyone in your world either a Democrat or a Republican?

The fact is the Republicans have a strong record of selling the country out to the moneyed interests faster and with less shame than the Democrats.

"But the Democrats do it too" is such a poor excuse for the Republican Party selling out its own values to the lowest bidder that it makes me sick.

What you are saying used to be accurate. Not any more-the Dems are quickly becoming every bit as bought and paid for as the other guys. You realize this-you don't want to accept this reality because it will upset your strong psychological association with the Democrats.

So it's true. Everyone in your mind is either a Democrat or a Republican.

And of course Democrats are wrong.

Have fun in your mind.

Monty Python already did this argument skit (better).

I have found that you repeat yourself more.

And you don't read.

Maybe things have gotten worse since the Democrats took control of the White House with majorities in the House and Senate? Maybe the Democrats should start taking responsibility for making matters worse when they campaigned on the promise of fixing the economy?

Here's an on topic article for ya. Don't forget to vote in the poll:


Bush and Republicans devalued the dollar by over a third.

There was a bounce up for the dollar after the July 08 crisis (a misguided flight to safety). That bounce has since deflated, see the 10% drop.

I checked back in history. GWB inherited the best economy and federal budget since Woodrow Wilson in 1913. The mess and crisis he left is only rivaled by what FDR inherited in 1933.

Best Hopes for a generation with a SMALL Republican minority,


BTW - Refusing to accept responsibility and blaming the victim is a particularly strong Republican fault

It's *so* transparent why Ms Palin was selected for the ticket :-

1. Oil prices were way up in 2008 - Ms Palin is from Alaska, an oil state (with "oil experience")
2. Mrs Clinton was in the running - Ms Palin, obviously, is female
3. Mr Obama has a charismatic personality - Ms Palin looks good in front of a camera

You could see the wheels turning in the minds of the campaign staffers...the game of tactics at work. No strategy, unfortunately. Just tactics.

Amidst the relentless celebrity gossip, PARADE Magazine - the weekly newspaper insert - decided to include an article about what kinds of things we should really be worrying about. They eventually get around to global warming and give a pep talk about how scientists usually figure out solutions for these kinds of things... so don't worry yourself too much.

(There's also a bizarre analogy given using the horse manure problem faced by metro areas at the turn of the 20th century - the magical solution - well, autos of course... with apparently no recognition of how that "cure" may have been worse than the disease...)

The whole thing struck me as clear propoganda to prop up the sagging morale of the populace in a failing empire - "and now back to the bread and circuses"

Thought I'd post this here because it's yet another example of the in-depth analysis most people are exposed to (fortunately newspaper subscriptions are declining so maybe this won't reach as many people as it might have in past years).


Enjoy !

EDIT: For additional enjoyment don't forget to check out the comments at the end of the article

What a load of horse manure ;-)

Loved the ending:

Yes, it is an incredibly large and challenging problem. But, as history has shown us again and again, human ingenuitystupidity is bound to be even larger.

At my age I've seen Peak Human Ingenuity come and go... it's all downhill from here.

Actually, I tried the Survival Quiz.
I got mashed in an earthquake, eaten by a bear, fell down an elevator shaft and lost in the woods...no hope at all !

I made this chart based on info from the Treasury Department at http://www.fms.treas.gov/mts/index.html. I used their Excel spreadsheet and added columns that created a 12 month average of total government receipts and total government expenditures. I thought this would be useful because this data is straightforward and not subject to a lot of caveats. I used a 12 month average because the spending and tax receipts vary wildly based on what month it is (April gets the most taxes, etc.) and I wanted to eliminate that effect.

On the graph, the blue line shows all money taken in by the government, the red line shows spending, and the gap between them is the deficit. You can see the effects of the 2001 recession, when receipts dropped. The current recession has a larger drop. The 1991 recession was so shallow the receipts didn’t drop at all. If we have an economic recovery, that blue line should start going up. The chart is through September of this year and it’s still going down, though that may be tough to see given the resolution of the picture. This is probably a trailing economic indicator.

Having said that this data is not subject to a lot of caveats, I should state that it says nothing at all about future obligations, such as social security payments. That’s a whole other story.

And on the state level . . .

Governors Try to Convince Voters That Budget Woes Are Theirs, Too

Nationwide, state-tax collections plummeted in fiscal year 2009 by an average 9.2%, adjusted for inflation, the Nelson A. Rockefeller Institute of Government at the State University of New York said last week. In the last three months of the year, collections declined by 16.6% from the same quarter a year earlier.

With wages weak and jobs few, income- and sales-tax revenue is falling, and governors are bracing themselves -- and their constituents -- for things to get worse. "We are looking at a multiyear problem hitting every single state," said Robert B. Ward, deputy director of the Rockefeller Institute. "The depth of decline right now is really unprecedented in modern times. . .

The recession will force big changes, not all of which have materialized. "We have yet to see the public sector adapt in the way the private sector has," said Mr. Klepper-Smith, also the chief economist and director of research for DataCore Partners LLC. "We can't tax our way out of this problem. Many in local government have yet to appreciate the structural nature of this recession. The cuts have been superficial."

"We have yet to see the public sector adapt in the way the private sector has,"

I suspect that the private sector is increasingly turning to bartering... many businesses just aren't able to pay (for everything they need) in cash anymore; on the other hand, they also don't have enough work for all their employees. Bartering saves money and keeps people busy.

I "like" these best: "multiyear problem" and "structural nature of this recession". This is way before ELM really starts to bite. It's time to call it what it really is: a depression.

Who says this isn't ELM biting us? With prices clearly leading any serious drop in production surely the additional demand has to be coming from somewhere?

I did. ELM is working its' way up the food chain all right. That's why I said REALLY starts to bite.Just wait for Mexico to seize exports totally in 5 years or so.

Good point. Right now we are just in the opening bars of the ELM Symphony.

"We have yet to see the public sector adapt in the way the private sector has,"

Off-shoring police and fire protection, for example. Or, cutting by 20% their fuel budget. Economy shrinking? Maybe we need LESS education- cut school funding at the same rate as economic decline. Ingenious private sector solutions!

eh? I thought the recession was over and everything was hunky dory again.. That's what CNN/Fox et al are saying. These networks have thousands of reporters with their ears to the ground, no?


The have thousands of anchormen reading press releases. The number of investigative journalists with their ear to the ground has been falling for decades. It is much more cost effective to broadcast a press release than it is to research an issue and 'break' a story.

"We have yet to see the public sector adapt in the way the private sector has,"

Disclaimer: until recently, I held a staff job in the legislative branch of a state government, as an analyst trying to reconcile the revenue shortfalls with the outlays that the public expected.

Government, particularly state-level government, is not a private business, and cannot be operated as if it were one. Most state budgets are dominated by six basic areas: K-12 education, Medicaid, roads, prisons/law enforcement, higher education, and other human services.

Short-term K-12 cuts are difficult: GM can decided to discontinue the Pontiac brand, states can't decide that they won't teach 4th grade during the recession, or won't teach the 10% of students with the worst grades because they're a bad investment. In a recession, spending on Medicaid invariably increases since more families qualify. If you want to hear the business community the WSJ represents howl, tell them that you're going to cut back on road and bridge maintenance. Significant cuts to prisons and law enforcement boil down to fewer prosecutions and letting prisoners out early, both politically unpopular.

Demand for higher education tends to increase during a recession; both unemployed and still-employed try to add to their skills. Even so, states have been cutting support for higher ed for years. California and Colorado are prime examples. At least in my state, the two-year schools have generally been leaders in trying lower-cost ways to teach students. However, education at all levels suffers from a productivity trap: the best method is still some variation of the "good teacher sitting at one end of the log and a student sitting at the other end," both of them asking and answering questions. There are limits to what online resources and larger class sizes can achieve.

"Other human services" covers a lot of things, but several states have seen the effects of cutting spending. For example, a child welfare case worker can only visit so many homes in a day. Without proper training, the case workers may miss important signals. New York, Colorado, and California, all under pressure to reduce human services spending, have also seen increases in the number of deaths of children in their systems.


can you expand on what you mean about the business community / WSJ getting all bent about cutting back on road and bridge maintenance ?

bridges are another matter but I'm all for less road mainentance - it will slow people down and we'll finally get to see what all those POS Escalades are made of... :)

He's right. Businesses aren't really anti-tax. They depend on tax-funded infrastructure to do business. Including transportation. Airports, roads, bridges, ports - they need those, and they don't want to pay for them.

Businesses really are anti-tax, that is anti-tax for them. They think you should pay your taxes and theirs. According to the Heritage Foundation business share of Federal taxes has dropped from 50% to 35% of the total since the beginning of the Nixon administration. Most of that drop has occurred since the "Reagen Revolution".

And they think that's good!

Businesses argue -- with some justification -- that business taxes are always passed on eventually in the price of goods and services delivered to individuals, so business taxes are simply consumption taxes collected in a very inefficient manner. Interesting how many taxes, particularly at the state/local level, are remnants of what could be tracked and/or calculated. Property taxes, for example, are left over from an era when (1) property ownership and transfer prices were one of the few things tracked by the government and (2) property ownership was generally tied to the means of production (eg, the farmer's fields or the blacksmith's smithy).

Of course that's correct, businesses pass on taxes. The only problem in what you wrote is your assertion that it's inefficient; it's actually pretty efficient in that the government isn't busy trying to monitor all the consumption streams, instead simply letting businesses allocate the burdens among their customers, which is bound to be more efficient than the govt. doing it.

The only way to make things more efficient is to tax hell out of raw material inputs, finished good imports, and especially all forms of energy and production of hazardous/toxic wastes. We could then get away from computed taxes entirely because we'd be taxing what we don't want instead of taxing what we do want (jobs, income, earnings).

As you have been discussing, the four day work/school week:

In Hawaii, school's out for recession

HONOLULU — At a time when President Barack Obama is pushing for more time in the classroom, his home state has created the nation's shortest school year under a new union contract that closes schools on most Fridays for the remainder of the academic calendar.

The deal whacks 17 days from the school year for budget-cutting reasons and has education advocates incensed that Hawaii is drastically cutting the academic calendar at a time when it already ranks near the bottom in national educational achievement.

While many school districts have laid off or furloughed teachers, reduced pay and planning days and otherwise cut costs, Hawaii's 171,000 public schools students now find themselves with only 163 instructional days, compared with 180 in most districts in the U.S.

Even more, they depend on the police, courts, and prisons to enforce their precious property rights. And they don't want to pay for those either.

I suspect that a lot of state and local governments have been trying all the creative financing that they can think of--trying to postpone painful cuts in services and/or personnel, hoping that the economy improves, and that tax revenues increase. I suspect that this hope is misplaced. IMO, whether it be local, state or federal, we simply can't afford the present size of government. And I agree that most people want more government services--and lower taxes.

"Government, particularly state-level government, is not a private business, and cannot be operated as if it were one. Most state budgets are dominated by six basic areas: K-12 education, Medicaid, roads, prisons/law enforcement, higher education, and other human services." Posted by mcain 6925

I think what needs to be addressed is not only so much what governments do, but HOW they do it. Here in San Francisco, I am the Chair of the South of Market Redevelopment Project Area Committee. Several years ago (before all the economic chaos begin) we were having a conversation about earthquake retrofitting unreinforced masonry buildings. A sum of money had been allocated years before for zero interest loans for this purpose. Yet no building owners ever took advantage of this. Then, at some subsequent point, the city government mandated that this work be done. Still, no one came forward to take advantage of this pool of money; rather they just went to Wells Fargo or B of A or whatever, and took out a regular loan for the purpose. When I asked why they wouldn't utilize the interest-free money, we were informed that as soon as city money is involved, the cost of the project essentially doubles. This is due to the fact that the city has a number of "contract compliance" demands that the regular banks don't. This seems to be primarily well-meaning "social justice" type stuff that appears to be doable only in good economic times. The banks will demand that a contractor be licensed and insured. The city will demand this as well, but also things like the level of wages the contractor has to pay their employees, that the contractor be vetted to insure that they don't discriminate on a number of grounds, and four or five other things I don't immediately recall. Of course, this creates an infinitely higher lever of paperwork and bureaucracy that makes dealing with city government even more unattractive. So building owners decided that it would be better to take out a $250,000 loan with their bank at whatever the interest rate was as opposed to a $500,000 loan at zero interest.

I remember from my early college days, the slogan "Make the personal political." Unfortunately, this has largely been successful, so governments are now addressing stuff they wouldn't have previously. As a result, governments at all levels have, over the past 40 years created myriads of new "rights" most of which involve a tiny fraction of the overall population. This has coincided with a growing sense of entitlement most people seem to have that has been expanding over this same timeframe. A good example is the recent discussion in Congress of an "Airline Passengers Bill of Rights." There have been a few incidents where passengers have been stuck in air terminals or on grounded planes for a few hours and thus inconvenienced. In previous eras, this would have been considered simply as part of the vicissitudes of life, now its something that government feels that it has to "do" something about. All this has caused governments to become far more "process oriented", which in turn required much increased staffing, expense, and overall dysfunctionality. In next month's election here in S.F. there is a local ballot measure to allow the members of the Board of Supervisors to have more than two assistants. The argument for a "yes" vote in the voter's handbook states "When San Franciscans have a problem, they should be able to pick up the phone and demand their elected representatives help fix it." In this line of thinking, there is no limit to the types of problems government is responsible for.

Of course, we have a Mayor's Office. 100 years ago we had a Mayor's office. However, unlike 100 years ago, we now also have a mayor's Office of Economic Development, a Mayor's Office of Disability, A Mayor's Office of Criminal Justice, and several more. All, of course, headed up by people with six-digit salaries, and staffed by people with mid to high five-digit salaries.

So maybe what needs to be done is:

1. Redefine our "rights" to the basic stuff in the Constitution. This will allow governments to downsize by eliminating countless agencies and offices, such as those I referred to above.

2. Depoliticize the personal. Empower governments to tell constituents that complain about these issues that "I'm sorry, but we can't help you, that's not a government problem."

3. Governments need to return to being primarily "goal/results" oriented, rather than "process/rights" driven. This will allow for a large downsizing in government staffing, bureaucracy and expense.

The way governments have evolved over the past 40 years have been increasingly expensive and dysfunctional. In the relative "good times" of this era, this has been doable in spite of the problems it has caused. But this era is over now, and if governments are to fulfil their basic purpose, these modern responsibilities that governments have adopted in recent decades will have to be dropped overboard.

Antoinetta III

Hi Antoinetta,

The single biggest expense in our family budget is our local property tax - something like one sixth or one seventh of our budget. Surely, I would like this to go down. And, I am equally sure that you and I would vigorously disagree as to how this tax money should be spent and what should be cut from the budget.

Subsidizing private motor vehicles (roadway expansion and repair) is a very large component of our local budget. I would be far less concerned about an "Office of Economic Development" than the counterproductive activity of widening a roadway or buiding another municipal parking lot.

Another huge local expense is for the Sheriff's office - yes, we need this service, but I doubt we need to spend as much money as we do worring about teenage marijuana use and sex between 19 and 17 year old kids - we spend lots of money on this kind of stuff.

I think government should be there to help citizens with a variety of problems - is not "fair play" an integral part of being a US citizen? How does a poor citizen get fair play from a big corporation without government help?

I agree with your notion of "goal/results". Maybe I am misreading you, but I suspect that law enforcement, prisons, roadways, etc, are all good uses of tax dollars from your POV. I suspect that we have very differnt goals in mind. And, moving on to the Federal level (you seem to allude to all levels of government), how does your POV align with the fact that the US has a military budget that is about the same size as all other military budgets on the planet combined? What is the goal here and what is the result? When is the last time you heard a serious proposal to cut our military budget in half?

And, what is "disfunctional" about Medicare and SS? Are these things you want to "drop overboard"? United Healthcare is an example of disfunctional from my POV.

Hi Bicycle Dave:

I think you'll be pleasantly surprised, I actually agree with virtually everything you have said here.

I completely agree about the waste involved in adding/widening more roads, especially since it seems clear that in the years ahead motor vehicle traffic will be declining as gas inevitably gets, first more expensive, and then less and less available. I know that here in the Bay Area, one project that the highway lobby has been clamouring for is a fourth bore in the Caldecott Tunnel on the East Bay. And I am hoping that the economy contracts soon enough that this and other similar projects become impossible to get underway. In a similar vein, about 35 years ago, the General Hospital here had a major seismic upgrade. Now, the voters recently approved the bonds to do another such upgrade, along with a lot of shiny "modernization." This repeated construction activity has been a great way for the elected politicians to funnel fat contracts to their campaign contributors in the construction industry, but it seems clear to me that the resources simply won't be there to do major rehabs and renovations on large facilities every 30-40 years. Since I don't consider the hospital any unsafer now than it was 35 years ago, here's another project I am hoping that the contracting economy will put a halt to. When such facilities are built, we are going to have to adopt the attitude of earlier cultures where the goal was for stuff to last essentially forever. On the coast of Spain, at La Coruna, there is a lighthouse. The lighting system has been automated and modernized, but the structure itself was built by the Roman Emperor Trajan sometime around the year 100. The Pantheon, an unreinforced cement building was also constructed in the second century, and still stands. I think its Barcelona in Spain that still gets a substantial portion of its water supply from a first or second century Roman aqueduct. And of course many of the cathedrals of Europe were built in the 10th and 11th century, and are still in use. So if this kind of infrastructure could be built to last for hundreds, even thousands of years back then, it should be able to be done now. Of course the rulers of previous eras didn’t have campaign contributors that they needed to find way of diverting public money to.

And, yes, a certain amount of police and shirriffs are necessary, but I agree that the moralistic stuff like the "War on Drugs", teenage sex, prostitution, etc. is all a waste, and trying to regulate/enforce stuff like this should be abandoned. Likewise, unfortunately some kind of military seems to be necessary, but this should be vastly downsized, we should withdraw from both Iraq and Afghanistan as soon as practical (Six months should be sufficient) as well as shut down all of our overseas bases, and bring the troops home. A standing army of a hundred or so thousand troops and a Navy of a dozen destroyers and battleships should be more than sufficient.

With corporations, the first thing that should be done is to reverse the 1896 Supreme Court decision that gave them a perverted sort of "personhood"; this should do as much as anything to equalize them with ordinary people. Also get rid of the laws that state that a corporation's primary responsibility is to maximize the profits of the shareholders.

No, I don't think healthcare and Social Security should be tossed over the side. These are things that are of a life-sustaining nature for virtually everyone, and therefore should be considered a primary government responsibility. By the way, you refer to something called "United Healthcare," but I'm not sure what you are referring to here.

As for the "variety of problems" that people have that government should deal with, well, if its something that effects a large amount of people in some sort of serious way, then yes, government should be involved. But there was an article in the local paper last week describing how one of the City Supervisors office got a call from someone complaining about milk spilled on the floor of the local Safeway. Sorry, but stuff on this level is simply whining as far as concerned; this person should have been told by the Supervisor's office to take the matter up with the Safeway management. Governments are simply not going to have the resources to spend time on trivial stuff like this.

Antoinetta III

Hi Antoinetta,

I sincerely apologize as I did misread the intent of your post - it seems that we really do agree!

We also have a dumb hospital issue - we have a very good local hospital (3 miles from our home) that has recently added substantial new additions/facilities. This is fine, not sure we needed all of this but nice to keep things up to date. Then, one mile from our house, the local health giant is building a major new hosptial - a really big one. We need both of these facilities like a new "hole it the head". I suspect that the end result (besides a huge waste of natural resources) will be a degradation of patient care as the two enterprises compete for health care workers.

You mentioned a lighthouse in Spain - I'm an advocate of both enduring architecture and environmental architecture features such as passive solar (I've posted about our house). When biking in Provence, we toured an excavated Roman villa (around zero BC) that used all sorts of neat strategies for heating and cooling without any FF and even minimal wood fuel. It seems that FF discoveries have caused us to lose a couple of centuries for improving our understanding of our ability to live appropriately in our ecosphere.

I agree with your views on corporations. I read the book "Web of Debt" that also talks about this. The book seems quite radical and often not well researched. But, I keep wondering if the author has actually proposed a much better way to manage our economy?

United Healthcare is a huge national health insurance company (maybe not in your area). They attempted to drop our coverage when an expensive medical problem occurred. Fortunately, we had professional help and they were forced to reinstate us - they claimed it was "just a computer error" - but no apology!

BTW, I really like your city. As part of my working career, I would find myself with time to kill on the weekend - I liked to visit Golden Gate Park on Sunday and "people watch" for hours. Not sure if this is still an interesting pasttime for your city.

Hmmm ...

Looking at these categories, what I see most of is salaries for government workers. I also don't see pension benefits paid to retired government workers.

Part of the problem is over- pensioned retirees.

There is nothing wrong with a decent retirement, but $60 - 80 - 100K a year? Some employees retire @ age fifty; calculate 30 years of + $80,000 is a lot of money! Some employees collect pensions while still employed or while they take 'part time' positions doing the same work as they were doing before 'retirement'.

Federal employees make twice the national average wage for similar jobs ... for doing exactly what, already? Certainly not for regulating banks!

At some point the states are going to have to slash pensions, raise retirement ages, claw back excessive amounts paid to retirees (or simply default on these obligations). Similarly, wages for state employees and contractors will have to be cut.

As for human services, there will be more people falling through the cracks. The Federal government has abandoned its task to be the last line of financial/employment defense for those at the bottom of the ladder. Look for children to be hungry while their parents are forced to pay out- of- pocket for school, just like in Ecuador.

I doubt there are many people who retired at 50 who get that kind of pension. You usually take a big hit for early retirement.

Federal employees make twice the national average wage for similar jobs .

Any support for this? The people "not regulating banks" are probably making a fraction of what they could make working for, say, Goldman Sachs.

Government workers who are highly paid are usually executive types who could probably make more in private industry, or highly skilled workers who are difficult to get into government work. Doctors, lawyers, scientists, etc. For example, one of the lawyers who is representing the public workers union in California used to be a public worker himself. He wanted to finish his career in public service, but as a lawyer, he could make twice as much money in the private sector, so that's where he ended up.

a lot of the skilled workers (Environmental Scientists is one i am familiar with) would be hired on ad hoc or consultancy basis in private sector.
As gov't employee they receive generous benefit packages...and when area of expertise is not required, they can staff the front counter and answer the telephone...just sayin...
and yes it is true about inflated retirement packages, my best friend is a 56 yo retired bus driver who does get a $70,000+ pension.
But i gamed the system myself, so i can't be too judgemental about the issue...if someone decides in their '20's to commit to a career path and then are able to retire early because of their a)foresight and b) good luck, then more power to them.

They could be, and they are. "Privatization" is a big issue.

However, states that have tried it have mixed results. They have to pay "consultants" a lot more than they have to pay state workers. While they can more easily fire consultants, they've found that it often doesn't save any money, because it takes so long to train people. Even private industry is now trying to retain employees if they can, to avoid losing their investments in their training. Hence the trend toward furloughs and shorter work weeks rather than layoffs if possible.

When you hear about peons who have apparently huge pensions, it's usually because they worked in a high cost of living area. The pension is a percentage of your salary, so if you have a high salary, you have a high pension.

I just don't think this is a big issue. It's a distraction from the real problem. According to the link Steve posted, 5,000 Calpers retirees make those six-figure pensions. Out of 1.6 million retirees. Very few are making that kind of money, and looking at the list, they are people like former university presidents. They'd probably have made a lot more money if they had similar positions in private industry.

I get $485 a month from Social Security and $288 for teachers' retirement. Where are all these big retirement bucks everyone is talking abour?

...or simply default on these obligations...

I hope I'm around when this happens, because the court case is going to be fascinating. When a party defaults on an obligation, they are generally forced into bankruptcy. The US Constitution reserves authority over bankruptcy to the Congress. Congress has provided for bankruptcy by individuals, firms, and governments below the level of a state (cities, counties, special districts, etc). There are no provisions that allow a state to file for bankruptcy protection.

I doubt that any state court (or federal court if it gets that far) will find that the state can simply renege on a contractual obligation.

Hi NASAguy,

Great graph. I like your comments about the pattern of the receipts. However, the outlays seem to be taking a different path from the previous recessions.


Thanks Dave. Indeed, the outlays have accelerated due to (1) bailouts, (2) the stimulus package, and (3) there is a long-term trend of accelerating payments for entitlements.

Thanks for putting together this graph--neatly lays out what is going on.

BTW, for a clearer result on graphs, make a PNG instead of a JPG. Leannan taught me that trick after I had made about 1,000 JPGs.

Thanks, next one will be a png.

if your graph of reciepts and outlays is correct, can you explain how the national debt increased by about $ 8 trillion in that time frame ?

borrowing is not conventionally called "reciepts".

for a reality based look at the debt look here:


"Retired General Says Israeli Attack to Take Out Iran's Nuclear Facilities Not Only Possible, the U.S. Should Join In"


Perhaps the retired general is thinking of running for office and is just working on getting the support of the Jewish vote.

Hello FMagyar. Possibly. I find it interesting to follow the build up in tentions over the years and have been posting newslinks on this here for years, for the sheer acknowlegdement that if this ever escallates to military confrontation our entire discussion on geological PO becomes void and we will be left with above ground factors dominating any supply, ie WW III.

The "Jewish vote" and the Isreali question are a real eye opener .The democrats get the votes while the republicans support the mic and the Isrealis.

The republicans will never get the Jewish vote-any more than they will get the black vote.Even twenty percent is probably a pipe dream.

Since you must take your votes where you can find them, this contributes a lot to the republicans having to cozy up to the fundamentalists.

Another irony-one rarely pointed out-is that blacks are among our most ardent and plentiful fundamentalists as a percentage of thier numbers.If the average black voter knew as much about the overall liberal agenda as the average white fundamentalist he might find himself in a rather turtured position-choosing between his God and his politics.

The average white fundamentalist-my family as an example-made thier decision long ago-they will stick to the party they see as best aligned with thier God.

Being an "Eeeevil Evolutionist" my self I see all this as a rather amusing demonstration of naked ape community politics and think that between Darwin and the better thinkers in the relatively new field of evolutionary psychology we have a perfectly adequate and somewhat elegant theory to explain our overall wacky behavior.

If tptb were to understand this theory it might keep them from heading off down a few blind alleys in search of solutions.

What we need is a super flu that makes every body who catches it sterile-and it needs to be super infectous.Like maybe seventy five or eighty percent.

I suspect that the chance of something along this line coming to pass are substantially higher than zero.We are now more crowded than ever, increasing the chance that some virus can make the necessary jump and evolve into something capable of inducing sterility or worse.

I talked to a couple of micro biologists at a local college recently and they estimated the odds of the emergence of a major new killer disease at about ten per cent per decade as a personal wag-names not to be mentioned of course.

May be some mad scientist will create it and turn it loose soon.

Whether it is a new flu or not, man is going to evolve or become extinct within the next two hundred years. Those that are left will be the most suited to adapt -- I hope that certain traits, like critical thinking with objectivity are selected.

I was thinking that if "swine" flu mixed, in the right amounts, with "bird" flu, then we could see a die-off event of 80% rather quickly. This means that nuclear reactors, refiners, off-shore rigs, etc..., will be left to their own devices in many cases. This would cause a catastrophe on the scale of a nuclear war. Whoever survives that would have to be very fortunate and very adaptive.

I can envision scenarios wherein critical thinking plays a major role in survival-maybe t will play out that way.

About getting votes-and peak oil allies where you can find them-The Christian Science Monitor just put up a piece about four dollar gas about twenty minutes ago that gently explores the subject of p[eak oil in a relatively fair manner.They quote a steven Kopits who is a New York energy analyst in thier last paragraph as saying there are no bulls in the oil industryas well as quoting ASPOand G.

It is always interesting to see the latest "take" from the MSM.
This article has made available another nick name for us- "peak oil enthusiast" - which I rather like as it kind of makes this like a hobby without satisfaction. :)
Add that to "Peak Oil Prankster"(good for Halloween)and "Peakster" (for the youngsters among us)
Seriously though, the last line in the story says it all:
"There are no bulls in oil".


oldfarmermac -

I think one must make certain distinctions regarding this matter.

While a large portion of Jewish people in the US tend to be of a liberal persuasion (e.g., they were very heavily involved in the civil rights movement of the 1960s and 1970s), I don't think that in and of itself matters very much to either Republicans or Democrats. Neither are really looking for so much for Jewish votes per se, but rather are seeking approval and support from the enormously powerful and well-funded pro-Israel, heavily Zionist US Jewish lobby, the most prominent manifestation of which is the AIPAC.

The real dynamic operating here is the fact that while Jewish people in the US constitute only a few percent of the population, they tend to occupy very prominent positions in the spheres of law, banking, media, Hollywood, and government. Their influence on the US political process is enormous, way out of proportion to their numbers, and is not to be trifled with. Consequently, both Republicans and Democrats bow down to this potent political force both to garner their approval and to avoid their wrath.

I know for a fact that many wealthy and prominent Jewish people in the US (such as certain partners in major New York law firms) are staunch Zionists, send enormous sums of money to Israel, and do everything in their power to influence US politicians to do things favorable to Israel. In my opinion, some of these people are US citizens in name only.

It is hard for me to picture Obama having been able to get elected without getting the approval of the AIPAC, and to do that he no doubt has had to have made certain commitments regarding a US Middle East policy that would always be favorable to Israel. So, if things get really dicey with Iran, my gut feel tells me that Obama would acquiesce to an Israeli attack on Iran, or maybe even be pressured into having the US do Israel's dirty work for her.

I think Israel could care less if Iran closes the Strait of Hormuz and makes a mess out of the rest of the Middle East, for it know that the US will always pull it's chestnuts out of the fire.

So, there we are. Why the American people have stood for this 'special relationship' for so long is beyond me.

"So, there we are. Why the American people have stood for this 'special relationship' for so long is beyond me."

They have stood for it for so long because the media is run by those that want them to stand for it.

The propaganda has as one of it's central goals the "hands off the Jewish people" attitude.

Just as an example: The holocaust happened and it was a terrible, terrible inhuman tragedy but how many other genocides have occuered throughout history??
The constant reinforcement and publication of the one genocide that was perpetrated upon the Jews is the only one that most Americans are aware of.
This engenders a indirect guilt that puts this group in a "special" place in the minds of the rest.
It is, IMO, nothing but a very clever ploy to control others.
And let's not forget the history of the money lenders.

Um, could the special relationship with Israel be based on our having a very closely-similar culture? What other nation's culture is more like our own, aside from Great Britain's, with whom we also have a special relationship?

Just as people look after our own families first, so do nations. Does it offend you when Latin American or African or Southeast Asian nations act in their common interest, believing themselves natural families of nations? We don't have to like everything about our families to love them, and to stand by them in crisis.

Which isn't to say it's not also in our vital interest to get Israel to treat the Palestinians fairly, &c. But we're certainly not going to simply turn our backs on them, any more than we'd tell England to go stuff itself.

Canada might be closer in overall culture to the USA than Israel is (or the UK).

We did tell the British to "go stuff yourself" after WW II when they asked for a $5 billion bridge loan to rebuild.

Later came back with a higher interest loan with conditions, like ending the "Imperial preference" which destroyed the economic reason for the British Empire.

I see relatively little commonality between the US & Israeli culture and society as it has evolved. (Today's Israel is a quite different place from 1950 Israel).

I see more commonality with any member of the EU than with Israel, as an example. Bulgaria, Estonia & Malta have more in common with the USA than does Israel.


Hi Porge,

Although historians differ - it may well be that Ireland had a population of around 10 or 11 million before the Engish decided to "fix the Irish Problem'. The potato blight was just an excuse to create a massive famine as all other crops and livestock remained unaffected (these were export items). After the so called famine, Ireland had a population of less than 4 million.

Regardless of the acutal numbers, England ranked right up their with the Germans in their cruelty towards another race of people. However, in the interest of economic stability, we seldom dwell on this nasty bit of history that occurred just a little over 100 years ago.

I have no axe to grind regarding the holocaust and all that followed. I just think that we should keep in mind our human history and the way we have tended to interact between races and nations. A good book to put a lot of this in perspective is "How the Barbarian Invasions Shaped the Modern World". We really need a better way to deal with our issues than our tendency to see if military power is the best first choice.

When you guys talk of the "Jewish vote" I assume you mean campaign contributions and influence.
If you are actually referring to ballots cast then you don't know the demographics well at all.
The Jews in this country represent less than 2 %.
And another little known fact is that there are just as many jews here as in Israel.

Like I said I assume the Jewish vote is a code for money.

Just read joule's comment above and see that I should have read between the lines.
On the same topic: Does anyone else see that this gross overrepresentation in finance, media and government might be the reason for all our problems???????
There is a very well chronicled cultural history behind this.

Porge, say it's not so... You a teabagger, too?

Take responsibility for your own situation. The Jews are not the problem unless you're a Palestinian. But that isn't what you meant, is it?

No I am not a teabagger.
That is a waste of time.
I am not trying to "shirk" responsibility. I am simply pointing out that the culture we are examining is one that is based on manipulating money for it's own sake.
I can see how it developed since other cultures persecuted them and did not allow them to own or participate on equal grounds so it started as a survival tactic and developed beyond.
I call it like I see it, that's all.
Way too much evidence.
And by the way I get a bad feeling when I think about screwing someone else over for money. Some people think that is why they live.

Not a teabagger? Certainly a piece of fecal matter.

One of the worst things about ignorant aholes like you is the justification your ilk provides the Zionists, the majority of whom are American Christians, for the existence of a racist state in what is laughingly called the 'holy land'.

Excuse me while I return to my study of the thought of that Shylocke, Einstein, while listening to the moneylender, Isaac Stern.

Yer redneck friends agree. This is why 8/10 of us vote D....

The chairmen, Edwin Merwin Jr. and Jim Ulmer, wrote the newspaper in backing Republican Sen. Jim DeMint's opposition to congressional earmarks.

"There is a saying that the Jews who are wealthy got that way not by watching dollars, but instead by taking care of the pennies and the dollars taking care of themselves," according to the piece published Sunday in The Times and Democrat of Orangeburg.

It is part of their culture plain and simple.
I hope you guys feel good about yourselves for taking the moral high ground and not letting historical facts get in the way.

The Jews in this country represent less than 2 %.

They are also the most liberal group. IIRC their vote is something like 85% for the democrats. Now mainly it is not about the Jewish vote, but the effectiveness of the AIPAC lobby. If AIPAC decides to destroy a candidate, by implying he/she is antisemitic (which for most Americans is akin to racist), that charge can swing enough voters to be an issue. Remember the Hillary versus Obama primary: it had appeared AIPAC decided it couldn't trust Obama and was about to rain on his parade. Obama went to AIPAC, and essentially kissed up to their demands. So most national politicians have learned not to mess with them, and do their bidding instead. For most Americans Israel is barely on their radar screen, so they won't pay attention to how they vote on Israeli issues. Even more so for the Palestinians, who are mostly seen as crazies who become terrorists. So the weighting given to Israeli Palestinian issues is very small. The weighting given to the threat of AIPAC going after an uncooperative politician looms much larger.

From porge:

On the same topic: Does anyone else see that this gross overrepresentation in finance, media and government might be the reason for all our problems???????
There is a very well chronicled cultural history behind this.

Why navigate all the way over to StormFront, when I can get my fix right here? This is still The Oil Drum, isn't it?

That story is really scary.

Sitting near Wald, a former head of Israel's military intelligence, retired General Aharon Farkash, agreed that the U.S. Air Force could be far more effective than Israel in crippling Iran's nuclear program. "The U.S. can destroy the nuclear capacity, and the war would not be long," Farkash said, though he cautioned that Western intelligence still might not know about all of Iran's nuclear sites.

Does the military in Israel think that Iran would not close the Straits of Hormous if they were attacked? Would Iran respond by attacking Saudi Arabia or Iraq? If Iran's nuclear plants are attacked, would the Iranians feel that they had the justification to attack nuclear installations in the U.S. or Europe?

Gotta love the military mind. Would the U.S. Air Force shoot down aircraft from Israel on the way to attack Iran? His answer:

"The chance of that," Wald replied, "is zero - no, less than zero."

I thought the military was supposed to follow orders. One hopes that our government would not be stupid enough as to allow those aircraft to fly thru U.S. controlled air space. Turkey is another matter...

E. Swanson

Does the military in Israel think that Iran would not close the Straits of Hormous if they were attacked?

While I can go with 'I don't think they care' for years every October the rounds are made with the 'Israel will attack Iran' story.

And so far it hasn't happened.

Now - if the global economy collapses and the various parties across the planet feel their leadership is threatned - a few will argue to 'roll the dice' or 'disctract 'em with a war' and some will win that argument in their halls of power.

Its gonna be interesting times....

Zbig Brzezinski: Shoot Down Israeli Planes if They Attack Iran

“We have to be serious about denying them that right,” he said [Brzezinski]. “If they fly over, you go up and confront them. They have the choice of turning back or not. No one wishes for this but it could be a 'Liberty' in reverse.’"

I think Brzezinski represents the pragmatic voice of the Empire, which are more likely to prevail over the "loonies from the basement". Not that a black swan type event could be ruled out due to rogue elements in the fragmenting power structure of the US.

In a high entropy environment its worth destroying the existing order of things as long as you end up with more than you started with (at others expense). Keeping with the established order leaves you with an ever shrinking share of the pie. Growth becomes equated with destruction, stability with expansion. So of course there will be elements within the system that will be trending towards "the new normal". I suppose we should be expecting black swan type events to increase markedly as things deteriorate at an accelerating rate. Things inexplicable to the casual observer.

If the US shot down Israeli jets, as Brzezinski proposes, perhaps the geopolitical shock would be even greater than an attack on Iran.

Needless to say, we need to avoid a scenario in which the U.S. interdicts Israeli aircraft in a combat mission. If that happened, it would not be at all surprising to have not just Israeli casualties, but also American casualties, Iranian casualties, an attack on Iran that was completely unsuccessful, and everybody mad at everybody.

That assumes we'd be in a ready mode to actually accomplish that task, have the will, and the ability.

I think those who think the US is going to (1) let Israel walk into that sort of situation and (2) actually shoot them down, are quite mistaken.

Exactly. It's talk.

Israeli fighters cannot fly the round trip without refueling. If a squadron or more of Israeli fighters landed on any US controlled airbase (think Kuwait) they would be refueled and sent on their way home no questions asked. I doubt if they would be rearmed but then again if word came down to give them armament, they would be loaded with the best bunker busting bombs, rockets and 20mm we had.

What? Who me? Nonsense, we are working on Health Care.

BTW: On the business page in our paper a couple years ago was a small announcement that the US sold Israel 2000 bunker buster bombs. Hmmmm

I assume they would refuel in flight. Israeli aircraft do have that capability. The problem is that the tankers have to fly much of the way with the combat aircraft to do that.

If this were a regular mission, no doubt they would refuel in air. Israel has a few KC135s and a few KC130s which would probably not be enough if they wanted to saturate the defenses with massive numbers of fighters. OTOH if they were returning from their mission with no weapons, and happened to land at a US base, it could be just an exercise. Refuel them, launch them and get them out of sight on their way home. Of course the best time to hit is about 3:00AM, land at night, refuel and get out befor daylight.

The planners around the world always pick that time to fight just to keep the fighter pilots up past bedtime.

The KSA radar would certainly see such an operation. I wonder if they would call the Shiites and tell them to get ready?

Does anyone have a chart of costs for all the different "new ways" to recover oil?

I.e., what's the cost of doing horizontal drilling at 1/2 mile, two miles, etc.?.. or doing (?)detergent(?)-based recovery at same depths?

I know that cost per barrel would be somewhat dependant on field size, but I'm looking for a piece of reference that I can look at - for a reality check - ever time I hear of some new miracle discovery that someone announces more often than not these days.

Exactly what qualifies as being "new"? How long has horizontal drilling been around anyway?

A Fresh Angle on Oil Drilling

The first patent for horizontal drilling technology was issued in 1891, just 30 years after Colonel Edwin Drake drilled the first oil well in Titusville, Penn. The primary use listed on the patent application, however, wasn’t wildcatting, but dental applications. It took another 40 years for the scaled-up technology to find its way into the petroleum industry, and another 50 years after that before it became commercially viable to bend a well.
These factors, along with several technological advances that have made the method commercially viable, have led to a 20-fold increase in the number of horizontal wells in the United States over the past two decades — from 1,000 in 1990 to 20,000 in 2000. The technique has increased production of some oil and gas fields, opened more types of fields to production, and revived or prolonged the life of fields that were almost exhausted.

Okay, doing the math, it was around 1981 when "well bending" became viable, 28 years ago. Since then virtually all offshore wells and most onshore wells have used this "well bending" technology. There is nothing new about it.

Ron P.

You'll notice that I did put "new ways" in quotes... (because the reporters use that phrase).

Thank you for the history lesson. Now, do you have any cost figures?

P.S. I believe it became commercially viable (overseas) as far back as the 1930s... but wasn't of interest to US companies until later.

The question marks in ?detergent? also comes from the reporter ?

Nope; that's my uncertainty.

From the U.S. department of energy (www.fe.doe.gov/programs/oilgas/eor):

Chemical injection, which can involve the use of long-chained molecules called polymers to increase the effectiveness of waterfloods, or the use of detergent-like surfactants to help lower the surface tension that often prevents oil droplets from moving through a reservoir. Chemical techniques account for less than one percent of U.S. EOR production.
Each of these techniques has been hampered by its relatively high cost and, in some cases, by the unpredictability of its effectiveness.

I'm very curious about the relative costs of Enhanced Methods and Deep Drilling for oil as well.. wondering where they price in.

Found this site, which has a little bit mentioned on the subject.. but don't know how useful it is. Can't take it as unbiased, but that doesn't necessarily mean it's skewed, either.


"While the cost factor for a horizontal well may be as much as two or three times that of a vertical well, the production factor can be enhanced as much as 15 or 20 times, making it very attractive."

Has a neat little procedural animation there, too.


jok -- A DW GOM well these days runs between $100 million to $200 million each. Production facilities can easily top $1 billion. A 15 to 20 fold increase by being hz is tad high IMO especially when your producing oil. A 2 to 5 fold increase is more typical. But increasinf low rate is just one of several reason for going hz. EOR costs have a very wide range. Injecting water is relatively cheap compared to a steam flood.


Sounds like

'Don't sweat the little stuff. and yet.. It's ALL little stuff.'

Can't really give you a detailed answer Iggy. Too many variables. But if you must: consider hz wells to cost around twice a vertical well if the lateral isn't more than a couple of thousand feet long. Some laterals these days can be over 25,000' long....maybe 5X as long as the vertical measurement. Chemicals and such for secondary recovery ops can vary a lot. As a rule use 15% to 30% of the gross revenue for such lease operating expenses. Again, just a crude ball park number.

If you can throw a detailed what if I'll be glad to cook a number for you.

some of what you seek is contained in this utube video posted a few days ago by "joe average":


about 1hr long.

Another commentary about Norman Borlaug


The late agronomist Norman Borlaug, regarded as the father of the "Green Revolution", is credited with saving millions from starvation. Despite the criticisms of environmentalists, Borlaug had a strong appreciation for the centrality of farmers' livelihoods in maintaining food security, writes Devinder Sharma.

How to explain PO to the MSM and Joe and Jane Six, or how to get PO across, was mentioned in several previous threads. Woefully low educational level, lack of logical thinking, apathy, consumerism, laziness, feelings of entitlement, etc. on the part of what was not called the unwashed masses, were noted.

Yet, peak oil is easy to explain. I’m sure Gail could point to at least 5 very accessible explanations in various forms, some have been posted on TOD but I am too lazy to hunt for them.

Someone pointed out that expert knowledge tends to be confined (e.g. posters on this board are often forced to trust their dentist) and that is quite true but somewhat beside the point.

The notions or concepts involved in PO are almost primitive, core concepts for human beings. E.g. a resource that is slowly used up until none is left; diminishing returns; it’s converse, efficiency (doing more, or better, or quicker, with some kind of ‘less’, using new procedures or inventions, etc.); sharing (per capita share); and that is about it. The first is the stock in the larder, the second training to run faster, etc. I need not go on.

The situation at hand is that denying PO is in the interests of the PTB and many vested interests as well as hangers-on, all of whom have high stakes in BAU in terms of maintaining, or increasing, income, wealth, power, status. (That includes Wall Street, or the financial ‘industry.’) The idea, reality or illusion, of perpetual growth is needed to be able to skim off the top without the threat of social unrest, revolution, and so on; a seemingly steady state in its ‘growth’, in its ideology or philosophical underpinnings, accepted, or paid lip service to by all, is required, as the only other alternative is repressive, violent, authoritarian regimes.

Note that these exist today in several 'high' oil extracting countries, and are supported/created by the US with the ‘west’, e.g. Iraq, Saudi, Nigeria. Authoritarian regimes are a poor choice, for many reasons (expensive, cumbersome, constraining, volatile, dangerous) with the main danger being that in the ‘west’ they would lead to a brutal ripping off of the mask with very uncertain, disagreeable, consequences. Political correctness and inherent superiority are the core of 19th cent colonialism, and of neo-colonialism as well.

Keeping the status quo going for as long as possible is a no-brainer from their pov, as it is, confusedly, for all the hangers-on, such as prison guards, clerks in insurance, workers in the automotive industry, construction, lawyers, nail care, a long list...

The MSM is either: a hidden branch of gvmt.; an arm of corporate America; subservient to vested interests thru laziness, greed; or, just pushing, for whatever reason, social consensus on all important points and providing empty infotainment as a distraction; etc. Interpretations may vary, many must agree that they do not provide, on many topics, relevant or correct information. They throw everything into the realm of ‘opinion’ with the rationale of being ‘balanced’...a disservice to the commons...Peak oil exist or not..Vaccines are essential or killers..The world is getting hotter or cooler, you decide!

People are thus conditioned to disbelieve in PO, as a powerful minority and the hangers-on are terrified of change. Moreover, alarmist nonsense - terror alerts, swine flu, etc. - sees to it that ppl come to be cynical or skeptical about the warnings they are bombarded with.

One might as well ask, as the 9/11 ‘truth‘ community does: How come scientists and engineers don’t immediately see that the 9/11 official story must be a fiction? Well, they can’t, they believe in their Gvmt., the MSM, Islamic terrorists are a reality to them, or more simply, they are afraid of bucking the official story, scared to stand out, they know the consequences can be harsh... Other examples are more complicated: Why did Ted Kennedy endorse the fact that child vaccines might cause autism (debunked over and over again by “Science.”) Well, because many ordinary ppl - those who haven’t read professional papers on the topic - believe it. So it was a political move on his part, whatever.

Science, as transmitted to the public, has become co-opted and debased in favor of financial, corporate, PTB, and Gvmt. agendas. (See the latest about oil in the Scientific American on TOD.) Pseudo-science, such as economics, has naturally enough benefited from this situation. As has trivia that can make headlines. There are jobs out there for those who want to earn by dragging in red herrings.

So explaining PO - or evolution, or autism, or 9/11 becomes an exercise in propaganda, persuasion, manipulation, domination. Nothing much to do with the intelligence (aka education) of those being addressed.

All those who have a cause of that kind tend to be amazed at the blindness and stupidity of their actual or potential audience, that that their laid out facts, thoroughly worked out schemes, rational opinions, are not given the expected consideration, the space they warrant.

The flowering of Science and the weight, influence accorded to Scientists (using caps instead of inverted commas to loosely designate) in the late 18th, 19th and early 20th century in the West (and other places previous, and in the past) is waning, is now behind us. I believe this to be the result of two prongs: a) the understanding of the world, or nature, in various fields, led to rapid technological development, economic growth, which is now not moving forward, in comparison with before; b) energy / world resources are being exploited to the limit, and thus expansion through allocation of abundant surplus comes to a stuttering halt.

I think the problem at its most fundamental is that people on a primitive level assume nature is renewable, like life itself. So, while on a intellectual level, people understand resource depletion, on a primitive level humanity simply can't comprehend it. We, as animals, instinctively assume that what is sustaining us was intended by nature to sustain us. Add to that the energy bonanza that oil has been and the good life it has created, and it becomes just too painful and traumatic to accept it will come to an end.

And yet many of us get this on an other than primitive level. We get it that the data shows that we are in deep doo doo and that that this won't be fixed by some miracle or some Jesus with the loaves and fishes routine. Somewhere around college we learned to evaluate things on an empirical basis and not based upon whatever primitive instincts we were born with. This is not a movie, Sparky.

An equally big problem is that the vast majority of those who get it have no intention of doing anything about it. Solutions must ultimately come from the top down. Unfortunately, our autocracy is not in the mood right now to interrupt the gravy train on its appointed rounds.

Generally speaking, people abhor data and its implications. The truth is for another day. Shut up and drive.

We have addressed some big problems,like racism, for example, in the fullness of time. We have addressed some of the big problems in a leisurely way, the mode we are most comfortable with. But now we don't have the luxury of leisure or the fulness of time.

Nature will not wait. Our actions have consequences; there will not be a time out while we think about them.

"Somewhere around college we learned to evaluate things on an empirical basis and not based upon whatever primitive instincts we were born with. This is not a movie, Sparky."

It definitely is not rocket science or require a PhD to see the depletion of oil. Yet, despite the clear facts, intelligent, educated people do not see what's happening. As for the not-so-educated, they're hopeless.

One of these things is not like the others.

People who haven't been properly trained simply cannot deal with big numbers in a meaningful way, even for those who are appropriately trained it isn't easy. Try it yourself: visualize 1 Billion marbles. This is the problem with informing people on the financial crisis, peak oil, evolution, soil depletion, or any of a score of other significant issues. The numbers involved in real understanding are so big that it takes an effort to fit them all in, so if someone you trust even a little says "Hey! No Problem here!" it is easier to just go along.

I'd say, however, that the 9/11 'truth' community (as you so appropriately quoted) has a different problem. Mostly false pattern matching, wishful thinking, and some woefully horrible information sources. Very sad.

Maybe Goldman getting 70 billion from the USA taxpayer is just another example of "false pattern matching" http://theautomaticearth.blogspot.com/

One of these things is not like the others!

Try it yourself: visualize 1 Billion marbles.

Easy! First you need to get a handle on the concept of closest packing of spheres and three dimensional lattices


Once you get that you chose your marble size, say a marble diameter of 0.5"

Next you solve the question of how many marbles you could fit in a cubic foot.

Solve the same problem for a cubic yard. Keep increasing your cubic volume until you figure out how much space you need to hold 1 billion marbles. I promise you if you do this you will have a pretty good idea as to what that number of marbles means.

See? It's really not that hard!
Disclaimer, I've read Bucky Fuller's book "Explorations in the Geometry of Thinking SYNERGETICS" at least 100 times, so maybe I'm just a teensy bit biased ;-)

Your average American citizen (consumer, actually) was asleep at “closest packing of spheres”

No Way! How could any red blooded American not be enthralled by the concept of “closest packing of spheres”. Next you'll be telling me that people don't read books like "Synergetics" over and over again. I'm sorry but I just can't bring myself to believe that! ;-)

I agree large numbers are a problem, a difficulty. Not just the numbers themselves (e.g. a trillion) but the context in which they must be placed. For example, I can grasp the magnitude of US debt (let's say just federal debt), and can even come up with comparisons (e.g. other bail-outs, other national debts, etc., all picked off the internet..) but I can’t grasp what it really means, what the possible ramifications, implications, consequences, future event, etc. are. There are too many parameters and potential political control mechanisms - interest rates, inflation, currency exchange; war, default, etc.

The MSM reports impressive, huge, numbers to obfuscate simple issues, they know ppl don’t get them. The journos. often don’t understand them either - they are just overpaid scribes who report in a garbled way, lackeys who provide a conduit.

It is not necessary to use big numbers, smaller ones suffice, the decimal point in the base 10 system works just fine. PO, in contrast to my ex. about finance, is based on measures, ahem estimations, of the material world.

I think you're missing something with the 9/11 "truthers", "moon landings faked" people, etc. Lets call a generic one of these beliefs "X". If there were to be a huge, sophisticated conspiracy of clever people out there to do X, then by virtue of the fact that you've seen through it you must be a very clever person. If things are essentially (there'll always be some minor noise and misunderstandings) the same as everyone else interprets then you're basically the same as everyone else. "If I've got a brilliant nemesis I must be brilliant." I suspect that the vaccines cause autism/breast implants cause chronic fatigue/we'd be super healthy with mega-doses of vitamin C/etc people have a variant of this: if there's a single "super-important-cause" that everyone else hasn't seen, then the fact I've seen it means I'm much smarter than everyone else.

That, incidentally, is why I find some of the "we're being trained to accept an all seeing Big Brother" so misguided: I actually did some academic work on surveillance systems and in the process met a lot of the decision makers in the process. Assuming they didn't pull the wool over my eyes, the scary thing is just how little conception of the big picture that they have, and how many surveillance decisions are currently only "justified" by public opinion or "at least I'm doing something" and not by the abysmal cost/benefit analysis. I'd actually be slightly happier if I believed there was a clever conspiracy against "the people" because then it'd be possible to pressure them to apply their cleverness in better directions; the idea this is their best effort is truly scary.

the idea this is their best effort is truly scary.

Well said! That's what scares me, too.

Calling something a conspiracy theory is simply a way to discredit an idea and shut off discussion of it by trying to make its proponents feel ashamed of their ideas. It's pretty simple - you just equate the idea with something ridiculous (like "moon landings faked") and you've instantly discredited it. Much easier than thinking to be sure. The moment someone calls something a conspiracy theory I know I can ignore everything else they say about that subject - it means they feel threatened by the ideas in some way and want to end discussion.

People conspire, it's what we do. It need not be overt and it does not require a star chamber. Not surprisingly, people don't always need to be told what is in their best interests - they spend all their time trying to get an advantage on everyone else anyway. There are officially sanctioned conspiracy theories (these are OK to talk about), and ones that we all know are nonsense and so we don't ever need to think about them (right?). And sometimes very powerful people with a lot to lose or gain form more sinister conspiracies that violate the law (oh no, that could never happen!).

If we avoid labeling ideas, and actually think about them, then we might see reality more clearly. I find my BS detector works well enough, and I do not need someone else to tell me what is OK to believe.

So explaining PO - or evolution, or autism, or 9/11 becomes an exercise in propaganda, persuasion, manipulation, domination.

Exactly how are Peak Oil, evolution, autism and the events of 9/11 related such that they require your list?

They are related by each being the subject of a conspiracy theory. Please read what Embryonic said.

Here are the conspiracy theories:

"Peak oil is propaganda by a cabal of Wall streeters and OPEC, spread so that they can make massive profits at our expense."
"Evolution is a lie taught by a worldwide cabal of Geologists and Biologists so they can live off fat research grants."
"Autism is caused by vaccines; this is being hushed up by big Pharmaceuticals."
"9/11 was initiated within the US Government." (The exact agency and reason varies.)

I am surprised you didn't use the faked moon landing or the Loch Ness Monster to prove your point (like the Embryonic).

? I didn't have a point; I was answering Eric's question, "how are these things related?"

each being the subject of a conspiracy theory.


"Peak oil is propaganda by a cabal of Wall streeters and OPEC, spread so that they can make massive profits at our expense."
"Evolution is a lie taught by a worldwide cabal of Geologists and Biologists so they can live off fat research grants."
"Autism is caused by vaccines; this is being hushed up by big Pharmaceuticals."
"9/11 was initiated within the US Government." (The exact agency and reason varies.)

Plenty of 'theories' there that have people 'conspiring'. And yet on a limited planet there will be an oil peak. Evolution sure does seem to be supported by observation and artifacts. Given the past, documented hush up efforts by Big Phara, if there was evidence that there was a link - is anyone shocked that there would be an effort to not discuss them? The US Government is big and many of us can remember Mr. Oliver North and his 'rogue' project - so I'd not be shocked if your claim was found to be true. And the internet is full of claims that others knew of the events and for some reason no action was taken.

But all the things you list exist because of a lack of openness of the groups involved. A lack of openness because someone fears a loss of power.

I would like to add that the real world! is when I look outside my window.

Everything else is just a mirage, it's fun for the time being and every smoke screen is a welcome distraction. We can talk about these events for years.

To bad that I'm seeing more and more worried people.

But it surely can't get worse than this, can it?

What's a king without servants.

The real world will always be there...

They were on my list because I know a little, or a lot about them. Cherry picking.

What the public believes is conditioned by the MSM.

One man’s ‘conspiracy theory’ is another man’s truth.

PO is rubbished as nonsense every day of the week.

My point was simply that one is dealing with opinion, adherence to a certain world view, allegiance to some community, belief in some pov, admiration of some leaders, etc. And that ‘scientific’ facts, arguments, conjectures, or previsions are, to put it mildly, a very secondary consideration.

China May Stumble in Race With Rivals for African Oil

From article:
"China’s economy will need more than 11 million barrels of oil a day in five years, 38 percent more than last year, according to Paul Ting, president of New Jersey-based Paul Ting Energy Vision LLC, a Chinese oil and gas consultant.

...oil-for-infrastructure deals are “dead,” Gregory Mthembu-Salter wrote in a September research paper for the South African Institute of International Affairs.

“The model has been replaced by one in which Chinese energy companies gain access to the country’s oil resources by buying stakes in established companies.”

"China’s economy will need more than 11 million barrels of oil a day in five years, 38 percent more than last year" ... "oil-for-infrastructure deals are “dead,” ... “The model has been replaced by one in which Chinese energy companies gain access to the country’s oil resources by buying stakes in established companies.”

Rockman thinks that the Chinese would sell any oil, produced by an American company it had shares in, to the USA - bearing that 38% growth figure in mind and the reality of world peak oil I think they will try and ship it back to China if the US (or any other nation) allows them.

xeroid --re-read my words. It was subtle but I said "for a period of time". Meaning that, given oil is fungable, they'll swap the U.S. production for other export oil. But when the days are reached that there isn't enough oil to split between us we'll reach the end of that "period of time". Eventually there will not be enough oi to split between the importers. Then it gets real dicey.

Of course, when we reach that point in time texas will likely leave the union and keep out remaining oil/NG for ourselves. Hey...if it's a good plan for China then it works for Texas too.

Hello Rockman,

Yep, I have posted scenarios before about inside-the-US ELM. Picture AZ & NV cutoff from pipeline resupply by CA & TX once they decide they don't want to share oil & natgas anymore.

It will be very tempting for someone in an exporting State, when prices & supply head towards Unobtainium, to not blow up, or somehow disable, or just let a pipeline rust away to non-functioning for an importing State. That way the former exporting State will suddenly have an increased local supply to further ramp their internal consumption.

Picture postPeak gasoline being $10/gal in both CA and AZ. A big pipeline breakdown could alter the balance whereby CA is $5/gal and AZ is now $20/gal. There is a hell of a lot of extortion opportunity when the price disparity reaches that big of a delta.

EDIT: for more clarification.

Toto -- While it's difficult for me to imagine the exporting states cutting off supplies when TSHTF we might reach a point of internal discord not seen at such a level since the Civil War. With such an assumption I suppose anything is possible. I've lived in TX for 30 years and know the personality of a large segment of the folks here. If it ever came to such extremes of physical confrontation between the Feds and the locals over natural resources the gov't better bring a lot of body bags with them. The spirit of the Alamo is very much alive and well here. And that's truly a scary thought. There are far more people here who fondly fantasize about such events then many in this country could imagine. And they are well armed and skilled.

Don't forget, as WT likes to point out, that Texas is a net oil importer.

Texas doesn't import oil consumer. It's the refineries here that import the crude, refineries which must comply with Texas state regulators in order to ship their products to the rest of the country. Last time I saw someone bother to do the calculation Texas produces enough oil/NG to supply our internal consumption for the next 50 or 70 years. If we annex La. (with their willingness, of course) we can jointly control a huge chunk of U.S. consumption.

But, as I've said, it's hard to imagine such a situation really developing. OTOH, we may be heading into unchartered waters with respect to internal divisions. It has happened before: the Civil War. Different cause, of course. But consider the result: over 600,000 dead if I recall correctly. And that was one American killing another because they felt their cause was justified. Has our gene pool changed that much in 150 years?

Texas produces enough oil/NG to supply our internal consumption

Natural gas, yes. But not oil.

Texas does not produce enough oil, on & offshore, to supply it's own internal demand (which is significantly higher than the US average). Add refinery gain and our recent recession and it gets close.


32.768 million barrels in May 2009 (plus a couple of million more barrels in federal waters offshore Texas, Texas federal waters production is fairly low).

1.09 million b/day. Perhaps 1.2 million b/day with federal waters.

Texas consumed 1,208 million barrels in 2007, or 3.3 million b/day. However, 433 million barrels were LPG, obviously most going into plastics.

Motor gasoline was 291 million barrels and distillates 144 million barrels or 1.19 million b/day. SOME of that LPG was used to keep rural homes warm and Texas threw away more than it's share of plastics, so I conclude that Texas does not produce enough oil to supply it's domestic needs.

My best response to "Drill baby drill" is "It didn't work in Texas !"


Just curious, how many people will fit in texas?

The entire population of the world, according to Rush Limbaugh.

Well with 6,500,000,000 people and texas with an area 268,581 sq miles we get 35,366,008,550,000 square foot divided by 6,500,000,000 = 5440 sq feet per person.

They "fit" but I don't think it would be comfortable.

He specified a 1,500 sq. foot house for each family, so there's plenty of room!

Those had better be some PRODUCTIVE roof gardens!

Not at 1 acre per (to meet all needs, not just veggies and fruit), there isn't.


I've seen some comments that it takes about 5 acres to produce enough food for a family. And, don't forget the water to grow the crops and for drinking. Western Texas tends to be a bit short on that score. I well recall driving across Texas and noticing a big change in vegetation between Dallas and Fort Worth...

E. Swanson

Get thee to a Permaculture Design Course. I should have one going this spring.


Thorium as alternative nuclear fuel:
I think, thorium is totally incapable of maintaining a nuclear fuel cycle. First reason: the breeded U233 has a neutron economy, that is just to bad to work. Its numbers of subsequent spallation neutrons is too low to offset all losses, especially absorption, and to deliver the neutron needed to breed a full fuel substitution. For a U238-PU239 breeding cycle it could work, but here you encounter the same problems, just at lower severity. And there are additionally the problems with the high power generation density in the reactor core of a fast breeder. I think, that is a problem that can´t be solved at all. Temperature and neutron radiation will wear down any material.

General Atomic built two reactors in the 1960-1980 time frame that very successfully used Thorium with enriched Uranium, Peach Bottom and Fort St. Vrain. I believe the "breeding" function of the reactors worked quite well but the second reactor, Fort St. Vrain, was a mechanical disaster.

Exponential Money in a Finite World

Within the next twenty years, the most profound changes in all of economic history will sweep the globe. The economic chaos and turbulence we are now experiencing are merely the opening salvos in what will prove to be a long, disruptive period of adjustment. Our choices now are to either evolve a new economic model that is compatible with limited physical resources, or to risk a catastrophic failure of our monetary system, and with it the basis for civilization as we know it today.


Nice to hear that. But not so nice is the fact, that nobody seems to realize that.

The sheeple is singing the Growth drum.

Till the bitter end.

Growth we need, consumer spending must growing.

Just on Bloomberg: "GREENBLATT (what a funny name...) sees cheap construction and consumer stocks".

Yes, Greenplatt, just wait until 2012. These stocks will be a lot cheaper then, or most probably just worthless. Then you can buy the whole construction and consumer business in the US.

I personally stick with this chart: http://www.theoildrum.com/files/ccst20090515.png

Hello Euro,

Yep, I too like that chart by Ace, and I will be glad when he gets settled in after his move and then hopefully returns to TOD with more updates. I mentally insert into the projected smooth decline some hypothetical above-ground severe dips caused from black swans such as hurricanes, wars, country collapses, etc.

I have just reviewed Mr Simmons' presentation slides given at the ASPO 2009 conference and my heart jumped into my mouth when I got to slide #28 concerning Exxon's Ghana field purchase. Can someone please look at my numbers and correct me if I have got this wrong:

Cost of purchase = $4,000,000,000
Peak number of Bbls/day = 120,000

Once at peak production, and given today's $80 / bbl it will take: $4,000,000,000 / (120,000 * $80) = 416 days at peak flow just to repay the initial investment. And this doesn't factor in running costs etc.

That sounds cream-cracker crazy to me! How the heck can this field be profitable at even $80/bbl.

Am I in the right ball park here?

HA -- I can't verify your numbers at the moment but if they are correct then ExxonMobil made a great deal. Granted the operating costs and time delay to initial production do factor in but in general if you acquire an oil producing property that "pays out" (returns your total purchase price less royalties and operating expenses) in less then 3 or 4 years then you've made a good trade. If the seller traded the field for just a little over one year's net production then they were insane. Unless there were very unusual mitigating circumstances. Remember in ExxonMobil's world making an 8% or 10% rate of return is considered a great success story. Typically a 3 or 4 year payout nets you that sort of return.

Actually, I think that the purchase price is far too low, when adjusted to 100%. If memory serves, ExxonMobil is only trying to buy something like 24%. When adjusted to 100% and accounting for royalty/production sharing, Matt calculated that ExxonMobil is paying about $200,000 per bpd of projected peak production.

Here is an excerpt from the WSJ article (the interest is 23.5%):

On Monday Kosmos informed bidders for its 23.5% stake in the field that it had "entered into an exclusive binding agreement" with Exxon, according to a person who had seen the letter.

$200,000 per bpd is actually not hugely higher than the recent capital costs in the tar sands play in Canada--on the order of $130,000 per bpd of production. And just comparing gross production to gross production, they are quite close--$142,000 per bpd in Ghana versus about $130,000 per bpd in Canada.

Thanks guys. What exactly is meant by "they paid $200,000 per bpd"? I find it hard to envisage what this means.

ExxonMobil proposed to buy, for $4 billion, 23.5% of a field which is supposed to produce 120,000 bpd. So, ExxonMobil's gross share of the production would be 28,200 bpd. So, their capital cost per bpd of peak production would be $4,000,000,000 divided by 23,200 bpd = $142,000 per bpd of peak production. Presumably if we adjust this for royalty and/or production sharing agreements, one gets the $200,000 number that Matt used.

AS WT explained if you buy a well making one bopd (net of royalty)then you pay $200,000 for that well. So you're paying $200,00 for a revenue source producing about $70 per day less operating expenses. Doesn't sound like much of a deal, does it? About 4 or 5 years ago production was selling for around $15,000 to $20,000 per bopd.

The problem with reading too much into those press releases is that the current development might produce 120,000 bopd but perhaps there also another huge reserve of oil as part of this acquisition which hasn't been developed. Bottom line: after 34 years in the business I don't pay much attention to such press release because there's never enough detail presented to judge them.

I find Kashagan a useful reference point. It's being developed, so it must be inside the (economic) margin.

Last I saw, its capital costs were about $136 billion and it is expected to produce 1.5 million bpd, so in rough terms the "going rate" for capital costs is $100 billion per million bpd, or $100,000 per bpd.

Or rather, that was the going rate at the time Kashagan got the green light.

Add in trifles like finance servicing, one-time royalties, "consultancy fees" (backhanders) and so on, and $200,000 per (expected) barrel per day starts to look like the market price for access to an oil field.

Edit: What would be interesting is the trendline for adjusted $/bopd over time. Is the trend linear? Is it exponential? Is it some power law? The answer would help predict when oil becomes too capital-intensive to produce.

Here is a $137,000 per bpd number from earlier this year:

Athabasca Oil Sands Expansion Costs Jump To $13.7 Billion
February 27, 2009

OTTAWA -(Dow Jones)- Project costs for a 100,000-barrel-a-day expansion at Royal Dutch Shell PLC’s (RDSA) Athabasca Oil Sands Project have climbed to $13.7 billion, partner Chevron Corp.(CVX) said in a filing with the SEC.

Thanks, WT. I was thinking in terms of decades, though - are there handy publically accessible sources for these kinds of numbers going back to 1970 or so?

I think I have a project...

also, your calculation looks at revenue. aside from purchase costs and royalties there are many other costs associated with production. I have no clue what a reasonable guess as to the costs is though.

Hello TODers,

Loved the DB toplink: "Supply and Debate", but was disappointed that Yergin didn't offer his full proprietary database to be totally free to all, so the debate could move to the next higher level. Additionally, I was dismayed that he didn't use this debate chance to personally endorse Simmons' call for a global, independent audit.

My guess is he still wants to make some Big Bucks$$$ for max reinforcement of his future postpeak Eco-Tech bunkers. Too bad for the rest of us doing the hard legwork for free. IMO, he sees us as stupid fools and not worthy of cooperation for postpeak mitigation, paradigm shift, and Optimal Overshoot Decline. My guess is that WTSHTF in terms of our energy & ecosystem, he will not be sending invitations to TODers to express his gratitude for our prior hard efforts at Peak Outreach to help prevent the worst of Overshoot & Collapse.

EDIT: I wonder if Yergin's grandkids and/or great-grandkids read TOD, EB, Dieoff, etc, plus books by Catton, Tainter, et al, then constantly pepper him with intense questions about elevated extinction rates, overpopulation, ecosystem decimation, climate change, etc, etc?

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


Sorry if this has been posted already. Here is an article in the London Times written by the CEO of BP. Of interest to all, not just British.

Right from the horse's mouth:

According to BP’s projections, we [the world] will need about 45 per cent more energy in 2030 than we consume today. That will require industry to invest some $25 to $30 trillion — more than $1 trillion (£600 billion) a year for 20 years.

HA -- An interesting assumption on his part: if the world is willing to spend that amount of money there must be viable prospects to drill. In other words, the next $25 trillion we spend will be done as easily and with the same success rate as the last $25 trillion (adjusted for inflation, of course) we spent drilling for oil and NG. This assumes, of course, we find another N. Sea, Ghawar, N. Slope, DW GOM, etc. Guess I better check the back of my file cabinet for those maps.

A mere trifle. Add it on the bill with the other £200 billions for UK power...


we'll worry about the tab later. After all that is really what the printing press was invented for ;-)

Assuming we can power the presses of course:


When it is this f....d up - makes you wonder why you worry about it at all. The options available to any family are so close to zero as to be indistinguishable.

Guessing a 50 dollar baseline for production costs this is only 600GB of oil over twenty years your talking about 30GB a year or about what we produce now.

Shocking in some respects but I'd argue its conservative. If we want to go to 40GB in twenty years and heading higher lets guess 100 dollar baseline or close to 2 trillion a year is probably far more reasonable if we are serious about running a oil based economy.
Of course this is assuming the oil is there to get but thats a different issue.

Reading the article it seems this was allocated across the entire energy industry not just oil yet a fairly reasonable oil only set of assumptions suggests that close to double this number for oil alone is more reasonable. I can't guess easily for the entire energy infrastructure but my wag is 3-4 trillion yearly is probably a good guess.


This would put the energy industry itself on par with Japan or China in shear size.
And about 7% or so of the worlds GDP would then be reinvested in energy.

Mind boggling large or small depending on how you look however given this drain you might guess that the rest of the worlds GDP would contract significantly.

A worst case scenario is a contraction by 50% or 30 trillion anually instead of 60 then energy would make up about 13% or the worlds economy.

Looking at energy and the economy I've come to the conclusion that investments higher than 15% are probably simply not possible i.e the economy simply contracts and energy usage declines as we hit 15%.

However if the economy is 50% smaller its energy usage has drops substantially I think 50% is high but lets go with it. So theoretically we can afford twice and much per barrel for oil production cost or 200 a barrel. Whats interesting is this baseline cost needs a sufficiently higher real price before its used so this suggests something in the range of 300-400 a barrel before the entire system simply is not viable.

Whats interesting is this approach pops out the same number I've gotten a number of different ways which is we will absolutely be forced to seriously give up on oil when it hits the 300-400 dollar price range.

Now back to the economy or demand side this is assuming a 50% drop in demand so one has to thing to cause that oil has to rise higher than the final equilbrium price where substitution slows economic contraction. Guessing again before we actually hit the end one could see oil prices rise into the 600-800 range which no doubt about it forces both the economic contraction to a much smaller economy and a steady and real move off of oil even if the price then falls.

This again fits my estimate of what I'd call the worst case scenario. If the above happened then we would both move off of oil and lower our consumption to the point that alternatives are economically viable. And at the worst we only lose I'm guessing about 75% of our wealth. I.e as we pass near 800 75% of the worlds wealth will be destroyed and economic activity reduced by 50%.

Personally I can't see our financial framework surviving this but thats a different issue all together.

Ignoring all that however what I consider a pretty good worst case scenario is actually theoretically survivable. Hurts like hell but ...

It fits with my conviction that falling oil supplies alone simply are not sufficient in and of themselves to destroy the economy its how other factors interact with it that will determine the outcome. I'm worried about sulfur longer term and of course obviously financial issues throw those in and it seems the worst case scenario is distinctly negative i.e we would have destroyed more than we have well before 20 years is out.

Of course the fact the world is probably already technically bankrupt simply assuming a steadily shrinking GDP does not help :)

Hello TODers,

DB toplink: "Shifting the world to 100 percent clean, renewable energy as early as 2030 - here are the numbers"

Okay, fine, but how come countries are not rapidly doing this conversion? You just cannot easily hand-wave away "..overcoming obstacles in planning and politics."

Some examples follow. Remember, govts have been aware of Malthus since 1798, Hubbert since 1955, and vastly elevated extinction rates for a long time, too, but have ALL decided to not move to the Precautionary Principle, but have let Maximum Power Principle [MPP] run rampant:

1. Sri Lanka went to civil war instead of mitigation by full-on Peak Outreach and fast adoption of renewables and O-NPK recycling by SpiderWebRiding.

2. Zimbabwe collapsed instead of Mugabe moving early to mitigation by full-on Peak Outreach and fast adoption of renewables and O-NPK recycling by SpiderWebRiding.

3. Nepal's condition has gotten worse than better over the years from lack of mitigation by full-on Peak Outreach and fast adoption of renewables and O-NPK recycling by SpiderWebRiding.

4. Other examples include the Congo, Somalia, Pakistan, ..on and on.

Please show me a country that doesn't import or use any FFs or FF-derived products including I-NPKS, recycles everything [including O-NPK], and has so improved their ecosystem so that pollution, water shortages, topsoil health, etc, are now non-issues, plus their specie extinction rate has now dropped back to normal, ancient levels.

Even Easter Island is still worse, instead of better:

Easter Island -- tourists destroying 'perfect place'

..Some 70,000 visitors now arrive each year, up from just 14,000 in the mid-1990s.

..Today, Easter Island once again faces environmental threats. Food comes from Chile, either by ship or on the seven weekly flights from Santiago (there are also two from Tahiti). The visitors "all pull the chain," Luz Zasso, the mayor, notes acidly. The absence of a sewage system is threatening the cleanliness of the island's underground water sources. But it would be hard to install one without damaging archaeological sites. Electricity comes from diesel-powered generators. Power cuts are frequent. Trash is piling up...

..The population is now 5,000, up from 3,300 in 2002, of whom only half are of Rapa Nui descent...
EDIT: Makes one think that very quickly, the Rapa Nui will soon be back to sneering at each other their not-so-old insult, "The flesh of your mother sticks to my teeth!".

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

You just cannot easily hand-wave away "..overcoming obstacles in planning and politics."

You're right, Bob. Those "obstacles" are in fact the hard parts of the problem we are facing. We can see solutions for the technical parts (without having to re-write the laws of physics or chemistry), but we don't have answers for those "obstacles."

I think whether or not one is a "doomer" comes down to whether you think those obstacles will be overcome, and therefore on one's view of human nature. Are people far-sighted, co-operative, and wise? Or are they short-sighted, selfish and stupid? Time to choose, everybody.

So that looks like $80 oil that's just been hit - as per 6 month survey question.

And if the new floor is $70 and only a few years back $30 was a high price; either someone is telling porkies, or something very bad happened to the cost base in a short space of time.

Nicely put.

Mr Lynch may even have to amend his words - but I doubt it.

Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward...


Hello TODers,

Inside the World's First Environmental Theme Park

.."During recessions, people aren't necessary sprinting to shopping centers, and businesses are closing down their retail shops. It was the perfect time to create an environmental theme park because we get people to visit Hollywood & Highland and provide retailers with opportunities to partner with us...
I would assume, like the link description says, "the Eco-Happiest Place on Earth", that this is just another open-loop system for further profit & enviro-decay versus a fully considered closed-loop Circle of Life attempt at Environmentalism.

For example: is all O-NPK humanure kept on-site and composted? Is the food locally sourced? Is electricity all PV, or should the building be filled with toxic smoke to represent the coal exhaust that powers the lighting and A/C? Do they have info-cards to handout with links to TOD, EB, Dieoff, LATOC, plus key book authors?

Is the main photo, at the entrance, a giant, blownup version of this?


Is this art displayed above the Food Court?


Otherwise, IMO, this is just another marketing scam to help direct people to another shopping extravaganza in the rest of the mall.

Yep this can only be a marketing scam of the worst kind.

Global Inheritance believes that change is good and that we need to be smart in making decisions. Sustainable golf is possible, especially in certain places in the world. With technology, science and common sense, man and nature can live in harmony, even on the golf course."

What a load of crap!

Land that is best used as grazing land could also serve a double use as a golf course (perhaps only when a particular pasture/9 holes are being rotated out of grazing).. As was true at the beginning of the game.

Just watch out for the crap :-)



From the first article posted above, 'Oil prices hit high but report warns of supply crunch', is this:

The report said that between 2005 and 2008, global oil production ceased to grow in spite of widespread investment and rising prices, which should normally have brought forth a big rise in supply. It notes that the biggest year for new discoveries was 1965, since when they have been falling. Global oil production overtook new discoveries in 1984 and has outpaced them ever since.

Per that last sentence, its been 25 years since extraction overtook discoveries. Doesn't that correspond to Hubbert's timeline for Peak to occur?

But one has to remember the Cornucopian Talking Points:

(1) If oil prices are rising, it's due so speculation.

(2) If oil prices are falling, it's because Peak Oil "Theories" are wrong.

(3) If oil production is flat to declining, as oil prices are increasing, it's because of Resource Nationalism, i.e., Western oil companies are not allowed access to prime producing areas.

As I have pointed out, #3 requires Cornucopian types to pretend that regions like Texas and the North Sea don't exist, or to believe in alternative history theories. So far, they have leaned to the first choice.

Re: The Good 100

The Motor City’s Newest Plants

Detroit, as you may have heard, has some problems... Despite all that—or perhaps because of it—Detroit is becoming a haven for urban farming: an example to which other cities can look.

“We are really very collaborative and community-based. We all work together,” says Ashley Atkinson, the director of urban agriculture and project development at the Greening of Detroit, which together with three other organizations supports the Garden Resource Program Collaborative (GRP)—a network of more than 850 thriving Detroit gardens.

What makes the Detroit model so special? ...it’s clearer than ever that the grassroots farms are not just about business and food production. Instead, they’re about using those things to create community involvement, long-term sustainability, and real results. Other cities: take note.

As with anything, the reality is not quite as cheery as the presentation. While there is truth in the statement

“We are really very collaborative and community-based. We all work together,” says Ashley Atkinson..."

The opposite is also at work at times, speaking from personal experience. This is another illustration of an issue that looms large when discussing solutions. That is, even among seemingly like-minded people, conflicts arise. People are human. Greed, ego, a sense of entitlement, possessiveness, power... these things are parts of all social structures and hinder progress towards goals. Some of the recent discussions about whither the Oil Drum here and at TAE reveal some of these same dynamics.

I have no solution to offer; simply put, the further along the road we get, the less the things that divide us can be allowed to dominate.

I am reminded of a story I read long ago. Forget the author, and I may have mentioned it before, but essentially humanity wakes up one day from its fratricidal wars to find it is acting in concert. Perfectly so, in fact. The reason is, of course, a perceived threat to all of humanity. An invasion, I believe. Suddenly, spontaneously, out of pure determination to survive, humanity's individual consciousness becomes collective and the foe is defeated.

Something like this, though far less fanciful, is probably necessary to avert the unfolding crisis.

Why do so many continue to think there is time?


I am reminded of a story I read long ago. Forget the author, and I may have mentioned it before, but essentially humanity wakes up one day from its fratricidal wars to find it is acting in concert. Perfectly so, in fact. The reason is, of course, a perceived threat to all of humanity. An invasion, I believe. Suddenly, spontaneously, out of pure determination to survive, humanity's individual consciousness becomes collective and the foe is defeated.

Two books that come to mind are Larry Nivens' Footfall and Harry Turtledoves' Worldwar/Colonisation series (I'm also a fan of HTs Southern Victory/Timeline-191 series. The Days of Infamy series has some particularly distasteful scenes, however).

one would think that the executive vp for expploration and developement for devon energy would have a clue about the difference between reserves and possible and speculative gas resources.

So, seeing the initial note about solar/wind/geothermal being sufficient to provide all energy, (which is what I believe- supported of course by a grid of HVDC and hydro storage), I swiftly scanned thru all comments of all you wise energy experts looking for an enlightening reaction to this weighty bit of news.

But I saw not ONE SINGLE WORD of comment about any of it, How odd! Any explanation?

Or, perhaps I have descended to the same level of skill at summarizing as the Woody Allen character did after speed-reading "War and Peace" -- ' It's about some Russians".